Indian Economy News & Discussion - Aug 26 2015

Vayutuvan · Post by **Vayutuvan** » 21 Sep 2015 02:40

Dhiraj: If you are interested we can take it to Indian Real estate thread. You lead the way there. I am out of this sub-thread as per Suraj's guidance.

Dipanker · Post by **Dipanker** » 21 Sep 2015 20:32

chaanakya wrote:If somebody makes a case that Bihar is having good Law and Order and that situation is normal when compared to many other states then I think we have no arguments. Same goes for UP.

You have to go by data than your preconceived notion:

Per NCRB 2013 data Bihar was 19th among the 28 states, Tamilnadu had 3rd highest crime rate.

http://ncrb.gov.in/CD-CII2013/CII13-TAB ... %201.6.pdf

Per NCRB 2012 data Bihar was 22 among all the 28 states, Tamilnadu again had 3rd highest crime rate.

https://en.wikipedia.org/wiki/Indian_st ... crime_rate

Added Later:

Got hold of NCRB 2014 data, and seems like Tamilnadu has improved quite a bit, still 7th most criminal state in the country though, for comparison Bihar is 20th,

http://ncrb.gov.in/
(look for 2014 data, table 1.4)

Dipanker · Post by **Dipanker** » 21 Sep 2015 20:38

Theo_Fidel wrote:
Dipanker wrote:What I am saying is when supply of engineers outstrips the demand by 4 fold leading to up to 80% and higher level of unemployment then you do not need more engineering colleges in these areas, and unfortunately that seems to be case pretty much in most part of the nation including the developed states. That's all I am saying!
This is wrong thinking. Our supply of engineers is our competitive advantage. It would not surprise me if the majority never get a engineering oriented job. This is true of the advanced wold too. Many many engineers move onto non-engineering professions. All capitalistic economies are wasteful with people, this is just reality. Companies want to pick from a large pool and only pick the very best, and they want to do it at the lowest possible cost to them, they have no interest in giving everyone a job. For this they need a massive pool of people. What happens to the rest? This is where government must step in with that social safety net and gentle nudge these folks to move on ....

If the right thinking is 80+% of unemployment by way of supply exceeding the demand 5 to 1 and then suggest that government to step in clear the mess, then I think I would stick to wrong thinking!

Theo_Fidel · Post by **Theo_Fidel** » 21 Sep 2015 20:50

Dipanker wrote:If the right thinking is 80+% of unemployment by way of supply exceeding the demand 5 to 1 and then suggest that government to step in clear the mess, then I think I would stick to wrong thinking!

If you bother to read carefully you will notice I said engineering oriented job, I never said no job. Most do get jobs elsewhere. Though my classmate who runs a private college says 30% of engineering students never get any job and end up on the employment exchange, it is still much better than the general population. People who have good english skills and engineering degree never have a problem getting hired per him....

Dipanker · Post by **Dipanker** » 21 Sep 2015 21:21

Theo_Fidel wrote:
Dipanker wrote:If the right thinking is 80+% of unemployment by way of supply exceeding the demand 5 to 1 and then suggest that government to step in clear the mess, then I think I would stick to wrong thinking!
If you bother to read carefully you will notice I said engineering oriented job, I never said no job. Most do get jobs elsewhere. Though my classmate who runs a private college says 30% of engineering students never get any job and end up on the employment exchange, it is still much better than the general population. People who have good english skills and engineering degree never have a problem getting hired per him....

Theo, throughout the discussion the context has been engineering job, so the 80% stat is for engineering job, I thought you would be able to see that, but apparently not.

Where I disagree with you is that you think govt. should help this massively unemployed pool of engineers, and I don't.

Theo_Fidel · Post by **Theo_Fidel** » 21 Sep 2015 21:55

Then why say unemployment, unless you are trying to mislead...

No. My context has been what it takes to get an engineering job and what engineering job companies are looking for. You can read my first post and the last. They will say the same thing. In fact you can go back to 2006 and my posts will say the same thing.

Your context has wandered all over the place, to be honest I have no idea what your context is. FrOm what I can piece together your big idea is that an uneducated unemployed is better than an educated unemployed….

WRT GOI support for failed engineers I'm talking more in terms of re-training, and moving to other professions. Most will probably be more blue collar types...

chaanakya · Post by **chaanakya** » 21 Sep 2015 22:54

{Deleted}

Please, stop trolling moderators in this manner. You were all told to stop. Stop. Don't keep posting off topic while saying "I won't say any more because moderator said not to." That's just ridiculous.

