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 - Nov 27 2017

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.
chetak
BRF Oldie
Posts: 16078
Joined: 16 May 2008 12:00

Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 28 Dec 2017 00:27

Suraj wrote:FATCA compliance is only required for those who have US assets . This includes all US people (citizens and GCs) and work visa holders . There’s no requirement for regular folks’ information to be passed to US authorities - no country would do that . If compliance is a burden, Indian banks can just exit from personal banking on US shores and let branches of US banks in India handle all such accounts .


FATCA form as part of additional KYC was pitched to me as a SEBI requirement for some mutual funds that I am holding. The overeager guy at the counter said that since I was already there, why didn't I sign the additional KYC FATCA form??

I declined to do so but was curious enough to ask to see the form which he showed me.

I don't hold any assets in the US and nor am I planning to acquire any.

I am pissed that the US of effing A can ask for the financial details and other info on an Indian citizen and our bleddy govt is all gungho to pass it on. What about my rights to privacy under the Indian constitution??

A_Gupta
BRF Oldie
Posts: 9978
Joined: 23 Oct 2001 11:31
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 28 Dec 2017 00:57

https://www.irs.gov/businesses/corporat ... -act-fatca
The US of A imposes FATCA on every country. (List of countries and agreements here:
https://www.treasury.gov/resource-cente ... FATCA.aspx )

The Foreign Account Tax Compliance Act (FATCA), which was passed as part of the HIRE Act, generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withholdable payments. The HIRE Act also contained legislation requiring U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets.


https://www.irs.gov/businesses/corporat ... stitutions

Under FATCA, to avoid being withheld upon, foreign financial institutions (FFIs) may register with the IRS and agree to report to the IRS certain information about their U.S. accounts, including accounts of certain foreign entities with substantial U.S. owners

FFIs that enter into an agreement with the IRS to report on their account holders may be required to withhold 30% on certain payments to foreign payees if such payees do not comply with FATCA

The FATCA regulations exempt many categories of FFIs from the requirement to register and report, including
- Most governmental entities
- Most non-profit organizations
- Certain small, local financial institutions
- Certain retirement entities

FFIs include, but are not limited to:
- Depository institutions (for example, banks)
- Custodial institutions (for example, mutual funds)
- Investment entities (for example, hedge funds or private equity funds)
- Certain types of insurance companies that have cash value products or annuities

Unless otherwise exempt, FFIs that do not both register and agree to report face a 30% withholding tax on certain U.S.-source payments made to them.

A_Gupta
BRF Oldie
Posts: 9978
Joined: 23 Oct 2001 11:31
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 28 Dec 2017 01:01


andy B
BRFite
Posts: 1585
Joined: 05 Jun 2008 11:03
Location: Gora Paki

Re: Indian Economy News & Discussion - Nov 27 2017

Postby andy B » 28 Dec 2017 02:05

chetak wrote:
Suraj wrote:FATCA compliance is only required for those who have US assets . This includes all US people (citizens and GCs) and work visa holders . There’s no requirement for regular folks’ information to be passed to US authorities - no country would do that . If compliance is a burden, Indian banks can just exit from personal banking on US shores and let branches of US banks in India handle all such accounts .


FATCA form as part of additional KYC was pitched to me as a SEBI requirement for some mutual funds that I am holding. The overeager guy at the counter said that since I was already there, why didn't I sign the additional KYC FATCA form??

I declined to do so but was curious enough to ask to see the form which he showed me.

I don't hold any assets in the US and nor am I planning to acquire any.

I am pissed that the US of effing A can ask for the financial details and other info on an Indian citizen and our bleddy govt is all gungho to pass it on. What about my rights to privacy under the Indian constitution??



Chetak ans Surak saars for businesses unkil has well truly got all countries by the balls to sign this fatca decleration so long as that Financial institution has US business you gotta sign and declare. Whilst not entirely surprising its quite interesting that these buggers are spreading this t personal investors and clients! My understanding is that these institutions pass on the data to uncle sam as required in theory atleast! The posts below by A gupta are spot on uncle sam knows!!

disha
BR Mainsite Crew
Posts: 6208
Joined: 03 Dec 2006 04:17
Location: gaganaviharin

Re: Indian Economy News & Discussion - Nov 27 2017

Postby disha » 28 Dec 2017 07:22

^It is the bank and their untrained reps who do the bungling. It is clear that if you hold US assets via a "US Reportable account", you come under the US equivalent KYC norms. The bank marketing such products need to identify such customers who deal in US assets.

In a nutshell if you do not own US assets directly you do not need to fill out the FATCA form for US. But again the idiots at the banks only want to do do their "CYA" in triplicate.

The term “U.S. Reportable Account” means a Financial Account maintained by a Reporting Indian Financial Institution and held by one or more Specified U.S. Persons or by a Non-U.S. Entity with one or more Controlling Persons that is a Specified U.S. Person. Notwithstanding the foregoing, an account shall not be treated as a U.S. Reportable Account if such account is not identified as a U.S. Reportable Account after application of the due diligence procedures in Annex I.

Suraj
Forum Moderator
Posts: 11090
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 28 Dec 2017 07:54

The FATCA issue isn’t restricted to India . Financial institutions everywhere are being burdened with it in various ways . Go to any US expat forum and there’s a thread complaining against FATCA. Financial firms get sucked into it in various ways, eg holding some of their deposits in US assets . And end up with regulatory burden that they try to pass onto customer . They should be told to exit US holdings instead .

