Indian Economy News & Discussion - Aug 26 2015

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 13 Nov 2015 02:28

Within a day of the Aberdeen Asset Mgmt report, legendary fund manager Jeff Gundlach provides another endorsement of the India story:
Money Manager Gundlach Says Buy India. Here’s How
Jeffrey Gundlach is a big fan of India’s stock market. So are investors in exchange-traded funds.

“Buy India … and don’t look at your statement for 25 years,” DoubleLine Capital’s chief executive officer told an audience of ETF investors last week at ETF.com’s annual Inside Fixed Income conference, citing the country’s demographics. The World Bank this year predicted India would overtake China as the world’s fastest-growing major economy in the next two years, with gross domestic product growth of 7.1 percent by 2017.

Many investors at the ETF event may have patted themselves on the back, since $4.7 billion has poured into India ETFs in the past two years. That’s helped to almost triple assets over that period, to $7.2 billion. While India ETFs rank 10th in single-country ETF assets, they rank second in inflows. Only flows into Japan ETFs top them, at $14.6 billion.

Gundlach took over from Bill Gross as the most well known bond fund manager in the world.
Industrial growth dips to 4-month low in Sept
Industrial growth fell to a four-month low of 3.6 per cent in September, against the 6.2 per cent in August, because of deceleration in manufacturing and mining activities, according to official data released on Thursday.

Electricity generation, however, registered a double-digit growth.

In September 2014, industrial growth, as measured by the Index of Industrial Production (IIP), was 2.6 per cent.

The growth rose to four per cent in the first half of the current financial year against 2.9 per cent in the corresponding period of the previous financial year.

IIP growth rose to 4.6 per cent in the second quarter of the current financial year against 3.3 per cent in the first three months, which will have positive implications for the gross domestic product (GDP) numbers for July-September, to be released by the end of this month end.

India's GDP rose just seven per cent in the first quarter of the current financial year against 7.5 per cent in the previous three months.

Even as manufacturing growth was down at 2.6 per cent in September against 6.6 per cent in August, capital goods and consumer durable goods continued to register double digit growth rates.

Capital goods production rose 21.8 per cent in September against 10.6 per cent in August, showing investment activities. However, the activities were still confined to public expenditure, instead of private investment.

Consumer durables output also rose by 17 per cent in September against 10.3 per cent in the previous month. This segment is expected to perform well in October as well. It was indicated by car sales surging 21.8 per cent in October.

Ahead of festival season, firms also seemed to be storing huge quantity of furniture. Production of furniture was up 69.9 per cent in September. Its output was up 49.5 per cent in the first six months of the current financial year.

October IIP numbers, anyway, may post higher numbers because of a contraction by 2.6 per cent in the same month in 2014.

"A favorable base effect related to the shift in the festive calendar is likely to lead to a short-lived spike in IIP growth in October 2015," said Aditi Nayar, a senior economist with the cooperative bank ICRA.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 13 Nov 2015 20:03

M&A spree?

http://economictimes.indiatimes.com/new ... 768597.cms
Corporate India's merger and acquisition (M&A) spree saw a significant uptrend in October, taking the deal tally for the first 10 months this year to $29 billion, says a Grant Thornton report.

According to the assurance, tax and advisory firm, there were 58 M&A transactions worth USD 3,144 million in October, a jump of 233 per cent. M&As were up 35 per cent in terms of the number of transactions.

The significant growth in October values was due to big ticket transactions, the report said, adding that seven deals were valued over $ 100 million each and one was worth a billion dollar. Together, they contributed to around 80 per cent of total M&A value.

"Outbound investments and Domestic M&A have been demonstrating signs of growth," Grant Thornton India LLP Partner Prashant Mehra said, adding that this growth was mainly driven by inbound transactions, which contributed to around $1.6 billion across 12 deals.

During January-October, there were 486 deals worth $28,798 million, as against 476 transactions worth $27,516 million in the year-ago period.

Going forward there is likely to be a positive outlook for deal activity.

With all the macro indicators looking positive, the current traction will continue to grow. Moreover, amidst the visibility of more on ground action around Government's key policy and reforms, the stage is set to witness a high growth in the deal activity for the next few quarters," Mehra said.

A sector wise analysis shows that M&A activity was driven by telecom, which contributed to 38 per cent of deal values while IT & ITeS and pharma together contributed to another 23 per cent in October.

Major deals during October include American Tower Corporation's 51 per cent majority sate in Viom Network for $1.2 billion and Mumbai-based Carnival Group's acquisition of Larsen & Toubro's commercial real estate projects in Chandigarh for $267 million

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 13 Nov 2015 23:15

Gurulog,

Modi announced IR Rupee Bond. Having sip'ed brooke bond tea watching James bond movie., I want to brag about owning IR Rupee Bond from LSE.

How do I subscribe/buy/own Rupee Bond from LSE?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 13 Nov 2015 23:18

What is LSE ?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 13 Nov 2015 23:22

Meanwhile, T N Ninan attempts to decipher the stellar tax revenue numbers so far this fiscal, despite seeming softness in growth and trade numbers:
The tax puzzle
Is something going on in the economy that we have not grasped? Consider the trend in excise revenue collection — it is up an astonishing 68 per cent in the first seven months of the financial year. The government is playing this down by saying that it mostly reflects changes in tax rates that were announced in the Budget, but you would assume that these had been factored into the tax projections for the full year. These projections assumed excise revenue growth of 23.9 per cent—which is being exceeded by a mile.

