Indian Economy News & Discussion - Nov 27 2017

kit · Post by **kit** » 06 Dec 2019 01:04

M_Joshi wrote:
Supratik wrote:That is old news. 40 trainsets of T18 are on order for the next 3 years. There is no clarity on imports yet but it is circulating. One of the problems flagged about T18 is low energy efficiency leading to higher operating costs. PG has had a better track record than SP in railways. There is no problem if govt wants to get into a JV with foreign manufacturers. That is how China moved up the ladder. I am against any direct imports.
All news links I provided are lass than a week old.

. CHENNAI: Union railway minister Piyush Goyal on November 27 informed Parliament that Chennai-based Integral Coach Factory (ICF) will manufacture 160 coaches of Train-18 in 2019-20. However, top railway officials say that it is unlikely that even a single coach of Train-18 will roll out of ICF this year — or in the near future — as top companies have raised concerns about specifications for procurement of a new electrical propulsion system..
vigilance probe is also looking into the procurement of the ..
This means ICF would not be able to deliver the third Train- ..
before March 2023, even as the nation waits, the letter added

Read more at:
http://m.timesofindia.com/articleshow/7 ... aign=cppst

Dec 2, 2019
Also Modi has gone in maun vrat recently. No public speech or kadak soundbites after Houston event.

uneasy lies the crown , but i have faith in Modi. Decades of cronyism and misgovernance cannot be sorted out in a term or two

arshyam · Post by **arshyam** » 06 Dec 2019 06:35

Apparently, BHEL wasn't involved in the development of T-18, but Medha, a private company was. This ruffled a lot of feathers - BHEL itself, IR bureaucracy, etc. Never mind that this was a prototype in development, and Medha did a kick-ass job in developing the traction motors design. Never mind that some ICF engineers showed some initiative and engineered something new. The proof of the pudding lies in the eating, and the T-18 has been running without a hitch fir months now, covering 1000+ km a day. So clearly, ICF got something right. BHEL's track record in contrast, especially in some of the older Mumbai EMUs isn't that great.

The IR electrical department was miffed that the mechanical department, under which ICF comes, took the lead on an "electrical" project. Never mind that beyond 100% electrification and a few hare-brained ideas like converting old diesel locomotives to electric and push-pull configurations, they had no forward looking ideas. The heartburn is from the fact that the mechanical department stole a march here, so crab mentality is in full flow.

Under these circumstances, why would any private company step up to develop anything? Same goes for talented people in orgs like ICF - why stick your neck out when you anyway get your paycheck for not doing anything different? This goes back to the earlier discussion on this thread about private sector not wanting to innovate, leaving the field open to chinese imports. Here, the imports might be from Europe/Canada (ABB, Talgo, Bombardier, etc.).

One statement from piyush goyal that ICF went ahead with the government's blessing, and that it was only for a prototype, and further production would happen on the basis of open tenders would have put a stop to this nonsense. Whereas now we have the ICF honchos worried about their careers, Medha wondering why it even got involved, T-18 production completely halted, and no one benefiting from the situation.

PG has shown no initiative and is letting the IR bureaucracy run rings around him. His biggest achievement to date has been a new Rajdhani express between Mumbai and Delhi, with a schedule that has affected a whole bunch of other trains. If only the same level of attention had been paid to resolve the T-18 project... At least, SP was clear during his stint that capacity improvement was imperative and paid full attention to additional tracks, etc., wheras the pace of such construction has slowed down under PG's watch.

Vips · Post by **Vips** » 06 Dec 2019 07:11

^ Indian railways to float global tenders for procurement of 100 new trains.

Indian Railways is planning to procure 100 new trains of international standards by 2022 to increase the speed of services. The production of train 18 has been stopped due to some controversy in the past tendering process at its Integral Coach Factory, Chennai.

According to the present rolling stock capacity of Indian Railways, the Vande Bharat Express (train 18) can run at the highest speed of 160km/h, while the Mail and Express trains can operate at up to 70km/h.

In 2016, Railways had awarded an Rs.40 billion contract for the manufacturing of 40 trains to a joint venture of Stadler and domestic supplier, Medha Servo Drives. The contract was awarded as a part of the Centre’s ‘Make in India’ initiative by the IR owned Chennai based production unit Integral Coach Factory.

