Indian Economy: News and Discussion (June 8 2008)

Abhijeet
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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Abhijeet » 29 Jan 2009 06:51

Good article as usual by Ramesh Ramanathan.

http://www.livemint.com/2009/01/2820513 ... lists.html

I want to focus on a practice in the banking industry—relatively unknown outside the sector—that I believe can cause enormous damage to the lives of the urban poor: negative lists in credit appraisals. A negative list is a list of areas of a city that a bank has identified where residents would not qualify for credit approval, just by virtue of the location.

This is a relatively new development in India.

To put it bluntly, negative lists are discriminatory. Consider the implications.

Lack of access to formal credit can have damaging consequences—on a personal level, it can drive people into debt traps from informal sources who can charge interest rates up to 10% a day. On a larger level, though, the consequences are even more destructive. As formal funds get sucked out of these areas, commerce gets bogged down, the entire neighbourhood deteriorates, driving a downward spiral of economic decay where the whole community—residents, traders, labourers— become dependent on an informal ecosystem of financial support to keep them afloat. This is the breeding ground for the mafia and criminal networks.

The US had a practice similar to our negative lists, called “redlining”, where areas of a city that were poor or dominated by blacks were credit-quarantined.

When the redlining practice in the US became public in the 1960s, there was enormous pressure for several years to get corrective policies. The Fair Housing Act of 1968 and the Community Reinvestment Act of 1977 were seminal pieces of legislation that addressed redlining discrimination.


A good case where the decision of the market is not aligned with the longer-term interest of society.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Singha » 29 Jan 2009 15:49

toi

Subhiksha chain runs aground in city
19 Jan 2009, 0321 hrs IST, Ashish Roy, TNN

NAGPUR: Subhiksha Trading Services, which had 20 outlets in the city, is in deep trouble with the outlets closing down one after the other. It
has not paid salary to its employees since last four months. The landlords have not received their monthly rent and the suppliers their payment for months. All the official telephones of the company officials, mobile as well as landlines, are not functioning.

The outlets are trying to offload their stock as fast as possible and at some stores goods are being offered at more than 50 % discount.

An employee, who has been informally laid off, told TOI that Subhiksha outlets at Jaripatka, Kamptee, Itwari and Wardhaman Nagar were closed in December and early January. Some more were closed down in second and third week of January. TOI visited the outlets in Gokulpeth and Dhantoli to find them closed. People living nearby said that they had not opened since last six to seven days. The outlet in Laxmi Nagar remains open only till 6 pm as there is no power supply.

Trader Mahesh Pise, who supplied food products manufactured by Haldiram and Mother's Recipe pickles to the chain, said that he had received only 35% of his dues. "I got this money only after NVCC lodged a police complaint on behalf of some 50 suppliers."

Another trader Prabhakar Deshmukh said that after the police complaint, top company officials from Chennai and Pune came to Nagpur and promised to clear all the dues. "They paid 35% immediately and gave cheques dated December 27 for second instalment drawn on a Pune bank. Those have not been credited into local accounts yet. They had promised to pay the final instalment on January 15 but the company officials seem to have vanished. None of their telephone numbers is functioning and the employees at the outlets still functioning don't have a clue."

A landlord told TOI he had not received rent since last six months. "They had paid a deposit of Rs 2.10 lakh and whenever I complain they say I should not worry as I have the deposit money. However, if the outlet closes down, I will suffer a big loss. I had invested Rs 3 lakh on interior design of the shop as Subhiksha signed an agreement for nine years. However, after six months they stopped paying the rent." :((

The landlord said that in November he was promised by company officials that his dues would be cleared by March but he has not received any money in December and January as promised.

He further said that Subhiksha had signed agreements with six persons for new outlets but they never opened. The landlords have incurred huge loss due to expenditure on interiors. TOI tried to contact Nagpur operations in-charge Mahesh Deshpande but his mobile was not functioning. The mobiles of outlet incharges were also not functioning.

A few days ago the manager of Kamal Chowk outlet Hanumant Malayya had been arrested by Pachpaoli Police when an employee found out that the provident fund account number given to him by the company was fictitious.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Vipul » 29 Jan 2009 20:26

Subiksha is also in big trouble in New Bombay.It is behind by more then 6 months in paying rents for its Nerul,Vashi and Belapur outlets.A common landlord owns two out of the three properties informs that Subiksha is now going to rationalise the number of outlets.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Vipul » 30 Jan 2009 20:23

India's per capita income increases to Rs 33,283: CSO.

