Indian Economy News & Discussion - Aug 26 2015

nandakumar · Post by **nandakumar** » 06 Apr 2016 07:54

Schinnas
The write-up on the Budget initiative on ecoomerce is very informative and well presented. Thanks.

Singha · Post by **Singha** » 06 Apr 2016 15:27

+1 keep it up

KrishnaK · Post by **KrishnaK** » 07 Apr 2016 09:34

NITI Aayog to submit PSU strategic sale roadmap this month

kmkraoind · Post by **kmkraoind** » 07 Apr 2016 10:30

NITI Aayog moots tax breaks for electronics manufacturing, plan's to dent China's clout - Economictimes

These increased wages are rendering China uncompetitive in employment intensive activities... firms currently located in China are looking for locations with less expensive labour," it says.

arguing that India should not even shun away from low value addition production as massive production orders in the sector `translates in a large total value addition and large number of jobs'.

Suraj · Post by **Suraj** » 07 Apr 2016 12:27

After manufacturing PMI, services PMI also rises significantly:
Services PMI rises to 21-month high

Growth in India’s services firms rebounded in March, rising to 54.3 after a sudden contraction of 51.4 in February, as new business increased markedly, a business survey showed on Wednesday.

The seasonally adjusted Nikkei/Markit Services Purchasing Managers’ Index (PMI) has experienced a straight ninth month above the 50 level that separates growth from contraction.

In March, incoming new work in the Indian private-sector economy rose at the fastest pace in three years. This reflected on sub-sector growth as Markit reported that five of the six major sectors witnessed growth, apart from transport & storage, which continued to lag.

The survey showed March was not different for job creation compared to previous months. The employment sub-index has more or less remained at the 50-mark throughout 2015-16. However, higher workloads encouraged service providers to hire additional staff for the third successive month. Job creation across the private sector as a whole was seen for the sixth straight month, but the rate of growth remained fractional overall.

Tax collection exceeds estimates:
Tax collection estimate for FY16 crossed

The government says it surpassed the revised (higher) tax collection target for 2015-16 by Rs 5,000 crore, at Rs 14.6 lakh crore.

The revised estimate (RE) was Rs 14.55 lakh crore, higher than the original budget estimate (BE) of Rs 14.45 lakh crore. Indirect tax collections have exceeded the RE by Rs 9,885 crore and direct tax realisations were short by Rs 4,000 crore over the revised estimate, said the finance ministry on Wednesday. The total collection, it said, was 17.6 per cent more than in FY15.

Indirect tax revenues are Rs 7.11 lakh crore and direct tax collection Rs 7.48 lakh crore. The former exceeded the (original) BE for 2015-16 by Rs 65,618 crore and the RE by Rs 9,885 crore. This was primarily due to the additional duties on petrol and diesel, and the increase in service tax rates. The collection represents a growth of 31.1 per cent over 2014-15.

Direct tax collection was 7.6 per cent higher than the 2014-15 receipts.

The final word on revised GDP

The final word on the controversy over the revised gross domestic product (GDP) is about to be pronounced. An experts committee headed by National Statistical Commission chairman Pronab Sen has decided that India's growth rate has been correctly estimated by the Central Statistical Office (CSO).

This means India grew at 7.6 per cent in 2015-16 and at 7.2 per cent in 2014-15. CSO had arrived at this number after revising the methodology of the way national income is computed and also by changing the base year. The certainty has been conveyed to the Reserve Bank of India, which decides the benchmark rate of interest for the economy in its bimonthly monetary policy based on this.

But, in handing out the hosannas, Sen's draft report could create a headache for the current chief statistician, T C A Anant.

For those who have complained about the Houdini-like rise in growth rate of the Indian GDP for FY15 and FY16, Sen says the estimates for earlier years were repressed by the older series. "There is a new problem in the market. What the new method has done is to open some serious questions about the accuracy of the earlier estimates." In other words, the former chief statistician in his analysis has pointed out that the revision of GDP for earlier years in the light of the new data would be consistently higher as there was consistent repression in the calculation of the industrial rate of growth.

Consumer sentiment rises to 4-month high in March: Deutsche Boerse

Consumer sentiment in India jumped to a four-month high in March but consumers remained concerned about the current state of their finances and the wider economy, a Deutsche Boerse report says.

The MNI India Consumer Sentiment Indicator rose to 111.2 in March from 108.9 in February, led by optimistic expectations for future finances and business conditions while sentiment towards spending took a backseat.

"Following the long decline over much of the past year, it is looking increasingly likely that consumer confidence troughed at the turn of the year. While still low, the rise in MNI India Consumer Sentiment Indicator in March, pushed it to the highest since November 2015," MNI Indicators Chief Economist Philip Uglow said.

Warming up to the idea of more power this summer

This summer, the power situation is likely to be comfortable as prices and demand might not shoot up. For one, there has been a notable uptick in renewable power supply in the past year, which means adequate availability of electricity during the summer months when demand usually peaks.

