Indian Economics thread.

[caudaceus]

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Privatization of utilities. We'll see how that works.

I have seen an article that claiming that the privatization of SOE will help India achieve a 5 Trillion $ economy.
It is quite perplexing that such articles can exist without much controversy. From where I come from, privatization is never popular and anyone proposed that will be branded as sellout/traitors.

P.S. Is it possible to partially privatize the SOE? Write some regulations that make it mandatory that the gov will retain at minimum 51% ownership of any privatized SOE.

 

[localizer]

I have seen an article that claiming that the privatization of SOE will help India achieve a 5 Trillion $ economy.
It is quite perplexing that such articles can exist without much controversy. From where I come from, privatization is never popular and anyone proposed that will be branded as sellout/traitors.

P.S. Is it possible to partially privatize the SOE? Write some regulations that make it mandatory that the gov will retain at minimum 51% ownership of any privatized SOE.

idk I've always questioned just how much more GDP can be eeked out of privatization of infrastructure

i often like to model the Chinese state as a corporation itself owning all the land. It just doesn't have competition since it's a monopoly.



In the US and india it's different. Most of the infrastructure is publicly owned, but land is privatized.

But US infrastructure was completed long before with government powers.

Unless India gives the companies power to seize land, I don't see them being able to expand their infrastructure.

 

[ansy1968]

The main issue I see is how are they going to expand utilities infrastructure?

It's hard enough when government in charge.


Even in the US private utility companies are not really independent in the sense that their pricing is controlled by the government and are guaranteed by contract a monopoly in the area. The alternative would be to run cables and pipes for each company?

@localizer

Why not gov't handle the distribution of electricity and let the multiple private power generating company sells their electricity to a single gov't transmission grid? Then used gov't savings from constructing and operation power plants as subsidies to encourage more private investment. In this way they can expand public utilities faster, then they can increase the prices little by little as not to shock the masses as they reduce the subsidies gradually?

 

[localizer]

@localizer

Why not gov't handle the distribution of electricity and let the multiple private power generating company sells their electricity to a single gov't transmission grid? Then used gov't savings from constructing and operation power plants as subsidies to encourage more private investment. In this way they can expand public utilities faster, then they can increase the prices little by little as not to shock the masses as they reduce the subsidies gradually?

But who is responsible for maintaining/expanding/upgrading the grid?


US is kind of doing that but it's still considered too much state involvement by the privatization people.


The mixed private-public ownership thing is a great arrangement for the private side because they often push all the costs to the tax payer.



Every time government buys something from the private sector it gets ripped off.

 

[ansy1968]

idk I've always questioned just how much more GDP can be eeked out of privatization of infrastructure

i often like to model the Chinese state as a corporation itself owning all the land. It just doesn't have competition since it's a monopoly.



In the US and india it's different. Most of the infrastructure is publicly owned, but land is privatized.

But US infrastructure was completed long before with government powers.

Unless India gives the companies power to seize land, I don't see them being able to expand their infrastructure.

@localizer

In our case, the public utilities were gov't owned then it was privatize , what happen is that a portion of the land had been commercialized like building condos and mall instead of expanding the needed infrastructure. You can't depend on Privatization especially on the distribution side cause the private sector main focus is PROFIT. A hard lesson for us here in the Philippines as we grapple with bad service and high cost.

 

[localizer]

@localizer

In our case, the public utilities were gov't owned then it was privatize , what happen is that a portion of the land had been commercialized like building condos and mall instead of expanding the needed infrastructure. You can't depend on Privatization especially on the distribution side cause the private sector main focus is PROFIT. A hard lesson for us here in the Philippines as we grapple with bad service and high cost.

Privatization of infrastructure also tend to ignore environmental and safety impacts like if a gas pipe blows up a residential block. Who will fix the destruction and pay for injuries? Who ensures this doesn't happen again?

 

[ansy1968]

But who is responsible for maintaining/expanding/upgrading the grid?

For me The most critical is the power transmission grid, it should remain in gov't hands and is the most expensive part (maintenance) of the power grid, let the private sector invest in power plant.

US is kind of doing that but it's still considered too much state involvement by the privatization people.

In our case private sector control the gov't regulatory function since most them are their former employee and will be rehired after their time in gov't in other word it had been REGULATORY CAPTURED.

The mixed private-public ownership thing is a great arrangement for the private side because they often push all the costs to the tax payer.

Yup and I know the routine, first multiple brownout then they will devised a scheme to prevent future power interruption to justified and condition the mind of the public for the cost increase, in a few years time it will repeat and the cycle continue.

 

[OppositeDay]

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So India is having a huge fiscal deficit while skipping out on education. Indian government is focusing on shorter term investments while betting on a quick influx of foreign investments to outgrow its debt, then it may restart long-term investments like education. It’s a reckless strategy. China needs to redirect Chinese investments from India to Southeast Asia and hope clustering effect is going to make Southeast Asia more attractive to non-Chinese investments. And keep up pressure on India to increase the geopolitical risks of investing there. India will be crushed by its own debt within a decade.

 

[ansy1968]

@OppositeDay

With a spendthrift new budget, Narendra Modi is undermining his greatest strength as an economic manager.

Written by an Indian, that statement alone is false, he has no managerial skill, here are some of his blunders,

1)D

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2)GST

3) jobless growth

4)handling of the Pandemic

5)agriculture

His promises is all fart, all talk no action.

 

[siegecrossbow]

Life comes at you fast.

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