Indian Economy News & Discussion - Aug 26 2015

JTull · Post by **JTull** » 08 Jun 2017 19:27

Are the Border Road, Rail and other infra projects included in these calculations? NDA govt has ramped investment in these sectors up massively in J&K and NE.

A_Gupta · Post by **A_Gupta** » 08 Jun 2017 20:20

https://www.bloomberg.com/news/articles ... d-stocking
Gold Imports by India Jump Fourfold as Tax Fear Spurred Stocking

India, which vies with China as the world’s top gold consumer, saw a fourfold increase in imports of the precious metal in May as traders stocked up fearing that the government would fix a higher rate for jewelry under a new national goods tax to be implemented from next month.

Overseas purchases advanced to 126 metric tons in May from 31.5 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Finance Ministry spokesman D. S. Malik declined to comment on the data.

India fixed the goods and services tax for gold at 3 percent, effective from July 1. The rate is lower than expected, Ketan Shroff, joint secretary at the India Bullion and Jewellers Association Ltd. said on Monday. The duty will replace more than a dozen domestic levies including excise tax and state tariffs, making India a common market for the first time.

Sicanta · Post by **Sicanta** » 09 Jun 2017 09:10

Online banking will kill physical banks in 5-6 years - Amitabh Kant

http://www.financialexpress.com/industr ... nt/708673/

Singha · Post by **Singha** » 09 Jun 2017 09:15

to some extent only in metros for younger gen. for older gen and anything non-metro physical banks will continue strongly for another 30 years for sure.

Kashi · Post by **Kashi** » 09 Jun 2017 09:20

Online banking is coming truly "online" in many Tier 2 and 3 cities as well.

It's a stretch however, to claim that physical banks will go extinct in 5-6 years, they will not. Let's not forget that a lot of people, young and old still throng the banks for locker services to store their valuables and given the wait lists for getting a locker in many banks, it would seem that the "physical banks" will be around for a very long time.

Maybe there will be fewer physical banking transactions as it happened with the advent of ATMs.

Sicanta · Post by **Sicanta** » 09 Jun 2017 09:29

Physical banks too are changing. Along with UPI apps, recently tried out SBI mingle - pretty good app. Has made redundant 3 third party apps for me.

A_Gupta · Post by **A_Gupta** » 10 Jun 2017 18:50

https://www.bloomberg.com/news/articles ... -clampdown

India’s oil demand bounced back in May, led by the highest growth in gasoline consumption in nine months and the fastest increase in diesel usage since November.

Total fuel consumption rose 5.4 percent to 17.79 million tons in May, the most in six months, according to the Oil Ministry’s Petroleum Planning and Analysis Cell. Demand for diesel, which accounts for about 40 percent of total sales, expanded 8 percent to 7.5 million tons. Gasoline offtake climbed 15 percent to 2.4 million tons, the fastest since August.

Oil consumption plunged 5.9 percent in January, the most in 13 years, after Prime Minister Narendra Modi’s shock clampdown on high-value currency notes in November. Demand fell 3.1 percent in February and 0.7 percent in March before rebounding in April.

“Fuel demand, unusually subdued in the last quarter of the fiscal due to demonetization, seems to be coming back to normal levels,” said K. Ravichandran, senior vice president and group head, corporate ratings at credit assessor ICRA Ltd. “Passenger vehicle sales continue to be good and that explains the recovery.”

A breakup of India’s May fuel consumption:

LPG demand rose 11.6 percent to 1.78 million tons
Petcoke use climbed 5.2 percent to 2 million tons
Naphtha consumption declined 1.2 percent to 1.07 million tons

A_Gupta · Post by **A_Gupta** » 10 Jun 2017 18:52

https://www.bloomberg.com/news/articles ... ometric-id

Indian citizens cannot be forced to enroll for a 12-digit unique identity number to be able file tax returns, the country’s top court said in a ruling that may be a hurdle for Prime Minister Narendra Modi’s plan to move transactions online.

The Supreme Court partially stayed a law that made the Aadhaar card mandatory for filing returns or for obtaining a 10-digit alpha-numeric code the Income Tax Department issues to tax payers. The stay is needed till a question on the right to privacy under Indian laws is decided by a constitution bench of the top court with at least five judges, a two-judge panel ruled. It also urged the government to address the issue of data security.

