Bharat Rakshak Forum Announcement

Hello Everyone,

A warm welcome back to the Bharat Rakshak Forum.

Important Notice: Due to a corruption in the BR forum database we regret to announce that data records relating to some of our registered users have been lost. We estimate approx. 500 user details are deleted.

To ease the process of recreating the user IDs we request members that have previously posted on the BR forums to recognise and identify their posts, once the posts are identified please contact the BRF moderator team by emailing BRF Mod Team with your post details.

The mod team will be able to update your username, email etc. so that the user history can be maintained.

Unfortunately for members that have never posted or have had all their posts deleted i.e. users that have 0 posts, we will be unable to recreate your account hence we request that you re-register again.

We apologise for any inconvenience caused and thank you for your understanding.

Regards,
Seetal

Indian Economy News & Discussion - Aug 26 2015

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
Avtar Singh
BRFite -Trainee
Posts: 20
Joined: 22 Jan 2017 02:07

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Avtar Singh » 08 May 2017 23:30

I really hope India is able to avoid this nonsense from the west;

https://www.rt.com/shows/renegade-inc/3 ... -cleansed/

There was only 1 really successful model in the west; germany founded on the "mighty Mark"
savings (and interest on said savings), investment, productivity, low inflation.
They have been dealt with by the ASEs (Anglo Saxon Elites) via the formation of the ECB.

I may be paranoid but I am sure the americans will want an East India mk2 for India..
The accountant in video posted by arshyam is 100% correct, no need to adopt western economist conventional thinking...
All those sitting in eminent chairs around harvard corner are very dangerous for India.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 01:35

geeth wrote:
Suraj wrote:When you're running a business informally, you're by definition not paying taxes, following workforce law, retrenchment laws, contributing to pension and more.

That doesn't mean they are necessarily breaking the law.

You can't avoid paying taxes and not break the law. You can't even 'pay some taxes' or 'follow some labour laws'. Either the business owner follows them or he doesn't. And when he doesn't, he's breaking the law.

Every business owner trots out the same argument about how Govt is corrupt, complex laws etc etc. There's nothing in any of such an argument that some salaried person does not know or appreciate. The bottomline is that running a business is a voluntary decision, and choosing to run it informally and conceal income is also voluntary.

Those taxes being withheld hurts *everyone*, regardless of how inefficiently they are being used. The businessman uses the same roads, water and power infrastructure as any salaried person. In fact most of them use it much more. They should pay their share of income taxes, corporate and payroll taxes. It's perfectly fine to argue for low income/payroll/corporate taxes, but not paying them in the first place is breaking the law. There are no shades of grey, at all.

Gus
BRF Oldie
Posts: 7447
Joined: 07 May 2005 02:30

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 09 May 2017 01:57

since when did evading taxes became a birthright?

a shopowner's/businessman's argument of "govt not delivering services blah blah, I have to grease palms blah blah, therefore I have to evade taxes" cannot be an excuse.

after all, the salaried class also suffers the same govt and still pays TDS. So please stuff it about tax evasion. This is getting tiring.

gakakkad
BRF Oldie
Posts: 4351
Joined: 24 May 2011 08:16

Re: Indian Economy News & Discussion - Aug 26 2015

Postby gakakkad » 09 May 2017 02:02

Avtar Singh wrote:I really hope India is able to avoid this nonsense from the west;

https://www.rt.com/shows/renegade-inc/3 ... -cleansed/

There was only 1 really successful model in the west; germany founded on the "mighty Mark"
savings (and interest on said savings), investment, productivity, low inflation.
They have been dealt with by the ASEs (Anglo Saxon Elites) via the formation of the ECB.

I may be paranoid but I am sure the americans will want an East India mk2 for India..
The accountant in video posted by arshyam is 100% correct, no need to adopt western economist conventional thinking...
All those sitting in eminent chairs around harvard corner are very dangerous for India.



true...flawed theories based on flawed math...

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 10:44

Suraj wrote:
geeth wrote:That doesn't mean they are necessarily breaking the law.

You can't avoid paying taxes and not break the law. You can't even 'pay some taxes' or 'follow some labour laws'. Either the business owner follows them or he doesn't. And when he doesn't, he's breaking the law.