JohnTitor
BRFite
Posts: 1306
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Nov 27 2017

Postby JohnTitor » 28 Dec 2017 09:14

Agree with the intrusive FATCA form filling for everyone irrespective of links to US. However problem is with Indian mentality. For instance most people in UK are not required to provide FATCA declaration unless they have a USD account or are a US citizen. I have never been asked to sign anything there.

FATCA is a requirement because US laws require taxation of all citizens irrespective of where they are. So a US citizen earning in India may have to pay US taxes if they cross a certain threshold. This is what you are declaring effectively. Since Indians cannot hold dual nationality they can be excluded from the whole declaration if their passport is checked and doesn’t have a green card stamp. But it boils down to attitudes and not being concerned about privacy.

Similarly, Indians are required to provide all biometric data to companies like infosys and E&Y when you join them. Everything from fingerprints to stool samples are given to them. Yet no one seems to think anything of it. The excuse they give is for US client requirements.

I turned down a job with these people when I found out about it. Funny thing is that I used to work for a company that was involved in DOD projects, highly classified yet I was not required to provide finger prints or anything else. Only requirement was that of citizenship- had to be UK or Ire

Privacy isn’t a concern for most people here I’ve noticed. Every shop asks you for your phone number even if you buy an ice cream. Everyone tells everyone their salaries and everyone is privy to everyone’s private life, discussing it like some sort of soap. So I’m not surprised when people don’t question their bank when asked to declare some US form.

arshyam
BRF Oldie
Posts: 2733
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Nov 27 2017

Postby arshyam » 28 Dec 2017 10:32

^^ How does this, apart from the gratuitous lecture on "Indian mentality" contribute to this thread?

JohnTitor
BRFite
Posts: 1306
Joined: 11 Aug 2016 06:14

Re: Indian Economy News & Discussion - Nov 27 2017

Postby JohnTitor » 28 Dec 2017 11:07

Saar , It isn’t a lecture. I'm sorry you felt that it came across that way. I am merely stating why things are the way they are. I have dealt with it myself and raised the issue with the bank. I ask everyone to not blindly give away information about themselves to business entities.

FATCA, the topic at hand is something that is a non issue elsewhere. Yet banks here ask everyone to sign it and (probably) share details with US authorities. Why should Indian nationals details be shared with them?? Apart from the obvious privacy issue, India isn’t a client state nor are Indians beneficiaries in any way from signing such forms.

Here’s the thing, it is being forced on global banks because the US wants to tax their citizens. So non citizens don’t need to be subjected to the law. Banks here can clearly rule out Indian citizens because they cannot hold dual nationality. All it requires is banks asking customers to tick a box stating they aren’t US citizens or GC holders and will inform the bank should they become one. Then signing FATCA isn’t needed!!

Mort Walker
BRF Oldie
Posts: 6609
Joined: 31 May 2004 11:31
Location: The rings around Uranus.

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 29 Dec 2017 02:27

Suraj wrote:The FATCA issue isn’t restricted to India . Financial institutions everywhere are being burdened with it in various ways . Go to any US expat forum and there’s a thread complaining against FATCA. Financial firms get sucked into it in various ways, eg holding some of their deposits in US assets . And end up with regulatory burden that they try to pass onto customer . They should be told to exit US holdings instead .


This is easy to say than to exit US holdings. The US is the largest economy in the world and any large economy in the world has business with the US. In effect, large financial institutions are giving away customer information to the US government. I wouldn’t be surprised if the US already had access to the entire Adhaar data base.

vera_k
BRF Oldie
Posts: 2889
Joined: 20 Nov 2006 13:45

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vera_k » 29 Dec 2017 05:13

JohnTitor wrote:FATCA, the topic at hand is something that is a non issue elsewhere. Yet banks here ask everyone to sign it and (probably) share details with US authorities. Why should Indian nationals details be shared with them?? Apart from the obvious privacy issue, India isn’t a client state nor are Indians beneficiaries in any way from signing such forms.


To combat tax evasion, FATCA is a reciprocal agreement to exchange information about accounts held by residents. So sure, India will benefit in some way by being able to claim tax due on accounts held in the USA by Indian tax residents. Whether that is happening to any significant extent is an open question, but the possibility does present itself.

A_Gupta
BRF Oldie
Posts: 9978
Joined: 23 Oct 2001 11:31
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 30 Dec 2017 00:55

CARE's assessment of the Indian Economy, 2017:
http://www.zeebiz.com/india/news-india- ... ings-34200

Mort Walker
BRF Oldie
Posts: 6609
Joined: 31 May 2004 11:31
Location: The rings around Uranus.

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 30 Dec 2017 01:07

From A_Gupta's link.

Government finances

As per the latest data released by the government for the period April-November’17, the fiscal deficit is 112% of the target, while the revenue deficit is 152.2% of the budgeted amount. It is expected that the revenue collection could be lower especially for indirect taxes which may not be compensated by higher non-tax revenue in the form of dividend received from PSUs and RBI and higher disinvestment receipts. This has prompted the government to announce an additional borrowing programme of Rs 50,000 cr for the year. Assuming this amount of Rs 50,000 cr is not exceeded nor are additional Tbills issued or retained in March, the fiscal deficit number would go up to 3.5% of GDP for FY18 under ceteris paribus conditions.


