Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday, 4 April 2025

India Competitive Index : Long Way to Go

 

 

Dear Shri Piyush Goyalji :


On 03 April 2025 , POTUS Donald Trump unleashed a “ Trade / Tariff War “ – a much stronger redux of the similar battle he had launched , exactly 7 years ago

That made me send to our Cabinet Ministers , following email :

Ø  A  # TradeWar  Epidemic  ?............... 22 March 2018

Extract from my E Mail :

      “ Only way to survive, will be by ensuring that we turn India into a :

# LOW-COST-ECONOMY,

where we can compete with the rest of the world ( for our share of the World trade ), on the basis of a BETTER  QUALITY LOWER  PRICE FASTER  DELIVERY , of our products and services

We must immediately implement #REFORMS which will help our companies lower  their costs of :

#      Manpower         (  Salaries / Wages  )

#      Materials            (  Raw materials / Components / Sub Assys )

#      Money                (  Funds / Finance / Capital )

#      Space                 (  Constructed factories / offices / homes  )

#      Management       (  Manufacturing and Marketing Overheads )

#      Compliance         (  Forms / Reports to be filled / filed  )

#      Corruption           (  Bribes to be paid to Govt Agencies / IT dept  )

#      Non-Governance  (  MPs – MLAs fail their responsibility  )

 

As far as enabling Indian companies to lower their costs is concerned ,  ( -

thereby , effectively making them more competitive in export market ), there is an

urgent need for our governments ( both at the Centre and at the States ) , to :


Ø     Speed up the pace of REFORMS already initiated during past 4 years

Ø     Initiate NEW REFORMS


During the past 4 YEARS , I have sent many suggestions to our Policy Makers

It is not possible to list all of these here, but readers interested to know , may look up a few of these at :

 

Ø   Agenda  for  Reforms  …………………………….. ........ 01  Oct 2015  

 

Ø  Citizen Monologues …………………………   ......... 24  Oct  2017  

          

Ø  HaveA Good Suggestion ? Send it to PM     08  Nov  2016  

         

Ø  An App for Everything ?  …………………………..  18  Aug  2017  

 

          

Ø  Level-PlayingField is a Double Edged Sword !    08  Feb  2017  “

 

Dear Shri Goyalji ,


This time around, I would like to encapsulate my previous suggestions { for

improvement of India’s Competitiveness } into a FORMULA  which would tell us

sharply, where do we stand vis-à-vis other countries, when it comes to figure out (

QUANTITATIVELY ), our INDIA COMPETITIVE INDEX { ICI }


I arrived at this INDEX by taking into account the following factors :


Extracting Factors from my earlier Blog

My blog lists detailed “Industrial Inputs” that shape a country’s competitive landscape. I’ll interpret these as factors for the ICI, aligning them with the tariff-driven push for cost reduction and productivity:

1.     Manpower:

o    Sub-factors: Average age, education level, skills, work ethics, productivity, working hours, holidays, salaries.

o    India Context: Young population (demographic advantage), literacy 74% (2024), labor productivity $7/hour (manufacturing), 48-hour workweek, 10+ holidays/year, wages ~$1/hour (PPP).

 

2.     Raw Materials/Components Availability:

o    Sub-factors: Local vs. imported, supply chain, logistics, duties/taxes, quality.

o    India Context: 60% raw materials imported (e.g., steel, electronics), logistics cost 13% of GDP (vs. 8% in China), 17.6% average tariff rate, variable quality.

 

3.     Finance/Bank Interest Rates:

o    Sub-factors: Equity, loans, interest rates, collateral, duration, terms.

o    India Context: Interest rates ~6.5% (2024, RBI), NPA ratio 3.2%, moderate access to credit for MSMEs.

 

4.     Land/Location:

o    Sub-factors: Availability, prices, transport, skilled manpower access.

o    India Context: Land acquisition delays, prices vary ($10–$100/sq.m.), transport connectivity improving (e.g., 40,000 km highways added 2014–2024), uneven skill distribution.

 

5.     Industrial Policy:

o    Sub-factors: Exemptions, incentives, restrictions, inspections, permissions, compliance.

o    India Context: “Make in India” incentives, 15+ approvals for manufacturing, high compliance costs (2% of revenue for SMEs).

 

6.     Market:

o    Sub-factors: Domestic, overseas.

o    India Context: 1.4B domestic market, exports $437B (2023), growing EV demand (100,000 units sold 2024).

 

7.     Technology:

o    Sub-factors: IPR, patents regime, copyrights, home-grown, licensing, royalty.

o    India Context: R&D 0.7% of GDP, 60,000 patents filed (2023), growing IT sector, licensing costs moderate.

