A Quick Glimpse into India's Economy

This interested me.

WSJ:

Under new regulations, retail giants such as Walmart, Carrefour and Tesco, long barred from selling directly to Indian consumers, will now be permitted to own a majority 51% stake in joint operations with a local partner. So-called single brand retailers, the likes of Apple and Ikea, can own 100% of their stores, up from 51% previously. Both kinds of stores will have to source nearly a third of their goods from small and medium sized Indian suppliers as well as confine their operations to 53-odd cities with a population over one million.

What is the reaction like to this move by some political leaders?

A sampling of opposition to the retail opening captures this neatly. In Uttar Pradesh, Uma Bharti, a senior leader of the opposition Bharatiya Janata Party (BJP), threatened to "set fire to the first Walmart store whenever it opens." Her colleague Sushma Swaraj has been busy tweeting up a storm of misinformation about how Walmart allegedly ruined the US economy. Not to be outdone, party stalwart L.K. Advani has temporarily abandoned a quixotic quest to repatriate wealth held by Indians abroad to focus instead on the more pressing task of saving Indian sovereignty from the dangers of cheap cauliflower and cut-price T-shirts.

I hadn't realized that India was still so backwards.  I had heard some things (and naturally all but forgotten about them a few minutes after I had heard them), but this level of regulation had surprised me.



In that, he says the Indian growth rate basically doubled during the 90's after (some) liberalization. 

Yet here's what he says in yet another article:

India stands a pathetic 133rd out of 183 countries in ease of doing business, according to the World Bank's Doing Business 2010. It comes 169th in ease of starting a business, 175th in giving construction permits and 182nd in enforcement of contracts. Legal delays are horrendous: It took 25 years to complete the supposedly top-priority case against Union Carbide officials for the Bhopal gas disaster of 1984.

Transparency International ranks India a lowly 84th in its Corruption Perception Index. The quality of public services, especially education and health, is terrible: India ranks 134th in the UNDP Human Development Index.

Privatization remains a dirty word. The government refuses to reform labor laws that make it impossible to sack workers, discouraging Indian companies from challenging China and Vietnam in labor-intensive sectors. As a result, Bangladesh has overtaken India in garment exports. Financial-sector reforms remain on ice. Price controls on petroleum products have been partially eased, reducing huge consumer subsidies, but if global prices shoot up, price controls will almost certainly return.

Despite such shortcomings, India averaged 8.5% growth in the five prerecession years, and achieved 6.7% even in 2008-09, the worst recession year. It improved to 7.4% in 2009-10, and may exceed 8 % this year. Optimists may seem justified in arguing that India will do better in coming years.

Still, I didn't realize it was as regulated as it is.  53 cities?  51%?  This stuff is insane.

The real tragic thing is that the Indian city of Gurgoan is showing how little government is actually needed.  It's the fastest growing city in India and has virtually no government.  This article is a must-read.