Problems and Issues Facing India

1
Problems and Issues Facing India
2
Major problems Issues in India today

• Overpopulation ? 1 billion climbing.
• Economic development.
• Hindu-Muslim tensions.
• Gender issues ? dowry killings.
• Caste bias ? discrimination against untouchables
  continues.
• The Kashmir dispute and nuclear weapons.
• Political assassinations.

3
India and the Subcontinent

• Conflict over Kashmir India Pakistan
• Irrigation
• Pride
• Nuclear Weapons India Pakistan
• Flood control India Bangladesh
• Humanitarian Aid India Bangladesh

4
Economic Strength

• Why is India becoming an economic superpower?

5
Even though the world has just discovered it, the
India growth story is not new. It has been going
on for 25 years old

6
1) Rising GDP growth
India Story

• 
  
  average annual GDP growth
• 1900 1950 1.0
  
• 1950 1980 3.5
• 1980 2002 6.0
• 2002 2006 8.0
• Sources 1900-1990 Angus Maddison (1995),
  Monitoring the World Economy, 1990-2000Census of
  India (2001), 2000-2005 Finance Ministry

7
2) Population growth is slowing
India Story

• 
  
  average annual
  growth
• 1901 1950 1.0
• 1951 1980 2.2
• 1981 1990 2.1
• 1991 2000 1.8
• 2001 2010 1.5
• Sources 1900-1990 Angus Maddison (1995),
  Monitoring the World Economy, 1990-2000Census of
  India (2001)

8
The Population Factor

• The worlds 2nd largest country with
  1,121,800,000
• Only 1/3 the size of the U.S.
• 1.7 natural increase
• 2025 approaching 1.4 billion

9
Worlds largest!

• Will surpass China by 2032
• 70 million have moved to the cities between
  1991-2001
• Growing massive cities such as Mumbai, New
  Delhi, Kolkata, Chennai

10
Indias demographic advantage means that its high
growth will continue longer term while China will
slow
11
India has law, China has order-India got
democracy before capitalism and this has made all
the difference-It will be slower than China but
its path will be surer-India more likely to
preserve its way of life
12
By 2010 India will have worlds largest
number of English speakersWhen 300 million
Indians speak a word in a certain way,
that will be the way to speak it. -Prof. David
Crystal, Cambridge Encyclopedia of the English
Language
13
3. Literacy is rising
India Story

• 1950 17
  
• 1990 52
• 2000 65
• 2010 (proj) 80
• Source Census of India (2001)

14
4. Middle class is exploding
India Story

• 
  Million
• 
  People
• 1980 8 65
• 2000 22 220
• 2010 (proj) 32 368
  
• Source The Consuming Class, National Council of
  Applied Economic Research, 2002

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INDIA WILL GRADUALLY TURN MIDDLE CLASS

• 1980 8
• 2000 22
• 2010 32
• 2020 50 West of the
  
  
  Kanpur-Chennai line
• 2040 50 East of the
  
  Kanpur-Chennai
  line

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Growing Middle Class

• Over 200 million people falling into a growing
  middle class of consumers.
• Technically defined as those earning between
  4000-21,000 a year.
• This actually only accounts for 60 M.
• Middle class-ness seems to include those going
  from living on 5 a day to 10.

17
5. Poverty is declining
India Story

• 1980
  46
• 2000 26
• 2010 (proj) 16
• 1 of the people have been crossing poverty line
  each year for 20 years. Equals 200 million.

18
6. Productivity is rising
India Story

• 30 to 40 of GDP growth is due to rising
  productivity

19
7. Per capita income gains
India Story

• (US ppp)
• 1980 1178
  
• 2000 3051
• Source World Bank

20
This means a per capita income roughly of (on a
ppp basis)

• ()
• 2000 2100
• 2005 3050
• 2020 5800
• 2040 16,800
• 2066 37,000

21
8. India is now the 4th largest economy
India Story

• And it will cross Japan between 2012 and
  2014 to become the 3rd largest

22
Government and the Economy

• India is the worlds largest democracy.
• India is one of the strongest nations in Asia.
• One of Indias largest industries is its
  moviemaking industrycalled Bollywood.
• Although India is one of the worlds top five
  industrial countries, millions of Indians live in
  poverty.

23
Globalization and India

• Thomas Freidman has asserted that globalization
  has made the world flat as evidenced by the
  growing service sector within India.
• This also implies that India is flat.
• Reality on the ground may differ.

24
DRIVERS OF GROWTH

• India East and S.E. Asia
• Domestic Exports
• Services Manufacturing
• Consumption Investment
• High tech, capital Low tech,
  labour
• intensive industry intensive
  industry

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Indias mixed economy

• The mix refers to private and public
  ownership. Socialism
• Foreign aid and foreign investment are crucial
  (also something Gandhi disagreed with).
• Urban areas have high-tech companies.
• Three quarters of the population are farmers
  living in small villages.

