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Indian Economy News & Discussion - Aug 26 2015

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby JayS » 10 Oct 2017 18:17

Prasad wrote:No. Idiotic decisions like having split tax rates for a/c & non a/c restaurants and stuff that vina was talking about is what shouldn't have happened in the first place. Of course this arises due to greed of state fm's who couldn't be bothered about making the rates rational and easy to understand but more of a 'revenue neutral' system (which is hilarious given fuel and alcohol aren't included).
It is good though that they're listening. Silver lining.


Agree on some obvious glaring stupidities done. But Even when everything was done professionally and good faith, still there were always some shortcomings bound to happen, since its a huge change. So its good that at least the system is nimble enough to correct its steps if it sees a reasonable public demand for something.

Alcohol and Fuel was kept out of GST because of state's greed. Two biggest revenue generators. This was precondition set by many states for accepting GST. Sometimes I feel we should abolish state governments' rights on a lot of things. They only impede progress.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby kvraghav » 10 Oct 2017 18:30

nam wrote:This sounds like using more money under the grab of GST. similar to as one member said GST is been applied on Personal loan Interest rates!

The problem is businesses that do not have competition or which have formed cartels for price control have all fired the price hike gun from Modi shoulders.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 10 Oct 2017 22:17

^^ The Indian small business has to learn. They need to learn to pay the taxes and they need to learn to stop giving dog biscuits and they need to learn to operate outside the margins of "tax arbitration".

It is good for the small business that they learn to follow the law*.

*This coming from the person who paid for dog biscuits. Inherited one business., started two more and had to close down all three. Money was sunk into manufacturing which was a non-starter. Thanks to the dogs and their penchant for biscuits. Small businesses like us demanded GST.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby kvraghav » 10 Oct 2017 23:07

I have a dress retail shop guy from whom I buy the jeans explaining to me how he will have to pay nearly 4 lakhs tax. When I told him that me being salaried still pay that much tax, he was shocked. Most of indias do not know what direct taxes are and that number is at 121 crore people. Talk to a ordinary guy who gets 1 lakh rental income about rent receipt and he has huge stories in return on investment regarding building costs but has enough money to buy fortuner. Why should 4 crore people subsidise others security and transport needs?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 10 Oct 2017 23:29

Why structural reforms like Demo and GST are painful but beneficial.

http://www.livemint.com/Opinion/zfJfZ5M ... India.html

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 10 Oct 2017 23:31

Corruption has reduced according to SBI research

http://economictimes.indiatimes.com/new ... s?from=mdr

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 10 Oct 2017 23:34

Lenders take control of Essar Power.

http://economictimes.indiatimes.com/ind ... s?from=mdr


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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 11 Oct 2017 09:43

^^ The above must be read in full

Daily labourers are worst affected, but permanent employees could also lose jobs as GST hits 12,000 hosiery units in the Ludhiana area.

Ludhiana: Manga Ram is proud that he works each day of each month. Despite his young age of 26, he’s an old hand in a hosiery factory in Ludhiana. But something around him has changed.

“There were 80-90 men working with me in this factory. Now there are only 50,” Manga Ram says.

First came demonetisation, then the Goods and Services Tax (GST). Now, the hosiery industry in Ludhiana is beginning to show signs of grave distress. A labour-intensive industry, it used to employ over four lakh workers, but 30 per cent of them have left looking for jobs elsewhere.

“Labourers have gone back to Uttar Pradesh and Bihar, where they came from. There is not enough work for them here,” says Manga Ram.

Ludhiana is home to almost 12,000 hosiery units, totalling an annual turnover of Rs 14,000 crore. But according to Darshan Dawar, president of Knitwear Club, the association of hosiery owners, this may not be the case for much longer, since business is down by 25 to 30 per cent.

“There are many small units which are holding on till this winter. If the season goes well, smaller units might remain afloat. But if demand falls further and order cancellations continue, more than 2,000 units will be closed by the end of the year,” he warns.

The trouble hasn’t hit the likes of Manga Ram, who is among the permanent employees in his factory. However, casual labourers hired to handle the extra seasonal workload or supplement trained workers are no longer needed.

Permanent workers also stand to lose their jobs in Ludhiana's textile units due to a slowing economy

Dawar says, “Daily wage jobs in the hosiery sector shrank following demonetisation, and this year there has been a further cut. We are getting fewer orders, and pending orders have been cancelled. Production has been affected, and in my unit alone, I have had to shunt out 25 daily labourers we employed.”

But permanent employees may yet lose their jobs, warns Dawar.

