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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.
vina
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 23 Jun 2017 09:53

Singha wrote:Even for coastal umpp imported coal is far cheaper than natgas..cleaner obviously for gas.

TataPower has offered to give a 51% stake of their Rs 6500 cr Mundra UMPP (which uses imported coal), for just Re 1 to the Guj Govt/Centre if they agree to buy power at "higher" rates.

The imported fuel based plants (either coal or gas) are simply unviable, given the prices the State Discoms are willing to pay for the power (which of course is govt controlled pricing).

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby JTull » 23 Jun 2017 17:41

This seems to be a case of imported coal being too expensive. With Coal India rapidly expanding production capacity, imported coal must be substituted instead of pushing for downstream price increases. State govts should not be in power generation business.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 24 Jun 2017 11:29

^^ due to high sulphur content we still need some tfta imported anthracite coal to mix with local coal
Govt is betting big on supercritical and gasified coal tech that will drive up efficiency from 30% to more.
heavy 10,000t coal trains need to be able to reach all the new plants from our coal mining belts. more electrification and track doubling to streamline these moves.

----

met a old colleague who has moved onto a large consulting co in iot/smart cities.
he said some 90 cities so far have been selected under smart cities.

about 2000 cr will be given to each one. but they say thats nowhere near enough for complete soln, but a start.
very few totally new cities like amravathi AP
a few are new satellite towns like new raipur chattisgarh
the rest are retrofits on top of old cities

things like sewage and water will come from separate funds like swacch bharat

180,000 cr is the initial kitty at 90x2000 ... over 5 yrs ...

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby jayasimha » 24 Jun 2017 12:08

^^

may be relevant here ( or may be moved to appropriate thread)

Press Information Bureau
Government of India
Ministry of Mines
22-June-2017 15:11 IST
Ministry of Mines Invites Science and Technology Project Proposals

Projects are invited from Academic Institutions, Universities, National Institutes and R&D Institution recognized by the Department of Scientific and Industrial Research, Government of India, for upto 3 years duration in the following thrust areas which have direct bearing on mineral sector, applied and sustainable aspect of mining and industrial applications:

2. THRUST AREAS OF RESEARCH IN MINES

The broad thrust areas for supporting Research in Mining are given below:
i) Prospecting/exploration for strategic rare and rare earth minerals.
ii) Development of new technology for mineral exploration and mining on land and deep sea to locate and exploit new mineral resources.
iii) Research in mining methods. This includes rock mechanics, mine designing, mining equipments, energy conservation, environmental protection and mine safety.
iv) Improve efficiency in process, operations, recovery of by-products and reduction in specification and consumption norms.
v) Research in metallurgy and mineral beneficiation techniques to utilize lower grade and finer size ores.
vi) Extraction of value added products from mine waste, plant tailings etc.
vii) Development of new alloys and metal related products, etc.
viii) Evolve low capital and energy saving processing systems.
ix) Production of materials of high purity.
x) Cooperative research among organizations associated with the mineral sector.

3. Scientific and Technical Merit and relevance to Industry

All organization should follow the instructions given below before submitting the project proposals to the Ministry:-

a) the proposal should be relevant to the overall mandate of mining, exploration, minerals, metals value addition, waste and environmental impact of mining and metallurgical processing
b) industry inputs and participation
c) Originality in terms of concept, method, innovation, or in application;
d) development of new methods, synthesis of advanced materials,
e) process improvements and innovation,
f) design of apparatus and other research tools,
g) process development for waste/secondary/low grade materials recovery,


h) zero waste mining, large data analysis and simulation modeling etc.
i) nature of study as experimental, modeling/simulation and both
j) There must be a clear enunciation of objectives and deliverable in the proposal
k) detailing of research methodology, design of experiments, chosen methods of analysis appropriate and valid.
l) intended/potential application area has to be made clear in the proposal, industry relevance, industry participation if appropriate
m) potential scalability to pilot plant and later on plant levels
n) what are the techno economic benefits (at least rough estimates).