Out of 40, only two trains (Vande Bharat Express) rolled out which are now operational on the New Delhi -Varanasi and the New Delhi – Katra routes. But due to some vigilance complaint alleging the previous tendering process, the Railway has stopped its domestic production plans in March this year. Subsequently, Railway had canceled the contract and ordered a vigilance inquiry to investigate complaints that tender documents were tweaked to favour the aforesaid company i.e. Medha Servo Drives.

According to previous tender conditions, the successful bidder is required to have facilities as per the Make-in-India schemes as well as a minimum of five years’ experience of supplying G8 countries. “Such pre-conditions work to the disadvantage of domestic companies,” the Department of Industrial Policy and Promotion (DIPP) said in a letter to Ashwani Lohani, the then chairman of the Railway Board in March 2018.

“The charges have been strongly contested, with Shubhrahshu, who was principal chief mechanical engineer at ICF until June 2019, sending a letter to current chairman V K Yadav in August to assert that the Stadler-Medha consortium had been awarded the contract because of their offer to manufacture the trains at the lowest possible cost”, reported by Rail Journal, an online news portal.

However, Railway has offered the opportunity to global rolling stock manufacturers such as Bombardier Transportation and Siemens to submit their counter-offers but they refused to do so, the official said in his letter. CRRC and Bharat Heavy Electricals Limited (BHEL) had been among the other bidders in the first round.

Sources said that initially seven numbers of the aluminum-body distributed-traction trains will be imported and the remaining trains will be manufactured in India under a technology transfer arrangement. Bids for the procurement of 100 new trains will be floated soon and roll out of the first train is expected in 2022.

arshyam · Post by **arshyam** » 06 Dec 2019 07:54

My point exactly.

csaurabh · Post by **csaurabh** » 06 Dec 2019 10:55

It is very hard to innovate in PSU, simply because 90% of the people there simply laze around and collect money at the end of each month.
If someone tries to do anything on his own it will be massively opposed, because it makes the others look bad.
A large majority of Babus prioritize their own laziness and comfort even if the nation is going downhill, because it does not affect them. Sad but true.
This attitude is even there in organizations such as ISRO and IITs, let alone an ordinary govt. factory. In fact the ordinary govt. factory worker is probably a more productive and useful person than the cretins at the high command who spend all their time playing office politics.

Jaeger · Post by **Jaeger** » 06 Dec 2019 11:29

Vips wrote:^ Indian railways to float global tenders for procurement of 100 new trains.

We are actually witnessing the destruction of indigenous know-how and capability on the level of Marut if not more. 40 Years from now our children on BR will be wondering how their idiot parents were OK with this happening... the only difference is they might be typing in Mandarin. How is this OK? The bloody crabs need to be made into curry and Train 18 needs to move forward!

arshyam · Post by **arshyam** » 06 Dec 2019 11:48

Supratik wrote:One of the problems flagged about T18 is low energy efficiency leading to higher operating costs.

The devil is in the detail w.r.t. to this point: who complained about this? Also, so what if it is energy inefficient, is the solution to can the entire project itself, which is what seems to be happening now?

Let's see about this "inefficiency" argument: The train runs on electricity, not diesel, which is imported. It has enough power to accelerate quickly and sustain running at 180. Most of our tracks are choked with traffic, so the acceleration itself is a positive since it leads to faster section clearance. The 180kmp top speed means the train can be operated at 140kph at least, which is a huge improvement over the existing trains, so it lends itself to good use in the future. Being an EMU design, there is no need for a loco, reversal of that loco at the end point, etc. Passenger locos on IR are in such short supply that goods locos are deployed to run passenger trains, so T-18 is actually an efficiency gain in that situation. As for the top speed, sure, one can argue that most tracks don't support 180 and only 110, so that much of the power is wasted. But that would be true for any modern trainset - it's not the train's fault that p-way upgrades haven't happened. Heck, even the ubiquitous WAP-4 locos can sustain 140kph with a medium sized load, but run at 110 most of the time. The LHB A/C coaches we have can run at 160kph, but only a very few trains actually cross 130 itself. So are they also inefficient?

In the mil forum, we keep harping on how the Chinese defence tech started out as sh1t, but they persisted with their tech and improved it over time, and that we need to do the same with our stuff. Does that rationale not apply here? And if not, why not?

arshyam · Post by **arshyam** » 06 Dec 2019 11:50

We should probably take this conv to the railways thread before a mod lowers the boom.

yensoy · Post by **yensoy** » 06 Dec 2019 11:50

^^^^ Absolutely. I am sure not a single one of the global tenderers (baring the Chinese companies) will come in at a lower price than T-18. The Chinese players will bid with a different angle altogether, which is the total destruction of indigenous capability and full dependence on them for the future. That is the reason people underbid, it's no state secret.