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Reasons for Success Indias
success is market led whereas Chinas is state
induced. The entrepreneur is at centre of the
Indian model
27
Licence Raj

• Licence Raj, also the Permit Raj refers to the
  elaborate licenses, regulations and the
  accompanying red tape that were required to set
  up and run businesses in India between 1947 and
  1990.
• The Licence Raj was a result of India's decision
  to have a planned economy where all aspects of
  the economy are controlled by the state and
  licences are given to a select few.
• Up to 80 government agencies had to be satisfied
  before private companies could produce something
  and, if granted, the government would regulate
  production.
• The social democratic plan is too optimistic for
  Inidan immature environment.

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• Rise of globally competitive
• Indian companies
• Reliance, Jet Airways, Infosys, Wipro,
• Ranbaxy, Bharat Forge, Tata Motors,
• TCS, Bharati, ICICI and HDFC Banks

29
India has a vibrant private space

• gt 100 Indian Companies have market
• cap of US 1 billion
• gt 1000 Indian Companies have
• received foreign institutional
• investment
• gt 125 Fortune 500 companies have
• RD bases in India
• gt 390 Fortune 500 companies have
• outsourced software development to India.
• lt 2 bad loans in Indian banks (vs 20 in
  China)
• gt 80 credit goes to private sector (vs10
  in
• China)

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Public space is a problem

• Dynamic democracy
• Free, lively media and press
• - Poor governance
• - High subsidies High fiscal deficit
• - Creaky infrastructure
• - Inefficient government companies

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What explains Indias economic success?

• Even slow reforms add up-state
• getting out of the way
• Young minds are liberated
• 3) India has found its competitive
• advantage in the knowledge economy

33
Key Reforms

• Opened economy to trade and investment
• Dismantled controls
• Lowered tariffs
• Dropped tax rates
• Broke public sector monopolies

34
Agriculture
35
By the Numbers

• Per Capita GDP - 3600
• 60 agricultural/ but only 20 of GDP.
• 100 million farmers own NO land.
• Approximately 80 of all Indians live on the
  equivalent of less than
• 2 a day.

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Agriculture
2

• Farming methods have improved, but few families
  own enough land to support themselves.
• Many farmers have set up cottage industries to
  add to their income.
• India is a leading industrial nation, and
  advances have been made there in technology and
  consumer industries.
• The growing middle class forms the market for
  consumer goods.

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INDIA ECONOMIC GEOGRAPHY

• Primary Sector
• Indian agriculture is inefficient and labor
  intensive.
• Animals are frequently used for power.
• The village is the focus of life for 74 percent
  of the Indian population with an estimated
  580,000 villages.
• Approximately 2/3 of India's huge working
  population (63 percent) depends directly on the
  land for its livelihood.
• Substantial progress toward modernization has
  been made in the Punjab's wheat zone.
• In the early 1980s more than 1/4 of India's
  cultivated area was still owned by only 4 percent
  of the country's farming families.
• Half of all rural families either owned as little
  as a half hectare (1.25 acres) or less, or no
  land at all.
• Land consolidation efforts have had only limited
  success, except in the states of Punjab, Haryana,
  and Uttar Pradesh.

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INDIA ECONOMIC GEOGRAPHY

• Major crop zones
• Wheat. Dry northwest notably in the Punjab and
  neighboring areas of the Upper Ganges. Many
  gains from the Green Revolution through the
  introduction of high-yielding varieties developed
  in Mexico.
• Rice. Moist east and a summer monsoon drenched
  south. More than 1/4 of all of India's farmland
  lies under rice cultivation, most of it in the
  states of Assam, West Bengal, Bihar, Orissa, and
  eastern Uttar Pradesh. This area has more than
  100 cm (40 inches) of rainfall. India has the
  largest acreage of rice among the world's
  countries. Yields per hectare are still low at
  below 1,000 kg (900 lbs./acre), however.
• Coconut. Malabar Coast. (Kerala)
• Millet. Southwestern India. A cereal grass,
  Setaria italica, extensively cultivated in the
  East and in southern Europe for its small seed or
  grain, used as food for man and fowls, but in the
  U.S. grown chiefly for fodder.
• Groundnut. Kathiawar Peninsula.
• Cotton. West-Central India (Deccan Plateau).
• Chick Peas. Northwest.
• Plantation. Northeast.

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INDIA ECONOMIC GEOGRAPHY

• Livestock
• India has more livestock than any other country
  in the world.
• Cows - 200,000,000
• water buffalo - 60,000,000
• Goats and sheep - 60,000,000
• Horses, donkeys, and elephants - 5,000,000
• Sheep are of major importance in the drier west
  where the Islamic population is clustered.
• Water buffalo is dominant in the Ganges Delta and
  coastal regions.
• Cattle (particularly the Brahman or Zebu breeds)
  are found throughout India.