 

8.     Taxation:

o    Sub-factors: Corporate income tax, capital gains tax.

o    India Context: Corporate tax 22% (25% for new firms), capital gains tax 10–20%, high compared to Kuwait (0%).

 

9.     Infrastructure:

o    Sub-factors: Road-rail network, air-sea connectivity, warehouses.

o    India Context: LPI 3.1/5, 1.4M km roads, 68,000 km rail, 13 major ports, warehouse capacity growing (100M sq.ft. added 2020–2024).

 

10.  Competition:

o    Sub-factors: Monopoly, oligopoly, cartels, fierce/free competition.

o    India Context: Mixed market, oligopolies in telecom (e.g., Jio), fierce competition in IT/services, cartels in some sectors (e.g., cement).

My blog also lists benchmarks (e.g., Ireland’s business-friendliness, Switzerland’s

productivity), suggesting a comparative approach. I’ll use these to normalize

India’s performance.


Additional Factors

To address tariff-driven competitiveness and modern economic realities, I’ll add:

11. Energy Costs

     Critical for manufacturing cost (India: $0.08/kWh vs.$0.06/kWh in China,

     2024).

                            

12. Environmental Compliance:

     Growing factor in trade (India’s carbon intensity 0.6 kg CO2/$ vs. 0.3 in EU,

     2024).


13. Digital Infrastructure

     E-commerce and Industry 4.0 (India’s internet penetration 60% vs. 90% in

     South Korea, 2024).

     

Formula for India Competitive Index (ICI)

Based on my blog’s factors and added elements, here’s the formula:

ICI  =

w1MP+w2RM+w3FI+w4LL+w5IP+w6MK+w7TC+w8TX+w9IN+w10CP+w11EC+w12EN+w13DIICI = w_1 \cdot MP + w_2 \cdot RM + w_3 \cdot FI + w_4 \cdot LL + w_5 \cdot IP + w_6 \cdot MK + w_7 \cdot TC + w_8 \cdot TX + w_9 \cdot IN + w_{10} \cdot CP + w_{11} \cdot EC + w_{12} \cdot EN + w_{13} \cdot DIICI=w1MP+w2RM+w3FI+w4LL+w5IP+w6MK+w7TC+w8TX+w9IN+w10CP+w11EC+w12EN+w13DI

Where:

  • ICI : India Competitive Index (0–100, benchmarked against global leaders).

  • MP : Manpower (weighted average of age, education, skills, productivity,
  •         hours, holidays, salaries; normalized 0–1).

  • RM : Raw Materials Availability (supply chain efficiency, logistics cost, tariff
  •         impact; normalized 0–1).

  • FI : Finance (interest rates, credit access; normalized 0–1).

  • LL : Land/Location (availability, price, transport, skill access; normalized 0–
  •        1).

  • IP : Industrial Policy (incentives, compliance cost; normalized 0–1).

  • MK : Market (domestic + export potential; normalized 0–1).

  • TC : Technology (R&D, patents, licensing costs; normalized 0–1).

  • TX : Taxation (corporate + capital gains tax; inverse normalized 0–1).

  • IN : Infrastructure (LPI, connectivity, warehouses; normalized 0–1).

  • CP : Competition (market structure diversity; normalized 0–1).

  • EC : Energy Costs (cost/kWh; inverse normalized 0–1).

  • EN : Environmental Compliance (carbon intensity; inverse normalized 0–1).

  • DI : Digital Infrastructure (internet penetration, e-governance; normalized
  •        0–1).

  • w₁ to w₁₃ : Weighting factors (sum to 1), adjustable based on trade
  •       priorities.

Normalization

  • Positive factors (e.g., MP, IN) are normalized to the global leader (e.g., MP =
  • India’s productivity $7/hour / Switzerland’s $50/hour = 0.14).

  • Inverse factors (e.g., TX, EC) are 1 - (India’s value / Global max), e.g., TX = 1 - (22% / 35%) = 0.37.

Weighting Example

Reflecting tariff-driven cost focus and your blog’s emphasis on inputs:

  • w₁ (MP) =  0.15
  • w₂ (RM) =  0.10
  • w₃ (FI) =   0.10
  • w₄ (LL) =   0.10
  • w₅ (IP) =   0.10
  • w₆ (MK) =  0.10
  • w₇ (TC) =   0.10
  • w₈ (TX) =   0.05
  • w₉ (IN) =   0.10
  • w₁₀ (CP) =  0.05
  • w₁₁ (EC) =  0.05
  • w₁₂ (EN) =  0.05
  • w₁₃ (DI) =  0.05

Sample Calculation (Hypothetical Data)

  • MP =  0.30   (  young workforce, low productivity )
  •  
  • RM =  0.50   (  high imports, logistics cost 13% )