The puzzle of a tax surplus might be explained by sectoral numbers. For instance, service tax collection is growing at more than 26 per cent, helped by the increase in the tax rate from 12.36 per cent to 14 per cent. Car sales have been buoyant, especially in the latest months, and effective taxation on automobiles was increased in the Budget — so excise revenue from this sector too would be showing growth on growth. The modified tax framework for the petroleum sector was said to be revenue-neutral; perhaps it wasn’t. The point to note is that, in his Budget speech, the finance minister had said the total impact of indirect tax changes would be Rs 23,383 crore — so that can hardly explain the much greater collection surge.

There is the possibility that the surge in collection reflects buoyant economic trends. The Reserve Bank’s latest growth assessment for the year is 7.4 per cent. But critics of the new set of GDP numbers would put growth at a lower level; they would point to less than five per cent growth so far in manufacturing, only three per cent in electricity generation, the monsoon precipitation shortfall of 14 per cent, the continuing double-digit decline in both exports and imports, the single-digit growth in bank credit, and the flattish trend in quarterly corporate profit and sales figures. None of these key indicators would suggest rapid economic growth. The surge in tax collection flies in the face of all these numbers.

Since tax figures are actual money in hand received, as opposed to an estimate, it points to the potential for nominal growth to be higher than what the current preliminary estimates suggest. Possibly, IIP / GDP estimate figures will be revised upwards in future.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 14 Nov 2015 00:13

Suraj wrote:What is LSE ?


London Stock Exchange (no not London School of eCONomics).

Here is the link from LSE itself http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1447397093582020300.html

Agreements signed Thursday covered financing for Indian infrastructure, plans to issue rupee bonds in London, cooperation in nuclear energy, joint research in new technology and a five-year plan to develop three "smart cities" in India, Modi and Cameron said.


Modi in his speech talked about Railway Rupee Bond (expected to be @ $1 Billion).

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 14 Nov 2015 01:03

It seems to have been announced mere hours ago. It's a Friday night. There will hardly be any details for a few days.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karthik S » 14 Nov 2015 03:33

disha wrote:Gurulog,

Modi announced IR Rupee Bond. Having sip'ed brooke bond tea watching James bond movie., I want to brag about owning IR Rupee Bond from LSE.

How do I subscribe/buy/own Rupee Bond from LSE?


The coupon rate will be very high if it can be bought using pound as bond holders will demand higher rates because of currency exchange rates fluctuations or every bond should have a default futures option, which may then lead to losses to the railways. I think it's best to trade bonds withing India.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Kakkaji » 14 Nov 2015 06:41

Here are some details:

IRFC set for UK cash trip

New Delhi, Nov. 13: Indian Railway Finance Corporation (IRFC) will be issuing rupee bonds worth Rs 6,000 crore in London later this year.

The bond issue, which has been in the works, was cleared by Prime Minister Narendra Modi before he left for his UK tour.

This will be the first "masala" bond issued by an Indian PSU since the government announced taxation rules for such bonds last month.

A nominal 5 per cent income tax, or withholding tax, will be levied on interest earnings from these bonds, similar to the treatment given to offshore dollar or euro-denominated bonds.

At the same time, capital gains from the possible appreciation of the rupee between the date of issue and redemption of the bond will be exempted from tax.

Earlier in the year, the Reserve Bank of India allowed domestic companies to raise offshore bonds denominated in rupee, in a baby step towards full rupee convertibility, one of the objectives set by Reserve Bank governor Raghuram Rajan when he took charge two years ago.

The rupee or masala bonds are Indian rupee-denominated paper issued in offshore capital markets.

Investors of these bonds bear the hedging risks from foreign currency fluctuations.

Yes Bank pact

Yes Bank today said it has signed a pact with the London Stock Exchange (LSE) for bonds and equity issuance with a focus on green infrastructure finance, under which it plans to list up to $500 million green bond on the bourse by December next year, reports PTI.

The lender said it might use the agreement to raise equity capital through a global depository receipt listing on the LSE.

The two proposals are part of the bank's overall $1 billion of equity capital raising plans.

Meanwhile, leading British lender Standard Chartered, the largest foreign bank in terms of branch presence, said it had entered into an agreement with the British government for a new financial services leadership programme, to help Modi's skilling initiative.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 14 Nov 2015 06:43

Actually Indian debt has been very attractive to international institutional holders lately. Currently there's a $30 billion ceiling on foreign holdings of government debt, which is being raised to $40-45 billion in phases. In addition, both private companies and states bond issues can be purchased by FPIs. FPIs have demonstrated good appetite for government debt, and are interested in state bonds. IR could also obtain significant funding through this channel.
India eases rules for foreign investment in government bonds
India's market regulator has allowed foreign investors to reinvest in government bonds the same day, according to a emailed circular seen by Reuters, hoping to sustain outside interest in the country's debt market.

India limits the amount of government bonds available to foreign investors, and some 90 percent of that allocation was filled in September last year, following the election of Prime Minister Narendra Modi's government earlier in 2014.