At the risk of going political... I must say that events in the past few years are pointing to a slow destruction of efforts by local companies to innovate and indigenize, while companies with zero history of R&D and zero investment into the future have been given huge tech-heavy contracts. With no tradition of innovation, they will go to the nearest and cheapest solution provider (surprise, the Chinese of course!) and do a shoddy job with zero development of in-house talent.

chetak · Post by **chetak** » 06 Dec 2019 14:59

private CPEC

has the article mixed up dollars and rupees

do the hans have any stake in the power and telecom spaces as a consequence of these "investments"

twitter

Chinese Banks gave loans more than 18 Billion Dollars to Anil Ambani’s Reliance Telecom and Power firms. This was to buy Chinese equipment https://www.pgurus.com/chinese-banks-ga ... equipment/ … via @PGurus1

Chinese Banks gave loans more than 18 Billion Dollars to Anil Ambani’s Reliance Telecom and Power firms. This was to buy Chinese equipment

Supratik · Post by **Supratik** » 06 Dec 2019 19:40

I have seen those articles. Nothing concrete has been decided except the RM stating in parliament that there will be more T18s. Rest is what media is saying using unnamed people. Right now these are nothing but Chinese whispers. We will all know if and when it happens.

Meanwhile manufacturing and service PMI rising in Nov is good news. Have to watch for 3 mths to see if growth is reviving.

Rishi_Tri · Post by **Rishi_Tri** » 06 Dec 2019 20:41

Kaivalya wrote:^ I think we are over simplifying the manufacturing issue here . For example MicroMax vs Xiaomi is not just an issue of chinese manufacturing/dumping into India. Please note

1. Micromax et all were leaders in "Feature phone" market as opposed to "Smart phone" market

2. Xiaomi's CEO is on the record saying their plans were to sell 10,000 in the first year - except they sold 9 million

3. Micromax et all tried to create a "Smart Feature phone" in the less than 5000 Rs category that was not successful

4. Xiaomi has 6 Indian assembly plants as opposed to others like Samsung,Vivo etc.

5. Xiaomi is losing market share in china to others even though it unseated Samsung ( not micromax) in india in the smartphone market

6. Xiaomi has avoided tariffs because of locally assembling and attempting to manufacture/source locally.

7. One of the reasons why we can tell apple or samsung to do it in India is because of xiaomi. The argument will be slowly extended like if you can sell here assemble here; if you can assemble here you can source here etc. Slowly fine tuning tax breaks and tariffs ( carrot and stick ) over period of time

In other words, Xiaomi won by product offering, local assembling and a combination of other factors even though their competition outspent them. For folks worried, it will take some more time to reduce imports that can be sourced locally.This has to be done industry by industry, product by product prioritized by lost foriegn exchange and national interest . We need a MakeinIndia ministry with long term vision and business acumen/execution on equally long term

https://money.cnn.com/2018/04/30/techno ... index.html

https://www.businesstoday.in/magazine/f ... 57815.html

Rewind to 2010-13 timeframe. Micromax was leader in smartphone market, not the smart feature phone market. It was competing with likes of Samsung before our current PM opened the flood gates to Chinese stuff.

https://gadgets.ndtv.com/mobiles/news/m ... cmr-689324

https://www.bgr.in/news/micromax-become ... ng-282597/

Micromax lost out because the 4G handsets of theirs were not well formed, developed as compared to Xiomi coming from a country where 4G had already been rolled out. Backed by China government subsidies, low entry barriers to India, Micromax, Lava got murdered.

http://www.forbesindia.com/article/spec ... ss/42971/1

Indian handset manufacturing demise is solely at feet of NDA government. They could not understand the implications of free trade.

Supratik · Post by **Supratik** » 06 Dec 2019 20:50

First of all Micromax was just stamping imports. How does it make it a champion? Second, should the govt have stopped 4G and digital India as long as Micromax is able to make 4G phones. FYI, it can't even make 2G phones.

First find out how Tata and Mahindra did it in cars. They had competition in an even more capital intensive industry before trying to sell Mircomax.

Supratik · Post by **Supratik** » 06 Dec 2019 20:54

I have bought Micromax phones for family when they were at their peak. Didn't last long. Selling cheap Chinese phones probably rejects i.e. without QC with a mark-up doesn't make you a champion entrepreneur.