Science & Technology (S&T) projects are funded through grant-in- aid by the Ministry of Mines through the process of project evaluation by Project Evaluation and Review Committee (PERC) and recommended projects are approved by the Standing Scientific Advisory Group (SSAG) constituted by the Ministry.

Projects can be submitted to the Section Officer, (Metal-IV section), Room No. 528, Block 11, 5th Floor, CGO Complex, Ministry of Mines, Lodhi Road, New Delhi-110001 (Phone No.-011-24364196 in the prescribed proforma by 15th July 2017 alongwith soft copy of the project proposal in MS word format (not more than 3 MB) to the E- mail vikas.raj@nic.in . The details of terms and conditions and the prescribed proforma are available at the website www.mines.nic.in. Those projects, which are shortlisted shall be directed to present their
proposal either in Delhi or any other city. The Grants-in-aid will be governed by Government of India terms and conditions as amended from time to time.


YSK

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Hari Seldon » 30 Jun 2017 08:35

x-post from Achievements dhaga. R Jaggi in Swarajya.

In Three Years Of Modi, Business Learns That India Is Not ‘Free Lunchistan’

Select excerpts:

India’s banks may be in deep trouble over bad loans, but there is another side to this coin: big lessons are being learnt by India Inc, which is facing a gut-wrenching, cleansing process that is unprecedented in our history of crony capitalism. For almost the first time in decades, capitalists are learning that there is no free lunch in capitalism.

When did you last hear that a big chunk of the domestic steel industry is about to be liquidated – most of the 12 loan defaulters being referred to the bankruptcy courts are steel companies? Their promoters will probably be left with nothing in the end. When did you last hear a proud Ambani seeking a rescheduling of his loan and more time for repayment? When did you last hear of big name promoters being forced to sell off their best businesses to retain what they can of their former business empires? In the past, they left banks with their worst businesses, while saving the best for themselves. When did you last hear of a liquor baron, who liked strutting around with young models, living the life of a beleaguered fugitive in London, doing time in courts and extradition hearings?


The names are like a roll-call of India Inc. The Ruias, once compared to the Ambanis in terms of ambition, will be losing two of their biggest businesses – oil refining to Rosneft, and steel to liquidation proceedings. The Tatas are shedding some of their overseas steel businesses bought at the top of the steel cycle just before 2008. They sold their urea business in India, and are in the process of shedding more businesses in India (including possibly telecom). Andhra Inc’s proud standard bearers – creations of the United Progressive Alliance (UPA) era when Andhra supplied the bulk of Congress MPs – went into default in many cases, and have had to divest assets: GMR has sold off coal, power and road assets worth more than Rs 10,000 crore, and is now in the process of unloading 40 per cent of its crown jewel, Delhi airport, to a French-led consortium. GVK, which runs Mumbai and Bengaluru airports, has exited Bengaluru completely. Jaypee Group, whose JP Infra is being liquidated, sold its hugely profitable cement business to the Birlas under lender pressure. DLF, the largest listed realtor, has destroyed more value than it has created over the last few years. It has been selling more assets to reduce debt than homes to buyers.

In three years of the Narendra Modi government, India Inc has been drenched by torrential conditions when earlier it barely managed to get its feet wet, safe under the umbrella of crony relationships.


But here’s the big gain: on the other side of this great fire-sale of its assets, India Inc will emerge leaner, stronger – and, hopefully, wiser. It must learn three important lessons.

First, over-diversification and over-reliance on debt-funding from banks can be a double-edged sword. In favourable circumstances, you could hit the big time. If, as in 2008, you face headwinds, your entire conglomerate may crumble. There must be a better balance between equity and debt in any business. Promoters must have enough skin in the game for bankers to believe their projects are worth funding.

