Indian Economy: News and Discussion (Apr 1 2011)

Theo_Fidel · Post by **Theo_Fidel** » 04 Mar 2012 21:47

I dunno. I know several of my colleagues who are American and have no problem working in India. If you are highly skilled that $25,000 barrier is laughable. One colleague of mine has been in India for 3 years. His specialty is balancing Turbine components. You don't want to know what his paycheck is. Never heard him having trouble getting a visa. It was delayed by 3 weeks once and there was much moaning on visa office work ethic but no actual barrier. Another person I know is teaching at a college in Chennai on X-Ray diffraction metallurgy. He has been there at least 2 years and don't remember him having problems. The Koreans have no problems getting in. There are a good 5,000 or so in Chennai.

I actually think the $25,000 barrier is a good idea. We are not the wide open West with land to settle and uncontrolled immigration. But yes we could simplify rules on work visa's. Permanent settlement wold be a tough question.

Singha · Post by **Singha** » 04 Mar 2012 22:07

indian society will also lose its awe and mystique of the gora if we get more of them working or studying side by side. that will definitely help in 'civilizational confidence deficit' problem.
this means we need to get not just some A1 level goras but some B+ and even C types too in the matrix...

Theo_Fidel · Post by **Theo_Fidel** » 04 Mar 2012 22:19

Gora worship comes from worshiping White skin no. Something the British made sure to plant deep in Indians in the 100+ years they frolicked around Indian society remember. Gora worship will continue as long as Fair&Lovely is worshiped.

lakshmikanth · Post by **lakshmikanth** » 04 Mar 2012 22:31

Theo saaar,

I used to do a lot of Gora worship meself, it started to vaporize in University. Some of it was still remaining until I met GHQ (Scottish American). In one year, all Gora worship vaporized.

India need some good miscegenation as well

. We have a billion people, the kids will blend in with no issues.

IMHO onleeee

Prem · Post by **Prem** » 05 Mar 2012 02:06

IMHO, India can use many skilled immigrants once the GDP crosses 4T. Fresh blood, ideas and mind will add to alreay dynamic and solid Yconomy. It will also provide soft power influence .

sanjaykumar · Post by **sanjaykumar** » 05 Mar 2012 07:20

Yes and also UK, Canada and USA have tolerated and then welcomed Indians. India can and should return the favour.

Suraj · Post by **Suraj** » 05 Mar 2012 22:54

Comparing US/Canada immigration imperatives with Indian ones is not too valid. These are societies build on the basis of immigrant population. India never was a barren New World wanting of a population. What we do need is people who are a source of high-end technological and managerial skills. I don't see anything wrong with the existing $25K cap. Remember, there used to be a time when we encouraged tourism from the west thinking every white person is loaded with cash. We ended up being overrun by backpackers with less money than a lot of domestic tourists. It's better that we focus on bringing back the best of the diaspora as well as foreigners to India to work in areas that build our technological and competitive abilities.

Supratik · Post by **Supratik** » 06 Mar 2012 00:24

Suraj wrote:Comparing US/Canada immigration imperatives with Indian ones is not too valid. These are societies build on the basis of immigrant population. India never was a barren New World wanting of a population. What we do need is people who are a source of high-end technological and managerial skills. I don't see anything wrong with the existing $25K cap. Remember, there used to be a time when we encouraged tourism from the west thinking every white person is loaded with cash. We ended up being overrun by backpackers with less money than a lot of domestic tourists. It's better that we focus on bringing back the best of the diaspora as well as foreigners to India to work in areas that build our technological and competitive abilities.

