Indian Economy - News & Discussion Oct 12 2013

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JE Menon
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Re: Indian Economy - News & Discussion Oct 12 2013

Postby JE Menon » 05 Mar 2015 23:11

RR's father was an intelligence officer, fairly senior if I'm right. And even if he was not, and even if I was referring to the average RAW officer, how are you making the comparison to Rabinder Singh who is a traitor to the country? Is the average RAW officer a traitor? And BRFites are the judges?

I don't like to be harsh, but people here are too quick to pull the trigger these days - someone does not agree with your viewpoint, and he's a stooge!

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Rahul M » 05 Mar 2015 23:38

his father was #2 and acting chief of raaa when he was sidelined by RaGa the original.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 05 Mar 2015 23:55

Getting this thread back on track after the RR personal background sidebar:
Spectrum auction: Bids worth Rs 65,000 cr received at end of second day
The government received bids worth Rs 65,000 crore at the end of second day of spectrum auction, which started with a bang on Wednesday.

According to sources, 11 bidding rounds have been completed and operators are bidding aggressively in 900 MHz band. The bids have gone up by over 33% of the reserve price fixed by the department of telecommunications in all the bands.

Operators such as Bharti Airtel, Idea Cellular, Reliance Communications and Vodafone have to win spectrum in 900 Mhz band as their licenses are coming up for renewal in 2015-16. And the entry of Mukesh Ambani’s Reliance Jio in the auction has made the bidding aggressive.

On the first itself, the government had received bids for Rs 60,000 crore. This might surpass the expectations of the government which has estimated to garner Rs 80,000-1lakh crore.

Services PMI at 8 month high in Feb
The HSBC Services PMI rose to 53.9 in February up from 52.4 in January, indicating strong expansion in output across the sector, besides new order flows. The latest numbers come on a day when the Reserve Bank of India (RBI), in a surprise move, cut interest rates by 25 bps. However, commentary associated with the survey report had expected the RBI to be cautious on the rate cut front.

According to Pollyanna De Lima, Economist at Markit, “Boosted by a solid rise in new work, the service sector output in India expanded at a robust rate in February that was the strongest since mid-2014,” said.

Before this, PMI Services was higher at 54.4 points in June, 2014.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby SaiK » 06 Mar 2015 09:17

there was this talk on how chinese villages are being advanced.. not a bad idea at all, but we have to see that from a sdre perspective.

private kompanies get into a land maintenance deal with a full agreement on returns and benefits.
- kompanies will do the agriculture on their land on a profit sharing deal
- farmers move into next generation apartments built by the kompany [perhaps subsidized mortgage rates or benefits or free depending on the land invested and agreed upon]
- kompanies in turn have agreement for land conversions with chippanda gov.. for railways, bullet trains, mega malls, what not.

so, farmers are safe! kopitalists take over.. sdre-ness suffers.

that is where gov can modify this other wise excellent idea with fine-grained regulations, on what kind of land, how it can be bought, maintained, type of seeds, GMO, etc.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby khan » 06 Mar 2015 10:13

SaiK wrote:there was this talk on how chinese villages are being advanced.. not a bad idea at all, but we have to see that from a sdre perspective.

private kompanies get into a land maintenance deal with a full agreement on returns and benefits.
- kompanies will do the agriculture on their land on a profit sharing deal
- farmers move into next generation apartments built by the kompany [perhaps subsidized mortgage rates or benefits or free depending on the land invested and agreed upon]
- kompanies in turn have agreement for land conversions with chippanda gov.. for railways, bullet trains, mega malls, what not.

so, farmers are safe! kopitalists take over.. sdre-ness suffers.

that is where gov can modify this other wise excellent idea with fine-grained regulations, on what kind of land, how it can be bought, maintained, type of seeds, GMO, etc.


Most farmers land holdings will be less than the cost of decent apartments.

It might work for cities.

What is really needed is a good eminent domain law where the land is zoned for a particular purpose, the land is auctioned off to the highest bidder and the proceeds given to the land holder.

No need to tell the farmer what to do with the money

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby member_28640 » 06 Mar 2015 14:10

Samsung is in talks with State Govts to build its third manufacturing plant..
UP is the front runner followed by TN and Guj
Clicky

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby milanforever » 06 Mar 2015 15:02

Serious question, not trolling :
It's well known that air quality in main Chinese cities is terrible. It's easy to explain that because of Chinese economy is based on manufacturing. The country was dirty poor ( like sub-saharan african poverty level) 35 years ago. In order to feed people and lift them out of poverty, some sort of compromises had to be made, i.e. more factories etc. Of course now it's time to address the issues.

But what shocked me was that I read that in India, air pollution is also quite bad. Apparent it's even worse in new Delhi than in Beijing. Why is it? I thought that India economy is more based on service sector. How does it happen?

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Atri » 06 Mar 2015 15:39

Mostly Vehicular emissions.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby gakakkad » 06 Mar 2015 15:45

India has a fair share of manufacturing..Most of Indian manufacturing is chemical ,petroleum refining and heavy engineering..Most of these are polluting industries.. We have a fair amount of vehicular pollution.. Extreme periphery gets polluted by cooking food on coal/kerosene stoves .. overcrowding of cities is an important factor...

