Besides GST reform—which will have a positive impact on India’s fiscal position and reduce the friction costs of state tariffs—the two big new laws I would like to see are the Land Acquisition Bill, passed and fully and fairly implemented, and a new Labour Law.
The Land Bill will allow factories and infrastructure projects to go ahead faster. At the moment, there is a complex process that most parties in such a land transaction are not happy with.
Besides the Land Bill, the other big impediments to growth and expansion are the very restrictive labour laws; it is very hard to fire people and labour regulations are both complex and inflexible. This is a harder thing to change, as there are many interests active in keeping the status quo.
If we see these two laws implemented, we can be more certain about a positive future for India. India has the largest and youngest labor force in the world and a cheap one, especially compared to China, and which also speaks ‘OK English’. Which company in the world would then not want to have some of its operations there?
But if India cannot achieve these two [goals], I think it will have to wait longer for the future that has been promised to them so many times by their politicians. But the future belongs to those with a young and energetic population: India has that more than anywhere else. Few other countries do.
Thursday, July 2, 2015
Tuesday, June 30, 2015
Basically, we are six years into an economic recovery… there are huge distortions in the markets, where basically financial assets have been going up very substantially, and real wages for the typical household, or real household income, has been either flat or down. So it’s created huge market distortions, and I think eventually this will be resolved by a massive deflation in asset prices.
Wednesday, June 24, 2015
Wages in real terms are basically down. The cost of living has gone up substantially — partially also because of this brilliant idea of Obamacare. So all I’m saying is the household is suffering at the present time. That’s why retail sales are not picking up. And while the employment numbers look better, I say that jobs have been replaced by low-paying jobs. In the 70's we had high consumer price inflation, now we have extremely high asset price inflation.