Indian Economy - News & Discussion Oct 12 2013

Vayutuvan · Post by **Vayutuvan** » 13 Jun 2014 21:46

Theo_Fidel wrote:Nothing will come of it. Every few years some dumma-dum is made, then the reality is examined and everyone sober s up. Then folks settle back to somnolence. I was actually surprised to see the DFC set up in its own right. This was the lesson of Delhi Metro/Konkan/etc. IR is simply not upto the task. Until a dedicated HSR corporation is set up and properly funded all this is whistling into the wind, etc.

There are probably only 2-3 sections that have the financial heft to support HSR. Chennai-Bengluru, Pune-Mumbai-Ahmedabad, Hyd-Vizag?, Delhi-?.

Mumbai-Pune-Sholapur-Sec(Hyd)-Kazipet-Vijayawada-Vishkha is an extremely busy route and all are big to very big cities, so would be Sec-Renigunta (Tirupati)-Chennai. Delhi-Mumbai is also a very busy one, IIRC.

Vayutuvan · Post by **Vayutuvan** » 13 Jun 2014 21:53

Why are the subsidies only in Delhi? or am I reading wrong?

Prasad · Post by **Prasad** » 13 Jun 2014 23:58

HSR will be useful on high-traffic routes. Buses and trains run to capacity all the time and even that isn't enough to satisfy demand on several routes. In TN alone, chennai-madurai/coimbatore/bangalore routes regularly run full and current capacity is struggling. For Chennai-coimbatore you have to be lucky to get train tickets unless you book months in advance. Reducing runtimes and increasing number of trains on routes like that will get you more money.

Theo_Fidel · Post by **Theo_Fidel** » 14 Jun 2014 02:14

^
Just a nit pick. The highest traffic by far is in the UP-Lucknow Bihar route. But these folks do not have paying capacity yet. In fact even now they prefer not to pay for tickets.

It can't be based on traffic. The tourist crowd too is not enough.

World over HSR is built on business travel. That will be its meat and potato's. Delhi does not have a ready business partner city. Mumbai is too far away.

Prasad · Post by **Prasad** » 14 Jun 2014 03:06

Mumbai - Baroda/Surat then. Also, the TN routes I listed isn't really tourist is it.

bhavani · Post by **bhavani** » 14 Jun 2014 09:01

As per a number of reports The Income Tax exemption limit may be increase from Rs 2 lakh to Rs 5 lakh by government in the forthcoming Union Budget 2014-2015.

This will really cheer the middle class

http://zeenews.india.com/business/news/ ... 01784.html

http://deccan-journal.com/content/modi- ... it-5-lakhs

Manish_Sharma · Post by **Manish_Sharma** » 14 Jun 2014 15:38

vina wrote:.....will cost 10 times the rest of other sections to complete , all sorts of Dili parasites will get Free Passes on it, will run at a perpetual loss and tab thrown across to the tax payers to pick up as per normal practice.

I'm reporting this post from a fanatic tamil separatist, supporter of ex-finance minister chidambaram (lawyer of enron who advised enron to drag Bharat to world court over enron mumbai plant...)

this anti-national tamil vina supports congress party and priyanka gandhi who lives in lutyens bunglow without doing any work for the nation, but has never objected or called her a parasite.

ack thoo !!!

Rahul Mehta · Post by **Rahul Mehta** » 14 Jun 2014 17:12

You cant find Congress supporter like Vina anywhere on SM these days.

So Vina is in the list of endangered species , not just on BRF but almost whole net.

It is our duty to protect every endangered species.

So please dont ask for any action against Vina.

SRoy · Post by **SRoy** » 14 Jun 2014 21:45

Theo_Fidel wrote:^
Just a nit pick. The highest traffic by far is in the UP-Lucknow Bihar route. But these folks do not have paying capacity yet. In fact even now they prefer not to pay for tickets.

It can't be based on traffic. The tourist crowd too is not enough.

World over HSR is built on business travel. That will be its meat and potato's. Delhi does not have a ready business partner city. Mumbai is too far away.

But even the reserved (paid for) categories in UP/Bihar don't run vacant either. Ticket less travelers are a different class.

Kakkaji · Post by **Kakkaji** » 15 Jun 2014 01:26

Shaktikanta Das is new revenue secretary, Takru out in less than 3 months

New Delhi, Jun 14 (PTI): Shaktikanta Das, a 1980 batch officer of the Indian Administrative Service, was on Saturday appointed as the revenue secretary, replacing Rajiv Takru.

Das, 57, who is currently fertilizer secretary, would assume charge by Monday or Tuesday, a top official said.

Takru, 59, who has been revenue secretary since March, has been appointed secretary to the Department of North Eastern Region (DONER), an official order said.

This is the first change at the top in the finance ministry since Narendra Modi government came to power three weeks back.

The Finance Ministry, which is currently preparing the Modi government's first budget, has Arvind Mayaram as finance secretary, R.P. Wattal as expenditure secretary, Ravi Mathur as disinvestment secretary and G.S. Sandhu as financial services secretary.

Anyone know if this Takru was a dynasty chamcha or what?

Kakkaji · Post by **Kakkaji** » 15 Jun 2014 03:25

This news is for vinaji:

http://economictimes.indiatimes.com/new ... 559918.cms

Earnest attempt being made for implementing GST: Nirmala Sitharaman

CHENNAI: The government has been doing "enough work" on much expected Goods and Services Tax and every "earnest attempt" is being made for implementing it, Commerce and Industry Minister Nirmala Sitharaman said today.

At the interactive session with industrialists, organised by industry body FICCI here, she said, "We have started enough work on GST. Earnest attempt has been taken (for the implementation)."

"I cannot fix a time-frame now. GST will come. Sooner than later... ..