However, foreign investors who bought government bonds before September had been unable to switch those bonds to different tenors - once debt was sold, they could not buy back in without going through the lengthy auction process.

"This will revive foreign investor interest in government bonds and help investors to switch to longer end bonds from shorter end, given a benign interest rate outlook in India," said Ajay Manglunia, head of fixed income markets at Edelweiss Securities.

Allowing foreign investors to reinvest in sovereign paper could also indicate that the government has no intention of relaxing overall limits on their investment anytime soon, Manglunia added.

SEBI, in an email sent late on Wednesday to the custodian banks of foreign investors and seen by Reuters, said the facility to buy and sell government bonds the same day would be applicable on the entire $30 billion ceiling on government debt purchases by foreign investors.

States may soon raise funds by selling bonds to Foreign portfolio investors
Foreign portfolio investors (FPIs) in Singapore, London and Hong Kong may soon take calls like 'buy' Maharshtra, 'sell' Tripura, and 'hold' Haryana with the Reserve Bank of India and the government planning to allow offshore institutional investors to trade in bonds floated by state governments. The proposed move, besides widening investor base, would let better-run states raise funds at cheaper rate than those whose finances are in a shambles.

Overseas investors' combined exposure to debt securities is now capped at $80 billion, of which $30 billion is permitted in gilts or sovereign bonds issued by the central government and the balance $50 billion can be invested in bonds sold by corporates. No investment is allowed in state governments bonds - commonly known as state development loans - and treasury bills issued by the Centre to raise less than one-year money.

Though fiscal situation vary from state to state, their costs of borrowing do not differ dramatically. Most institutional investors attach little significance to finances of states. But FPIs, once allowed to invest in state papers, are likely to pay a premium on bonds of states with better financial health.

Over the past two years, the states borrowing mechanism has been streamlined with regular auctions held every alternate Tuesdays. Seven to 14 states borrow a total Rs 8,000-10,000 crore in each auction. For the first time, the central bank has issued a tentative calendar for selling state securities in line with central government bonds. In the July-September quarter, 10 states and one of the union territories are likely to sell Rs 45,000-50,000 crore bonds. State bonds come in maturities of 10-year, but issuers like Gujarat and Karnataka have introduced five-year papers too.

At present, the combined FPI investment in central government bonds has touched the $30-billion ceiling. Even though there is about $20 billion headroom for FPIs to buy corporate bonds, some of the investors may be waiting for the yield to widen. Yields are comparative lower on corporate bonds with many issuers deferring bond issuances amid expectations of interest cuts by RBI.

With an $80 billion overall cap, and the $30 billion gilt limit maxed out, the $20 billion headroom means FPIs hold $30 billion of corporate debt, for a total of $60 billion of Indian debt held by foreign investors.
India May Raise Foreign Investors’ Debt Quotas

With a robust demand for Rupee bonds issued within India, I see little reason to think that masala bonds (rupee bonds issued at foreign exchanges) will rate a significantly higher coupon. Arguably it might sell at a discount because it's available at their own local exchange as opposed to via RBI's auctions, though limited masala bond liquidity might be a bigger factor in their yield premium than anything else.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 16 Nov 2015 04:46

More about rupee bonds:
Japan's retail investors get a yen for rupee bonds
Japanese retail investors cannot seem to have enough of rupee-denominated bonds. And, financial institutions from all corners are happy to oblige.

Each issuance size is small, as investors are still testing the waters. Even so, Rs 4,132 crore worth of rupee bonds so far this year have been issued to Japanese investors and another Rs 681 crore is lined up till December. In 2014, Rs 907 crore of such bonds were issued and Rs 744 crore was raised between 2011 and 2013.

These 'uridashi bonds' are papers issued to Japan's retail investors, commonly known by the moniker of 'Mrs Watanabe' as the matron responsible for maximising returns on her family's earnings.

Long years of low interest rates in Japan forced retail investors there to bet on currencies worldwide from the 1990s and are now considered a significant force in the world currency market.

As speculators and carry traders, the Watanabes invest in markets where currencies are stable but offer relatively higher yields.

Image
Last week, I posted an analysis stating that the drop in foreign trade was entirely value based due to the fall in commodity prices. The following data suggests the same, since volumes are actually up YoY, so the only way exports could drop is due to a drop in prices:
Cargo traffic at 12 major ports up 3.67% in Apr-Oct
Cargo volume handled by country's 12 major ports rose by 3.67% to 347.88 million tonnes during April-October 2015 over the same period a year ago.

The state-run ports had handled 335.57 million tonnes (MT) of cargo during April-October 2014.

Kandla Port handled the maximum 57.31 MT of cargo during the period, which was up 4.79% against 54.69 MT during April-October 2014.

Paradip Port handled 42.50 MT, during the first seven months of the current fiscal. The port had handled 40.27 MT during the same period a year ago.

JNPT at Mumbai handled 37.38 MT while Mumbai Port handled 36.12 MT and Visakhapatnam port handled 32.97 MT of cargo respectively during April-October period.