Backed by robust economic growth, India's per capita income has increased to Rs 33,283 in 2007-08 indicating an overall improvement in the living standards of the people.

Rising by almost 60 per cent since 2003-04, India's per capita income, which indicates what an average person earns, has increased to Rs 33,283 in 2007-08, reveals the quick estimates of national income released by the Central Statistical Organisation (CSO) on Friday.

The country's per capita income, has been growing at an annual rate of over 10 per cent since 2003-04, it said.According to the data, the per capita income, after taking into account population growth, increased to Rs 33,283 during 2007-08 from Rs 29,524 in the previous fiscal.

The per capita income, increased by 12.7 per cent (at current prices) during 2007-08, while country's population inched up by 1.4 per cent to 1.38 billion by the end of the fiscal.

The double-digit growth in the per capita income during the five successive years comes in the backdrop of impressive economic growth recorded by the country during that period.

The Gross Domestic Product (GDP) growth rate, which was 8.5 per cent in 2003-04, dipped to 7.5 per cent in the next year. However, since 2005-06, India has been recording an economic growth rate of nine per cent or more.

Economy grew by 9.5 per cent in 2005-06 followed by an even higher rate of 9.7 per cent during the next fiscal. Even during 2007-08, which witnessed a deceleration in the growth rate, economy expanded by 9 per cent.

The growth rate, however, is expected to decline to 7 per cent during the current fiscal primarily on account of the impact of the global financial meltdown on the country.As per the recent projections of the Reserve Bank of India and the Prime Minister's Economic Advisory Council, the growth rate was likely to dip to 7 per cent and 7.1 per cent respectively, during the current fiscal.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Akshut » 31 Jan 2009 00:02

Vipul wrote:

The per capita income, increased by 12.7 per cent (at current prices) during 2007-08, while country's population inched up by 1.4 per cent to 1.38 billion :eek: by the end of the fiscal.

.



It's 1.18 billion....+2+2+2+2+2+2+2+2+2.......and so on.........

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Singha » 31 Jan 2009 08:12

as per TOI Subhiksha will be closing half of its 1600 stores. the company says they goofed up in expanding too much on debt rather than raising more funds in the stock market.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Singha » 31 Jan 2009 08:29

politicians are good at sensing the public mood and keeping the mobs pacified. this might pass.

http://edition.cnn.com/2009/POLITICS/01 ... utive.pay/

Angry senator wants pay cap on Wall Street 'idiots'

WASHINGTON (CNN) -- One day after President Obama ripped Wall Street executives for their "shameful" decision to hand out $18 billion in bonuses in 2008, Congress may finally have had enough.
"You can't use taxpayer money to pay out $18 billion in bonuses," an angry Sen. Claire McCaskill says.

An angry U.S. senator introduced legislation Friday to cap compensation for employees of any company that accepts federal bailout money.

Under the terms of a bill introduced by Sen. Claire McCaskill, D-Missouri, no employee would be allowed to make more than the president of the United States.

Obama's current annual salary is $400,000.

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," an enraged McCaskill said on the floor of the Senate. "They don't get it. These people are idiots. You can't use taxpayer money to pay out $18 billion in bonuses."

McCaskill's proposed compensation limit would cover salaries, bonuses and stock options.

On Thursday, Obama said the prospect that some of the $700 billion Wall Street bailout could end up paying for bonuses to managers of struggling financial institutions was "shameful."

The president said it was the "height of irresponsibility" for executives to pay bonuses when their companies were asking for help from Washington.

"The American people understand we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," Obama added.

McCaskill's proposal comes three days after struggling banking giant Citigroup -- which has taken about $45 billion from the government's Troubled Asset Relief Program -- reversed plans to accept delivery of a $42 million corporate jet. The company changed its mind under Treasury Department prodding.

Former New York Mayor Rudy Giuliani defended corporate bonuses Friday, saying that cutting them also means slashing jobs in the Big Apple.

