Indian Economy: News and Discussion (Apr 1 2011)

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JE Menon
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by JE Menon »

>>Projections more than 10 years to future is not really considered real.

Absoeffinglutely. Most of these guys who make these predictions can't even predict the behaviour of their kids next month, let alone the trajectory of whole countries, nay regions, across a decade. It's a crapshoot.
member_20134
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by member_20134 »

http://timesofindia.indiatimes.com/busi ... 724554.cms

Kingfisher Airlines to sell property to cut debt, shares surge 4%

Wait for other airlines to follow suit and demand concessions from the government.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Sudip »

According to 2011 report (http://en.wikipedia.org/wiki/List_of_In ... ment_Index ),

If kerala was a country, it has the 3rd highest HDI in the world after only Norway and Australia (http://en.wikipedia.org/wiki/List_of_co ... ment_Index )

Is kerala really better than countries like Switzerland, new Zealand, japan?


The only conclusion I can make is that, there is high inaccuracy in our local data collection and prjection
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by svinayak »

All these Index are western psy ops. Just ignore them and dont take them too seriously
Certain stds are required
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Yogi_G »

In a state where there is growing extremism, most of productive youth are in Gelf, state runs on remittances and widespread alcoholism flourishes, I am sorry thats not what I call HDI. Sure 100% education, health and all that, but so is Cuba. Kerala is India's Cuba.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Singha »

+1 to that. if the gulf worker market suddenly undergoes a deep recession, the effects will be devastating.

and kerala does have highest per capita consumption of daru...something even the president thought fit to bring up in a public meeting.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Dilbu »

Hey don't put buri nazar on our ishtate. :mrgreen:
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by shyam »

Buri nazar wale... there mooh kala...
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by member_20134 »

Human Development Index is bunkum. Kerala is no where near states like Maharashtra and Gujarat when it comes to quality of life anyway HDI which supposedly puts Pakistan and Bangladesh ahead of India should be treated with the contempt that it deserves. It will be interesting to know where West Bengal stands on the HDI perhaps there is a bias towards sickle ruled states.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Singha »

WSJ :mrgreen: when its paisa ka issue, all their high sounding 'principles' fall in the gutter.

Australia Seeks End of India Uranium Ban

By DAVID FICKLING And RAY BRINDAL

SYDNEY—Australia's Prime Minister Julia Gillard signaled on Tuesday an end to a decades-long ban on selling uranium to India, a move aimed at taking advantage of demand for cleaner-burning fuels and to offset a potential drop in sales to Japan following this year's earthquake.

The policy shift—outlined by Gillard in a newspaper editorial on Tuesday—comes despite India's continued refusal to sign an international treaty aimed at preventing the spread of nuclear weapons.

Uranium is widely used in the generation of nuclear power, but can also be enriched for use in warheads. India's tense relationship with neighboring Pakistan, especially over the disputed regions of Jammu and Kashmir, has led New Delhi to remain outside the United Nations' Nuclear Non-Proliferation Treaty.

India's rapid industrialization is straining its ability to generate power from traditional energy sources like coal. Concerns over climate change have also prompted it to look at alternative fuels such as nuclear power, and court overseas uranium exporters that can plug a domestic supply gap. At the same time, Australia is looking for new markets for uranium exports after the March earthquake and tsunami in Japan crippled the Fukushima Daiichi nuclear power plant, and prompted several other reactors offline for safety checks. Japan's uranium consumption next year will likely decline by 50%, the Bureau of Resources and Energy Economics, an Australian government agency, said in September. :mrgreen:

Olympic Dam in South Australia is a multi-mineral orebody producing copper, gold, silver and uranium.

"It is time for Labor to modernize our platform and enable us to strengthen our connection with dynamic, democratic India," Ms. Gillard wrote in a signed editorial in the Sydney Morning Herald newspaper.

The move follows a warming of India's nuclear ties with the U.S., France and Canada in recent years. India signed an agreement with the U.S. in 2005 that opened its civil nuclear facilities to the International Atomic Energy Agency, or IAEA, and led some countries to overturn a ban on uranium exports to the subcontinent.

Ms. Gillard's Labor party will debate the proposal at its conference in Sydney next month, but it has already won support from Resources and Energy Minister Martin Ferguson and other government officials.