Kakkaji · Post by **Kakkaji** » 15 Jun 2014 03:39

http://economictimes.indiatimes.com/ind ... 563493.cms

Shortage of capital: Should FM Arun Jaitley divest government's stake in PSU banks?

Cosmo_R · Post by **Cosmo_R** » 15 Jun 2014 03:54

Kakkaji wrote:http://economictimes.indiatimes.com/ind ... 563493.cms

Shortage of capital: Should FM Arun Jaitley divest government's stake in PSU banks?

Who's going to buy banks with farmers' loan waivers during the UPA and promised by the likes of TDP and CSR?

The Nationalized banks like oil and gas companies have been milked to cater to the vote bank and populist measures.

No sane investor would buy PSU banks. All they would want is license to open branches .

geeth · Post by **geeth** » 15 Jun 2014 10:48

Instead of diverting funds on HSR, IMO, it would be better to concentrate in developing / upgrading selected rail routes to higher speed of about 200 KMPH. This will save lot of freight / passenger time, improve efficiency and conserve scarce funds.

As far as I know, HSR in Japan is running at a loss and tickets are as much costly as airfare.

nawabs · Post by **nawabs** » 15 Jun 2014 14:52

Work is ongoing to increase speed to upto an avg of 160 km/hr in Delhi-Kanpur, Delhi-Agra, Delhi-Jaipur section.

Hari Seldon · Post by **Hari Seldon** » 15 Jun 2014 16:28

^^IMO, Modi is unlikely to get hung up on an ego issue - e.g., "I announced HSR, hence will build it, cost be damned."

His practicality comes through in his handling of the US visa snub.

Hence, I'm confident he won;t get into this white elephant HSR cesspool. More likely, he'll rename HSR to any train that travels over 150 kmph (200 would be very nice though) in desi conditions and continue using our broad gauge tracks only. Only.

subhamoy.das · Post by **subhamoy.das** » 15 Jun 2014 18:45

Hard reforms are coming. It will be cushioned by tax breaks and strengthening of the rupee which in turn will bring inflation down. Let the reforms roll....

Suraj · Post by **Suraj** » 15 Jun 2014 22:05

Good action to reconsider the FTAs being negotiated. The India-EU deal in particular, was not being negotiated in good faith by the UPA regime. Badly negotiated deals are worse than no deal.
Modi govt might go slow on new trade pacts

Under the earlier government, substantive work on talks in reduction of agricultural and industrial tariffs had already happened. The fate of all these key deals and others are uncertain. New commerce and industry minister Nirmala Sitharaman has not elucidated on her stance to the officials.

There are also murmurs within the ministry of commerce and industry that the trade policy division under the commerce department might be brought under the multilateral economic relations division within the ministry of external affairs. It is perceived that the trade deals in operation weren’t negotiated as they should’ve been, leading to rising imports from the partner countries, while exports from India have not seen a significant jump.

Officials say this is especially true of the trade deals that India signed with the Association of Southeast Asian Nations, Japan and Korea. Though signed with much fanfare, the tangible results hoped for haven’t been apparent. One reason India chased these big trade pacts was to obtain more access in the services market for its professionals. Even that did not fructify properly, because of Japan and Korea’s refusal to clinch agreements under which both parties agree to recognise each other’s academic standards and degree programmes.

For those who ask what Jaitley's credentials to be Finance Minister are, he helped frame the original SEZ Act laws. The SEZs have helped more than quadruple India's exports since they came into effect:
One's expectations from Jaitley tenure

Arun Jaitley has started his innings as finance minister by setting his priorities as restoring growth while taming inflation and reining in the budget deficit. Having been commerce minister in the Vajpayee government from January 2003 to May 2004 should assure exporters and importers that he knows their problems well.

As commerce minister, he presented India's views forcefully at the fifth ministerial conference of the World Trade Organization in September 2003 at Cancun, Mexico. He articulated the need for less developed economies to protect their farmers' interests and got them to collectively argue that the agricultural and export subsidies of developed countries hurt the farmers and competitiveness of developing ones.

Jaitley did the bulk of the spadework for a separate legislation on Special Economic Zones (SEZs). Kamal Nath built on it to get the SEZ Act through in 2005. The scheme attracted a lot of investment till Pranab Mukherjee, as finance minister, imposed a Minimum Alternate Tax on SEZ units and global recession hit export growth.

It was in 2003 that duty credits at 10 per cent of incremental exports were given to export houses. The entitlements were so liberal that the business of buying export performance flourished. Many stringent restrictions on entitlements were later imposed under the tenure of Jaitley. Litigation increased and it was replaced with the Target Plus Scheme in 2004.

hanumadu · Post by **hanumadu** » 16 Jun 2014 00:27

Suraj wrote:For those who ask what Jaitley's credentials to be Finance Minister are

Jaswant Singh too was an FM and did a good job. The nitty gritties are worked by subject matter experts.

svinayak · Post by **svinayak** » 16 Jun 2014 05:08

One more guy comparing India with China

http://www.ft.com/cms/s/0/00358aa0-f0b5 ... z34kyO9pB3

June 15, 2014 11:34 pm
India also has too many mouths to feed
From Mr Bachu Biswas.
Sir, David Pilling does an excellent job in listing Narendra Modi’s challenges in leading India that is more urbanised now than many people realise (“India must accept it is urban and reap the benefits”, June 12). However, the single most long-term challenge – India’s explosive population growth – was only briefly mentioned in Mr Pilling’s article. India has a landmass that is one-third of China’s; yet, its total population is catching up. According to each country’s census, India in 2011 had a population of 1.21bn versus 1.34bn for China in 2010.