In the past three months, the cumulative average power demand has remained at 137,000-140,000 megawatt (Mw). Fluctuations in demand are likely to occur due to erratic weather conditions. Power experts rule out any possibility of grid snags. The current installed capacity in the country is 290,000 Mw running at a plant load factor of 60 per cent. With enough room to meet any surge in power demand, spot power prices are also likely to remain subdued. The average power price is expected to be around Rs 3 a unit.

In March, the average price was Rs 2.67 a unit. In April, the price discovered to date was Rs 3.4 a unit, compared to Rs 3.8 a unit in the same month last year. It was Rs 3.4 a unit in May 2015 and Rs 3.8 a unit in June 2015. The prevailing situation is 'discoms-friendly', according to an analyst, who tracks the sector. With transmission woes also being eased, the southern part of the country could be looking at a better summer this year. By next month, Rajasthan, Gujarat and Tamil Nadu will have considerable wind power, which will further improve availability of electricity.

ritesh · Post by **ritesh** » 07 Apr 2016 12:42

Quoting from a well know blogger... PV Subramanyam.
This is for all those naysayers. Please read article in full.

http://www.subramoney.com/2016/04/na-mo ... ght-track/

Modiji haven’t taken a single leave in more than 2 years and works tirelessly for India. I am sure, a lot of things are to be done, but this govt is surely doing work better than any Indian govt till date.

Prem · Post by **Prem** » 07 Apr 2016 20:38

http://www.bloomberg.com/gadfly/article ... ot-know-it
India Could Be Sitting on a Gold Mine

The country vies with China as the world's biggest buyer of gold jewelry, thanks in large part to its cherished status in marriage ceremonies. Imports of the metal came to $35 billion last year, and were equivalent to about 43 percent of the country's current account deficit in the September quarter. In November, Modi launched a program to lure private gold holdings onto the market by getting banks to offer interest on items deposited in their vaults.At the start of the 20th century, India was the world's sixth-biggest gold producer, according to the country's Geological Survey. Since then, production has slipped so dramatically that the likes of Sweden, Nicaragua and Kyrgyzstan are bigger miners. According to the Geological Survey, about 80 percent of the country's gold output in 2006-2007 was a by-product of smelting imported copper.You'd think, given this backdrop, that the government would be doing everything it could to encourage local miners. Far from it: Deccan Gold Mines, which hasn't dug up an ounce in 13 years because of the difficulty of obtaining permits from state governments, told Bloomberg's Swansy Afonso, Rajesh Kumar Singh and Archana Chaudhary that it has no incentive to explore for gold after laws passed last year forced miners to bid for the right to mine the deposits they find.Finding mineral deposits is risky, cost-intensive business. As with pharmaceuticals, movies or venture capital, there are a long tail of failed investments behind every blockbuster. While miners worldwide have been cutting back on exploration costs because of the slump in commodities prices, they'll still spend about $8 billion in 2016, according to SNL Metals & Mining. The only reason companies risk this capital is because they hope to get first refusal on the right to dig up what they've found.Of course, it's possible that India simply has a poor endowment of gold that was all tapped early in the 20th century. Mines, like oil wells, eventually run dry. And as anyone who's visited the ghost towns of Western Australia or California's Sierra Nevada can testify, a history of gold mining doesn't necessarily indicate a future of gold mining.The problem at the moment is that without robust private-sector exploration, it's hard to be sure what the problem is: A paucity of resources in the ground, or a lack of capital to develop them. Only about 13 percent of the country's 575,000 square kilometers of land with geological potential has been explored in detail, according to the Indian Mineral Federation. The country could be sitting on a gold mine, and not even know it.

Suraj · Post by **Suraj** » 08 Apr 2016 06:49

I am skeptical about that Bloomberg article. Gold doesn't strike me as something we'd leave lying under the ground if it could be extracted, considering its univeral desirability. I think Occam's Razor applies - we really don't have any significant known gold sources.

vina · Post by **vina** » 08 Apr 2016 07:19

I am skeptical about that Bloomberg article. Gold doesn't strike me as something we'd leave lying under the ground if it could be extracted, considering its univeral desirability. I think Occam's Razor applies - we really don't have any significant known gold sources.

By your logic, so should we "not" have done the same with oil and gas , but we did exactly that and thanks to the idiotic interference in product pricing history of the Govt of India, we will continue to do so as well. Exact same thing with gold.

Trouble is, India does NOT have the technology and the capability to extract anything below 50 ms or so below the ground, including coal. We have NO deep underground mines (yeah, I know the KGF mines are the deepest man made hole in the earth, but that is historical, not recent).

Jot another win to the Baboon driven system and it's proclivity of shooting our own feet out from ourselves. The entire price fixing on a "return" of capital basis and the consequent command and control and micromanaging of investments, operating decisions and product pricing by Baboons and Mantri in Delhi has been a total disaster , especially in Oil and Gas and also in power. Yeah, the Modi Govt has freed pricing for new "marginal and difficult to reach fields" (whatever that means, again more Baboongiri and litigation ) . But that is really in line with it's strategy of making "headlines" and not doing much in substantive terms. This is more in line with the "tax of 25% for new business and startups" , "no taxes for next 3 years for startups" .. which is kind of inane, when you don't expect any real cash flow from most new business in 3 years anyways. What about the REAL substantive point , of cutting taxes as promised in the 2015 budget to 25% over 5 years and what has been the movement ? You get some waffling noises at best .

hanumadu · Post by **hanumadu** » 08 Apr 2016 07:37

^^Looks like every gripe you have with Modi govt some how ends with how it affects you and your company.

