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Indian Economy News & Discussion - Aug 26 2015

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rahulm
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby rahulm » 28 Aug 2017 12:25

[url=Govt mulling 2% relief on GST for digital payments]http://timesofindia.indiatimes.com/business/india-business/govt-mulling-2-relief-on-gst-for-digital-payments/articleshow/60250385.cms[/url]

As predicted :

The steps come at a time when there has been a fall in electronic transactions over the past few months. While they had picked up massively till March this year, the volumes have been coming down thereafter as the availability of cash went up.


As per the RBI, the number of electronic transactions went up from 67 crore in November last year to a peak of 89 crore in March this year. However, only 84 [crore] (sic) transactions were recorded in June.


The good news is the GOI is monitoring electronic payments trend and responding.

I have seen and experienced many establishments over the past few months stop accepting PayTM and 'swipe machine not working Sir'. People mostly and water will always take the path of least resistance.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby yensoy » 28 Aug 2017 14:45

tandav wrote:How about creating on demand /cloud manufacturing factory concept... you import the most advanced machines for manufacturing and setup an industrial park with trained technicians on each machine. The machine is rented for job works by anybody with requirement An advanced Amazon type Intra factory logistics grid would move parts from one machine to the other as the work progresses


Bespoke manufacturing is great for prototypes and limited runs but not very practical for production in terms of costs. You could use a milled or 3D printed part for a prototype but in production runs you will be stamping them out on the cheap. Of course you do have players like Flextronics and HTC who are contract manufacturers operating at scale. Unlike computation - software/cloud, BPO or KPO which is highly fungible, manufacturing jigs and assemblies are very component specific, capital intensive and need expert operators.


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Re: Indian Economy News & Discussion - Aug 26 2015

Postby tandav » 29 Aug 2017 17:19

yensoy wrote:
tandav wrote:How about creating on demand /cloud manufacturing factory concept... you import the most advanced machines for manufacturing and setup an industrial park with trained technicians on each machine. The machine is rented for job works by anybody with requirement An advanced Amazon type Intra factory logistics grid would move parts from one machine to the other as the work progresses


Bespoke manufacturing is great for prototypes and limited runs but not very practical for production in terms of costs. You could use a milled or 3D printed part for a prototype but in production runs you will be stamping them out on the cheap. Of course you do have players like Flextronics and HTC who are contract manufacturers operating at scale. Unlike computation - software/cloud, BPO or KPO which is highly fungible, manufacturing jigs and assemblies are very component specific, capital intensive and need expert operators.


And I find in India job works for making machines requires a lot of processing and most of the job work, from bending, welding, stamping to painting etc most of the machines and experts are under utilized since there is no ability of know who has which resource lying idle... An UBER like database which can map/reveal to potential users such under utilized resources would be a massive win.

For example Rs 10 Cr + equipment (like 5 inch sheet bending equipment) are used only once a week by their original indenters, these resources should be utlized 100% however they are locked away inside silos and soon the ability/skills to use it is lost

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 29 Aug 2017 18:56

PDS dealers quitting as corruption subside in PDS due to DBT.

http://m.timesofindia.com/india/as-e-ca ... 267460.cms

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby yensoy » 29 Aug 2017 22:35

^^^^ Corruption and various such leakages kept a lot of the population fed and a few fattened. As the system gets cleaned up, it will be extremely important to ensure that the money saved is used to create jobs, lots of jobs. It won't matter that the system is clean. Even the crony capitalists who have taken unrepayable loans from SBI & its ilk have done their bit in providing jobs to lakhs of people while enriching themselves.

I hope the government realizes that cleanup by itself is negative for jobs, and the proceeds must be ploughed right back into the economy, twice over, so we have job-full GDP growth.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 29 Aug 2017 23:14

http://www.hindustantimes.com/business- ... DHBiI.html
India’s maiden GST revenue mop-up got off to a bumper start, with finance minister Arun Jaitley saying on Tuesday that taxes worth Rs 92,283 crore were collected in July from just 64.42% of the total taxpayer base.