+++1

Prem · Post by **Prem** » 06 Mar 2012 02:01

http://online.wsj.com/article/SB1000142 ... 81722.html

MUMBAI—India banned cotton exports until further notice, a move that will likely tighten global supply and lead to higher international prices.The announcement from the world's second-largest cotton exporter, after the U.S., encompasses all exports of the fiber crop, including those that traders have registered with the government but haven't yet shipped. The announcement sent cotton prices on the ICE Futures U.S. exchange higher. But domestic prices will likely plunge, said A. Ramani, secretary of the Indian Cotton Federation. They have already slid over the past year on expectations of a record crop this year.This is the second time in nearly two years that India has banned cotton exports in response to concerns about local supplies. Exports for the year that began Oct. 1 have already handily topped expectations for the 12-month period, the government said. Some textile industry bodies have demanded restrictions on exports to ensure adequate availability for the domestic spinning industry.Lower stock levels would have caused prices of the fiber to rise in the local market, the government said. "The decision to ban further exports took into account the trend of domestic consumption and depletion of domestic availability," it said in a statement.Dhiren Seth, president of the Cotton Association Dhiren Seth, president of the Cotton Association of India, said the ban will "seriously impact" domestic prices, noting that the local supply situation has been improving given expectations for this year's crop.
Cotton production in India is expected to reach a record 34.5 million bales in 2011-12, up from 33.9 million bales last year. One bale equals 170 kilos.Exporters have shipped 9.4 million bales of cotton in the marketing year that started Oct. 1, the government said, higher than initial forecasts of 8.4 million bales for the year from the Cotton Advisory Board, an arm of textile ministry. China buys more than 70% of India's cotton exports. Pakistan, Bangladesh and Thailand are the next-largest markets, according to trade executives and textile ministry officials.

Hitesh · Post by **Hitesh** » 06 Mar 2012 03:41

A dumb move on the part of GoI. It will not work in the long term.

uddu · Post by **uddu** » 06 Mar 2012 07:28

Let's export the finished products worldwide rather than just export cotton to China which utilizes this raw material and turns into Chinese product with a made in China Tag.

Hitesh · Post by **Hitesh** » 06 Mar 2012 20:38

Again, it would not work. You would hurt the cotton growing farmers. This ban comes at the expense of the cotton growing farmers because now the domestic textile mills are free to browbeat the farmers into selling the cottons at rock bottom prices and reap the profits for themselves. This is one of the most anti-friendly farmers measures that I have seen GoI passed.

All textile mills have to do is match the export prices for the cotton and the farmers would happily sell those to the domestic textile mills. But no, the textile mills don't wanna pay the asking price but want to force the farmers to sell at rock bottom prices so they can reap the profits themselves. This is nothing but a scam on behalf of Sharad Pawar. He is one of the most despicable men in India. His policies have resulting in skyrocketing inflation in foodstuff prices and basic commodities.

Theo_Fidel · Post by **Theo_Fidel** » 06 Mar 2012 21:35

The reason for the ban is that last years export figure has already been exceeded. Indian textile manufacturers will end up with the same amount of cotton as last year. As long as farmers get subsidy and input assistance from GOI, such policies will be implemented.

As pointed out 80% of the demand is from Panda. Another 10% is from TSP and Bangladesh. I fail to see how giving them cheap cotton benefits us.

Hitesh · Post by **Hitesh** » 07 Mar 2012 00:34

The reason why there is such demand from overseas is because China and others are willing to pay the price whereas our domestic textile mills won't. Cotton needs to be set at market rate in order to protect the farmers from fleecing by the textile mills and cotton brokers.

If our domestic textile mills were willing to match the price, then China wouldn't be eating 80% of our cotton exports. China doesn't care if we ban exports to China or not. China will get other countries to export cotton to China. China is willing to pay the price. India is not.

member_21708 · Post by **member_21708** » 07 Mar 2012 19:09

World cotton glut may put pressure on prices

Mumbai, March 5: For the third year in a row, world cotton consumption is projected to trail world cotton production as a result of which stocks are set to accumulate further and prices run the risk of weakening.

China factor
So, China will continue to be a critical factor for the world cotton market. The rebuilding of the Chinese national reserve means that by the end of 2011-12, it might hold over 3 million tonnes or as much as a quarter of global stocks. The key question, therefore, would be how much more would the Chinese accumulate. There are uncertainties attached to this.

http://www.thehindubusinessline.com/mar ... 966975.ece

Ministers' panel to review cotton export ban on Friday

New Delhi, March. 6:
The Commerce Ministry had said that on Monday that the ban was necessitated as almost 94 lakh bales of cotton had already shipped out against an estimated export surplus of 84 lakh bales. The ban followed higher than anticipated exports and apprehensions of a tendency of hoarding the item in bonded warehouses abroad, it said.

http://www.thehindubusinessline.com/ind ... 967475.ece

vic · Post by **vic** » 07 Mar 2012 19:56

Raw Cotton prices affect the farmers, whole cotton "yarn" prices affect the industry. Any idea of the trend in cotton yarn prices. Last year the industry was supposed to have made 200 to 400% profits, but now it seems to be in a slump. Pls give any good website where I can track historical cotton "yarn" prices

vijayk · Post by **vijayk** » 08 Mar 2012 18:17

http://expressbuzz.com/opinion/columnis ... 69214.html

Juggad economics

Suraj · Post by **Suraj** » 09 Mar 2012 09:46

Please stick to the topic of the thread.