A_Gupta · Post by **A_Gupta** » 08 Apr 2016 08:15

Suraj wrote:I am skeptical about that Bloomberg article. Gold doesn't strike me as something we'd leave lying under the ground if it could be extracted, considering its univeral desirability. I think Occam's Razor applies - we really don't have any significant known gold sources.

Per this (PDF) Govt of India document:

During 1980-85 (6th Plan): Discovery of gold deposit at Chigargunta in Andhra Pradesh, proved the southern extension of the Kolar Gold Field.

1985-90: gold deposits of Kempinkote, Wandalli, Uti, Champion East Lode and Mysore Mine Block in Karnataka

1990-95: New gold deposits were identified in Ajjanahalli, Chinmulgund, Hira-Buddini and G.R. Halli in Karnataka. In the Dona area, Andhra Pradesh, gold prospects were identified and explored by GSI and MECL. The Bhukia area in Banswara district, Rajasthan was included in the Gold Map of India. This is a significant breakthrough, as except for southern states and a few small occurrences in central and eastern parts of the country, gold prospects were not known in other parts.

2002-07 (10th plan) : Additions of 12,177 million tonnes of coal, 941 million tonnes of lignite, 8.2 million tonnes of copper ore, 0.8 million tonnes of lead-zinc ore, 37.42 million tonnes of
iron ore, 14.38 million tonnes of manganese ores, 5.70 million tonnes of bauxite, 1883 million tonnes of limestone, 42.49 million tonnes of gold ore and 5.56 billion cubic meters of CBM were made by GSI during the Xth Plan period mostly by way of new discoveries.

2007-2012 (11th plan): "In Kerala, two distinct gold anomalous zones with values ranging between 50 to 668 ppb have been delineated. Geochemical anomalies have led to formulation of two mineral investigation programmes for gold in Bankura district, West Bengal."

MECLhas augmented the following resources.
In Parasi Central( Ph-I & Ph-II) , Ranchi district, Jharkhand, a measured resource (331) of 7.47 million tonnes of gold ore with 0.98 g/t gold has been augmented.

In Bhukia East Block, Banswara district, Rajasthan, an indicated resource (332) of 11.74 million tonne of gold ore with 2.51g/t gold has been augmented.

---
I think these ores are marginal. But this page says:
http://www.kereport.com/2012/10/05/aver ... old-mines/
"Check out the awesome infographic below! It a shows how rare +2.0 g/t Au deposits are and that the average grade of producing deposits is 1.06 g/t Au."

PS: I have been unable to locate a "Gold Map of India".

PPS: In its first 120 years, Kolar averaged 15.9 g/t.
http://www.kolargold.com.au/

Dipanker · Post by **Dipanker** » 08 Apr 2016 08:43

vina wrote: Trouble is, India does NOT have the technology and the capability to extract anything below 50 ms or so below the ground, including coal. We have NO deep underground mines (yeah, I know the KGF mines are the deepest man made hole in the earth, but that is historical, not recent).

You are completely wrong on this one. Most underground coal mines accessible through vertical shaft are quite a bit deeper than 50 meters. The Deepest coal mine in India is Chinakuri mines at 1900 meters!
Another one I can remember is Moonidih at ~650 meters. Though a certain % underground mining machineries are imported for mines which are fairly mechanized, bulk of equipment is Indian made. On the average these mines range few hundred meters in depth.

Similarly for most of the underground metal mines (copper/zinc/lead) are also several hundred meters deep.

Anything at a shallow depth of 50 - 100 meters would be mined by open pit mining methods, India has the technology and the equipments to do it. If I was to make a guess I would say that 80% to 90% open pit mining machineries are built in India.

Suraj · Post by **Suraj** » 08 Apr 2016 09:16

vina wrote:
I am skeptical about that Bloomberg article. Gold doesn't strike me as something we'd leave lying under the ground if it could be extracted, considering its univeral desirability. I think Occam's Razor applies - we really don't have any significant known gold sources.
By your logic, so should we "not" have done the same with oil and gas , but we did exactly that and thanks to the idiotic interference in product pricing history of the Govt of India, we will continue to do so as well. Exact same thing with gold.