Kakkaji · Post by **Kakkaji** » 22 Sep 2015 05:16

Public spend pick-up to boost economy

Projects awarded up 43%, tendering 67%

Austin · Post by **Austin** » 22 Sep 2015 10:11

http://economictimes.indiatimes.com/new ... 035010.cms

HONG KONG: Bullish on growing trade ties with China, Finance Minister Arun Jaitley today said the government is very keen to see the border dispute getting resolved expeditiously, even as he said India's border with China has been "far more peaceful" than the western borders.

"India-China trade has increased significantly. Trade has brought the two countries much closer... We have some contentious issues of the past between us, but even while those issues would be resolved in the due course, I think our economic relations have become a symbol of strength and therefore mutual investments in each other's country will be a win-win situation for both of us," he said.

Jaitley, who is here to meet foreign investors, also said China has established its place as a low-cost manufacturing brand globally and India is now trying to build its Made in India brand with the Make in India campaign.

Great economies do compete with each other and that does not mean they become opponents," he said during his media interactions here.

On opportunities for India to attract FDI after China slowdown, the Finance Minister said, "I see an important opportunity for India and I see that opportunity because the relative slowdown in China does not impact India as such."

Austin · Post by **Austin** » 24 Sep 2015 09:07

PM Modi's Reform Agenda Has Failed to Boost Economy: L&T Chief

The chairman of one of India's biggest industrial groups, Larsen & Toubro Ltd, sees little sign of a recovery in Asia's third-largest economy, with some of his factories running far below capacity and facing a dearth of new orders.

AM Naik, the executive chairman of the 77-year old group, often viewed as a bellwether of the economy, said Prime Minister Narendra Modi's reform agenda had failed to boost business among its core engineering, construction and infrastructure customers.

"In terms of economic revival, it is not happening on the ground," Mr Naik told Reuters on Wednesday at his office.

India matched China as the world's fastest growing major economy with 7 percent growth in the last quarter, but economists have pointed to other indicators like capital investment to suggest the picture is not as rosy.

Mr Naik said a recovery in private sector capital expenditure remained at least a year away, as corporations wrestling with hefty debts hold off investment even as New Delhi pumps billions of its own money into new road and rail schemes.

Several of L&T's factories ready to build defence equipment for Prime Minister Modi's "Make-in-India" campaign are waiting for orders, Mr Naik said. He also questioned how the government could deliver on a pledge to build up to 30 kilometres of roads a day when less than a dozen highway projects had been put up for tender.

Selling Assets

L&T, a sprawling group with a market capitalisation of $21 billion, has disappointed investors in recent quarters with worse-than-expected revenue growth amid a slowdown among Middle Eastern oil and gas clients and continued weakness in India.

To revive performance, Mr Naik said L&T, which has revenues of over $15 billion, is looking to sell some assets including roads and infrastructure projects and dilute its stake in non-core subsidiaries to revive performance.

"I am trying to reduce the smaller businesses and sell them. If I can do something about heavy asset companies, some of it we could exit or sell, our return on equity will improve," he said.

L&T, whose manufacturing portfolio includes infrastructure for metro trains, submarines and parts for nuclear reactors, will also appoint individual unit chief executives and individual boards to encourage independence and boost returns among its more than 70 businesses, Mr Naik said.

Under Naik, L&T has been selling stakes in some of its subsidiaries over the last 18 months and looked at listing others on the stock exchange.

Bain Capital has agreed to buy 10 percent of L&T Finance Holdings Ltd, its financial services arm. Last year, L&T agreed to sell a chunk of L&T Infrastructure Development Projects Ltd to a Canadian pension fund.

JE Menon · Post by **JE Menon** » 24 Sep 2015 09:54

^^There is no direct quote of AM Naik saying that. Nothing that is not quoted is reliable, because it is essentially the reporter's opinion or interpretation of fact. Sometimes even quotes are not because they are cut and re-arranged.