Chennai handled 29.97 MT, Kolkata 29.16 MT, New Mangalore 19.58 MT, VO Chidambaranar 21.78 MT, Kamarajar (Ennore) 18.36 MT, Cochin 13.11 MT and Mormugao 9.59 MT during the April-October period.

Mormugao port registered the highest growth of 25.27% during the period followed by V O Chidambaranar 19.06% growth.

There are 12 major ports under the control of the Centre besides 187 minor/intermediate ports under the jurisdiction of states along the 7,517 km long coastline of the country.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vipins » 16 Nov 2015 20:12

Modi government goes high on reforms; new bankruptcy law, subsidy rules on anvil
Among measures on the cards are single-window clearance for multi-storey buildings, a monetary policy framework, a new bankruptcy law and subsidy reforms as the Modi government seeks to maintain the momentum on policy change.

The government is also expected to take LPG subsidy reforms forward by excluding those in the high-income bracket. Direct benefit transfer for kerosene is expected to be taken up on a pilot basis in five districts of each state. Petroleum Minister Dharmendra Pradhan has already written to chief ministers on this.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 16 Nov 2015 22:01

Exports fall for 11th straight month, down 17.53% in October
India’s merchandise exports fell for the 11th consecutive month in October, this year. As compared to this, during the 2008-09 global financial meltdown, the decline was for nine months in a row.

Exports contracted 17.53%, to $21.35 billion in October, against $25.89 billion in October 2014, according to data released by the Commerce Ministry on Monday.

Besides a global slowdown, the severe fall is attributed to a decline in global commodity prices. Exports had last recorded growth in November 2014, rising 7.27% year-on-year.

Imports too declined by 21.15% to $31.12 billion in October as compared to the year ago period, when it was $39.46 billion. For the current financial year, (April-October), India’s cumulative imports were $23.20 billion. This was a 15.17% drop from $27.35 billion, which was the cumulative figure for the same period last year.

Also in the current financial year, trade deficit has narrowed to $77.76 billion, cumulatively for months leading upto October. The corresponding figure for the previous year was $86.26 billion.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 17 Nov 2015 04:57

Wholesale prices drop for 12th straight month in October, longest decline in 40 years
General wholesale prices fell in October for 12th month in a row by 3.81 per cent, official data released on Monday show. It was back in 1975-76 that there was Wholesale Price Index (WPI)-based deflation for a full year. It was in October 2014 that inflation was last seen, at 1.66 per cent.

However, there are a few price pressure points, particularly in food articles. Pulses in particular — these saw inflation rise to almost 53 per cent in October from 38.56 per cent the previous month. Inflation in onions also remained elevated, though it moderated to 85.66 per cent from 113.70 per cent.

“It appears that imports (of pulses) have not been able to quell the prices. Separately, insufficient rain during the monsoon seems to be having a limited effect on vegetables, as overall inflation remains muted at 2.56 per cent but inflation in onion prices has remained high and stands at 85.7 per cent,” said Richa Gupta, senior director, Deloitte in India.

Food inflation rose to 2.44 per cent in October from 0.69 per cent the previous month. In non-food items, oilseeds also showed a rising tendency, to 6.52 per cent in October from 2.21 per cent the previous month.

In other broad categories, deflation decelerated to 16.31 per cent in October from 17.71 per cent in September.

In manufactured products, the rate of price fall declined to 1.67 per cent from 1.73 per cent earlier .

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 17 Nov 2015 07:39

japan has slipped into recession.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 17 Nov 2015 08:42



India is going to enter into Goldilocks economy.

What a change., 5 years back it was in stagflation (I remember posting it here first)., and now it is going to enter into Goldilocks phase. If this phase is sustained till 2025-2030 (very much doable)., we will have a nominally $8T economy in by 2027-2030.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Yagnasri » 17 Nov 2015 13:59

Vijay Malya was declared as Willful Defaulter under RBI Guidelines by State Bank of India.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 17 Nov 2015 14:09

Telcos line up Rs 34,000-cr capex for 4G expansion
Large telecom operators plan to spend Rs 34,000 crore in the current financial year to roll out fourth-generation technology (4G) networks and boost their existing one, to address call drops.

Airtel, which had earlier said it would spend $3 billion for its India and global operations in FY16, recently said it might end up investing $200-$400 million totalling a capex of $3.2-3.4 billion (Rs 21,142-22,463 crore) because of accelerated 3G and 4G expansion in India.

Idea Cellular, the third largest operator, has already raised its guidance from Rs 5,000-5,500 crore to Rs 6,000-6,500 crore for the current financial year, out of which half has already been spent. Vodafone, the second largest telecom service provider, also said it would be stepping up investments.

FinMin raises duty drawback rates to arrest export slump
As exports fell for the 11th month in a row in October 2015, the government on Monday increased the refunds to exporters on duties on imports, particularly those relating to engineering products. This would also neutralise the impact of import duty hike in steel, used in engineering products.

Besides engineering goods, the government raised the duty drawback rates on composite products such as leather handbags, ready-made garments made of cotton wool and those made of cotton with lycra.

The Central Board of Excise and Customs raised the duty drawback rate by two percentage points for the engineering sector, which would allow higher tax refund to exporters of machinery and appliances, electrical machinery, tools and implements, among others.