Lower indirect tax collection meaning that GST isn't generating the revenue needed by the Central government?

Prem
BRF Oldie
Posts: 20508
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Prem » 30 Dec 2017 02:47

https://www.rbi.org.in/Scripts/BS_ViewW ... x?id=42706
Transparency on export ?? FE reserves up 3.5 billions and now 405 Billion.. 1T by 2022-23 fiscal.

hanumadu
BRF Oldie
Posts: 3851
Joined: 11 Nov 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 30 Dec 2017 09:18

Make in India bearing fruits.
On wards and upwards to net zero imports by 2022.
https://pbs.twimg.com/media/DSQ5cSNVQAA1S9Q.jpg

Austin
BRF Oldie
Posts: 20136
Joined: 23 Jul 2000 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 30 Dec 2017 11:46

hanumadu wrote:Make in India bearing fruits.
On wards and upwards to net zero imports by 2022.
https://pbs.twimg.com/media/DSQ5cSNVQAA1S9Q.jpg


Looks like the current government is beholded to china all stastics we see is wrt to China vs us , better to put stastics into broad aspect of BRICS and if they want to add China then let them add our top 3 trading partner too


Rahul M
Forum Moderator
Posts: 16246
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 30 Dec 2017 12:20

Suraj et al,
I was wondering about the job growth situation in the country and what the govt can do to promote it. let me know if what follows is a feasible idea or not.

Let me summarise the job situation in the country.
Pro's :
P1. Availability of cheap abundant labour force
P2. Political support for any company that provides jobs in decent numbers

Con's
C1. Labour laws that are restrictive & disincentivize hiring. these are supposed to protect interests of labourers but look after the interests of only those who are already employed and raise the entry-bar for job seekers.
C2. Lack of skilled labour force.
C3. Political support for labour unions, even the rowdy ones
C4. Much of the employment that is generated is informal or temporary (through outsourcing) which means minimal salary, no benefits etc. This is a work-around to get around C1 but leads to lowering of quality of available jobs.

=======================
If we do a comparison of the relative weights of the above factors we can easily see that
A. C1 >> P1, restrictive labour laws are a much stronger factor than availability of abundant cheap labour. While GoI did try to amend labour laws that effort went nowhere. It is now trying to make changes through state govt's under NDA control but that is a long winded process. Net negative.
B. C2, this point might be mitigated by skills India in the future, making this a net neutral point.
C. C3>P2, political support for unions is stronger than that for hiring co's, making this a net negative.
D. C4, net negative.

Looking at this comparison, we can clearly see why Indian co's prefer adopting capital intensive production techniques over labour intensive ones, in spite of labour being cheaper in India than capital. This results in jobless growth (yes, I am given to understand the situation may not be as bad as is made out in MSM, but the point stands; job growth lags GDP growth, whereas we would like it to lead GDP growth) which is a recipe for India to be stuck in a middle income trap. What's worse, inequality will rise leading to social & political instability and economic deteorioration.

All that's without the automation crisis which would make the job situation much worse. The Indian business environment already incentivized to seek capital intensive processes would opt for automation in a heart-beat (they already are), leaving the masses of job-seekers without a job.

Clearly, with the current policies, as we have seen above, there's not much hope of nudging co's towards hiring more, because the factors are all strongly stacked against that decision. That's not a commentary on the performance of the govt as it is about the current techno-economic situation we find ourselves in. What's needed is for govt. to come up with policies that even out the scales against hiring and hopefully nudge co's towards adopting labour intensive methods. My belief is, if the policy-scape is evened out the co's will innovate themselves and come up with India specific solutions to the problems, creating both future proof production methods for India, absorb the incoming work force and give themselves a competitive advantage globally.

So what can the GoI do to even out the playing field ? Changing labour laws state by state, is too uneven and too slow. Even if it works would take a long time. For one thing, the ruling party may be cast away in the next elections and the incoming govt might reverse the laws. No co' is going to take a long-term punt when the ground situation is in flux.
==============================
One idea would be for the MoF to connect the reduction in corporate tax (say) to a proportionate increase in total employed : capital invested (in Cr) ratio. That is, for any excess in TECI ratio above a certain benchmark (to be set adjusted annually) the corporate tax would get reduced by the corresponding percentage. The upper limit to such reductions might be set at 5% (i.e effective corporate tax of 25% ).
To prevent co's from gaming the system the jobs would have to be on the payroll for at least 12 consecutive months; this would be checked with annual submissions in AADHAR linked EPF accounts.
IMHO, this would give co's a tangible incentive in creating jobs that they can actually reflect in their bottomline. Secondly it could free up govt's from providing across the board tax incentives to sectors with the hope that it would generate jobs, hope that often does not materialize.