"We can sell uranium as a nation to countries such as China and Russia but under our existing policy, which is outdated, Australia can't sell uranium to India," Mr. Ferguson said in an interview on Australian Broadcasting Corp. radio on Tuesday morning.

To buy Australian uranium, India will need to negotiate a detailed bilateral protocol covering the safe handling and accountability for Australian uranium, which will only be used for civil purposes, Mr. Ferguson said.

However, moves by the Labor Party to change policy risk alienating the Greens, which support Ms. Gillard's minority government but are publicly opposed to uranium mining and nuclear power.

"Australia, as a significant global uranium supplier, has a responsibility to acknowledge that India is a nuclear-armed state that obtained its weapons capacity in breach of international commitments," Dave Sweeney, a nuclear-free campaigner for the Australian Conservation Foundation, said in a statement.

India, which detonated its first nuclear bomb in 1974, has traditionally had trouble sourcing supplies of uranium use in civil nuclear power. The country has an estimated 80-100 nuclear warheads, according to the Federation of American Scientists, an anti-nuclear weapons group.

"Adding Australian uranium to the mix would not ease the long-standing tensions between India and its nuclear-armed neighbors or improve the effectiveness of the global nuclear safeguards regime," Mr. Sweeney said.

Australia has the world's largest uranium reserves, with 23% of all recoverable uranium in the world. The country accounts for around 12% of global uranium exports and is home to two of the five largest uranium mines.

BHP Billiton Ltd.'s Olympic Dam mine in the outback of South Australia state has the world's largest uranium deposit, totalling 2.5 million tons of uranium oxide—enough to supply current global uranium demand for 45 years. The mine is currently working toward a A$30 billion (US$30.62 billion) expansion designed to tap these ores.

Rory Medcalf, international security program director at the Lowy Institute, a Sydney-based think tank, said India was a "unique case" because it was stable and democratic, and it was unlikely that Australia would change tack in terms of existing opposition to uranium sales to some other states like Israel or Pakistan. 8)

Write to David Fickling at [email protected] and Ray Brindal at [email protected]
—Enda Curran in Sydney and Ray Brindal in Canberra contributed to this article.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Singha »

with germany deciding to phase out nuclear power by 2020 totally, and some other nations likely to scale back....the suppliers are between rock and hard place.
Theo_Fidel

Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Theo_Fidel »

Singha,

Not necessarily. Right now about 40% of world supply comes from old Soviet weapons grade stockpiles. This stockpile will run out effectively in 2013. Yes, 2 years away. At which point the Uranium available will collapse and prices will soar. This just a temporary lull before the storm. This also the reason for the frantic efforts to sign contracts and get reactor going before that date.

What they really want is for India to invest and develop brand new Uranium mines so they don't have to pay for the investment. This is a 10 year process in the West.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by arnab »

Theo_Fidel wrote:Singha,

Not necessarily. Right now about 40% of world supply comes from old Soviet weapons grade stockpiles. This stockpile will run out effectively in 2013. Yes, 2 years away. At which point the Uranium available will collapse and prices will soar. This just a temporary lull before the storm. This also the reason for the frantic efforts to sign contracts and get reactor going before that date.
Not true Theo
Overall, the blending down of 500 tonnes of Russian weapons HEU will result in about 15,000 tonnes of LEU over 20 years. This is equivalent to about 152,000 tonnes of natural U, or just over twice annual world demand.

From 2000 to 2013 the dilution of 30 tonnes of military HEU is displacing about 10,600 tonnes of uranium oxide mine production per year, which represents some 13% of world reactor requirements.

Under the 1994 Agreement, USEC recognised the need to release the diluted military uranium to nuclear utilities in such a way as not to impact negatively on the US uranium market.
http://www.world-nuclear.org/info/inf13.html
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Austin »

India’s Debt at 70% of GDP Is ‘Constraint’ to Higher Rating, Moody’s Says
India’s public debt at 70 percent of its gross domestic product is preventing Asia’s third-biggest economy from securing an investment-grade rating, Moody’s Investors Service said.