"If you somehow take that bonus out of the economy, it really will create unemployment," he said on CNN's "American Morning." "It means less spending in restaurants, less spending in department stores, so everything has an impact."
yeah right, as if they are paupers without the fat bonus

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Singha » 31 Jan 2009 08:35

400k for the big dogs in the executive suites would mean around 75k onree for the newbies. well below law and maybe on par with junior doctors? slightly more than current median MS salary and same as median Phd salary?

oh brother if this were to pass, I would book a ticket (tourist visa) to NYC just to walk all the way up and down soho, tribeca, greenwich village, central park, upper east side and *5th avenue* to see the mayusi and "former masters of the universe" in their black wool coats shamble along and shop at *market basket* (not some chi-chi whole foods) and eat at Sbarro's pizza by the slice than kobe beef and wild salmon @ Megu/Masa :rotfl: its going to be priceless seeing the pampered high maintainence upper east side wives deprived of their amex black credit cards and nannies and pushing their squealing designer kids in prams in the hot sun, swatting at flies, avoiding the rotting piles of fruit and garbage as the municipal workers go on strike for unpaid wages or lack of budget to buy diesel for the garbage trucks and barges...

sooner these parasites and morons are brought back to earth and get
some sense slapped into them the better.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby ramana » 31 Jan 2009 10:29

GD, Schadenfreude at its best!

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Yogesh » 31 Jan 2009 14:58

Is Satyam embargo isolated one ? seems not at least by this article ...

Aditya Sinha
First Published : 17 Jan 2009 01:28:00 AM IST
Last Updated : 17 Jan 2009 08:14:48 AM IST

India appears to be in a funk lately. The Satyam fraud, the Mumbai attack, and the imminent departure of India's beloved George W Bush… There seems to be no end to the bad news. Thank God parliamentary elections are around the corner. The country could do with some comic relief.

In a blink, however, the nightmare will resume. The global recession, which led to India's realty collapse and the disappearance of Satyam money parked by B Ramalinga Raju, shows no signs of abating before the first quarter of 2010 — if Barack Obama, who takes over as US president on Tuesday, steers his country's economy intelligently.

Even then, India will be lucky to grow at five per cent in 2009: Capital has already flown away in large amounts, and credit costs are not coming down in a hurry. Central banks around the world have already found that their monetary tools (such as lowering interest rates) are increasingly ineffectual, and rates won't go below zero. You have to wonder how many Satyam-type crises are lurking in the shadows.

There are many lessons in the Satyam fraud, and one of them is this: the notion that it's only the smaller fry in our business class which manipulate the law to their satisfy greed (like using the IT sector's tax breaks for money laundering and land scams) is incorrect. Our top industrialists too appear to have the same level of ethical values as cow-belt politicians and child molesters.

Take Mukesh Ambani, for instance. He was in the news quite a bit in 2008, and not just because he duelled with his brother Anil over the fate of the government when Parliament voted on the nuclear deal. You might have noticed that he was the top earning CEO, at Rs 24.51 crore. Of course, you don't really believe that this was the only money in which he was swimming around: Reliance Industries
Limited is worth around Rs 2,00,000 crore, and that's after the drop in value following the stock market decline from September. You have to also wonder whether his CEO salary is enough to pay for the 27-floor house he is building in Mumbai at the cost of $ 2 billion :eek: :shock: (according to Forbes).

Yet when it came to paying income tax, he wasn't even in the top 200 — in fact, his mother paid more tax than he did (she coughed up Rs 4.46 crore), as did Shah Rukh Khan (Rs 34 crore) and Sachin Tendulkar (Rs 8.8 crore). Such facts make sense only when you consider the kind of power Mukesh Ambani wields: a top energy sector official in the Government of India told this columnist that the ministry of petroleum and natural gas was run as if it was a division of Reliance Industries! Last summer, Sonia Gandhi was rumoured to have been in a dilemma whether to use his private jet or that of another industrialist to visit Beijing for the Olympics.

This raises the question of which is more powerful, our political class or the entrepreneurial class; or put another way, is the political class beholden to the entrepreneurial class, and not vice-versa as is usually presumed? We have always known that the smartest businessmen do not put their eggs in one basket — that Mukesh Ambani is as friendly to L K Advani as he is to Sonia Gandhi, and that Anil Ambani is still trying to live down the folly of throwing his lot in with the Samajwadi Party instead of keeping a veneer of equidistance from all parties.

Somehow, the business class has been able to convince everyone that business interests are pretty much equivalent to national interest, in that they remain the same no matter who is in power.