So econ thread gurus, time for your opinions. Is this doable, or too naive or something else ?

suryag
Forum Moderator
Posts: 2968
Joined: 11 Jan 2009 00:14

Re: Indian Economy News & Discussion - Nov 27 2017

Postby suryag » 30 Dec 2017 13:16

Rahulm ji a prerequisite for quality job creation(even at technician level) is skill enhancement. I have toured a lot of engg colleges this past year talking to departments and i can assure you the technical depth and breadth of the engineers coming out is worrisome. Want to reiterate, this is in no way reflection of their abilities(afterall they are the cream of the country having passed multiple entrance exams). The colleges are trying hard but they dont find good faculty very easily as good engineers invariably end up joining the corporate companies. I made informal enquiries and a lot of my team mates are interested in doing one week guest lecture kind of a course mainly driven by the satisfaction it gives us. I remember UBji mentioning some way of adding or enrolling yourself as guest lecturer but if this initiative is streamline and tied to CSRR(all MNCs have to adhere to this anyway) we could see very good transformation in the skill sets, it could be a 2x20 hr commitment that is needed to ignite the spark in our budding engineers(presuming they have the basics nailed down theoretically) and today we have engineers in almost all the fields that can spare this 2x20hrs, challenge is to create that bridge between students and professionals .. my 2c

Rahul M
Forum Moderator
Posts: 16246
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 30 Dec 2017 13:31

I agree, but white collar jobs are a smaller fraction of the job market. some of that problem would be taken care of by the skills India initiative, but I agree improving teaching standards via CSRR can be one innovation. however would MNC's release their most capable people for this or their least capable ones ?

then again, the bulk of job seekers are looking for blue-collar jobs in manufacturing, services etc. the requirement for skills while important, would still not be enough for co's to hire folk unless the policy environment improves.

chetak
BRF Oldie
Posts: 16078
Joined: 16 May 2008 12:00

Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 30 Dec 2017 13:34

suryag wrote:Rahulm ji a prerequisite for quality job creation(even at technician level) is skill enhancement. I have toured a lot of engg colleges this past year talking to departments and i can assure you the technical depth and breadth of the engineers coming out is worrisome. Want to reiterate, this is in no way reflection of their abilities(afterall they are the cream of the country having passed multiple entrance exams). The colleges are trying hard but they dont find good faculty very easily as good engineers invariably end up joining the corporate companies. I made informal enquiries and a lot of my team mates are interested in doing one week guest lecture kind of a course mainly driven by the satisfaction it gives us. I remember UBji mentioning some way of adding or enrolling yourself as guest lecturer but if this initiative is streamline and tied to CSRR(all MNCs have to adhere to this anyway) we could see very good transformation in the skill sets, it could be a 2x20 hr commitment that is needed to ignite the spark in our budding engineers(presuming they have the basics nailed down theoretically) and today we have engineers in almost all the fields that can spare this 2x20hrs, challenge is to create that bridge between students and professionals .. my 2c


outstanding idea.

Hope that it works out.

Please don't get me wrong, but the first lot who volunteer their time could be informally screened and chosen to make a big impact so that the stake holders are motivated to support the initiative.

nam
BRFite
Posts: 651
Joined: 05 Jan 2017 20:48

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nam » 30 Dec 2017 15:27

Electronic goods local production is now greater than imported goods for the first time.

We are now producing stuff like TVs locally.goi has upped import tariffs on electronic goods.

This is THE area which will drive mass employment. This is what made Chinese rich. This will drive sme feeding into assembly plants.

Cannot stress enough how important this is. We need to drive down cost by going big. Existing producers should become outsourcing centers like out itvity majors.

vijayk
BRF Oldie
Posts: 3080
Joined: 22 Jun 1999 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 30 Dec 2017 18:10

Image

Akshay Kapoor
Forum Moderator
Posts: 1358
Joined: 03 May 2011 11:15

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Akshay Kapoor » 30 Dec 2017 19:20

Rahul M wrote:Suraj et al,
I was wondering about the job growth situation in the country and what the govt can do to promote it. let me know if what follows is a feasible idea or not.

Let me summarise the job situation in the country.
Pro's :
P1. Availability of cheap abundant labour force
P2. Political support for any company that provides jobs in decent numbers

Con's
C1. Labour laws that are restrictive & disincentivize hiring. these are supposed to protect interests of labourers but look after the interests of only those who are already employed and raise the entry-bar for job seekers.
C2. Lack of skilled labour force.
C3. Political support for labour unions, even the rowdy ones
C4. Much of the employment that is generated is informal or temporary (through outsourcing) which means minimal salary, no benefits etc. This is a work-around to get around C1 but leads to lowering of quality of available jobs.

=======================
If we do a comparison of the relative weights of the above factors we can easily see that
A. C1 >> P1, restrictive labour laws are a much stronger factor than availability of abundant cheap labour. While GoI did try to amend labour laws that effort went nowhere. It is now trying to make changes through state govt's under NDA control but that is a long winded process. Net negative.
B. C2, this point might be mitigated by skills India in the future, making this a net neutral point.
C. C3>P2, political support for unions is stronger than that for hiring co's, making this a net negative.
D. C4, net negative.

Looking at this comparison, we can clearly see why Indian co's prefer adopting capital intensive production techniques over labour intensive ones, in spite of labour being cheaper in India than capital. This results in jobless growth (yes, I am given to understand the situation may not be as bad as is made out in MSM, but the point stands; job growth lags GDP growth, whereas we would like it to lead GDP growth) which is a recipe for India to be stuck in a middle income trap. What's worse, inequality will rise leading to social & political instability and economic deteorioration.

All that's without the automation crisis which would make the job situation much worse. The Indian business environment already incentivized to seek capital intensive processes would opt for automation in a heart-beat (they already are), leaving the masses of job-seekers without a job.