nandakumar · Post by **nandakumar** » 24 Sep 2015 12:34

As of last year, (2013-14) two-thirds of central excise revenues came from petroleum products and tobacco (C&AG report no 7, 2015). After recent hikes in petroleum product duties and the 2015 budget hike in the case of cigarettes the proportion would have only gone up. By a marginal increase in petroleum product levies and cigarettes but bring down the excise duty revenue to zero in everything else you can have a revenue neutral tax arrangement as far as excise duties are concerned. But assessees will only have one centre of tax administration, namely the VAT. The arrangement will have the added advantage of providing an extra duty protection for indigenous maqnufacture. Tha cenvat tariff rate can be retained at the existing 12% but by an administrative notification, the duty rate may be set at 'nil'. Hence the countervailing duty (equivalent to the applicable cenvat rate) imposed on imorted goods will still be `12%. So effectively, there will be a single point commodity taxation in the country with the State-level VAT. Of course petroleum and cigzarettes will continue to be taxed perhaps at a higher rate but the burden would fall on a handful of refiners and oil marketing companies. But the rest of the country will be spared the pain of dual administration of taxes.
But Service Tax is a bit more complex. Here, telecom, banking and insurance,civil construction and manpower recruitment (the top 5 services) account for only 30 per cent of the total. Some more innovative measures will have to be thought of while balancing the needs of revenues of the Centre with simplifying the tax administration process for the service tax payers. One option could be to identify services in terms of those that are 'non-tradable' in the sense that there is very little inter-state dimension to the delivery of such servicesit and those that are tradable (inter-state). The Centre while nominally retaining the right to imposing a service tax, levies only zero duty on services that are predominantly 'non-tradable' (i.e. only intra-state) services while levying the standard rate on tradable services. The rate for tradable services can be hiked to make it revenue neutral for the Centre. But basically we would have moved to a workable GST with single point assessment without all the compolications that the present bill that is stuck in the Rajya Sabha. There is no legal impediment to enable States to impose a tax on 'services'. The 88th Constitution Amendment Act does talk of a tax on services which can be collected by the States (in addition to the Centre, of course) and appropriated by them. The Centre has nominally notified the amendment to the Constitution (Gazette notification of January 15, 2004) but left the effective date of when it will come into force, unspecified! A new notification with implementation date (April 1, 2016?) sets the framework for States to start collecting a tax on services.

Yagnasri · Post by **Yagnasri** » 24 Sep 2015 13:44

This is your post on taxation etc from Political thread ?

As I have said there is a need to relook into the entire taxation. We can not simply tax in the same manner of other nations. Even Taxation need to change with time and needs. Earlier the land and property taxes were quite huge as the agriculture was the main income to the people. Now the tax on agricultural land and crops is almost negligible.

Now real estate and properties have become serious investments attracting huge amount of inflow of funds and showing spectacular returns due to speculative activities. With the removal urbon land ceasing act, huge amount of land is retained by real estate barons in the names of having a "land bank" for later development. At the same time there is huge amount of demand for housing at affordable prices which is not being provided by the builders. In fact there is no serious national level effort to creating affordable housing now. While we may have a aim for home for all unless there is a clear road map and efforts is there we can not achieve it.

In most of the cities and towns purchasing a home has become prohibitive because of the huge cost. While we are all happy to see the property prices go up due to speculation, we are giving no considaration to the people who wish to have a home to live. Even when there is no demand the builders are not willing to reduce the price as most of them are financed by black money.

nandakumar · Post by **nandakumar** » 24 Sep 2015 15:04

Yagnasri
Yes that is correct. The post immediately above yours was the one i was alluding to in my response on the excise duty collections that you nhad mentioned. It just occured to me that the way forward on tax reform could be on the lines I had suggested.

Austin · Post by **Austin** » 24 Sep 2015 16:54

JE Menon wrote:^^There is no direct quote of AM Naik saying that. Nothing that is not quoted is reliable, because it is essentially the reporter's opinion or interpretation of fact. Sometimes even quotes are not because they are cut and re-arranged.

Well there are couple of direct quotes from him in that article , On his own companies he says he is wating for government orders for defence etc

Supratik · Post by **Supratik** » 24 Sep 2015 18:53

Many of our companies like L&T are world class. They are expecting an advanced country level of doing business and it is clearly not happening yet. Even with Modi and the generally business-friendly BJP. It is better than the others but still not comparable with the advanced countries. Specially the bureacracy believes India still lives in the socialist past where they don't need to work but only get paid. I will not be surprised if Modi is finding it hard to make them work to the level of efficiency required. At some point it will be necessary to reform the bureacracy particularly termination of position. Otherwise this problem will persist.

JE Menon · Post by **JE Menon** » 24 Sep 2015 19:16

Austin wrote:
JE Menon wrote:^^There is no direct quote of AM Naik saying that. Nothing that is not quoted is reliable, because it is essentially the reporter's opinion or interpretation of fact. Sometimes even quotes are not because they are cut and re-arranged.
Well there are couple of direct quotes from him in that article , On his own companies he says he is wating for government orders for defence etc

These are the only two direct quotes:

"In terms of economic revival, it is not happening on the ground," Mr Naik told Reuters on Wednesday at his office.