Supratik · Post by **Supratik** » 06 Dec 2019 20:56

Similar thing has happened to TV manufacturers Videocon and Onieda when "current PM" was not there. Couldn't compete.

uddu · Post by **uddu** » 06 Dec 2019 21:14

In a rare move, railways prematurely retires 32 of its officers
https://timesofindia.indiatimes.com/ind ... 404113.cms
Hope the corrupt ones that tried to stop the Vande Bharat Express are among the ones retired.

Supratik · Post by **Supratik** » 06 Dec 2019 22:03

Bajaj is going to face tough choices in the coming future IMO. With the scooter market slowly disappearing, them not entering either the car market when they had time or taking EVs seriously, just tinkering with motorcycles and calling a quadricycle a car is not going to make it for them.

Supratik · Post by **Supratik** » 06 Dec 2019 22:16

All is not lost for Indian mobile manufacturers. If the govt can manage to get the component and subcomponent makers to make them in India by policy decisions all they have to do is wait and then jump back into it. I believe the Chinese also source their components. Same thing Indian companies can do and bounce right back.

Kaivalya · Post by **Kaivalya** » 07 Dec 2019 01:07

Rishi_Tri wrote:
Kaivalya wrote:^ I think we are over simplifying the manufacturing issue here . For example MicroMax vs Xiaomi is not just an issue of chinese manufacturing/dumping into India. Please note

1. Micromax et all were leaders in "Feature phone" market as opposed to "Smart phone" market

2. Xiaomi's CEO is on the record saying their plans were to sell 10,000 in the first year - except they sold 9 million

3. Micromax et all tried to create a "Smart Feature phone" in the less than 5000 Rs category that was not successful

4. Xiaomi has 6 Indian assembly plants as opposed to others like Samsung,Vivo etc.

5. Xiaomi is losing market share in china to others even though it unseated Samsung ( not micromax) in india in the smartphone market

6. Xiaomi has avoided tariffs because of locally assembling and attempting to manufacture/source locally.

7. One of the reasons why we can tell apple or samsung to do it in India is because of xiaomi. The argument will be slowly extended like if you can sell here assemble here; if you can assemble here you can source here etc. Slowly fine tuning tax breaks and tariffs ( carrot and stick ) over period of time

In other words, Xiaomi won by product offering, local assembling and a combination of other factors even though their competition outspent them. For folks worried, it will take some more time to reduce imports that can be sourced locally.This has to be done industry by industry, product by product prioritized by lost foriegn exchange and national interest . We need a MakeinIndia ministry with long term vision and business acumen/execution on equally long term

https://money.cnn.com/2018/04/30/techno ... index.html

https://www.businesstoday.in/magazine/f ... 57815.html
Rewind to 2010-13 timeframe. Micromax was leader in smartphone market, not the smart feature phone market. It was competing with likes of Samsung before our current PM opened the flood gates to Chinese stuff.

https://gadgets.ndtv.com/mobiles/news/m ... cmr-689324

https://www.bgr.in/news/micromax-become ... ng-282597/

Micromax lost out because the 4G handsets of theirs were not well formed, developed as compared to Xiomi coming from a country where 4G had already been rolled out. Backed by China government subsidies, low entry barriers to India, Micromax, Lava got murdered.

http://www.forbesindia.com/article/spec ... ss/42971/1

Indian handset manufacturing demise is solely at feet of NDA government. They could not understand the implications of free trade.

Sir - I think you are overly harsh. Even the article you quote says Samsung was the leader in the smartphone market( not micromax ). Like supratikji mentions micromax added some features and assembled phones not manufacture > 70% components. Also 4G launch and consequently preparation was around/before 2012 before NDA started. There is no good time to open the markets ever because everyone else have already been there and we will always be closed economy. Micromax was healthy enough to innovate 2010 -2013 timeframe you mention ..they stumbled much later

Supratik · Post by **Supratik** » 07 Dec 2019 01:16

Micromax initially did not even assemble. They started assembly later. By the time they started having a proper plant they had started loosing the market.

Suraj · Post by **Suraj** » 07 Dec 2019 09:20

The RBI MPC has been very poor at reading the current economic sentiment, IMHO. Voting 6-0 to keep rates where they are because of unseasonal heavy rainfall causing a temporary spike in food inflation while they drop their GDP growth projects to sub 6% is a case of focusing on the paise and not the Rupees.