Second, the past assumption that friendly voices in government will bail you out is invalid. The Modi government will surely help some industries facing adverse global conditions (like steel), but it is unlikely to favour one business at the cost of another. The assumption that things will be back to normal once a government changes will not hold anymore. Even a UPA returning to power in 2019 or 2024 will not be able to go back to the 2G and Coalgate ways of allocating resources, or offering sweetheart bailouts to cronies.

Third, unless the new bankruptcy code fails to deliver, promoters cannot hope to delay the inevitable when businesses fail by dragging banks to courts. They will lose whatever skin they have in the game if they do that.

However, the biggest lesson is the one the government must learn: government-owned banks are the weak links in the chain linking cronies to easy capital. If banks themselves are not allowed to go bust – something unlikely if they are state-owned – it is not possible to assume that bankers will not go overboard with mindless lending based on policy and political nudges.


Oh, read it all.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 01 Jul 2017 23:28

Congratulations India. Today you are a single market. 20% of the humanity will be trading unfettered. It is the trade which led to humans and its civilization. It is the trade of goods and services which will bind us back into a single country.

Congratulations.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby JohnTitor » 01 Jul 2017 23:41

Next, India needs to get rid of STD and "circles" for telecoms. Even the EU has scrapped roaming charges across the single market.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 02 Jul 2017 05:18

Hari Seldon wrote:x-post from Achievements dhaga. R Jaggi in Swarajya.

In Three Years Of Modi, Business Learns That India Is Not ‘Free Lunchistan’



I have said this before that Namo wants to do things the right way. It would have been much easier for him to just print the money, infuse banks with fresh capital and create a bad bank with the troubled assets. USA did it, China did it so why not we?
Politically also this is a much riskier option. Growth is stunted. Employment generation is affected but for the long term health of the Economy, it is the right option IMO. At least inflation is under check with this approach.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby rahulm » 03 Jul 2017 18:41

Petrol pump strike: Dealers protest against daily price revision, call for nationwide stir on July 5 followed by one on July 1

Also, the owners have accused companies of the lack of transparency in the daily dynamic pricing mode


What transparency are these chaps seeking. Advance notification of prices before public knowledge ? Does the new daily pricing structure squeeze their 'profiteering through adulteration ' model ?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karthik S » 04 Jul 2017 22:29

GDP will double in 8-9 years thanks to GST, Union minister Suresh Prabhu says


"The GST aims at increasing the number of taxpayers. And, as the tax revenue rises, the GDP will also increase. Our GDP is $2.5trillion today and in the next 8-9 years, it will grow to $5 trillion if our tax revenues increase.


http://timesofindia.indiatimes.com/busi ... 424232.cms

2.5 to 5 in 8 9 years is 8% annual GDP growth, sounds reasonable. But to keep up with population growth and providing employment, we need to see sustained double digit growth for atleast 4 5 years.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Atish » 05 Jul 2017 01:16

Kudos to the Namo Govt for appointing a knowledgeable, competent, honest and experienced professional (Shri Prabhat Bezboruah) as Chairman of Tea Board. Normally Congress appointed a venal, corrupt, incompetent, clueless IAS baboon. This is a small example of acche din - appointing right people for the right job.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby rajkumar » 05 Jul 2017 14:38

JohnTitor wrote:Next, India needs to get rid of STD and "circles" for telecoms. Even the EU has scrapped roaming charges across the single market.


Not STD but the concept of 'Circles for telecoms'

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vijayk » 06 Jul 2017 15:44

Read his take on Modi in question 2

Image

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Austin » 06 Jul 2017 17:08

Jim Rogers Interview with Zee Business on GST





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Re: Indian Economy News & Discussion - Aug 26 2015

Postby VinodTK » 10 Jul 2017 01:38

Harvard study predicts dramatic fall in China's economic growth, impressive rise for India
BEIJING: A Harvard University study has projected a dramatic fall in China's economic growth to 4.41 per cent in the coming years until 2025. On the other hand, India would perform extremely well growing at 7.72 per cent during the period, Havard's Center for International Development said in a study.