“Till now, we have retained our permanent staff, even while there is little or no work for them. We are hoping that the situation will improve. If we throw them out, we will have to later look for skilled men. But if no changes are announced for the hosiery sector, especially for the small- and medium-scale units, full time workers too stand to lose their jobs,” he adds.

Adverse impact of GST

Hosiery units claim that the imposition of GST has forced them to increase the selling price of their products. Also, there is now a need for larger amounts of working capital and cash in hand, which has pushed smaller or marginal hosiery owners off the map.

Dawar, whose Sunhill Knitware located in Bajwa Nagar manufactures knitted sweaters and pullovers, says: “I have had to increase the cost of my products by Rs 50 to Rs 100 a piece, and the buyers have refused to touch my products.”

The unorganised hosiery sector used to carry out business on a system of credit.

Hosiery units claim that the imposition of GST has forced them to increase the selling price of their products.

“Payments were made when the finished product was sold and we received payments. Now, the raw material cost plus its tax has to be paid for at the time of its purchase, for which we are taking loans at high interest rates. It takes time to produce and sell, and payments of the sale can take even longer,” explains Dawar.

“It might work out for those who have large scale units, but for small or micro units, taking bank loans and paying a huge amount of interest for months could mean end of their business.”

The cost increase is being attributed to the high GST on thread or yarn. It was earlier taxed at 3 per cent, and is now taxed at 5 to 12 per cent, reduced from the slab of 18 per cent on 6 October, following a meeting of the GST council.

“Before GST, the thread, which is a mix of acrylic and nylon, was available at Rs 350 per kg. Last week, the rate has been increased to Rs 405 per kg,” says Kapil Joshi, who runs E-marc hosiery products.

“The thread mills have created cartels and are quoting unrealistic prices. I cannot pass on the increase to my customer, as there is already a shortage of demand because of demonetisation. As a result, I have cut down on my margins. We are not sure that the reduction in GST on some yarns announced on Friday will lead to reduction in rates of raw materials,” Joshi adds.

Another factor affecting the industry is the GST imposed on job work.

“Suits, sarees, sweaters etc. pass through some hand work and machine work processes done by artisans. They work from home, are not trained, and don’t have big set ups,” explains Sonu Nilibar, coordinator of the Cloth Merchant Association of Ludhiana.

“These artisans are mostly illiterate and rarely keep accounts. Even if they are not in the GST net because they fall in the less than Rs 20 lakh category, to get bills from them is almost impossible,” he adds.


An entire informal and shadow economy is coming onboard into formalization and we are here cribbing instead of celebrating the event.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Yagnasri » 11 Oct 2017 09:51

We can celebrate all we want. But good thing also comes with a price. I wonder what will be the price of GST.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby arvin » 11 Oct 2017 10:01

Yagnasri wrote:what will be the price of GST.


Congress mukt bharat.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Yagnasri » 11 Oct 2017 10:03

That is not a price sir. It is a benefit.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 11 Oct 2017 10:32

^^ there is a chance those made redundant will vote non bjp. So don't count your chickens yet.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nandakumar » 11 Oct 2017 11:05

There seems to be some misconception about the SC ban on sale of firecrackers. The latest SC order suspends the operation of its own judgement/order(?) of Sep 12th. That in effect means it restors the operation of the earlier Nov 2016 order. What the Nov 2016 order of the SC did was to cap the number of temporary licenses for vending firecrackers at 500. That will be in place now. Is that adequate for boisterous/noisy celebration of Deepavali this year? Hard to say. As a corollary it is difficult to claim that justice has been rendered or grave injustice been caused to affected parties. The SC has boxed itself into a corner. It has suspended till Nov 1st its earlier order only because CPCB had in a submission before the Delhi High Court 20 years ago, claimed that sulphur dioxide emission is harmful to health and this fact was not brought to light at the time of arguments leading to the famous Sep 12th judgement. Citing this now is dubious at best. That apart, the second argument that weighed in with the SC was the fact that the earlier Nov 2016 was passed after Diwali was celebrated across the country before that date. Thus the SC never got a chance to examine whether its 2016 order had a salutary impact on ambient air quality during Diwali this year. Here again the problem for the SC is this. Is the evidence of one year good enough to come to conclusion that is statistically valid? Can we really conclude that, 'all other things were constant' Between Oct 18/19 of this Oct? That is not all. What if the CPCB measurement finds that there is statistically no significant variation in the air quality pre and Diwali days. Would the SC impose upon itself financial penalty as exemplary costs for diluting the pure pristine joy flowing from celebrating Diwali with fire crackers, without valid cause?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Aditya_V » 11 Oct 2017 14:13

India major Trade defecit over the last 5 years

http://commerce.nic.in/eidb/iecnt.asp

Trade deficit of USD 190 Billion in 2012-13 down to USD 109 Billion 2016-17

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nandakumar » 11 Oct 2017 15:47

Aditya_V wrote:India major Trade defecit over the last 5 years

http://commerce.nic.in/eidb/iecnt.asp

Trade deficit of USD 190 Billion in 2012-13 down to USD 109 Billion 2016-17

The link doesn't work. Any way, is this net of oil import bill?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vijayk » 11 Oct 2017 15:48

arvin wrote:
Yagnasri wrote:what will be the price of GST.


Congress mukt bharat.


The way campaigning by SCUM media and CON looters is going on, it is being successful. BJP better pay attention to urban voters.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 11 Oct 2017 16:18


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

Postby nam » 11 Oct 2017 16:40

vinod wrote:
nam wrote:Small business who want to escape showing their revenue can easily do it by under-invoicing. A potato chip maker can under-invoice his raw material by making a deal with the potato producer. The producer saves on GST and the chip maker can get a discount, which will cover up his input credit.

And what happens when he sells his chips? If the buyer demands a bill, he will end up invoicing more than the input!!! Its probably much easier for him to do it properly, than try and do the balancing trick every time! He is bound to make a mistake at some point.


The customer can ask for all the bills he want. Tax department is not concerned about the input cost. They want tax on sales. Unless IT can catch the potato producer red handed under invoicing, there is nothing they can do it.

This is what was done for years before GST, the famous.. "without bill" transaction. People will still do the same, GST or not. Ofcourse the producer will not bill transaction for enough amount which he can move around.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 11 Oct 2017 17:08

The deindustrialization of Punjab was proceeding even two years ago.
https://qz.com/572910/how-china-killed-punjab-inc/

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby pankajs » 11 Oct 2017 18:16

nam wrote:
vinod wrote: And what happens when he sells his chips? If the buyer demands a bill, he will end up invoicing more than the input!!! Its probably much easier for him to do it properly, than try and do the balancing trick every time! He is bound to make a mistake at some point.


The customer can ask for all the bills he want. Tax department is not concerned about the input cost. They want tax on sales. Unless IT can catch the potato producer red handed under invoicing, there is nothing they can do it.

This is what was done for years before GST, the famous.. "without bill" transaction. People will still do the same, GST or not. Ofcourse the producer will not bill transaction for enough amount which he can move around.

That might still be a bad bargain for the retails because a lower input cost means that his profit and taxable income will be higher. Income at the hands of individual as well as corporation is likely to be more expensive. Of course the cost/benefit will vary based on the GST and the Income tax rate rate applicable in each specific case but overall it makes sense for the retailer to not fudge the input cost.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby kumarn » 11 Oct 2017 22:26

Have been speaking to entrepreneurs and CA forms lately, the mid-size ones. One firm has 100+ crore profit, but declares only few lakhs on books. All of them are clear: with GST and NAMO around no more hiding of income. Have to come above board and declare income correctly. They are all planning for this.

I wouldn't be surprised if there is a massive surge in tax revenues over the next 2-3 years.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 11 Oct 2017 23:11

nam wrote:
The customer can ask for all the bills he want. Tax department is not concerned about the input cost. They want tax on sales. Unless IT can catch the potato producer red handed under invoicing, there is nothing they can do it.

This is what was done for years before GST, the famous.. "without bill" transaction. People will still do the same, GST or not. Ofcourse the producer will not bill transaction for enough amount which he can move around.


And under-invoicing like above starts the chain of black money. For moving black money around, large denominations of notes and with large circulation is needed. Further all this is funneled in RE creating artificial bubbles.

However DEMO put paid to the entire eco-system of black money. I am not talking about few lakhs or even crores here or there. I am talking about few 10s or 100s of crores - the middle and the big fish.

Now one can see why DEMO had to precede GST., otherwise GST would have been a failure.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 11 Oct 2017 23:14

kumarn wrote:Have been speaking to entrepreneurs and CA forms lately, the mid-size ones. One firm has 100+ crore profit, but declares only few lakhs on books. All of them are clear: with GST and NAMO around no more hiding of income. Have to come above board and declare income correctly. They are all planning for this.

I wouldn't be surprised if there is a massive surge in tax revenues over the next 2-3 years.


That's basically formalization of economy. Isn't this what we all wanted? Isn't it good for India in the long run? Will not this make the Indian economy more sturdy? And will not the growth - even if it is 5% y-o-y will be on firmer ground?

The way I think is simple - if 50% was informal economy., a 10% growth rate is same as 5% growth rate on 80% formal economy. Of course this are "thumb rule" numbers.

To your point: http://www.thehindubusinessline.com/economy/direct-tax-collections-jump-16-to-rs-386-lakh-cr-in-aprsep/article9900269.ece

Aided by better compliance from certain non-corporate assessees, the Centre’s net direct tax collections grew 15.8 per cent in April-September 2017 to ₹3.86 lakh crore. This represents 39.4 per cent of the total Budget estimate of direct taxes for 2017-18 (₹9.8 lakh crore).

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Supratik » 12 Oct 2017 01:11

The inefficient and corrupt will not survive in a proper law based market economy. People working in these setups will loose jobs. The nimble, efficient, law abiding ones will survive and grow and create jobs. Someone on the demo thread was complaining how he cannot survive without the informal economy as otherwise his competitors will kill his business. Now people like this have the opportunity to grab the market. It is a process of destruction and creation. Painful but necessary.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 12 Oct 2017 01:26

While the weavers in Bhiwandi's and Ludhiana are suffering, the Bangladeshi perception is that Indian competitiveness in the US garment market has increased.

http://www.thedailystar.net/business/in ... sh-1475272
For instance, India last year was the third biggest exporter of garment items to the US, which happens to be Bangladesh's single largest export destination.

In the first eight months of this year, India climbed up to the second spot, while Bangladesh slipped from the fourth position to the sixth, according to the US Department of Commerce.

“The rise of the Indian garment industry's competitiveness means we are losing our work orders to some extent,” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association.
Last edited by A_Gupta on 12 Oct 2017 03:33, edited 1 time in total.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby pankajs » 12 Oct 2017 01:48

Also IT will have access to the GSTN data and will cross verify. Sales turnover on IT form will have to match GSTN data.

i.e. One cannot claim higher VAT/ GST credit based on a higher sales but lowball the sales figures in the IT filing. That was common but not anymore.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby pankajs » 12 Oct 2017 01:51

Also note if the retailer or anyone on the chain fudges sales data the guy immediately above him will be at their throat to get his credit.

If the retailer does not fully report his sales figures that will cut the credit of the one immediately above and will come straight out of his pocket. Next time such a retailer will not get the supplies.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby TKiran » 12 Oct 2017 10:56

Deleted by moderator
Last edited by Gerard on 13 Oct 2017 04:09, edited 1 time in total.
Reason: Post deleted. User warned.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Aditya_V » 12 Oct 2017 11:41

nandakumar wrote:
Aditya_V wrote:India major Trade defecit over the last 5 years

http://commerce.nic.in/eidb/iecnt.asp

Trade deficit of USD 190 Billion in 2012-13 down to USD 109 Billion 2016-17

The link doesn't work. Any way, is this net of oil import bill?


Here is the updated link. It includes OIL Imports and OIl exports. Lets not forget Refined Petroleum products are our Biggest export. So when "Media" was saying exports were falling it was just the price of Refined Petroleum Products falling due to Oil prices.

http://commerce.gov.in/eidb/default.asp

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Aditya_V » 12 Oct 2017 11:59

The intresting part of the data is this item of export which constitutes around 5-6% of our total exports worth around USD 14 to 15 Billion a year.

NUCLEAR REACTORS, BOILERS, MACHINERY AND MECHANICAL APPLIANCES; PARTS THEREOF.

BTW Refined Petroleoum Products exports in Value have dropped by USD 32 Billion from 2012-13 to 2016-17. From 21% of our exports to 11% of our exports

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Aditya_V » 12 Oct 2017 12:10

Going through Export data, our 2011-12 we exported an abnormal level of High speed Diesel in 2011-12 of 155,736 tonnes of HSD , before and after this year we exported only in the 40000 tonne to 50000 tonne range, what was exceptional that year.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Aditya_V » 12 Oct 2017 12:34

Going through data, imported coal is down, but OIl in terms of Quantity has gone up from 153000 tonnes in 2011-12 to 215000 Tonnes in 2016-17. I guess the number of Vehicles has also increased on the road.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby chaitanya » 12 Oct 2017 19:24

Factory output jumps to 9-month high in August, inflation eases

NEW DELHI: Industrial production grew at a nine-month high of 4.3 per cent in August, mainly on account of robust performance of mining and power sectors coupled with higher capital goods output, official data showed today.
...
The output growth in manufacturing sector, which constitutes 77.63 per cent of the index, however decelerated to 3.1 per cent in August from 5.5 per cent a year ago.

The output of the mining and electricity sectors grew at 9.4 per cent and 8.3 per cent as compared to August 2016.

As per use-based classification, the growth rates in August 2017 over August 2016 are 7.1 per cent in primary goods, 5.4 per cent in capital goods, (-) 0.2 per cent in intermediate goods and 2.5 per cent in infrastructure/ construction goods.

The consumer durables and consumer non-durables sectors recorded growth of 1.6 per cent and 6.9 per cent, respectively.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Philip » 12 Oct 2017 22:07

Tax collection increases are spent on govt. funded works.The most inefficient of all.How much of a rupee actually is spent on its purpose,how much swallowed up by politico-babu corruption? Secondly,it is spent on central govt. expenditure for admin/babu purposes,where an inflated ever increasing bureaucracy and massive wastage occurs.In the informal economy,most money spent is direct.Less siphoning off by babudom barring the usual bribes given. It is the prudent allocation and implementation of the taxpayer's money ,with the least amount of brigandry by politico-babu gangs that matters not increased tax collections.That could also be construed as official theft of an individual's wealth which the Demon/GST scheme has been accused of by many.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nam » 12 Oct 2017 22:19

I don't know if this is just hot air or there is substance to it.

http://www.financialexpress.com/india-news/narendra-modi-training-for-1-lakh-students-in-japan-sankalp-skills-acquisition-knowledge-livelihood-promotion-strive/

There is a plan to send our guys for training in Japanese industry. If this is properly implemented, this could create a phenomenal up gradation in skills.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 12 Oct 2017 22:59

Philip wrote:Tax collection increases are spent on govt. funded works.The most inefficient of all.How much of a rupee actually is spent on its purpose,how much swallowed up by politico-babu corruption?


This is a circular argument., what you are stating is that you will NOT pay taxes since you THINK that taxes are spent inefficiently and much swallowed by politico-babu corruption and IRONICALLY you will bribe the same babu to look the other way on your tax evasion.

In the informal economy,most money spent is direct.


What you are stating is that "informal economy created by TAX EVADERS is the best way of prudent allocation and implementation of TAX PAYERS money!

Of course "Kitna Gaya!?". How much did you lose?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Prem » 13 Oct 2017 01:21

A_Gupta wrote:While the weavers in Bhiwandi's and Ludhiana are suffering, the Bangladeshi perception is that Indian competitiveness in the US garment market has increased.http://www.thedailystar.net/business/in ... sh-1475272
For instance, India last year was the third biggest exporter of garment items to the US, which happens to be Bangladesh's single largest export destination.In the first eight months of this year, India climbed up to the second spot, while Bangladesh slipped from the fourth position to the sixth, according to the US Department of Commerce.“The rise of the Indian garment industry's competitiveness means we are losing our work orders to some extent,” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association.


Decade ago many Indian garment exporters shifted to BD. They might be returning home because of improved business environment.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 13 Oct 2017 03:31

Prem wrote:
A_Gupta wrote:While the weavers in Bhiwandi's and Ludhiana are suffering, the Bangladeshi perception is that Indian competitiveness in the US garment market has increased.http://www.thedailystar.net/business/in ... sh-1475272


Decade ago many Indian garment exporters shifted to BD. They might be returning home because of improved business environment.


Also the daughter of one of the exporters who shifted his factories from India to BD was killed in a terrorist hold up in BD.

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

Postby hanumadu » 13 Oct 2017 03:43

http://www.financialexpress.com/economy/growth-speeds-up-as-industrial-production-rises-4-3-in-august/892084/

Double bonanza for economy: Macros improve as inflation down, factory output up

The industrial production, which grew a meagre 1.2%, bearing the brunt of a dismal show of the manufacturing sector, made a remarkable comeback at 4.3%. Both CPI and IIP defied conservative predictions, including ET Now’s, which had predicted CPI to rise 3.4% and IIP to rise 2.5%. However, the with August’s industrial production at 4.3%, it is inching towards 4.5% growth in July last year.
The mining sector in August grew 9.4% as compared to 4.8% in July, while manufacturing sector grew 3.1% as compared to 0.1% in the previous month. The electricity sector also rose with its output at 8.3% as compared to 6.5% in July. Primary goods output was 7.1%, up from 2.3% in July. Capital goods output grew 5.4% from -1% in the previous month.


Can some one estimate growth for the second quarter if September shows similar results?


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