GoI needs to change the composition of the MPC. Three from RBI, Three from FinMin or elsewhere. Right now it's simply an academic group:
Governor of the Reserve Bank of India – Chairperson, ex officio - Shaktikanta Das
Deputy Governor of the Bank, in charge of Monetary Policy—Member, ex officio - BP Kanungo
One officer of the Reserve Bank of India to be nominated by the Central Board – Member,; - Michael Patra
Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member;
Professor Pami Dua, Director, Delhi School of Economics – Member;
Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad - Member

nachiket · Post by **nachiket** » 07 Dec 2019 13:22

At least they left it unchanged. The GST council seems to be living in their own world and looks set to commit a monumental blunder.

GST rates set to increase as council eyes major revamp

Almost two and a half years since its launch, the GST council is expected to discuss major restructuring to raise the base slab from 5% to 9-10%, while doing away with the 12% rate and moving 243 items in this segment to the 18% band — moves that will increase the tax burden on consumers but may generate close to Rs 1 lakh crore of additional revenue.

This will worsen the economic situation even further. Absolutely brain-dead move. When everyone and his cat agrees there is a demand slowdown these maharathis want to increase taxes.

Rahulsidhu · Post by **Rahulsidhu** » 07 Dec 2019 14:23

nachiket wrote:At least they left it unchanged. The GST council seems to be living in their own world and looks set to commit a monumental blunder.

GST rates set to increase as council eyes major revamp

Almost two and a half years since its launch, the GST council is expected to discuss major restructuring to raise the base slab from 5% to 9-10%, while doing away with the 12% rate and moving 243 items in this segment to the 18% band — moves that will increase the tax burden on consumers but may generate close to Rs 1 lakh crore of additional revenue.
This will worsen the economic situation even further. Absolutely brain-dead move. When everyone and his cat agrees there is a demand slowdown these maharathis want to increase taxes.

It seems like the backdrop for this is state govts. being seriously cash strapped (due to low GST collections and Central govt. being late on its dues to the states). The right solution would be for GoI to break its artificial shackles and let the deficit rise. Borrow from the market and pay the states. The WRONG solution is raising GST rates, which unfortunately is likely to happen.

Rahulsidhu · Post by **Rahulsidhu** » 07 Dec 2019 14:28

Suraj wrote:The RBI MPC has been very poor at reading the current economic sentiment, IMHO. Voting 6-0 to keep rates where they are because of unseasonal heavy rainfall causing a temporary spike in food inflation while they drop their GDP growth projects to sub 6% is a case of focusing on the paise and not the Rupees.

GoI needs to change the composition of the MPC. Three from RBI, Three from FinMin or elsewhere. Right now it's simply an academic group:
Governor of the Reserve Bank of India – Chairperson, ex officio - Shaktikanta Das
Deputy Governor of the Bank, in charge of Monetary Policy—Member, ex officio - BP Kanungo
One officer of the Reserve Bank of India to be nominated by the Central Board – Member,; - Michael Patra
Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member;
Professor Pami Dua, Director, Delhi School of Economics – Member;
Dr. Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmedabad - Member

I haven't been a fan of this explicit inflation targeting MPC regime. As I've previously written, this was a seriously retrograde move. The older system was much better. But even for me, this move was shocking. I've previously read some of the MPC members commentary and, sorry to be harsh, they were totally insipid and illogical.

Indian economists should be watching US policy making (fiscal and monetary) and its outcomes very carefully. The solution to our troubles is actually much simpler than made out to be.

Rahulsidhu · Post by **Rahulsidhu** » 07 Dec 2019 15:20

https://openthemagazine.com/cover-stori ... ion-fears/

What is the broad message? (a) There is no gloom and doom in 5 per cent. (b) In 2020-2021, growth will increase to around 6 per cent, but not significantly beyond that. (c) The clean-up will lead to a more efficient and more formal economy, but not overnight. (d) In the 2020-2021 Budget, we will witness the contours of a new pattern of public expenditure.

Reading this article really made me despondent. A senior economic advisor to the govt. is justifying 5-6% growth at a time when working age population is growing ~2%, on the grounds that we have a more "efficient and formal" economy.

My view: there is absolutely NO justification for growing so slowly at such low income levels and such favorable demographics. Low inflation is good, but (1) it can go well together with high growth rates (2) what hurts the poor more than inflation is stagnant/declining incomes. Economists would do well to pay attention to employment and income growth at least as much as they do to inflation.

