Back from his summer holiday’s, Dez brings us a report on the economy of India. How did the Indian economy evolve from being an almost bankrupt nation 20 years ago to being the emerging economy it is today? What challenges lay ahead? Join Skip and Dez for part 1 of a 3 part special on India.
Skip: Hello everyone, this is Skip Montreux reporting from Tokyo Japan.
Dez: And I’m Dez Morgan back from my travels, a little poorer and a little wiser. And you’re listing to Down to Business English
Skip: Yes, I have always thought you were a little wise.
Dez: Yeah, very funny.
Skip: Welcome back Dez. It is so good to have you back. I’m sure after three episodes of me yapping away all by myself, our listeners are happy as well.
Dez: Thank you Skip and it’s good to be back.
Skip: Just before we get started on today’s topic I want to report on something that is not very wise.
Dez: And what’s that?
Skip: That is the U.S. debt being downgraded by Standard & Poor’s from AAA to AA+
Dez: Yeah, I read about that, first time ever I believe.
Skip: It certainly is. I just wanted to add that into the show as a follow up on the last episode of D2B on the U.S. debt situation. At that time the U.S. government had reached an agreement on raising the debt ceiling, and everyone was under the impression that it would be enough to avert a credit downgrade.
Dez: And I guess not.
Skip: No. But anyway Dez tell our listeners what are you wiser about after your holiday.
Dez: I must say that I am wiser about India. The last time I visited India was about 10 years ago, so I thought a good business topic for today’s show would be how exactly India has changed in that time.
Skip: So it has changed a lot would you say?
Dez: Very much so. I remember the first time I visited India. At that time you would see cows in the middle of the road when you drove from Delhi airport into the city. And now there’s a metro train link.
Skip: Cows in the middle of the road? Yes, that is precisely my image of India.
Dez: As you know, in the Hindu religion the cow is sacred so it can do as it pleases but at least now it does so outside the city limits.
Skip: Well a train link does sound like progress. Any other big changes?
Dez: The Metro system really was a huge project and is probably the most visible example of progress in the capital. Along with that there’s a far wider range of goods available on offer in stores and finally there’s that sort of intangible quality that people just seem to have more money and are better off.
Skip: A lot of progress then and way too much information for us to bring you in a single episode.
Dez: Because this is such a huge topic, we’ll be looking at India in a three part D2B special
Skip: We will begin today with Part 1. A look at some important milestones in India’s development and how these are reflected in the India of today.
Dez: So let’s do it. Let’s get D2B, Down to Business with India. How did it get here and where’s it going?
Skip: The first question on the table is what major economic events occurred in the past to bring the Indian economy to where it is today.
Dez: The milestone event was July 24th 1991 when Monmohan Singh, the then Finance Minister revolutionized the economy forever.
Skip: Isn’t he the current Prime Minister of India?
Dez; He is indeed, yes. But going back to 1991, India was virtually bankrupt with barely enough foreign exchange to last two weeks.
Skip: Like when it’s two weeks till payday and I have just enough money to squeak by.
Dez: Exactly, but in India’s case there was no payday. In desperation India air freighted 47 tonnes of gold to the Bank of England, just to keep going till the International Monetary Fund agreed upon more permanent help.
Skip: You mean it really was that desperate?
Dez. Absolutely, however Singh saw opportunity in the chaos. Prior to 1991 India had one of the most regulated markets on earth. Almost everything was controlled by the still infamous Indian red tape. The result being that it was very difficult for businesses to grow and evolve and perhaps more importantly, entrepreneurs found it virtually impossible to start new businesses.
Skip: I guess with all of that red tape it was really difficult for anything to change.
Dez: Yeah, and that was precisely the problem but as the situation was so desperate the government was finally willing to listen to change and that is precisely what Singh brought them. He devalued the currency, abolished many of the quotas and licenses that businesses needed, and opened up some industries to foreign investment.
Skip: So that was the key point moment–1991?
Dez: It really was. The Indian economy has quadrupled in size and has grown 7% on average a year since then.
Skip: And now everything is running fine and India will continue to grow at a similar pace into the future?
Dez: Well that brings us to our second question. Where is India going in the future? The reforms of 1991 freed the market to produce what was needed and provided much needed capital by opening up to foreign investment.
Skip: In other words the markets prior to 1991 were so inefficient that making any progress was easily achieved.
Dez: That is certainly true but the problem is that these reforms only opened up the supply side but did little for the input side. For an industry to supply goods it requires inputs from labour, infrastructure, and power; and a lot more needs to be done in these areas for India to continue to grow.
Skip: Are you saying that the Indian economy is still in trouble?
Dez: No, it’s far more diversified and resilient than 20 years ago but it has shown signs of slowing down over the last few years.
Skip: And as you said earlier it took a crisis for major changes to be enacted.
Dez: It did and although there is no crisis now there could be in the future if reform is not on the current agenda.
Skip: Is there any reason why it wouldn’t be?