And if things get a bit hot — as they did for Raju the past ten days — then the easiest thing to do is to drag in the political class and let it take the heat. It is not difficult to implicate anyone: politicians need money. Tamil Nadu officials privately estimate that the DMK spent Rs 70 to 100 crore on winning the recent Thirumangalam assembly by-election, and you can imagine that even if the expenditure on the Lok Sabha polls is not as concentrated as it was in Thirumangalam, it will still be dizzyingly high. Politicians have taken money from business houses large and small (leave aside the fact that it is the businessmen who approach the politicians, and not vice-versa), and in any case, the political class is no paragon of virtue in the eyes of the voter. It is easy to tar a politician.

No wonder then, after the Satyam fraud came to light, both Andhra Pradesh Chief Minister Y S R Reddy and his predecessor Chandrababu Naidu were on television denying that they had any sinister role in the scam.

It is still early days, and whispers continue that the Satyam saga is going to take a political twist and perhaps a political toll, considering that the Congress party is banking on Andhra for a good share of Lok Sabha seats.

If that happens, you can bet that Raju will quietly be forgotten, and will one day return to resume his role as a captain of industry.

And, after all, deflecting public anger onto politicians worked after the Mumbai attack — after all, the fact India has not gotten a single extradition from Pakistan is blamed on the UPA, and not on busybodies like Condoleezza Rice or David Miliband, both of whom have managed to keep India in check while General Ashfaq Parvez Kayani thumbs his nose at us.

This habit of the entrepreneurial class using the politician as a straw man culminated this week in two industrialists proclaiming that Gujarat Chief Minister Narendra Modi was fit to lead India. Possibly they were thinking that he was a man who would both support India Inc and fight terrorism effectively.

Possibly they are right; there are many voters who think the same. However, it is presumptuous that the entrepreneurial class, discredited as it is, tries to short-cut the democratic process in our country by anointing a political leader before his time has come, if it is ever to come. Such proclamations should be loudly ignored.

If the business class really means business, then it can propose some electoral reform — with regard to financing of campaigning, which would make the political class less reliant on them. But wait a minute; if the business class did that, then it would hold no leverage over the polity of a poor nation such as India's. If electoral financing was reformed, through a device like public funding, then entrepreneurs like Ramalinga Raju and Mukesh Ambani would have to follow the rule of law.

No wonder India is in a funk. Both national security and economic security are compromised by a bunch of self-serving frauds. It isn't surprising, then, that there is a move by the information and broadcasting ministry, currently under Prime Minister Manmohan Singh, to muzzle the ubiquitous media (in "designated" times of crisis).

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Yogesh » 31 Jan 2009 15:02

Sorry folks just forgot to post the link:
http://www.expressbuzz.com/edition/stor ... LYs=&type=

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SK Mody » 31 Jan 2009 23:28

From IE epaper of 31/Jan/09, front page:
Old time Brfites may also want to notice a certain other item on the same page :D
Govt wants autonomous entity to manage debt, RBI Dy Governor disagrees

T HE Reserve Bank of India (RBI) and the Finance Ministry are at loggerheads again on the issue of setting up an autonomous entity to manage the government’s debt, estimated at Rs 18.44 lakh crore or almost 40 per cent of the GDP as on March 31, 2008.

At present, this function is managed by the RBI resulting in a conflict of interest situation where the central bank sets the short-term interest rate as a monetary authority and simultaneously sells government bonds as the country’s debt manager.

Rakesh Mohan, Deputy Governor, RBI, who chairs a committee on financial sector assessment (FSA) constituted by the government and the central bank in September 2006, has firmly opposed the setting up of an independent Debt Management Office (DMO) outside the central bank’s purview.

The FSA exercise, undertaken by India on its own for the first time based on a handbook prepared by the World Bank and the International Monetary Fund, is complete now and a comprehensive report on the stability and development of India’s financial sector will be published soon.

According to government officials, confirmed separately by sources in the RBI, in the last and final meeting of the FSA committee, Rakesh Mohan pointed out that divesting the RBI of its debt management functions was not prudent at a time when the government is running a high fiscal deficit. His views are that of the RBI. But the co-chair of the committee, Economic Affairs Secretary Ashok Chawla and member Arvind Virmani, currently Chief Economic Advisor in the finance ministry, both strongly recommended the desirability of setting up an independent DMO.

The Centre’s fiscal deficit, budgeted at 2.8 per cent of the gross domestic product in the beginning of 2008-09, is estimated to be around 7.9-8 per cent of the GDP, according to the Prime Minister’s Economic Advisory Council. The RBI fears that political and government interference in the affairs of the DMO may cause irreparable damage, given the scale of its operations.