The nation’s fiscal deficit and “the debt burden, which is high relative to similarly rated countries,” are among the constraints, Atsi Sheth, a sovereign analyst at Moody’s, said in a telephone interview from Mumbai yesterday. “For the ratings to be improved, we will have to be comfortable that India’s government debt is at a level that can be sustained over the medium term.”

India’s finance ministry pitched for a higher rating in a meeting with Moody’s officials on Nov. 14, R. Gopalan, secretary, Department of Economic Affairs, said a day later. The government raised its planned borrowing for the six months through March 31 by 32 percent as revenue collections fall short of target. Finance Minister Pranab Mukherjee said Oct. 4 that it may be hard to meet his goal of cutting the budget deficit to a four-year low of 4.6 percent of GDP.

Moody’s rates India’s rupee sovereign debt a Ba1, the highest junk grade, a level shared by Indonesia and Morocco. India’s foreign-currency debt is rated at Baa3, the lowest investment grade. Sheth, who declined to comment on the lobbying by the finance ministry, expects the budget gap to be as high as 5.5 percent in the year ending March 31. Mukherjee said yesterday the government isn’t revising its deficit target yet.

Rising Bond Yields

The yield on the benchmark 10-year government bond has risen 96 basis points this year, the most in Asia, to 8.88 percent, as inflation remained untamed above 9 percent for a 11th consecutive month in October, while increased supply damped demand. The Reserve Bank of India has increased borrowing costs 13 times starting March, 2010, to slow the pace of price gains, and expects inflation will cool to 7 percent by the end of March.

“It might be optimistic to expect a rating upgrade at this juncture when there are significant risks” on account of the deficit, said Suvodeep Rakshit, an economist at Kotak Securities Ltd. in Mumbai. “The government’s finances are under severe pressure this year due to slowing growth and higher rates.”

Slowing economic growth may also exacerbate the deficit, Sheth said. The $1.7 trillion economy is likely to expand 7.6 percent in the fiscal year to March, 2012, slower than 8.5 percent in the previous year, according to the central bank.

“The deficit is going to be higher due to growth slowdown,” Sheth said. “Growth and profitability have been lower than the government had assumed and that will be reflected in revenue growth.”

Revenue Collection

India’s receipts grew 38.7 percent in the six months to September from a year earlier, slower than 58.4 percent gain in the same period a year ago, according to government estimates. Fourteen of the 30 companies that comprise the benchmark Sensitive Index reported profits that fell short of analyst estimates in the quarter ended Sept. 30.

The government will also spend more on oil and food subsidies, she said. The state caps retail prices of fuels including diesel, cooking gas and kerosene to rein in inflation and shield about 828 million people the World Bank says live on less than $2 a day.

Standard & Poor’s and Fitch Ratings have a BBB- rating on India’s local-currency debt, the lowest level in the investment category.

“A high debt burden, we believe, limits the fiscal flexibility that the government has to respond to future shocks, as well as invest in India’s social and physical infrastructure Needs,” Sheth said.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Vasu »

its here....almost!

FinMin gives nod to FDI in multi-brand retail
The Finance Ministry has given its consent to the draft Cabinet note on opening the multi-brand retail to foreign investment, an official said.

The DIPP had earlier circulated a draft Cabinet note to seek inter-ministerial views on the politically sensitive issue.

The note was in line with the recommendations of the high level committee of secretaries (CoS), headed by Cabinet Secretary Ajit Kumar Seth.

The CoS had recommended 51% FDI in the sector with several riders. These included a minimum foreign investment of $100 million.

The decision on FDI in the sector has been delayed in view of concerns that it would adversely impact neighbourhood kirana shops, which account for over 90% of $590 billion retail trade. These concerns have been voiced by several political parties and traders' unions.

Besides, the government is also contemplating to hike the ceiling of FDI in single-brand retail. At present, the country allows 51% FDI in single brand retail, 100% in cash and carry (wholesale) business, but bars it completely in multi-brand retail.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Vipul »

Pranab approves changes in Food Bill.

Finance Minister Pranab Mukherjee, the head of the Empowered Group of Ministers (EgoM) on Food, has approved key changes in the proposed National Food Security Bill and the revised draft will be placed before Cabinet soon.