"I am trying to reduce the smaller businesses and sell them. If I can do something about heavy asset companies, some of it we could exit or sell, our return on equity will improve," he said.

This says more about the state of L&T than about Modi's government. The rest of the text is what the reporter (unnamed) says that Naik said. If the article is scanned carefully, the things he says suggests to me there is reason for concern about L&T. "Waiting for orders"? Which CEO says that anymore? He should be chasing the order, not waiting for them.

Suraj · Post by **Suraj** » 24 Sep 2015 20:37

L&T is hurting like most other infra companies are: L&T Falls on Unit's Loan Downgrade

"Growth not picking up" translates to them being anxious about lack of utilization of their recent projects and not being able to service their debt them quickly enough. There may be uniquely local factors at play affecting their specific distressed projects, and the statements really amount to a call for a growth push that lifts all boats.

Suraj · Post by **Suraj** » 24 Sep 2015 21:03

Centre wants rabi harvest to double, will encourage farmers to sow more

In the wake of the surge in onion prices, the central government says it plans to raise production at least two-fold in the coming rabi season. The focus will be on more sowing, primarily in the Gangetic plain and the northeast states.

And, to explore the possibility of a buffer stock of 1-1.5 million tonnes, equal to a month of consumption. India annually produces 18-19 mt. The crop is cultivated three times a year, starting January -- kharif, late kharif and rabi. Annual sowing is one to two mn hectares. Around 60-65 per cent of the total production or 11-13 mt is during the rabi season; this crop is harvested in April-June.

Onions produced during rabi can be stored for a longer duration as compared to those coming at other times of the year. Every year, seven to eight mt of the rabi onion is stored till October-November.

The Centre then raised the minimum export price to $700 a tonne and also ordered the import of around 10,000 tonnes. The first tranche of around 1,000 tonnes is expected around the first week of next month. Another 1,000 tonnes could come by the second and then the third week of October.

Meanwhile, to encourage growers to plant more during the coming rabi season, the Centre has decided to place advertisements in newspapers and other media to popularise the cultivation. "We should encourage farmers to grow during the rabi and also look at scientifically storing these," agriculture secretary Shiraz Hussain said on Wednesday, at the two-day annual rabi conference today.

The government will also look at promoting production of hybrid varieties.

On the MAT topic:
Govt to amend I-T Act to exempt foreign firms covered by DTAAs

In a big relief to foreign firms, government today said the Income Tax Act will be amended with retrospective effect to exempt from MAT the overseas companies that are covered under double taxation avoidance agreements.

Foreign companies that do not have a permanent establishment in India will be exempt from paying minimum alternate tax (MAT) on profits from April 2001.

The provisions of Section 115JB of Income Tax will not apply to foreign companies with effect from April 1, 2001, if they are resident of a country with which India has Double Taxation Avoidance Agreement (DTAA) and they do not have a permanent establishment (PE) in India, said an official statement.

JE Menon · Post by **JE Menon** » 24 Sep 2015 21:12

Thanks for that clarification Suraj.

Austin, looks like I was wrong. Serves me right for getting paranoid about reporters. Spending too much time in the hot air forum.

Vriksh · Post by **Vriksh** » 25 Sep 2015 06:36

I am helping organize the IIT Bombay's first ever Global Business Forum (GBF) 16-18 Oct 2015 in Goa and would like to extend an invitation to all at this forum. You can register to attend the GBF event by following this link. http://iitbaa-gbf.com/gbf2015/gbf-2015-registration/.The group rate is inclusive of Accommodation and food (Friday 16th, Saturday 17th and Sunday 18th night)

GBF is being spearheaded by IITB Alumni Association and a Team of IIT Bombay faculty and students with the express purpose of providing a platform to connect IITB Entrepreneurs with Government, Businesses, Collaborators and Funds. The idea is to catalyze a push to take laboratory innovations to markets nationally and globally.

The GBF is an excellent platform to connect interested people and other institutions with IITB ideas and startups by providing them with inputs such as venture funding or debt funding, customer validation or collaborations in team building or provide marketing expertise. If you have a great startup idea and want to connect with smart people to take it to market: the GBF provides a entrepreneurial network of IITB students and Alumni on the lookout for such ideas and teams they could contribute to. As an attendee you would be invaluable in providing feedback validation to ideas being pitched. The sidelines and roundtable discussions of the GBF also provide an opportunity to pitch your own ideas and products to interested people and institutions.