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Atri » 06 Mar 2015 15:51

Manufacturing mostly moved out and away from big cities. Big cities get air polluted due vehicles and traffic jams etc.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Singha » 06 Mar 2015 19:16

delhi and most of the tier1 cities have moved to euro-4 std petrol so not issues except old diesel taxis. but trucks and buses still use a less great variety of diesel I think. restaurants use coal for cooking as its cheap. due to power cuts lot of small diesel generators are used.

mostly the polluting small industries are moved out delhi over the last decade but the above issues still there and in winter some kind of temperature inversion locks these pollutants close to the ground.

in bangalore it is airborne dust due to highest level of office construction in the world and traffic jams.

but overall compared to 1998 delhi , the air is far far more ok there now in central areas. there would be localized belts of pollution near the major roads and choke points.

even the poorer people have moved of wood , coal and kerosene to small sized gas cylinders to convenience factor. probably the really destitute and living on the roads are only ones still using wood and kerosene now.

there is some kind of psyops going on about air pollution in china and india. wife has been to china several times incl beijing, guangzhou, nanjing and shanghai several times in last few years and she never reported any visible air quality issue.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby vera_k » 06 Mar 2015 20:49

^^^

No pysops. The industrialized countries have been upgrading environmental standards for the last 40 years or so. That makes for unfavorable relative comparisons even if air quality is not getting worse.

http://www.epa.gov/air/caa/

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby pankajs » 06 Mar 2015 21:17

pankajs wrote:Also, I don't think the chief economic adviser spoke out of turn on building up the Forex reserves of up to $1 Trillion in the years ahead.
/CT Just a thought on this $750 Billion to $1 Trillion reserve soft target.

http://www.tradingeconomics.com/india/external-debt
Seems to me the aim is to get reserves up to cover the total external Debt($456 billion) + 1 Years import (or An appropriate figure whatever is considered safe by 2019 or perhaps 2024).

Why would the government need such a reserve? Could it be to counter a likely sanction stretching up to about a year? Why would GOI plan for a sanction? Perhaps the GOI is contemplating something that will trigger automatic sanctions in around 2019 or 2024?

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 06 Mar 2015 21:50

Ding wrote:Serious question, not trolling :
It's well known that air quality in main Chinese cities is terrible. It's easy to explain that because of Chinese economy is based on manufacturing. The country was dirty poor ( like sub-saharan african poverty level) 35 years ago. In order to feed people and lift them out of poverty, some sort of compromises had to be made, i.e. more factories etc. Of course now it's time to address the issues.

But what shocked me was that I read that in India, air pollution is also quite bad. Apparent it's even worse in new Delhi than in Beijing. Why is it? I thought that India economy is more based on service sector. How does it happen?

The pollution you're referring to is specifically PM2.5 level. It is bad in Delhi mainly in winter. The rest of the time Beijing is much worse. For example, right now I see PM2.5 data of 171 for Delhi vs 363 for Beijing.

Delhi has a well known winter smog phenomenon. It disrupts flight operations pretty much every winter because the whole place is blanketed in fog. Unless there's rainfall (which isn't very common in winter) , this serves as a prime carrier for PM2.5 pollution. This is exacerbated by the automobiles, thermal power plants, as well as wood and oil fired heating in winter (New Delhi temps go to close to 0 in winter). PM2.5 data is way lower in Mumbai, Chennai or Bangalore.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby pankajs » 06 Mar 2015 22:03

Kaushik Basu @kaushikcbasu · 13h 13 hours ago

Am at last satisfied that India's GDP growth adjustment, by which 2013-14 growth rose from the earlier estimate of 4.7% to 6.9%, is valid.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Gus » 06 Mar 2015 22:30

the problem with beijing is that under certain conditions - the air gets trapped in the region and does not get blown away...it is then we get those stunning pictures..

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Prem » 06 Mar 2015 22:53

pankajs wrote:
pankajs wrote:Also, I don't think the chief economic adviser spoke out of turn on building up the Forex reserves of up to $1 Trillion in the years ahead.
/? Could it be to counter a likely sanction stretching up to about a year? Why would GOI plan for a sanction? Perhaps the GOI is contemplating something that will trigger automatic sanctions in around 2019 or 2024?


1T reserve is essential to compete with China in the neighborhood. No one will put sanction on India anymore. Economic warfare can best be faced with economic strength. Just imagine 1 Billion $ budget to use Information Tech,Media to put Britshit down, Few more Billion to discredit London Market and Britain goes way down in global power structure. RR problem is how to build Reserves without appreciation in INR. (So GOI Boldly goes for Gold)

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby milanforever » 06 Mar 2015 23:52

Suraj wrote:
Ding wrote:Serious question, not trolling :
It's well known that air quality in main Chinese cities is terrible. It's easy to explain that because of Chinese economy is based on manufacturing. The country was dirty poor ( like sub-saharan african poverty level) 35 years ago. In order to feed people and lift them out of poverty, some sort of compromises had to be made, i.e. more factories etc. Of course now it's time to address the issues.

But what shocked me was that I read that in India, air pollution is also quite bad. Apparent it's even worse in new Delhi than in Beijing. Why is it? I thought that India economy is more based on service sector. How does it happen?

The pollution you're referring to is specifically PM2.5 level. It is bad in Delhi mainly in winter. The rest of the time Beijing is much worse. For example, right now I see PM2.5 data of 171 for Delhi vs 363 for Beijing.

Delhi has a well known winter smog phenomenon. It disrupts flight operations pretty much every winter because the whole place is blanketed in fog. Unless there's rainfall (which isn't very common in winter) , this serves as a prime carrier for PM2.5 pollution. This is exacerbated by the automobiles, thermal power plants, as well as wood and oil fired heating in winter (New Delhi temps go to close to 0 in winter). PM2.5 data is way lower in Mumbai, Chennai or Bangalore.


Thanks guys for the explanation. Interesting to read and get to know the information. Sorry if my post was not in the approriate forum. I was kinda worried about it.

Cheers!

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Vipul » 07 Mar 2015 01:11

India may see good monsoon as El Nino predicted weak.

India can expect higher monsoon rainfall this year than the patchy rains that affected farm output last season, going by a Reuters report. While there is no official announcement from the India Meteorological Department so far, the report cites IMD sources as saying the prediction is based on the fact that the El Nino weather pattern is in a "neutral" phase.

The El Nino effect is marked by a warming of sea surface temperature on the Pacific Ocean, and has a considerable effect on the Indian summer rains. El Nino can lead to drought in Southeast Asia and Australia and heavy rains in South America, hitting production of food such as rice, wheat and sugar.

The Australian weather bureau on Tuesday forecast that the chance of an El Nino developing this year had risen to about 50 per cent. The IMD has already shared its current outlook with the government and is expected to come out with another assessment of El Nino in April, according to the report.

India's monsoon was hit by an El Nino in 2009 when the four-month long season turned out to be the driest in nearly four decades. India's agriculture sector remains largely rain-fed, except in areas where groundwater is pumped out mercilessly.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 07 Mar 2015 02:44


Day 3 update:
Bids reach Rs 77,000 cr (almost $13 billion) on Day 3 of spectrum auction
At the end of the third day of the telecom spectrum auction, overall bids received were Rs 77,000 crore. At the end of the first day, the estimated bids stood at Rs 60,000 crore and the second day at Rs 65,000 crore.

On Friday, 17 rounds of bidding were completed, according to official sources. Eight telecom companies are fighting to win spectrum in four bands — 800-, 900-, 1,800- and 2,100-MHz.

The most aggressive bidding is being recorded in the 900-MHz band, as Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications are in a critical situation —their licences in various circles are due for renewal.

If daily bids are taken into account, the estimated revenue is likely to go up to Rs 85,000 crore, as there would be unsold spectrum in the 900-MHz band because of the structure of the auction and the conditions laid out in its notice inviting applications, including a fixed slot size for an entrant. A few bidders are withdrawing at the last round, though the prices are rising in the 900-MHz band.

Earlier, the government had estimated a mop-up of Rs 80,000 crore-1 lakh crore from the sale of spectrum.

Bank credit growth remains tepid:
Bank credit up 10.39% y-o-y at Rs 64,53,394 cr ($1.07 trillion)
Bank credit growth continued to trail deposit mop-up and remained muted with a mere 10.39 per cent rise at Rs 64,53,394 crore in the fortnight to February 20, up from Rs 58,45,833 crore a year ago, according to the latest data released by the Reserve Bank of India.

Deposits of banks, on the other hand, continued to outpace credit demand rising 11.85 per cent to Rs 84,74,824 crore in the reporting fortnight, against Rs 75,76,609 crore in the corresponding fortnight last year.

In the previous fortnight, banks’ credit had grown at 10.38 per cent, while deposits increased by 11.77 per cent.

Banks’ demand deposits rose by 11.81 per cent to Rs 7,69,079 crore in the period, against Rs 6,87,838 crore.

Time deposits stood at Rs 77,05,748 crore, up 11.85 per cent, against Rs 68,88,771 crore in the corresponding period last year.

Public sector banks together accounted for 73.3 per cent share in aggregate deposits and 71.2 per cent share in gross bank credit followed by private sector banks at 19.2 per cent and 21 per cent, respectively, at the end of December 2014.

Forex reserves keep rising, all time highs practically every week lately:
RBI's forex reserves climb to all-time high of $ 338.08 bn
The Reserve Bank of India's (RBI) foreign exchange reserves hit an all-time high of $ 338.08 billion for a consecutive week, show data released on Friday. The rise in reserves was $ 3.89 billion.

Foreign currency assets, a key component, rose by $ 3.90 billion to $ 312.20 billion. The reserves have been rising because the central bank has been mopping dollar flows through state-run banks.

During the week gold reserves remained unchanged at $ 20.18 billion.

For the week under review, the Special Drawing Rights (SDRs) fell by $ 11.4 million to $ 4.07 billion, while India's reserve position with the International Monetary Fund (IMF) was down $ 4.6 million to $ 1.63 billion.

Cash transfer system gets a major fillip:
NPCI links 150 million DBT bank accounts with Aadhaar
The country's umbrella body for all retail payments system, National Payments Corporation (NPCI), has reached a new milestone with successful linking of as many as 150 million bank accounts with the Aadhaar numbers, moving closer to map the overall 170 million DBT accounts.

The Reserve Bank-promoted NPCI today said it expects that all beneficiaries of all government subsidies/benefit transfers will be brought under the linkage programme.

"The current focus is on linking bank accounts of 170 million DBT (direct benefit transfer) beneficiaries with Aadhaar before June 30," NPCI said in a statement.

"This electronic benefit transfer programme will not only be unique but also be one of the largest in the world," said the agency's chief A P Hota.

The government has been focusing on DBT to plug leakages and save cost.

To push DBT and financial inclusion, the government last year launched Jan Dhan scheme under which banks have opened more than 125 million accounts by January 26.

NPCI is the nodal agency for all retail payment systems under the Jan Dhan scheme.

Govt wants Sebi, not RBI, to regulate money market
the Finance Bill proposes to amend sections 45U and 45W of the RBI Act, which effectively takes away the central bank’s powers to regulate government securities and other money market instruments.

The amendment to section 45W says, “Any direction issued by the Reserve Bank of India, in respect of security, under chapter III D of the Reserve Bank of India Act, shall stand repealed.”

Usha Thorat, former deputy governor of RBI, said, “Certain powers in relation to regulating money market instruments and products and derivatives based on these instruments were given to RBI in 2005-06 by amending the RBI Act and this happened after a lot of discussion. Now, with this amendment in the Finance Bill, all these provisions are proposed to be withdrawn. RBI was given responsibility for financial stability and the power to regulate forex and money markets was given to RBI to enable it to fulfil its mandate for financial stability.

“Before such sweeping changes are brought about through the Finance Bill, there has to be an understanding of the purpose for such changes and whether these are indeed in the interest of financial stability. It has to go through a lot of discussion and dialogue.”

If the proposed amendments go through, regulations relating to the issuance and investment of commercial papers, inter-bank repo or any other repo and reverse repo used as instruments to raise liquidity by keeping these as collateral as government securities will no longer be in RBI’s hands.

To be sure, these amendments are not an extension of the Public Debt Management Act, which essentially deals with primary issuances of government securities. After the proposal is enacted, public debt management will be under the purview of Public Debt Management Agency, not RBI.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby RamaY » 07 Mar 2015 02:52

Suraj garu,

Does it mean Banks have excess cash of ~RS 20,00,000 Crores (difference between deposits and loans)? I presume they either keep that money with RBI as security (IIRC it was 10% of deposits) and remaining in T-bills?

TIA.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 07 Mar 2015 02:56

They have to keep at least the amount specified by the current Cash Reserve Ratio in cash for operations. They have to hold an amount equal to or greater than the Statutory Liquidity Ratio in government bonds and/or gold. The current rates are listed on the RBI site. CRR and SLR are 4% and 21.5% right now.

RBI eases norms for home loans of up to Rs 10 lakh
Giving a boost to affordable housing, the Reserve Bank of India (RBI) today eased the norms for home loans for up to Rs 10 lakh by allowing banks to include stamp duty and registration charges to the cost of a unit.

These charges form around 15 per cent of the cost of the house and place a burden on borrowers.

“With a view to encourage availability of affordable housing to such borrowers, it has been decided that in cases where the cost of the house does not exceed Rs 10 lakh, banks may add stamp duty, registration and other documentation charges to the cost of the unit for calculating LTV (loan to value) ratio,” RBI said in a notification.

As per the current practice, banks do not include stamp duty, registration and other documentation charges in the cost of housing property.

“It has been brought to our notice that these amounts form around 15 per cent of the cost of the house and place a burden on the borrowers from economically weaker sections (EWS) and low income groups (LIG),” RBI said while easing the norms.

India’s manufacturing, services growth outpaced China in Feb: HSBC
Emerging markets’ output growth rose to a 5-month high in February, and manufacturing as well as services sector in India expanded at a faster pace than China during the month, an HSBC survey said today.

Three of the four largest emerging economies registered higher output in February. India recorded the strongest rate of expansion, followed by China where growth picked up to a five-month high.

In Brazil, private sector business activity rose for the first time in five months. In contrast, Russian private sector output declined at the strongest rate since May 2009.

During February, the HSBC composite index for India, which maps both manufacturing and services, stood at 53.5, whereas for China it was 51.8, Brazil (51.3) and Russia (44.7). An index measure of above 50 indicates expansion.

Gold deposit scheme, REITs can monetise 1% of GDP, says report
“Savings in non-productive physical assets, primarily property, gold is 17 per cent of GDP…a well-run gold monetisation and REITs scheme can recycle one per cent of GDP, which can revive the savings rate in the financial and help fund investments,” JM Financial said in a report.

REITs have market size potential of USD 50 billion with a return profile of 13-14 per cent pre-tax, it added.

The report also said gold monetisation scheme can ease pressure on imports. The country has an estimated 20,000 tonnes of gold stock. The gold monetisation scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account.

Noting that as much as 30 per cent of the physical stock of gold can come into the market and get monetised over the next three years, the report said even if only 5 per cent of the total gold stock comes under the scheme over the next three years it will circulate gold to the tune of USD 15 billion or Rs 93,000 crore per annum. This is roughly half of the annual gold demand or 0.8 per cent of GDP.

Govt to raise Rs 5,000 cr by selling PSU shares via ETF
The government plans to raise Rs 5,000 crore by selling shares of public sector companies through an Exchange Traded Fund (ETF) in FY16 as it intends to ramp up disinvestment receipts to an all-time high figure to bridge the fiscal gap, disinvestment secretary Aradhana Johri said on Wednesday.

The government used an ETF, which invested in a pool of 10 public sector stocks, to raise about Rs 3,000 crore in FY14. The ETF is managed by Goldman Sachs. The next tranche of stocks will also be sold to the same ETF, Johri said.

“We are trying to work with Goldman Sachs to make that product more retail friendly this time,” Johri told FE in an interview.

Because of the plan to revise the ETF to give it retail focus, the government did not use the option to divest shares in public sector companies in FY15.

“We will have to take approval from the Securities and Exchange Board of India (Sebi) for this,” she said.

The government plans to raise Rs 69,500 crore in FY16 by mostly selling stakes in public sector companies. Part of that will come through selling shares directly to an ETF, to help the country meet its revenue targets.

Finance Ministry expects EMIs to come down
With two ‘surprise’ rate cuts in less than 60 days, the Finance Ministry expects equated monthly instalments (EMI) on loans, such as for housing and automobiles, to come down. The Ministry has also tried to clear the air on the reported differences between the Finance Minister and the RBI on the rate cut.

“We have said in Parliament that we are pursuing a very prudent fiscal consolidation roadmap. Our aim is to move growth onto a sustainable, non-inflationary path... We are in a situation where we see EMIs coming down,” Minister of State for Finance Jayant Sinha told reporters here.

Chief Economic Advisor Arvind Subramanian said the rate cut is consistent with what was said in the Economic Survey and the Budget on the outlook for inflation and the economy.

“It shows that the RBI and the government are on the same page in terms of how we view the economy. It also means that the Budget can be seen as conducive to non-inflationary growth,” he added.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby SaiK » 07 Mar 2015 08:28


this is cool! but might go unlike bidding from chorporates. excellent idea, like IPO. public will be keen first to know about the company profiles.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby vipins » 07 Mar 2015 13:59

Ticker on ET Now- wrote:Govt can increase individual income tax exemption by 10000Rs

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 08 Mar 2015 02:29

After the coal auction, the spectrum sales are also outdoing estimates, with assured revenues of at least Rs.86,000 crore ($14 billion)
Day 4: Spectrum auction revenue at Rs 86,000 crore
Four days into the telecom spectrum auction, the government’s assured revenue from the sale stands at Rs 86,000 crore. The spectrum auction, the biggest so far, is the first under the current central government.

At the end of the fourth day, 24 rounds of bidding had been completed, according to the Department of Telecommunications. The auction will now resume on Monday.

On the first day, the government had received bids for Rs 60,000 crore. Going by the aggressive bidding, the revenue might surpass the government’s expectation of Rs 80,000 crore-Rs 1 lakh crore. It is expected the auction will go on for at least two weeks.

IIP data continues to use old methodologies, resulting in a divergence between IIP and industrial GDP growth data:
Growing divergence between IIP and industrial data in GDP
Moody's Analytics said, "Industrial output growth has slowed on account of slowing mining activity and weaker export demand.

Revised GDP figures showed a much higher pace of economic growth in 2014 than previously thought. Industrial production data will be more closely scrutinised as a result, in a bid to reconcile the seeming discrepancies."

The IIP methodology should be revised to bring it in line with the new GDP series, Moody's Analytics said. In the new GDP series, the base year is revised from 2004-05 to 2011-12 and economic growth is defined to include indirect taxes (net of subsidies).

Though the base year of the IIP will also be revised to 2011-12 some time this year, it may still show discrepancies with the GDP data. This is so because the IIP now constitutes around 25 per cent of industrial data in the GDP, while the rest comes from corporate results announced by listed entities and some data provided by the Reserve Bank of India, according to an official from the ministry of statistics and programme implementation (MoSPI).

Earlier, GDP data used to mainly come from the IIP in the first estimate, while the annual survey of industries used to figure in the data after years of gap.

In short, the IIP data is noise right now.

Govt raises Rs 12,591 cr from auction of 3 coal mines
Government kitty has swelled by Rs 12,591 crore with the sale of three mines to Hindalco, Jindal Power and Indrajit Power today, the third day of the second tranche of coal block auctions.

Amid stiff competition from bidders, Hindalco Industries won Dumri mine in Jharkhand, Jindal Power grabbed Tara block in Chhattisgarh and Indrajit Power clinched Nerad Malegaon block in Maharashtra.

"Indrajit Power bids the highest for Nerad Malegaon for Rs 660 (a tonne). Hindalco highest bidder at Rs 2,127 (a tonne) for Dumri and Jindal Power at Rs 126 (a tonne) for Tara coal block," Coal Secretary Anil Swarup tweeted.

These three mines would contribute a cumulative Rs 12,591 crore to the state exchequer. With the three blocks, the government stands to garner over Rs 1.43 lakh core, including over Rs 1 lakh crore from the auction of 19 blocks in the first tranche. Three more coal blocks will be put up for auction when the bidding starts tomorrow.

After 22 out of 200+ blocks, total gains are already Rs.1.43 lakh crore. CAG estimated original losses to be Rs.1.86 lakh crore total, a number that will be far exceeded once all auctions complete.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby A_Gupta » 08 Mar 2015 19:33

Just how difficult the road ahead is, look at the detractors:
http://america.aljazeera.com/multimedia ... paign.html

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby A_Gupta » 08 Mar 2015 19:35

Also see this: http://blogs.worldbank.org/jobs/manufacturing-conundrum

We can see why developing countries want these manufacturing jobs: our data show that a country’s peak manufacturing employment share between 1970 and 2010 rather than is its peak manufacturing output share, is a much better predictor of its average per capita GDP in 2005-2010. Controlling for peak manufacturing employment shares and the date that manufacturing activity peaked, peak output shares are insignificant predictors of subsequent prosperity. This suggests that manufacturing output matters for prosperity only insofar as it comes with jobs. Moreover, we show that every country that is rich today, by any reasonable standard, had more than an 18-20% manufacturing employment share sometime since 1970.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby vishvak » 08 Mar 2015 19:39

Outdoing estimates is probably an indicator that manufacturing within country - make in India - can be profitable in different ways. We need to master tech from various fields of knowledge.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby pankajs » 08 Mar 2015 19:54

Related to Make in India indirectly.

A Decade of Economic Destruction... by Shri S Gurumurthy

Watched this a few days back. He says somewhere (@32 mins) that we spent more on imported capital goods (9 Years / $587 Billion vs $505 billion for oil) than on Oil or gold all from China. He calls it the biggest source of currency weakness and depreciation. All because we did not want to antagonise China or our Industrialists and allowed imports on a massive scale at zero duty at the cost of our local manufacturing.

This can be easily reversed by applying appropriate custom duty and anti-dumping duty. That in itself will generate demand for Capital goods inside India and add substantially to make in India.

We are just at the beginning phase to remake India so the opportunities are going to be huge.

Added later: I recall hearing just before the budget of the inverted duty structure being one of the other reasons for imports preference over local manufacturing. Take the inverted duty structure + massive imports from China + massive subsidies and freebies and you get a terrible economy. How could the dream-team not realize and correct this? Looks like a deliberate ploy to de-industrialize India and probably is treason. Another 5-10 years of the same would have left us where?

So Revert the duty structure and apply anti-dumping duty across board to boost make in India.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby nawabs » 09 Mar 2015 03:10

Acquiring irrigated multi-crop land may become more difficult

http://www.business-standard.com/articl ... 008_1.html
The government is considering various options to ensure the smooth passage of the controversial land acquisition amendment Bill, listed for tabling in the Lok Sabha on Monday, in both Houses of Parliament. According to officials in the know, some of the alterations to the proposed amendment Bill might make it very difficult to acquire irrigated multi-crop land for sectors outside the ambit of social-impact assessment (SIA) and consent clause.

The ruling National Democratic Alliance (NDA) is in a minority in the Rajya Sabha.

The sectors that are exempt from SIA and consent clause are defence, rural infrastructure (including rural electrification), affordable housing & housing for the poor, industrial corridors & infrastructure, and social infrastructure projects under public-private partnership (PPP) where ownership of land rests with the government.

“This will ensure government land and wasteland are acquired on priority in all projects, and irrigated multi-crop farmland is touched only as the last resort,” said a senior official.

The Bill, listed for tabling in the Lok Sabha on Monday, will replace an ordinance approved by President Pranab Mukherjee in December last year. The alterations to the Bill, though, might not be incorporated at the stage of tabling; these, according to the official, could come in reply to a debate on the Bill.

These likely moves were seen as measures to also dispel the impression that the new Bill was ‘anti-farmer’, added the official, who did not wish to be named. But even these changes are to be incorporated only after all of the Centre’s efforts to reach a consensus on the amendments fail.

So far as acquisition of irrigated multi-crop land is concerned, the government might move closer to the position of the previous Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, passed by the United Progressive Alliance (UPA) government of the time.

The Act of 2013 had in its Chapter 3 (titled ‘Special Provision to Safeguard Food Security’) said that irrigated multi-crop land should not be acquired; any such acquisition, if at all, should only be in exceptional cases.

The Act also said, whenever such an irrigated multi-crop land was acquired, an equivalent area of culturable wasteland should be developed, or an equivalent value be deposited with the appropriate government for investment in agriculture. Culturable land is that which can potentially be developed as vegetative cover but is not being used due to constraints like erosion, water logging, salinity, etc.

The Act of 2013 had exempted linear projects, such as railway lines, from this provision. “Linear projects like railway lines, highways, major district roads, irrigation canals, power lines, etc, are kept out of the purview of this provision,” the Act had said.

However, in amendments to the original Land Bill, the current government also exempted defence, rural infrastructure, industrial corridors, etc, from the provisions of Chapter 3 that deal with acquisition of irrigated multi-crop land.

“Now that there has been some opposition to the ordinance in its current form, we are considering bringing back the provisions of Chapter 3 on the hitherto exempt sectors. That will ensure irrigated multi-crop land is not acquired for the sectors under any circumstances,” the official said.

This implies the linear projects might continue to be exempt from the provision but the five sectors added in the ordinance by the current government will also have to follow the rule.

The Akali Dal, a key NDA ally, had also demanded that the Centre ensure that irrigated multi-crop land is not acquired under any circumstances. There have also been suggestions on notifying land parcels where SIA and consent clause will not be applicable for the exempt sectors. Officials, however, said the Bill might not change the contentious issue of removing select sectors from the ambit of SIA and consent clause.


Social security rollout: Centre calls meet with banks, insurers

http://www.financialexpress.com/article ... ers/51452/

The Centre has called a meeting of banks and insurers on March 11 to roll out, with fixed deadlines and targets, the three schemes announced in Budget fy16 to ensure universal social security for the underprivileged.

The schemes — the Pradhan Mantri Suraksha Bima Yojana (or PMSBY, providing accidental death risk cover), Atal Pension Yojana (for a defined pension) and Pradhan Mantri Jeevan Jyoti Bima Yojana (or PMJJBY, covering both natural and accidental death risk) — will be implemented on a mission mode like the Pradhan Mantri Jan Dhan Yojana, with the full backing of banks and insurance firms, financial services secretary Hasmukh Adhia told FE.

He said the new schemes will be implemented initially through the existing bank account holders, and their premium/pension amounts can be either deposited by them in their accounts or automatically debited provided the accounts have the required amount in them.

The deadlines and targets for the new schemes will be fixed during the meeting and the progress will be continuously monitored by the Centre to ensure that they are met, Adhia said. At the end of February, 13.7 crore accounts had been opened under PMJDY and 12.2 crore RuPay debit cards were issued. These new accounts have mobilised deposits of Rs 12,694 crore.

Calling the three schemes the “biggest reform measure” in Budget FY16, Adhia said: “Any citizen with a bank account and aadhar number can join. All he/she has to do is give a signed letter to the bank stating his/her name and of the nominee. The bank will enrol him/her as rest of the details will already be with it.”

“We will push the new schemes on a mission mode like the PMJDY, take out common advertisements and hold financial literacy campaigns. Banks and insurance companies will jointly implement them. Bank mitras (banking correspondents) will also get good incentives for ensuring more subscribers,” he added.

These schemes will ensure at least Rs 12 (which the subscribers have to pay annually as premium for accidental death risk of Rs 2 lakh under PMSBY) go into all the zero balance accounts opened under PMJDY, thereby making them accounts with deposits, Adhia said. At the end of February, around 8.6 crore accounts were zero-balance and the government was trying to ensure that these accounts also mobilise deposits.

“Even the poorest of the poor will be able to afford to deposit Rs 12 per year and they will do it as the insurance cover comes sans conditions. This product is simple and easy to understand. I see crores of rupees going in as bank deposits,” he added.

The PMSBY incentive is, of the Rs 12 given by a subscriber, Re 1 goes each to the bank and the bank mitra (for getting subscribers for the scheme). Also, banks are free to give their Re 1 commission to the bank mitra as additional incentive. The annual premium for PMJJBY (which covers both natural and accidental death risk of Rs 2 lakh) is just Rs 330, or less than Re 1 per day, for age group 18-50. On the structure of PMJJBY, Adhia said that of the Rs 330, Rs 289 will go to the insurance fund while the remaining Rs 41 will go as commission and bank charges. “If a bank mitra gets 100 people as subscribers from one village, he will make Rs 3,000. Since it is not a term product, the bank mitra will have to ensure that new subscribers join the scheme every year,” Adhia added.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 09 Mar 2015 04:39

With Rs 1,000 cr a day, foreign inflows cross $11 bn in 2 months
With an average of over Rs 1,000 crore a day, the net foreign fund inflows into Indian capital markets have crossed $11 billion (over Rs 68,000 crore) in little over two months so far in 2015.

The analysts expect the inflows to further accelerate going ahead, following assurances in the Union Budget to revisit controversial issues like GAAR (General Anti Avoidance Rule).

The Foreign portfolio investors (FPIs) have bought shares worth a net amount of Rs 31,256 crore till March 5 this year, while in the debt segment, their net inflows stand at Rs 37,296 crore, taking the total to Rs 68,552 crore (411.08 billion), as per the data compiled by the Central Depository Services Ltd (CDSL).

Overseas investors witnessed a net inflow of Rs 24,563 crore in February, while the same in the previous month January stood at Rs 33,688 crore.

FIIs (Foreign Institutional Investors) were rechristened as FPIs last year under a new regulatory regime that has made it easier for them to invest in India.

Coal-mining states to be richer by Rs 71,000 cr
The second phase of the e-auction of 11 coal mines proved to be a bonanza for mineral-rich states, whose revenues increased to Rs 2.05 lakh crore from Rs 1.35 lakh crore in the first phase. Out of the received bids worth Rs 71,027 crore for 30 years (mines' life), Rs 59,736 crore is towards royalty and the rest is the auction amount.

The second phase was almost similar to the first with sector majors grabbing richer coal blocks at high price. The only exception was Jindal with the lowest bid to get a rich coal block with power generation as end-use. While operational coal blocks were auctioned in the first phase, the second phase auctioned off about-to-produce mines.

The first phase, which ran from February 14 to 22 saw auctioning of 18 blocks earning the respective state governments cumulative revenue of Rs 1.35 lakh crore. The second phase started from March 4 and ended on Sunday.

Total valuation of the coal block auctions so far has reached Rs.2.05 lakh crore ($33 billion), well above the CAG's estimate of Rs.1.86 lakh crore, with only 29 out of 204 blocks so far auctioned. Total valuation at the end may be Rs.15-20 lakh crore ($250-333 billion).

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby RamaY » 09 Mar 2015 05:14

Suraj garu,

Pls help me understand.

The foreign inflows are going into existing capital markets. Does it mean it is just fueling a stock bull run because investors are behind limited (existing) stocks. Or is it possible for these funds to go into new projects?

One way existing companies can tap these inflows is by issuing new stocks. But that will influence controlling stakes. But is it an effective way to utilize these inflows to fund new projects instead if increasing stock valuations?

Thanks...

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 09 Mar 2015 06:29

The majority of the inflows go into government debt, not equity market, as the data shows. Companies make money by increasing their public float, when they need to fund activity. When they don't wish to dilute their equity ownership base, they can resort to domestic or external commercial borrowings. Allowing foreign ownership of government debt (in Rupees) enables the government to lower the crowding out effect of the SLR on private commercial borrowers. On the other hand, the lower rate of credit growth, as compared to deposit growth, suggests that there's muted demand for domestic capital, partly on account of many companies still carrying heavy debt loads, and partly because borrowing rates are still quite high.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby RamaY » 09 Mar 2015 07:25

Thanks Suraj.

So everything circles back to interest rates. FPIs coming into debt markets ($5+B) while corp world is going slow on taking loans due to high interest rates.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby disha » 09 Mar 2015 07:55

I am proposing a new number system for counting.,
-----------------------------------
Instead of Shunya, Ek, Do, Teen..., lakhs, crores, arab, kharab, neel, padma and sankh - I am proposing

Sibal, one, two, three..., crores, raja, rahul & sonia.

That is zero is replaced by Sibal., we have Raja for arab (100 crore = 1 Raja)., Rahul for Kharab (or 10,000 crore = 100 Rajas = 1 Rahul) and Sonia for neel (or 10 lakh crore = 100 Rahuls = 1 Sonia).

Zero/Shunya = Sibal.

The spectrum auction will fetch us 8 Rahuls. (@80,000 crore)

The coal auction will fetch us 1 Sonia. (@ 10 lakh crore)
-------------------------------------

Coal auction of @30 mines has so far raised 1.5 Lakh Crore (or @15 Rahuls). That is an average of @5000 crore (or 50 Rajas) per mine.

There are some 200 coal mines to be auctioned., so by my estimate 8 lakh crore will be surpassed and we may be on track to get @10 lakh crore (or 1 Sonia). In previous posts, I indicated that @12 lakh crore will be realized by the end of the coal auction. Let us see if that figure (1.2 Sonias) will be reached or breached.

Here is the latest:

http://www.financialexpress.com/article/economy/coal-auction-rains-revenue-bonanza-touches-rs-1-57-lakh-cr/51417/

However this is the news one should read (in full below):

Coal production kicks into high gear., Modi Sarkar achieves 4x times annual growth rate YoY

Coal production in the last nine months has increased by 7 per cent, no mean feat if you consider the rate of growth in recent years, Piyush Goyal, Minister for Power, Coal and New and Renewable Energy, said here on Sunday.

Speaking to corporate leaders at “Breakfast with BusinessLine”, he said it was easy to dismiss this as insignificant, but the difference was stark considering that the compounded annual growth rate was just 1.5 per cent over the past five years and 3-4 per cent in the best years.

Observing that the media often failed to take note of such positive developments, he said power generation also had increased — thermal by 13 per cent and overall by 11 per cent.

Business Line editor Mukund Padmanabhan led the interaction with Mr. Goyal and moderated it.

The Power Minister said it was during a long review with Coal India officials that he had, in a moment of frustration, come up with a coal production target of one billion tonnes in the next five years. “An off-the-cuff comment became our target,” he said. Coal India had achieved 925 million tonnes, which gave him the confidence that even a billion tonnes was possible.

The bigger challenge was where to use the coal. He said he had persuaded the Railways to provide 25 additional rakes to move coal in March. He had requested the government-owned NTPC to lift additional quantities of coal so that stocking capacity at mines was freed up, enabling them to produce more.

Referring to the proposal to have five new ultra-mega power projects (UMPPs), each of 4,000-MW capacity, he wondered whether it was worth pursuing the UMPPs that relied on imported coal. It was for the States to decide, especially coastal States such as Tamil Nadu, Gujarat and Maharashtra, where the cost of transporting coal from mines was high.

His worry was how the one billion tonnes of coal that Coal India produced would be consumed. “I am trying to encourage more and more domestic coal UMPPs. There may be some possibilities of UMPPs on the coast through imported coal, but we have to be careful that we don’t get into a situation like the Tatas in Mundra,” Mr. Goyal said.

In the past fortnight, he said the Cabinet had cleared a proposal as a test case where the NTPC would bundle about 1,500 MW of unallocated thermal power from the Central pool with solar power and market both together. This would increase the cost of thermal power a little.

Renewable energy

“We have planned a 5X growth in renewable energy in the next five years. It is an article of faith for Prime Minister Narendra Modi. India is much more conscious today and all of us recognise that we have to leave behind a cleaner and greener country as we move forward,” he said.

On the Bill to amend the Electricity Act, 2003, which has been tabled in the Lok Sabha, Mr. Goyal said he hoped it would be enacted in the second half of the Budget session. Asked about the reservations among some States to the amendment Bill, which separated carriage from content, he expressed confidence that they would see the wisdom in changes that would increase both competition and efficiency in the sector. “If one or two States come on board, I think the rest will follow under pressure from the public. This is exactly what happened in the case of VAT,” he said.


Results of the above:

1. Net worth of Australian coal mines is falling down.

2. Green energy like Solar is getting cross-subsidized by Thermal energy.

3. Increase in power generation - approx. 20 GW (20,000 MW) came online during last 9 months! That is the total installed capacity of Pakistan. Note: At this rate, by 2017 - India may add @100-125 GW of electricity!*

[* Thumb rule calculation., feel free to point out errors]

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 09 Mar 2015 09:29

Rise in coal and electricity generation will have a multiplier effect on all other sectors of economy, whether it's agriculture, industry or services. Stable electricity output will drive consumer goods consumption. High coal output also feeds two other critical core industries - steel and cement production, both of which drive economic growth as well.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Sachin » 09 Mar 2015 10:48

Suraj wrote:After the coal auction, the spectrum sales are also outdoing estimates, with assured revenues of at least Rs.86,000 crore ($14 billion)

Now that it is established that the previous government did a very sloppy job on auctioning these priced resources, will the spectrum related income accrue to the Central Government? The coal auction funds seems to be given to the respective states - which most likely they would squander. But if the funds coming through spectrum allocation is efficiently used by central government, it would make life simpler for them.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby pankajs » 09 Mar 2015 10:55

Mining it self will drive demand in heavy commercial vehicle, Freight demand and all allied goods and services and thus help lift the overall economic activity within the country.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Suraj » 09 Mar 2015 11:01

Sachin wrote:
Suraj wrote:After the coal auction, the spectrum sales are also outdoing estimates, with assured revenues of at least Rs.86,000 crore ($14 billion)

Now that it is established that the previous government did a very sloppy job on auctioning these priced resources, will the spectrum related income accrue to the Central Government? The coal auction funds seems to be given to the respective states - which most likely they would squander. But if the funds coming through spectrum allocation is efficiently used by central government, it would make life simpler for them.

Yes telecommunication and the control of spectrium comes under the union list, not states list. So the money goes to the centre. For the coal auction, the bid and earnest deposit goes to the center I think. The mine lifetime annual payments go to the states.

I don't think money going directly to states will be necessarily squandered. Some of it may, but they're unlikely to do any worse than the center has already done in the last 6 decades. Greater fiscal freedom and competition is a positive influence, rather than a constraining negative one. It is upto the public to vote for the entities who productively put the money to work.

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Re: Indian Economy - News & Discussion Oct 12 2013

Postby Sachin » 09 Mar 2015 13:01

Suraj wrote:Yes telecommunication and the control of spectrium comes under the union list, not states list.

There are rumours that since the spectrum got auctioned for a high value, the telecom companies would raise their tariffs and pass the burden to the subscribers. I feel TRAI etc. are there just to regulate such things.


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