Added later: Off-topic discussion moved to off topic thread.

Prem · Post by **Prem** » 10 Mar 2012 00:54

http://www.ft.com/intl/cms/s/0/b4085f0c ... z1oeKYLzzy
India loosens monetary policy

India’s central bank surprised the markets on Friday when it loosened its tight monetary policy to ease a credit squeeze in the banking system and moderate a sharp economic slowdown.The Reserve Bank of India announced a 75 basis point cut in the cash reserve ratio (CRR), the proportion of deposits banks must keep with the central bank, to 4.75 per cent. The move injected about Rs480bn ($9.6bn) into the country’s banking system. India’s aggressive move, the first policy action outside a scheduled meeting since July 2010, comes after China, Brazil and Indonesia intervened to ease liquidity, as emerging economies try to shield themselves from the European debt crisis. The rate cut also highlights the RBI’s growing concern about the liquidity crunch’s impact on the wider economy. “The overall deficit in the system persists above the comfort level of the Reserve Bank,” the central bank said in a statement. “Accordingly, it has been decided to inject permanent primary liquidity into the system by reducing the CRR so as to ensure smooth flow of credit to productive sectors of the economy

Prem · Post by **Prem** » 10 Mar 2012 04:15

http://www.smetimes.in/smetimes/news/in ... 90413.html
India urges faster economic integration of South Asia

Describing South Asia as one of the fastest growing sub-regions in the world, India Friday called for its faster economic integration."We should strengthen economic links while dealing with politics in the best way we can," National Security Adviser Shivshankar Menon said while inaugurating the third edition of the Asian Relations Conference here.Menon pointed out that despite the traditional narrative of pessimism, intra-SAARC trade has doubled in the past five years.It's time to seize the opportunity to transforming South Asia, he said.
"The costs of not doing business with each other have risen. There is a much wider realisation of the costs," said Menon.Over 30 scholars and experts are participating in the two-day conference, which has been organised by the Indian Council of World Affairs and the Association of Asian Scholars.

Prem · Post by **Prem** » 10 Mar 2012 04:17

Exports up 4.3 pc, imports 20.6 pc in February
http://www.smetimes.in/smetimes/news/to ... 87554.html

The commerce ministry Friday reported a growth of 4.3 percent in the country's exports for February at $24.6 billion on a year-on-year basis, while imports for the last month were higher by 20.6 percent at $39.8 billion.According to official data released here, the country had a trade deficit of $15.2 billion for the month under review.Rupee depreciation, higher cost of crude oil imports and falling demand in major markets like the US and Europe have caused the trade deficit to widen in the last couple of months.
The data showed that exports in the period between April and February 2011-12 grew by 21.4 percent at $267.4 billion. Imports during the period under review were higher by 29.4 percent at $434.2 billion.The trade deficit between April 2011 and February 2012 stood at $166.8 billion.Commerce Secretary Rahul Khullar told reporters here that exports for the current fiscal could be around $292-298 billion, imports in the same period can be around $470-475 billion with a trade deficit of around $175-180 billion.Trade deficit stood at $104 billion in 2010-11."We are getting a growth rate of 20 percent (exports). It looks like you'll get around $300 billion (by the end of 2011-12)," Khullar said.

Singha · Post by **Singha** » 10 Mar 2012 07:48

a lot of the country is heading for a rain deficit monsoon and probable drought this year.

the omens so far are inauspicious.

Austin · Post by **Austin** » 10 Mar 2012 23:02

India’s fiscal deficit to hit 5.6%: World Bank

The World Bank on Friday said the Indian government is likely to miss the ambitious target for fiscal consolidation set in the 2011-12 budget of limiting fiscal deficit to 4.6 per cent of the GDP by about one percentage point due to lower-than-expected revenues and increasing outlays on subsidies.

In its India Economic Update, 2012, the World Bank said the slow growth expected in core OECD countries added to the urgency of the world’s largest democracy overcoming its structural problems and enhancing domestic growth drivers. The key signals to spur growth could come from the reform of direct taxes, the implementation of the long-delayed goods and services tax (GST) and the passage of the land acquisition and mining bills, the World Bank said.