Every business owner trots out the same argument about how Govt is corrupt, complex laws etc etc. There's nothing in any of such an argument that some salaried person does not know or appreciate. The bottomline is that running a business is a voluntary decision, and choosing to run it informally and conceal income is also voluntary.

Those taxes being withheld hurts *everyone*, regardless of how inefficiently they are being used. The businessman uses the same roads, water and power infrastructure as any salaried person. In fact most of them use it much more. They should pay their share of income taxes, corporate and payroll taxes. It's perfectly fine to argue for low income/payroll/corporate taxes, but not paying them in the first place is breaking the law. There are no shades of grey, at all.



A business having a turnover of less than 10 lakhs per annum need not have salestax registration
Establishments employing less tha 10 people need not contribute to ESI
Establishments employing less than 20 people need not contribute to PF
Less than 1.5 crore turnover, no excise duty

The list is long. These are some of the examples.

Mind you, these people who are not required to pay taxes or contribute to labour welfare are allowed to use the road /rail and other infrastructure legally.

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 10:50

Gus wrote:since when did evading taxes became a birthright?

a shopowner's/businessman's argument of "govt not delivering services blah blah, I have to grease palms blah blah, therefore I have to evade taxes" cannot be an excuse.

after all, the salaried class also suffers the same govt and still pays TDS. So please stuff it about tax evasion. This is getting tiring.


Salaried class also avoid tax by way of under reporting of pay and perks. Govt employees don't get a chance, so some of them crib. The unfortunate part is, many don't want to pay tax but enjoy the facilities. Dont try to make virtue out of necessity.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 10:56

geeth wrote:The list is long. These are some of the examples.

No no... I *knew* you would get down this tangent, so let me remind you, we are talking of informal businesses that *despite* reporting requirements, do not do so. What you are quoting are formal business rules. Any small business that is registered, and maintains records of its activity to prove that it's within the turnover or employment ceilings for various additional reporting or levy requirement, is already part of the formal sector, because GoI knows about them.

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 11:14

Suraj wrote:
geeth wrote:The list is long. These are some of the examples.

No no... I *knew* you would get down this tangent, so let me remind you, we are talking of informal businesses that *despite* reporting requirements, do not do so. What you are quoting are formal business rules. Any small business that is registered, and maintains records of its activity to prove that it's within the turnover or employment ceilings for various additional reporting or levy requirement, is already part of the formal sector, because GoI knows about them.


No..no. I also *knew* you would go on this tangent. Govt does not know anything, unless there is voluntary disclosure or the Govt inspect. If either of them doesnt happen, then is is not known. But not known doesnt mean it is illegal. So you cannot say everybody who is doing business and not filing returns is avoiding tax, because filing returns is not mandatory(eg., income tax, sales tax, service tax etc). That is what you said before.

It is a different matter that it is safe to assume there are more fraudsters than honest people.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 11:37

And they *are* breaking the law when they don't register and report. It's just that GoI doesn't care about small kiranas breaking the law much, because they visibly don't transact enough business and aren't worth the trouble. It's the same concept as people speeding. Pretty much everyone does, but enforcement only makes examples of a few because there's no cost benefit to it. Just because police doesn't target everyone doesn't magically mean you were not speeding too.

Revenue collection has a cost. The lions share of the revenues - both income and corporate taxes - come from the biggest corporations or highest earning individuals. It costs much less to collect Rs.100 from one person than Rs.1 from 100 people. Therefore, it's true that GoI doesn't often know or care, but don't confuse that with not breaking the law. Companies that don't report, are still breaking the law. How many companies that grow past official reporting threshold requirements diligently do so then ? 10% of them ? 25% ?

JohnTitor
BRFite
Posts: 1112
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 09 May 2017 11:47

geeth wrote:No..no. I also *knew* you would go on this tangent. Govt does not know anything, unless there is voluntary disclosure or the Govt inspect. If either of them doesnt happen, then is is not known. But not known doesnt mean it is illegal. So you cannot say everybody who is doing business and not filing returns is avoiding tax, because filing returns is not mandatory(eg., income tax, sales tax, service tax etc). That is what you said before.

It is a different matter that it is safe to assume there are more fraudsters than honest people.

The bolded bit.. if you don't report your income, even if you are within exemption limits, you are committing a crime. Income needs to be reported and if you don't need to pay tax that's fine. Deciding not to report because you feel that you are exempt isn't. Besides, the former isn't part of the formal economy.