“These concerns need to be addressed by the government so that confidence is instilled in the public at large,” Justices A.K. Sikri and Ashok Bhushan said in their ruling.

Aadhaar, which means “foundation” in Hindi, is a unique number provided to citizens after collecting their biometric information -- finger prints and an iris scan -- along with demographic details. Modi opposed the Aadhaar program before coming to power, saying it violated national security and the privacy of citizens. Now, it is key to his push to move the nation toward cashless transactions and save money on the payment of social security benefits.

The government has told the top court that 1.15 billion or 95 percent of Indians already have Aadhaar numbers. The program also has 582 banks, brokerages and government departments listed as users permitted to access Aadhaar’s data. Google Inc. estimates India’s digital payments industry will grow 10-fold to $500 billion by 2020.

Sicanta · Post by **Sicanta** » 10 Jun 2017 20:09

A_Gupta wrote:https://www.bloomberg.com/news/articles ... ometric-id
Indian citizens cannot be forced to enroll for a 12-digit unique identity number to be able file tax returns, the country’s top court said in a ruling that may be a hurdle for Prime Minister Narendra Modi’s plan to move transactions online.

From July 1, Aadhaar 'must' for filing tax returns, obtaining new PAN: CBDT

http://www.business-standard.com/articl ... 493_1.html

The Central Board of Direct Taxes (CBDT) on Saturday made it clear that Aadhaar will be a "must" for the filing of Income Tax Returns or for obtaining a new PAN from July 1.

The policy-making body of the Income Tax Department issued a statement stating that the Supreme Court, on Friday, had only given a "partial relief" to those who do not have an Aadhaar or an Aadhaar enrolment ID, and the taxman, hence, will not "cancel" their Permanent Account Number (PAN).

The CBDT issued a three-point "effect of the judgement" of the apex court statement saying.

From July 1, 2017, onwards every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar enrolment ID number for the filing of income tax returns as well as for applications for PAN.

"Everyone who has been allotted permanent account number as on the 1st day of July 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar," it said.

It explained what will happen in a case of "non-compliance" or where a person does not possess Aadhaar.

"Only a partial relief by the Court (SC) has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled so that other consequences under the Income Tax Act for failing to quote PAN may not arise," the CBDT said.

If the PAN is cancelled, then a person cannot do his normal banking and financial operations and hence this relief is given. But, it has been made clear that for the filing of ITR or to obtain a new PAN, Aadhaar will be mandatory from July 1, a senior I-T official explained.

Senior officials said the apex court's order given yesterday was "studied" by a high-level team of authorities from the Law Ministry, Finance Ministry, CBDT and the Income Tax Department after which this clarification has been issued.

chetak · Post by **chetak** » 12 Jun 2017 18:36

xposted from the political thread

shocker

Eating out: India’s exorbitant world food bill

Eating out: India’s exorbitant world food bill

by Rahul Goswami 10 Jun 2017

In the Konkan, small electrically operated oil presses that ingest limited amounts of dried copra to expel oil for households to cook with are common. These can press enough in a day (electricity supply permitting) to fill several dozen glass bottles with coconut oil. As such a filled bottle of freshly pressed coconut oil usually sells for Rs 130 to Rs 160, the price per litre may be estimated at about Rs 180. This price compares quite well with the price range of Rs 190 to Rs 220 that is paid by the household buyer for a litre of branded coconut oil.

But it compares not at all with the trade price of an imported shipment of sunflower-seed or safflower oil which in 2016 was imported into India at an average price of just under Rs 60 per kilogram. India imported 1.53 million tons of sunflower-seed or safflower oil last year, and the Rs 9,080 crore spent on it pushed the total amount spent on imported ‘edible’ oils to beyond the Rs 70,000 crore mark.

Palm oil

Both by weight and by the total amount paid for it, palm oil is the most visible imported food commodity in India today, and has been for the last five years. In 2016 India imported 8.25 million tons of palm oil (the supplying countries being Malaysia and Indonesia) for which the importing agencies paid Rs 38,900 crore. This immense annual flood of a sort of oil that ought never to have touched our shores let alone ooze into our home kitchens and canteens came at less than Rs 48 per kilogram last year. For this reason - the absurdly low price per landed ton of Malaysian and Indonesian palm oil, a low price that hides from the Indian consumer the deforestation devastation and species extinction in those countries, new cooking oil blends are being shoved into the foods market every other month by the edible oils industry.