In 1980, India’s population was nearly 300m less (687m vs 981m in China). However, over the next 30 years, India’s population grew by 76 per cent as compared to only 37 per cent for China. This development, in the context of each country’s landmass, reveals something quite alarming: India is a very crowded country, indeed.
China has made the transition very successfully from an agriculture-based economy to a rapidly industrialised country, where the mass migration of its citizens to urban centres seeking employment have created megacities, which have also created a whole new set of challenges. Notwithstanding, the overall poverty alleviation has been remarkable in China. Market-based economic policies in India since the 1990s (despite the malaise during the last term of Manmohan Singh’s administration) have also generated significant economic benefits. India now boasts a middle class that is, by some estimates, about 200m strong. The BJP’s absolute majority in last month’s election, without the support of this new middle class, would not have been possible.
China’s political leaders recognised early in the economic development process (in the 1980s) that no matter how efficiently they were able to allocate resources, these resources were still not enough as China had too many mouths to feed. Slowing the population growth was absolutely essential for the aggregate benefits of the market economy to reach a greater number of citizens. It is true that China is not a democracy as India is. Yet, the political leaders in India need to square with its citizens that India too has too many mouths to feed.
Mr Modi’s electoral victory provides a unique opportunity to have this conversation with the citizenry about the nation’s explosive population growth. Without an appropriate agreement (policy), India’s sustainable growth prospects in the long run are questionable at best.
Bachu S Biswas, New York, NY, US

neel · Post by **neel** » 16 Jun 2014 05:25

svinayak wrote:One more guy comparing India with China

http://www.ft.com/cms/s/0/00358aa0-f0b5 ... z34kyO9pB3

June 15, 2014 11:34 pm
India also has too many mouths to feed
From Mr Bachu Biswas.
Sir, David Pilling does an excellent job in listing Narendra Modi’s challenges in leading India that is more urbanised now than many people realise (“India must accept it is urban and reap the benefits”, June 12). However, the single most long-term challenge – India’s explosive population growth – was only briefly mentioned in Mr Pilling’s article. India has a landmass that is one-third of China’s; yet, its total population is catching up. According to each country’s census, India in 2011 had a population of 1.21bn versus 1.34bn for China in 2010.

In 1980, India’s population was nearly 300m less (687m vs 981m in China). However, over the next 30 years, India’s population grew by 76 per cent as compared to only 37 per cent for China. This development, in the context of each country’s landmass, reveals something quite alarming: India is a very crowded country, indeed.
China has made the transition very successfully from an agriculture-based economy to a rapidly industrialised country, where the mass migration of its citizens to urban centres seeking employment have created megacities, which have also created a whole new set of challenges. Notwithstanding, the overall poverty alleviation has been remarkable in China. Market-based economic policies in India since the 1990s (despite the malaise during the last term of Manmohan Singh’s administration) have also generated significant economic benefits. India now boasts a middle class that is, by some estimates, about 200m strong. The BJP’s absolute majority in last month’s election, without the support of this new middle class, would not have been possible.
China’s political leaders recognised early in the economic development process (in the 1980s) that no matter how efficiently they were able to allocate resources, these resources were still not enough as China had too many mouths to feed. Slowing the population growth was absolutely essential for the aggregate benefits of the market economy to reach a greater number of citizens. It is true that China is not a democracy as India is. Yet, the political leaders in India need to square with its citizens that India too has too many mouths to feed.
Mr Modi’s electoral victory provides a unique opportunity to have this conversation with the citizenry about the nation’s explosive population growth. Without an appropriate agreement (policy), India’s sustainable growth prospects in the long run are questionable at best.
Bachu S Biswas, New York, NY, US

This gets it absolutely backwards. China's restrictions on population growth are one major factor driving the slowing of the rate of Chinese GDP growth, as their "demographic dividend" is almost exhausted at this point. The trick is not to reduce the growth rate of population, but to ensure the educational attainment of that growing cohort, so that at it's peak productivity based on lifecycle considerations the level of the peak is high enough to lift the entire country.

RoyG · Post by **RoyG** » 16 Jun 2014 10:47

Kakkaji wrote:http://economictimes.indiatimes.com/ind ... 563493.cms

Shortage of capital: Should FM Arun Jaitley divest government's stake in PSU banks?

Have we ever considered going for credit unions in a big way? They are now lobbying hard in the US so that they can get the cap placed on them for loan removed and they are accountable to their members and not shareholders.

muraliravi · Post by **muraliravi** » 16 Jun 2014 18:12

http://www.business-standard.com/articl ... 022_1.html

Excellent I say, way to go. The details are very good. Days after announcement, the investment is to the tune of $6BN and on a PPP basis roughly $18BN. Very nice. The distribution of investment in various sectors is also very good. Heavy manufacturing focus.

nawabs · Post by **nawabs** » 17 Jun 2014 06:45

Modi govt works on bitter price pills

http://www.business-standard.com/articl ... 161_1.html

The government might go for a one-time increase in the price of diesel to bring down the entire underrecovery of oil marketing companies (OMCs) on this count to zero and raise the rates for subsidised cooking gas, in phases (tranches of Rs 50 each are possible). Government is also likely to go for a rise in kerosene oil prices in phases, for the first time since June 2011.

These steps might stoke inflation and dent Modi’s popularity for a while, as he himself had indicated. The likely move might, as stated earlier, boost inflation further. Wholesale Price Index-based fuel rates rose to 10.53 per cent in May against 8.93 per cent in April. Modi had said on Saturday, “I know my popularity might go down due to hard decisions, people might be annoyed with me, but they will appreciate it later.”

The government is also considering raising rail passenger fares by 10 per cent and freight by 6.5 per cent under the fuel adjustment component. These increases were earlier put on hold, pending the new government’s approval. Passenger fares were revised by up to two per cent under the fuel adjustment component in the higher classes and around 3.5 per cent in the lower classes under the increase done in October 2013. Simultaneously, freight rates were increased by 1.7 per cent under the FAC. The increase in the FAC for freight is additional to the busy season surcharge of 15 per cent announced last week.

While the middle class is hoping for an increase in the threshold of tax exemption from Rs 2 lakh to Rs 3 lakh a year, this might be put on hold for at least the current financial year.