The red bit.. yes. Yes it does. It is illegal to have an income and not report it. That by definition is tax evasion, even if no tax is accrued

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 11:57

Suraj wrote:And they *are* breaking the law when they don't register and report. It's just that GoI doesn't care about small kiranas breaking the law much, because they visibly don't transact enough business and aren't worth the trouble. It's the same concept as people speeding. Pretty much everyone does, but enforcement only makes examples of a few because there's no cost benefit to it. Just because police doesn't target everyone doesn't magically mean you were not speeding too.

Revenue collection has a cost. The lions share of the revenues - both income and corporate taxes - come from the biggest corporations or highest earning individuals. It costs much less to collect Rs.100 from one person than Rs.1 from 100 people. Therefore, it's true that GoI doesn't often know or care, but don't confuse that with not breaking the law. Companies that don't report, are still breaking the law. How many companies that grow past official reporting threshold requirements diligently do so then ? 10% of them ? 25% ?


No, they are not breaking any law, when dont register and report. Like a person need not file income tax return if he doesn't have taxable income. But once he files a return even if he doesnt have taxable income, he should continue to do so.

Similarly, an establishment need not register under ESI rule if it has less than 10 employees. But if it registers even with less than 10 employees, he cannot withdraw later.

So, you cannot say those who dont file income tax returns are fraudsters. That is what you said in the case of businesses.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 11:59

So the gist of your argument is that 'informal economy' is basically composed solely of entities with <10 employees ? :) And that everyone else DOES register and report everything ? Ok :-)

And to ask again - what fraction of such entities diligently report the moment they hire employee #10 ?

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 12:20

$1.3 Trillion Housing Boom Set to Be India's Next Growth Driver
In a country where slums sit cheek-by-jowl next to palatial luxury -- including what’s been reported as the world’s most expensive private home -- India’s unhoused may soon become a more potent economic growth driver.

Prime Minister Narendra Modi’s drive to bring homes to the country’s 1.3 billion people, rising incomes and the best affordability in two decades will unleash a $1.3 trillion wave of investment in housing over the next seven years, according to CLSA India Pvt.

The firm expects 60 million new homes to be built between 2018 and 2024, creating about 2 million jobs annually and giving a tailwind of as much as 75 basis points to India’s gross domestic product. The volume of social and affordable housing will rise almost 70 percent to 10.5 million annually by 2024, exceeding the 33 percent increase in the premium market.

“The housing sector is at a tipping point and will be the economy’s next big growth driver,” Mumbai-based analyst Mahesh Nandurkar and his colleagues wrote in a note last week. “The catalyst is the government’s big push for an ambitious housing program.”

Image

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 12:23

Suraj wrote:So the gist of your argument is that 'informal economy' is basically composed solely of entities with <10 employees ? :) And that everyone else DOES register and report everything ? Ok :-)

And to ask again - what fraction of such entities diligently report the moment they hire employee #10 ?


Now you can see yourself who is going on a tangent. Fullstop for me.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 12:27

Yes let's move on. There's really no point in sitting around claiming the informal economy is <10 person companies. That's simply absurd, considering the amount of illicit economic activity unearthed by demonetization. No one's going to believe such claims 'oh no need to report, everyone's honest and doesn't report only because they don't have to' of yours.

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 12:33

Pls dont try to put words into my mouth. It is pretty annoying. Either stick to the point or stop responding.

Yeah...let everybody believe your line that every one who indulges in business activity is a fraud.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 12:43

The same applies to you, i.e. "every one who indulges in business activity is a fraud."

You support the businessman's right to self report . I'm sorry, but that's utopian nonsense. Given the choice, everyone - businessman or salaried class - will evade taxes. The rate of conversion of someone with <10 people to >=10 people from unreported to reported is negligible. It doesn't happen until they're much bigger and simply cannot hide their size any longer. In fact I'll assert that businessmen are bigger frauds than salaried class.

India loses more in tax revenue than it collects. Lost corporate taxes amount to ~$320 billion, more than the $300 billion in total taxes collected. In fact, despite most people NOT being salaried but self employed, data shows that income taxes as a reported source of income exceeds business income. That single piece of data rubbishes the claim of business income being reported. Source ? here you go - posted in page 62

For a nation of self employed people, it's a nice demonstration of 'honesty' that the much smaller salaried class report more income than the entire collective business-owning class do. And in fact, the individual salaried class report almost as much income as companies themselves collectively do as business income.