"The economic pole of global growth has moved over the past few years from China to neighboring India, where it is likely to stay over the coming decade," it said.

What is significant that even Indonesia, Vietnam, Uganda, Kenya and Mexico are expected to perform a lot better than the world's sector biggest economy, according to the report.

"China's rapid growth rate over the past decade has narrowed the gap between its complexity and its income, which researchers suggest is the harbinger of slower growth," CID researchers said adding, "The growth projections still have China growing above the world average, though at 4.4 percent annually for the coming decade, the slowdown relative to the current growth trend is significant".
Elaborating further, Ricardo Hausmann, director of CID, professor at the Harvard Kennedy School (HKS), said, "The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia, and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years".

The study said that "The growth projections are based on measures of each country's economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities".

The researchers emphasized that there are many steps policymakers, investors, and business leaders can take to enter more complex production to realize faster growth.


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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Schmidt » 11 Jul 2017 11:44

There is a lot of discussion about jobless growth , and that there are no jobs created under Modi in the last 3 years

I feel that jobs are being created constantly , just that they are not being captured in job surveys as they are not part of the so called " formal economy "

As a comparison , see the below report on US jobs added in June 2017 :


https://www.thebalance.com/jobs-report- ... cs-3305732

As you can see , the main drivers of job creation in the US are :
Total no jobs added in June - 222,000

Health care
Leisure and hospitality
Government
Retail sector
Temporary help - they can measure this ???
Financial activities
Construction
Mining
U.S. manufacturing - this category added a measly 1000 jobs ( out of 222 000 jobs added in June )

As you can see , most of the jobs added in the US would not even be captured by our job surveys

For instance , is construction sector in India considered an industry or a service ?

I doubt very much if we track jobs growth in the above sectors

Also , increasingly , the services sectors and self employed / micro and small business would be the drivers of job growth
See the no of drivers in all cities , who either work as drivers or have their own cars and work of Ola / Uber etc

The old paradigm of stable factory jobs that generated lifelong employment along with health and insurance is long gone

This is just like CPI / WPI calculations that are increasingly muddled and irrelevant as they capture a different basket of goods and services than what we actually consume

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby pankajs » 11 Jul 2017 11:52

http://www.thehindubusinessline.com/eco ... 756513.ece
P-Note unwinding to weigh on equity market

SEBI had on Friday banned foreign portfolio investors (FPIs) from issuing P-Notes where the underlying assets are equity derivatives, and ordered unwinding of existing contracts. The new norms say P-Notes are not allowed if not for hedging. “SEBI has virtually shut down PNs,” said Suresh Swamy, Partner, PwC. “P-Note unwinding may accelerate in the days to come.” Swamy believes trading could now shift offshore.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Austin » 11 Jul 2017 12:21

VinodTK wrote:Harvard study predicts dramatic fall in China's economic growth, impressive rise for India
BEIJING: A Harvard University study has projected a dramatic fall in China's economic growth to 4.41 per cent in the coming years until 2025. On the other hand, India would perform extremely well growing at 7.72 per cent during the period, Havard's Center for International Development said in a study.

"The economic pole of global growth has moved over the past few years from China to neighboring India, where it is likely to stay over the coming decade," it said.

What is significant that even Indonesia, Vietnam, Uganda, Kenya and Mexico are expected to perform a lot better than the world's sector biggest economy, according to the report.

"China's rapid growth rate over the past decade has narrowed the gap between its complexity and its income, which researchers suggest is the harbinger of slower growth," CID researchers said adding, "The growth projections still have China growing above the world average, though at 4.4 percent annually for the coming decade, the slowdown relative to the current growth trend is significant".
Elaborating further, Ricardo Hausmann, director of CID, professor at the Harvard Kennedy School (HKS), said, "The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia, and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years".

The study said that "The growth projections are based on measures of each country's economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities".