Clearly, with the current policies, as we have seen above, there's not much hope of nudging co's towards hiring more, because the factors are all strongly stacked against that decision. That's not a commentary on the performance of the govt as it is about the current techno-economic situation we find ourselves in. What's needed is for govt. to come up with policies that even out the scales against hiring and hopefully nudge co's towards adopting labour intensive methods. My belief is, if the policy-scape is evened out the co's will innovate themselves and come up with India specific solutions to the problems, creating both future proof production methods for India, absorb the incoming work force and give themselves a competitive advantage globally.

So what can the GoI do to even out the playing field ? Changing labour laws state by state, is too uneven and too slow. Even if it works would take a long time. For one thing, the ruling party may be cast away in the next elections and the incoming govt might reverse the laws. No co' is going to take a long-term punt when the ground situation is in flux.
==============================
One idea would be for the MoF to connect the reduction in corporate tax (say) to a proportionate increase in total employed : capital invested (in Cr) ratio. That is, for any excess in TECI ratio above a certain benchmark (to be set adjusted annually) the corporate tax would get reduced by the corresponding percentage. The upper limit to such reductions might be set at 5% (i.e effective corporate tax of 25% ).
To prevent co's from gaming the system the jobs would have to be on the payroll for at least 12 consecutive months; this would be checked with annual submissions in AADHAR linked EPF accounts.
IMHO, this would give co's a tangible incentive in creating jobs that they can actually reflect in their bottomline. Secondly it could free up govt's from providing across the board tax incentives to sectors with the hope that it would generate jobs, hope that often does not materialize.

So econ thread gurus, time for your opinions. Is this doable, or too naive or something else ?


Very good analysis and excellent diagnosis of the problem but I'm not sure the solution will work. It requires too much monitoring , measurement and enforcement by govt. A recepie for corruption and failure Why attack the Cs directly. Any thoughts on that ?

Mollick.R
BRFite
Posts: 112
Joined: 15 Aug 2016 10:26

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mollick.R » 30 Dec 2017 20:56

Another article on same topic with more stats

Key Points :-
1. Domestic electronics production in 2016-17 stood at $49.5 billion, higher than the near $43 billion spent on imports.

2. In 2015-16, the local production was $37.4 billion against imports of $41 billion, while in 2014-15, electronics goods worth around $30 billion were made in India against $37.5 billion sourced from overseas.

3. While 6 crore handsets were manufactured in the country in 2014-15, this has grown nearly three-fold in just two years to 17.5 crore in 2016-17.

4. The value of phones made in India has moved up from Rs 19,000 crore in 2014-15 to as much as Rs 90,000 crore in 2016-17.

5. "The production of LCD/LED TVs grew from nearly 90 lakh units in 2014-15 to 1.5 crore units in 2016-17. In terms of turnover, LED production grew from Rs 2,172 crore in 2014-15 to over Rs 7,100 crore in 2016-17,"

6. The overall demand for electronics (sourced locally and through imports) in 2016-17 has been to the tune of $86.4 billion ($60.5 billion in 2014-15), and the government expects this to more than double by 2020 and stay between $171 billion and $228 billion. "The overall projection by 2023-24 is a whopping $400 billion,"

7. contract suppliers such as Taiwanese Foxconn and Wistron (which are investing/expanding in India) or home-grown ones like Dixon and Optiemus., Those now sourcing locally include Chinese Xiaomi, Oppo, Vivo, Huawei and Gionee.



https://timesofindia.indiatimes.com/business/india-business/in-a-first-desi-e-goods-pull-ahead-of-imports/articleshow/62301056.cms

Mollick.R
BRFite
Posts: 112
Joined: 15 Aug 2016 10:26

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mollick.R » 30 Dec 2017 21:04

We are late by more than a decade , but still it's picking up & can be considered as a good start.
to add a few points
1. Gross value of manufactured electronics should not make us do lungi dance, as we still lack downstream component level manufacturing by tier1 , tier2 manufacturers & the supporting ecosystem. In absence of that we are losing many jobs & giving away dollars to import the components & paying for patent royalties etc.

2. As predicted before in several GOI reports that in around another decade our Electronics import will more than or almost equal to our Petroleum import bill. A big cause of worry, we need major policy initiatives to do electronics manufacturing in india for scale suitable for 140 cr people (projected) of that period.

Rahul M
Forum Moderator
Posts: 16246
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 30 Dec 2017 23:02

Akshay Kapoor wrote:
Very good analysis and excellent diagnosis of the problem but I'm not sure the solution will work. It requires too much monitoring , measurement and enforcement by govt. A recepie for corruption and failure

got to disagree, employee count via EPF is something the govt does anyway. with aadhar linking for the first time it is possible to do this without any heavy monitoring effort or even human intervention.
Why attack the Cs directly. Any thoughts on that ?
I am guessing you mean co's ? this is the opposite of attacking, this is rewarding them in their bottomline for employing people, how is that a bad thing ?

whatever else we do, be it tariff barriers or improving skills, unless the co's want to employ people (as against adopting more and more automation) there is not going to be much of an uptick in job growth.

Akshay Kapoor
Forum Moderator
Posts: 1358
Joined: 03 May 2011 11:15

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Akshay Kapoor » 30 Dec 2017 23:47

Rahul M wrote:
Akshay Kapoor wrote:
Very good analysis and excellent diagnosis of the problem but I'm not sure the solution will work. It requires too much monitoring , measurement and enforcement by govt. A recepie for corruption and failure

got to disagree, employee count via EPF is something the govt does anyway. with aadhar linking for the first time it is possible to do this without any heavy monitoring effort or even human intervention.
Why attack the Cs directly. Any thoughts on that ?
I am guessing you mean co's ? this is the opposite of attacking, this is rewarding them in their bottomline for employing people, how is that a bad thing ?

whatever else we do, be it tariff barriers or improving skills, unless the co's want to employ people (as against adopting more and more automation) there is not going to be much of an uptick in job growth.