The rollout of the ambitious National Food Security Act, put through by the previous government, might be staggered.

Theo_Fidel · Post by **Theo_Fidel** » 17 Jun 2014 07:09

^^^

Mr Modi, don't do things because you fear inflation. Shortage economies like ours will always have inflation problems. Rationalize the subsidy and increase the public transport layout. Take with one hand but also give with the other.

RoyG · Post by **RoyG** » 17 Jun 2014 20:54

Theo_Fidel wrote:^^^

Mr Modi, don't do things because you fear inflation. Shortage economies like ours will always have inflation problems. Rationalize the subsidy and increase the public transport layout. Take with one hand but also give with the other.

Thank god you aren't the FM. High inflation and no fiscal responsibility over a period of 10 years and you want him to "rationalize the subsidy" and "increase the public transport layout." I would say, don't be afraid to bite the bullet now and stay the course and don't pay attention to these lefty Keynesians who were responsible for this mess.

Hari Seldon · Post by **Hari Seldon** » 19 Jun 2014 05:15

Arvind Panagriya on the econ decisions Modi must take to sustain growth (Foreign Policy)

Suraj · Post by **Suraj** » 20 Jun 2014 02:09

Forest ministry greenlights faster, simpler clearances; defence, roads get priority

Indicating that all projects for which the due diligence has already been completed would soon be cleared, the minister said top priority would be given to defence and other state-sector projects and national highways. Amending the relevant laws with a view to removing hassles of investors were also on the agenda, the minister said, adding discussions for review of the laws had just begun.

Asked whether the processes for environmental and forest clearances could be streamlined for faster decision-making, the minister said, “The processes can be simultaneous... At one point, they can converge.”

“Why can’t these (EC and FC) be given on the same day?” the minister asked.

The minister said he was in dialogue with the coal, mines and steel ministers for fast-tracking the environmental clearances of stalled projects. “We (he and the power, mines and steel ministries) will have a meeting on Monday. We will review the pending projects,” he said.

Already, the environment ministry has given clearance to the township project for the naval base in Karwar, which was stuck for three years, the minister said, illustrating how decision-making had been expedited. Efforts, he said, were on to fast-track clearances for about 6,000 km of roads near the Indo-China border and allow the setting up of coast guard ‘chowkies’.

The roads and defence ministries have been asked to sort out issues that were coming in the way of building roads and bridges over defence land, he said. FE had reported earlier that the defence and road ministries have coordinated to facilitate speedy transfer of certain land parcels currently with the three armed forces to the National Highways Authority of India (NHAI) so that a host of large highway projects can take off.

Some of these projects have been stuck for want of defence ministry clearances (for land transfer) for up to five years, taking a toll on highway construction, which is also reeling from the hit taken from the economic slowdown and low investor interest.

Delays in clearances from the environment, mining and defence ministries along with problems in land acquisition had stalled 439 projects involving investment worth close to R20 lakh crore (about $340 billion).

Reliance announces three-year capital spend of Rs 1.8 lakh crore ($30 billion)

Oil-to-yarn and retail conglomerate Reliance Industries (RIL) will be investing R1.8 lakh crore between now and FY16 to expand legacy businesses like petrochemicals and refining, and further strengthen new, consumer-facing ventures like retail and telecom, chairman Mukesh Ambani said on Wednesday.

Speaking to shareholders at the company’s 40th annual general meeting (AGM), Ambani said his company was in the midst of its most significant investment cycle that once completed will transform RIL into a “radically different company”. The current investment cycle began in FY14.

Interestingly, the investment target articulated by Ambani on Wednesday is higher than the capital expenditure target of R1.5 lakh crore that he had outlined in his speech last year.

Kakkaji · Post by **Kakkaji** » 21 Jun 2014 06:05

Modi effect: Clutch of PE funds out to raise $2 billion

MUMBAI: More than half-a-dozen PE funds are set to start the process to raise a combined $2 billion (about Rs 12,000 crore) from foreign and local investors, riding on the bullish sentiment the change in government has brought to the market.

At least four established PE funds have begun talks with investors while three have revived previously shelved plans, said people with knowledge of the matter and fund managers.

neel · Post by **neel** » 21 Jun 2014 23:17

Hari Seldon wrote:Arvind Panagriya on the econ decisions Modi must take to sustain growth (Foreign Policy)

Mostly sensible, although, as it is published in a Western magazine, it emphasizes by stating first trade liberalization over all the other, much more important reforms (GST, direct-tax simplification, end to retrospective taxation, easing labour/bankruptcy laws, aggressively cutting subsidies, consolidation and privatization of PSU banks, allowing states to drive land and labour reforms via the Concurrent List, infra. investment, restructuring of railways and electricity Dis. Co.'s & Reg. Commissions, facilitating urbanization, privatizing manufacturing PSU's, improving education, converting in-kind transfers to cash transfers wherever possible, improving urban sanitation, and toilets).

Also, for the record, India did not "borrow" the British educational system; the indigenous educational system was willfully and maliciously destroyed by the British as a key part of their sack of India, and a much less effective system - that restricted opportunities on the basis of caste and had as its explicit core mission Christian proselytism, rather than education - was then imposed on India by force.

nawabs · Post by **nawabs** » 22 Jun 2014 20:01

Stop more-revenue-anyhow policy: Shome

http://www.business-standard.com/articl ... 976_1.html

Tax Administration Reform Commission (TARC) says numerical value of fiscal deficit is not the only concern but its quality as well
If coercive methods are used to collect taxes, quality of fiscal deficit will come down
In that case, rating agencies will note the deteriorating business environment in India
Says transfer pricing mechanisms used to augment revenue generation when the goal should have been to minimise tax avoidance

Abolish post of revenue secy: Shome panel

http://www.business-standard.com/articl ... 047_1.html

Set up an Independent Evaluation Office to monitor the performance of tax administration, promote accountability, evaluate the impact of tax policies and assess all factors that affect tax administration
A tax council to develop a common tax policy, analysis and legislation for both direct and indirect taxes
A separate budget allocation to ensure time-bound tax refund and a passbook scheme for Tax Deduction at Source
Develop PAN as a common business identification number, to be used by other government departments also such as customs, central excise, service tax, DGFT and EPFO

Finance ministry may veto Shome recommendations on revenue boards

http://www.business-standard.com/articl ... 803_1.html

Recommendations of the Parthasarathi Shome panel to shift to a moving tax target, merge revenue boards and abolish the post of revenue secretary might not find favour with the finance ministry.