"These revised rates are based on average incidence of customs and central excise duties and service tax related with the manufacture of export goods and involve substantial total drawback for exporters," the government said in a release.

After the additional hike in the duty drawback, the rate for certain engineering products could go up to close to eight per cent, sources said.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 18 Nov 2015 03:48

India Overtakes USA to Become World’s Second-Largest Internet User Base
India will overtake the U.S. to have the second-largest population of Internet users after China by December, an Indian trade group said Tuesday.

Fueled by a boom in smartphone ownership, the number of Internet users will rise to 402 million in December from 375 million in October, according to the trade group Internet and Mobile Association of India. China has about 650 million Internet users, according to the World Bank.

Much of the increase is driven by a boom in mobile-data users, which rose to 276 million in October, an increase from 159 million from a year earlier, the trade group’s report said. Of the 11 million Indians that the report says will access the Internet for the first time in the next year, two-thirds will do so with a cellphone.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 18 Nov 2015 08:48

I wonder if negi and a few others remember this discussion from a year ago when the RuPay cards were first announced. There was a lot of skepticism whether it would amount to anything. The criticisms were legitimate, considering it's a significant undertaking to implement the payments gateway backbone, card issuance and other administrative details. Yet, here we are today - from a few million there are 225 million RuPay cards in use a little over a year later:
Why RuPay has potential to end the dominance of Visa and MasterCard in India
There are 603 million debit cards in use in India, data from the RBI shows. As of October 30, out of 222 million RuPay cards in circulation, close to 170 million cards are linked to Jan-Dhan accounts and only 52 million cards are mainstream. The remaining are from Visa, MasterCard and American Express. "The domestic card system has gained popularity and with its linkage under the Jan-DhanYojana, it has become a household name," RBI deputy governor SS Mundra said. But many accounts, those which were opened by the government for Jan-Dhan, still do not have enough deposits, and hence these cards are not being used optimally.

On an average, Visa and MasterCard would charge Rs 3 per transaction. RuPay charges 45 paise per ATM transaction. RuPay says there is no special treatment and it has only taken up business opportunities that others were not keen on because of lower profitability.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Prem » 18 Nov 2015 09:09

disha wrote:
Suraj wrote:[
India is going to enter into Goldilocks economy. What a change., 5 years back it was in stagflation (I remember posting it here first)., and now it is going to enter into Goldilocks phase. If this phase is sustained till 2025-2030 (very much doable)., we will have a nominally $8T economy in by 2027-2030.


Because of MMS non governance , 2022 economic and strategic target has been delayed till 2027-2030
Best part of Indian economy will be it won't be much export oriented economy thus giving us strategic independence of gentle or mad elephant. India's Crude basket has dropped below 40 and it's still going south. With Coal import dropping and solar matching conventional prices, We should achieve energy secured pretty soon and energy independent in medium term thus free from many ME religious ,social political sand storms. Natural balance of power in our neighborhood will be restored after many centuries.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 18 Nov 2015 09:14

Exhibit of smoke and mirrors ..BSNL reports 672Cr Operating Profit

Enthused, I clicked to read the article. One that immediately screamed was WOW! But then, realised it was classic govt smoke and mirror show.

Is this 672r the "Operating Profit" as we know from normally accepted meaning of the term ? Nope, not by a fat chance. What they are reporting is EBITDA! . Okay .. what about EBIT , read further down and hidden away your read,

The net loss of BSNL though increased to Rs 8,234 crore for the reported fiscal compared with Rs 7,020 crore last year, mainly on account of asset depreciation calculated as per the Companies Act.

How inconvenient this depreciation and amortisation business. I ask you ? Nah ?

The loss could have come down to Rs 5,370 crore if the company would have calculated its asset depreciation as per the old Act.


Pah, it is all a conspiracy. They are making us report per GAAP like everyone else. What do they think we are ? Some snivelling telephone company ? We lived in a parallel universe until now and were reporting funny numbers and it is our right to live in such a universe and report funny numbers. Our loss was actually only Rs 5370 cr , but they are making us report it as Rs 8234 crores!! Don't even ask any questions about our accumulated losses.

Lal Salaam, etc, etc. Inquilab Zindabad.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby jamwal » 18 Nov 2015 17:28

Can you please be a little less cryptic and flamboyant (if that's the right word) with your posts ? I find it really hard to follow you and 1-2 other posters.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby panduranghari » 18 Nov 2015 18:14

disha wrote:Gurulog,

Modi announced IR Rupee Bond. Having sip'ed brooke bond tea watching James bond movie., I want to brag about owning IR Rupee Bond from LSE.

How do I subscribe/buy/own Rupee Bond from LSE?


Why would you buy a 'bond' when interest rate rise is expected? Or unless you have so much money, that you care not how you loose it?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Rahul M » 18 Nov 2015 18:58

Suraj, I have my doubts about how much the RuPay cards have taken off. I want it to succeed but so far all my attempts to use my own RuPay card has ended in failure. nor do I know anyone who uses them. I did ask.
I am afraid number of cards issued may not be the ideal barometer to measure its success.

most e-commerce sites still do not have an option for rupay cards, that needs to change and GOI needs to enforce that.
true change would be when bulk of internet transactions in India take place via RuPay.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 18 Nov 2015 21:36

Would you care to describe what 'all my attempts to use my own RuPay card has ended in failure' implies ? It could mean anything from the card being damaged to something else. I assume you're not one of those who needs to use PMJDY issued cards for direct benefits transfer subsidies. Mastercard/Visa lockin of higher end portals like e-commerce sites would not surprise me - they have a lot to lose if RuPay cards squeeze them out.