Apologies. Typo - I meant to say ‘why not attack the Cs (Cons) directly’ ie why not change policy to resolve these issues directly like bringing an exit policy and amending labour laws. I’m using a phone to type and this typo completely changed the meaning of what I was saying.

Akshay Kapoor
Forum Moderator
Posts: 1358
Joined: 03 May 2011 11:15

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Akshay Kapoor » 30 Dec 2017 23:49

If you think that current EPF systems are enough to monitor and adhar linkage will avoid human intervention then I stand corrected.

Rahul M
Forum Moderator
Posts: 16246
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 31 Dec 2017 01:38

that's what the EPFO does.

hanumadu
BRF Oldie
Posts: 3851
Joined: 11 Nov 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 31 Dec 2017 01:45

Mollick.R wrote:
2. As predicted before in several GOI reports that in around another decade our Electronics import will more than or almost equal to our Petroleum import bill. A big cause of worry, we need major policy initiatives to do electronics manufacturing in india for scale suitable for 140 cr people (projected) of that period.


Modi has stated his objective of net zero electronic imports by 2022. That is the exports of electronic goods will cancel out the imports.

Austin
BRF Oldie
Posts: 20136
Joined: 23 Jul 2000 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Austin » 31 Dec 2017 08:35

BRICS

IMF GDP per capita, current prices Purchasing power parity; international dollars per capita [ Oct 2017 ]

http://www.imf.org/external/datamapper/ ... HN/ZAF/RUS

GDP based on PPP, share of world

http://www.imf.org/external/datamapper/ ... HN/ZAF/RUS

hanumadu
BRF Oldie
Posts: 3851
Joined: 11 Nov 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 31 Dec 2017 12:20

No shortfall in direct or indirect tax collections as per @muglikar_

Image

A_Gupta
BRF Oldie
Posts: 9978
Joined: 23 Oct 2001 11:31
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 31 Dec 2017 18:27

hanumadu wrote:No shortfall in direct or indirect tax collections as per @muglikar_


Thanks! that got me to trying to find out exactly what is going on.
The story is about this table from the Controller General of Accounts of the GOI.
http://cga.nic.in/MonthlyReport/Publish ... -2018.aspx

I'll summarize here, with figures shown as CURRENT (COPPY) {COPPY = Corresponding Period of the Previous Year}
As a fraction of the budget estimates:
A. Revenue receipts are 53.1% (57.8%)
B. Non-debt Capital receipts are 73.3% (48.5%)
C. Total Receipts (A+B) are 54.2% (57.4%)
D. Revenue expenditure is 70.5% (66.1%)
E. Capital expenditure is 59.5% (57.7%)
F. Total expenditure (D+E) is 68.9% (65.0%)
G. Fiscal deficit (F-C) is 112% (85.8%)
H. Revenue deficit (D-A) is 152.2% (98.2%)

When one follows the details, every month of this fiscal year, the gross tax revenues have exceeded that of last year, except for November 113890 crores (114396).

Similarly, there is a details page for expenditures, and one thing that stands out is that at Finance Ministry, the Department of Revenue was budgeted at 500.68 crores but has spent 24893.82 crores or almost 5000% of the budget estimate (my guess would be it is because of GST roll-out).

------
So, IMO, the real story is -
1. November revenue has shown a YoY decline.
2. The pace of revenue, while above budget estimates, is slower than last year.
3. The pace of expenditure is above budget estimates, and is also faster than last year.
Hence the risk of not meeting fiscal deficit targets has ticked upwards.

PS: An expenditure that neither creates assets nor reduces a liability is categorised as revenue expenditure
PPS: If economic activity is going up on a YoY basis and revenue is not, it logically means that either people are successfully evading taxes and/or India got a tax cut.
Last edited by A_Gupta on 01 Jan 2018 01:32, edited 1 time in total.

Mort Walker
BRF Oldie
Posts: 6609
Joined: 31 May 2004 11:31
Location: The rings around Uranus.

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 31 Dec 2017 22:13

hanumadu wrote:No shortfall in direct or indirect tax collections as per @muglikar_

Image


For indirect taxes we'll have to wait until July 2018 to get a good idea of actual collection after one full year of GST. This will tell us how refunds and the Reverse Charge Mechanism (RCM) are working.

chetak
BRF Oldie
Posts: 16078
Joined: 16 May 2008 12:00

Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 01 Jan 2018 10:49

Law aiding Monsanto is reason for Delhi’s annual smoke season



Law aiding Monsanto is reason for Delhi’s annual smoke season


By Arvind Kumar | NEW DELHI | 30 December, 2017



Dense smog covers Delhi-Gurugram Expressway in Gurugram on 5 December. IANS
Delhi’s problem of being covered by smoke started right after the Punjab Preservation of Subsoil Water Act in 2009, which delayed the burning of crops till late October, was implemented for the first time.