The researchers emphasized that there are many steps policymakers, investors, and business leaders can take to enter more complex production to realize faster growth.


So they are projecting 7,7 % GDP growth for India and 4.4 % for China for next decade ? But the base GDP of China which is higher than India might compensate for higher GDP number even with low growth ?

During the entire period of Obama of 8 years the average GDP growth was 1.48% link

EU Growth rate for past 8 years has been the same less than 2 years , both countries have also accumulated huge debt in propotion of their GDP , for US it is ~ 108 % and EU it is ~ 90 % of GDP.

In any case we are told by MSM that these growth rates are fantastic !

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 11 Jul 2017 19:28

What's the point of the above post ?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karthik S » 11 Jul 2017 19:37

I was assuming we'd hit double digit growth from 2020 onwards owing to the various reforms such as GST, infra, agriculture output improvements, increased FDI, manufacturing growth etc. 7.7% seems to be somewhat on lower side.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Singha » 12 Jul 2017 07:44

i think US is able to measure jobs in all sectors due to employers needing to give tax returns and pay for some healthcare of the workers . so a paper trail is there. casual part timer jobs like lawn mowing, babysitting or newspaper delivery cannot be tracked.

in india i see a lot of people employed in lower end of construction sector and physical labour who are surely paid minimum wage and not at all any benefits or tracking.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Austin » 12 Jul 2017 16:45

Suraj wrote:What's the point of the above post ?


Point is the that of double standards they have when the Westerns MSM try to measure the US/EU economy and China , They try to sell their own 1.4 % growth as some thing of a terrific achievement after all the QE they do to get there and they would sell Chinese projected growth rate of 4.5 % as something terrible , Surely china has its own screw up but the West has much bigger share of problem

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 12 Jul 2017 16:48

Singha wrote:i think US is able to measure jobs in all sectors due to employers needing to give tax returns and pay for some healthcare of the workers . so a paper trail is there. casual part timer jobs like lawn mowing, babysitting or newspaper delivery cannot be tracked.



yes. there's an argument that the labor statistics mask the massive issue of underemployment as it counts anybody who left the unemployment benefits as 'employed'

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 12 Jul 2017 18:45

Yawn.. CPI and Growth numbers out today. Both are down. Basically it points to this.

1. The economy was slowing even before DeMo. It has continued to slow since then
2. There are now HUGE output gaps in the economy . In Inglees, economy is performing well below potential
3. Real interest rates are high (it is like what 2.25% ? , that is shockingly high for a country like India), but people still whine about "interest rate for savers" . The administered "savings rate" for PF, etc should be brought down further, drastically a political hot potato which no on will touch
4. RBI is caught in it's own petard. The global interest rates are going UP, while Indian interest rates need to go DOWN. Expect Rupee to be under pressure and also watch the bond market carefully for any exit from foreigners. You can see a sell on "news" if interest rates are cut in August
5. Rupee seems overvalued. RBI's probably needs to bite the bullet and cut in August ahead of the Fed which seems certain in Oct. Trouble is how much ? 50% will be needed to bring the "real interest rates" below 2% (ideally should be about 1% or less)
6. Too many moving parts. Lets see what happens.
7. Growth will depend on transmission of rate cuts (currently it has been terribly mixed. The "MCLR" nonsense put up by the RBI has just led to colluding by the banks and prevented refinancing to lower rates on existing loans at household level . That itself would have put lot of spending in household's hands an allowed the Govt the cut back on spending.. But no, but here, the "Govt" wants to do the spending (remember, Modi thinks he can out "command and control" the Kangress of old ) and not households.

Oh well. Another day in India.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 12 Jul 2017 19:13

Austin wrote:
Suraj wrote:What's the point of the above post ?