Finance ministry officials, however, contend that there is no right time to do the right thing. “In fact, tough choices should be made now, especially with the government’s borrowing programme increasing, huge savings can be made on interest payments. The RBI has never really wanted to cede control. It is now citing high fiscal deficit as a reason,” an official said.

When contacted, Virmani said his views were clear right from the time he headed a panel way back in 2001 on the issue. The panel he chaired then had recommended setting up a middle office within the finance ministry to develop a risk management framework in the first stage and an autonomous DMO backed by statute in the second stage.

The government had, in Budget 2007-08, announced its decision to set up an autonomous debt management office. But, with a reluctant RBI, it took a while — 18 months or so — before the finance ministry could even set up a middle office in its premises to initiate work on the Budget promise. It later set up an internal working group under Jahangir Aziz, former principal economic advisor, finance ministry that recommended setting up a National Treasury Management Agency to manage the government debt.

Aziz, who is now Executive Director, JP Morgan Chase Bank, NA at its Mumbai branch, said, that India’s debt as a percentage of GDP has stabilized over the last 6-7 years. “In Japan that has a DMO, the public debtGDP ratio is much higher than India’s. High fiscal deficit and public debt cannot be reasons not to have a DMO,” he said.

According to Aziz, for the monetary policy to be more credible, it is important to remove fears in the market that monetary actions are taken to serve other interests. “For instance, today the market is always guessing if a rate cut or a reduction in the cash reserve ratio is a signal of higher government borrowings,” he said, adding that monetary action should not be influenced by the level of government borrowings.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby ramana » 31 Jan 2009 23:42

Which one? No need to be cryptic.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SK Mody » 01 Feb 2009 00:09

The ad on "right to recall" group.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby shyam » 01 Feb 2009 04:42

http://epaper.indianexpress.com/IE/IEH/ ... ndex.shtml

Rahul the Mehta! :twisted:
You need respect him for his commitment!! Bravo!

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby svinayak » 01 Feb 2009 05:21

http://www.slideshare.net/oliver.barret ... esentation

This guy says that India has another 50 years of low cost production. Branding is the key.
Relative stable environment for long term growth

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Satya_anveshi » 01 Feb 2009 06:26

shyam wrote:http://epaper.indianexpress.com/IE/IEH/2009/01/31/index.shtml

Rahul the Mehta! :twisted:
You need respect him for his commitment!! Bravo!


The MRCM (Mine Rent for Citizens and Military) Party
Jai Jawan Jai Kisan
Epilogue – II

And my special thanks to people in internet communities such as bharat-rakshak.com , “Indian Politics” community on orkut etc. Their response has played important role in making the drafts. I should also thank the people who hated these proposals but at least replied. The hostiles’ arguments against my proposals did enable me to improve the text of the proposals as well as create techniques using which now I am able convince a common that he who opposes MRCM demands is an enemy of the commons, and they must not support him.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby vina » 01 Feb 2009 19:45

I have no idea why Rahul Mehta was kicked out of the forum. He added so much color and a "different" (ok, I really meant wacked out) perspective. We need to invite him back to the forum. He would have had a field day with the NBJPrie of and "elitemen" of Wall St who managed to bring the world economic system down single handedly with their stupidity, incompetence, greed and absolute dishonesty .

I think, the BR admins should mail him and invite him back. Mehtaji come on, stop moping and sign on up and welcome back!. We need you.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SriKumar » 01 Feb 2009 20:11

Definitely Rahul Mehta ji added his own viewpoint that was different from the rest. Seeing the paper ad. one realizes that he puts his money where his mouth is- which is more than what I can say for myself. I think BRF was better off with his participation. One problem that people had (that I sensed) was that he tended to have same the responses to different issues in very different threads (e.g. IIMs should pay rent for their land or something like that, ...IITs should be made military institutions). He was able to defend his viewpoint well in those situations, but his stock viewpoints were repeated ad nauseum across many threads, over many years and it must have tired out some admins.