RuPay cards, in my opinion, are currently in a place like the Chinese building out a lot of roads. It seemed like they were building too many to nowhere, but it was only a matter of time before the utilization grew dramatically. In other words, they government is going its part to seed the foundation. It's typically been an Indian problem that the availability of goods or services is lacking, and therefore demand remains largely unfulfilled . In cases like these, just seeing availability is being rapidly addressed, is a very new dynamic. Typically this happens with private services, e.g. cellphone connections, not a government driven goods/services supply.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Rahul M » 18 Nov 2015 22:32

I have an a/c with a PSU bank and it came with a RuPay debit card. I tried to make online payments using RuPay wherever that option was there and have failed in that effort every single time. and no, my card is not damaged. I am not that much of an ignoramus to miss such a situation.

I haven't expressed any doubts about the need for rupay per se but about how we are going about it. there's no reason why broad acceptance has to wait till an arbitrary % of Indians carry rupay cards. if we leave it to market forces the big two would use every trick in the book to muscle it out of existence.

asking India based e-commerce outlets to mandatorily add an option of paying by rupay within, say 1 year could be a game changing step IMO.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 18 Nov 2015 22:56

Perhaps someone more familiar with e-commerce payment mechanisms can weigh in, but my understanding is that these sites have to have agreement with payments providers (MC/Visa or RuPay). That enables them to make the charge request on the corresponding payments gateway. If these websites are compelled to use MC/Visa due to their $ power exclusivity, that means they cannot access the NPCI network to bill to a RuPay card at all. That's a regulatory issue that needs to be addressed by preventing MC/Visa from asserting any such payments exclusivity. They can take GoI to court for it; they will fail. I would be surprised if GoI hasn't planned to annouce mandatory RuPay support requirement, if not announced it already.

Most RuPay cards are PMJDY ones, and therefore go to the lower strata of society who don't necessarily use e-commerce sites much. However they cards are being used, proportionate to the % of non-zero PMJDY accounts, which itself has fallen from 75% to 36% lately:
http://www.pmjdy.gov.in/account

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby ldev » 18 Nov 2015 23:30

AFAIK, RuPay is a credit/debit card (it does not matter what it is because the processing is the same) Payment processing in India for RuPay is done by National Payment Payments Corporation of India. For an online site to accept RuPay (in any part of the world), RuPay has to be on the list of accepted cards for the payment processor and the payment gateway used by that online site e.g. if RuPay wants wider acceptance it could tie up with somebody like First Data which is an integrated payment processor & gateway accepted at 6 million Points of Sale. If Rupay wants to blaze its own path, then it will have to individually approach different payment gateways around the world to increase acceptance. From Rahul M's experience it looks like so far they have done neither.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 18 Nov 2015 23:34

RuPay is just a trademark for cards issused to use the NPCI gateway. It comes in the form of both credit and debit cards. It doesn't have to worry about international accessibility right now - just getting mandatory access to every card-based payment portal within the country would be a very large step. Right now it's primarily tailored to utilizing DBT subsidy payments via PMJDY program RuPay cards, which account for 3/4ths of the 225 million RuPay cards.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby ldev » 19 Nov 2015 00:16

AFAIK there are 1 or 2 India based payment gateways. My guess is that even in India most online sites are using overseas based gateways who will need to put the RuPay card on their list of accepted cards (on a global basis). The ideal solution will be for National Payments Corporation to also perform gateway functions for online India based sites, besides being a card issuer and processor.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 19 Nov 2015 02:51

Lots of movement on the economic front:
Divestment, exports, infra get govt push
The Cabinet on Wednesday cleared the sale of a 10 per cent stake in Coal India, restored interest subvention for merchandise exports, directed compensation for stalled road projects, empowered the ministry concerned to clear road projects up to a cap on costing and for the first time gave production subsidy directly to sugar farmers.

The slew of measures would revive market sentiments, investments and economic growth. The government had also liberalised the foreign investment regime last week to boost the market.

The Cabinet also gave a nod to a marketing margin of Rs 150-200 per standard cubic metre charged by gas retailers like Reliance Industries and GAIL (India) for urea and liquefied petroleum gas plants. This was based on recommendations of the Petroleum and Natural Gas Regulatory Board.

The government is expected to mop up Rs 20,000 crore from the Coal India disinvestment, power minister Piyush Goyal said at a press briefing. At current prices, the 10 per cent stake sale could fetch Rs 21,137.71 crore. Shares of Coal India, in which the government holds a 79.65 per cent stake, rose 0.83 per cent to Rs 334.95 on Wednesday.

The Cabinet Committee on Economic Affairs also cleared the initial public offer for Cochin Shipyard, for the government to offload a 10 per cent stake in the country's largest shipbuilding and repair facility.