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INDIA ECONOMIC GEOGRAPHY

• Cattle are an integral element of the Indian
  agricultural economy.
• They are the primary source of draft power
  (plowing, pulling carts, grinding grain, and a
  host of other tasks).
• Cattle graze on forage which would otherwise be
  wasted during a dry season.
• Cattle consume secondary agriculture byproducts
  (straw, rice husks, and corn stalks).
• Cattle produce an estimated 771,000,000 metric
  tons (850,000,000 tons) of cow dung, the
  principle source of domestic fuel a year.
• Dung is also mixed with mud and used for plaster
  also a major source of fertilizer.
• Cattle also produce most of India's milk (the
  bulk of which comes from the water buffalo).
• When a cow dies, it is consumed by the
  untouchables (who have no prohibitions about
  consuming beef when it is available) of the large
  Hindu population.
• Cow hides are a major source of leather.
• The maintenance of the large numbers of cows and
  buffalo is a completely rational activity in the
  Indian agricultural economy.

41
Indias Green Revolution

• Introducing higher-yielding varieties of seeds
  in 1965.
• Increased use of fertilizers irrigation.
• GOAL ? make India self-sufficient in food grains.
• India's "Green Revolution" allowed RICH farmers
  to triple their crop by using modern science and
  technology.

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INDIA ECONOMIC GEOGRAPHY

• Green Revolution describes the development of
  extremely high-yielding grain crops that allow
  major increases in food production, particularly
  in subtropical areas.
• In 1953, scientists developed rust-resistant
  dwarf wheats which doubled Mexico's per acre
  production in the next decade.
• After a major drought in India in 1965, Mexican
  dwarf wheat was widely planted in the Punjab
  region, producing dramatic increases in wheat
  yields.
• The improved rice (IR)- IR-8 was spotted in 1965
  at the Los BaZos research institute in the
  Philippines, which was set up using aid from the
  Ford and Rockefeller Foundations.
• Its first harvest, from 60 trial tons of seeds,
  produced a six-fold increase of rice under field
  conditions.
• About 10 of India's paddy land is now planted
  with IR-8 varieties.

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INDIA ECONOMIC GEOGRAPHY

• Green Revolution benefits
• Two to four times the yield of indigenous grains.
• A shortened growing season allows two crops per
  year.
• Miracle grains" have a wider tolerance for
  climatic variations.
• Green Revolution problems
• Need for high application of fertilizer and
  insecticide, and in the case of rice, there is a
  need for copious irrigation.
• "Miracle grains" have been adopted in the most
  prosperous areas and among the most prosperous
  farmers. As a result, interregional and social
  gaps have widened.
• Traditional marketing patterns have been upset.
  Thailand and Myanmar (Burma) have found their
  traditional markets disappearing, and Japan now
  looks for exports.

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Industries
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INDIA ECONOMIC GEOGRAPHY

• Secondary sector
• At the time of independence (1947), Indian
  industries emphasized textiles and food
  processing.
• Gandhi championed development of the cottage
  industries that existed prior to the intervention
  of Britain.
• A cottage industry involves small scale
  production using high labor inputs.
• Cottage industries are very important because
  they are labor intensive.
• They employ 40 individuals for every one employed
  in a large automated factory producing the same
  products.
• A total of 750 products is produced by small
  industries which use lt100,000 in capital.
  (Receivers, tools, plumbing fittings, etc.).
• Manufacturing employs only 13 of the labor
  force.

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INDIA ECONOMIC GEOGRAPHY

• Manufacturing Regions
• Kolkata (Calcutta) and Jamshedpur form an
  emerging industrial region in northeastern India.
  
• Calcutta forms the center of the Bihar-Bengal
  area where jute manufacturing dominates, but
  engineering, chemical and cotton industries also
  exist. Jute a strong, coarse fiber used for
  making burlap, gunny, and cordage it is obtained
  from two East Indian plants-Corchorus capsularis
  and Corchorus olitorius of the linden family.
• The Jamshedpur region 240 km (150 mi) west of
  Calcutta has the Tata Steel Works, Indias single
  largest steel making complex (Indian Ruhr).
• In the nearby Chota-Nagpur district, coal mining
  and iron and steel manufactures have developed,
  and Bhilai is a growing nucleus of heavy industry.

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INDIA ECONOMIC GEOGRAPHY

• Manufacturing Regions
• 2. Western Zone-Mumbai (Bombay)-Ahmadabad
  This Maharashtra, Gujarat area specializes in
  cotton and chemicals with some engineering and
  food processing, automobiles, and petrochemicals.
• 3. Southeastern Zone- Chennai (Madras)
  specializing in textiles.
• 4. Bangalore supports diversified electrical
  manufacturing, machine tools, the construction
  industry, and food processing.