I dont know what was the final trigger in getting him banned (by a forum admin who is no longer an admin but an active participant, nevertheless). I think it might be worth getting him back...(I can already see some members crying 'No, not again' :) ).
Added later: Other than elitemen and NBJPrie, there was also 'commons'. :lol: He came up with another beauty when some guys ganged up on him in a particular thread: thread rakshaks.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Stan_Savljevic » 02 Feb 2009 02:26

^^^ Did you forget the uber-signature? AWMTA :P

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Rahul M » 02 Feb 2009 02:30

Stan_Savljevic wrote:^^^ Did you forget the uber-signature? AWMTA :P

what was that again ?
you guys are jogging my memory quite a bit today. :D

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Stan_Savljevic » 02 Feb 2009 02:33

All wise men think alike.
An under the belt to end: For a while, I thought Rahul M was the other (read saner) version/id of Rahul Mehta :rotfl: :rotfl:

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Rahul M » 02 Feb 2009 02:35

in my early days many made that mistake !
I was horrified ! :rotfl:

btw, remember someone had the idea that rahul mehta was actually an AI bot funded by MSFT. :lol:

added later : how does one actually read that advert in Indian express, it does look too small.
TIA.


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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SK Mody » 03 Feb 2009 00:21

Rahul M wrote:in my early days many made that mistake !
how does one actually read that advert in Indian express, it does look too small.
TIA.


Need to register and login.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Theo_Fidel » 03 Feb 2009 03:04

http://www.bloomberg.com/apps/news?pid= ... efer=india

The Reserve Bank last month cut the growth estimate in India’s $1.2 trillion economy to 7 percent in the year to March 31 from between 7.5 percent and 8 percent it estimated earlier.


Exports gained 17.1 percent to $131.9 billion in the nine months to Dec. 31, today’s statement said. Oil imports fell 31 percent to $4.7 billion in December, while non-oil imports rose 32 percent to $15.5 billion, the statement said.


I don't get it. Why is Non-Oil Imports increasing.

I'd be really curious to see the invisible account.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Suraj » 03 Feb 2009 03:39

Theo_Fidel wrote:I don't get it. Why is Non-Oil Imports increasing.

I'd be really curious to see the invisible account.

Unfortunately even the commerce ministry press release doesn't subdivide the non-oil import data. Invisibles data is not released by the commerce ministry, which releases merchandise trade data. The invisibles (services exports/imports) account is typically reported by RBI and Finance Ministry.

PS: welcome back here :)

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Katare » 03 Feb 2009 07:42

Need to see the details but non-oil-import growth of 32% is a very good news. It shows increased activity and resilance in local economy.

Meanwhile Reddy effect......

Funds flow to India Inc shrinks Rs 94,000 crore

Theo_Fidel

Re: Indian Economy: News and Discussion (June 8 2008)

Postby Theo_Fidel » 03 Feb 2009 09:01

Katare wrote:Need to see the details but non-oil-import growth of 32% is a very good news. It shows increased activity and resilance in local economy.

Meanwhile Reddy effect......


Is that a positive or negative on the Reddy legacy?

IMHO it was a wise and conservative monetary policy.

The total credit from commercial banks available has risen so there should be no shortage of money.
Much of the remaining I suspect was hot money which has taken a hammering.

Non-Oil imports during a time of reduced exports usually means items for consumption,
Not as it might seem at first glance, for manufacturing.

Not good for a economy that is running such huge deficits.

At this rate within 24 months we will be at 3 months of imports WRT currency reserves
which historically has triggered a crisis.

Am I the only one worried here.

Still investing in small lots, no more than 5% at a time.

Suraj, It is good to be back after an enormous work/travel load.
I seem to have missed a lot of the tamasha.

Suraj
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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Suraj » 03 Feb 2009 10:01

The Rs-$ exchange rate is still hovering around the 48-50 mark, a historic low territory. That would imply costlier consumer goods imports, which ought to be a natural barrier to imports. However that is a hypothesis, in the absence of data from the commerce ministry.

For quite a while now though, capital goods imports have grown at double digit rates, commensurate with known import of manufacturing and construction equipment. Further, during the summer months, we ran a surplus of exports over non-oil imports. During the last couple of months though, we've run a deficit, with non-oil imports too exceeding exports, including in Dec 2008.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby ajay_ijn » 03 Feb 2009 10:22

For quite a while now though, capital goods imports have grown at double digit rates, commensurate with known import of manufacturing and construction equipment. Further, during the summer months, we ran a surplus of exports over non-oil imports. During the last couple of months though, we've run a deficit, with non-oil imports too exceeding exports, including in Dec 2008.

