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Yogesh Gupta

Reservoir Engineer, Shell International E&P

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Can someone please correct my economics?

In India, 55% population is working in agriculture sector, 20%-25% in service and industry sector, 7-10% in public sector, 10% nearly unemployed.

Though the service and industry sector in India contributes the most to the GDP (55%), population wise it employs the least (20-25%).

If say the developed nations demand less goods and services, this would mean developing nations like India would see fall in exports of goods and services and also see fall in its imports of energy like oil an gas. This would create a surplus of supply in energy sector and costs would go down.

Hence, if the developed nations reduce the import of goods and services from India, I agree it may contribute in less income to nearly 20-25% of the population involved in the service and industry sector, but would help nearly 70% of the population to have an increase in their income as their energy costs (direct and indirect) go down.

The current economic difference between the poor and rich is very high. I believe this slow down will give time to the country to bring about a balance.

In the current economic crisis, many companies let go the most experienced staff or elderly staff and retained the young ones since they are low cost to the company. I believe similar effect will be seen if a slowdown happens in India. The rich elderly executives will be forced retired (can still lead a good life) and on the other hand the 70% population gets a chance to catch up with the rich.

Let me know if i am missing something in my view.

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    Dec 12 2012: Hello John,

    Actually I believe there are two ways to CO2 emissions. 1) By bringing in alternate energy which can satisfy the current demands of goods and services or 2) reduce the demands of goods and services.

    For the second way there are two approaches that are possible. 1) economic approach (forcing higher prices, etc)
    2) awareness among common man to reduce its dependency on goods and services.

    I have written more about this second approach of awareness in another blog.
    http://yogeshpgupta.wordpress.com/2012/12/12/donate-or-change/

    I believe awareness approach is more long term solution than economic approach. Let me know what you think about it.
    I do not believe in blame game.. but I have just started writing so may not be very clear in my thoughts.. :)
    • Dec 12 2012: Ample renewable (green) energy is key to any future economy, not only because we need energy directly but also because it allows for more efficient recycling of the finite amounts of metals and phosphorus the Earth has given us. Letting India catch up to the rich countries through higher wages means rich countries have to sacrifice some material prosperity, even if it's something as small as lowering the annual income growth of millionaires. So you are thinking in the right direction.

      India does have a trade deficit but this can likely be covered with the money Indian expats send home to India, so it might not even be a real trade deficit.

      India's PPP (GDP corrected for local prices and inflation) is rising steadily so the whole of India is becoming less poor but it could be that much of the extra money goes to the rich and/or the government and don't forget that if the government fixes a road in front of your house or gives you more medicine you have become less poor even if your personal income didn't go up.
    • Dec 12 2012: I don't understand why India is not focusing more on nuclear energy.
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        Dec 12 2012: I have seen the government pushing for nuclear power plants. There was resistance initially due to fresh Japan tragedy and political influence.

        Though i feel it is a much better source of energy as it takes less space and gives more energy. I have seen wind farms, solar panels, hydro, biogas, etc already in use, but the demand is just too high.
        • Dec 12 2012: Sounds good. I hope the government ramps it up quickly.

          I don't know if you are allowed to reveal it to me, but can you tell me how Shell is doing with renewables? I mean, how seriously do they take it, and how aggressively are they funding research in this domain?

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