Point is the that of double standards they have when the Westerns MSM try to measure the US/EU economy and China , They try to sell their own 1.4 % growth as some thing of a terrific achievement after all the QE they do to get there and they would sell Chinese projected growth rate of 4.5 % as something terrible , Surely china has its own screw up but the West has much bigger share of problem

And this thread is on the economy of India . Not west or China or their standards . Once again you are bringing discussions here that should stay in the perspectives thread . It doesn't matter if it also relates to India - the topic deals with other countries and it should be in the perspectives thread, please . There's plenty that directly focused on our economy, that gets primacy here . The Chinese can complain about the problem on their forums, we don't need to.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby srin » 12 Jul 2017 20:17

Given the inventory clearances that were happening (huge discounts and "sales") pre-GST, I wonder how reliable any inflation or growth or industrial output statistic is going to be. And same thing for next quarter or so - till the entire supply chain adjusts.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Rishirishi » 12 Jul 2017 22:13

rahulm wrote:Petrol pump strike: Dealers protest against daily price revision, call for nationwide stir on July 5 followed by one on July 1

Also, the owners have accused companies of the lack of transparency in the daily dynamic pricing mode


What transparency are these chaps seeking. Advance notification of prices before public knowledge ? Does the new daily pricing structure squeeze their 'profiteering through adulteration ' model ?


The problem with daily pricing is that the dealer does not know how much he is going to get for the fuel in stock. It increases their risk. better would have been to adjust the price once every month or even every quarter.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Raveen » 12 Jul 2017 22:47

Rishirishi wrote:
rahulm wrote:Petrol pump strike: Dealers protest against daily price revision, call for nationwide stir on July 5 followed by one on July 1



What transparency are these chaps seeking. Advance notification of prices before public knowledge ? Does the new daily pricing structure squeeze their 'profiteering through adulteration ' model ?


The problem with daily pricing is that the dealer does not know how much he is going to get for the fuel in stock. It increases their risk. better would have been to adjust the price once every month or even every quarter.



Haha


That, is called the risk of doing business - the govt is not in it to make your enterprise risk free.
Live by the sword of capitalism, and die by it - no public money subsidized freebies, no risk free business. This is not a socialist government.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby disha » 13 Jul 2017 09:37

From swarajyamag brief:

Demonetised Currency Still Being Counted, Says Urjit Patel: The Reserve Bank of India is still not in a position to provide the exact amount of demonetised currency returned to the central bank, Governor Urjit Patel told a parliamentary standing committee on Wednesday. Counting "is still on" and the information will be provided "at the earliest," Patel said. He added that the total money in circulation now is Rs 15.4 lakh crore against Rs 17.7 lakh crore in November last year when Prime Minister Narendra banned high value notes in an attempt to battle black money and corruption.


It is like Rs 2.3 lakh crore of promissory notes have been taken out of circulation., with less money circulating around - inflation falls. And hence inflation falls to a record 1.5%.

Retail Inflation At Record Low: Official data showed on Wednesday that India's annual retail inflation eased to a record low of 1.54 per cent during June, while the country's factory output growth also slowed to 1.7 per cent in May. The June retail inflation rate fell when compared with May, when it prevailed at a higher rate of 2.18 per cent. According to data released by the Central Statistics Office on Consumer Price Index, retail inflation was dragged lower by a sharp fall in prices of food items like pulses, vegetables and other perishables. The current inflation rate is the lowest since the series began in 2012.


In fact if one looks at the posts last year and two years back during the may/june time frame., there was so much whining about Toor Dal prices. And now the whine is about "poor farmer" who cannot sell toor dal at a profit because the prices crashed!

