We lag behind considerably behind China in all economic and social indicators . For example our Nominal per capita income is under $2,000. But China’s is touching just under $ 10,000. We have an advantage of in $ to Local currency ratio. Still we are under $ 7,000 whereas China is $ 22,000. That would mean an average Chinese is three times richer than Average Indian.The percentage of extremely poor Chinese ( those whose per capita income is less than $ 2 per day is under 10%. Whereas Indians (who earn less than $ 2 per day is 30 %. That means over400 million Indians are at extreme poverty level. This poverty level provides less than 1, 700 K. Cal energy but not a balanced Diet. The children born to such parents are mal nourished underweight and do not have proper mental ability and they will be handicapped life long.Hunger and Poverty are the two curses that shall not visit on any body. As we know humans need Proteins build the body and play a major part of Indian dietary deficit. Proteins are obtained from milk, eggs, Dhall (legumes), meat, fish. All these are expensive. Hence we have worlds largest (50%) undernourished children.If you set aside religious issues, rejecting even cow’s meat is harmful. It has an effect of overgrazing the Indian land and degrading grass land. Please remember Without Grass there would be no human civilisation. Please note Ricr, Wheat, Corn, Jowar, Ragi are are grass. I am not advocating any body to eat cow’s meat. But any interference in nature will have disastrous consequences.If you follow the current interventionist policy, Leather Industry will collapse. India loses its competitive edge. Cows themselves will suffer. As once Cattle stops giving milk or bulls become too old to work, they become a burden to the farmer. Then farmer will starve them and they will die in larger number in emancipated condition.However they have made enoromous effort to develop diary industry and broaden their economy.China depends on Pigs and pork as they have very little grazing land. They are well fed as they were not directly colonised as India was and thus they were better fed.In 1947 we were 400 million and hardly producing 40 million tons of food grains. Today we are 1400 million producing close 165 million million tons of major grains and further minor food grains like grains like sweet Corn, maize, Raghi etc..Still our per capita availability of food grain has fallen and availability of legumes, fish, meat has fallen drastically. Only good point we have kept up with populatin increase. Milk availability has increased.China has no such problems. Our democracy, corruption, bureaucracy, poor distribution channels exacerbate the problems.. They have not had such problems as it is ruled by communist regimes. Again I Am not backing totalitarian system as their Great Leap Forward (Cultural revolution ) killed 38 million people.China produces all kinds of Industrial Goods and their GDP is today is larger than USA in PPP, where as we are only a fourth of that. We produce very little manufactured goods compared to China. Comparatively China produces for the world, we almost just manage to produce for our population with a shortfall.We have a trade deficit, whereas China has a trade surplus.Their army is nearly 2 1/2 times larger and spend nearly 4–5 times compared to us. They are challenging US in far flung theatres though cautiously. They are on the way developing a two ocean capability. May be only to safeguard trade routes. We have only started an attempt to safeguard our backyard of Indian Ocean.We have better Air Force and Navy but entirely dependent upon foreign supplies, but they have built indigenous defence Industry. We lag behind them in capacity. It will suck our resources badly.They have serious threats all around them and they have no genuine friends. Japan, ASEAN, US, Russia India and Europe are all weary of them their friends are Pakistan and North Korea. They can purchase friends with money and aid. We have only weary neighbours. But only Pakistan as serious enemy. Even China is only a weary neighbour.They have lots insurgency in their periphery like Xinjiang, Tibet, Inner Mongolia, party troubles etc. We are also in a similar situation including Kashmir.
Brilliant and nuanced analysis. And quite on point on how the market segmentation and opportunity really sits right at the top end of the spectrum for emerging CPG brands in aspirational categories in India in the next 2 decades.
I agree that per-capita GDP is a poor gauge of India's economy. The narratives we draw from the data are also only as good as the data itself. High incidence under-reporting or even mis-reporting of financial data in India casts severe doubt on the national GDP - which even if correct, is a measure of economic output rather than household affordability.
It would be nice to see the first chart (income vs population size) get Y-axis labeling for incomes - it is hard to justify nine categories when the incomes for the last 4 seem nearly identical. Are "urban mass" and "urban blue collar" really different?
This post truly does a fantastic job of putting to words the reality of the intersection of everyday peoples' lives in the country & the underlying factors that will eventually drive the future of the country's FMCG ; thank you Manish
Super post! Would you pls share the link / copy of CLSA report you've referenced?