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Technology
49
Indias Economy Today

• 60 of people work in agriculture
• 28 of people work in new service industries
• New Technology has helped expand the economy
• Important Industries
• Textiles, chemicals, steel, software, mining

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India Technology Superpower

• Geneva-based STMicroelectronics is one of the
  largest semiconductor companies to develop
  integrated circuits and software in India.
• Texas Instruments was the first to open
  operations in Bangalore, followed by Motorola,
  Intel, Cadence Design Systems and several others.
  
• 80 of the Worlds 117 SEI CMM Level-5 companies
  are based in India.
• 5 Indian companies recently received the globally
  acclaimed Deming prize. This prize is given to
  an organization for rigorous total quality
  management (TQM) practices.

• 15 of the world's major Automobile makers are
  obtaining components from Indian companies.
• This business fetched India 1.5 Billion in 2003,
  and will reach 15 Billion by 2007.
• New emerging industries areas include,
  Bio-Informatics, Bio-Technology, Genomics,
  Clinical Research and Trials.
• World-renowned TQM expert Yasutoshi Washio
  predicts that Indian manufacturing quality will
  overtake that of Japan in 2013.
• McKinsey believes India's revenues from the IT
  industry will
  reach 87 Billion by 2008.
• Flextronics, the 14 billion
  global major in Electronic Manufacturing
  Services, has announced that it will make India a
  global competence centre for telecom software
  development.

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India Technology Superpower

• Over 100 MNCs have set up RD facilities in India
  in the past five years. These include GE, Bell
  Labs, Du Pont, Daimler Chrysler, Eli Lilly,
  Intel, Monsanto, Texas Instruments, Caterpillar,
  Cummins, GM, Microsoft and IBM.
• Indias telecom infrastructure between Chennai,
  Mumbai and Singapore, provides the largest
  bandwidth capacity in the world, with well over
  8.5 Terabits (8.5Tbs) per second.
• With more than 250 universities, 1,500 research
  institutions and 10,428 higher-education
  institutes, India produces 200,000 engineering
  graduates and another 300,000 technically trained
  graduates every year. (note per capita numbers
  are lower in comparison with first world, Russia
  and Israel, indicating India should increase the
  number of educational institutions and
  educational opportunities to its 1.3 billion
  population)
• Besides, another 2 million graduate in other
  areas in India annually.
• The Indian Institute of Technology (IIT) is among
  the top three universities from which McKinsey
  Company, the world's biggest consulting firm,
  hires most.

52
Information Technologys Impact

• India produces about 100,000 new engineers a
  year. About 3 times the number of the U.S.
• But still only 1.6 million people are employed in
  IT and Service Center jobs.
• Key centers include Bangalore, New Delhi,
  Gurgaon, and Hyderabad.

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U.S. companies in IndiaIT Services-design,
support, and or production

• Adobe, Cisco Systems, Dell, Google,
  Hewlett-Packard, General Motors, IBM, Intel,
  Microsoft, Motorola, Texas Instruments, Yahoo

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India Trade

• Tata Motors paid 118 million to buy Daewoo
  commercial vehicle Company of Korea.
• Ranbaxy, the largest Indian pharmaceutical
  company, gets 70 of its 1 billion revenue from
  overseas operations and 40 from USA.
• Tata Tea has bought Tetley of UK for 260M.
• India is one of the world's largest diamond
  cutting and polishing centres, its exports were
  worth 6 Billion in 1999.
• About 9 out of 10 diamond stones sold anywhere in
  the world, pass through India.
• Garment exports are expected to increase from the
  current level of 6 billion to 25 billion by
  2010.
• The country's foreign exchange reserves stand at
  an all-time high of 120 Billion.

• India's trade with China grew by by 104 in 2002
  and in the first 5 months of 2003, India has
  amassed a surplus in trade close to 0.5M.
• Mobile phones are growing by about 1.5Million a
  month. Long distance rates are down by two-thirds
  in five years and by 80 for data transmission.
• Wal-Mart sources 1 Billion worth of goods from
  India - half its apparel. Wal-Mart expects this
  to increase to 10 Billion in the next couple of
  years.
• GAP sources about 600 million and Hilfiger 100
  million worth of apparel from India.

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India Self-Reliance

• India is among six countries that launch
  satellites and do so even for Germany, Belgium,
  South Korea, Singapore and EU countries.
• India's INSAT is among the world's largest
  
  domestic satellite communication systems.
• Indias Geosynchronous Satellite Launch Vehicle
  (GSLV) was indigenously manufactured with most of
  the components like motor cases, inter-stages,
  heat shield, cryogenic engine, electronic modules
  all manufactured by public and private Indian
  industry.
• Kalpana Chawla was one of the seven astronauts in
  the Columbia space shuttle
  when it disintegrated over Texas skies just 16
  minutesbefore its scheduled landing on Feb 1st
  2003, she was the second Indian in space.