Oil and gas are primarily industrial feedstock materials requiring bulk extraction, processing, transport and storage capabilities. Gold is a precious metal with deep personal attraction to humans, found in limited quantities, inert and easily separated from ore if visibly concentrated. Historically the discovery of substantial gold deposits anywhere does not hidden for any length of time, and there have been gold rushes in many places. Klondike & Yukon Gold Rush. California Gold Rush. People ran into and populated entire regions in a mad scramble for gold. How many oil or coal rushes were there ? None. They are characterized by industrial extraction efforts driven by government and corporate imperatives. The human psychology involved in the search for gold and that for oil/coal are very different.

vina · Post by **vina** » 08 Apr 2016 09:22

Gold is a precious metal with deep personal attraction to humans. Historically the discovery of substantial gold deposits anywhere does not hidden for any length of time, and there have been gold rushes in many places. Klondike & Yukon Gold Rush. California Gold Rush

The kind of "extraction" by panning river beds etc for nuggets and dust is long over and are best left to stuff like the movie "McKenna's Gold" . Now you are talking about industrial extraction using modern processes and mining a ton of ore to get a gram of gold kind of thing.

vina · Post by **vina** » 08 Apr 2016 09:26

Dipanker wrote: You are completely wrong on this one. Most underground coal mines accessible through vertical shaft are quite a bit deeper than 50 meters. The Deepest coal mine in India is Chinakuri mines at 1900 meters!
Another one I can remember is Moonidih at ~650 meters. Though a certain % underground mining machineries are imported for mines which are fairly mechanized, bulk of equipment is Indian made. On the average these mines range few hundred meters in depth.

Correct me if I am wrong. I read somewhere that India's coal output is something like 97% open cast and underground mines are something like 3% or so of output. I would submit the the overwhelming bulk of mining in India, more so the recent ones are open cast (for good reason, much cheaper and easier, and higher margin than underground , though highly devastating to the local ecology).

Suraj · Post by **Suraj** » 08 Apr 2016 09:29

vina wrote:
Gold is a precious metal with deep personal attraction to humans. Historically the discovery of substantial gold deposits anywhere does not hidden for any length of time, and there have been gold rushes in many places. Klondike & Yukon Gold Rush. California Gold Rush
The kind of "extraction" by panning river beds etc for nuggets and dust is long over. Now you are talking about industrial extraction using modern processes and mining a ton of ore to get a gram of gold kind of thing.

Thank you for making my point. If there's no place in the country where gold can be panhandled or dug up manually by persistent gold rushers, it means there isn't any viable source of gold that can be extracted without anything less than an industrial process, which means the cost of setup and production will be required.

The cost of mining gold is not trivial. It currently runs at $1100-1600/ounce, and that's with an existing base of equipment and survey data to apply to further exploration:
The Real Cost of Mining Gold

Now, the current spot price of gold is ~$1230/oz . Unless anyone can establish an all in mining cost - initial sunk costs plus ongoing exploration costs - less than that at any gold bearing location in India, industrial mining is not viable.

That takes me back to what I originally said - there's doesn't appear to be any location where there's sufficient gold that's currently worth the cost of digging it up. If there is, it will be self-evident very quickly because it will trigger a gold rush.

Dipanker · Post by **Dipanker** » 08 Apr 2016 10:17

vina wrote: Correct me if I am wrong. I read somewhere that India's coal output is something like 97% open cast and underground mines are something like 3% or so of output. I would submit the the overwhelming bulk of mining in India, more so the recent ones are open cast (for good reason, much cheaper and easier, and higher margin than underground , though highly devastating to the local ecology).

Currently India produces about 15% coal through underground mining and the rest through open cast. The share of underground is supposed to go up in future. Surface mines are economical only upto certain depth, beyond that the cost of removing the over-burden (waste) becomes too expensive thus dictating underground mode of extraction.

IMO India needs stricter reclamation laws to manage the environment impact of open cast mining.

Singha · Post by **Singha** » 08 Apr 2016 14:21

http://wap.business-standard.com/articl ... 024_1.html

Power situation improving in country

A_Gupta · Post by **A_Gupta** » 08 Apr 2016 15:56

I don't know if this news-item from February was missed.
http://in.investing.com/news/stock-mark ... tion-50790

NEW DELHI, Feb 27 (Reuters) - Vedanta Ltd VDAN.NS has won India's first-ever auction of a gold mine, a provincial government official said, as the nation opens up the sector to private companies to curb overseas purchases of the metal that cost it $36 billion last year.

Vedanta, a unit of London-listed Vedanta Resources Plc VED.L , beat three other bidders in the auction of the Baghmara mine in the eastern state of Chhattisgarh, the head of the state's Directorate of Geology and Mining, Reena Kangale, told Reuters on Saturday.

The company quoted the highest bid of 12.55 percent of the Indian Bureau of Mines price of 74,712 rupees ($1,087) a troy ounce, Kangale said, adding she expected mining for potential reserves of about 2,700 kilograms to begin in two years.

A troy ounce is equivalent of 31.10 grams.

In a statement, Vedanta said the block measuring 6.08 square kilometres required extensive exploration and that the process will commence in "due course".

Federal Mines Secretary Balvinder Kumar last week told Reuters the government planned to auction at least three gold mines in 2016.

PS: larger, readable version of the global gold infographic from 2012, linked to previously, here:
http://visual.ly/global-gold-mines-and- ... kings-2012

Supratik · Post by **Supratik** » 08 Apr 2016 18:47

Bloomberg is partly right, partly wrong. The license-permit raj was a severe handicap on everything including mining. The new policy actually makes it more market oriented, benefits all stake holders and encourages mining specially by the private sector.

Suraj · Post by **Suraj** » 09 Apr 2016 02:25

Substantial progress in infrastructure project delay management:
Nov 2014: Cost overruns, delays in 83% of infra projects
April 2016: Only one third of infra projects delayed, cost overruns in 18% of projects

Prime Minister Narendra Modi is starting to see some success in getting infrastructure projects moving again.