JohnTitor
BRFite
Posts: 1112
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 09 May 2017 12:57

^^ wasn't there a statistic that said something like only 1% (or maybe it was 3%) of working indians pay tax? That statistic alone suggests that there are lots of tax dodgers. Or is the claim that these people don't need to file because they are below the threshold?

I'll try to find the source but it came out during the demonetisation exercise

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 13:03

The data above quoted from page 62 shows that the IT base is 29 million people who collectively report Rs.10.79 lakh crore in income. Companies and firms collectively report ~8.5 lakh crore in income. That's it.

The vast majority of Indians are not salaried, and yet the salaried class reports more individual income than the self-employed do ? Where are all the millions of people who run their own businesses in the IT forms ? Only 14 million people reporting incomes of 0-2 lakh. Another 14 million report >2 lakh income, and that together is the total number of people reporting any source of individual income. The remaining 1.2 billion people are sitting idle, and it's a miracle GDP is 2.6 trillion solely from 29 million people. That means our small highly skilled workforce is 4 times more productive per unit as California with 45 million people and $1.3 trillion GDP.

JohnTitor
BRFite
Posts: 1112
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 09 May 2017 13:04

geeth wrote:Pls dont try to put words into my mouth. It is pretty annoying. Either stick to the point or stop responding.

Yeah...let everybody believe your line that every one who indulges in business activity is a fraud.

What are you using as the definition of 'informal'?

The definition to be used is those work packets that are not covered by a formal contract. One that can cover a dispute in court. Your maid who you pay to clean the house without any contract is informal. The construction worker who is employed on a daily basis for a sum without a legally binding contract is informal.

You run a corner shop employing a "chotu".. the chotu is informal because you haven't issued hima contract with pay and terms and conditions included. But you as the shop owner are not informal because by definition you have to pay various fees and taxes. How can you term that informal?

gakakkad
BRF Oldie
Posts: 4351
Joined: 24 May 2011 08:16

Re: Indian Economy News & Discussion - Aug 26 2015

Postby gakakkad » 09 May 2017 18:16

Indeed the math does not add up... Salaried class reporting more income than businesses ... but it is businesses who employ the salaried class... how is that even possible ? it's like moon being brighter than the sun...

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 19:52

Every last business owner in the 'informal economy' as you call it, is a tax evader. They also ignore all worker benefit laws. No formal salary and overtime contract. No pension plan contributions. No formal severance. No DA/HRA etc. All of this by choice .


All I said in my first post is that it is a generalised statement and is wrong. I stand by what I said.

John Titor: please read the posts of last two days..you will find answer to your questions.

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 20:07

gakakkad wrote:Indeed the math does not add up... Salaried class reporting more income than businesses ... but it is businesses who employ the salaried class... how is that even possible ? it's like moon being brighter than the sun...


Allow me to add it for you:

Take 100 establishments that employ 5000 people. Of that say 10% pay income tax. So 500 people pay income tax. But it is possible that none of these 100 establishments pay income tax or minuscule number pays income tax but the sum total is less than the total income tax paid by its employees. How?

Take the case of Reliance Industries. They employ thousands of employees..but did not pay ANY corporate tax till mid ninetees. Only after Chiddu as Fin Minister introduced Minimum Alternative Tax (MAT), they started paying tax. But they had many employees including motu bhai whe were paying income tax.

Another fact is, most of the establishments dont make any profit, but end up with huge losses in the initial years of establishment. They can carry forward and adjust their losses in the subsequent eight years against profit.

All these concessions are given to businesses because of inherent risks involved. But alas! Some people are still in Nehruvian mould and for them "profit" is a dirty word and businessmen are not even to be touched with a barge pole.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 20:18

geeth wrote:
Every last business owner in the 'informal economy' as you call it, is a tax evader. They also ignore all worker benefit laws. No formal salary and overtime contract. No pension plan contributions. No formal severance. No DA/HRA etc. All of this by choice .

All I said in my first post is that it is a generalised statement and is wrong. I stand by what I said.

Since India has so many people working in their own self employed businesses, why are there only 29 million IT assessees ? There's probably more people than that running businesses through various means (co/partnership/etc) in a large state. Even if a business is smaller than a threshold, personal income in the form of business sourced income, has to be reported . Even if you're not making money, you still have to report and show that.

Despite all the claims of honest, individual salaried income declared significant exceeds individual business income declared, even though the salaried class is vastly smaller than the small business class. Heck, salaried income declared is almost as much as corporate income declared. This from the same economy where 90-95% are self employed and not salaried ? How does such an economy show declared salaried income as much higher than declared business personal income ? And salaried income almost as much as total income declared by companies ?

PS: for the claims of loss setoff against future revenues, data posted above already shows that cumulative loss set off is much less than reported revenues.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 20:19

geeth wrote:Take 100 establishments that employ 5000 people. Of that say 10% pay income tax. So 500 people pay income tax.

All 5000 have to declare income.
geeth wrote:But they had many employees including motu bhai whe were paying income tax.

Only 29 million people (as of 2013-14 in the data posted above) nationwide report income. Not just salaried income - *any* income at all.

geeth
BRFite
Posts: 1152
Joined: 22 Aug 1999 11:31
Location: India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby geeth » 09 May 2017 20:30

It is a different matter that it is safe to assume there are more fraudsters than honest people.


Suraj,

Above is what I said in one of the earlier post. No point in harping on the same point again and again. I am not going to take the bait.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 20:34

Well, I don't envy you :) It's hard to make your claims with a straight face when officially reported incomes - and reported loss set offs - disagree with your claims so dramatically.


Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 21:37

gakakkad wrote:@ Suraj , you were one of the proponents of ICOR. You think the downward trend in Gross fixed capital formation and savings as a % of GDP would continue ? would we say that there has been some delinking of ICOR to growth rate in the last few years?

Sorry I did not see this sooner. I'm not really an ICOR proponent since it's a standard measure. I think the GFCF and savings/GDP figures will improve, and that the fall is a temporary blip on account of the drop in savings and investment during UPA-2 . It takes time and effort to rebuild that momentum. It's not possible within a fiscal year or two, because policy measures themselves don't fix it overnight. It takes a period of sustained growth in investment to do so.
The road to growth is paved with low ICOR

VKumar
BRFite
Posts: 239
Joined: 15 Sep 1999 11:31
Location: Mumbai,India

Re: Indian Economy News & Discussion - Aug 26 2015

Postby VKumar » 09 May 2017 22:55

In a keynote address, at Oracle Open World, in New Delhi, Amitabh Kant, said that physical banking would die out in about 4 years.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 09 May 2017 23:21

Govt projects wheat output to be highest at over 97 mn tonnes in 2016-17
The government on Tuesday projected wheat output at an all-time high of 97.44 million tonnes (MT) in the 2016-17 crop year ending next month due to good monsoon.

India had harvested 92.29 MT wheat during the 2015-16 crop year (July-June). Wheat, the main rabi crop, is being harvested now. The previous record was 95.85 MT achieved in 2013-14.

In its third estimate released on Tuesday, the agriculture ministry has revised the 2016-17 wheat output marginally upward by 0.8 MT from its earlier estimate as yields got better in the absence of any major weather aberrations.

India to produce record food grains in FY17, says Agriculture ministry
India is likely to produce a record 273.38 million tonnes of food grains in 2016/17, slightly higher than the previous estimate of 271.98 million tonnes, Agriculture ministry said in a statement, as ample monsoon rains boosted crop yields.

disha
BR Mainsite Crew
Posts: 5682
Joined: 03 Dec 2006 04:17
Location: gaganaviharin

Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 10 May 2017 10:30



I think Indian economy is already touching double digit growth. The usage of electricity is a key pointer there.



Good monsoon leading to bumper harvest leading to better farm income leading to higher "consumer confidence"., another good monsoon and we will enter into 2 more year of virtuous cycle of growth at double digit.
Last edited by disha on 10 May 2017 18:13, edited 1 time in total.

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 10 May 2017 11:11

Do you have data correlating GDP growth against annual electricity consumption for the past decade or so ? It's a useful exercise for anyone who has the time of inclination to dig up and chart the data, if it's not available online. Also applies to other core sector items like coal and steel. I'm afraid I'm a little short on time these days.

gakakkad
BRF Oldie
Posts: 4351
Joined: 24 May 2011 08:16

Re: Indian Economy News & Discussion - Aug 26 2015

Postby gakakkad » 10 May 2017 21:55

Suraj wrote:Do you have data correlating GDP growth against annual electricity consumption for the past decade or so ? It's a useful exercise for anyone who has the time of inclination to dig up and chart the data, if it's not available online. Also applies to other core sector items like coal and steel. I'm afraid I'm a little short on time these days.


I ll do this and post ..

disha
BR Mainsite Crew
Posts: 5682
Joined: 03 Dec 2006 04:17
Location: gaganaviharin

Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 10 May 2017 23:17

gakakkad wrote:
Suraj wrote:Do you have data correlating GDP growth against annual electricity consumption for the past decade or so ? It's a useful exercise for anyone who has the time of inclination to dig up and chart the data, if it's not available online. Also applies to other core sector items like coal and steel. I'm afraid I'm a little short on time these days.


I ll do this and post ..


Thanks Gakakkad'ji. If you can., can you provide annual figures for the past 10 years on total electricity produced, total oil & gas consumed and

I have been developing a theory for a while., basically to look at some key parameters and predicting the direction and rate of economic growth. And of course a layman can use it as well as a TFTA economist from Harbard.

Let me state it here., my premise is that all economic growth is correlated to energy. And the key parameters are the production and consumption efficiency of energy (which is related to GDP). In terms of electricity., for example if I am producing 10 MW of power and consuming all of it to produce 1 unit of GDP., then my efficiency is 0.1., this can be correlated to another nation that is producing 10 MW of power and producing 2 unit of GDP., efficiency is 0.2 and is 2x efficient then the other nation with efficiency 0.1.

Coming to energy inputs., I am thinking of restricting to only two - total electricity power produced and total oil & gas consumed (imported and produced locally). Most of the coal is mined for producing electricity or for coking iron. The steel output by itself is an indicator that can be used to validate the heading of the economy derived from the energy produce/consume calculations.

This simplifies the calculations on knowing where the economy is headed and the rate of economic growth once a baseline is established. Note that efficiency is always an "after number" - more on that later.

*I am not an economist, neither a mathematician or a statistician. Just a layman who can put 2+2 together.
**I have a deep distrust of financial advisors, economists - particularly who make their living by writing for eCONo journals.

ManSingh
BRFite -Trainee
Posts: 84
Joined: 15 Aug 2016 17:30

Re: Indian Economy News & Discussion - Aug 26 2015

Postby ManSingh » 10 May 2017 23:57

Suraj wrote:The data above quoted from page 62 shows that the IT base is 29 million people who collectively report Rs.10.79 lakh crore in income. Companies and firms collectively report ~8.5 lakh crore in income. That's it.

The vast majority of Indians are not salaried, and yet the salaried class reports more individual income than the self-employed do ? Where are all the millions of people who run their own businesses in the IT forms ? Only 14 million people reporting incomes of 0-2 lakh. Another 14 million report >2 lakh income, and that together is the total number of people reporting any source of individual income. The remaining 1.2 billion people are sitting idle, and it's a miracle GDP is 2.6 trillion solely from 29 million people. That means our small highly skilled workforce is 4 times more productive per unit as California with 45 million people and $1.3 trillion GDP.


This post is awesome( if true - still very hard to believe). I always wondered who arr the one's who drive luxury suv's despite being so young.
One newbie question: It is always mentioned that the biggest employer is agriculture in India where there is no such requirement as PAN, IT returns etc. Will the anomaly 8.5 lakh crore vs 10.79 lakh crore still be so unjustifiable?

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 11 May 2017 00:03

gakakkad wrote:
Suraj wrote:Do you have data correlating GDP growth against annual electricity consumption for the past decade or so ? It's a useful exercise for anyone who has the time of inclination to dig up and chart the data, if it's not available online. Also applies to other core sector items like coal and steel. I'm afraid I'm a little short on time these days.

I ll do this and post ..

Thanks in advance!

Suraj
Forum Moderator
Posts: 10483
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 11 May 2017 00:18

ManSingh wrote:This post is awesome( if true - still very hard to believe). I always wondered who arr the one's who drive luxury suv's despite being so young.
One newbie question: It is always mentioned that the biggest employer is agriculture in India where there is no such requirement as PAN, IT returns etc. Will the anomaly 8.5 lakh crore vs 10.79 lakh crore still be so unjustifiable?