Biomedical research which is independent and not either funded by or influenced by the oil palm industry and edible oil traders (which means the world’s largest commodity trading firms) indicates that palm oil, which is high in saturated fat and low in polyunsaturated fat, leads to heart disease. It is considered less harmful than partially hydrogenated vegetable oil, but that is no redemption, for palm oil can under no circumstance be compared to our traditional cooking oils, coconut included.

The colonisation of the Indian kitchen and of the processed foods industry by palm oil has taken place only on the basis of landed price per ton, and that is why this oleaginous menace is now found in many everyday products such as biscuits and crackers and cookies (which school children develop addictions for), snack chips, shampoos, skin care and beauty products, and even pet food.

Soya oil

The next largest oily invasion is that of soyabean oil, of which 3.89 million tons (mt) was imported by India in 2016 (3.5 mt in 2015, 2.1 mt in 2014). Most of this was of Argentinian origin, just over 3 mt, and because more than 98% of the soya that is grown in Argentina is genetically modified (GM) the millions of tons of soyabean oil India has imported from that country has been used, blended, fractionated, caked and consumed by humans and animals with no indication about its GM origin and with no tests whatsoever for its effects on human and animal health. In terms of rupees per landed kilogram of soyabean oil, at about Rs 53 it is between palm oil and sunflower-seed or safflower oil. These landed prices show dramatically the effect exporting countries’ subsidies for a commodity category have on the related industry (edible oils) in an importing country.

Just as the vast palm oil plantations in Malaysia and Indonesia have waxed luxuriant in place of the old growth tropical rainforests that were cut down, turning the wildlife of these forests into hapless refugees, swelling the lucrative and thoroughly illegal forest timber trade, so too have the vast soya plantations in Argentina immiserated that country’s rural population and caused hunger because of the soya monocrop that has replaced their food biodiversity and whose need for fertiliser grew (as it did with Bt cotton in India) instead of shrinking. Both these long-drawn out eco-social catastrophes have been prolonged because of the inability or unwillingness of Indian consumers and regulatory agencies to acknowledge the faraway effects of our considerable ‘demand’ for palm oil and soyabean oil.

Pulses

Second to palm oil by weight amongst food commodities imported by India is pulses, of which 6.18 mt were imported in 2016 for a price of Rs 27,700 crore. The annual import pattern of a decade of 4 mt to more than 6 mt of imported pulses last year are a large fraction again of the average 18.7 mt of pulses a year grown in India for the last five years (until 2016-17).

Between 2003-04 and 2009-10 the quantity of pulses (tur or arhar, gram, moong, urad, other kharif and rabi pulses) harvested scarcely changed, averaging 14.2 mt over this period. There was a jump in 2010-11 to 18.2 mt and then another plateau followed until 2015-16, with the average for those six years being 17.7 mt. With the 22.7 mt estimated total pulses harvest in 2016-17, we can hope that another plateau is being scaled, and indeed this pattern of a plateau of several years followed by a modest increase does tend to indicate the following of a more agro-ecological cultivation of pulses (these being in rainfed farms) than intensive cultivation dependent on fertiliser, pesticide and commercial seed.

Sugar

What is a new concern is an item that by weight is fourth on the list of food commodity items imported, and that is sucrose: India imported 2.11 mt in 2016, in 2015 it was 1.6 mt, in 2014 it was 1.37 mt. The country with the greatest consumption of sugar, estimated by the Ministry of Agriculture and the Department of Food and Public Distribution to be around 25 mt per year and growing disproportionately above the natural growth in the number of households, the processed and packaged food sector is the destination for the 2.11 mt of sucrose imported in 2016. A ready consumer for the sucrose is the commercial fruit juice sector, which bases its produce on a small amount of fruit pulp (vegetable extract is often added for bulk), water, chemical preservatives, food-like colours, artificial flavours and sweeteners.

The giant bulk of our sugarcane harvests distract from the ratios calculated - that a ton of raw sugar is obtained from 13 or 14 tons of cane. (This is usually net of jaggery / gur / khandsari and also net of molasses, which is used by distilleries and animal feed.) The mountains of bagasse - the crushed residue from which the sugar has been extracted - which remain are used in the paper and pulp industry, are an ingredient in cattle feed, and are used as biofuel.

Nuts

At 730,000 tons imported in 2016 and under the international trade category of ‘edible fruit and nuts’ is cashew nuts and Brazil nuts, on which Rs 8,345 crore was spent. A second important sub-category is ‘dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried’ and 350,000 tons were imported in 2016 (for Rs 6,204 crore), while 280,000 tons of apples, pears and quinces, 182,000 tons of ‘other nuts, fresh or dried’ were also imported.

Under 23 main categories food commodities, which include 167 sub-categories and more than 400 subsidiary categories, the bill for imported foods (including dairy and beverages) and food products that we purchased from all over the world in 2016 was USD 22,041 million (USD 22.04 billion), or at the average rupee-dollar exchange rate for 2016, Rs 152,088 crore! In 2015 this bill was USD 20,877 million which at the average annual rupee-dollar exchange rate for 2015 was Rs 137,794 crore. In 2014 this bill was USD 19,372 million which at the average annual rupee-dollar exchange rate for 2014 was Rs 123,015 crore.

Globalisation

These amounts are astronomical and underline the strength of globalisation’s thrall by which we are gripped, exerted upon us not only by the World Trade Organisation but also by the agreements that India has signed (or intends to, and demonstrates intent by importing) with regional trade blocs of the European Union, the OECD and ASEAN. The financial allocations to some of the largest central government programmes, and the budgetary sums of some of the biggest successes in the last three years shrink in comparison to the size of these purchases: the spectrum auction in 2015 brought in Rs 110,000 crore, the 2016-17 central government pensions budget of Rs 128,166 crore, the Rs 47,410 crore transferred so far as subsidy directly into accounts under the Direct Benefit Transfer for LPG consumer scheme, the expenditure of Rs 51,902 crore in 2016-17 on MGNREGA (the highest since its inception).

Bringing about stability in farmers’ incomes (let alone an increase), encouraging rural and peri-urban entrepreneurship based on traditional foods cultivated by agro-ecological methods, ensuring that consumers can find and are assured by the quality of food staples which are free of GM ingredients, chemicals and additives, and the saving of enormous sums of money can all be had if we but reduce and then cut out entirely the wanton import of food and beverages, and processed and packaged food products.

Uttam · Post by **Uttam** » 12 Jun 2017 20:58

India's retail inflation eases to lowest since 2012

This drop in inflation is concerning. I wonder if RBI is getting too cautious.

disha · Post by **disha** » 12 Jun 2017 21:33

http://economictimes.indiatimes.com/new ... 100078.cms

ShauryaT · Post by **ShauryaT** » 12 Jun 2017 23:18

India's factory output rises 3.1% in April

Manufacturing sector’s growth continued to remain tepid. It grew 2.6 percent in April compared with 6.2 percent in March and 5.5 percent in the same period last year.

Infrastructure or construction goods grew 5.8 percent in April as compared with a sluggish 0.8 percent jump last year. Similarly, consumer non-durables jumped 8.3 percent in April from a near-flat growth of 0.1 percent last year.

Consumer durables saw a negative growth at (-) 6.0 percent in April, compared with 13.8 percent growth during the same period last year.
Mining production also witnessed slight slowdown to a 4.2 percent growth in April from to a robust growth of 9.7 percent in March.

Electricity grew (-) 5.4 percent in April as against 14.4 percent in same period last year.

A_Gupta · Post by **A_Gupta** » 13 Jun 2017 03:39

^^^ Seems it beat the forecast?
https://www.bloomberg.com/news/articles ... ogy-stocks

India’s index of industrial production rose 2.7 percent in April versus a year earlier, according to estimates compiled by Bloomberg. The index is likely to miss that forecast and rise 2.3 percent, according to Bloomberg Intelligence.

A_Gupta · Post by **A_Gupta** » 13 Jun 2017 21:54

http://www.hrmasia.com/content/india-ch ... look-years
India, China and Singapore report weakest hiring outlook in years

The intention to grow headcount is strongest in Japan and Taiwan, and weakest in China and Singapore, according to latest ManpowerGroup Employment Outlook Survey.
...
The labour market slowdown in India is also expected to continue in Q3, following six consecutive quarters of steady decline. Indian employers also reported their weakest Outlook since the survey began in Q3 2005.

Karthik S · Post by **Karthik S** » 13 Jun 2017 22:10

Our govt should play protectionist role to try to stop chinese goods, while promote Indian SMEs. Still millions of made in china stuff in Indian markets. Our people are as good as chinese if not more in this regard.

Singha · Post by **Singha** » 13 Jun 2017 22:39

https://www.recode.net/2017/5/31/157203 ... -code-2017

india slides from mary meeker growth of internet ppt

https://www.recode.net/2017/5/31/156936 ... -code-2017

Singha · Post by **Singha** » 13 Jun 2017 22:42

the china slides https://www.recode.net/2017/5/31/157207 ... net-trends

in mobile payment we are just starting out at 250b this year.

china is 5trillion led by alipay and wechat

situation is like mobile phone monthly sales in early 2000s. we used to track it monthly based on COAI releases and a big celebration when it crossed 1 million a month...by then cheen was north of 600 mil subs.

Karthik S · Post by **Karthik S** » 13 Jun 2017 22:45

Cheen is a generation ahead of us in economy and infrastructure. We should try to match their present numbers (GDP, highways network, etc) by 2030.

Gus · Post by **Gus** » 14 Jun 2017 06:30

http://www.firstpost.com/india/industri ... 89717.html

I spotted this trend last year itself in visits to a few ITIs in erode TN. Lots of hustling and bustling around and campus recruitments as well by industries from Coimbatore

Hari Seldon · Post by **Hari Seldon** » 14 Jun 2017 07:02

Karthik S wrote:Cheen is a generation ahead of us in economy and infrastructure. We should try to match their present numbers (GDP, highways network, etc) by 2030.

+1. Also, since we are a generation behind, the opportunity to leapfrog tech and investments required is very much alive.

A tad sad to see critical areas like having our own payments gateway + clearing house (RuPay), online transactions platform (UPI, BHIM etc), solar module production and R&D etc not getting sufficient govt push - lotsa opportunity for new ideas, innovation, startups, capital etc abound once these enablers hit critical mass. Only.

Sicanta · Post by **Sicanta** » 14 Jun 2017 17:59

PNB and Allahabad bank to merge by 1st April 2018

http://m.moneycontrol.com/hi/news/compa ... 61315.html

hanumadu · Post by **hanumadu** » 16 Jun 2017 00:27

Suraj will not be happy with all this off topic discussion when he comes back. I think he just had a baby or something so it will be some time before he comes back. Until then, make merry folks

Suraj · Post by **Suraj** » 16 Jun 2017 04:36

Mods, ban hanumadu !

I'll move most of the posts to the urban development and public policy thread 'soon' .

Added later: thread cleaned up. Folks, stay on topic, or else hanumadu gets banned!

arshyam · Post by **arshyam** » 16 Jun 2017 07:12

Let's get this back on track.

If true, this will have a big impact on the construction sector and perhaps help it revive. But can it be enforced? What do maulaners think?

Here’s why you shouldn’t buy a house till GST rollout on July 1 - M Rajendran, TNIE

NEW DELHI: Are you planning to invest in a house? Wait till the government rolls out the new universal tax regime, in all probability by next month, and you might end up saving a substantial amount in the form of taxes.

The Finance Ministry has issued a clarification directing construction companies to pass on benefits of lower tax burden under the GST regime to consumers in the form of reduced prices and instalments. Else, they can be prosecuted for profiteering under Section 171 of the GST law.

The clarification has come after the CBEC and States received several complaints that customers who have booked flats by making part payments were being asked by builders to deposit entire amounts before July 1 or face higher taxation for payments made later.

“This is against the GST law,” said a Finance Ministry statement.

“Construction of flats, complex, buildings will have a lower incidence of GST as compared to a plethora of indirect Central and State taxes suffered by them under the existing regime,” the statement added.

Currently, there is a cascading of input taxes on constructed flats. For instance, a Central Excise duty is payable on most construction material at the rate of 12.5 per cent, and it’s higher in the case of cement. In addition, most States levy an Entry Tax and Value Added Tax in the range of 12.5 - 14.5 per cent on most building materials.

“As a result, incidence of Central Excise duty, VAT and Entry Tax on construction material is currently borne by builders, which they pass on to the customers as part of the price charged from them. This is not visible to the customer as it forms a part of the cost.” This, the ministry adds, will change under the GST regime.

The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers. “Despite this clarity on law position, if any builder resorts to such practice, the same can be deemed to be profiteering under section 171 of GST law.”

“The Finance Minister has also made it clear. Any tax credit that the builder gets after GST is implemented has to be passed on 100 per cent to the consumer,” says Samantak Das, Chief Economist at Research Knight Frank India.

“This is a great move and will help clarify the cloud hovering around the consumer that they may have to pay higher taxes.”

Reality check Example

Cost of buying house: Rs 10 lakh
Input tax: Rs 32,000
Tax paid on final product (including input tax): D1 lakh
Tax paid under GST: Rs 68,000

Current regime
12.5% Central excise duty
12.5-14.5% VAT
Entry tax for construction materials (charges vary from state to state)
4.5% Service tax
1% VAT under composition scheme

Under GST
■ Full input credit would be available for input taxes
■ So input taxes embedded in the flat can’t form a part of the cost of the flat
■ Builders must pass on the benefits of lower tax burden under GST to buyers by way of reduced prices

Suraj · Post by **Suraj** » 16 Jun 2017 11:37

Surprise Narrowing in India Current Account May Support Rupee

India’s current account deficit narrowed more than estimated helped by a smaller goods trade gap, burnishing the country’s external finances and providing further support for the rupee.

Key Points

The shortfall was $3.4 billion January-March, or 0.6 percent of gross domestic product, the Reserve Bank of India said in a statement in Mumbai on Thursday
That compares with a median $6.3 billion deficit predicted in a Bloomberg survey of 16 economists
The gap is smaller than the previous quarter’s $7.9 billion (1.4 percent of GDP) but higher than the $0.3 billion in the same quarter in the previous year (0.1 percent of GDP)
Big Picture

The surprisingly strong data could support the rupee. The local currency hit its highest level since August 2015 last month amid robust inflows into India.

SwamyG · Post by **SwamyG** » 16 Jun 2017 22:48

Narendra Modi government finally manages to break the Swiss bank black money vault

hanumadu · Post by **hanumadu** » 17 Jun 2017 01:18

Suraj wrote:Mods, ban hanumadu !

I'll move most of the posts to the urban development and public policy thread 'soon' .

Added later: thread cleaned up. Folks, stay on topic, or else hanumadu gets banned!

Bahut na insafi hai

Supratik · Post by **Supratik** » 17 Jun 2017 14:39

India added 22 million non-farm jobs between 2013-2015 - McKinsey.

file:///C:/Users/user/Downloads/Indias-labour-market-A-new-emphasis-on-gainful-employment.pdf

Sicanta · Post by **Sicanta** » 17 Jun 2017 15:38

^^

https://www.google.co.in/url?sa=t&rct=j ... XkL3qdTCgA

A_Gupta · Post by **A_Gupta** » 20 Jun 2017 00:15

Posted here because of its potential impact on trade:
http://timesofindia.indiatimes.com/indi ... 220976.cms

Taking the connectivity mantra seriously, on Monday, India became the 71st country to join the United Nations TIR Convention, making it easier for India to position itself as a regional trading and transit hub.

The TIR Convention is the global standard for goods customs transit.
...
One of the persistent problems for India's connectivity projects has been the disconnect between transport and customs systems with different countries. Once the systems are integrated with global norms, India reckons it will become easier to service African and Asian markets when the DMIC comes online.
...
"TIR can help implement the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement by addressing policy incompatibility among the BBIN group. For example, Bangladesh does not recognise insurance policies made in India, Nepal or Bhutan, which has resulted in many ad hoc provisions for coverage. With TIR there would be no need for bilateral arrangements as guarantors are covered by the global guarantee chain."

"BBIN MVA lacks any guaranteeing mechanism to protect customs revenue in the event of goods getting diverted to the national territory of the state through which it is passing. Without such mechanism the MVA could not be operational".

Joining the convention "would be a major economic boost to South Asia, eventually connecting the region to the rest of the world. It could become a key link between South and South-East Asia, particularly as China is already a TIR member, and connect transit routes east to Myanmar, Thailand, Laos, Cambodia and beyond."

Vamsee · Post by **Vamsee** » 20 Jun 2017 21:09

This is very good article.
It tells us what we already know. Marginal farming is just not sustainable. We keep on postponing the obvious solutions :-(

The roots of rural distress

Suraj · Post by **Suraj** » 20 Jun 2017 22:15

The farm loan waivers are simply a symptom of the problem, and they just reflect the fact that now we have some money to paper over the cracks. But it's not sustainable. The government needs to accelerate retraining and absorption of surplus labour into manufacturing and services, particularly through an increased push to urbanize. Just the effort to build massive urban and transport infrastructure will absorb 10s or even 100s of millions of people.

Suraj · Post by **Suraj** » 22 Jun 2017 10:32

Steel production is 41.8MT from Jan-May, reporting over 8MT/month all through the year so far, solidly #3 behind China and Japan, and on track to hit 100MT for the year. Japan is at 43.8MT after 5 months, and we should overtake them in another year or two.
Worldsteel May 2017 stats

FIEO sets $325 billion export target for current fiscal year

With exports recording continuous growth, exporters body FIEO expects that the country's merchandise shipments would reach $325 billion this fiscal.

"Indian exports have been on an upward trend in last few months with export of $275 billion in last fiscal and a target of $325 billion to achieve in 2017-18," FIEO said in a statement.

Monthly air passenger traffic hits new record of 10 million in May

Minister of State for Civil Aviation Jayant Sinha on Tuesday said that the country's air passenger traffic for last month has set a record as over one crore passengers were ferried by domestic airlines in May.

According to the data furnished by the Directorate General of Civil Aviation (DGCA) on Monday, total domestic air passenger traffic rose by 17.36 per cent to 1.01 crore in May from 86.69 lakh ferried during the corresponding period of 2016.

From 11% to 2.2%, inflation does a Vanishing act in India

Four years ago, India’s inflation was running at over 11 per cent. Now it’s melted to a record low of 2.2 per cent, below Mexico, Turkey and the UK, as the Reserve Bank of India’s (RBI’s) battle against price pressures gains traction.

The slide has prompted the RBI, led by Urjit Patel, to slash its inflation forecasts and led one member of its six-person monetary policy committee to break ranks at its June 7 announcement, stoking market speculation the bank could next cut rates, perhaps as early as August.

Prasad · Post by **Prasad** » 22 Jun 2017 10:36

On the inflation front, crude was nearly $100 in 2013. It has been hovering around $50 this year and dropped to 46 today.

Yagnasri · Post by **Yagnasri** » 22 Jun 2017 11:58

Just now attended the launch of Municipal Bonds of Pune Municipal Corporation at BSE Mumbai as we are on the intermediaries to the issue. 200 Cr raised initially. Purpose drinking water supply to the city. Venkaya Naidu and DF among others were present. Following are the main points:
1. Guidelines on Municipal Bonds were issued by SEBI in 2015.
2. All major town/municipalities/corporations (some 500) with more than one lakh population were asked by GoI get themselves rated.
3. 307 already done that. Rest are under process.
4. 90+ already appointed merchant bankers etc. for raising funds from Markets.
5. 80+ are in the process of doing the same.
6. PM wants at least 10 Municipal Bonds issues before December.
7. 20% of the funds will be given as grant from GoI for the people who perform.

Suraj · Post by **Suraj** » 22 Jun 2017 19:11

Prasad wrote:On the inflation front, crude was nearly $100 in 2013. It has been hovering around $50 this year and dropped to 46 today.

But it also depends on pass through price to consumer since we are talking CPI here . GoI did cut prices as crude prices fell, but not to the same magnitude , the balance being used to generate taxes to plug the deficit .

It's worth plotting something like Brent or WTI against prevailing prices at a particular Indian city, plus CPI over the same period of time, say 2 years .

JTull · Post by **JTull** » 22 Jun 2017 19:34

Suraj wrote:
Prasad wrote:On the inflation front, crude was nearly $100 in 2013. It has been hovering around $50 this year and dropped to 46 today.
But it also depends on pass through price to consumer since we are talking CPI here . GoI did cut prices as crude prices fell, but not to the same magnitude , the balance being used to generate taxes to plug the deficit .

It's worth plotting something like Brent or WTI against prevailing prices at a particular Indian city, plus CPI over the same period of time, say 2 years .

You need to consider FX as well. INR has devalued about 8.25% during last 4 years. Not quite the near the drop in Brent/WTI, but GoI does try to protect the economy from this volatility to some extent.

India has the fastest growth in Crude consumption in the world, so possibility of serious impact from crude price volatility remains. GoI is trying to substitute with NatGas and other measures to balance the energy mix. Also, long-term purchase agreements with Qatar, and direct upstream investments in foreign assets are helping.

Singha · Post by **Singha** » 23 Jun 2017 09:24

Even for coastal umpp imported coal is far cheaper than natgas..cleaner obviously for gas.

Suraj · Post by **Suraj** » 23 Jun 2017 09:53

EPFO ties up with Hudco to enable Rs 2.67 lakh housing subsidy to members

Retirement fund body Employees' Provident Fund Organisation (EPFO) on Thursday joined hands with Housing and Urban Development Corp (HUDCO) to enable its members avail credit-linked subsidy of up to Rs 2.67 lakh for buying affordable homes under PMAY.

Under the housing scheme, the EPFO allows its subscribers from societies for withdrawing up to 90 per cent of their EPF accumulations to buy homes.

The labour ministry intends to facilitate at least 10 lakh subscribers in the next two years by allowing them to use 90 per cent of EPF accumulations to make down payments to buy houses and use their accounts for paying off EMIs of home loans.

In April this year, the EPFO had amended the EPF Scheme to enable subscribers make down payment to buy homes and pay EMIs through the EPF account.

Under the PMAY, the beneficiaries are provided credit linked subsidy based on their income levels so that the dream of housing for all can be realised by 2022.

The HUDCO is a nodal agency for implementation of credit linked subsidy scheme for middle and lower-income groups and economically weaker section under the PMAY.

20k jobs less? FY18 will see 1.5 lakh new jobs against 1.7 lakh in FY17, says NASSCOM

Indian IT exports will grow by 7-8 per cent, unchanged from previous year's growth, despite protectionist voices in major markets like the US, industry body Nasscom said today.

The USD 156 billion Indian industry -- the biggest job creator in the organised sector -- is also projected to add 1.3-1.5 lakh new jobs during 2017-18 compared to a net hiring of 1.7 lakh in the previous fiscal.

Bankruptcy Code: Banks to refer Essar Steel, Electrosteel, Bhushan Steel to NCLT

The fate of three near-bankrupt steel companies — Essar Steel, Bhushan Steel and Electrosteel Steels — which together owe lenders nearly `1 lakh crore will now be decided by the National Company Law Tribunal (NCLT). Having failed to recover their dues or rope in either strategic or financial investors, lenders to these companies finally agreed on Thursday to resort to the Insolvency and Bankruptcy Code (IBC), bankers familiar with the development said. The decision follows a directive by Reserve Bank of India (RBI) on June 13 to banks asking them to refer a dozen troubled companies — with a combined debt of close to `2.4 lakh crore — to the tribunal.

The three steelcos — Essar, Bhushan and Electrosteel — together have a manufacturing capacity of close to 18 million tonnes per annum. The total debt of the Essar Group is estimated at `1.17 lakh crore. Most private banks have sold off their Essar Steel exposure to asset reconstruction companies, taking a haircut of more than 50%; most PSU banks have declared Essar Steel an NPA.

After demonetisation, against all expectations, deposits with banks stay put

Contrary to lenders’ expectations, most of the money that moved into banks after demonetisation has stayed put. In addition, the accumulation to their deposit base continues at a steady base, data from Reserve Bank of India (RBI) show. On December 23, total deposits — time and demand — stood at Rs104.69 lakh crore; on June 9, the total value of demand and time deposits with the banking system stood at Rs105.78 lakh crore, up more than 1%. State Bank of India (SBI) chairman Arundhati Bhattacharya had observed in May that around 65% of the inflows during demonetisation were in the system. The government announced the withdrawal of high-value notes on November 8 and the window for banks to accept the demonetised Rs500 and Rs1,000 notes was between November 10 and December 31. Bankers had anticipated that up to 40% of the deposits that flowed in post November 10 would remain with them.