+1. Please do share if you get an access to the report
+1 , please share and other sources you have used to
We lag behind considerably behind China in all economic and social indicators . For example our Nominal per capita income is under $2,000. But China’s is touching just under $ 10,000. We have an advantage of in $ to Local currency ratio. Still we are under $ 7,000 whereas China is $ 22,000. That would mean an average Chinese is three times richer than Average Indian.The percentage of extremely poor Chinese ( those whose per capita income is less than $ 2 per day is under 10%. Whereas Indians (who earn less than $ 2 per day is 30 %. That means over400 million Indians are at extreme poverty level. This poverty level provides less than 1, 700 K. Cal energy but not a balanced Diet. The children born to such parents are mal nourished underweight and do not have proper mental ability and they will be handicapped life long.Hunger and Poverty are the two curses that shall not visit on any body. As we know humans need Proteins build the body and play a major part of Indian dietary deficit. Proteins are obtained from milk, eggs, Dhall (legumes), meat, fish. All these are expensive. Hence we have worlds largest (50%) undernourished children.If you set aside religious issues, rejecting even cow’s meat is harmful. It has an effect of overgrazing the Indian land and degrading grass land. Please remember Without Grass there would be no human civilisation. Please note Ricr, Wheat, Corn, Jowar, Ragi are are grass. I am not advocating any body to eat cow’s meat. But any interference in nature will have disastrous consequences.If you follow the current interventionist policy, Leather Industry will collapse. India loses its competitive edge. Cows themselves will suffer. As once Cattle stops giving milk or bulls become too old to work, they become a burden to the farmer. Then farmer will starve them and they will die in larger number in emancipated condition.However they have made enoromous effort to develop diary industry and broaden their economy.China depends on Pigs and pork as they have very little grazing land. They are well fed as they were not directly colonised as India was and thus they were better fed.In 1947 we were 400 million and hardly producing 40 million tons of food grains. Today we are 1400 million producing close 165 million million tons of major grains and further minor food grains like grains like sweet Corn, maize, Raghi etc..Still our per capita availability of food grain has fallen and availability of legumes, fish, meat has fallen drastically. Only good point we have kept up with populatin increase. Milk availability has increased.China has no such problems. Our democracy, corruption, bureaucracy, poor distribution channels exacerbate the problems.. They have not had such problems as it is ruled by communist regimes. Again I Am not backing totalitarian system as their Great Leap Forward (Cultural revolution ) killed 38 million people.China produces all kinds of Industrial Goods and their GDP is today is larger than USA in PPP, where as we are only a fourth of that. We produce very little manufactured goods compared to China. Comparatively China produces for the world, we almost just manage to produce for our population with a shortfall.We have a trade deficit, whereas China has a trade surplus.Their army is nearly 2 1/2 times larger and spend nearly 4–5 times compared to us. They are challenging US in far flung theatres though cautiously. They are on the way developing a two ocean capability. May be only to safeguard trade routes. We have only started an attempt to safeguard our backyard of Indian Ocean.We have better Air Force and Navy but entirely dependent upon foreign supplies, but they have built indigenous defence Industry. We lag behind them in capacity. It will suck our resources badly.They have serious threats all around them and they have no genuine friends. Japan, ASEAN, US, Russia India and Europe are all weary of them their friends are Pakistan and North Korea. They can purchase friends with money and aid. We have only weary neighbours. But only Pakistan as serious enemy. Even China is only a weary neighbour.They have lots insurgency in their periphery like Xinjiang, Tibet, Inner Mongolia, party troubles etc. We are also in a similar situation including Kashmir.
Brilliant and nuanced analysis. And quite on point on how the market segmentation and opportunity really sits right at the top end of the spectrum for emerging CPG brands in aspirational categories in India in the next 2 decades.
Great read, can’t recommend it enough!!
I agree that per-capita GDP is a poor gauge of India's economy. The narratives we draw from the data are also only as good as the data itself. High incidence under-reporting or even mis-reporting of financial data in India casts severe doubt on the national GDP - which even if correct, is a measure of economic output rather than household affordability.
It would be nice to see the first chart (income vs population size) get Y-axis labeling for incomes - it is hard to justify nine categories when the incomes for the last 4 seem nearly identical. Are "urban mass" and "urban blue collar" really different?
Does India really have 0.3 (3 lakh) million households that earn an 3.4 Million USD (~30 crores) Per Year?
This post truly does a fantastic job of putting to words the reality of the intersection of everyday peoples' lives in the country & the underlying factors that will eventually drive the future of the country's FMCG ; thank you Manish
Too brutal
Great post - so useful to understand the reality of India - thanks for sharing
Brilliant post.