The Tax Administrative Reforms Commission (TARC), in its report to the ministry, has suggested subsuming Central Board of Direct Taxes (CBDT) and Central Board of Excise and Customs (CBEC) in a common Tax Policy and Analysis unit. It said the post of revenue secretary is superfluous.

A ministry official, however, said the same recommendation was made in 2011 too by Shome as well as then Law Minister M Veerappa Moily, but it was squarely rejected by the ministry.

“Unlike advanced countries, India has a small taxpayer base. The UK model cannot be applied to India because of complications of tax structure. It is neither feasible nor desirable to merge the two boards. The proposal had been made and rejected in the past,” said an official, who did not wish to be identified.

Finance ministry officials also said abolishing the post of revenue secretary is not feasible as he has the broader vision and perspective while framing tax policies. According to officials, changing the target in line with economic growth is not possible as tax collections always come with a lag effect. Besides, they argue, in comparison to OECD countries “which have saturated tax base and everything is predictable”, in India it can happen only when tax base improves.

“You can't keep changing it every now and then. We do one review at the time of Revised Estimates. Frequent changes will only cause confusion and if revenue collections decline people will justify it saying the economy was not doing well. Tax officers will take shortfall as normal,” said another official.

The Shome panel pointed out that a static target adversely affects tax officers’ equilibrium as blind revenue targets cause unjust pressure on good taxpayers and all modern administration have moved away from that.

“Instead, the Boards pressure chief commissioners, who pressure commissioners, who pressure lower level officers to meet fixed revenue targets, irrespective of the prevailing condition of the economy,” the TARC report said.

Officers complained bitterly during TARC’s consultations in the five metros about the anxiety that they go through on account of the revenue collection pressure and some even went to the extent of pointing to the need for mentoring, coaching and psychological support, it added.

Some customer-centric recommendations of TARC such as pre-filled tax forms, a common return for income tax and wealth tax, and the permanent account number (PAN) as common business identification number might be accepted.

svinayak · Post by **svinayak** » 23 Jun 2014 04:36

neel wrote:
Hari Seldon wrote:Arvind Panagriya on the econ decisions Modi must take to sustain growth (Foreign Policy)
Mostly sensible, although, as it is published in a Western magazine, it emphasizes by stating first trade liberalization over all the other, much more important reforms (GST, direct-tax simplification, end to retrospective taxation, easing labour/bankruptcy laws, aggressively cutting subsidies, consolidation and privatization of PSU banks, allowing states to drive land and labour reforms via the Concurrent List, infra. investment, restructuring of railways and electricity Dis. Co.'s & Reg. Commissions, facilitating urbanization, privatizing manufacturing PSU's, improving education, converting in-kind transfers to cash transfers wherever possible, improving urban sanitation, and toilets).

Also, for the record, India did not "borrow" the British educational system; the indigenous educational system was willfully and maliciously destroyed by the British as a key part of their sack of India, and a much less effective system - that restricted opportunities on the basis of caste and had as its explicit core mission Christian proselytism, rather than education - was then imposed on India by force.

Somebody has figured out that this article is written for the western audience and with western prescription
Comment section

ALEXIS PLESHCOY piyu2cool • 7 days ago
India is one of the oldest civilizations on Earth; it has originated four world religions—Hinduism, Buddhism, Jainism, and Sikhism; it has survived millennia, and recovered after the fall of many Empires, including the British Empire.
Based on history (and I might add JEE) I was hoping for something original; why would the Western beaten path be followed to the letter?
But it is up to India to do what is best for her, and I don’t see anybody stopping her, other than its own intellectual power which I was hoping would take her to a different direction (the Antilia residence is not a good omen, while a Taj Mahal truly belongs to eternity) .
However, I want to assure you that at least in terms of fish in the ocean (“We have explored just 1 percent of the ocean surface.”) there isn’t much left; the apex predator of the seas, the shark, is about to be extinct as shark fin soup even before another hundred million Chinese join the middle class.
Global warming is here to stay, and please, think in terms of millennia, not just years; in the beginning there was no oxygen at all, it was produced by plants, so just give the explosion engine or coal powered plants enough time.

nawabs · Post by **nawabs** » 25 Jun 2014 17:47

Govt mulls Rs 1-lakh-cr road financing corp

http://www.business-standard.com/articl ... 089_1.html

The government plans to set up a finance corporation with a corpus of Rs 1 lakh crore, in partnership with Japanese investors, to fund projects in the road sector. The Japanese partners are likely to have a 26 per cent stake in the corporation, with assured returns of nine per cent, according to a highly-placed road ministry source.

Road Transport Minister Nitin Gadkari had already held two meetings to discuss setting up of the corporation and a final decision was expected shortly, said an official asking not to be named. He added the toll revenue of around Rs 5,000 crore, which the road transport ministry gets, would be securitised to raise money.

In 2012-13, of the 7,464-km build-operate-transfer (BOT) target, only 1,115.75 km were actually awarded. Similarly, in 2013-14, of the targeted 5,000 km through the public-private partnership (PPP) mode, only 287 km were awarded through three projects, as the bids did not find takers among private-sector players. Another 2,500 km of projects were awarded under the EPC mode.