Dez: Unfortunately there’s been a string of scandals involving members of the ruling party which has forced the Singh government to control the damage rather than focus on the more important tasks ahead.
Skip: That happens too frequently in governments all around the world.
Dez: It does but the question that many Indians have been asking is whether Prime Minister Singh has the political will to push through another round of reforms which would power India into the future.
Skip: Well let’s hope for the Indian and the World Economies that he does.
Dez: Let’s hope so and as you will hear in Part 2, India is surging ahead in at least one of those areas, but to be sure that you listen in I’m not going to mention which one.
Skip: Hmmm…..Labor, Infrastructure or Power, I wonder which one. However now it is time for us to get D2V…Down to Vocabulary.
Skip: First up today, I have the adjective intangible which means something that is present, but difficult to see or quantify. As listeners can imagine, this is the opposite of tangible which means a quality that can be clearly seen or appreciated. In the story Dez said he had noticed that the people of India seemed to have more money, but he couldn’t really prove it as the reasons were intangible.
Dez: In business the value of a brand can often be seen as intangible as it’s really difficult to say exactly how much brand names such as Google or Levi’s are actually worth.
Skip: That certainly is true.
Dez: Next, I have the countable noun milestone, which initially meant the stones by the side of main roads that marked the distance between two places. Nowadays a milestone is generally an important point in the development of a trend, a market or technology.
Skip: We can’t say kilometerstone can we?
Dez: I’m sorry but I don’t think so. In the story Skip discusses the upcoming schedule for D2B and said that I would be talking about the milestones in the development of India. In other words the important moments in the development of the country.
Skip: The first computer to use a mouse was a milestone in the development of personal computing.
Dez: It was a Mac wasn’t it?
Skip: Commercially? Yes, it was. Anyway, moving on, next I have an uncountable two part noun; red tape. Which means unnecessary government regulation and paperwork. In the story Dez talks about the infamous Indian Government over-regulation or red tape prior to 1991.
Dez: I have a friend who is an architect and building permissions and regulations are considered by most architects to be red tape as they are unnecessarily complicated and restrictive.
Skip: I can imagine that to be the case.
Dez: Yes indeed. Next I have the countable noun quota, which means that the number of a certain product that can be built or imported, is limited. In the story I talk about how the quotas that applied in many industries in India were abolished so giving businesses more freedom.
Skip: I have heard that in the EU, imports of cars are controlled by quotas to protect domestic car makers.
Dez: I think that is true, yes.
Skip: Now let’s look at the adjective resilient. To be resilient means to be strong and able to withstand difficulties. In the story Dez told us that the Indian economy is much more resilient today than 20 years ago so a crisis would be very unlikely.
Dez: Resilient was the exact word that The Economist magazine used to describe the Indian economy.
Skip: Can you give us another example of resilience?
Dez: Interestingly, the resilience of Rupert Murdoch and his company News Corp. is being tested at the moment and we shall just have to see the results.
Skip: His resilience seemed beyond question just a few short months ago but as you say we shall have to see.
Dez: Moving on I have the verb to enact which means the action of actually putting a policy or law into place. In the story Skip noted that it took a crisis for the necessary policy changes to actually come into place or be enacted.
Skip: As we mentioned in an earlier story, everyone knows that the budget deficit in the U.S. must be reduced but exactly how this will be enacted is a hot debate between the two major parties.
Dez: And it will continue to be so for some time I think.
Skip: To finish off vocabulary today, I have a two part verb to push through which means when a policy is forced into law by the ruling party even though it faced strong opposition. Sometimes they are pushed through perhaps without adequately considering the opposition’s view.
Dez: Well that doesn’t sound very democratic.
Skip: Probably not, but it is necessary sometimes I suppose. In the story Dez questions whether Prime Minister Singh has the political will to get past the opposition or is able to push through the changes that need to be made.
Dez: A further example would be when governments try and push through policies just before a holiday or late in a long session when they think the opposition may not be paying full attention.
Skip: Good example. Well that brings us to the end of vocabulary for today.
Skip: Tthat is another episode of Down to Business English. Dez, once again, great to have you back!
Dez: Thanks Skip, it’s good to be back. Just before we go everyone, don’t forget to visit the Down to Business English website where the audio script for today’s episode is available as a FREE download.
Skip: Our website address is www.downtobusinessenglish.com . And while you are there, you might be interested in signing up for the Down to Business English newsletter. In the newsletter, you will get updates to some of the stories we cover here on the show, as well interesting links to related videos, and perhaps a business English study tip.
Dez: And if you’d like to recommend a topic for us to cover in a future show, please let us know. If you are on Facebook, drop by our Down to Business English Facebook page, click the Like button and leave your suggestion on the Page wall for everyone to see.
Dez: And you can find me at twitter.com/dezmorgan . Thanks for listening everyone and we will talk to you all again soon.
Skip: Yes thanks everyone! See you next time.