"Yesterday evening, the Finance Minister has given final clearance to the draft Food Bill. It will be soon placed before Cabinet," Food Minister K V Thomas told reporters on the sidelines of an event here. The key changes proposed in the Bill have been approved and the Cabinet note will be circulated for inter-ministerial comments today, he added.

Earlier, in July, the EGoM on Food had cleared the draft National Food Security Bill, which seeks to provide a legal entitlement to subsidised foodgrains to 75 per cent of the country's rural population and 50 per cent of urban India.

After consultation with concerned stakeholders and the state governments, the Food Ministry proposed several key changes in the draft Bill and those have been approved by the Finance Minister, Thomas said.The two major changes include: keeping an option open for supplying more than 3 kg of subsidised foodgrains to general households and widening its reach to include lactating women, destitute and aged people and providing nutritious food to children, he said.

"The cash-handout of Rs 1,000 per month for six months to lactating women would be extended to the entire country instead of 52 districts," he added. With respect to general households' entitlement to subsidised foodgrains, Thomas said Mukherjee has approved insertion of the word, 'minimum', in the draft so that the government can increase allocation if production rises.

In the present form of the Bill, the Food Ministry had proposed that the government will supply only 3 kg of rice and wheat per person per month to general households at a price not exceeding 50 per cent of the support price. Among other changes, Thomas said the Finance Ministry has agreed to remove the condition of extending the benefits of the proposed food security law only to general households in states where the Public Distribution System (PDS) is modernised.

"The present draft restricts benefits for general households to states having modernised PDS. Now the benefit will be extended to all states," he said.The changes to be made in the proposed Food Bill were discussed with Congress President and UPA Chairperson Sonia Gandhi, he added.

The proposed Bill would cost the government exchequer more than Rs 1,00,000 crore annually in subsidies. Presently, the subsidy bill on food is less than Rs 70,000 crore.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by kmkraoind »

Even during 2008-2009 crisis Rupee stood at 49-50 range. Now its at 51 and still there are no significant FII outflows out of nation. Is this a pure rigging by big players, so that they can get all their black money with a decent profit?
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by gakakkad »

^^ bilathel , crude oil i believe ..

Meanwhile parnab da completing the final steps to stage Jee-hard against the Indian economy... hope no work is done in the winter session of parliament as well...
Theo_Fidel

Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Theo_Fidel »

Rs 100,000 crore??? :eek: :(

Take the bottom 30% of India and distribute this as cash and each person will get Rs 3,500 per annum. A family of 5 will get an income of Rs 17,500. Definitely a excellent back stop to poverty. Entire NAC needs to have their brain power checked.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Aditya_V »

Theo_Fidel wrote:Rs 100,000 crore??? :eek: :(

Take the bottom 30% of India and distribute this as cash and each person will get Rs 3,500 per annum. A family of 5 will get an income of Rs 17,500. Definitely a excellent back stop to poverty. Entire NAC needs to have their brain power checked.
Mute question is how much will make it to the poor, and what will be the Quid pro Quo by the Distributors, I have heard than in NREGA distributed through panchayat leaders, alteast in Panchayat elections that there is an informal Quid Pro Quo.

and the Delhi based NGO circuit is using these Govt schemes, CSR Bill to keep their gravy train flowing.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by krishnan »

Another scam in the making
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Sri »

Everything is laks of carore.... what is the revenue of GoI anyways?
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Sri »

RBI says unablr to control Rupee Fall

"Trying to intervene when market sentiment is dead set against a currency could be a bit of a losing game," said Abheek Barua, chief economist at HDFC Bank.

"While $300 billion or more might seem like a lot of money, it might actually not be adequate if the size and structure of our external balances are factored in. Our reserves are not as readily available as that in some of the other emerging economies. So we have to be careful while using these reserves."

Now is not the time for that forin holiday...
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Aditya_V »

Sri wrote:RBI says unablr to control Rupee Fall

"Trying to intervene when market sentiment is dead set against a currency could be a bit of a losing game," said Abheek Barua, chief economist at HDFC Bank.

"While $300 billion or more might seem like a lot of money, it might actually not be adequate if the size and structure of our external balances are factored in. Our reserves are not as readily available as that in some of the other emerging economies. So we have to be careful while using these reserves."