Until a few years ago, when farmers in Punjab burnt the remnants of the rice crops in their fields in preparation for sowing wheat, the smoke from such fires was confined to Punjab. Back then, farmers burnt the straw in late September and early October. According to a publication of the Indian Council of Social Science Research published in 1991, “At the end of September and in early October, it becomes difficult to travel in the rural areas of Punjab because the air is thick with the smoke of burning paddy straw.” However, in recent years, farmers have delayed the burning until late October.

This delay is crucial and responsible for the smoke being carried all the way to Delhi. An analysis of the wind flow patterns reveals that wind blows into Delhi primarily from the west during the monsoon season, but changes direction in October when it starts blowing into Delhi from the north.

The decision to delay the clearing of the fields was not the choice of farmers, but was forced on them by the Punjab government, which passed the Punjab Preservation of Subsoil Water Act in 2009. According to this law, farmers can no longer sow rice in April, but have to wait until the middle of June to do so. Haryana too has copied Punjab and passed a similar law. Rice has a 120-day period between germination and harvest, and the restriction on sowing the grain means that the fields would be harvested and cleared only in October, by which time the direction of the wind would have changed. In what has turned out to be a real world example of the Butterfly Effect, Delhi’s problem of being covered by smoke started right after this law was implemented for the first time. Before this law was passed, the problem in Delhi was limited to vehicular and industrial pollution, apart from smoke from bonfires in winter, and there were no reports of the entire metropolitan area being enveloped by smoke.

This piece of legislation was passed ostensibly to preserve groundwater, the depletion of which was blamed on rice fields, which supposedly not only used too much water, but also lost a significant quantity of water to evaporation, but this argument is a very tenuous one. According to the International Water Management Institute (IWMI), water in rice fields contributes to recharging the groundwater and very little of it is lost to evaporation. The data from Uttar Pradesh in IWMI’s analysis shows that rice fields in the state contributed to increasing the level of the water table, thus supporting the claim that water in rice fields replenishes the aquifers.

The group that has been primarily responsible for exerting pressure to move away from growing rice in the name of “crop diversification” is the United States Agency for International Development (USAID), which operates out of the American embassy. Over a period of several years, it has used the excuse of preventing the decline of groundwater to push this agenda. USAID has a worldwide reputation of behaving like a front group for American multinational corporations such as Monsanto. Former American diplomat Jeanine Jackson recently justified her intervention in favour of Monsanto when she served as the American ambassador to Burkina Faso by claiming that the advocacy of American businesses and investments was the “number one task” for ambassadors.

It should, therefore, come as no surprise that Monsanto will be the primary beneficiary of USAID’s purported solution for Punjab’s problems. According to their solution, farmers need to stop growing rice and replace it with Monsanto’s genetically modified (GMO) maize.

India’s surplus food grain supply is an uncomfortable fact for Monsanto and other proponents of GMO food, who insist that the world would face a shortage of food grains if not for genetically engineered plants sold by Monsanto. It is in this light that one must view Monsanto’s collusion with the Punjab government and their joint efforts targeting the production of rice in India. In 2012, the then Punjab Chief Minister asked Monsanto to set up a research centre for creating maize seeds and announced plans to reduce the area under the cultivation of rice by around 45% in order to grow maize. Monsanto typically co-opts not only politicians, but also members of the academia and converts them into its shills. Little wonder then that the passage of the law in Punjab was preceded by fear mongering about the cultivation of rice, which reached a feverish pitch a few years back in the form of a campaign advertisement from a group of “eminent scientists” who appealed, “Chonne hetho rakba katao, Pani Bachao, Punjab Bachao (Reduce the area under rice, Save Water, Save Punjab)”.

Monsanto now offers the replacement of rice by its GMO crops as a solution that will increase the level of subsoil water, but the multinational corporation is the cause of the problem. Its fertilizers and pesticides have accumulated in the ground over the years, and this has led to poor retention of moisture in the soil, leading farmers to pump out excessive amounts of underground water. The new law, reducing the time period during which farmers are permitted to grow rice, has further accentuated this problem.
Monsanto now offers the replacement of rice by its GMO crops as a solution that will increase the level of subsoil water, but the multinational corporation is the cause of the problem. Its fertilizers and pesticides have accumulated in the ground over the years, and this has led to poor retention of moisture in the soil, leading farmers to pump out excessive amounts of underground water. The new law, reducing the time period during which farmers are permitted to grow rice, has further accentuated this problem. Farmers had developed their own method of crop diversification by growing multiple varieties of rice and staggering the time of sowing these varieties over a period of two months beginning in April. The loss of the ability of farmers to easily diversify their rice crop, combined with the fact that late sown rice is vulnerable to diseases and pests has created a fear in farmers of losing their crop, leading them to use greater amounts of pesticides and fertilizers, further degrading the soil and its ability to retain water.

Monsanto’s GMO products are known to cause several problems. Its maize is known for killing bees, leading to a shortage of seeds of plants such as onions which depend on bees for pollination. Several European countries have banned its maize as its pollen has been responsible for killing entire colonies of bees. Monsanto’s GMO maize is also not fit for human consumption and is primarily used as chicken feed. Likewise, most of Monsanto’s wheat is used to feed animals because it is unfit for human consumption. Thus the government’s plan to replace the cultivation of rice—which is the staple food for a large section of the population of India—by Monsanto’s chicken feed is a cynical move that will result in government created food shortages in the country.