Tax collections for July, the first month when a unified Goods and Services Tax (GST) was implemented across the country in place of more than a dozen central and state levies like excise duty, service tax and VAT, are likely to further go up when all the tax payers file returns.

The collections so far are in excess of the finance ministry’s internal estimate of Rs 91,000 crore.

So far, 38.38 lakh taxpayers accounting for 64.42% of the total businesses, who had registered in July, filed returns. As per registration, 59.57 lakh businesses should file return for July.

“The 64.42% taxpayers have paid Rs 92,283 crore in taxes for July,” Jaitley told reporters in New Delhi.

Of this, as much as Rs 14,894 crore has come in from the Central GST (CGST), Rs 22,722 crore from State GST (SGST), Rs 47,469 crore from Integrated GST (IGST) and Rs 7,198 crore from compensation cess levied on demerit and luxury goods.

The minister said that if budget estimates are extrapolated to arrive at a monthly collection number, the Centre should have got Rs 48,000 crore and all states put together another Rs 43,000 crore.

The deadline for filing first monthly return and payment of taxes under the GST ended on August 25. However, businesses that availed of transitional credit were allowed to file returns till August 28 after paying taxes on self-assessment basis by August 25.

Jaitley said that late payment is allowed on payment of a nominal Rs 100 per day on Central GST and an equivalent amount on State-GST.

As per the tax sharing formula, the Centre will compensate states for any revenue loss calculated on a base year of 2015-16 and assumed revenue growth of 14%.

“In sum total we seem to be comfortable, but we will have to break up the figures finally to see if any specific state has not had that 14% in which event, out of this compensation cess that particular state will have to be compensated. At least the red line seems to have been crossed,” he said.

In July of last year, Rs 31,782 crore of excise duty was collected and Rs 19,600 crore of service tax. There is no estimate for the combined sales tax or VAT collection by states.

Dissecting the July GST collections, Revenue Secretary Hasmukh Adhia explained that the Rs 47,469 crore IGST, which also includes Rs 20,964 crore on account of imports, would be apportioned between the Centre and states based where the taxes were due.

Adhia also said the figure for SGST collection was higher than CGST because many businesses claimed credit for IGST paid while paying CGST. Hence, net payment of SGST was more.

With regard to collection impacting the fiscal deficit target, he said “it is too early to comment”.

Explaining the reason, he said now that the internal estimate has been breached in the first month of GST rollout, it means that many businesses that were otherwise not paying taxes were coming into the net.

“You will have to wait for few more months to study the pattern... A more efficient taxation system checks evasion, brings in non-filers into the system; (now it is) more difficult to evade (taxes) -- that seems to be the initial first reaction,” Jaitley said.

He said the total GST collection is Rs 92,283 crore and the figure will increase with more compliance after late comers file returns.

With regard to registration, Jaitley said 72.33 lakh businesses have migrated to GST Network. Of this, totally migrated is 58.53 lakh and those who have not completed all the registration formality is 13.80 lakh.

Also the number of new registrations are 18.83 lakh.

hanumadu
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 29 Aug 2017 23:46

So far, 38.38 lakh taxpayers accounting for 64.42% of the total businesses, who had registered in July, filed returns. As per registration, 59.57 lakh businesses should file return for July.


With regard to registration, Jaitley said 72.33 lakh businesses have migrated to GST Network. Of this, totally migrated is 58.53 lakh and those who have not completed all the registration formality is 13.80 lakh.


So only 38 lakh out of 72 lakh business who have partially or totally migrated to GSTN have paid taxes. That's only 52%. Assuming most of the others are tax paying businesses and will complete migration, the govt will be expecting a bonanza tax collection.

Business who have not migrated to GSTN, what are their options for paying tax? Do they pay some other kind of tax?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 30 Aug 2017 00:00

hanumadu wrote:Business who have not migrated to GSTN, what are their options for paying tax? Do they pay some other kind of tax?

Parsing the article, they're just late to file. They still file GST. After August 28 they also pay a Rs.100 per day fine.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby VKumar » 30 Aug 2017 00:02

Very heavy rainfall in Mumbai, the highest after the 2005 cloudburst, has shut down the city. Tomorrow is declared holiday by the Chief Minister, as a precaution, also as civic services are fully stretched. What a huge loss for the national financial capital. Some low lying areas seeing knee deep and even waist level flooding, as every year.

One would hope for better management management by the municipality but they haven't learnt their lessons.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 30 Aug 2017 00:06

Suraj wrote:
hanumadu wrote:Business who have not migrated to GSTN, what are their options for paying tax? Do they pay some other kind of tax?

Parsing the article, they're just late to file. They still file GST. After August 28 they also pay a Rs.100 per day fine.


100 for SGST and 100 for CGST. But my question was regards to those businesses that do not want to register for GSTN and not pay GST. Is there a way they can pay a minimum tax if their revenues are under a certain threshold and not bother with GST at all.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 30 Aug 2017 01:34

The roll out of GST seems to have been very smooth except one minor incident when GSTN could not handle the rush as the deadline loomed. Touchwood.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nash » 30 Aug 2017 12:09

$45 billion gold-en battle has just begun & Modi is leading the charge

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

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 30 Aug 2017 21:11


Supratik
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 30 Aug 2017 21:21


tandav
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby tandav » 30 Aug 2017 21:23

VKumar wrote:Very heavy rainfall in Mumbai, the highest after the 2005 cloudburst, has shut down the city. Tomorrow is declared holiday by the Chief Minister, as a precaution, also as civic services are fully stretched. What a huge loss for the national financial capital. Some low lying areas seeing knee deep and even waist level flooding, as every year.

One would hope for better management management by the municipality but they haven't learnt their lessons.


No issues in most places in Mumbai... Airport is back and running... power is fine... only the low lying areas are affected. Train services affected. People have opened their doors and hearts and helped all those stranded.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby James » 31 Aug 2017 13:00

I have a few questions on the basic working of DBT (Direct Benefit Transfer) which is to replace the PDS (Public Distribution System) of foodgrains. Currently, the PDS shops provide foodgrains at a subsidized rate [pls note all examples used are hypothetical nos, and may or may not be the correct ones]. So if the actual procurement price of 1 kg rice is Rs. 10 for FCI, then PDS price may be say Rs. 3 per kg. This leads to a subsidy of Rs. 7 per kg.

The DBT scheme now proposes to transfer this amt. of Rs. 7 directly to the customer so that he can purchase from the market himself.

This is explained here: http://vikaspedia.in/social-welfare/dir ... t-transfer
Specifically
in Public Distribution System (PDS), Food Corporation of India (FCI) is the Government agent responsible for procurement, movement, storage and distribution of food grains to Fair Price Shops. FCI issues the food grains at subsidised rates, as fixed by the Government. The rates so fixed do not cover the full economic cost incurred by the Corporation. The difference represents the consumer subsidy for the PDS, and is paid to the Corporation by the Government of India.


But the market price will definitely be higher than the procurement price of FCI. Whereas the consumer will get the DBT only to the extent of what FCI would have paid, so net net the consumer would tend to out lose by having to a market rate which is much higher than the sum of subsidy received plus the subsidized rate that he would have otherwise paid. So how will this issue be resolved?

Secondly, at the time of temporary spikes in prices, the PDS customer is insulated as the PDS price does not vary so much. However when PDS is done away with and DBT kicks in fully, then that consumer would be more prone to the vagaries of market prices. And as these are the most vulnerable section of society (economically), hence the pain they would feel would be more. Will the DBT payout be more in such cases? How will track prices and to what level of micro-markets?

Of course, there are many flaws with the PDS such as unscrupulous PDS retailers hoarding good quality grains and giving poor quality stock to PDS consumers. But will dismantling the PDS lead to more problems than it solves?

Any thoughts on this?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 18:48

The choice will be with the person receiving the DBT. He can still buy it from the kirana PDS store at the subsidized price or top it up with his own money and buy it from the market. With DBT and economic growth the PDS system is going to die out.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 18:49

Worrisome slowdown in GDP growth to 5.7%. Needs analysis.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 18:50

India CIC now similar to advanced countries. Demo effect. Need to see if it is maintained.

http://www.financialexpress.com/economy ... bi/834251/

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

Postby Karthik S » 31 Aug 2017 18:51

Can stagnant or in few places depreciating real estate prices contribute to GDP slow down? Because during UPA second term, real estate prices contributed significantly to GDP growth figures than any job creation.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 18:55

I think it is a honesty price and the system will adjust. How fast is the question. There were several members on BRF cribbing about demo. It clearly suggests that many in the informal economy have not adjusted to the new way.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby SaiK » 31 Aug 2017 19:40

India's Q1 GDP growth slows to 3-year low of 5.7% from 7.9% in the same quarter last year

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

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 31 Aug 2017 20:01

Supratik wrote:India CIC now similar to advanced countries. Demo effect. Need to see if it is maintained.

http://www.financialexpress.com/economy ... bi/834251/


the ratio cannot be everything. indonesia with a very low ratio is as corrupt or more than india, while japan as article notes has a high cash ratio but known as a clean governance.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 20:58

In advanced countries including Japan corruption are usually at higher places. Petty corruption is almost non-existent. Cash fuels petty corruption in India e.g. a babu accepting bribes leading to 1-2 crore of BM. But yes, it is just one of the parameters.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby samirdiw » 31 Aug 2017 21:02

In the end, India will still be trapped in debt
Massive administrative reforms would be needed to cut corruption and waste.

here is a hidden disease eating into India's Budget and it is quite incurable. It is called a "debt trap" and its cause is simple — greed. Media chatter over the upcoming Budget has told us India's problem is that it spends much more than it earns. That is all the term "fiscal deficit" means. What is less discussed is how the government fills the gap between its earnings and spending through relentless borrowing. The Centre's total debt is now a staggering Rs 4,700,000 crore. Include the states' debt and India's total government debt is Rs 6,500,000 crore, approximately 65% of its GDP.

"Oh, that's okay, nothing to worry about," a bureaucrat said breezily. "Look at the United States. Its debt is 75% of its GDP."

But the figure is so huge that New Delhi now has to borrow money just to pay the interest due on its old loans. This is the deadly disease called the "debt trap" and it was the UPA's parting gift to the nation. In its last year in power, the UPA took new loans of Rs 457,000 crore, more than the Rs 427,000 crore interest it paid on old loans. Though these figures were public and showed India had technically fallen into a debt trap, they were ignored.

Blithe comparisons to the US miss or wilfully ignore the crucial fact that the US borrows money at 1-3% interest rate, while India borrows at 7-9%. So though the US' debt is higher than India's, its interest payments are lower. Only 6% of the US federal budget goes to interest payments, while for India it is 25%. The US also borrows in its own currency, a luxury no other nation enjoys.

{
India is neck-deep in debt because successive governments have got the nation hooked onto populist schemes replete with corruption.
India's situation is worsened by the reasons the government has borrowed so much. National debt is understandable if the money is used to build infrastructure
or fund emergencies. For example, America's debt is at all-time highs because it has fought just two wars, printed $2.5 trillion to stymie the sub-prime crisis and expanded its intelligence and military capabilities in response to 9/11. America has also invested heavily in free schooling, social security, and now, universal healthcare.

India is neck-deep in debt simply because successive governments have got the nation hooked onto populist schemes replete with corruption. Food, fuel and fertilizer subsidies, wonky welfare programmes and spiralling defence spending swallow 30% of India's budget. With interest eating up 25%, only about 40% of India's budget is available for everything else, including health and education. Even in this there is widespread waste and corruption.

Normally, in this column I proffer solutions to the problems I highlight. But in this case there are none at hand.

To break out of the debt trap, the government would have to raise revenues and cut spending. Indians need to realise that while the state must help the poor, it cannot mollycoddle the middle-class. Voters would have to accept that cheap fuel, food, electricity, water and cooking gas are not birthrights.

Those backing huge defence spending would need to see one cannot build a first-class military with a third world economy. Massive administrative reforms would be needed to cut corruption and waste.

Lastly, citizens would need to embrace the fact that apart from voting it is also their basic duty to pay taxes honestly.

In our hearts we know these are pipe dreams. Politicians' short-term electoral goals have combined with our own myopic hunger for free lunches to create a deadly cocktail of insatiable greed that demands instant gratification. We want it all and we want it now, even if we cannot afford it.

While our parents laboured and saved, even if it meant depriving themselves just so we could have a better life, we are repaying them by living it up and selfishly passing the bill on to our kids.

Changing this will take years of disciplined effort, political maturity and social transformation. And there is no sign of this happening. For all the personal desire Prime Minister Narendra Modi and Finance Minister Arun Jaitley may have to do the right thing, the political and social compulsions for continuing handouts and huge defence spending are too powerful.

So on 10 July, when Jaitley bravely stands up in Parliament to present the Budget we should know he won't be able to do much. No man can. The basic structure of India's economic choices has fallen into a pattern that is impossible to change. This is the reason India has not had a landmark budget since 1996. Jaitley can nip, tuck, tweak, whittle and cut. And he can do some good.

But in the end India will still be trapped in debt. And we will only have ourselves to blame.


http://www.sunday-guardian.com/analysis ... ed-in-debt

Rs 6,500,000 crore = around 1 Trillion dollars? Thats a lot of money

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 31 Aug 2017 21:24

All this issues are being addressed by Modi govt. It has been only three years. Don't expect overnight chsnges.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 31 Aug 2017 23:08

@JhaSanjay

Sanjay Jha Retweeted News18
That means India has slipped to around 3.75% GDP on the old GDP index where Congress/UPA had scaled 9.6%, and averaged over 7.8% in 10 yrs.


Keeping this to technical discussion only, Is it possible to accurately calculate or extrapolate the GDP measured under the new series (base year 2011-12) to an older series (2004-5)? Or the whole process of calculating the GDP must be done all together anew for any change in the base year?

TIA.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby g.sarkar » 01 Sep 2017 00:03

http://economictimes.indiatimes.com/new ... 306431.cms
Demonetisation Part II: Modi's black money elimination drive has just begun
ECONOMICTIMES.COM|Aug 31, 2017, 03.30 PM IST
NEW DELHI: With 99 per cent of the demonetised 500 and 1,000 rupee notes having returned to the banking system, has demonetisation failed to serve its purpose? That may not be true, because Project Demonetisation is not over with the mere return of junked notes. The more important part begins now, or has already begun. With so much of the cash in the mainstream now, the government will scrutinise the deposited cash and a good part of it may turn out to be black money.
Demonetisation has already expanded the tax base. Individual income tax returns jumped 25% so far in the current financial year as the authorities turned up the heat on evaders after demonetisation. The returns filed by individuals were 25.3% higher at 2.79 crore as of August 5, an addition of about 55 lakh from 2.23 crore in the corresponding period of 2016-2017. Growth in filing in the previous year was 9.9%.
An estimated Rs 15.4 lakh crore worth old 500 and 1000 rupee notes were demonetised on November 8. As most of it has come into the banking system, the money will be under the tax scanner. Of course, the black part of this money will become white, but not before it is taxed. Such a large amount entering the tax system is itself a success of demonetisation which was touted as a drive against black money.
......

http://www.firstpost.com/india/demoneti ... 93957.html
Demonetisation: Narendra Modi has won the battle of perception; Opposition barking up the wrong tree
Gautam

Suraj
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 01 Sep 2017 00:37

I think Q1 data will be too 'noisy' to make much sense of. Q1 2017-18 is the final quarter before GST came into effect (it came into force on July 1). A lot of business and especially manufacturing activity seemed to have slowed, though I also suspect there's an element of unreported activity that was not collected on time due to changes related to reporting results for GST. GDP figures will show a rise in Q2 because of higher reported tax collections.

There's also an element of high base effect since Q1 in the last year was 7%. But I think the principal factor is the huge amount of transitional activity related to changeover to GST that causes data to not be clear enough to read enough into.

What I consider FAR more important, is that GFCF data (investment to GDP ratio) has arrested its downward slide is and is back up close to 30% again. Growth is driven by sustained investment. Falling GFCF on account of the debt on the books of companies and banks was affecting investment/GDP . It was critical that the slide be arrested, and I'm glad to see it looking up. Rising GFCF is a leading indicator of GDP growth in later quarters. Back during the fast growth of mid 2000s, GFCF was ~36-37%.
GDP numbers: A manufacturing blow but investments are turning the corner

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Kakkaji » 02 Sep 2017 06:17

While the Congress and other usual suspects make noise about 'contracting GDP', the recent data has already started moving in the other direction:

Respite after rough ride - Factories spring back to life

New Delhi, Sept. 1: An independent business survey today showed that the country's factory activity unexpectedly expanded in August, snapping back from a contraction the previous month, offering some respite to the Modi government that had been scalded by embarrassing economic data on demonetisation and GDP growth over the last two days.

The rebound suggests that disruptions to production stemming from confusion over the goods and services tax (GST) good have eased, holding out hopes that India's economic growth rate, which unexpectedly slipped to a three-year low of 5.7 per cent in the April-June quarter, may also improve in the current quarter.

The Nikkei India Manufacturing Purchasing Managers' Index (PMI) rebounded to 51.2 in August from a low of 47.9 in the previous month, indicating a substantial turnaround from July's GST-related contraction.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Kakkaji » 02 Sep 2017 06:22

More:

Niti upbeat about GDP

New Delhi, Sept. 1 (PTI): Economic growth in the second quarter of 2017-18 is expected to soar to 7-7.5 per cent on the back of a good monsoon and clarity over the GST, Niti Aayog's new vice-chairman Rajiv Kumar said today.

The GDP growth rate slid to a 3-year low of 5.7 per cent in the first quarter.

"In the July-September quarter, economy will grow 7-7.5 per cent. Destocking in anticipation of the GST is complete and now there is more clarity on the new tax regime,"


Panagariya had kept saying that he is not bothered about the current deceleration, and that he was confident that India will get to an 8-8.5% growth in a couple of years.

Dhoti shivering with one quarter of data is not wise.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby samirdiw » 02 Sep 2017 17:27

It is time for the govt to support specific industries(where we don't have much base currently) and make them competitive wrt to China and rest of the world. While with better taxation and removal of red tape many industries would automatically come up there is a need for focused support by govt. This can come about by much larger tax cuts for specific industries, internal design, component manufacturing and exports (e.g. say 5% cut for each factor). No percentage cuts for screw driver giri. These are

    Defense Manufacturing - DIvest and go public (in western sense or privatize as we call it in India) from govt controlled.
    Machinery Manufacturing
    Electronic /Computer Manufacturing
    Electrical equipment Manufacturing

Huge gains in these will support higher growth, lower deficits, reduce Chinese exports, higher employment, Industrialize the nation and move to manufacturing a large percentage of GDP. It is not easy to make gains in these areas without focused investment and support.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Hari Seldon » 02 Sep 2017 19:23

samirdiw wrote:It is time for the govt to support specific industries(where we don't have much base currently) and make them competitive wrt to China and rest of the world.


+1.

However, WTO complicates things. As the case of GoI's domestic sourcing requirement for solar panels showed (which we lost, BTW).

Wonder how PRC is able to pull it off avoiding WTO so well, I have to wonder.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 02 Sep 2017 20:47

One easy way around WTO requirements is that for all things imported into India., the end-user documentation or instruction set or assembly manual or manuals or whatever is required for users to understand the product including disclaimers must be in all local languages., that is all of 26 languages need to be supported. And the doc writers need to be sourced locally since they understand it better.

A toilet seat might be imported and sold in Gujarat and TN as well., of course the instruction set to install it must cover for both the languages and other 24 languages as well.

That goes for fire crackers too. Or cell phones. Or switches/routers/<whatever>.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby putnanja » 02 Sep 2017 21:08

disha wrote:One easy way around WTO requirements is that for all things imported into India., the end-user documentation or instruction set or assembly manual or manuals or whatever is required for users to understand the product including disclaimers must be in all local languages., that is all of 26 languages need to be supported. And the doc writers need to be sourced locally since they understand it better.