Supratik · Post by **Supratik** » 07 Dec 2019 20:06

Labour market is growing at 1.3-1.5% not 2%.

They are probably thinking of raising GST rates to compensate for the coming IT tax changes. I think this is not the right time to tinker with GST rates. Better to curtail expenditure for at least a year. In India the govt is obsessed with govt led growth.

Borrowing more to maintain fiscal deficit targets is a bad idea as once you start going that route there is no end to it. We are not America or China who can live with it.

This is a difficult balancing act as govt mainly media-led is under pressure to do something quickly to fix growth. Formalization of economy is not going to yield results in a day. It will take sometime.

Rishirishi · Post by **Rishirishi** » 08 Dec 2019 02:05

Labour market is growing at 1.3-1.5% not 2%.

They are probably thinking of raising GST rates to compensate for the coming IT tax changes. I think this is not the right time to tinker with GST rates. Better to curtail expenditure for at least a year. In India the govt is obsessed with govt led growth.

Borrowing more to maintain fiscal deficit targets is a bad idea as once you start going that route there is no end to it. We are not America or China who can live with it.

This is a difficult balancing act as govt mainly media-led is under pressure to do something quickly to fix growth. Formalization of economy is not going to yield results in a day. It will take sometime.

Taxation needs to be incread dramatically to invest in infrastructure, law and order, education and rural development.

Low tax only serve the rich. The notion that money "tricle down" is just a hoax. While villages see vegitables rot, becase of lack of roads, millions of Indians are taking foreign holidays. IT is PATHETIC. A tourist tax of Rs 25 000 should be put on each outbound flight.

Rishirishi · Post by **Rishirishi** » 08 Dec 2019 02:23

India hand in 2015 27 million 4 wheel vehicles. Is there any roadtax on them? Anyone who owns a car can probably pay 15-20K per year to keep the vehicle. A Rs 10 000 per vehicle tax would give Rs 27 000 crores yearly. If that money is used to exclusively roads, it can give about 50 000 KM of rural roads per year. In 10 years time India would have 500 000 Km of rural roads, which will spark rural growth and slow down the growth of overcrowded cities.

ldev · Post by **ldev** » 08 Dec 2019 04:56

Rishirishi wrote:India hand in 2015 27 million 4 wheel vehicles. Is there any roadtax on them? Anyone who owns a car can probably pay 15-20K per year to keep the vehicle. A Rs 10 000 per vehicle tax would give Rs 27 000 crores yearly. If that money is used to exclusively roads, it can give about 50 000 KM of rural roads per year. In 10 years time India would have 500 000 Km of rural roads, which will spark rural growth and slow down the growth of overcrowded cities.

So the Rs 40-45 per liter combination of Excise duty and VAT on petrol is not enough to fund rural roads? What is needed to broaden the tax base is to tax agriculture. I cannot think of a single country other than India where income from agriculture is tax exempt.

Karan M · Post by **Karan M** » 08 Dec 2019 05:36

Rishirishi wrote:Taxation needs to be incread dramatically to invest in infrastructure, law and order, education and rural development.

Low tax only serve the rich. The notion that money "tricle down" is just a hoax. While villages see vegitables rot, becase of lack of roads, millions of Indians are taking foreign holidays. IT is PATHETIC. A tourist tax of Rs 25 000 should be put on each outbound flight.

Dude, I swear, you would fit right in with the India of 1940's to the 1980's. Retrograde moves like yours of "wealth transfer" only serve to penalize those who are already bearing the yoke of running the already disproportionate tax burden.

Cain Marko · Post by **Cain Marko** » 08 Dec 2019 06:41

I'd rather flirt with the idea of zero income tax on wage earners. Perhaps a small consumption tax on non basic goods. And a tiny transaction tax on bank transactions.

arshyam · Post by **arshyam** » 08 Dec 2019 07:11

Per reports here and there, there are a few green shoots appearing. I hope they leave the GST rates as it is for now and wait it out, otherwise, it would be akin to pulling these green shoots off the ground and exacerbating the problem.

I am looking to purchase a two-wheeler, but postponed my buy till BS-VI models are available. Might as well as it is a matter of 2-3 months at this point. But I am sure a lot of people have thought the same way and inadvertently contributed to the auto sector slowdown. Now if GST were to increase, more postponement would happen, and so on.

arshyam · Post by **arshyam** » 08 Dec 2019 07:21

Karan M wrote:
Rishirishi wrote:Taxation needs to be incread dramatically to invest in infrastructure, law and order, education and rural development.