In a worsening international scenario, macroeconomic policy room is much more limited now than in 2008, said the survey and that fiscal stimulus could come from rationalising expenditure by expanding investment and cutting subsidies. Investments in infrastructure could address supply bottlenecks and bring private investment, with social safety nets cushioning the impact of rising prices.

abhishek_sharma · Post by **abhishek_sharma** » 11 Mar 2012 07:31

Top Incomes in the Long Run of History (includes India)

Top Indian Incomes, 1922–2000

Suraj · Post by **Suraj** » 12 Mar 2012 12:44

Indian industrial growth rises 6.8% in Jan, beating 2.1% mean estimate

India’s industrial production rose at the fastest pace in seven months in January, weathering the highest interest rates since 2008 and weaker global growth.

Output at factories, utilities and mines advanced 6.8 percent from a year earlier, after a revised 2.5 percent climb in December, the Central Statistical Office said in a statement in New Delhi today. The figure exceeded all 26 estimates in a Bloomberg News survey.

The gain signals production is withstanding the impact of the elevated cost of credit on domestic demand and the fallout for exports from Europe’s debt crisis. India’s central bank, which moved to inject cash into the economy last week and reviews rates on March 15, has signaled readiness to join nations from Brazil to the Philippines in cutting borrowing costs as inflation eases.

With further cuts in CRR recently, it seems RBI is comfortable with inflation level and is opting for greater growth over inflation targeting.

Raja Bose · Post by **Raja Bose** » 12 Mar 2012 12:52

Suraj wrote:Comparing US/Canada immigration imperatives with Indian ones is not too valid. These are societies build on the basis of immigrant population. India never was a barren New World wanting of a population. What we do need is people who are a source of high-end technological and managerial skills. I don't see anything wrong with the existing $25K cap. Remember, there used to be a time when we encouraged tourism from the west thinking every white person is loaded with cash. We ended up being overrun by backpackers with less money than a lot of domestic tourists. It's better that we focus on bringing back the best of the diaspora as well as foreigners to India to work in areas that build our technological and competitive abilities.

+100! India should be as pragmatic about immigration as the West is - allow people who can add value to our economy, keep others out. All of us who are in massa should be under no illusion that massa did us a favour or vice versa - it was a purely a transaction based on one's skills/abilities (both existing and potential), no charity involved on either side.

SureshP · Post by **SureshP** » 12 Mar 2012 15:49

IIP’s funny numbers: Time to dump them lock, stock, barrel

by R Jagannathan Mar 12, 2012

So, the Index of Industrial Production (IIP) has punched in at 6.8 percent in January. 2012. Three cheers for an industrial revival?

Actually, we should give the index three boos for producing nonsensical numbers.

The broad numbers are certainly not off the mark. The big growth engines of January were Manufacturing, which grew by a robust 8.5 percent, and Electricity, which rose 3.2 percent. Mining, which has been a bit under the weather for all of 2011 due to scams and bans, declined by 2.7 percent.

The IIP numbers seem to be in contradiction with ground realities

Overall, the IIP has given us a moderate 4.0 percent growth in the April 2011-January 2012 period.

But look under the covers, and what you find is a can of worms.

Industrial growth is being driven by consumption, with consumer goods zooming by 20.2 percent, especially consumer non-durables by 42.1 percent. Consumer durables – fridges, ACs etc – are actually declining by 6.8 percent.

What’s going on? Are Indian consumers buying up toothpaste, soap, and food like they are going out of fashion?

Seems so.

Exhibit A is “Food products and beverages”, which showed 92.6 percent growth in January. Indians are either eating too much now or they were eating too little in January 2011. How did this happen? Have the rich forgotten about weight-watching, or are the poor eating better? If this is true, we should forget about food security and worry about only those pockets where malnutrition is chronic.

Exhibit B is “Printing, publishing and reproduction of recorded media”, which grew a spectacular 56.1 percent. Are people reading more newspapers and watching more TV for some reason? The data suggest that most publications and channels are bleeding, and advertisers are holding back on spends. Or are people spending more on entertainment and CDs – which is what recorded media could be about? Nobody has told us that people are watching more films or things like that.

Exhibits A and B are also valid for April-January 2011-12, since they reported 28.3 percent and 24.2 percent growth. So this is not some isolated trend restricted to a January blip.