Here are three links about it:

http://www.thehindu.com/news/national/karnataka/toor-dal-prices-go-through-the-roof/article7563716.ece

and

http://www.thehindu.com/news/cities/bangalore/Toor-dal-prices-take-a-fall/article14412373.ece

and

http://timesofindia.indiatimes.com/india/government-increases-msp-of-pulses-oil-seeds-and-cotton-to-support-farmers-amid-price-fall/articleshow/59182080.cms

So what changed? At least on toor dal (the prices of which is indicator and inversely correlated to the 'burden' of nutrition on the middle-class family wallet)., this is what was happening:

https://thewire.in/155044/surge-in-2015-pulse-prices-was-a-result-of-cartellisation/

And here are some choice quotes from above:

When prices of dal or pulses kept rising through the early summer of 2015, this was initially seen as a natural fallout of adverse weather conditions. But once the monsoons subsided, prices unexpectedly went through the roof. That was when dal prices hit the headlines in newspapers and dominated discussion on prime time television news. The union government swung into action – first by cracking down on hoarders and announcing that it would import more pulses and then, by increasing the minimum support price (MSP) of two major pulse crops in a bid to encourage farmers to grow more pulses. Gradually, the prices stabilised and the issue disappeared into the news hole, far from public memory.

It was only for those keeping a close eye on developments that the elements did not add up. In May 2015, just when Prime Minister Narendra Modi was completing a year in office, the government claimed that overall consumer price inflation had dropped to a four-month low and that wholesale price inflation had been negative for the previous six months. Only pulses bucked the trend. Even at the global level, there was either a close match or an excess supply of agri-commodities. So, was there a scam somewhere as many suspected?


And who were the scamsters?

Tier I: Glencore Group, ETG Group, Edelweiss Group

• Tier II: Jindal Group comprising Dalip Jindal, Pradip Jindal, Jindal Agro, etc; Vikas Gupta, Superior Group; Manoj Agrawal; SV Agri Trade; Sharp Mint Group

• Tier III: Manoj Agrawal, Riddhi Siddhi Impex, Parth International, Gayatri Maa, Gunn Enterprises, Charles India Private Limited


Those effects are showing up in the retail food "inflation"., currently with stable food prices and a soft real estate., there is actually more money in the hands of the people which is spent in consumption - which is reflected in - FMCG!

http://timesofindia.indiatimes.com/business/india-business/fmcg-industry-likely-to-grow-by-over-15-in-2-3-years/articleshow/57537148.cms

^^ Note this was predicted a year or two back., all the shampoo sachets are being used by the other India a.k.a Bharat in a big way.

The report noted that the industry has seen the growth rate accelerating in 2016 over the previous two years, with 18 of the 22 categories recording an uptick, driven by rural markets


There is one more nugget. Textiles. And voila: http://www.business-standard.com/article/news-cm/iip-growth-slows-to-1-7-in-may-2017-117071201162_1.html

Some important items showing high positive growth during the current month over the same month in previous year include 'digestive enzymes and antacids' 90.5%, 'textile machinery' 51.8%, 'meters electric and non-electric' 48.7%, 'jewellery of gold studded with stones or not' 36.7%, 'industrial valves of different types- safety, relief and control valves non-electronic, non-electrical' 32.8%, 'telephones and mobile instruments' 29.2%, 'aluminium billets/ingots' 23.6% and 'tea' 21.8%.


Now I wonder why the high positive growth of 'digestive enzymes and antacids'!!!

Even though the top line 'industrial output slows to 1.7%' is a depressing number., in reality India's economy is in zoom-zoom-zoom mode.

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

Postby Suraj » 13 Jul 2017 09:54

CPI inflation falls to record levels, IIP at 3-month low: Will RBI cut rates?
Growth in industrial production fell to a three-month low in May while consumer price index (CPI)-based inflation declined below a stipulated floor of 2 per cent in June, providing the Reserve Bank of India leeway to cut the policy interest rate in August. Pulled down by capital goods, consumer durables and manufacturing, and mining, the index of industrial production expanded 1.7 per cent in May, lower than the revised 2.8 per cent rate in April. CPI inflation was down to a record low of 1.5 per cent in June from 2.2 per cent in the previous month.

Food items continued to witness deflation amid farmers distress in various parts of the country. The data came when the kharif sowing season is progressing smoothly with even pulses showing a rise in acreage.