Generally, income taxes are progressive, i.e. higher income quintiles pay more proportionally of the total IT paid. For example, here's US data:
Top quintile pays 94% of all taxes
Another graph
On the other hand our tax brackets pay in the following ratios:
India share of IT from brackets
In our case the middle quintiles pays most of the IT. See the last share% column. 50% of IT is paid by the 10lakh-1crore group, which most of the typical upper/middle class falls into I think. 75% of IT is paid by those earning 1crore or less. This is essentially the diametric opposite of what a progressive taxation system should result in. It is also the root of the middle class salaried group's angst, because they're clearly the ones largely being sucked dry for everyone. Beyond the 1cr mark pretty much no one is salaried, and income is business, investment and other sources. They also have significant means to shelter income, both legal and illegal ones. Just the number of assesses in the >1cr mark is way fewer than what people would anecdotally believe is reality based on consumption figures for luxury goods.

JohnTitor
BRFite
Posts: 1112
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 11 May 2017 00:19

geeth wrote:Another fact is, most of the establishments dont make any profit, but end up with huge losses in the initial years of establishment. They can carry forward and adjust their losses in the subsequent eight years against profit.

All these concessions are given to businesses because of inherent risks involved. But alas! Some people are still in Nehruvian mould and for them "profit" is a dirty word and businessmen are not even to be touched with a barge pole.


Sure - this it the case world over. I think the statistic is that around 80% of startups die out within 12 months. So no surprise there. Depending on various factors, incubation periods for these businesses can be anywhere between 1-5 years. Heck I worked at a startup previously and even 5 years into its life it was still losing money hand over fist - it wasn't that the business was bad or anything, just takes a while for it to stabilise, but you need staying power for that.

Anyway in india, it is quite common for small businesses to keep 2 books - one that is shown to the taxman, and the other the real one. I know this very well because I have interacted with 100s of people running businesses in india who have this practice. You can see that some of these businesses make losses for years on end, yet the owner is driving in a new beemer every year. This is how they hide their losses.

The fact that there are concessions isn't a bad thing, nor is it that businesses make use of them. In fact its the contrary, without it, it would be hard to start and run an equitable business. Secondly, profit isn't a bad thing. No one here is claiming so. In fact, the more the profit, the better. That's what everyone wants, that's what GDP growth is all about!

What is at issue is the fact that tax isn't being paid at par of the revenue generation. That is what needs to be addressed and there can be no hiding from it. The "informal economy" as it is called needs to be shut down and converted into the "formal economy". Everyone makes money, everyone pays their dues. The government can then start reducing taxes because the tax base has suddenly become much larger.

JohnTitor
BRFite
Posts: 1112
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 11 May 2017 00:31

disha wrote:Thanks Gakakkad'ji. If you can., can you provide annual figures for the past 10 years on total electricity produced, total oil & gas consumed and

I have been developing a theory for a while., basically to look at some key parameters and predicting the direction and rate of economic growth. And of course a layman can use it as well as a TFTA economist from Harbard.

Let me state it here., my premise is that all economic growth is correlated to energy. And the key parameters are the production and consumption efficiency of energy (which is related to GDP). In terms of electricity., for example if I am producing 10 MW of power and consuming all of it to produce 1 unit of GDP., then my efficiency is 0.1., this can be correlated to another nation that is producing 10 MW of power and producing 2 unit of GDP., efficiency is 0.2 and is 2x efficient then the other nation with efficiency 0.1.

Coming to energy inputs., I am thinking of restricting to only two - total electricity power produced and total oil & gas consumed (imported and produced locally). Most of the coal is mined for producing electricity or for coking iron. The steel output by itself is an indicator that can be used to validate the heading of the economy derived from the energy produce/consume calculations.

What you are stating is quite similar to the Kardashev Scale i.e. more energy = more advanced civilisation.

I had done some similar work during a previous stint several years ago at a bank. You should find that energy usage correlates quite well with GDP growth (assuming both figures are fairly accurate). Further, what you will find is that at various price points for energy, GDP will vary - so cheaper electricity = higher demand = more growth and so forth. You can combine the two energy sources you quoted by converting it to joules/hour or something similar. About 10% is wastage.. though in India, that figure is much higher (I saw somewhere on this website the T&D losses by each state, KA for instance is about 15%, but there are some states with T&D as high as 50-60%, can't remember where on that website I found it).


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: Baidu [Spider], gargi and 4 guests