Exhibits C, D and E relate to what is falling in the IIP: “Office, accounting and computing machinery” (-14.1 percent), “Electrical machinery and apparatus” (-30.5 percent), and “Radio, TV and communication equipment and apparatus” (-13.8 percent).

Surely, there is a contradiction between exhibits A and B, and what C, D and E show.

Can India be buying more recording media and consuming more entertainment and news if office and computing machinery are going down, and if radio, TV and computing equipment are crashing?

This is not to suggest a one-to-one correlation between related products every month, but at the very least there is a clear need to look at the data afresh and see if the right things are being collected and collated.

Let’s also look at some of the other numbers – going even deeper into specific products. January has shown a 127.3 percent increase in “Zarda/chewing tobacco”. Either people are taking up more bad habits as the economy dives downhill, or the data gatherers were smoking something when entering the data.

“Marble tiles and slabs” reported 69.4 percent growth during January. Now, we didn’t hear of any real growth in the real estate sector in January in any part of the country. So how did marble tiles and slabs show this spike in growth? Who is buying marble tiles when the money being invested in realty is going down? Or have the data gatherers lost their marbles? (If you are a glutton for numbers, here’s the full monty from the government’s data website).

Newspaper production went up 57.1 percent in January. Oh? People are now eagerly reading newspapers, or are the poor using more newspapers to cover themselves in a cold winter since they can’t afford woolen blankets?

The official release announcing the January IPP also notes a 246 percent rise in petroleum coke, lenses (72 percent, the population is either taking to photography in a big way or more people are developing myopia), and insulated cables/wires of all kinds (up 57.5 percent). Since cables and wires are largely used in homes and offices, one wonders why this is happening in a flat or negative real estate scenario.

There is only one point to be made: the IIP numbers are simply yo-yoing too much and appear too lumpy to be really believable. Somebody needs to take a close look at the whole index, and audit the process through which data is being collected.

Meanwhile, the current IIP is worth taking with bags of salt. However, we don’t advise that, since salt might show a big spike in the next IIP number.

Best to throw out the flawed current IIP with the bathwater.

http://www.firstpost.com/economy/iips-f ... 40814.html

Suraj · Post by **Suraj** » 12 Mar 2012 23:47

SureshP wrote:
IIP’s funny numbers: Time to dump them lock, stock, barrel
by R Jagannathan Mar 12, 2012
So, the Index of Industrial Production (IIP) has punched in at 6.8 percent in January. 2012. Three cheers for an industrial revival?

Actually, we should give the index three boos for producing nonsensical numbers.
http://www.firstpost.com/economy/iips-f ... 40814.html

The author of that article is about 3-4 years behind on the story. Oldies here will remember the discussions on our outdated IIP and GDP base year and data collection policies from that time. Nothing has changed; it's just that the story lost its

factor here after everyone who participated then (vina, Singha, Katare etc) got bored. In the meantime our GDP and IIP data remains understated.

Theo_Fidel · Post by **Theo_Fidel** » 13 Mar 2012 00:46

RBI has posted their GDP numbers for 2011-2012.

Rs 89.121 Trillion.

~~GCFC~~ GFCF of Rs 26.09 Trillion. About 29% of GDP.
----------------
Yes.

I was doing some convoluted calculations and got my acronyms all mixed up.

neel · Post by **neel** » 13 Mar 2012 07:11

Theo_Fidel wrote:RBI has posted their GDP numbers for 2011-2012.

Rs 89.121 Trillion.

GCFC of Rs 26.09 Trillion. About 29% of GDP.

You of course meant GFCF, right?

Vipul · Post by **Vipul** » 14 Mar 2012 01:21

Number of houses in India increases 32 per cent in 10 years to 330 million in 2011.

The number of houses in the country increased around 32 per cent to 330 million in 2011 from 250 million in 2001, figures compiled by the Houselisting and Housing Census 2011 showed.Union home secretary R K Singh released the final figures of the first phase of Census 2011, known as Houselisting and Housing Census, in New Delhi today.

Over the 10-year period, the number of houses used for residential and partly residential purposes increased by 60 million, which helped the housing gap in the country, data showed.Also, there was a substantial improvement in the quality of housing - both in rural and urban areas – with the use of better construction material used for roof, wall and floor, the census report said.