Low tax only serve the rich. The notion that money "tricle down" is just a hoax. While villages see vegitables rot, becase of lack of roads, millions of Indians are taking foreign holidays. IT is PATHETIC. A tourist tax of Rs 25 000 should be put on each outbound flight.
Dude, I swear, you would fit right in with the India of 1940's to the 1980's. Retrograde moves like yours of "wealth transfer" only serve to penalize those who are already bearing the yoke of running the already disproportionate tax burden.

Exactly, this has the license-permit-quota raj type of thinking written all over it.

Let's see how this could play out: an outbound tourist tax would not necessarily mean an increase in domestic tourism - it would simply mean a postponement of that trip for most people. It's not that a Singapore can be replaced by, say, Mylapore. Not to mention the small slice of such people who will be targeted by this rule, would vociferously protest to the point that media will step and make it a general tourist tax, discouraging domestic tourism as well. Some analyst would come along and say this was because RBI wants to restrict outgo of dollars (never mind that it has $450B in its kitty) and then more articles on "India restricting foreign travel" would appear leading to confidence issues in the economy, and so on. Further doom and gloom, and all that. Net result: a small handful of people asked to shell out more tax could result in a disproportionate blowback on the economy that ends up costing much more than what this tax could bring in to the govt coffers.

Rishirishi · Post by **Rishirishi** » 08 Dec 2019 07:37

Postby Karan M » 08 Dec 2019 05:36

Rishirishi wrote:
Taxation needs to be incread dramatically to invest in infrastructure, law and order, education and rural development.

Low tax only serve the rich. The notion that money "tricle down" is just a hoax. While villages see vegitables rot, becase of lack of roads, millions of Indians are taking foreign holidays. IT is PATHETIC. A tourist tax of Rs 25 000 should be put on each outbound flight.

Dude, I swear, you would fit right in with the India of 1940's to the 1980's. Retrograde moves like yours of "wealth transfer" only serve to penalize those who are already bearing the yoke of running the already disproportionate tax burden.

Nope, i am a former admirer of Thatchers tax cuts. Now i just know better. People have been folled into thinking that lower taxes gets the economy going becase of investments bladi bladi bla. The countries which are best to live in have very high taxes. Take a look at the facts and jugde for your self. Indias tax revenue is only 16% and Pakistan is on 11%. Guess how much tax they pay in Scandinavia, Germany, Japan, China, UK ?
Revenue to tax ratio.
https://en.wikipedia.org/wiki/List_of_c ... _GDP_ratio

PS: Do not confuse GDP growth with standards of standard of living and quality of life, for the masses. Most of the GDP growth will end up with the top 5% wealthy. And what do the wealthy spend it on ? certainly not on stuff like infrastructure or education. It is more like private Jets, luxury mansions, Louis Vitton, sending kids to foreign universities etc etc
But isint the saved taxes used to invest in new business and create jobs? Partially true, but sadly the super rich manuplate the figures so that the banks end up with all the risk. Hece if the project goes well, they make an earning. If the project fails, the public pays for it, via bank bailouts. Just think about it. We have a huge banking crisis in India, can you see any crises for the ones who created the mess ?

Deans · Post by **Deans** » 08 Dec 2019 12:38

I have written on the Chinese threat (imports destroying our manufacturing base). The deficit has only increased since 2014 (particularly if you include trade with HK) There are solutions, which are as follows:

1. The problem with anti-dumping duties or raising duties, is that we may lose cases at WTO, or run afoul of regional trading pacts (Chinese phones can be assembled in Vietnam and be imported duty free under ASEAN free trade agreements). Imports are often under-invoiced. An item that costs $ 100 to import, may be invoiced at $ 50 (so effectively it attracts half the duty) while the other $50 is the importers black money remitted to China, outside the RBI's purview. The solution is to impose a minimum floor price for import (which is allowed) and countries like Russia successfully did to revive their manufacturing of consumer products.

2. Where are are imposing anti dumping duties, club HK with China - which, incredibly we don't do, because our babus think HK is a separate country.

3. In core industries, have the option to ban imports from organisations or countries, that support terrorism. (like CAATSA in US). That includes countries that do not sanction UN designated terrorists (China), do not deport them (Malaysia), or support terror groups operating against India (Turkey)
It can also include all organisations doing business in Indian territory illegally occupied by Pak (e.g. sale of cellphones used in POK). It is inexplicable that we have resumed palm oil imports from Malaysia, after they offered a discount (which they had to because EU cut imports and their price crashed).