Is that including oil exports?, shouldn't we remove oil from exports and imports to get the right picture. i was thinking reduction in global commodity prices should reduce prices of finished goods and probably offset a weaker rupee too.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Suraj » 03 Feb 2009 10:45

Why not include refined petroleum exports ? It is a value added item. The better equation would be to eliminate oil consumed domestically, and just include the quantity that goes towards export processing, though that data is difficult to come by.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby R Vaidya » 03 Feb 2009 12:42

-- End of west –Asia as New Power

http://www.dnaindia.com/report.asp?newsid=1227165


Rvaidya

Theo_Fidel

Re: Indian Economy: News and Discussion (June 8 2008)

Postby Theo_Fidel » 03 Feb 2009 21:05

R Vaidya wrote:-- End of west –Asia as New Power

http://www.dnaindia.com/report.asp?newsid=1227165

Rvaidya


Nice Polemic.

Not a lot of data other than the Demographic Tsunami theory
which is patently false.

Sorry Vaidya, Nothing informative or new there.

We are not going to get prosperous working long hours for low wages.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Vipul » 03 Feb 2009 21:11


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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SwamyG » 03 Feb 2009 21:12

Theo: Why is the Demographic theory false?

Vaidya: I always that it will take at least 2 generations for prosperity to kick in. If we take 1991 as the initial kick-off, it will be by 2020 when ROI would become more visible, and by 2050 or so the prosperity would have made inroads further. That is if there are no major external or internal factors.

Theo_Fidel

Re: Indian Economy: News and Discussion (June 8 2008)

Postby Theo_Fidel » 03 Feb 2009 21:57

SwamyG wrote:Theo: Why is the Demographic theory false?


Because it does not allow for changes in the future.

No country has become poor due to controlling its population growth
While many have become poor by not controlling it.

Age is not an issue for the next generation of jobs.

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby vina » 03 Feb 2009 22:12

Yes. And it ignores productivity increases. With the massive gains in productivity , you tend to use far fewer labor for the same things that earlier used to take lot more labor. Affects a whole range of industries and also why even household stuff. How much time does any modern housewife who has access to a grinder or a mixie spend in making dough for idli/dosa compared to what her grand mom did ?

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby SwamyG » 03 Feb 2009 22:15

Theo: More at global economic thread.....

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Re: Indian Economy: News and Discussion (June 8 2008)

Postby Arya Sumantra » 03 Feb 2009 22:57

vina wrote:Yes. And it ignores productivity increases. With the massive gains in productivity , you tend to use far fewer labor for the same things that earlier used to take lot more labor. Affects a whole range of industries and also why even household stuff. How much time does any modern housewife who has access to a grinder or a mixie spend in making dough for idli/dosa compared to what her grand mom did ?


which brings us to any important point- What is more important job creation or productivity gains? Depends on situation. In some cases productivity gains help keep costs low but in others mechanization appears cheaper only because energy costs are undervalued today.(lasting of fossil fuels resources, pollution costs, costs to a nation maintaining energy security, other hidden costs etc)

Do the so called productivity gains really bring benefit to society? A foreign mba student on an exchange program to IIM-B posted the photo of a campus garbage collector on her blog and mocked it. The garbage collector uses a bullock cart for the job. I asked her what was the use of an automobile? Would his time savings be really worth the addition oil import burden on India or the pollution it would cause. What are the chances he would do something really economically worthwhile in time saved?
Same goes with washing machines and dish washers. In their absence the maid servants got jobs. With their arrival, people are craving for more electricity while the jobs for uneducated are reduced.

The only way a developing nation like ours can significantly boost jobs especially for low skilled manpower is by selective De-mechanization of industry. I remember Nirma uses labourers mixing powders by hand instead of a mechanized mixer. Of course they did it to claim Small Scale Industry benefits but atleast it created more jobs and us having to burn less of coal in power stations. Leave out those areas of mechanization where human safety is endangered or where the cost increments due to human substitution hurt the poor and middle class themselves.
Can you argue that US companies saved more in productivity gains by repeated lay-offs over last decade than the $800 billion it is investing now to create new jobs?
The way population is exploding in the developing world, the economic growths will not be able to create enough jobs for large swathes of unskilled labour force. Recent Vib. Guj Summit 2009 announced Rs 12 lakh crore investment and 25 lakh job creation. If you look at job created/ capital invested it is Rs 50 lakh investment per job creation!!

Politicians of the future will have to selectively apply a De-industrial Revolution as a cheaper way to create more jobs.


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