There are 8 Special Interest Groups (SIGs) at the GBF showcasing business and technology innovations http://iitbaa-gbf.com/sigs
1 ) Energy : Renewables, Energy Storage, Transmission Grids
2 ) Environment (Water): Waste water Treatment, Drinking Water, Environment sensing and monitoring, Air Quality, GIS water security
3 ) Education and Skills : Creating a more agile better trained blue collar workforce (not just white collar)
4 ) Information and Communications Technology : Aadhar based systems, Digital India
5 ) Infrastructure : Road, Rail and Sea Based Transport Infrastructure,
6 ) Make in India : Manufacturing with a special focus on Defense systems
7 ) Healthcare : Innovations in healthcare devices and systems
8 ) Smart Cities : Focus on Urban Mobility and Smart Governance

Each SIG will showcase about 7-10 Startups (either angel funded or have customers) that are in a growth phase and about 7-10 campus initiatives (that have the potential to become startups or are technologies looking for business models)

GBF boasts a list of luminaries and domain experts as patrons and speakers http://iitbaa-gbf.com/patrons. In addition the event will have keynotes from Cabinet Ministers and/or Chief Ministers of major states for each SIG. One of the objectives of the GBF is to start evolving technology policy initiatives as an advisory to Government Bodies with input from domain experts in order to deliver better outcomes to the citizenry.

In case you are interested in long term discussions you can also sign up for SIGs of interest and get connected to people via a mailing list who are working in those domains. http://iitbaa-gbf.com/register/. SIGs will continue the discussions post GBF and evolve policies under their mandate.

Looking forward to seeing you all at the GBF.

vina · Post by **vina** » 25 Sep 2015 11:57

Somehow, I have a very uneasy feeling about this Govt's economic agenda that focuses on "foreign investment" and bends backwards to woo them, but kicking the domestic guys in the teeth.

Make no mistakes about it. The table is so heavily skewed against the domestic guys in many industries, that it is is not even funny. The govt bends over backwards to "clarify" the tax difficulties and disputes for the foreign guys (Vodafone, MAT, Permanent Establishment for FPIs, clarity on the nature of income) which it clearly must do. However, for the domestic guys, absolutely none of this has been fixed and while the FPIs and Foreign Companies have got better terms (taxation, clarity etc.. etc..) and in addition the welcome mat and the voice power to get the govt to act. .

For domestic guys, the govt simply doesn't even hear them, or even if it does, doesn't care, and gives them the birdie.No one is asking fro any special favours. All one wants is a sane set of laws in taxation and regulation and stuff that applies equally to everyone. More than the foreign guys, it is the domestic guys who need clarity and relief from daily idiocy and extreme taxation related draconian stuff and over regulation driven handicaps even more.

The situation as it is developing is, Foreigners are Jamaai, while for domestic guys, Ghar ki murgee, daal baraabur.

The govt has decided that they can shaft domestic guys and get the foreign guys in with better terms than the domestics. Mark my words. Modi Sarkar, has written the long term decline, death and epitaph of companies like L&T, BHEL, and a host of marquee names in industries from Autos to Financial Services to Metals to health care and even emerging areas with this kind of refusing to clear the roadblocks for the local guys , but opening an autobahn for the foreigners.

Arjun · Post by **Arjun** » 25 Sep 2015 12:22

Yes, the UPA government did hand over the entire airlines segment to foreign carriers - under Modi they have tried to repair the damage partially.

As for other sectors - lets not get taken in by all the sales talk in NY and other foreign capitals. It suits the government to have both FDI and domestic alternatives available for the investment rampup that India sorely needs. At the end of the day however - this is one government that is most ideologically aligned to the need for generating homegrown leaders as opposed to dependance on MNCs.

Yagnasri · Post by **Yagnasri** » 25 Sep 2015 12:45

There are hardly any tax benefits for citizens to save. Except the interest on housing loan which itself I feel not needed, there is no major benefit for a decade or so. Youth has no incentive to save good amounts for pension or PF. Domestic savings were killed during UPA and almost nothing changed now except new 50K for NPS deposits. Even the NPS is not at all user friendly. You can not even make payments from any bank account online into it.
.
UPA's tax and spend almost continues. While there is no escape from MANDREGA type schemes which are now reformed and will result in creation of more public amenities. Tax side other then GST which is quite radical there is nothing on cards. Jetlee is basically changing nothing else.

A_Gupta · Post by **A_Gupta** » 25 Sep 2015 13:39

India - exports and imports:
https://atlas.media.mit.edu/en/profile/country/ind/

Aditya_V · Post by **Aditya_V** » 25 Sep 2015 13:41

Yagnasri- Savings cannot be just by Tax benefits, the whole real estate Boom only without increase in Incomes during UPA meant that incentive went totally into borrowing and invest in Real estate. The Highly inflated real estate bubble sucked a lot of life out of the economy.