4. In sectors vital to the national interest, e.g. Power, telecom, transport - no country with interests hostile to India should be allowed to bid for projects and PSU's can be prevented from importing from China.

5. Trade deficit has to be made up by investments in Indian infrastructure, or in Indian companies (investing in start-ups, unlisted companies, minority stakes in listed companies).

6. Strict inspections on quality at the time of import and consumer friendly regulations. for e.g. imported toys, household products have to have instructions in all major languages (stickers not allowed), free of harmful chemicals, comply with ISI standards.

kit · Post by **kit** » 08 Dec 2019 15:41

Just to make people aware the chinese are capable of selling 6 inch smart phones full HD with bluetooth 4 4g dual sim with ca third card slot android phones with top notch build quality and their latest processor 6gb memory and 128 plus ram for just 50 to 70 euros !!.. can any other company in the world beat that..granted they wont last more than a year !!

jpremnath · Post by **jpremnath** » 08 Dec 2019 16:58

It is surreal to see people coming with ideas of increasing tax on BRF...how times have changed..Indira Gandhi would love to have them in her cabinet of the 70s...We have empirical evidence of how increasing taxes( GST not income..) hits the common man the most who then cuts down on consumption...This hits the bottom-line of companies who cuts down cost just to be in business..this will include layoffs and reduced raw material purchase...This is a vicious cycle and lead to a situation where everyone except the wealthy gets hit. And the govt?..well, they will realise that when consumption drops, revenue from GST and income tax drops faster..and there you go!..the wonderful universe of a socialist economy..

Our finance ministry is populated by babus whose whims and fancies are not checked by the ministers..Just recall the economic genius par extraordinaire Hasmukh Adia, whose brilliant idea of implementing LTCG tax in the Jaitley budget of 2018 to collect 20,000 crores started one of the biggest bear markets ever. The tax collected was a fraction for the billions of dollars worth of wealth destroyed and destroyng many companies.

The govt is the least efficient mode of capital allocation. What happened to the windfall revenue collected from fuel?...Did the road construction pace double from UPA? It improved only slightly..What happened to the much touted smart cities?
Thousands of crores...nope.billions of dollars were spent in recapitalising sick PSUs and banks. Did that boost the economy..No..we have seen the economy go from bad to worse...Govt investments need to be focused. Aiming at maximising employment and consumption. In our country apparently no one seems to bother..

yensoy · Post by **yensoy** » 08 Dec 2019 18:45

Increasing tax without taking on large infrastructure projects is meaningless. I don't think what the country needs now is either GST reduction or lowering of personal income tax rates. We need a huge internal Marshall plan. We need to invest in decongesting our cities, in securing our sources of water, in cleaning up the environment, in improving the quality of our schools and hospitals, and in much better policing. These efforts are critical to put us in to the middle income group of countries, and no these cannot be done by private individuals or companies (although the private sector can and must be roped in to do the legwork upon payment).

Supratik · Post by **Supratik** » 08 Dec 2019 20:31

While it is understandable that people are upset with the slow growth but please be careful with the data you present on this thread. This is because this thread is read outside. Highway construction has more than doubled in the last 5 years. Railways has nearly doubled.

IT tax slabs are going to change. See this video. They should also change tax on incentives and investments.

https://youtu.be/uhSEPn48cPk

Rishirishi · Post by **Rishirishi** » 09 Dec 2019 05:56

The govt is the least efficient mode of capital allocation. What happened to the windfall revenue collected from fuel?...Did the road construction pace double from UPA? It improved only slightly..What happened to the much touted smart cities?
Thousands of crores...nope.billions of dollars were spent in recapitalising sick PSUs and banks. Did that boost the economy..No..we have seen the economy go from bad to worse...Govt investments need to be focused. Aiming at maximising employment and consumption. In our country apparently no one seems to bother..

I would say it depends on the governmnet. Any country needs Defence,infrastructure, education and law & order. How do you get the private sector to finance that ?
People here envy China with its 250 dollars per month manufactuing jobs. Indian companies are crying for good quality graduates for 1500 dollar per month jobs. The brightest are leaving India, to escape from the Indian cities that have become a living hell. How do you expect the next Samsung or Google come from India, when the brightes pack up and leave?
Imagine what type of comapneis Mumbai and Bangalore could have if the cities would had been as organised like Singapore or Frankfurt. It is not as expensive or difficult as it may seem.