  • FI =   0.65    (  6.5% interest, moderate credit )

  • LL =   0.55    (  land delays, improving transport )

  • IP =   0.60   (  incentives offset compliance costs )

  • MK =  0.85   (  large market, growing exports )

  • TC =   0.15   (  low R&D )

  • TX =   0.37   (  22% tax vs. 35% max )

  • IN =   0.62   (  LPI 3.1 )

  • CP =   0.70   (  mixed competition )

  • EC =   0.25   (  1 - 0.08/0.10 )

  • EN =   0.50   (  1 - 0.6/1.2 )

  • DI =    0.67   (  60% penetration  )

  • ICI  

  • = ( 0.15 × 0.30) + (0.10 × 0.50) + (0.10 × 0.65) + (0.10 × 0.55) + (0.10 ×

  •  0.60) + (0.10 × 0.85) + (0.10 × 0.15) + (0.05 × 0.37) + (0.10 × 0.62) +

  • (0.05 × 0.70) + (0.05 × 0.25) + (0.05 × 0.50) + (0.05 × 0.67) = 0.045 +

  •  0.05 + 0.065 + 0.055 + 0.06 + 0.085 + 0.015 + 0.0185 + 0.062 + 0.035 +

  •  0.0125 + 0.025 + 0.0335 = 0.5615 (or 56.15/100).

This score suggests India is moderately competitive, reflecting its market size and

policy efforts but highlighting gaps in technology and energy costs.


Dear Shri Goyalji :

Obviously , what ICI that I have come up with above , is certainly not the " last word " on the subject. Look upon it, more as a " Conseptual Framework " , which enables us to figure out where do we stand, vis a vis , rest of the world

And what do we need to do to catch up with more productive countries 

If you are wondering : " Does this Conceptual Framework, make sense ? "

Then , please look up the following charts , prepared using my formula

Even a cursory glance is enough to drive home the following " Home Truth " :

>  Higher the COMPETITIVE SCORE of a country , higher its PER CAPITA, GDP


I rest my case


with regards ,

hemen parekh

www.HemenParekh.ai / www.HemenParekh.in  /  www.My-Teacher.in

05 April 2025 




 

 

Use Gen AI

 

Context :

 

Ø  Link of Article

 

Extract :

 

The article mentions that 50% of public service organizations are gearing up to implement Gen AI shortly. This adoption is expected to bring about improvements in automation, enhance policy analysis, and foster transparency within the public sector.

 

Additionally, 61% of these organizations believe that Gen AI will not only enhance the citizen experience but also act as a catalyst for driving innovation.

 

This indicates a significant shift towards embracing Artificial Intelligence technologies to revolutionize public services by leveraging the potential of Gen AI.

 

In essence, the survey findings highlight a growing acceptance of Gen AI among public service organizations, with a strong belief in its potential to streamline processes, boost policy effectiveness, and ultimately enhance the overall citizen experience.

 

The emphasis on transparency and innovation underscores the evolving landscape of public sector operations, with Gen AI poised to play a pivotal role in reshaping governance and service delivery.

 

 

My Take:

 

My Experiments with ChatGPT 25/12/2022

 

"The efficiency of government services is crucial, and the integration of advanced technologies like Gen AI can undoubtedly revolutionize service delivery.

 

In my earlier blog post, I discussed the importance of modernizing systems to enhance public service efficiency. The current trend of public service organizations moving towards Gen AI aligns with the prediction I made regarding the transformative impact of AI on governance.

 

The focus on improving policy analysis and promoting transparency resonates with the need for innovation in service delivery that I highlighted in my previous writings."

 

Shri Ashwini Vaishnawji - Provide International Regulation for AI 29/09/2023

 

"The application of Gen AI in public service organizations underscores the significance of international regulation for emerging technologies. As I mentioned in a recent blog post, the implications of AI technologies go beyond data insights, with generative AI creating new possibilities for data utilization.

 

The evolving landscape of AI and its potential at a collective level necessitates robust regulatory frameworks, as highlighted by the need for international standards in my earlier writings.

 

The utilization of Gen AI in public services reinforces the importance of ensuring safe and ethical AI deployment."

 

 

Call to Action:

 

To the public service organizations considering the adoption of Gen AI :

 

Embrace this transformative technology with a strategic approach. Ensure thorough planning, address data privacy concerns, and prioritize transparency in the implementation process.

 

Collaborate with regulatory authorities to establish guidelines for ethical and responsible use of AI in public service delivery.

 

Let Gen AI be a tool for innovation and citizen-centric governance, setting a benchmark for efficient and transparent public sector operations.

 

 

With Regards,


Hemen Parekh

 

www.My-Teacher.in