Those aldready rich and holding to prime property made a killing.

vina · Post by **vina** » 25 Sep 2015 13:46

The trouble with business in India is this.

1) There is a parasitic PSU that has abysmal performance, a drain on the economy that is simply never allowed to die, and cannot be allowed to die.

2) The govt policies are designed in such a way that the PSUs are given some sort of quasi monopoly, the private industry and the Indian people in general subsidise these PSUs and keep them alive (think ITI, BSNL, Air India and the literally hundreds of others that would not survive if not for the subsidy the people pay to these leeches).

3) What the govt policies NEVER admit, and despite whatever the law /legislation is, the key aims of the policy making is to never let the PSU go under and "manage" competition (via regulatory handicaps, entry barriers, taxes etc. etc)

4) Now with entire sectors getting handed out to the foreigners (especially in Financial services), where they enjoy far superior tax terms, aren't governed by onerous over regulation and full freedom and operating via tax havens, the Indian economy will get shrunk into the following.

a) A parasitic public sector that lives in monopolies and quasi monopolies with "managed competition" via, written and unwritten rules and policy making on the fly

b) Foreign sector that has fully taken over entire sectors of the Indian economy because of far superior terms and regulatory and tax advantage over the domestic indian competition
c) Crony capitalists of the private sector of the license permit raj kind who can work the system to their advantage to the max.

If anyone thought that the Modi sarkar was going demolish the legacy madness put in place by the Kangress and open out India and put in a rules based, open field that gives full room to disruptive innovation and productivity and change on a massive scale like what the systems US do, sorry. Not going to happen.

For any startup who foolishly thinks that the Indian domestic market is the place to focus on, sorry. That is idiotic and not scalable and sustainable. Do what the IT/Vity boys realised 30 years ago. The way to go is transcend the limitations of India, market wise, regulations wise and get out of the hands of the Baboons and other assorted critters and their miserable money grubbing idiocy and lack of any sense whatsoever how businesses can grow and succeed. Get located targeting global markets, get incorporated abroad and basically simply avoid everything to do with this place, except possibly being physically present.

member_20292 · Post by **member_20292** » 25 Sep 2015 17:24

^^ this is true. Youve hit the nail on the head.

Makes a lot of sense to sell to assorted Westerners with whom you will have no payment delays and issues than some desi Lala company .

Its the rule of the world.

Why make products and sell something to a poorer part of India, when you can get to Mumbai (or NCR or Bangalore etc.) and sell something to the richer parts of India ?

Extrapolating - why sell to Indians when there's better margins to be made abroad? See Tata Motors. The Nano is unloved. JLR isnt.

Amber G. · Post by **Amber G.** » 25 Sep 2015 18:16

vina wrote:

If anyone thought that the Modi sarkar was going demolish the legacy madness put in place by the Kangress and open out India and put in a rules based, open field that gives full room to disruptive innovation and productivity and change on a massive scale like what the systems US do, sorry. Not going to happen....

hmm.. then why do these CEO's are going for a photo-op?

chandrasekaran · Post by **chandrasekaran** » 25 Sep 2015 18:33

I am no economic expert, but I still believe the government is trying to do its best *given* the circumstances. To recap

#1. Parties which just have 44 or 18 MP's call the shots today and openly proclaim that they would not let any legislation to pass.
#2. Banking sector burdened with lakhs of crores of NPA's.
#3. Judiciary in absolute pits, powerful people openly getting away mocking the laws of the land
#4. NGO's plush with tonnes of money to manipulate and stall every decision making
#5. A bureaucracy that works at best at 1% efficiency
#6. Press with zero credibility
#7. Defense procurement in a mess
#8. Populace used to and demanding freebies
#9. Corruption in almost every aspect of day to day living

This *IS* the reality. You expect the government, for example, divest stake in BSNL in this scenario ? Who are we kidding ? I am almost amazed that this government has achieved this much under the circumstances they came to power!

vina · Post by **vina** » 25 Sep 2015 20:17

hmm.. then why do these CEO's are going for a photo-op?

Because they all head foreign companies for whom this govt is promising to give better regulatory, tax clarity and ease of business all of which are denied to their domestic counterparts if they exist and potential domestic competitors that may come up.