Acquiescing to a pending demand from merchandise exporters, the Cabinet restored the three per cent interest subvention, to arrest falling exports. The move will have a financial implication of up to Rs 2,700 crore in a year. Merchandise exports declined for the eleventh month in a row in October, a period longer than the slump in the aftermath of the 2008 financial crisis. The subvention would be available for both pre- and post-shipment credits, Goyal said.

The government had earlier announced a revamped Merchandise Exports from India Scheme and raised the duty drawback rates for various products to help exporters.

The interest equalisation scheme, earlier called the interest subvention scheme, would be applicable from April 1, 2015, for five years and would be evaluated after three years, an official statement said.

No speed brakes in transport reforms
In what could be a major revival move for the languishing highway construction sector, the Cabinet Committee on Economic Affairs (CCEA) allowed extension of the concession period for all stuck road projects for reasons beyond the control of the concessionaire or the delay caused by the government in giving necessary clearances. The CCEA also gave approval to segregate construction cost from cost for land acquisition, centages and pre-construction activities for the purpose of appraisal and approval of national highway projects.

For railways, the Cabinet approved an investment of Rs 8,349 crore ($1.3 billion) for laying down multiple freight-specific rail lines in Odisha, Chhattisgarh and Andhra Pradesh.

Labour ministry to table 9 reform bills in Winter Session
"The government wants to rationalise labour laws and these laws are in the interest of workers and will protect their rights. The purpose of this is employment generation and ease of doing business," Labour Minister Bandaru Dattatreya told reporters.

The legislations that the Ministry plans to table in Parliament include Child Labour (Prohibition & Regulation) Amendment Bill, 2012, and Payment of Bonus (Amendment) Bill, 2015, which have already been approved by the Cabinet.

Dattatreya said his ministry will place the Small Factories (Regulation of Employment and Conditions of Services) Bill before the Cabinet for vetting after which it will be placed before Parliament.

To simplify and rationalise laws, the 44 existing central labour laws will be converted into four codes, of which two -- the Labour Code on Wages and the Labour Code on Industrial Relations -- are being prepared to be placed before the Cabinet.

"Tripartite meetings are over on these two codes. We have tried our best to reach a consensus and there are a few differences, which will be solved. We are preparing a Cabinet note and we expect this to be cleared to be tabled in the coming session," Dattatreya hoped.

The ministry will also place before the Cabinet an amendment Bill for the Employees' Provident Fund & Miscellaneous Provisions Bill and upon clearance, this too shall be placed before Parliament for discussion and clearance.

"That apart, we will be approaching the Cabinet with amendments to the Minimum Wage Amendment Bill and the Employees' State Insurance Act," the minister said.

Asked why the government wants to bring two separate laws on wages, Dattatreya said: "The minimum wage in different forms will be featured in the wage code and the second part touches on a national minimum wage that will be statutory and all state governments will have to implement it," he added.

The ministry will also seek the Cabinet nod for a proposal to amend the Building and Other Construction Workers Related Laws Amendment Bill, which will also be placed in the winter session.

Even as the Labour Ministry is working on the next wave of labour reforms, the central trade unions are not on board on the industrial code, the Small Factories Bill and the EPF Amendment Bill.

They are strongly opposed to some amendments, including those relating to easing retrenchment, lay-offs and closure of units provision and forming unions under the proposed New Industrial Relations Code.

The Bill allows companies employing up to 300 workers to lay off staff without seeking official sanction. At present, industries hiring up to 100 workers are allowed to lay off without permission.

Besides, the unions are opposing the Small Factories Bill, which exempts units with less than 40 workers from 14 labour laws, including ESI and EPF Acts.

That means they can buy health insurance and provident fund schemes for their workers from the open market and need not subscribe to ESIC schemes as per the new law.

Unions have also objected to the proposed EPF Amendment Bill which seeks to provide an option to workers of the formal sector to choose between Employees' Provident Fund Scheme and the New Pension Scheme (NPS).

They feel that this will dilute the social security net. They have also been demanding Rs 15,000 per month minimum wages across the board.

As many as 10 trade unions observed a nationwide strike on September 2 against the government's proposed amendments to the labour laws through these Bills, which they termed as "anti-worker and unilateral".

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Raj » 19 Nov 2015 07:04

Suraj wrote:RuPay is just a trademark for cards issused to use the NPCI gateway. It comes in the form of both credit and debit cards. It doesn't have to worry about international accessibility right now - just getting mandatory access to every card-based payment portal within the country would be a very large step. Right now it's primarily tailored to utilizing DBT subsidy payments via PMJDY program RuPay cards, which account for 3/4ths of the 225 million RuPay cards.


My understanding is that Rupay has a tie-up up Discover Card payments systems. This will come in handy when Rupay credit cards are issued and they can be used outside India.
http://npci.org.in/RuPay_Global_card.aspx
Here is the road map for Rupay.
Image

I tried using my US based discover card in India at several stores but the transactions failed to process. Discover does not have international transaction fees, but their acceptance is extremely low in India.
http://www.npci.org.in/documents/PressRelease69.pdf
Currently Visa/Mastercard seem to have cornered most of the market share of online transactions in India.