For the 2014-15 financial year, the target was to award 3,000-3,500 km of road projects through the BOT route and another 5,000 km through the engineering, procurement and construction (EPC) route, another ministry official said.

Unlike the BOT model, the government funds the entire project under EPC and a developer undertakes the necessary construction work.

BOT requires a private-sector developer to raise and invest money for construction of roads at its own risk, while the National Highways Authority of India acquires land for projects.

At present, completion of road projects worth Rs 83,000 crore are pending. Since 2009, only three projects have been completed, adding only 315 km to the country's existing highway network. This is despite a record 147 projects (a combined value of Rs 1.47 lakh crore) being awarded under the public-private-partnership (PPP) mode.

After an initial euphoria, private investors have been shying away from bidding for projects, given a difficult economic environment. A slowdown, coupled with land acquisition and environmental clearance issues and funding problems, has spoilt the government's private partnership plans. A weak economy has also meant slow growth in traffic, especially commercial traffic, according to a ministry official. This has made developers' initial revenue assumptions go haywire. The Centre even had to come out with a policy to reschedule premiums for road developers.

Aditya_V · Post by **Aditya_V** » 25 Jun 2014 18:32

Rahul Mehta wrote:You cant find Congress supporter like Vina anywhere on SM these days.

So Vina is in the list of endangered species , not just on BRF but almost whole net.

It is our duty to protect every endangered species.

So please dont ask for any action against Vina.

NDTV is still doing Gobbels like propaganda. Come Maharashtra local elections and they will be back in full force. INC supporters are not an endangered species, it is foolish to think so. They are spread in every NGO/media across the land.

and when did supporting INC be a problem in BRF, it takes all to make the country

Suraj · Post by **Suraj** » 26 Jun 2014 03:55

Foreign inflows in debt zoom to a record high

Foreign institutional investors (FIIs) bought debt instruments worth a little over $10.5 billion in 2014, beating the previous high of $10.13 billion in 2010. There was a sell-off last year, as FIIs pulled out nearly $8 billion from the corporate and government bond markets in 2013.

India has received around $36 billion worth of capital inflow in the year so far, with the bulk coming over the past three months. Of this, portfolio investment in debt and equity was $20.4 billion and foreign direct investment around $8.5 billion.

Experts attribute the flows to a mix of higher interest rates in India, cheap capital in developed markets and foreign investors' preference for high-yielding assets in emerging markets. "Libor (London interbank offered rate) has fallen to a 40-year low of 0.5 per cent, drastically reducing the cost of taking risk. The result is a scramble among foreign investors for riskier but high-yielding assets in emerging markets, including India," said Deep Narayan Mukherjee, director of ratings at India Ratings.

Capital flows into India were amplified by geopolitical troubles in Ukraine and Russia and concerns about China's growth rate. "Capital that would have gone to Russia and China in the normal course found its way into the Indian debt and equity markets, given the size of our economy compared with competing countries like Brazil, Indonesia, South Africa and Turkey," Mukherjee added.

According to the Securities and Exchange Board of India (Sebi), FIIs bought shares worth $9.9 billion in 2014, in line with $20 billion invested by them in the same period last year. Nine companies have together raised nearly $5 billion through bonds abroad, according to Prime Database.

Besides, companies raised around Rs 11,500 crore (approximately $2 billion) through four qualified institutional placements (QIPs) of shares till May, much higher than Rs 8,000 crore raised through 10 QIPs during all of 2013. The bulk of the QIPs were picked up by foreign investors. This includes $500 million raised by YES Bank and Idea Cellular each, but excludes stake sales by promoters in Kotak Mahindra Bank to the Canadian Pension Plan Board worth around $370 billion.

FDI inflow was at a steady pace, with multinationals investing nearly $6.25 billion in March and April, according to the Reserve Bank of India. The April inflow of $2.6 billion was in line with FDI worth $36 billion during the year ended March 2014.

Chinese industrial parks get approval

During the fifth India-China strategic dialogue in August 2013, both sides had identified five states where the parks would be set up -Uttar Pradesh, Andhra Pradesh, Gujarat, Maharashtra and Karnataka. In October 2013, a Chinese delegation had visited potential sites in these states.

However, the plan was delayed due to resistance from some sections of the Indian industry, especially small and medium enterprises, which were apprehensive the move would give China leeway to dump goods in the market here. And, ahead of the general elections, the United Progressive Alliance government didn't want to risk proceeding with the move.

Officials say the Chinese embassy had written to the Uttar Pradesh State Industrial Development Corporation, seeking 400 acres for the project, with a special focus on manufacturing electronics. It is learnt the Chinese government also approached the Haryana State Industrial and Infrastructure Development Corporation to set up industrial parks in that state.

In December 2013, the Haryana government floated a proposal to set up a Chinese industrial park in that state. It had also offered 500 acres to the Chinese, with single-window clearances to investment proposals exceeding Rs 100 crore.

Apparently, China is keen to set up manufacturing units related to agro-processing and electronics.

The Centre believes the move will help address India's widening trade deficit with China, which has led to the government pushing China to source more products from here. In 2012-13, India's trade deficit with China stood at $40.78 billion, compared with $39.40 billion in 2011-12 and $27.95 billion in 2010-11, according to commerce ministry data.

nawabs · Post by **nawabs** » 27 Jun 2014 10:03

Sustainable growth not at cost of poor, India says

http://www.financialexpress.com/news/su ... /1264521/0

Efforts to put the global economy on a sustainable path must not be at the cost of the poor, India today said and asked developed countries to take a lead in committing to technology transfer for developing nations to achieve balanced growth. Speaking at a UN Environment Conference in Nairobi, Environment Minister Prakash Javadekar also said that the proposed amount for the Green Climate Fund should be utilised in purchasing green technologies and it should provided to the developing countries free of cost.