Now is not the time for that forin holiday...
Now is not the time for most SDRE indians, with Housing Loans rates crossing the sky, dim economic scenario(other than IT/BPO segment everybody else is forgeting bonuses), share prices tanking................. list is endless.

Its at times like these the impact of the Mismanagement wholesale of loot the economy Treasury from 2004 to 2011 will bear fruit. 2G scam is just a public scam while whole lot is hidden.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by RamaY »

Sri wrote:Everything is laks of carore.... what is the revenue of GoI anyways?
Tax revenues in the range of 10 Lakh crores. Planned expenditure in the range of 3 Lakh crores. 20-30% commission from planned expenditure is 60-100,000 crores every year in to NBRJP (forgot Rahul Mehta's abbreviation) pockets.

Direct cash schemes will reduce this cuts as the corruption has to happen at the receiver level (bottom level). That is why the talks of $1T infra investments etc where the corruption happens at the top and middle levels.

INC is a scam system from the beginning. It is sustained by the fear of self-awareness. No body want to assert majority opinion in the worlds largest democracy (majority opinion rules).
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by vera_k »

kmkraoind wrote:Even during 2008-2009 crisis Rupee stood at 49-50 range. Now its at 51 and still there are no significant FII outflows out of nation. Is this a pure rigging by big players, so that they can get all their black money with a decent profit?
With high inflation, the natural tendency for the rupee will be to depreciate 6-8% a year. In the presence of high inflation, this tendency can be countered if exports, FDI or FII investments grow fast enough. RBI might prefer the devaluation anyway, since it allows them to discourage the flow of hot money while encouraging exports and preserving the forward movement on economic reforms (i.e. no capital controls like in Brazil).
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Najunamar »

I have been wondering if moves to dump euro denominated FX reserves in favor of USD is responsible for the recent depreciation of the INR, there was severe inflation earlier in 2011 that did not result in this type of sudden drop! Any insight based on the trade volumes?
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Asit P »

Sudip wrote:According to 2011 report (http://en.wikipedia.org/wiki/List_of_In ... ment_Index ),

If kerala was a country, it has the 3rd highest HDI in the world after only Norway and Australia (http://en.wikipedia.org/wiki/List_of_co ... ment_Index )
Is kerala really better than countries like Switzerland, new Zealand, japan?
The only conclusion I can make is that, there is high inaccuracy in our local data collection and prjection
Kerala gets lot of money through remittance (leading to high GNI-PPP) and its education standard is also pretty good. Hence, it definitely scores very good on 2 out of the 3 determinants of HDI.

Having said that, the possibility of errors in data collection cannot be ruled out completely.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Asit P »

Ashwinipai wrote:Human Development Index is bunkum. Kerala is no where near states like Maharashtra and Gujarat when it comes to quality of life anyway HDI which supposedly puts Pakistan and Bangladesh ahead of India should be treated with the contempt that it deserves. It will be interesting to know where West Bengal stands on the HDI perhaps there is a bias towards sickle ruled states.
Pakistan and Bangladesh are not ahead of India. India comes in the group of countries with medium HD whereas both Pakistan and Bangladesh come in the group of countries with low HD.

Within India West Bengal is positioned at no 19!

I agree that like every other index, HDI also has its own limitations and deficiencies. However, treating it with contempt is taking things a bit too far.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by vera_k »

Graft costing India 1.5% of GDP growth each year
Corruption, especially in high places, is eating up India’s gross domestic product (GDP) growth by at least 1.5% each year. This figure has been calculated in an internal report of the Planning Commission
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Asit P »

GDP growth to be between 7.5-8 percent: C Rangarajan
Prime Minister's Economic Advisory Council Chairman C Rangarajan has projected a GDP growth rate of 7.5 per cent to 8 per cent in the 2011-12 financial year.

"Initially, the growth rate forecast for 2011-12 by the council was 8.2 per cent. The world situation is not very encouraging and it may vary between 7.5 per cent to 8 per cent," Rangarajan said here last night.