• Back in 1968, India imported 9M tonnes of
  food-grains to support its people, through a
  grand programme of national self-sufficiency
  which started in 1971, today, it now has a food
  grain surplus stock of 60M.
• India is among the 3 countries in the World that
  have built Supercomputers on their own. The
  other two countries being USA and Japan.
• India built its own Supercomputer after the USA
  denied India purchasing a Cray computer back in
  1987.
• Indias new PARAM Padma Terascale Supercomputer
  (1 Trillion processes per sec.) is also amongst
  only 4 nations in the world to have this
  capability.
• India is providing aid to 11 countries,
  writing-off their debt and loaning the IMF
  300M.
• It has also prepaid 3Billion owed to the World
  Bank and Asian Development Bank.

57
India Pharmaceuticals

• The Indian pharmaceutical industry at 6.5
  billion and growing at 8-10 annually, is the 4th
  largest pharmaceutical industry in the world, and
  is expected to be worth 12 billion by 2008.
• Its exports are over 2 billion. India is among
  the top five bulk drug makers and at home, the
  local industry has edged out the Multi-National
  companies whose share of 75 in the market is
  down to 35.
• Trade of medicinal plants has crossed 900M
  already.
• There are 170 biotechnology companies in India,
  involved in the development and manufacture of
  genomic drugs, whose business is growing
  exponentially.
• Sequencing genes and delivering genomic
  information for big Pharmaceutical companies is
  the next boom industry in India.

58
India Foreign Multi-National Companies

• Top 5 American employers in India
• General Electric 17,800 employeesHewlett-Pac
  kard 11,000 employeesIBM 6,000
  employeesAmerican Express 4,000
  employeesDell 3,800 employees
• General Electric (GE) with 80 Million invested
  in India employs 16,000 staff, 1,600 RD staff
  who are qualified with PhDs and Masters
  degrees.
• The number of patents filed in USA by the Indian
  entities of some of the MNCs (upto September,
  2002) are as follows Texas Instruments - 225,
  Intel - 125, Cisco Systems - 120, IBM - 120,
  Phillips - 102, GE - 95.
• Staff at the offices of Intel (India) has gone
  up from 10 to 1,000 in 4 years,
  and will reach 2000 staff
  by 2006.
• GE's RD centre in Bangalore is the company's
  largest research outfit outside the United
  States. The centre also devotes 20 of its
  resources on 5 to 10 year fundamental research in
  areas such as nanotechnology, hydrogen energy,
  photonics, and advanced propulsion.
• It is estimated that there are 150,000 IT
  professionals in Bangalore as against 120,000 in
  Silicon Valley.

59

• Top 5 American employers in India
• General Electric 17,800 employeesHewlett-Pack
  ard 11,000 employeesIBM 6,000
  employeesAmerican Express 4,000
  employeesDell 3,800 employees
• General Electric (GE) with 80 Million invested
  in India employs 16,000 staff, 1,600 RD staff
  who are qualified with PhDs and Masters
  degrees.
• The number of patents filed in USA by the Indian
  entities of some of the MNCs (upto September,
  2002) are as follows Texas Instruments - 225,
  Intel - 125, Cisco Systems - 120, IBM - 120,
  Phillips - 102, GE - 95.
• Staff at the offices of Intel (India) has gone
  up from 10 to 1,000 in 4 years,
  and will reach 2000 staff
  by 2006.
• GE's RD centre in Bangalore is the company's
  largest research outfit outside the United
  States. The centre also devotes 20 of its
  resources on 5 to 10 year fundamental research in
  areas such as nanotechnology, hydrogen energy,
  photonics, and advanced propulsion.
• It is estimated that there are 150,000 IT
  professionals in Bangalore as against 120,000 in
  Silicon Valley.