"It has been agreed to establish Green Climate Fund of US USD 100 billion per year by 2020. This amount should be utilised to purchase Intellectual Property Rights (IPRs) of most crucial technologies for public good and these technologies should then be freely available to the developing countries to facilitate sustainable development," he said at the Ministerial Plenary of the First UN Environment Assembly.

Javadekar said that developed countries must provide enhanced financial resources, technology transfer and capacity-building support to developing countries to meet the vast requirements of sustainable development.

"Our efforts to put the global economy on a sustainable path must not be and cannot be on the backs of the poor. The wide difference between the average per capita consumption of energy and other resources in the developed and developing countries as also the huge wastage of food at consumer level in developed countries makes it imperative for developed countries to take the lead to shift towards Sustainable Production and Consumption (SCP) patterns.

"The developed countries have to lead from the front and commit technology transfer to developing countries for them to achieve this," Javadekar said.The environment minister rued the fact that "not much progress" has been made on the issue of technology transfer despite the fact that the Rio+20 document mandates relevant UN agencies to identify options for a facilitation mechanism that promotes the development, transfer and dissemination of clean and environmentally sound technologies.

"India strongly feels that technology transfer is the most important means of implementation and an effective and functional Technology Facilitation Mechanism (TFM) is a must for a meaningful Post-2015 Development Agenda," he said. He said that the TFM should meet the technology transfer needs of developing countries in various sectors like health, energy, food, water, sanitation and others.

"The developing countries need to be assisted in technology needs assessment, adaptation, rollout and human and institutional capacity building," Javadekar.

Javadekar said that India attaches utmost importance to the evolution of the post-2015 development agenda and strongly believes that it must be an agenda for development which can propel sustained and inclusive economic growth in all countries, particularly developing countries.

"Poverty eradication, which has been identified at Rio+20 as the greatest global challenge and an indispensable requirement for sustainable development, must remain the central and overarching objective of the Sustainable Development Goals (SDGs) and the post-2015 development agenda," he said.

He also advocated for making the SDGs and the Post-2015 Development Agenda universal in nature and said that it cannot remain a series of policy prescriptions from the North to the South unlike the Millennium Development Goals (MDGs).

"A universal agenda means that developed countries must also take on obligations in relevant areas," he said. He said that the SDGs and the post-2015 development agenda must address the three dimensions of sustainable development - economic, social and environmental - in a balanced manner, both across goals as well as within them.

In terms of global development cooperation, Javadekar said that it is important that aid commitments are not only met in earnest but that they are expanded and extended in the post-2015 period.

The environment minister said that India has its National Climate Action Plan with eight missions -- solar energy , energy efficiency, sustainable habitat, water, Himalayan eco-system, Greening India, sustainable agriculture and strategic knowledge for climate change. He said that his country's new initiatives relate to integrated coastal development, forest conservation, combating desertification, island development and cleaning the river Ganga.

"We are committed to energy and resource efficient development. We have designed low carbon strategy and have on our own set up ambitious renewable energy targets," the minister said.

Noting that since the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF) is separately assessing the financing requirements of SDGs, he said that India welcomes the decision to hold the third 'Financing for Development' Conference in the middle of next year before the adoption of the post-2015 development agenda.

nawabs · Post by **nawabs** » 27 Jun 2014 19:23

Tax spillovers

http://www.financialexpress.com/news/ed ... rs/1264564

Given global concerns over what is called ‘base erosion and profit shifting’ (BEPS), finance minister Arun Jaitley will be pleased to know, an IMF study of spillovers in international corporate taxation seems to endorse a lot of what the government is doing. So, while not talking of the retrospective nature of taxes introduced when Pranab Mukherjee was the finance minister, the report says developing countries need to guard against companies selling the underlying Indian assets in tax-light countries to avoid paying the Indian government its due—in other words, India was right to change some of its laws; it is the retrospective nature that caused a problem. And though the report does not specifically acknowledge it, India’s solution to BEPS is probably the minimum alternative tax (MAT). The report points to interesting methods being used by companies to avoid paying taxes—fund large infrastructure projects through debt to lower tax outgo, for instance. All of which means that, apart from being an active participant in all international tax discussions, India needs to begin relooking several of its tax treaties—with Mauritius for instance—as well as build more expertise in areas like transfer pricing. For the latter, the argument is not that transfer pricing adjustments should not be made, only that the taxman must do his homework well.

That said, the report makes some other points that are worth keeping in mind. One, a 10 percentage points cut in corporate tax rates, can increase the FDI stock in country by around 30% in the long run. While that is one of the reasons behind the Chinese FDI surge, it is worth keeping in mind, as FE columnist Surjit S Bhalla pointed out last fortnight, at 30%, India’s effective corporate tax levels are among the highest in the world—the figure is 23% in the US and 21% for much of Europe. The second big finding flows from the first, a 1 percentage point cut in tax rates in other countries reduces a country’s corporate tax base by 3.7%—over the decade, the report says, corporate tax rates have fallen 5 percentage points. In other words, Jaitley’s budget needs to be looking at ways to cut corporate tax rates while looking at measures to catch BEPS by MNCs and others.

Cosmo_R · Post by **Cosmo_R** » 28 Jun 2014 06:28

"NEW DELHI: For two weeks from July 1, even finance minister Arun Jaitley will be scanned by a three-layered security system as the Budget papers for 2014-2015 start getting printed in the basement of the North Block office.

Delhi Police will provide the first layer of security, CRPF the second and Intelligence Bureau the third, as the ministry offices will be under 24x7 vigil.

The finance ministry joint secretary (Budget) and about five other secretaries will be issued smart cards to keep tabs on their movement into the underground press area, which will be sealed off for everyone else for two weeks. But even they will not be allowed to carry anything along with them.