The problems related to the low levels of groundwater and the inability of the soil to retain moisture must be solved, but the solution should not be a drastic one, such as creating famines by banning food items such as rice. Before the level of groundwater fell in Punjab, the state experienced a problem of water-logging, which was partially solved by pumping out the excess groundwater. Thus, it is clear that an acceptable level of the water table can be maintained by finding a proper balance between the two extreme situations, without replacing any crop.

In 2012, the then Punjab Chief Minister asked Monsanto to set up a research centre for creating maize seeds and announced plans to reduce the area under the cultivation of rice by around 45% in order to grow maize.
Today, farmers burn the residual straw from the cultivation of rice as it is an affordable method of clearing the fields. A ban on such burning will destroy the livelihood of poorer farmers and give way to industrial farming, with a few large corporations such as Monsanto taking over all the land and resources. The government has already helped large corporations through a slew of measures and it must not take any more steps that run the small farmers out of business. Instead, if it wants to prevent burning, it must help small farmers clear the fields between the rice and wheat seasons and help them implement proper water management solutions. This would mean going against the rules set forth by the World Trade Organization, which has mandated that no business other than American multinational corporations can receive aid or subsidies from the government, and any subsidy given to American businesses will be done under the cover of “research grants” funnelled through universities. India should completely ignore these rules and fix its problems, not the least of which is the yearly phenomenon of smoke cover over Delhi.

The Delhi metropolitan area has one of the highest agglomerations of population in the world, and suffocating the people of the area on an annual basis should be treated as a crime against humanity, especially when the cause for such suffocation can be easily controlled. Although smoke from fields remaining within Punjab is also a problem that needs to be addressed, it is not as severe a problem as in Delhi, as the smoke in Punjab would be spread over a larger area with a much lower population density. For now, a step that should be taken immediately in order to prevent Delhi from becoming a gas chamber for several days every November, is to revoke what should rightfully be called the Monsanto Profit Act of 2009 and permit farmers to sow their rice crop whenever they deem it fit to do so.

vijayk
BRF Oldie
Posts: 3080
Joined: 22 Jun 1999 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 01 Jan 2018 18:19

India TV‏Verified account
@indiatvnews

NEWS ALERT: Eight core sectors record 6.8 pc growth in November 2017 as against 3.2 pc in the same month previous year

vijayk
BRF Oldie
Posts: 3080
Joined: 22 Jun 1999 11:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 01 Jan 2018 18:21

vijayk wrote:India TV‏Verified account
@indiatvnews

NEWS ALERT: Eight core sectors record 6.8 pc growth in November 2017 as against 3.2 pc in the same month previous year


http://www.ptinews.com/news/9366649_Eig ... ember.html

Suraj
Forum Moderator
Posts: 11090
Joined: 20 Jan 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 01 Jan 2018 18:36

Rahul M wrote:So what can the GoI do to even out the playing field ? Changing labour laws state by state, is too uneven and too slow. Even if it works would take a long time. For one thing, the ruling party may be cast away in the next elections and the incoming govt might reverse the laws. No co' is going to take a long-term punt when the ground situation is in flux.

GoI and state governments can do plenty to encourage formal employment. Fiscal encouragement is the most direct one. Support industries that involve largescale production involving significant labour input. Tax holidays, tax rebates tied to numbers employed and average pay rate. They can play a game targeting overall payroll tax revenue growth by offering a lower rate for larger numbers employed (and paid well enough). As people find such jobs more attractive than the uncertainty of running a self-employed business on the margins, they'll push more and more state governments to generate such jobs.

However, this takes a substantial amount of co-ordination and administrative efficiency. Make in India subsumes many of these objectives, but I think they could target a few industries as a vanguard effort to show that this works, and extend the work to more industries. Right now, the Make In India programs seems to suffer from being spread across an entire economic spectrum without targeting any particular industry, such that gains are incremental across the board, leading to criticism about it not really achieving much so far. By targeting and pushing rapid employment growth in some industries, they can be showpieces to impress the need to extend the effort elsewhere.

Rahul M
Forum Moderator
Posts: 16246
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 01 Jan 2018 20:08

Suraj wrote:
Rahul M wrote:So what can the GoI do to even out the playing field ? Changing labour laws state by state, is too uneven and too slow. Even if it works would take a long time. For one thing, the ruling party may be cast away in the next elections and the incoming govt might reverse the laws. No co' is going to take a long-term punt when the ground situation is in flux.

GoI and state governments can do plenty to encourage formal employment. Fiscal encouragement is the most direct one. Support industries that involve largescale production involving significant labour input. Tax holidays, tax rebates tied to numbers employed and average pay rate. They can play a game targeting overall payroll tax revenue growth by offering a lower rate for larger numbers employed (and paid well enough). As people find such jobs more attractive than the uncertainty of running a self-employed business on the margins, they'll push more and more state governments to generate such jobs.

However, this takes a substantial amount of co-ordination and administrative efficiency. Make in India subsumes many of these objectives, but I think they could target a few industries as a vanguard effort to show that this works, and extend the work to more industries. Right now, the Make In India programs seems to suffer from being spread across an entire economic spectrum without targeting any particular industry, such that gains are incremental across the board, leading to criticism about it not really achieving much so far. By targeting and pushing rapid employment growth in some industries, they can be showpieces to impress the need to extend the effort elsewhere.

which particular industries are potential low hanging fruits ? on the flip-side I fear there might be industries which are being rendered obsolete by tech or will move fully into automation in the near future. Industries we need to get out of.


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: No registered users and 9 guests