An American Lion

The Darjeeling Limited

This is a wonderful read, and I don't have much to add, so I'll just steal some quality content from the New York Times, put it on my blog, and hope no one notices that this is filler:

S. K. Sahai’s firm ships containers 2,400 nautical miles from Singapore to a port here in four or five days. But it typically takes more than two weeks to make the next leg of the journey, 870 miles by rail to New Delhi.

For most of that time the containers idle at the Jawaharlal Nehru Port near Mumbai because railway terminals, trains and tracks are severely backlogged all along the route. Counting storage and rail freight fees, Mr. Sahai estimates the cost of moving goods from Mumbai to Delhi at up to $840 per container — or about three times as much as getting the containers to India from Singapore.

“They don’t have any physical space,” Mr. Sahai, who is chairman of SKS Logistics of Mumbai, said about the government-owned Indian Railways. “And all their trains are booked.”

As the world looks to India to compete with China as a major source of new global economic growth, this country’s weak transportation network is stalling progress.

Economists say India must invest heavily in transportation to achieve a long-term annual growth rate of 10 percent — the goal recently set by the prime minister, Manmohan Singh. But whether measured by highways, airways or — particularly — far-reaching railways, India’s transportation is falling short.

Critics say the growth and modernization of Indian Railways has been hampered by government leaders more interested in winning elections and appeasing select constituents, rather than investing in the country’s long-term needs. It is one of the many ways that the political realities of India’s clamorous democracy stand in contrast to the forced march that China’s authoritarian system can dictate for economic development.

A 40,000-mile, 150-year-old network, Indian Railways is often described as the backbone of this nation’s economy. And in fact it is moving more people and goods than ever: seven billion passengers and 830 million tons of cargo a year. But its expansion and modernization is not keeping pace with India’s needs.

This is a great lesson in the need to maintain a level of spending on infrastructure.

Here's a wonderful graphic that I'm also going to lift from the article, but I did resize it and I do give the New York Times credit for their work:

INFO Graphic: The New York Times

I do count myself an advocate of austerity in a time when there's simply no more money left to spend. But, were I able to influence what money is being spent in India, I would look for a way to finance rail expansion and capacity and I would look to outside investors to do so (why don't people talk about rail transport in this country in order to alleviate stress on our own roadways?). India has built a fairly impressive (for that part of the world, anyway) wireless sector and it has built a fair amount of technical and Internet infrastructure. Yes, it's a destination for that dreaded word "outsourcing." It's also where you can find people willing to work hard who have a high degree of education and competence.

What is really is is a place where people can and should do business. India has bureaucratic issues, but the rule of law means something in India. When you can be rest assured that a nation observes the rule of law when it comes to business dealings, then investing your money there is the better bet.

Would you invest in China before you would invest in India? That's a difficult question. I would hope that India could find a way to unleash itself, overturn the worst aspects of the bureaucracy, reform the public sector and come up with a way to invest in rail transport. This is a tough thing for a country to figure out. There are only so many things that can be done in order to improve infrastructure and make things more palatable for outside business investors. Let's hope common sense prevails.