A toilet seat might be imported and sold in Gujarat and TN as well., of course the instruction set to install it must cover for both the languages and other 24 languages as well.

That goes for fire crackers too. Or cell phones. Or switches/routers/<whatever>.


I believe as per WTO regulations, you cannot insist on extra rules for imported items that's not imposed on domestic producers. The same will need to be applied to domestic manufacturers too.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby guru.shetty » 02 Sep 2017 22:35

Some simple theorizing (without a lot of ifs and buts) on low GDP growth over the last 3 years:

* Govt is inherently inefficient. It has become increasingly better at tax collection over the last 3 years. It has been able to reduce fiscal deficit drastically mainly because of maintaining fuel prices even though crude oil price has come down drastically. The savings are not being passed to common man, where it could be more efficient. Govt has been spending the money it has been collecting on infrastructure improvements and new subsidies (free LPG for example, that is being used for cooking does not add much to economy. People used to cook even before that). Because of corruption at various levels, that extra money has been converted into real-estate and gold. Both of which are not very good drivers of economic growth.

* Farm loan waivers simply put more money on inefficient farming techniques.

* Govt's infrastructure improvements have been in areas that do not increase efficiencies for transportation. For e.g., the only 2 long expressways built in India over the last 10 years have been built by Mayawati and Akhilesh Yadav. Adding more lanes to existing highways (without making them limited access expressways) which this govt has been concentrating on, does not help much with drastic improvements in time.

* With demonetization, the black money of small businesses, instead of running the economic engine, has gone back to the banks to sit there becoming inefficient. The Banks haven't been able to loan it out to businesses.

* With GST, smaller companies that did not pay taxes before are now forced to pay taxes. That efficient money now becomes inefficient money.

Govt's reforms with aadhar linked subsidies and GST will likely only show benefits over the long term.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 03 Sep 2017 11:39

^^ Really really sad to see such a statement on an economic thread., such statements puts con in economy!

1. Government is inefficient., cite crony corrupt leaders to prove the point.
2. Government is efficient in collecting the tax. Throw away the point #1 at this point., and just take this point selectively!
3. The tax paid is revenue lost by business and hence that money is not being re-invested and hence the economy is suffering.

There is something called "fiscal deficit"., with lower fiscal deficit, the cost of borrowing by the government is low. In nutshell, the government pays less to run the country. That is it becomes "efficient". Of course it can now raise new borrowings and put it to inefficient use like building statues or efficient use like building roads or other infrastructure.

Like this: https://www.bloomberg.com/news/articles/2017-02-01/modi-plans-59-billion-rail-road-push-as-bombardier-ge-invest

That creates further growth (removes inefficiencies and puts money back into peoples pockets) which leads to growth in economy.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby guru.shetty » 03 Sep 2017 15:26


1. Government is inefficient., cite crony corrupt leaders to prove the point.



It was not my intention to imply that *this* govt is inefficient. Intention was to say that most places in the world, governments are inefficient compared to private sector.

It is very important to remove black money from India and make Indians more tax compliant. The current tax compliance is very poor. But the question is, is this hurting economic growth over short term by removing the efficient money from private sector (and unorganized sector) and giving to government.

There has to be a explanation for low growth when the country's population is huge and increasing, a huge amount of people entering workforce age, but growth averaging around only 7%.

Is the vision around infrastructure spending sound? Are they spenfing where the return on investment over medium term is the best there can be? E.g Spending money over the last 3 years building 4 lane highways without biting the bullet and going for a expressway network. Can the goods move around from factories to port any faster on highways going through small towns?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 03 Sep 2017 20:34

Why is Indian economic growth currently maxing out at 7% or so? What are the bottlenecks as they existed in 2014, and what progress has been made in widening these 2014-2017? Have any new obstacles been created? Lastly, when will the benefits of clearing these bottlenecks become apparent?

I guess those are the questions that Guru Shetty is asking.
This article may give a start:
https://swarajyamag.com/economy/short-t ... modinomics
Short Term Pain, Long Term Gain: The Five Arrows Of Modinomics


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