60
William H. Gates, Chairman and Chief Software
Architect Microsoft Corporation (b-1955) Gates
emphasized that India had emerged as a major
global IT hub not because of the availability of
low-cost skills, as many believe. Rather, it had
more to do with the ''quality'' and ''world-class
skills'' to be found in India, he said. ''The key
is the quality of the human talent here. When
people do software projects in India, they do so
because this is the place they can find people
with the latest skills. It is not on the (cheap)
price (of labor),'' he was quoted as saying by
The Times of India newspaper. Gates had high
praise for the ''quality of educational
institutions which could make India into an IT
superpower.' September 19, 2000. http//www.atim
es.com/ind-pak/BI19Df01.html .
61
Goldman Sachs Report of 1 October, 2003
"Dreaming with BRICs The path to 2050" India's
GDP will reach 1 trillion by 2011, 2
trillion by 2020, 3 trillion by 2025, 6
trillion by 2032, 10 trillion by 2038, and
27 trillion by 2050, becoming the 3rd largest
economy after USA and China. In terms of GDP
estimates, the continental India (1.3 billion,
with 0.5 trillion in 2000) will overtake Italy
(60 million, 1.2 trillion in 2000) by the year
2016, France (60 million, 1.4 trillion in 2000)
by 2019, UK (60 million, 1.5 trillion) by 2022,
Germany (85 million, 2.0 trillion in 2000) by
2023, and Japan (130 million, 3.9 trillion in
2000) by 2032.
62
Indians abroad
A snapshot of Indians at the helm of leading
Global businesses The Co-founder of Sun
Microsystems (Vinod Khosla), Creator of Pentium
Chip (Vinod Dahm), Founder and creator of
Hotmail (Sabeer Bhatia), Chief Executive of
McKinsey Co. (Rajat Gupta) President and CFO of
Pepsi Cola (Indra Nooyi) President of United
Airlines (Rono Dutta) GM of Hewlett Packard
(Rajiv Gupta) President and CEO of US Airways
(Rakesh Gangwal) Chief Executive of CitiBank
(Victor Menezes), Chief Executives of Standard
Chartered Bank (Rana Talwar) Chief Executive
officer of Vodafone (Arun Sarin) President of AT
T-Bell Labs (Arun Netravali) Vice-Chairman
and founder of Juniper Networks (Pradeep Sindhu)
Founder of Bose Audio (Amar Bose) Founder, chip
designer Cirrus Logic (Suhas Patil ) Chairman
and CEO of Computer Associates (Sanjay
Kumar) Head of (HPC WorldWide) of Unilever Plc.
(Keki Dadiseth) Chief Executive Officer of HSBC
(Aman Mehta) Director and member of Executive
Board of Goldman Sachs (Girish Reddy) Chief
Economist of the International Monetary Fund
(Raghuram Rajan) Former CTO of Novell Networks
(Kanwal Rekhi)
63
Brain Drain

• Young talent leaving India seems to be slowing
  down.
• Average starting salary for an IT engineer in
  India today is approximately 10-12,000.
• Many are graduates of the Indian Institute of
  Technology
• Several campuses located throughout the country
• This salary provides a comfortable lifestyle in
  modern India for the privileged few.

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Indians in the USA.

• Statistics that show
• 38 of doctors in the USA,
• 12 of scientists in the USA,
• 36 of NASA scientists,
• 34 of Microsoft employees,
• 28 of IBM employees,
• 17 of INTEL scientists,
• 13 of XEROX employees,
• are Indians.

US H1-B Visa applicants country of origin
 1.  India 44 2.  China 9 3.  Britain 5 4.  Philippines 3 5.  Canada 3 6.  Taiwan 2 7.  Japan 2 8.  Germany 2 9.  Pakistan 2 10. France 2

• Of the 1.5M Indians living in the USA, 1/5th of
  them live in the Silicon Valley.
• 35 of Silicon Valley start-ups are by Indians.
• Indian students are the largest in number among
  foreign students in USA.

65
IIT Harvard MIT Princeton
IIT Harvard MIT Princeton , says CBS 60
Minutes. CBS' highly-regarded 60 Minutes,
the most widely watched news programme in the US,
told its audience of more than 10 Million viewers
that IIT may be the most important university
you've never heard of." "The United States
imports oil from Saudi Arabia, cars from Japan,
TVs from Korea and Whiskey from Scotland. So what
do we import from India? We import people, really
smart people," co-host Leslie Stahl began while
introducing the segment on IIT.the smartest,
the most successful, most influential Indians
who've migrated to the US seem to share a common
credential They are graduates of the IIT.


in science and technology, IIT undergraduates
leave their American counterparts in the
dust. Think about that for a minute A kid
from India using an Ivy League university as a
safety school. That's how smart these guys
are. There are cases where students who
couldn't get into computer science at IIT, they
have gotten scholarships at MIT, at Princeton, at
Caltech.
66
Religious Conflict Between Hindus and Muslims in
India
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HINDU-MUSLIM TENSIONS

• Ayodhya riots
• Mumbai riots
• 1992-93. Thousands dead.