Next year Rupay based credit cards will be issued per this article.
http://www.thehindu.com/business/Econom ... 289575.ece
I think by 2017, there would be wider acceptance of Rupay, also the transaction costs would be a lot cheaper.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 19 Nov 2015 09:50

the payment gateway kinetic workflow thing is far more complex than it looks on the surface. agreements are everything and GOI needs to mandatorily get all indian banks, wallets, processors, merchants in a line. consumer will benefit.
https://en.wikipedia.org/wiki/Payment_gateway

merchant website
payment gateway
payment processor(merchants bank)
card association(visa/mastercard..)
card issuing bank

all these 5 people are in the picture. who makes how much of a cut and from whom is complex.

see wiki link for a variant of Ulan's 15 step cycle.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby chetak » 19 Nov 2015 10:08

Yagnasri wrote:Vijay Malya was declared as Willful Defaulter under RBI Guidelines by State Bank of India.


saar, i know for sure that you have inside info but do you also have any link for this, for the aam aadmis onlee:)

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 19 Nov 2015 10:10

its in google news/

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 19 Nov 2015 11:31

Raj wrote:...

A well researched and detailed response. Thank you.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 19 Nov 2015 21:10

There's a continued effort by GoI to understand what's holding back their gold schemes and act quickly to fix problems. It's rarely the case that such a scheme will be designed perfectly at the outset, but a continuous effort to finetune it is a sign of good administrative handling:
Norms will be relaxed to push gold monetisation scheme
Following a fortnight of tardy progress for gold monetisation scheme, the Finance Ministry and Bureau of Indian Standards took a lead to simplify administration of the scheme to provide impetus to the scheme, sources in North Black, industry and banks informed Business Standard.

In the first fortnight from 5 November when the scheme was launched only 400 gram gold has been deposited under gold monetisation scheme and that too with only one bank during the launch day because no other banks have been able to sign tripartite agreement with hallmarking centres who are acting as collecting centers and gold refineries.

Interestingly response to gold bonds is much better compared to GMS and even gold coins with Ashok Chakra embossed on it have also received comparatively better response.

A government source said that retail investors have applied for Rs 100 crore worth of soveriegn bonds. The source added that some 6,000 gold coins have been sold. Coins are at present sold only by MMTC centres, which are not big in numbers. Contrary to gold bonds whose price is fixed for whole issue, coin prices are changed daily depending upon market prices of gold. RBI has fixed price of gold per gram at Rs 2,684 for bonds till the issue closes on 20 November while today's market price is lower by 5-6 per cent depending upon city. Despite lower market price, Rs 100 crore subscription is seen as good response. A banker said on the condition of anonymity that in next 4 months of this financial year, 3-4 tranche of bonds can be expected.

Sources also said that the government would address the tax concerns surrounding the scheme.


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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 20 Nov 2015 03:52

Resurgent Rajasthan sees proposals worth Rs 3.3 lakh cr ($52 billion)
In the past year, Rajasthan has undertaken a raft of economic and industry reforms to create an investment-friendly image. Her government was left with a huge debt, including Rs 70,000 crore of debt from the power sector, by the previous Congress government.

THE PROMISES
Rs 11,000 cr investments announced by Kumar Mangalam Birla
Rs 10,000 cr pledged by Gautam Adani
Rs 6,500 cr worth investments by Anil Ambani
Rs 10,000 cr worth projects to be undertaken by chemical & fertiliser ministry
24 model railway stations to be developed in the state


Lauding Raje's role, Union Finance Minister Arun Jaitley said, after leading the state in reforms, the chief minister should now lead the state in ease of doing business. The government should provide land for business. "The India of 2015 is not the India of 1971. For that matter, it is also not the India of 1991. The aspirational constituency, which supports growth wants India to reform at a much faster speed," he said. "Everything should be corruption free. Taxation should be reasonable and the policy should not be so aggressive that it deters investors, " he added.

Among the investments made public on Thursday, the biggest perhaps came from Kumar Mangalam Birla, chairman of the Aditya Birla Group. Birla promised investment of nearly Rs 11,000 crore, including Rs 7,000 crore for setting up two new cement plants and Rs 3,000 crore for establishing a 500 MW solar power plant in the state. Gautam Adani, head of the Adani Group, also promised to invest an additional sum of Rs 10,000 crore over four years for the expansion of thermal power plants and generation of solar power in the state.

Uday Kotak, chief executive officer of Kotak Mahindra Bank, found special mention from Raje for the bank's financial services. Kotak said his bank's lending ratio is more than the deposit in the state.

For instance, against a deposit of Rs 100, his bank lends Rs 250. "We plan to double our lending from Rs 5,000 crore to Rs 10,000 crore in the next three years... this will help small, medium-scale industries and farmers in the state," Kotak said.

CEA-led panel may suggest GST rate of 20-24%
A panel led by Chief Economic Advisor Arvind Subramanian is likely to submit its report of the goods and services tax (GST) rate as early as Friday, government officials told Business Standard.

The revenue neutral rate suggested by the panel could be in the range of 20-24 per cent, much lower than the RNR of almost 27% suggested by a sub-panel of the Empowered Committee of State Finance Ministers on the GST. A final decision will be taken by the GST Council.

Finance Minister Arun Jaitley had said earlier this year that a 27% rate was too high, while his state counterparts say anything less than 25% would lead to loss of revenue for them.


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