Isn't that the ideal situation. As a foreigner, you have the country's govt killing domestic competition and giving you a competitive advantage. Simple question. Why aren't the same ease of business, tax and regulatory clarifcations being given to the foreign guys not being given to the domestic guys ? Why is that even an issue at all ? Shouldn't the case be that the domestic guys better terms than the foreign guys in the like in every part of the world, or worst case, foreingers get same treatment as domestic guys. Here it is worse than the worst case. The domestic guys get shafted and the foreigners get the red carpet!

RoyG · Post by **RoyG** » 25 Sep 2015 20:33

vina wrote:
hmm.. then why do these CEO's are going for a photo-op?
Because they all head foreign companies for whom this govt is promising to give better regulatory, tax clarity and ease of business all of which are denied to their domestic counterparts if they exist and potential domestic competitors that may come up.

Isn't that the ideal situation. As a foreigner, you have the country's govt killing domestic competition and giving you a competitive advantage. Simple question. Why aren't the same ease of business, tax and regulatory clarifcations being given to the foreign guys not being given to the domestic guys ? Why is that even an issue at all ? Shouldn't the case be that the domestic guys better terms than the foreign guys in the like in every part of the world, or worst case, foreingers get same treatment as domestic guys. Here it is worse than the worst case. The domestic guys get shafted and the foreigners get the red carpet!

It's not so easy.

IMO, the real reason is Indian corporate houses and PSUs.

They like a situation in which Indian laws are just lax enough where they can do business and expand while keeping domestic and foreign competition to a minimum. In essence, they want a monopoly.

With C-System still putting up stiff resistance to any sort of productive legislation, Modi is going abroad and getting some foreign corporates to break the monopoly. They have money and influence.

Behind the scenes, perhaps the PMO and foreigners can crack the cocoon.

I think the situation will steadily improve especially with the BJP poised to bag Bihar and inch toward a majority in the RS.

Theo_Fidel · Post by **Theo_Fidel** » 25 Sep 2015 20:45

chandrasekaran wrote:This *IS* the reality. You expect the government, for example, divest stake in BSNL in this scenario ? Who are we kidding ? I am almost amazed that this government has achieved this much under the circumstances they came to power!

Divesting BSNL has no link to the points you made. It can be done tomorrow if GOI is up to it... ..at which point it will probably go belly up the next day....

http://www.thehindu.com/business/Indust ... 625829.ece

For the last financial year (2014-15), the losses stood at Rs.7,265 crore (un-audited).

About Rs.15,000 crore of BSNL’s revenue goes into paying staff salaries, while about Rs.11,000-Rs.12,000 crore is put in maintenance of networks (both landline and mobile) and core equipment.

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BTW folks should not be defending Air India. It looses a staggering Rs 2,000 crore per year on the foreign connections. GOI is in stop loss mode on this one.
BTW loss this year is a sumptuous Rs 5,474 crore. This actually qualifies as an improvement... ...should be shut down tomorrow...
All the gory details are in link below...

http://www.business-standard.com/articl ... 225_1.html

The accumulated loss is now more than Rs 44,000 crore ($7.3 billion)-equal to India's annual health budget-and borrowing has grown to more than Rs 38,000 crore ($6.3 billion), according to data compiled by IndiaSpend

M Joshi · Post by **M Joshi** » 25 Sep 2015 21:09

vina wrote:
hmm.. then why do these CEO's are going for a photo-op?
Because they all head foreign companies for whom this govt is promising to give better regulatory, tax clarity and ease of business all of which are denied to their domestic counterparts if they exist and potential domestic competitors that may come up.

Isn't that the ideal situation. As a foreigner, you have the country's govt killing domestic competition and giving you a competitive advantage. Simple question. Why aren't the same ease of business, tax and regulatory clarifcations being given to the foreign guys not being given to the domestic guys ? Why is that even an issue at all ? Shouldn't the case be that the domestic guys better terms than the foreign guys in the like in every part of the world, or worst case, foreingers get same treatment as domestic guys. Here it is worse than the worst case. The domestic guys get shafted and the foreigners get the red carpet!

It would help if you could provide some data & factual points to put your case forward, rather than rumbling like Kejriwal or Rahul Gandhi.

If a country like India needs money & investment, then who is going to do it? These are the guys with money, who can invest easily & bring a lot of jobs for neo-middle class & middle class.
Foreign guys get red carpets? Did Vodafone get a red carpet to Bombay HC when they were slapped with a Billion $+ tax? Was Nokia plant in Chennai given red carpet when they left the plant & left thousands of people unemployed? Did POSCO get red carpet in Orrisa? The fact is foreign companies face as much red tape & as much red carpet as do relative Indian counterparts. Also, most of these companies are allowed enter India only with a JV with an Indian company. Is that not helpful for Indian companies to learn & grow. Take the example of Hero Honda. If it weren't from technical support of Honda decades back, it would've been different for Hero today & maybe they wouldn't be world's largest 2-wheeler company today.

