In response to the concerns I brought up in my last post:

• Low paid Jobs: The truth of the matter is that we are witnessing a great number of high-value highly paid outsourcing jobs being outsourced to India. In fact I think that the low-value customer facing jobs will actually dry up or stagnate. Call centre jobs are customer facing jobs that notoriously culture specific. No amount of changing "maninder" to "mandy" or jaswinder to "jesse" will make the customer relationship trouble-free. It is much easier to give one highly paid job that doesn't need a yank accent to one highly paid professional than to give low paid jobs to ten professionals who do need to have the accent. The retraining costs are higher and because the number of people being hired is larger, concerns about employee retention and customer retention become more important.

• The great unwashed: Purchase power parity means that one dollar worth of rupees buys more in India than one dollar does in the US. Thus assessing the salaries and poverty levels in India need to be done taking PPP into account. Secondly, 6 % of India is more than the population of France. The percentage of well-trained people in India doesn't have to be high to start competing with most western countries for investments. In fact high-growth industries in India will offer even higher returns for the dollar on account of PPP. About financial markets, don't kid yourself, the BSE and the NSE are relatively well-run. Let's not bring up the Vancouver stock exchange in comparison. Enron anyone?
  
• An externally dependant economy: There are others who see India as essentially dependant on consumer demand in the west and is therefore vulnerable to economic downturns in the west. India's economy has never been driven by international trade. Even now about that international trade accounts for only up to 15% of Indian GDP (but this figure is rising). Most of the red hot growth is being driven by a combination of different factors: improved exports, improved management skills brought in by the Indian diaspora in the West, increased investment often influenced by Indians abroad, internal deregulation, and mass consumerism. Thus although India's growth is dependant on the west for growth, there will have to a multiple coincidence of events such as reduced exports to the west, reduced investments from the west, increased commercial regulation in the country and reduced consumer demand- hard to see why all that could happen (short of there being all out war with a country).
• Byzantine regulations: Internal regulation is reducing as the government grows more confident of future prosperity, Indian corporate ability to handle competition and a better understanding of the downsides of an overly regulated economy.
• The Business Cycle: Still others concede there is real growth but attribute it to the business cycle and castigate the government for not undertaking massive structural reform. Structural reform affects large groups of people and needs to proceeded with carefully. This is very difficult to do in any country and less so in India where voters rightfully feel democratically empowered. The government has been taking small steps (lots of little change is often enduring change) and that is important. Every level of government needs time to catch up especially in a country where population increase complicates problems further. It is important not to set expectations too high or and to give the "losers" in any massive structural change a chance to adapt. It is important to be fair to everyone. That said, things are a lot different in India than they used to be. People who bleat about how little has changed probably feel mean their bank accounts not their country.
• Catching up with China: - is not important. Set your own house in order. forget about the Joneses. In any case, India uses capital in a far more efficient manner than China. It's capital markets are older and more sophisticated. Also India's economy has not been as trade-dependant as China's. Thus although India could use more money and will probably never catch up with China, it doesn't need as much money to kickstart internal propserity and can probably afford to improve to a greater degree through internal people. India is close to have the largest number of young people in the world. The value of human resources in terms of value-addition grows and grows. India's population will remain young long after China starts greying. There is plenty to be achieved in Indian internal deregulation. If Indians are to be the ones to benefit primarily from that then so be it.