He said that India has the potential of growing at 9 per cent in a sustained way.
Keeping the global scenario in mind, if we achieve this growth rate then - "not bad at all".
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by gakakkad »

http://www.livemint.com/2011/11/2209153 ... tting.html

RBI refuses to intervene... Though things would never go to the extent of 91 , I think GOI is at a crisis point... RBI wants to ensure that GOI gets its butts spanked for the fiscal profligacy in the past few years...
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by vera_k »

The RBI is part of the government, so they'd do whatever they can to help I'm sure. But the deadlock in Parliament is a problem. Not sure why a new election isn't called if the government is unable to transact business.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Prem »

http://www.pehub.com/126834/blackstone- ... -in-india/
Blackstone Eyes $500-$720M Deals a Year in India
Reuters) - U.S. private equity giant Blackstone Group expects to invest roughly $500 million to $720 million a year in India over the next few years, a top official said on Tuesday, as a subdued stock market drives entrepreneurs to other investors.Akhil Gupta, chairman and managing director of Blackstone India, told the Reuters India Investment Summit that private equity was in great demand to fund projects.“Not just ourselves, but the entire fraternity is extremely busy right now,” he said.The firm expects to do five or six deals a year in India of roughly $100 million to $120 million each, he said.The main stock index .BSESN has fallen more than a fifth this year as a slew of rate increases dented consumer spending and hurt earnings growth.Blackstone, which manages about $128 billion globally according to Thomson Reuters data, is one of the most active private equity investors in India, where it has invested nearly $1.8 billion since 2006.
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Katare »

Theo_Fidel wrote:Rs 100,000 crore??? :eek: :(

Take the bottom 30% of India and distribute this as cash and each person will get Rs 3,500 per annum. A family of 5 will get an income of Rs 17,500. Definitely a excellent back stop to poverty. Entire NAC needs to have their brain power checked.
Theo,
Rs 100,000 Corer = $20 Billion
It only comes to Rs70/month/citizen (Rs 2.28/day) if 100% citizens are covered. They are trying to cover ~70% of the population so it'll come Rs 100/month as planned. For bottom 30%, which is what they should target it'll come to Rs 230/month.

Main reason they are trying this expansion is because they have a lot of low quality grain that is getting wasted due to storage problems/cost but the same time hunger and malnourishment is wide spread in poorer sections of population. Delivery system is pretty poor so it'll have limited impact but cash delivery system would be much easier to loot due to easier portability than grain.

In Delhi they had 30K ghost employees working in municipal corporation think about how many more poor would pop up on files of babus if it generates cash for babus/politicos!!
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Vipul »

Cabinet cleares 51 percent FDI in multi-brand retail.

The much debated 51 per centFDI in the multi-brand retail sector was today cleared by the parliament, a move which will pave the way for opening of global retail stores like Wal-Mart, Carrefour and Tesco in major Indian cities worth an estimated $450 billion a year.

India will open the country's retail industry to foreign supermarkets, a cabinet minister Thursday told reporters, a much delayed reform expected to help unclog supply bottlenecks and ease inflation over time.

BJP and other political parties including UPA allies had opposed the move.

It also decided to raise the cap on foreign investment in single-brand retailing to 100 per cent from 51 per cent, Food Minister KV Thomas said
Ambar
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Re: Indian Economy: News and Discussion (Apr 1 2011)

Post by Ambar »

vera_k wrote:
kmkraoind wrote:Even during 2008-2009 crisis Rupee stood at 49-50 range. Now its at 51 and still there are no significant FII outflows out of nation. Is this a pure rigging by big players, so that they can get all their black money with a decent profit?
With high inflation, the natural tendency for the rupee will be to depreciate 6-8% a year. In the presence of high inflation, this tendency can be countered if exports, FDI or FII investments grow fast enough. RBI might prefer the devaluation anyway, since it allows them to discourage the flow of hot money while encouraging exports and preserving the forward movement on economic reforms (i.e. no capital controls like in Brazil).

RBI need not "discourage" the flow of hot money, FIIs are already discouraged enough to pull money out of India. We have lost around 1.2-2.0 billion USD/month in cumulative FII inflow this year, 2011 is proving to be another 2008, the only difference being our situation is much worse than 2008. In service sector which now makes up nearly 65% of our economy,we have the highest wage inflation in Asia by a long margin. Spiraling public and private debt, un-curbed inflation, lackluster policies, gilts that have curves flipped..at this rate we'll soon go back to junk status while we are too busy harping about "civilization meltdown" in the west.
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