From last year, a dietician is locked in with those stationed inside to take care of meals for them so that they do not take ill in the unusual conditions with no ventilation and long working hours. Doctors are on call, but are not present in the sealed area. Last year, two members of the Budget staff fell ill and were admitted to a hospital. Police were posted at the hospital to stand guard and ensure that no Budget information was leaked out. "

So I would guess, that when they hit the print button, a white cloud of smoke appears form the chimney much like the papal enclave.

How quaint. Halwa Halwai!

http://timesofindia.indiatimes.com/pre- ... 357105.cms

Kakkaji · Post by **Kakkaji** » 29 Jun 2014 05:12

Paging economics Gurus to comment:

Vote for bonds as cash tool

Calcutta, June 28: International Finance Corporation (IFC), the investment arm of the World Bank, is betting on debt instruments such as non-convertible debentures as a prefered route for raising capital by non banking finance companies (NBFCs) and microfinance institutions (MFIs) in India.

Bank tip on gold use

Mumbai, June 28: Two of the country’s biggest state-run lenders — the State Bank of India and Bank of Baroda — today pitched for treating a portion of their gold deposits as part of the mandatory cash reserve ratio (CRR) or statutory liquidity ratio (SLR), both of which banks consider as non-productive.

“When banks are holding gold, it is of value. I think it makes sense to bring it under CRR/SLR. It also fits the larger pattern that ultimately we are talking about, unearthing the gold and bringing it to productive sectors in the economy as a whole. The gold that is readily available can be brought under recognition,” Mundra told reporters.

Suraj · Post by **Suraj** » 30 Jun 2014 10:21

Labour reforms are coming:
India's Modi eyes first labor overhaul in decades to create jobs

Prime Minister Narendra Modi has set in motion the first major revamp in decades of India's archaic labor laws, part of a plan to revive the flagging economy, boost manufacturing and create millions of jobs.

Successive governments have agreed labor reform is critical to absorb 200 million Indians reaching working age over the next two decades, but fears of an ugly union-led backlash and partisan politics have prevented changes to free up labor markets.

Now, with the benefit of a single party majority in the lower house of parliament for the first time in 30 years, laws that date back to just after the end of British rule are set for an overhaul. Officials at the labor ministry say this is a top priority in the government's first 100 days in office.

India has a forest of labor laws, including anachronisms such as providing spittoons in the work place, and are so complex that most firms choose to stay small. In 2009, 84 percent of India's manufacturers employed fewer than 50 workers, compared to 25 percent in China, according to a study this year by consultancy firm McKinsey & Co.

The Planning Commission circles the drain:
In peril under India's new PM, a vestige of Soviet-style planning

Indian Prime Minister Narendra Modi never had a high opinion of the Planning Commission, an institutional vestige of the country's attempts to mimic the Soviet command economy during the infancy of its independence more than half a century ago.

As leader of the industrial powerhouse state of Gujarat, he stunned buttoned-down members of the commission last year by turning up at a meeting with a video that accused them of high-handedness and hobbling states with one-size-fits-all policies.

Now, as prime minister of the country, he looks set to clip the central agency's wings, or perhaps abandon it altogether.

It is the starkest symbol yet of Modi's determination to junk the Fabian socialist-leaning economic policies set in train by the first prime minister of independent India, Jawaharlal Nehru.

In a signal that the end could be nigh for what has remained a sacred cow of policymaking despite many years of market-oriented economic reforms that began in the 1990s, a government-backed report last week suggested dismantling the Planning Commission and replacing it with a think tank.

"Since the Planning Commission has defied attempts to reform it to bring it in line with the needs of a modern economy and the trend of empowering the states, it is proposed that the Planning Commission be abolished," the Independent Evaluation Office (IEO) said in a report.

A month into his premiership, Modi has already sidelined the body whose tome-like five-year plans are always laboriously crafted but rarely adhered to.

He has left the post of executive head of the commission vacant, and he has taken away its authority to determine the federal government's capital expenditure, passing that to the finance ministry.

And, for the first time, the Commission has been excluded from discussions to frame the national budget, which is due to be presented on July 10.

A Planning Commission spokesman declined to comment.

The IEO's proposal is likely to amplify voices, many of them in Modi's Bharatiya Janata Party (BJP), that have questioned the relevance today of an agency created in 1950 to optimize scarce resources in a newly born nation.

Arun Shourie, an influential BJP member, derides the Planning Commission - set in a hulking New Delhi building with 500-600 employees - as a "parking lot" for political cronies and unwanted bureaucrats.

The commission's defenders are no strangers to criticism.

In 2012, it was pilloried for spending some $50,000 to renovate two office toilets, and then it was lampooned for suggesting that citizens who consumed goods worth 27 rupees ($0.45) or more a day were not poor - in a country where millions struggle to survive on less than $2 a day.

The commission has remained resilient, however, largely because over the decades it emerged as a parallel cabinet with the prime minister of the day formally its head.

It also took on responsibility for allocating federal funds to states and sanctioning capital spending of the central government, which was deeply resented by states and various government departments.

"The states want a system which gives them a much greater flexibility to use these funds in a manner which suits their development (and) addresses their development challenges," Ajay Chhibber, the author of the IEO report, told Reuters.

Chhibber said the panel should be turned into a body of experts that functions as a repository of knowledge and new research, offering long-term solutions for problems like climate change and coastal management.

Previous proposals to revamp the agency have made little headway, but Chhibber's report is likely to hit the sweet spot for a prime minister who is busy overhauling government departments to improve efficiency and speed up decision-making.

Since taking office on May 26, Modi has consolidated various ministries and scrapped several cabinet panels to streamline the administrative structure. He has also promised a more efficient and less top-down relationship between the center and states.

"From Modi's perspective from Gujarat, the Planning Commission may have been a superfluous busybody playing preferential politics, attaching strings to money intended for the state's use," the Indian Express said in an editorial.