About a third of more than 1,000 projects valued at 14 trillion rupees ($210 billion) are delayed as of January, down from 42 percent a year earlier, according to government data released on Thursday. Cost overruns have come down from 19.8 percent to 18.4 percent in that time, it showed.

Modi has made reviving investment a priority since he took office, taking steps to ease bottlenecks and entice foreign companies to set up factories. Yet bad debt, weak global demand and difficulties in pushing through key reforms threaten to hobble the world’s fastest-growing major economy.

“Many of the projects today are stuck because of stressed assets," said Hemant Kanoria, chairman of SREI Infrastructure Finance Ltd. “If someone has gone to the hospital, is taken to the ICU and a quick treatment is not given, the person will die. It’s similar with infrastructure projects."

The number of stalled projects fell in the past six months due to faster government clearances in the power and chemical industries, according to a report released by the central bank this week. Proposals to set up new factories remained subdued due to demand uncertainty and muted business confidence, it said.

Markets should scale back expectations of a strong cyclical recovery, Deutsche Bank said in a report on April 5, citing data from Centre for Monitoring Indian Economy Pvt., a local research company. It showed that projects are delayed primarily because investors are wary of deploying capital.

"While earlier investors complained about problems with land acquisition, availability of raw materials, and delays with regulatory clearances, those factors do not rank high any longer," it said. "The drag now principally comes from a lack of conviction about demand, locally or externally."

About 38 percent of the delayed projects are in roads and highways, followed by power and coal, according to the statistics ministry.

India’s northeast states marred by insurgency have seen cost escalations as high as 800 percent. Mizoram, a small state in India bordering Myanmar, has waited 18 years for a dam that will generate 60 megawatts of electricity and end its power woes. Construction is finally expected to be finished by October after issues over land compensation delayed the project and escalated its cost by almost four times.

Prem · Post by **Prem** » 09 Apr 2016 04:41

http://economictimes.indiatimes.com/ind ... 739578.cms
Cardiovascular disease, diabetes may cost India $6.2 trillion

UNITED NATIONS: Non-communicable diseases like cardiovascular, diabetes and cancer can cost the Indian economy a whopping $6.2 trillion during the 2012-2030 period, a UN report has said, warning about the spread of such diseases in rapidly urbanising countries like India and China.
"Non-communicable Diseases (NCDs) present not only a threat to human health in cities, but also have significant economic implications," said the 'Global Report on Urban Health: Equitable, heal .Between 2014 and 2050, China is expected to add an additional 292 million people to its cities, while in India that figure is estimated at 404 million.The report warned that inadequate planning for the "inevitable increase in urbanisation" in India is creating a socially and environmentally "unsustainable" situation. "The cost of cardiovascular disease, diabetes, cancer, chronic respiratory diseases and mental health conditions has been estimated at $27.8 trillion for China and $6.2 trillion for India during 2012-2030," it said.InChina and India, cardiovascular disease and mental health conditions present
the greatest economic threats, followed by respiratory diseases and cancer. China's losses exceed those of India's as the impact of lost labour and physical capital is greater in higher-income countries, the report said. F

Prem · Post by **Prem** » 09 Apr 2016 04:46

http://fortune.com/2016/04/08/india-economy/
http://fortune.com/2016/04/08/india-economy/

Don’t tell Donald Trump, but China’s days as the globe’s most exciting economy are numbered.
That’s because while China’s workforce has already begun to shrink, in part as a result of the country’s one-child policy, its neighbor to the West, India, is growing its workforce at a breakneck pace.According to Ernst and Young, the Indian workforce will grow to 900 million strong by 2020. To put that in perspective, the American workforce, which is the third largest in the world, comes in at just under 160 million people.Because economic growth results from the combination of capital goods, like factories and computer systems, with labor, a growing labor force can be a huge boon for an economy. At the same time, the Indian government must also train its workforce effectively and build the necessary infrastructure to help its economy flourish. According to a recent cnn survey“Currently only 2% of India’s workers have received formal skills training, according to Ernst & Young. That compares with 68% in the U.K., 75% in Germany and 96% in South Korea.It’s a problem spread across industries. The Royal Institution of Chartered Surveyors estimates that in 2010India needed nearly 4 million civil engineers, but only 509,000 professionals had the right skills for the jobs. By 2020, India will have only 778,000 civil engineers for 4.6 million slots.There is a similar gap among architects. India will have only 17% of the 427,000 professionals it needs in 2020.If India can successfully transform its human resources into productive workers, you can expect it to quickly replace China as the economy that both inspires fear and respect among American economy watchers.

Bade · Post by **Bade** » 09 Apr 2016 05:16

^^ Imagine the kind of growth India's NITs and IITs have to go through to support this kind of growth in the economy. We are nowhere close to achieving this target in educating and developing the skill levels of the population. Just all these campuses put together can train only 30,000 students each year, when the number has to be ten times that.

hanumadu · Post by **hanumadu** » 09 Apr 2016 07:16

Bade wrote:^^ Imagine the kind of growth India's NITs and IITs have to go through to support this kind of growth in the economy. We are nowhere close to achieving this target in educating and developing the skill levels of the population. Just all these campuses put together can train only 30,000 students each year, when the number has to be ten times that.