The census has found that 87 per cent of households are using tap, tube well, hand pump and covered well as the main source of drinking water while 43.5 per cent use tap water.However, only 47 per cent of households have source of water within the premises.

Nearly 36 per cent of households have to fetch water from a source located within 500 metres in rural areas and 100 metres in urban areas while 17 per cent still fetch drinking water from sources located more than 500 metres away in rural areas and over 100 metres in urban areas.

Use of electricity for lighting saw an 1 per cent growth in the 10-year period with 67 per cent of the households using electricity as the main source of lighting.The rural-urban gap in electricity use has reduced by 7 percentage points to 37 per cent in 2011 from 44 per cent in 2001, showing an expansion of the government's rural electrification programme.

Other major highlights of Houselisting & Housing Census 2011 are:

Fifty-eight per cent of the households have bathing facility within the premises - an Increase of 22 pts over 2001;

Around half of the households have drainage connectivity - two-third accessing open drainage and one-third closed drainage;

Forty-seven per cent of the households have latrine facility within premises – 36 per cent with water closet and 9 per cent still using pit latrine. Access to latrine has gone up to 64 per cent in 2011 from 53 per cent in 2001.

Sixty-one per cent of households have kitchen facility - 55 per cent within the premises and 6 per cent outside the premises.

The number of households using LPG for cooking has increased to 29 per cent in 2011 from 18 per cent in 2001. Two-thirds of the households are using firewood/crop residue, cow dung cake/coal etc, while 3 per cent households use kerosene.

He number of households with television sets have increased by 16 per cent while the number of households using radios/transistors declined by about 15 per cent;

Less than 1 out of 10 households have a computer/laptop while only 3 per cent have access to the internet – internet penetration is 8 per cent in urban areas and 1 per cent in rural areas;

Sixty-three per cent of households have telephone/mobile facility (82 per cent in urban areas and 54 per cent in rural areas) while the penetration of mobile phone is 59 per cent against landline's 10 per cent;

Forty-five per cent of the households have bicycles, 21 per cent two wheelers and 5 per cent four wheelers. The number of two-wheeler users increased 9 percentage points while the number of four-wheeler users increased 2 percentage points over the 10-year period. The rural urban difference has reduced from 19 to 13 pt while 18 per cent of the households have no such facility.
Census of India 2011 was conducted in two phases. The first phase, called the `Houselisting and Housing Census' was undertaken a few months prior to the second phase termed as ''Population Enumeration''.

In Census 2011, approximately 2.5 million enumerators and 2 lakh supervisors were engaged in a 45-day operation to cover households across the length and breadth of the country. Information was collected on 35 items and 15 million census schedules were canvassed in 16 Indian languages.

Theo_Fidel · Post by **Theo_Fidel** » 15 Mar 2012 02:17

RBI/GOI is moving to drop Crore. It will be Billion and Trillion from here on. Kinda sad but overdue step....

BTW at 101.7 Trillion Rupees our GDP will cross $2 Trillion this year. $2.042 Trillion at the present Rupee exchange rate. If you consider the GDP under count it has already passed that milestone. BTW just about 5 years for our second Trillion from May 2007.

http://www.thehindubusinessline.com/ind ... wl_opinion

The Prime Minister's Economic Advisory Council (PMEAC) estimate for GDP in 2012-13, for example, is a little over Rs 1 crore crore.

To avoid tangles of this sort, the Government and the RBI have begun expressing aggregates in billions and trillions of rupees. Thus, the effect of the recent relaxation of the cash reserve ratio (CRR) was to ‘inject Rs 480 billion of primary liquidity into the banking system'.

Similarly, in its Outlook document the PMEAC brackets next year's GDP of Rs 101.7 lakh crore with Rs 101.7 trillion.

Suraj · Post by **Suraj** » 15 Mar 2012 02:41

Since the GDP estimate for 2011-12 (year ended March 31 2012) is Rs.89.2 trillion, and the exchange rate has hovered between Rs.43/$ and Rs.53/$ over the year (currently at Rs.49/$), the whole $2 trillion number is an academic discussion now. If the tax receipts towards the end of the year cause a typical seasonal low liquidity situation and thus strengthen the Rupee, we might just breach the Rs.45/$ mark, translating to $2 trillion, by end of the fiscal or sometime soon after.