What about Mudra Loan scheme to small vendors? Today a week long national camp has begun for this scheme. Rs. 1,20,000 crore to small vendors which at an average loan of Rs. 10 lakh lets say, is going to help 1 crore families at least. 52% of the loans dispersed till now have been given to women entrepreneurs.

Also, care to explain how exactly is Govt. killing domestic competition to favour foreign companies. Which Indian company got shafted to help a foreign company? Which industry are you talking about? If you cannot provide specific examples or cases then would suggest you not to pollute this thread. Period.

chandrasekaran · Post by **chandrasekaran** » 25 Sep 2015 21:32

Divesting BSNL has no link to the points you made. It can be done tomorrow if GOI is up to it... ..at which point it will probably go belly up the next day....

And pray tell me what would happen the day after ?

You can't complain about the pace at which things are moving while completely ignoring the regressive forces that are acting to slow down the pace. IMHO Indian business heads can be justified in expressing any concern about the slow pace of growth, only when they unequivocally and publicly call out the Con/Commie regressive mafia at work.

Suraj · Post by **Suraj** » 25 Sep 2015 22:02

This entire sidetrack conversation sounds quite... bipolar. It was mere months ago that vina spent several posts complaining about lack of clarity for foreign investors regarding MAT. Now that has turned into 'favoritism towards foreigners while domestics are ignored'. There are far too many silly claims to address, and this argument simply sidetracks the thread. Please don't feed it.

Meanwhile, an asset allocation strategist from WisdomTree tours India:
Takeaways From My Trip To India

Theo_Fidel · Post by **Theo_Fidel** » 25 Sep 2015 22:54

chandrasekaran wrote:And pray tell me what would happen the day after ?

The company will be torn apart and various viable pieces absorbed into other private players.non-viable pieces will vanish.. ..jobs will be lost and people will need to find new jobs. This is normal part of business operations, don't worry nothing will be wasted. Even when King fisher was torn apart, most of the planes and assets were absorbed by other companies....

I have no idea what the rest of your comment means and didn't bother re-reading...

nandakumar · Post by **nandakumar** » 26 Sep 2015 02:24

Theo Fidel
BSNL's tower infrastructure (mobile telrphony) could be monetised. But thats about it. Spectrum trading rules as prposed does not offer much wiggle room on trading. They were allotted on nomination basis. So technically under the new policy they will have to pay rates discovered under action, which means paying extra cash to the Govt, which BSNL doesn't have. Meanwhile there will be a PIL directly in the SC and a Sibal will manage to get a stay order against any restructuring of BSNL. The case will drag on and we will be discussing at this forum one year hence, what to do with BSNL a year down the road.

Suraj · Post by **Suraj** » 26 Sep 2015 04:20

MUDRA loans to total Rs 1.22 lakh cr by March, says Jaitley

Those engaged in micro and marginal businesses such as fruit sellers, vegetable vendors, mechanics, barbers or cobblers, will get a total of Rs 1.22 lakh crore of loans this financial year through the recently launched Micro Units Development and Refinance Agency (MUDRA), finance minister Arun Jaitley said on Friday.

Launching a drive under the scheme at a Punjab National Bank event here, Jaitley said Rs 24,000 crore had been given as advances to 3.7 million small entrepreneurs through MUDRA. The ministry aims to cover 12.5-17.5 mn small business people under MUDRA in 2015-16, he added.

The scheme was launched by the prime minister in April to dund and promote micro finance institutions and banks, which would in turn provide loans to small and vulnerable sections of businesses. The initial corpus was Rs 20,000 crore and a credit guarantee fund of Rs 3,000 crore were provided by banks from their priority sector lending shortfall.

A non-banking finance company and part of the Small Industries Development Bank of India, it will later take the form of a bank, through legislation in the next year. Small businesses can take a loan up to Rs 50,000; the highest bracket of loans available to the small and medium enterprises sector would be up to Rs 10 lakh.

The current focus is on small businesses, encompassing a range such as shopkeepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers and small units, all of which need to borrow from money lenders and informal sources.

Theo_Fidel · Post by **Theo_Fidel** » 26 Sep 2015 04:39

Nandakumar,

No, take BSNL shares and sell them in open market. Divested. Take what ever measly amount market gives you. It is now a private company. The government does not concern itself beyond the minimal administration issues like it had for Kingfisher. No more fresh money and let it fend for itself in the open market place....