There must be 30000 engineering graduates every year in TG, TN, KA and AP itself. Primary concern should be how to bring the standards of those colleges to respectable level.

Supratik · Post by **Supratik** » 09 Apr 2016 15:17

It is not going to be based on IITs and NITs. They will form the cream at best. It will be based on mass private education, like it or not. The days of socialist education models are over. We have to ensure quality of education.

Supratik · Post by **Supratik** » 09 Apr 2016 15:59

Make in India working according to Moody's. More data points. I suspect rupee may appreciate at some point or deliberately kept low and could swell FE reserves.

http://timesofindia.indiatimes.com/busi ... 736262.cms

sarang · Post by **sarang** » 09 Apr 2016 16:49

I think we are talking about engineers, not about the students who are learning engineering or who have engineering degrees

Prem · Post by **Prem** » 10 Apr 2016 00:27

Modi Sarkar is already ahead of the game. India is now opening up almost 1 ITI ( Industrial Training Institute ) a day. It's quiet revolution going on and once get done half way ,visible signs will be there to imagine the growth momentum going far in future of which world has not witnessed yet.

Rahul M · Post by **Rahul M** » 10 Apr 2016 09:35

there is a massive need for standardising and certifying vocational jobs like electrician, plumber, carpenter etc.

Gus · Post by **Gus** » 10 Apr 2016 09:39

Saw some polytechnics on the way from chennai to erode on trichy road. It was full of teens buzzing around. I think TN is catching this wave like how it caught the engg wave of 90s.

VKumar · Post by **VKumar** » 10 Apr 2016 10:03

Modi ji also to be thanked for recent changes made in food standards by Food Safety and Standards Authority of India http://www.fssai.gov.in/ though "miles to go". The Indian food standards were originally written in 1954 and are practically unaltered since then. The old standards are out-of-sync with requirements of a modern food industry but the FSSAI instead of modernizing the standards, was implementing the old standards, thereby making it practically impossible for the development of the food processing industry. In the past two months some progress has taken place and for which we have to thank the Modi government. However there is an enormous distance to go and progress is being stymied by vested interests through PIL, NGO and many others, some of them well meaning but ill advised and others who are ignorant or blatantly corrupt.

As an agricultural economy, which is ranked in the top 3 worldwide in practically every agri commodity, the way forward for the Nation is to have a modern and vibrant food processing industry, feeding India and exporting to the world, employing millions in MSME sector, just like the Countries of Spain, France, Italy, UK, USA, Thailand, Australia.

Hari Seldon · Post by **Hari Seldon** » 10 Apr 2016 18:13

India offers $20 billion investment in Iran; wants land, cheap gas in return (ET)

SaiK · Post by **SaiK** » 11 Apr 2016 10:17

http://www.livemint.com/Industry/XW0fu6 ... today.html

India’s audacious plan to bring digital banking to 1.2 billion people
Debuting Monday, the UPI is a system designed to make transferring and receiving money as easy as exchanging e-mail or text messages

so, what would be the min/max transaction charge for a simple money send?

Austin · Post by **Austin** » 11 Apr 2016 11:55

India's forex reserves rise to $359.75 billion: RBI

http://economictimes.indiatimes.com/art ... 755003.cms

rahulm · Post by **rahulm** » 11 Apr 2016 14:01

This UPI thing is great news and a fantastic move by NaMo.

It is an uniquely desi solution leveraging lowest common denominator tech. basic (not smartphone) mobiles making it the most inclusive of all options.

Per my understanding, In a country where it is possible to conduct a lifetime of commerce largely invisibly - this offers a platform to track and tax the invisible economy in the future.

Finally, I earnestly wish and hope this method of transacting is mandated in all municipal and SRTC buses. I am tried of the pakka shana chor conductors on the gravy train - stealing my Rs. 1 only change every time. This could get rid of the "chutta nahi hai" issue once and for all from all petty transactions and finally I can be rid of the nuisance of being offered and carrying around a chocolate toffee which turns to a gooey paste in my pocket in lieu of chutta

+108 to NaMo.

NRao · Post by **NRao** » 11 Apr 2016 18:09

Tata announces Scunthorpe plant deal

Tata Steel has sold its Long Products Europe business, including its Scunthorpe plant, to investment firm Greybull Capital for a token £1 or €1.