For all practical purposes the wait for the $2 trillion mark is already over. When our GDP was Rs.75 trillion or so, we could actually say the $2T mark was some distance away, but not any longer; whether or not we already are is a matter of where the exchange rate happens to be on any given day. Time to pack up the tents and start the caravan for the $3 trillion mark. This will be an eventful phase, since we'll overtake several Euro nations (Italy, France, UK) whose GDPs are all the $2-3T range, and subsequently Germany @ $3.2T.

Rahul M · Post by **Rahul M** » 15 Mar 2012 03:09

time estimate when that might happen ? 1 T to 2 T happened in 5 years right ?

Suraj · Post by **Suraj** » 15 Mar 2012 03:20

I would guess 4 years, i.e. by 2015-16 fiscal year, or maybe sooner. This presumes ~11-12% nominal GDP growth, much less than the current 14-15%, with the difference being to (very roughly) account for continued currency fluctuation effects.

tejas · Post by **tejas** » 15 Mar 2012 07:56

Sorry but I for one am glad to see lakhs/crores bite the dust. As the numbers get larger, my confusion grows greater. No on else on the planet uses such a strange numbering system. As an aside I was shocked to see Brazil's GDP hit $2.5 trillion and pass the UQ. How did that happen so suddenly? So Brazil will likely pass Germany before India

shyam · Post by **shyam** » 15 Mar 2012 10:49

tejas wrote:Sorry but I for one am glad to see lakhs/crores bite the dust.

Just to quote a phrase from Rajiv Malhotra - it just shows who is digesting whom. The problem I see is that Indians stopped using notations after crore and started using thousand crore, lakh crore etc. It just confuses almost everyone. May be the next generation will get pissed of with representing budget, GDP etc in rupee, and rather prefer them to be stated in US$.

neel · Post by **neel** » 15 Mar 2012 22:43

shyam wrote:
tejas wrote:Sorry but I for one am glad to see lakhs/crores bite the dust.
Just to quote a phrase from Rajiv Malhotra - it just shows who is digesting whom. The problem I see is that Indians stopped using notations after crore and started using thousand crore, lakh crore etc. It just confuses almost everyone. May be the next generation will get pissed of with representing budget, GDP etc in rupee, and rather prefer them to be stated in US$.

Or maybe there will be a higher fraction of educated people who learned to count in their mother tongue up to such large numbers, and we will then come back to using lakh and crore, since we will then also start to use abja, kharva, padma and shankha (which, for the benefit of BRFites who do not know how to count that high in their mother tongue, are the next larger orders of magnitude). Especially since abja means billion, I have never understood why we don't use it.

sudarshan · Post by **sudarshan** » 15 Mar 2012 23:55

tejas wrote:Sorry but I for one am glad to see lakhs/crores bite the dust. As the numbers get larger, my confusion grows greater. No on else on the planet uses such a strange numbering system.

I was so amused by this post, I had to come out of hibernation to post a reply (OT, so my apologies). What's "strange" about the Indian (or Vedic) numbering system? The convention in this system is that after one thousand, numbers which have unique names go in multiples of 100's (laksha (lakh) is one hundred thousand, koti (crore) is one hundred lakhs, abja is one hundred crores, etc.). Whereas the "modern" system goes in multiples of thousands (million, billion, trillion, etc.). Why is one convention any less "strange" than the other?

If "crores" becomes too small a unit to represent Indian wealth, just go with the next higher named multiples - abja, kharva, etc., as Neel pointed out.

People who get used to the Western system will find the Indian system strange, and vice versa. Why did India have to go to so much trouble to design a symbol for the Rupee? Just keep using the $ sign, no?

Sudarshan

saip · Post by **saip** » 16 Mar 2012 00:42

tejas wrote:Sorry but I for one am glad to see lakhs/crores bite the dust. As the numbers get larger, my confusion grows greater. No on else on the planet uses such a strange numbering system. As an aside I was shocked to see Brazil's GDP hit $2.5 trillion and pass the UQ. How did that happen so suddenly? So Brazil will likely pass Germany before India

How corrupt is Brazil? Do they have same black money floating in their economy as India does?
Recently I was with a friend who sold his apartment for something like 25 lakhs (yes lakhs

). But he received only 15 L through Bank drafts (which is white) and the remainin 10 L in cash which of course is all black. And then told me he had to pay registration guys something like 1 L. So if you add this black money to the GDP may be the Indian GDP is already well past 3 T?