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1992 Hindu mob destroyed the mosque in Ayodhya.
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Riots followed killing over 2000 people.
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Hindu fundamentalists want to build a Hindu
temple in place of the mosque.
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Hindu fundamentalism opposes Indian National
Congresss secularism.
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1996 Fundamentalist Bharatiya Janata Party
(BJP) won the election.
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But they did not have a majority and had to form
a coalition government.
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The coalition only lasted a month, and the United
Front took over.
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The United Front was a coalition of small leftist
parties including the Communists.
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1997 BJP came back to power. Atal Bihari
Vajpayee became Prime Minister.
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HINDU NATIONALISM

• BJP Party wins national elections in 1998.
• Favors confrontation with Pakistan
• Develop nuclear weapons program, acccomplish
  little else.

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Tamil Nationalism and Militarism
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Greater Tamil Nadu
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Tamil separatists want their own nation
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Demographics Of Sri Lanka

• 3 Major Groups
• (in descending order)
• Sinhalese (Buddhists, speaks Sinhala)
• Tamils ( Hindus, speaks Tamil)
• - Sri Lankan Tamils (indigenous Tamils)
• - India Tamils (tea/rubber plantation workers
  from India)
• Moors (Muslims)

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Conflicts In Sri Lanka

• Conflicts in the areas of
• Citizenship Rights
• Jobs in the Govt (Sinhala Only policy)
• University Admission Criteria
• Resettlement of Population

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Impact of Conflict In Sri Lanka

• Political Consequence
• A. Armed conflict
• Tamils felt they were 2nd class citizens
• tried to make peaceful demands
• early 1950s Federal Party asked Tamil areas to
  be
• recognised as a federation
• did not ask for separate state
• did not use violence
• so why was there violence used against them?

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Impact of Conflict In Sri Lanka

• till 1976, demands were not met
• a new political party emerged
• - Tamil United Liberation Front
• - asked for a separate INDEPENDENT state
• to be called Tamil Eelam
• why asked for a separate state?
• believed only separation would ensure the rights
  of the
• Tamils

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Impact of Conflict In Sri Lanka

• proposal rejected by the Sinhalese govt
• result anger dissatisfaction!!!
• Tamil youths formed a militant group
• Liberation Tigers of Tamil Eelam (LTTE)
• or popularly known as the Tamil Tigers,
  terrorist group
• - attacked Tamil members of the police force
• - attacked members supporters of the ruling
  party - attacked Tamil politicians who did not
  support the proposed separate state
• - attacked Sinhalese

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Tamil SeparatismThe Tamil Tigers
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They are called the Tamil Nadu Liberation Front.
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Tamil Nadu is the name of a state in India
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The area demanded by the Tamil nationalists
includes most of southern India and northern Sri
Lanka
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Tamil Nationalism Sri Lanka has a majority of
Sinhalese and a minority of Tamils.
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Following independence the Tamils demanded their
own nation called Eelam
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Impact of Conflict In Sri Lanka

• unfortunately, violence also came form the
  Sinhalese
• - eg 19561st anti-Tamil riot (as a response
  to a
• peaceful Tamil protest against the Sinhala
  Only policy)
• hundreds of Tamils lost their lives, millions
  worth of
• property
• many incidents between 1981-1983
• encouraged by Sinhalese security forces (army)
• consequence
• - thousands of Tamils fled to Tamil Nadu
• - Indian govt was forced to intervene

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Impact of Conflict In Sri Lanka

• B. Foreign Intervention
• conflict attracted big neighbour India
• Foreign Minister sent to Sri Lanka to mediate
  failed
• 3 June 1987 Indian tried to help the Sri Lankan
  Tamils
• - 20 Indian ships of food and petroleum
  products for the
• Tamils
• - turned back by the Sri Lankan navy
• - 4 June 1987 Indian Air Force dropped the
  food and
• medical supplies instead and violated the
  Sri Lankan
• airspace

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Impact of Conflict In Sri Lanka

• B. Foreign Intervention
• July 1987 Sri Lankan signed a peace accord with
  India
• - a ceasefire between the Tigers and the Sri
  Lankan
• forces
• - Tigers to surrender their arms to Indian
  peacekeeping
• troops
• - merging of the Tamil dominated Nn and the
  En
• provinces
• Oct 1987 Tigers did not surrender their weapons
  fully
• - Indian troops took control of the
  Tiger-controlled
• Jaffna by force

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Impact of Conflict In Sri Lanka

• B. Foreign Intervention
• Oct 1987 to Dec 1988 clashes in the N and E of
  Sri
• Lanka bet the Tigers and the Indian
  peacekeeping forces
• the latter withdrew in March 1990
• the Tigers moved in to take control of the NE
• tensions continued up to nowonce in a while,
• clashes bet the Sinhalese and the Tigers would
  appear in
• the news
• no settlement in sight due to LTTEs demand for
  a
• separate state

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Fighting continued from 1976 to present.
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Factors (Consequences)

• Political
• Armed Conflict
• Foreign Intervention
• Economic
• Unemployment
• Loss of Investments from other Countries
• Fall in the Number of Tourists
• Social
• Sri Lankan Tamils Driven Out of their Homeland

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Political Armed Conflict

• One consequence of the Sinhalese-Tamil conflict
  has been an armed conflict between the LTTE
  (Tamil Tigers) and Sinhalese government forces.
• When the Tamils peaceful demands were rejected,
  a group of youths formed the LTTE (Tamil Tigers)
  who believed that violence was the only way to
  demand and obtain rights for the Tamils.
• Riots which occurred in the 1980s between the
  Tamils and the Sinhalese sparked off a long armed
  conflict between the Sinhalese government forces
  and the LTTE (Tamil Tigers).