SaiK · Post by **SaiK** » 11 Apr 2016 19:17

chutta-less economy should be the future

...

http://yourstory.com/2016/02/mobile-wallets-upi/
but there are hassles..

i am sure there would be nothing called canceling payments.. and this is all for street business.
go on the bus, flash your phone to punch driver@bus# id, and pay your ticket.
driver@bus# gets the payment, and you are ready to continue travel.

heckle: network connectivity.. mobile dead zones, bitwise traffic increase, and 1.2billion on mobile!

another use case

order 1/2 chai, chaiwala@vendor# id, and pay our chai. chai wala smiles having received payment and gives you the chai. now, service is blocked if they can't transact.

bottom: mobile connectivity must increase.
area defence wifi must be integrated. every street lamp post or public transport(satellite at remote or local wifi) can be wifi hotspot at low bandwidth for such ops... keep it at low bauds so that it desist people to ramming it for multimedia purposes. MMS messages must be blocked at router/switches to prevent such traffic rather and to aid just the bitwise payments.

whatever happened to use the free TV channel bandwidth for internet?
satellite service can be used to decrease dead zones and backhauling

panchyat node for optic fiber for robust network.

road and rail posts can act as wifi hotspot. economies of scale for hotspot services gets a boost!

Suraj · Post by **Suraj** » 11 Apr 2016 23:00

After Rajasthan, another state pushes for comprehensive land titling:
Maharashtra plans Bill on land titling

Maharashtra is in the midst of formulating a land title Bill, to minimise property disputes. This comes in the wake of the legislative Assembly in Rajasthan passing (last week) a legislation with the same aim, on urban land. The city of Pune will see a pilot project. The city is also among the 20 selected by the Centre for the Smart Cities project.

A senior minister, who did not want to be named, due to the ongoing legislature session, told this newspaper: “Once a property is registered with the proposed land titling centre, officials there would conduct a detailed title search, including past ownership, transactions and litigation history (if any), to establish non-encumbrance on the land. Thus, the buyer would have a clear understanding of the ownership issue and past record before purchase. This is a step towards guaranteed land titles. The government may consider handing over the title certificate to the owner in demat form.”

A revenue department official hoped the proposed legislation would reduce around half the title disputes currently pending at the high court here. It would also simplify the maintenance of property records.

After 14th Finance Commission, centre asks states to raise capex, focus on villages and infra

The Centre on Monday nudged states to enhance capital expenditure, and invest more in rural areas and infrastructure to spur growth, while retaining fiscal consolidation.

States' share in Union taxes has substantially gone up after implementation of the 14th Finance Commission report that prescribed a record 10% increase in their share in the Union taxes to 42%.

The government has pegged economic growth at 7.7.75% for the current financial year against 7.6% expected for 2015-16. The growth in the past two years has been affected by rural distress, which is likely to be somewhat less this year as the monsoon is expected to be normal.

"States are requested to align their focus to the thrust provided in the Union Budget to promote investment and growth in the rural sector. It is imperative to step up capital expenditure at state level also," said Finance Secretary Ratan Watal.

Watal said the Centre had accepted the recommendations of 14th Finance Commission (FC) and that would give larger funds and greater autonomy to states.

"Total transfers to states including grants-in-aid from the Centre to states are estimated to be ~9.47 lakh crore in 2016-17 compared to ~8.36 lakh crore during 2015-16, which is an increase of 12% of RE (revised estimates) of 2015-16," said Watal.

He said the Centre had also approved an additional fiscal deficit to eligible states during the remaining period of the award from 2016-17 to borrow more under the two flexibility options.

First monsoon forecast is in. It's important to note that growth acceleration in the last two years came despite successive years of deficient rain of more than 10%, something that's only happened 4 times in the last century. A more normal rainfall pattern will significantly boost rural economic activity:
Skymet predicts above-normal monsoon

Skymet, a non-government weather forecaster, said on Monday that the year's southwest monsoon should be slightly 'above normal', at 105 per cent of the Long Period Average (LPA).

Rainfall within 96-104 per cent of the LPA is considered normal and anything above as 'above normal'. LPA is 889 mm, the average rain the country got in the 50 years from 1951.

Above normal rain would ease the drinking water crisis engulfing several parts of the country and will lift the farm sector, which has seen a drop in growth and a low in farmgate prices. A little more than half of India's arable land relies on the June-September southwest monsoon for water. About 70 per cent of the total annual moisture in a year comes from this.

Skymet is the first major Indian weather forecasting agency to have issued a monsoon forecast for 2016. The agency is credited with correctly predicting the 2009 drought but its first forecast went wrong in 2015. The government's India Metereological Department is to issue its first forecast later this month.

In 2014 and 2015, India suffered back-to-back droughts for the fourth time in a little over 100 years, when the southwest monsoon was 12 per cent and 14 per cent below normal, respectively.

All-time FDI inflow high for the last fiscal - $42 billion with one more month of data reporting left:
India gets $ 42 bn FDI during April-February: RBI

Foreign direct investment in the country increased to $ 42 billion during April-February in 2015-16, up by 27.45 per cent from the inflows in the corresponding period of the previous fiscal, RBI said today.

The inflows were $ 32.96 billion during April-February 2014-15.

The data further revealed that FDI in February was $ 3.2 billion, down from $ 5.14 billion in January. The foreign direct inflows were $ 3.48 billion in February 2015.

The net FDI (minus FDI outflow) was $ 34.04 billion during April-February as against $ 29.66 billion in the corresponding period of the last fiscal.

As per the Finance Ministry, 98 per cent of foreign direct investment is coming into India through the automatic route and as a “positive sign” the number of applications being routed via the FIPB approval route has started declining.