Economists expect CPI inflation to remain lower than the mandated 2 per cent in July.

In terms of broad sectors, electricity generation expanded 8.7 per cent in May against 5.4 per cent in April. Both manufacturing and mining performed dismally. While capital goods contracted by 3.9 per cent in May after rising in April, consumer durables fell for the sixth consecutive month at 4.5 per cent in May. The new category of infrastructure and construction goods was almost flat, growing 0.1 per cent. Food prices continued to deflate at 2.1 per cent in June after a 1 per cent deflation in the previous month. An over 20 per cent deflation in pulses prices and more than 16 per cent in vegetables led the fall.

Industrial output is 1.9% despite electricity output growing 8.7% ? Since industrial growth is a statistical measure while electricity output growth is a measurable metric, this very likely suggests that industrial growth is being undercounted.
June consumer inflation eases to 1.54%, lowest in new series
The country's annual consumer price inflation further eased to 1.54 per cent in June, helped by a fall in food prices, government data showed on Wednesday.

The rise was slower than 1.70 per cent forecast by economists in a Reuters poll, and was the lowest since India started releasing retail inflation data in January 2012 based on a combined CPI index for rural and urban consumers.

Consumer prices rose 2.18 per cent year-on-year in May.

Retail food prices fell 2.12 per cent last month from a year ago, compared with a 1.05 percent fall in the previous month.

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

Postby disha » 13 Jul 2017 09:57

^^ In the previous post note the growth in 'textile machinery' but also correlate with the information below:

On the other hand, industry group 'motor vehicles, trailers and semi-trailers' at (-) 71 bps, had the largest negative contribution to IIP growth in May 2017, followed by 'electrical equipment' (-) 46 bps, 'chemicals and chemical products' (-) 44 bps, 'fabricated metal products, except machinery and equipment' (-) 33 bps, and 'beverages' (-) 20 bps in May 2017. Industry group 'wearing apparel' at (-) 14 bps, 'textiles' (-) 12 bps, and 'food products' (-) 7 bps, also served IIP with negative contribution in May 2017.


Wearing apparel, textiles showed a negative dip in Summer. And there is a simple reason which can be confirmed by people on the ground.

May/June is wedding season in India and with demo., all the black cash has been out of circulation. No 1 lakh Rs. bouquet of 1000 Rs. for 100 guests. No money garland. All of that has been sucked out. More importantly., all the demand for textiles that surge during wedding season has been dampened. This shows up in 'industry group and textiles' downward blip.

---

Now do not wait for June or July or Aug or Sept IIP data. That will be mediocre at best. Fast forward to November, December and January 2018 IIP data. We will know about it in Jan 2018 - March 2018 time frame.

I think there will be a major uptick in IIP data in March 2018 time frame.

----

What should RBI do? In September, cut the interest rate based on monsoon. I would suggest a good dose of 50 basis point cut if the monsoon is good. This will push the Indian economy growth well over 10% in 2018.


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

Postby disha » 13 Jul 2017 10:01

Suraj wrote:Industrial output is 1.9% despite electricity output growing 8.7% ? Since industrial growth is a statistical measure while electricity output growth is a measurable metric, this very likely suggests that industrial growth is being undercounted.


Could be. Or there is a growth in domestic consumption of electricity with several villages and towns getting more reliable electricity. It improves quality of living which is not immediately seen in industrial output.

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

Postby Prasad » 14 Jul 2017 00:34

I suppose this can go here -

Recent Social Security Initiatives in India
JeanDrèzea. ReetikaKherab


If anyone has access to this paper, perhaps they can post a summary ? Given that this is Dreze of the Sonia UPA NAC membership fame, it is very interesting to see where their focus is.

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

Postby pankajs » 14 Jul 2017 23:42

http://www.moneycontrol.com/news/busine ... 26485.html\
Paddy sowing area up 4.5%; pulses rises 24% in kharif season



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