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Political Armed Conflict

• This has led to a bitter 20 year war between the
  Sinhalese government and the LTTE and has cost
  more than 60,000 lives and has resulted in other
  economic and social consequences which have
  affected Sri Lanka.

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Results of the Armed Conflict
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Tamil villagers identify the bodies of their
loved ones killed during clashes between
government forces and Tamil Tigers
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1983 Riots in Sri Lanka
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Aftermath of the 1983 Riots in Sri Lanka
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Economic - Unemployment

• The Sri Lankan riots of 1983 lead to massive
  unemployment.
• Both Tamils and Sinhalese lost their jobs.
• Many of the jobless Sinhalese also took part in
  vandalizing, looting and burning their places of
  work.
• With unemployment and the subsequent destruction
  of places of work would result in suffering and
  economic hardship for Sri Lanka and its citizens.

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Impact of Conflict In Sri Lanka

• Economic consequence
• Unemployment
• breadwinners killed during armed struggles
• factories and plantations closed/destroyed
• looting, vandalising, burning places of work by
  the
• Sinhalese
• thousands of workers, self-employed persons lost
  their
• jobs (Tamils and Sinhalese alike)

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Wrecked businesses following the 1983 Riots in
Sri Lanka (also known as Black July)
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Economic Loss of Investment

• The Sri Lankan conflict has scared off potential
  investors to Sri Lanka who are afraid that the
  instability in the country would cause them to
  lose their investments.
• With a loss of investment, Sri Lanka cannot grow
  its economy, re-build damaged infrastructure or
  create jobs

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Impact of Conflict In Sri Lanka

• Loss of foreign investments
• foreign investment needed
• but political instability is an unattractive
  factor
• foreign investors may not have the confidence to
  invest
• in a politically unstable country
• US66m (82) to US39m (83) to US22m (86)

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Economic Fall in the Number of Tourists

• The Sri Lankan conflict has scared off many
  tourists who do not dare to travel to Sri Lanka.
• As tourism is one of Sri Lankas major income
  earners, there has been a fall in tourism
  earnings and a loss of tourism-related jobs.
• With a loss of foreign investment and a drop in
  tourist earnings, Sri Lanka cannot get the funds
  needed to re-build infrastructure or to develop
  attractive amenities and facilities causing the
  country to be in a state of continuous financial
  hardship.

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Impact of Conflict In Sri Lanka

• Decline in tourism
• tourism was a major income earner
• seriously affected by the violent internal
  conflict
• tourist arrivals decreased, loss of jobs, fall
  in earnings
• less funds to develop attractions, amenities and
  facilities
• (hotels, transport, housing etc)

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Tourist Attractions in Sri Lanka
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Impact of Conflict In Sri Lanka

• Social consequence
• Refugees
• 65k Tamils fled to India after 1983 riots
• creation of High Security Zones to keep LTTE
  away
• army move into Tamil areas
• refugee camps ? overcrowded

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Social Sri Lankan Tamils Driven Out of Homeland

• Following the 1983 riots, thousands of Tamils
  fled to India
• In the early 1990s, the Sri Lankan Army set up
  High Security Zones (HSZ) where access is
  controlled and occupied large parts of
  Tamil-dominated areas to deal with the Tamil
  Tigers.
• Due to this conflict, many Tamils have fled from
  their homes and live in overcrowded refugee camps.

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Social Sri Lankan Tamils Driven Out of Homeland

• Most Tamils have lost their homes as a result of
  the conflict and have to suffer in overcrowded,
  unhygienic conditions in refugee camps.
• Many families have also been broken up or
  separated during the fighting and many Tamils
  have suffered during the 20 years or so of
  endless conflict, robbing them of a bright future
  in their country.

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Tamils fleeing from their homes in Jaffna, the
northern part of Sri Lanka
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Tamils fleeing Sri Lanka by ship following the
1983 Riots
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February 2003 Truce signed by both sides.
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Peace In Our Times

• no sight of peace
• violence is a daily happening even after the
  2004
• Tsunami
• political assassinations (political leaders to
  law makers)
• common

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Political Cartoon on Sri Lanka Conflicts
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Is the dream gone for South Asia?