Maritime India Summit: Rs 2 lakh crore ($30 billion) investment expected, says Nitin Gadkari

Union Minister Nitin Gadkari said today that an investment of Rs 60,000 crore will be made in the port sector by May 26 this year. He added that investments worth Rs 2 lakh crore were also expected in the Maritime India Summit to be held in Mumbai from April 14 to 16.

India is also set to double its ports capacity to 3000 million tonnes (MT) by 2025, Gandkari said. The capacity of ports stood at 1,500 MT in 2015.

SaiK · Post by **SaiK** » 12 Apr 2016 05:22

High economic growth has gone hand-in-hand with increasingly precarious employment
In spite of high GDP growth recorded during 2005-2013, the vast majority of workers continued to scrape out a precarious living from dead-end jobs

http://www.livemint.com/Opinion/J78vDaK ... ingly.html

Did the period of strong economic growth between 2005 and 2013 change the structure of employment in the country? The answer from the Sixth Economic Census is: precious little. It did not result in better, safer, more secure or more productive jobs for the masses.

For instance, we would expect a shift away from rural to urban India, as workers find new opportunities in towns and cities. But the share of enterprises, or “establishments” as the census calls them, in urban areas went up only a smidgeon, from 39% in 2005 to 40.52% in 2013. The pace of change has been glacial. What’s worse is the share of employment in non-agricultural establishments fell from 89.18% in 2005 to 82.57% in 2013.

The blueprint for economic development, the route out of poverty for developing nations, is one of a steady increase in jobs outside agriculture that not only cures disguised unemployment in farms but also results in higher productivity. But the economic census numbers tell a very different story. In spite of record growth rates in the economy, the share of non-agricultural employment fell between 2005 and 2013. That is not a healthy trend.

What about diversification away from agriculture in rural areas? There have been many reports of manufacturing moving to rural areas. But the economic census doesn’t share that optimism. In 2005, 19.54% of the total rural workforce was employed in agricultural establishments and 80.46% in non-agricultural establishments. (Workers engaged in farming are left out of the economic census, so that leaves out a large chunk of workers in agriculture.)

In 2013, 31.01% of the total rural employment was in agricultural establishments and the remaining 68.99% was in non-agricultural establishments. So the proportion of workers in agricultural establishments in rural India has increased, while the proportion working in non-agricultural employment has declined.

What was the main work in these “agricultural establishments”? It was taking care of livestock. It doesn’t speak much about rural diversification.

Nor has there been any change in the very small size of the average Indian enterprise. Indeed, the share of minuscule “establishments” has become higher. In 1990, for example, 93.41% of establishments had between one and five workers and they accounted for 54.45% of the total number of workers employed. Twenty-three years later, 95.5% of establishments had between one and five workers and they accounted for 69.52% of the workers employed.

It’s well known that the small size of Indian firms is a major reason for their abysmal levels of productivity. But employment in establishments employing more than 10 workers has steadily declined from 37.1% in 1990 to 21.15% in 2013. The average employment in a non-agricultural establishment with at least one hired worker fell from 6.40 in 1990 to 4.54 in 2013. The trend is towards an increase in very small firms. That doesn’t augur well for growth in productivity.

Studies have shown that the share of micro and small enterprises in manufacturing employment is 84% in India, versus 27.5% for Malaysia and 24.8% for China.

There’s other evidence available. In 2005, 35.41% of workers were in what the survey calls “own account establishments” or businesses that didn’t have a single hired worker. In 2013, that percentage had shot up to 44.29%. It’s likely that the vast majority of people in these “own account establishments” barely make ends meet and would grab the opportunity to get a decent job. Many of these so-called establishments would be street corner banana sellers. They’re part of the 18.44% of establishments that operate without a “fixed structure”.

Another 36.19% of all establishments are home-based and only the remaining 45.37% operate outside the home and have a fixed structure. That isn’t all. In 2005, 5.3% of all establishments were not permanent, but seasonal in nature. In 2013, that proportion edged higher to 5.9%. What financing can these home-based and “no fixed structure” establishments command? What technology can they use? What levels of skill or management acumen can they develop? How can they ever scale up?

The best illustration of the kind of growth in employment we’re seeing is that of all the states, Manipur—a failed state plagued by multiple insurgencies, where government control over large parts of the state is tenuous—holds the record in employment growth between 2005 and 2013. It’s not hard to imagine the kind of “employment” that people have to take up in order to survive.

The fact of the matter is that, in spite of the high GDP growth recorded during 2005-2013, the informalization of employment increased during the period. The vast majority of workers continued to scrape out a precarious living from dead-end jobs and the proportion of such workers has increased. The numbers show the problem has only become worse.

A vast number of young people join the workforce every year, with millions deserting small and increasingly unviable farms for jobs in industry or services. This new generation, everybody tells us, is very “aspirational”. Will they tolerate, as their parents did, being stuck in “home-based” and “no fixed structure” employment? Will they tolerate the increasing inequality between their bleak existence and the high-paying jobs in the formal sector? If they don’t, the demographic dividend is likely to become a demographic nightmare, with widespread social unrest.

Manas Chakravarty looks at trends and issues in the financial markets. Comments are welcome at capitalaccount@livemint.com