There was a reminder today why India is not the next China, which it would like to be, and why it may never be like China at all. Half of India is in a black out. The Associated Press reports that 600 million people were without power — about twice the entire population of the United States.
The power grid failure is the tip of an iceberg. The Hindu recently reported that the poor quality of India’s roads has increased the price of energy. The paper mentioned one of the conclusions of a government report:
It also called for access-controlled expressways, and suggested that at least 18,637 km of expressway be built in the 13 Five-Year Plan. At present, India has just 600 to 700 km of access-controlled expressway, as against 74,000 km in China.
Government blocks to foreign investment often are blamed for why large companies from outside India do not want to do business there. China also has restrictions, but in general, they are less strict. What the People’s Republic does have that India does not is the infrastructure that sits side-by-side with China’s massive manufacturing and shipping system. Those make it a ready place for companies from the developed world to do business.
China has not had a blackout that affects half of its population. The central government has made sure of that. The headlines about the blackout in India will not sit well with any multinational that might consider putting assets and investments there.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks