Indian Economy News & Discussion - Aug 26 2015

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Bart S
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Bart S » 29 Sep 2017 00:02

nam wrote:
European countries provide free medical & schooling. There is no other worth while services provided by European govs, as most other things are private.


:shock:

Firstly, those 2 services by themselves are world class and worth a great deal even if they were the only services provided. These aren't the token rubbish of poor quality that passes for health and school services by the govt in India. Ever tried visiting a govt hospital in India or a govt school? Or trying to get any major work done without a bribe? And what you call 'schooling', in most major European countries includes free/highly subsidized university education, and this includes about 200 of the top 500 universities in the world that are in Europe. Lots of Indian families will be happy to pay the same tax levels (they already pay through their nose for pvt services that too, are poor) for the education alone. Lots of Americans for that matter would kill to have the same free education or healthcare.

And it is pretty inaccurate to state that there are no other worthwhile services that European govts provide.

There are also the basics of low corruption, safety and security, cleanliness, maintenance of roads and infrastructure, effective subsidized housing, short work-weeks, guaranteed paid vacation, unemployment benefits, old age homes, pensions, water that you can drink from the tap, adequate water supply, excellent sanitation, almost no power outages or issues, world class infrastructure and connectivity, meritocracy and social mobility, visa free travel and immigration (largely) within the western world etc.

The overall welfare state in Europe really exists (despite people who complain about it) and citizens have a genuine safety net. In India (and most third world countries) it is nothing but a sick joke, the 'welfare' is available only to politicians and their hangers on like the MNREGA types and various elites running the caste/union gangs along with the real estate mafia.

When the Indian govt can provide that I will be happy to pay 50% tax.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 29 Sep 2017 00:38

https://www.bloomberg.com/news/articles ... -of-fy2018
India Sticks to Planned Borrowing in Second Half of FY2018
India announced its borrowing program for the second half of the financial year, sticking to the budget plan amid calls for fiscal stimulus to boost a slowing economy.

The government will sell bonds worth 2.08 trillion rupees ($32 billion) in the six months beginning Oct.1, Economic Affairs Subhash Chandra Garg told reporters in New Delhi. In the first half of the financial year to March 2018, India had a borrowing target of 3.72 trillion rupees while for the whole year, Garg said the gross borrowing is budgeted at around 5.8 trillion rupees.


Any deterioration in public finances risks the wrath of rating companies such as S&P Global Ratings, which last week downgraded China for the first time since 1999 citing soaring debt. India carries the lowest investment grade rating and a cut to junk status could force some investors to dispose their Indian assets.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby srin » 29 Sep 2017 01:03

JohnTitor wrote:
Gus wrote:Tax code needs reform too. It is damn hard to figure out take home + tax paid = CTC, because of the many tax advantaged allowances with their myriad rules and regulations.

Maybe there are some gurus here who can maximize these things, but I always struggled to grasp and consoled myself with a "probably not worth the time you are spending to maximize these things" :cry:



Having lived and worked abroad all my life, I have struggled to understand the concept of CTC to no end. I am used to gross salary and tax liabilities leaving mw nwt salary.

This CTC is a joke, with companies adding in their share of the PF to make the amount look larger but makes no difference to take home amount. Add to it the number of various rebates like housing and medical etc.

Worse still two people with the same CTC can have completely different take home amounts because of the financial jugglery by companies.



That's because Govt doesn't know or care about CTC. It cares only about the basic salary (for computing HRA, gratuity, EPF contribution, leave encashment taxation etc).

CTC is a corporate invention and it should be seen from their perspective (what's the salary budget for an employee). That's why they put employer contribution to PF and in one of my previous companies, they put bonus and gratuity too. :(( Anyway, after a few such mistakes, I've found that having this perspective is good in salary negotiations, because it gives me leeway to negotiate.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Bart S » 29 Sep 2017 01:47

srin wrote:
That's because Govt doesn't know or care about CTC. It cares only about the basic salary (for computing HRA, gratuity, EPF contribution, leave encashment taxation etc).

CTC is a corporate invention and it should be seen from their perspective (what's the salary budget for an employee). That's why they put employer contribution to PF and in one of my previous companies, they put bonus and gratuity too. :(( Anyway, after a few such mistakes, I've found that having this perspective is good in salary negotiations, because it gives me leeway to negotiate.



Actually the CTC makes a lot more sense than the weird calculations for basic salary, DA, etc. Basically it's the govt's fault for imposing what some baboons had designed for govt salary on the general taxpayer population. The CTC is the only way to rationalize salaries to an extent for the purpose of hiring, bank loans etc, otherwise with all the confusion inherent with the govt system it can lend itself to creative fudging one way or the other.


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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 29 Sep 2017 04:51

^^^^
Hindustan Unilever chief executive Sanjiv Mehta said in a presentation to investors that rural demand for its products has been weak because of the lingering effects of demonetization as well as the farm crisis.


But news-item Sep 2017:
https://www.bloombergquint.com/business ... ys-nielsen
Consumer Demand Intact As Distributors Feel GST Pain, Says Nielsen
The FMCG sector grew in double digits in the year to August as consumers move from unbranded to branded items. Demand for homecare and personalcare products was in single digit, Nielsen said. And that’s despite demonetisation and GST.


FMCG = Fast Moving Consumer Goods.

News-item Sep 2017
http://economictimes.indiatimes.com/ind ... 520017.cms
FMCG sales see 12 per cent growth in rural markets, 7 per cent rise in food and beverages category in July

And lest there be any doubt, this from 2016
Hindustan Unilever: HUL recognised as top FMCG Company in India
https://www.hul.co.in/news/news-and-fea ... india.html

So what & when did Sanjiv Mehta say?
http://www.livemint.com/Companies/2etts ... arm-c.html
In an investor presentation made to the Arisaig Consumer Symposium, HUL chief executive Sanjiv Mehta said that in 2016-17, growth in rural markets lagged that in urban ones for the first time since 2011-12.

There’s also been a steady fall in consumer sentiment since 2011-12, the presentation said, citing data from researcher Nielsen.
...
HUL said the early part of the quarter ending September 2017 “was affected...” but that trade channels were now improving while the wholesale channel was stabilizing.

Notice Nielsen in September 2017 is saying "Customer Demand Intact" -- see above.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 29 Sep 2017 05:22

For all the doom and gloom talk, RBI again raises the foreign investor debt holding limit:
RBI increases foreign investor limits in G-secs
The Reserve Bank on Thursday increased foreign portfolio investors' investment limits in central and state government securities by an aggregate Rs 14,200 crore for the October-December period.

Limits for investment by FPIs for the December quarter have been increased by Rs 8,000 crore in Central government securities and by Rs 6,200 crore in state development loans, the central bank said in a notification.

Accordingly, the aggregate FPI limits have gone up to Rs 2,89,300 crore from the earlier Rs 2,75,100 crore.

The G-secs limits include a cap of Rs 1,89,700 crore in general securities, up from Rs 1,87,700 crore earlier, and Rs 60,300 crore in long term securities, up from the earlier Rs 54,300 crore.

For the state development loans, the general limits are Rs 30,000 crore and Rs 9,300 crore in long term securities, which is up from the earlier Rs 28,500 crore and Rs 4,600 crore, respectively, the apex bank said.

Govt to widen tax base, asks I-T dept to add 12.5 mn filers in FY18
The Income Tax Department has been tasked to add 12.5 million new return filers in the current financial year as part of the government's plan to widen the tax base in the country.

The Central Board of Direct Taxes (CBDT), that makes policy decisions for the I-T department, has directed the taxman to undertake "focused efforts to significantly increase the tax base in the current financial year of 2017-18."

The target, the CBDT directive accessed by PTI said, is to add 12.5 million new I-T return filers.

The Hyderabad and the Pune regions of the department have been given the highest targets to add 12,80,000 and 11,80,000 new filers respectively.

They are followed by Chennai with 10,47,000 new filers and Chandigarh at 10,41,000 fresh filers.

As per official data, the total number of all returns (electronic + paper) filed during the financial year 2016-17 was 54.3 million, 17.3 per cent more than the returns filed during the 2015-16 fiscal.

Similarly for fiscal 2016-17 (till June 30), 12.6 million new taxpayers (return filers + non-filers making tax payments) were added to the tax base.

Govt asks PSUs to step up capex, dividends
The government on Thursday nudged state-owned companies to spend an additional Rs 25,000 crore as capital expenditure this fiscal year, above the budgeted combined capital spending target of Rs 3.85 lakh crore for the Centre and public sector undertakings (PSUs).

It also asked these companies to declare liberal dividend payments to the government.

Additionally, the Centre said it would borrow Rs 2.08 lakh crore during October 2017-March 2018. It had borrowed Rs 3.72 lakh crore during April-September.


While the full-year borrowing estimate of Rs 5.80 lakh crore is being adhered to for now (net borrowing at Rs 4.25 lakh crore), the borrowing programme will be re-assessed in December, based on spending needs, according to a senior finance ministry official.

Net borrowing in the October-March period has been pegged at Rs 1.92 lakh crore.

GST collection in two months reached anticipated figures: Arun Jaitley
The Union Finance Minister Arun Jaitley on Thursday said that GST collection in first two months reached anticipated figures and revenue would probably move up in next few months.

The Finance Minister also spoke about foreign direct investment (FDI), saying that deposits continue to be largest ever.

Direct tax collections were up by 15.7 per cent over the previous year’s figures, he added.

With reference to FDI inflows, for the YTD, it reads:
Jan-Mar 2017: $12.2 billion
Apr-Jun 2017: $14.6 billion
Total for fiscal 2016-17 (upto Mar 2017) was $43.4 billion.
Total for calendar year 2017 (upto Jun 2017): $26.8 billion

Looks like CY2017 and FY2017-18 figures will be be in excess of $50 billion.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Philip » 29 Sep 2017 14:43

The govt. has yet to realise that all these decades since independence,India survived because of the informal economy,which employed people at the lowest levels of society.daily wage earners,casual farm labour,construction workers,etc.,etc.Small and med. scale industries and businesses are the foundation of the nation,not the Tatas ,Birlas and now Ambanis.Agriculture is/was the backbone of the economy. First attack on it was the NREGA dole,making labour scarce and rural labour less productive. We all rant and rave about black money,but during the last global eco crisis,it was this black money,informal economy that saved the nation.

Who are the largest holders of black money? Politicos,babus and their crony capitalists. They never lost out with the demon programme,where 99% of so-called BM returned! Those who really suffered were the poor and middle class.Small businesses and industries are collapsing all over the country.No need to talk of farmer's suicides each year.Now even individuals and families in towns and cities are committing suicide due to eco reasons.GST has only further added to the mess. Prices of almost everything have risen,petrol/diesel hikes intolerable,where 50% is Tax! One of the biggest employers in the country,the construction industry has been devastated. No buyers for exg. stock and no new projects planned by developers. cement consumption down by around 30%! The general slide is now accelerating as one industry depends upon another.The GOI may collect X billions in GST but what about prices,unemployment and collapsing businesses? China is laughing all the way to the bank with its $50B trade surplus with India.The GOI is doing nothing about promoting Indian industry vis-a-vis China. When you do your Diwali purchases this yr. just see how many Chin goods are on the market.

The GOI is also forgetting that the vast majority of voters are poor and middle class.If they feel that they're worse off come 2019 than when the NDA-2 took power with great expectations from the masses,then the NDA will suffer heavy losses. It may still hold onto power,but will have been deeply wounded. No amt. of spin on how much the govt. has collected by way of taxes,etc. means anything to the common man.His employment,business fortunes ,and cost of living which impact upon his family welfare come first and last as always.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karthik S » 29 Sep 2017 14:58

Philip wrote:The govt. has yet to realise that all these decades since independence,India survived because of the informal economy,which employed people at the lowest levels of society.daily wage earners,casual farm labour,construction workers,etc.,etc.Small and med. scale industries and businesses are the foundation of the nation,not the Tatas ,Birlas and now Ambanis.Agriculture is/was the backbone of the economy. First attack on it was the NREGA dole,making labour scarce and rural labour less productive. We all rant and rave about black money,but during the last global eco crisis,it was this black money,informal economy that saved the nation.

Who are the largest holders of black money? Politicos,babus and their crony capitalists. They never lost out with the demon programme,where 99% of so-called BM returned! Those who really suffered were the poor and middle class.Small businesses and industries are collapsing all over the country.No need to talk of farmer's suicides each year.Now even individuals and families in towns and cities are committing suicide due to eco reasons.GST has only further added to the mess. Prices of almost everything have risen,petrol/diesel hikes intolerable,where 50% is Tax! One of the biggest employers in the country,the construction industry has been devastated. No buyers for exg. stock and no new projects planned by developers. cement consumption down by around 30%! The general slide is now accelerating as one industry depends upon another.The GOI may collect X billions in GST but what about prices,unemployment and collapsing businesses? China is laughing all the way to the bank with its $50B trade surplus with India.The GOI is doing nothing about promoting Indian industry vis-a-vis China. When you do your Diwali purchases this yr. just see how many Chin goods are on the market.

The GOI is also forgetting that the vast majority of voters are poor and middle class.If they feel that they're worse off come 2019 than when the NDA-2 took power with great expectations from the masses,then the NDA will suffer heavy losses. It may still hold onto power,but will have been deeply wounded. No amt. of spin on how much the govt. has collected by way of taxes,etc. means anything to the common man.His employment,business fortunes ,and cost of living which impact upon his family welfare come first and last as always.


Phillip sir, construction, or RE was bound to slowdown. Read somewhere that the RE prices in India appreciated by 1100% from 2004 to 2014. Who will buy them? Also RE was one of areas where BM was invested. Politicos, babus and crony capitalists are all hand in gloves, be it RE, colleges etc. Let property prices come down to what they are actually worth, let RBI bring down IR, you'll see construction activity grow again, but in a proper way.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nam » 29 Sep 2017 15:26

Bart S wrote: :shock:

Firstly, those 2 services by themselves are world class and worth a great deal even if they were the only services provided. These aren't the token rubbish of poor quality that passes for health and school services by the govt in India. Ever tried visiting a govt hospital in India or a govt school? Or trying to get any major work done without a bribe? And what you call 'schooling', in most major European countries includes free/highly subsidized university education, and this includes about 200 of the top 500 universities in the world that are in Europe. Lots of Indian families will be happy to pay the same tax levels (they already pay through their nose for pvt services that too, are poor) for the education alone. Lots of Americans for that matter would kill to have the same free education or healthcare.



I would have to disagree. For the money paid, I would get better service from private hospitals in India with health insurance. You need to ask Europeans, specially Brits about the "NHS queue".
The cost of medicine is off the charts. India has access to generics. Bribe in European countries is legalized as "service fees" or "premium service".
Regarding school, it is softer version of Indian private schools. Again for the money paid, I would get a high end private school in India.

On higher education, India is the king of subsidized higher education. We may not have top notch unis, but no body considers all Indian graduates useless.



Can I also say most of Indians will never pay 50% tax, no matter the level of service. One thing we need to understand, Indian income tax for salaried person is low, because GoI accepts it cannot provide the service.

Hence it allows them to choose private hospitals and private schools by having lower IT.

European gov are forced to provide some of these services because private services are very expensive. In return they have to charge high taxes.

We in India(specially middle class) demand Europe level of service, with Dubai style tax system.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nam » 29 Sep 2017 15:37

For my rant on we are not building new skills & tech for example the number of Metro project we have. Happy to now know that majority of the trains used in Metros are been built in India.

We also exported some to Australia. There might be high level of screwgiri involved, but it is a start.

Alstom and Bombardier are building them in India and exporting out.

This model should be joro shoro se published. Alstom and Bombardier can now use scale and Indian manufacturing cost to compete with the Chinese. Similar to how Suzuki survived due to Maruti.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vinod » 29 Sep 2017 18:08

In my view, slowing down in RE sector is a good thing. Unhinged escalation of house prices robs access for the ordinary citizens from ever owning a home. RE were mainly dealing with BM. Now, that has been stopped or at least greatly reduced. Yes, that means some job losses... but overall it is good for the country. While the whole economy rebalances itself after demo and GST, there will be some pain.. it is inevitable. I feel we have the best person at the helm to implement this kind of changes. For me that faith hasn't gone yet.. It had to be done, and it is being done by the best person. Rest of what follows, we will have to live with it.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 29 Sep 2017 18:47

RE was bound to stagnate because of demo. it was a bubble anyways, becoming out of reach for aspirant middle class.

the PMAY interest subsidy is picking up for LIG and MIG groups. but it won't be compensating for stagnation in big projects.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vera_k » 29 Sep 2017 19:22

nam wrote:One thing we need to understand, Indian income tax for salaried person is low, because GoI accepts it cannot provide the service


Indian personal income tax rates are not that low, at least not low enough to excuse the lack of services provided by government.

Worlds highest effective personal tax rates

But it is also true that other local taxes are low, and many urban services and schools would be mostly funded out of local taxes.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 29 Sep 2017 19:47

Regarding getting to a cashless society:
1. I don't know if India's infrastructure is more resilient than that of Puerto Rico.
2. Hurricane Maria completely downed Puerto Rico's electricity grid.
3. Even with diesel/petrol electric generators, fuel is in short supply and so these don't help.
4. The telecom infrastructure is also destroyed.
5. Credit cards, debit cards don't work because there is no power.
6. ATMs also don't work because there is no power.
7. The roads are damaged or blocked by debris from the hurricane, and so resupplying fuel, ATMs, etc., is difficult. 9000 containers full of emergency supplies are stuck at the port with no way to get them to the interior.

Upshot: the main commerce is with cash people had on hand prior to the hurricane. This is more than a week after the hurricane hit.

IMO, the resiliency of all the systems in face of major natural disaster has to be very high to really get to a cashless society.
Not just resilient, but "anti-fragile". (Via Wiki: "Antifragility is a property of systems that increase in capability, resilience, or robustness as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. It is a concept developed by Professor Nassim Nicholas Taleb in his book, Antifragile and in technical papers. As Taleb explains in his book, antifragility is fundamentally different from the concepts of resiliency (i.e. the ability to recover from failure) and robustness (that is, the ability to resist failure).")

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 29 Sep 2017 19:50

https://www.bloomberg.com/news/articles ... frank-says
Three Indian cities offer the highest yields for prime office space as a shortage of supply allows owners to push up rents, according to Knight Frank LLP.

Technology hub Bengaluru earned the highest yield at 10 percent, followed by New Delhi and Mumbai at 9.2 percent and 8.5 percent respectively, according to ‘Global Cities: The 2018 Report,’ released Thursday. Hong Kong offered the lowest yield of the 34 cities, at 2.7 percent, behind Paris and Zurich, both at 3 percent, the report showed.


This is what should drive real-estate expansion.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Vips » 29 Sep 2017 20:25

Modi may be the last hope for the Indian economy to achieve greatness.

Recent weeks have witnessed an enormous amount of hand-wringing in the press about India’s economy. These articles share a common thematic trajectory: they start with a recitation of statistics that highlight a slowdown, lay it on the doorsteps of demonetisation and GST, and in the grand tradition of the blood-sport which is Indian politics, either use these statistics to settle personal scores, or, as in the case of the political opposition, use it to prepare oneself for 2019 with nervous glee. None of this hand-wringing is accompanied with any insight or solutions beyond the obvious.

The fox knows many things. The hedgehog knows one important thing.

In a now famous essay written when he was an Oxford Don in the 1930’s, Isaiah Berlin classified people into foxes and hedgehogs as a means of making a distinction about people and the different ways in which they confront reality. Foxes, according to Berlin, may know many things, but a coherent worldview is beyond their comprehension. The hedgehog, however, knows one great truth, and steadfast in its pursuit, remains unreconciled until he/she reaches it.

This parable is perhaps the best way to understand Narendra Modi and his actions surrounding the economy. Modi is the hedgehog who knows what India needs to do to become prosperous, but importantly, is also willing to act upon it. Indeed, he may be the only politician in contemporary Indian history who has undertaken structural reforms out of choice rather than, like Narasimha Rao in the 1990’s, being compelled to do so.

Structural reform is thankless: costs are borne upfront, and rewards come later. (The currency for this transaction is political capital, and Arun Jaitley has paid the most for his role as the able knight who is the face of such change.) For years, it was the very absence of these structural reforms that armchair foxes have bemoaned. Now that the reforms are occurring, the foxes are coming out of the forest, and unwilling to pay the price, claim that these are ill-timed, ill-conceived or ill-executed.

Through his decade-long executive leadership of one of India’s richest states, Modi knows what the foxes don’t: First, that there’s never a right time to make a hard choice, and second, the slowdown is the result of a fundamental fragility of the Indian economy baked into India’s economic foundation at its creation: the government’s overwhelming role in the economy.

Modi is seeking to eliminate this fragility by recalibrating the entire engine of India’s economic growth methodically: Jaitley’s increasing of the states’ share in the divisible pool of union taxes in 2015, digitisation/demonetisation of the economy in 2016, the GST in 2017, Piyush Goyal’s work in the power sector over the last three years, Nitin Gadkari’s ongoing work in transportation, all are transformative and quantifiable contributors to the structure of the economy, and designed to create a robust and higher equilibrium for the Indian economy from which it can propel itself higher.

That these reforms are happening without any taint on any senior politician of the government is in itself a first in India’s modern history. The republic was lucky to survive through years of pillage under the Congress, and if it were nothing else but just that the BJP is taint-free, we would still have much to be thankful for.

But Modi’s toughest test is yet to come. Just as Modi fought the culture wars and reshaped our national discourse on identity and nationhood for all time, and just as how he is transforming India’s foreign policy through a new Modi-doctrine, he must now dismantle the greatest vestige of Jawaharlal Nehru’s and Indira Gandhi’s legacy: the socialist superstructure that is the curse of India. Only when he is finished, will he have succeeded in his undeclared personal ambition: to bury Nehru and Indira Gandhi forever.

To do so involves treating the economic organisation of a society not merely in transactional terms, but as a moral issue inextricably linked to individual rights and dignity, and moving wholeheartedly towards the only economic system that provides for such: a free-market system adapted to help those on India’s economic margins.

In doing so, he would do well to reduce his reliance on ever wiser economic councils and bureaucrats, but follow his hedgehog instincts which have yielded such sharp results in foreign policy and India’s culture wars. (As an aside, I note with some amusement a lesson from my first class in economics with Professor Jagdish Bhagwati: “India did so badly in the 50’s and 60’s not because it had too few economists, but because it had too many!”)

This then, is the call to arms. In addition to a dogged focus on anti-corruption (a necessary issue for 2014 but insufficiently ambitious for 2019), Modi needs to speak to the country in civilisational terms about the manner of its economic organisation, and seek the mandate to put the nation on the path to double-digit growth for decades to come.

In practical terms, and as a first step, it requires the sale of the government-owned banks and PSU’s in their entirety. Not re-capitalisation, not mere NPA-resolution, not partial-disinvestment of loss-making PSU’s etc. A complete sale. These are giant black holes that destroy capital, or at best, use it sub-optimally. Modi cannot rebuild a nation without removing the termites from its foundation.

By seizing the time still available in 2017-2019 (and perhaps for five years thereafter), Modi may still live up to his own revolutionary declaration of 2014: “Government has no role in business”. Modi may represent the last best hope for the Indian economy to achieve true greatness. If Modi doesn’t do it now, India will be condemned to this middling, snakes-and-ladder growth pattern for another several generations.

If not Modi, then who? If not now, then when?

The hedgehog knows.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby arvin » 29 Sep 2017 20:45

I dont think PSUs will be touched till 2019. Max may be poster boy Air india.
Only disruption left after Aadhar of everything, Jan dhan, demo and GST is I think Income tax concessions.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 29 Sep 2017 21:41

They have been trying to sell Air India, but no buyer.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nam » 29 Sep 2017 21:41

Here is a wonderful example of western government funding high tech industry to create a monopoly and drive their economies. The Chinese do it openly.

https://www.vox.com/world/2017/9/27/16373156/boeing-tariff-bombardier-canada

Boeing’s aid comes in the form of favorable defense contracts and tax breaks on the state level. Bombardier’s subsidies, by contrast, come in the form of the government effectively partnering with the company in funding the early stages of product development.


We waste money on PSUs. ATAGS cannot come fast enough with orders to BF & Tata. I so hope it will lead to tech & high tech project management milestone in the country.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby KJo » 29 Sep 2017 22:04

hanumadu wrote:They have been trying to sell Air India, but no buyer.


They can reduce the asking price. Maybe merge with another airline.
Or maybe this "trying" is an eyewash.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Lisa » 29 Sep 2017 22:27

nam wrote:
I would have to disagree. For the money paid, I would get better service from private hospitals in India with health insurance. You need to ask Europeans, specially Brits about the "NHS queue".
The cost of medicine is off the charts. India has access to generics. Bribe in European countries is legalized as "service fees" or "premium service".
Regarding school, it is softer version of Indian private schools. Again for the money paid, I would get a high end private school in India.



With the NHS and its queues life expectancy in the UK is 81.60. What is it for those attending private hospitals in India?

Medicine is technically free, there are NO fees or any premium services on the NHS. You pay a FIXED processing fee for any medicine irrespective of its cost, eg, the current cost of Betaferon in the UK is £7,263.97 per patient per annum and the processing fee would be £8.60. That's all you pay £8.60. Children, pregnant women and the elderly pay nothing at all. What would it cost in India, less than £8.60?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 29 Sep 2017 22:36

They will first try to sell off AI assets to reduce debt. Then govt is planning to take over some of the debt. There is talk of listing on bourses. Then only will it be sold. It is now a lemon and a liability that cannot be sold outright. So it is not going to be a one sec toffee sale but a laborius one.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby isubodh » 29 Sep 2017 23:09

A_Gupta wrote:Regarding getting to a cashless society:
1. I don't know if India's infrastructure is more resilient than that of Puerto Rico.
2. Hurricane Maria completely downed Puerto Rico's electricity grid.
3. Even with diesel/petrol electric generators, fuel is in short supply and so these don't help.
4. The telecom infrastructure is also destroyed.
5. Credit cards, debit cards don't work because there is no power.
6. ATMs also don't work because there is no power.
7. The roads are damaged or blocked by debris from the hurricane, and so resupplying fuel, ATMs, etc., is difficult. 9000 containers full of emergency supplies are stuck at the port with no way to get them to the interior.

Upshot: the main commerce is with cash people had on hand prior to the hurricane. This is more than a week after the hurricane hit.

IMO, the resiliency of all the systems in face of major natural disaster has to be very high to really get to a cashless society.
Not just resilient, but "anti-fragile". (Via Wiki: "Antifragility is a property of systems that increase in capability, resilience, or robustness as a result of stressors, shocks, volatility, noise, mistakes, faults, attacks, or failures. It is a concept developed by Professor Nassim Nicholas Taleb in his book, Antifragile and in technical papers. As Taleb explains in his book, antifragility is fundamentally different from the concepts of resiliency (i.e. the ability to recover from failure) and robustness (that is, the ability to resist failure).")


The whole point of DARPA funding internet was to be resilience against similar disasters. And we have come a long way since that project.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 30 Sep 2017 05:32

isubodh wrote:The whole point of DARPA funding internet was to be resilience against similar disasters. And we have come a long way since that project.


Yes, much more complex and fragile. But this is probably a topic for another thread.
From the Indian economy point of view, the systems & network that support cashless had better be really good.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby TKiran » 30 Sep 2017 10:00

Informal economy (eg. Agriculture, mom&pop cash&carry shops etc.) generates 10 times employment. ie for 1 Software Engineer generated there will be 10 people getting employed in the informal economy.

But to generate that 1SWE, you need 100000 $ investment. For example, 1 billion$ investment, Infosys could generate 10000 SWEs in 2004.

So what BJP govt is doing right now is that they decided to generate 1employee in formal sector, so that 10 employees are generated automatically. That's a great idea, instead of appreciating such an ingenious plan, why are we criticizing the government?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby chetak » 30 Sep 2017 10:32

KJo wrote:
hanumadu wrote:They have been trying to sell Air India, but no buyer.


They can reduce the asking price. Maybe merge with another airline.
Or maybe this "trying" is an eyewash.


no buyers, because..........

no one wants the "unlimited" liability of the militant, entitled and demanding staff who always put themselves far above fare paying customers. They have sunk the airline and continue to bleed it dry like leeches.

No one wants the already "perks for life" empowered retired staff, the vast hordes of govt sanctioned freeloaders with "lifetime" confirmed first class travel benefits for self and extended families, continuing in perpetuity even after the primary beneficiary kicks the bucket.

No one wants that militant unions that will come along with the airline to bugger the new owner.

If you have the testimonials, then sell the airline with it's assets, routes and infrastructure minus the staff, liabilities of the retired and govt authorized free loaders and minus the unions.

The airline will be snapped up in a heartbeat.

lastly, sell only to an Indian company and not to a foreigner.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Vidur » 30 Sep 2017 11:05

Vips wrote:Modi may be the last hope for the Indian economy to achieve greatness.

Recent weeks have witnessed an enormous amount of hand-wringing in the press about India’s economy. These articles share a common thematic trajectory: they start with a recitation of statistics that highlight a slowdown, lay it on the doorsteps of demonetisation and GST, and in the grand tradition of the blood-sport which is Indian politics, either use these statistics to settle personal scores, or, as in the case of the political opposition, use it to prepare oneself for 2019 with nervous glee. None of this hand-wringing is accompanied with any insight or solutions beyond the obvious.

The fox knows many things. The hedgehog knows one important thing.

In a now famous essay written when he was an Oxford Don in the 1930’s, Isaiah Berlin classified people into foxes and hedgehogs as a means of making a distinction about people and the different ways in which they confront reality. Foxes, according to Berlin, may know many things, but a coherent worldview is beyond their comprehension. The hedgehog, however, knows one great truth, and steadfast in its pursuit, remains unreconciled until he/she reaches it.

This parable is perhaps the best way to understand Narendra Modi and his actions surrounding the economy. Modi is the hedgehog who knows what India needs to do to become prosperous, but importantly, is also willing to act upon it. Indeed, he may be the only politician in contemporary Indian history who has undertaken structural reforms out of choice rather than, like Narasimha Rao in the 1990’s, being compelled to do so.

Structural reform is thankless: costs are borne upfront, and rewards come later. (The currency for this transaction is political capital, and Arun Jaitley has paid the most for his role as the able knight who is the face of such change.) For years, it was the very absence of these structural reforms that armchair foxes have bemoaned. Now that the reforms are occurring, the foxes are coming out of the forest, and unwilling to pay the price, claim that these are ill-timed, ill-conceived or ill-executed.

Through his decade-long executive leadership of one of India’s richest states, Modi knows what the foxes don’t: First, that there’s never a right time to make a hard choice, and second, the slowdown is the result of a fundamental fragility of the Indian economy baked into India’s economic foundation at its creation: the government’s overwhelming role in the economy.

Modi is seeking to eliminate this fragility by recalibrating the entire engine of India’s economic growth methodically: Jaitley’s increasing of the states’ share in the divisible pool of union taxes in 2015, digitisation/demonetisation of the economy in 2016, the GST in 2017, Piyush Goyal’s work in the power sector over the last three years, Nitin Gadkari’s ongoing work in transportation, all are transformative and quantifiable contributors to the structure of the economy, and designed to create a robust and higher equilibrium for the Indian economy from which it can propel itself higher.

That these reforms are happening without any taint on any senior politician of the government is in itself a first in India’s modern history. The republic was lucky to survive through years of pillage under the Congress, and if it were nothing else but just that the BJP is taint-free, we would still have much to be thankful for.

But Modi’s toughest test is yet to come. Just as Modi fought the culture wars and reshaped our national discourse on identity and nationhood for all time, and just as how he is transforming India’s foreign policy through a new Modi-doctrine, he must now dismantle the greatest vestige of Jawaharlal Nehru’s and Indira Gandhi’s legacy: the socialist superstructure that is the curse of India. Only when he is finished, will he have succeeded in his undeclared personal ambition: to bury Nehru and Indira Gandhi forever.

To do so involves treating the economic organisation of a society not merely in transactional terms, but as a moral issue inextricably linked to individual rights and dignity, and moving wholeheartedly towards the only economic system that provides for such: a free-market system adapted to help those on India’s economic margins.

In doing so, he would do well to reduce his reliance on ever wiser economic councils and bureaucrats, but follow his hedgehog instincts which have yielded such sharp results in foreign policy and India’s culture wars. (As an aside, I note with some amusement a lesson from my first class in economics with Professor Jagdish Bhagwati: “India did so badly in the 50’s and 60’s not because it had too few economists, but because it had too many!”)

This then, is the call to arms. In addition to a dogged focus on anti-corruption (a necessary issue for 2014 but insufficiently ambitious for 2019), Modi needs to speak to the country in civilisational terms about the manner of its economic organisation, and seek the mandate to put the nation on the path to double-digit growth for decades to come.

In practical terms, and as a first step, it requires the sale of the government-owned banks and PSU’s in their entirety. Not re-capitalisation, not mere NPA-resolution, not partial-disinvestment of loss-making PSU’s etc. A complete sale. These are giant black holes that destroy capital, or at best, use it sub-optimally. Modi cannot rebuild a nation without removing the termites from its foundation.

By seizing the time still available in 2017-2019 (and perhaps for five years thereafter), Modi may still live up to his own revolutionary declaration of 2014: “Government has no role in business”. Modi may represent the last best hope for the Indian economy to achieve true greatness. If Modi doesn’t do it now, India will be condemned to this middling, snakes-and-ladder growth pattern for another several generations.

If not Modi, then who? If not now, then when?

The hedgehog knows.


Well done. Good points. However this kind of deep structural reform cannot succeed without administrative reform. Take demonitisation. People found ways of subverting the system and depositing cash. So we know have an enforcement problem of big magnitude. Our success will be defined by how good our tax department is. But that is riddled with corruption. We should have first strengthened the tax department through infusion of new blood laterally , people who are not tied to and trained and born and bred in the system. We should have changed the entire hierarchy of CBDT and downwards to IT Commissioner level.

Take GST, there are a lot of glitches in design and enforcement, we should have roped in a private sector leader to design the nuts and bolts , design the IT systems and lead the roll out. The government is not capable of executing such large and complex projects.

The system cannot and will not change from inside.

Then there is the judiciary which has increasingly become the last refuge of the scoundrels. We need to find a way to reform them. The PM has inherited a very difficult job indeed.
Last edited by Vidur on 30 Sep 2017 11:16, edited 2 times in total.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby yensoy » 30 Sep 2017 11:07

^^^^ Majority of cabin crew and other staff in AI is on short term contracts and no longer have the golden salary and perks packages of their predecessors. This cleanup has been happening for a long time.

AI actually can be turned around. There are some conditionalities:
1. Debt has to be erased. With the millstone of huge debt hanging on it, AI can never be profitable and can never be sold. Losses need to be realized.
(1.a. As a secondary to 1., there must be an investigation into the huge Boeing order placement during PP's regime, and the unholy nexus between politicians and folks in the aviation industry. Doesn't directly help AI but would help reduce some of the hate.)
2. AI cannot be made profitable by cutting. AI has to be made profitable by growth. Already the kind of route structure and hub structure in place is pretty awesome, but needs to be grown carefully and strategically. This should be rather easy given that aviation is growing at 10+% in India.
3. AI must retake business. That's where the money is. AI has no trouble filling the back seats but when it comes to the front - actually it also has no trouble filling in the front because the 787-8 has a puny 18 business seats which is a record low by international standards. It needs to upgrade its service quality and housekeeping, for instance by deputing folks from hospitality industry to oversee the soft product.
Also AI's level of professionalism, IT/systems, frequent flyer program etc really need to reach the level of Star Alliance biggies.
As an example, Star Alliance carrier Lufthansa stopped using the AI lounges, something unimaginable and needs fixing.
4. AI must regrow across the country, especially Mumbai & Bangalore. While the Delhi hub has benefits (and a HUGE problem if Pak declares a no-fly zone) select point-to-point routes can be introduced from other cities to address business traffic.
Also to grow are airports where AI has national carrier advantage - Goa, Pune, Chandigarh (all military airfields with restricted foreign carrier access).
5. Air India Express subsidiary should be doubled. Too many direct connection opportunities still exist which can be filled in with an India based carrier.
6. AI engineering has had a great safety & work quality record. Time to grow it into a distinct entity and service 3rd party airlines (will need some customs benefits for this to happen). Else AI engineering can be spun off.
7. Financial restructuring/charge-back: AI does a lot of stuff for the government. These need to be evaluated carefully and appropriate invoices made and charged back to the government; else the co-dependence can't be severed.
Further, aviation is by nature a high cash-flow low-to-negative returns business. Countries like Thailand lose money hand over fist on their national carrier but do so anyway to bring in tourists. There has to be recognition for certain strategic routes to gather tourists, and government has to cut a subsidy cheque to AI to operate those.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 30 Sep 2017 12:44

Mod Note:

Keep this thread on track! Please take AI talk to the Civil Aviation thread.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nam » 30 Sep 2017 15:30

Lisa wrote:With the NHS and its queues life expectancy in the UK is 81.60. What is it for those attending private hospitals in India?

Medicine is technically free, there are NO fees or any premium services on the NHS. You pay a FIXED processing fee for any medicine irrespective of its cost, eg, the current cost of Betaferon in the UK is £7,263.97 per patient per annum and the processing fee would be £8.60. That's all you pay £8.60. Children, pregnant women and the elderly pay nothing at all. What would it cost in India, less than £8.60?


Life expectancy has improved in India, thanks mainly to private hospitals. I think it is around 65-70. If left to public hospitals...
However it is not just the hospitals which determine that. My grandfather lived up to 95. The first time he visited a hospital was at 94! Lived in a village, fresh air, clear water, hard working types. Walked 3 miles to catch a bus to attend my wedding, when he was 90!

NHS is a fabulous achievement for a public health system and it's inherent problems. Having used both, I feel services are quicker in Indian private hospitals, well because it is private. Health insurance makes it cheaper compared to the NI that is paid monthly. Nothing against NHS, however the comments were meant for Indians, who think grass is greener on the other side.

Regarding medicines, majority of the people are not going to need Betaferon, however for regular medicines for 8.60 is expensive, specially if you need 4-5 types. India has the advantage of generics. I had to get a hep-c generic from India costing 1/10th as US version was $3-4k!

Even Pakistanis who hate us, want their kids to be treated at Indian private hospitals. The Indian External Minister is their favourite as she promises visas for Pakistani kids... on twitter!

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 30 Sep 2017 17:53

http://economictimes.indiatimes.com/new ... 872572.cms
"India's economic history is replete with the same lessons. Every time policymakers trade off some macroeconomic stability for growth, the economy ends up with neither. The current government has heeded these lessons remarkably well, and shown admirable fiscal restraint. We shouldn't blemish that record now," JP Morgan said.

Read more at:
http://economictimes.indiatimes.com/art ... aign=cppst

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 30 Sep 2017 18:26

Regarding India v the West, I remember this headline from 2013:
https://www.bloomberg.com/news/articles ... 85-in-u-s-
Heart Surgery in India for $1,583 Costs $106,385 in U.S

Apart from absolute measures of welfare, people should consider whether things have improved since last year or stayed the same, because as the above headline shows, comparisons of very different economies is difficult. India yesterday versus India today is by itself difficult (e.g., see the controversy over measurement of GDP) and it is the very same economy. Comparing India with the US or Germany is so much harder. So these discussions will be inconclusive.

As a matter of philosophy or dharma, I have a problem with "I'll do my part only if you do your part". That allows a perpetual excuse for not doing what should be done. Citizens should pay their taxes and should through voting and public opinion-building try to get a better government; and should teach their children, friends and relatives about being public-spirited. This "let things improve, and then I'll pay my taxes" means nothing will ever improve.

It has to be "I care enough to try to make a difference" (in my limited sphere of action).

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Lisa » 30 Sep 2017 20:16

nam wrote:
Lisa wrote:With the NHS and its queues life expectancy in the UK is 81.60. What is it for those attending private hospitals in India?

Medicine is technically free, there are NO fees or any premium services on the NHS. You pay a FIXED processing fee for any medicine irrespective of its cost, eg, the current cost of Betaferon in the UK is £7,263.97 per patient per annum and the processing fee would be £8.60. That's all you pay £8.60. Children, pregnant women and the elderly pay nothing at all. What would it cost in India, less than £8.60?


Life expectancy has improved in India, thanks mainly to private hospitals. I think it is around 65-70. If left to public hospitals...
However it is not just the hospitals which determine that. My grandfather lived up to 95. The first time he visited a hospital was at 94! Lived in a village, fresh air, clear water, hard working types. Walked 3 miles to catch a bus to attend my wedding, when he was 90!

NHS is a fabulous achievement for a public health system and it's inherent problems. Having used both, I feel services are quicker in Indian private hospitals, well because it is private. Health insurance makes it cheaper compared to the NI that is paid monthly. Nothing against NHS, however the comments were meant for Indians, who think grass is greener on the other side.

Regarding medicines, majority of the people are not going to need Betaferon, however for regular medicines for 8.60 is expensive, specially if you need 4-5 types. India has the advantage of generics. I had to get a hep-c generic from India costing 1/10th as US version was $3-4k!

Even Pakistanis who hate us, want their kids to be treated at Indian private hospitals. The Indian External Minister is their favourite as she promises visas for Pakistani kids... on twitter!


Life expectancy in India is 68.35 years. Bulk of the medical service in the UK is provided for by the NHS that is exclusively funded by taxes. Aso, JFYI, generic medication's use is widespread in the UK with this entire industry to all purposes and intent being controlled by Indians.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vijayk » 30 Sep 2017 20:48

http://indianexpress.com/article/opinio ... y-4867559/

Data vs gossip: Who should win?
The incomes of the poorest are rising at a faster pace than any time since January 2015. That could be the reason for Modi winning elections and why the growth slowdown will soon reverse.

Image

Many have claimed, like Sinha, that demonetisation was an unmitigated disaster, but no one has provided any evidence to prove the same. As far back as November 19, 2016, just 11 days after the announcement of demonetisation (‘Big bang or big thud’,IE), I began by stating that: “By the strangest of coincidences, those opposing demonetisation are almost 100 per cent of those who have opposed every economic decision of this government since day one.” I went on to state that whether demonetisation was a success or not should not be measured by how much cash was returned. Over 99 per cent of the cash has been returned and many observers proudly proclaim: There, we told you so — demonetisation inflicted pain for no gain. And excess pain on the poor poor. The poor then, because of this pain, went and voted for Modi in overwhelming numbers. Let us be honest — yes, demonetisation was a disaster for those who evade taxes.
The jury on whether demonetisation would lead to a jump in tax revenues is still out; if demonetisation does not lead to an increase in personal income tax compliance, then yes, it did not work. Tax compliance in India is at low 25 per cent —. for every Rs 100 of income tax that the government should collect, it collects only Rs 25. Some critics have looked at the confusing set of numbers on those who have filled tax returns this year, relative to the pre-demonetisation earlier year. This is not the complete, or even a quarter of the tax compliance story. Look at increase in tax revenues, relevant to an increase in income growth, for knowledge, and inference, and conclusion about the efficacy of demonetisation.
Yet another Sinha complaint is that GST has been a disaster. This is very strange — one of the biggest reforms in India is barely two months old and we already have evidence that it was badly implemented and a conceptual failure? No doubt there are several problems with GST — the average GST tax rate is too high and tax credits are not being delivered in time. And one can add several layers of worthy criticism. But to pronounce it a failure for 15 minutes of Warhol time is not, well, worthy of an ex finance minister.
Moving on — I have also criticised policies for the slowdown, in particular the exorbitantly high real interest rate policy followed by the MPC. During Sinha’s FM tenure (1999-2002), the real RBI call rate declined by 200 basis points. During Jaitley’s tenure (2014-2017) the real repo rate has increased by 200 bp. I don’t see the slowdown as structural — I see it as a self-inflicted cyclical, easily reversible wound which might begin to repair as early as next week.
One further point on the uncompetitive nature of our monetary policy. The increase in the real repo rate in India (average increase over 36 months earlier) during the last 21 months is the second highest among major emerging markets. Our increase is at 370 bp, Russia at 500 bp, Brazil at 300 and Indonesia some distance behind at 182 bp.
I want to end with the following puzzle to several critics, and supporters, of the government: There is a lot of anecdotal evidence about the poor, and not so poor, losing their jobs because of demonetisation and other Sinha-articulated bad policies of the government. If the poor are really losing out, it should show up in the rate of growth of real wages (some political ideologues actually point to slow growth in nominal wages as evidence that the economy is doing badly — even Sinha does not do that).
The most unskilled worker in India is the ploughman; with some skills, is the carpenter. If there are jobs being lost in urban areas (MSMEs etc.) the impact should show up in the slowing real wage growth of ploughmen and carpenters. But the opposite is happening. The chart divides the time-period since December 2015 into two sections — before and post-demonetisation. At the time of demonetisation, real wages were rising at 2 per cent per annum. Post demonetisation, in July 2017, the rate of growth has more than doubled to near 5 per cent.
If these data are correct (maybe the dataratti will now move towards questioning the accuracy of the rural wage data, the oldest such series in India) then the incomes of the poorest are rising at a faster pace than any time since January 2015. Maybe that is why Modi has been winning elections; maybe that is why the growth slowdown (with a little help from the RBI) will soon reverse.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby chetak » 30 Sep 2017 21:00

Lisa wrote:
nam wrote:
Life expectancy has improved in India, thanks mainly to private hospitals. I think it is around 65-70. If left to public hospitals...
However it is not just the hospitals which determine that. My grandfather lived up to 95. The first time he visited a hospital was at 94! Lived in a village, fresh air, clear water, hard working types. Walked 3 miles to catch a bus to attend my wedding, when he was 90!

NHS is a fabulous achievement for a public health system and it's inherent problems. Having used both, I feel services are quicker in Indian private hospitals, well because it is private. Health insurance makes it cheaper compared to the NI that is paid monthly. Nothing against NHS, however the comments were meant for Indians, who think grass is greener on the other side.

Regarding medicines, majority of the people are not going to need Betaferon, however for regular medicines for 8.60 is expensive, specially if you need 4-5 types. India has the advantage of generics. I had to get a hep-c generic from India costing 1/10th as US version was $3-4k!

Even Pakistanis who hate us, want their kids to be treated at Indian private hospitals. The Indian External Minister is their favourite as she promises visas for Pakistani kids... on twitter!


Life expectancy in India is 68.35 years. Bulk of the medical service in the UK is provided for by the NHS that is exclusively funded by taxes. Aso, JFYI, generic medication's use is widespread in the UK with this entire industry to all purposes and intent being controlled by Indians.


isn't there a long waiting time for appointments/seeing the doctor??

It looks like many of these land up in India, as medical tourists. They are able to get faster treatment.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Lisa » 30 Sep 2017 22:57

Chetakji,

Agreed 100% but how does such a crap service deliver a life expectancy of 80+ years? IMHO, yes there are issues but in reality complaints arise from expectations being considerably larger than necessity, thus the narrative of failure. I would deeply love for the Indian medical service to be such a failure because even with such a failing an average indian could enhance his or her longevity by almost 20%. Agreed?

To make the necessary investment get ready to pay more tax.

On a side bar, when you have time look at longevity in the US and compare it with Cuba, its almost the same. Ask yourself, how does poor Cuba afford its citizens the same life expectancy as the richest county in the world. Answer is primary healthcare investment. Again, get ready to pay more tax.

https://en.wikipedia.org/wiki/List_of_c ... expectancy

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Deans » 30 Sep 2017 23:06

Supratik wrote:In general unprocessed food items are not taxed and processed ones are taxed. So he did pay tax before. It has marginally increased depending on where he is having that ice-cream. If he is having that ice-cream in a parlor or AC restaurant or higher he is going to pay the new service tax. If he is having that ice cream in from a local vendor his taxes will not be hugely different. Either he was not aware that his ice-cream was always taxed or he is exaggerating given his income profile.


I was CEO of a national chain of restaurants. The GST payable now is the same as VAT+Service Tax+ SB Cess + Krishi whatever cess (in some places
GST makes the price marginally lower than earlier). However, GST is LESS documentation (no fights with each state over audits and returns) and more refunds, so on the whole GST is preferable for genuine tax paying firms.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vijayk » 01 Oct 2017 08:43

http://www.eurasiareview.com/30092017-d ... cies-oped/
Don’t Let Critics Succeed In Derailing Modi Government’s Economic Policies – OpEd
\

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vijayk » 01 Oct 2017 08:50

http://www.dailypioneer.com/columnists/ ... untry.html
MODI WAS CHOSEN TO TRANSFORM COUNTRY

In the end, politics is all about exercising choices. In recent weeks, a furious debate has erupted on a simple issue: Whether short-term pain is a necessary precondition of long-term gain. This is the central issue confronting the Narendra Modi Government as it finds itself confronted by the tremors caused by his strategy of disruption. Whether it is former Finance Minister Yashwant Sinha’s habitual expression of dissent-this time directed at Finance Minister Arun Jaitley’s alleged mismanagement of the economy-or the belief that fixing the existing rail facilities is preferable to embarking on an ambitious Bullet Train project, it all boils down to the Prime Minister being pressured to manage rather than transform the Indian economy.

The debate is interesting in many ways. In the first year or so of the Government, when the Government was still finding its feet, critics charged Modi with having abandoned his reformist zeal and pressing with incremental changes. At that time, the pundits were unanimous that India’s take-off necessitated a tough battle against corruption, improving the ease of doing business, standing firm on the need to reduce the fiscal deficit and, above all, moving fast to secure the implementation of the Goods and Services Tax that had been pending for over a decade.

Today, with GST in play, demonetisation having enlarged the direct tax base exponentially and established an ownership trail of cash, the charge is that the Government has moved a bit too fast and caused distress. If only, it is being said, Modi and Jaitley had moved in a more sedate way, India’s GDP growth rate would not have suffered a dip in the previous few quarters.

The critics of the Modi Government can be divided into three broad groups.

First, there are those who remain unreconciled to the outcome of the 2014 General Election and have missed no opportunity to snipe at the Government. In the main-or at least until demonetisation and the GST rollout-their criticism has been on issues unrelated to the economy. They have charged the Modi Government of subverting the ‘Idea of India’, truncating the bounds of tolerance and facilitating the creation of a Hinduised polity that leaves minorities nervous. Modi has particularly been charged with promoting authoritarianism.

Second, there is the group that was most affected by the Government’s war on corruption and the cash economy. There was a large group of people, by no means exclusively in the trading sector, that had created a zero-tax business model. Given the series of steps, beginning with Aadhaar and extending to demonetisation and GST, they now find that tax evasion has become extremely difficult, if not impossible. The linkage of technology with compliance has forced many of those who avoided the tax net to either come clean-thereby adversely affecting their margins-or shut shop.

Since competitiveness in the zero-tax sector depended on not paying Government dues or bribing their way out, their business model has collapsed. This section had initially felt that the Uttar Pradesh election would give the thumbs down to the anti-black money drive. This didn’t happen. They have now focussed their energies on GST and the larger issue of slowdown.

Finally, there are those who feel that Modi’s focus on the economy and development is misplaced and that the Government should concentrate on changing the terms of political discourse and highlighting identity issues. This group includes a section of the BJP that has never taken kindly to the focus on modernisation, GDP growth and fiscal deficit. They would prefer to use the economy debate to steer the BJP back to identity politics.


There are some practical steps the Government can and must take to ease the birth pangs of GST. Anecdotal evidence, for example, suggests that the refunds due to traders and manufacturers are not being processed fast enough. This has affected liquidity. Second, the recapitalisation of public sector banks is overdue and the delay has seriously affected credit disbursement which is too low for a growing economy. There is also a mismatch between the priorities of the Reserve Bank and the Government that needs to be bridged.

Finally, unlike the highways programme that is proceeding at a very rapid pace, the upgradation of Railways has been erratic. Each railway accident and incidents such as Friday’s stampede in Mumbai create resentment and invite charges of Governmental negligence. More important, they undermine popular support for the Government’s long-term objectives and encourage the belief that modest change is the only viable path for India.

The important thing is not to be in denial over the problems of governance but to attend to them as soon as they surface. However, under no circumstances can the Modi Government take its eye off its long-term New India project. Modi was elected to transform India, not merely manage the status quo.


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