Indian Economy News & Discussion - Nov 27 2017

dsreedhar · Post by **dsreedhar** » 22 Jan 2021 23:41

True. Thanks Kaivalya
Thanks Suraj. Will check that thread.

Vamsee · Post by **Vamsee** » 24 Jan 2021 23:01

Gujarat government signs pact with Adani Port to setup largest multi-modal logistics park

Gandhinagar, The Gujarat government on Friday signed a Memorandum of Understanding (MoU) with the private infrastructure company, Adani Port & SEZ Ltd., to setup the country's largest multi-modal logistics park at Sanand with an estimated investment of ₹50,000 crore.
The proposed 1,450 acre park will have a dedicated air cargo complex with 4.6 km long runway to handle even large sized cargo aircraft and will offer direct air, rail and road connectivity. It will also have a provision of direct rail connectivity with dedicated freight corridor which is part of the Delhi-Mumbai Industrial Corridor (DMIC).

According to the state government, the project will be completed in a phased manner in three years as the work will commence within six months after obtaining required clearances and permissions.

The warehouse will have 38 lakh sq ft space for textile, bulk, e-commerce, nine lakh sq ft space for bonder warehouse, four lakh grade-A palatized facility and 60,000 temperature controlled palletized facility. Against 3.3 lakh capacity, a container yard in this park will have four handling lines with TEU (twenty ft equivalents).

Suraj · Post by **Suraj** » 25 Jan 2021 08:40

RBI's January Bulletin makes for interesting reading, especially the State of the Economy section:
Full RBI January Bulletin (pdf)
State of the Economy (PDF)
Press Release: January 2021

- 2020 turned out to be a year in which everything changed. The year 2021 has commenced with countries across the world in a massive vaccination drive.
- In India, recent shifts in the macroeconomic landscape have brightened the outlook, with GDP in striking distance of attaining positive territory and inflation easing closer to the target.
- Financial markets remain ebullient with EMEs receiving strong portfolio inflows and India on track for receiving record annual inflows of foreign direct investment.

Yagnasri · Post by **Yagnasri** » 25 Jan 2021 13:47

Cyrano wrote:Details are emerging of massive swindling of funds in the Polavaram project by TRS govt, whose Baghirathi video is posted above. (

Polavaram is in AP. Do you mean Kaleshwaram project? That project is in TS and huge expenditure was incurred for that.

Cyrano · Post by **Cyrano** » 25 Jan 2021 16:05

My bad, indeed I meant Kaleshwaram

Vayutuvan · Post by **Vayutuvan** » 26 Jan 2021 06:04

Cyrano wrote:Details are emerging of massive swindling of funds in the Polavaram project by TRS govt, whose Baghirathi video is posted above. PILs filed have revealed some data. Just within 4 out of 28 work packages that were allocated, evidence of prices quoted by vendors like BHEL etc overstated by several x fold in govt expenditure details, and a gigantic scam of several 10xthousands of crores is being revealed.

If the centre has even partially funded the project, don't they have a right & duty of oversight to prevent such corruption?

Lack of credible political opposition in TS means this will largely go unchecked and unpunished.

The Chief Engineer, a junior to me, studied at the ZPHS in my native place. Many of my childhood friends were his classmates at the HS. I also studied for a couple of years there. Do you have hard evidence? I will introduce you to local MLAs, left kapu leaders from that area, and others in the know. You can confront them if you are willing. Come up with hard actionable evidence. Then we are talking.

vijayk · Post by **vijayk** » 26 Jan 2021 07:01

https://www.msn.com/en-us/news/world/in ... uxbndlbing
India's Foreign Investment Grew 3 Times Faster Than China's on Tech Bets

Foreign Direct Investment (FDI) fell 42% worldwide in 2020, but rose 13% in India, eclipsing China's 4% gain, the United Nations Conference on Trade and Development reported on Sunday.

DI in India rose to $57 billion, with most money flowing to companies active in the digital economy, the UN said. India now receives the third most FDI worldwide, trailing China ($164 billion) and the U.S. ($134 billion).

But FDI fell in other economies in the South Asia region, especially those dependent on exporting apparel, as demand fell during the COVID-19 pandemic.

India offers foreign companies lower wages, tax incentives and, in some cases, tax exemptions. The government said it seeks to promote "pro-business" policies that increase competitive markets to generate wealth rather than "pro-crony" policies that favor entrenched interests.

Developing economies now account for about 70% of FDI, the U.N. report said.

"Though FDI inflows showed a substantial jump in the 1990s over 1980s, it was still modest compared to many rapidly growing Asian economies and a miniscule compared to China," Dr. Bipul Kumar Das said in a research paper published in the January 2020 issue of the International Journal of Scientific& Technology Research.

Suraj · Post by **Suraj** » 26 Jan 2021 21:19

IMF projects impressive 11.5 per cent growth rate for India in 2021

The IMF on Tuesday projected an impressive 11.5 per cent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic.

The International Monetary Fund’s growth projections for India in its latest World Economic Outlook Update released on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted by eight per cent in 2020 due to the pandemic.

In its latest update, the IMF projected a 11.5 per cent growth rate for India in 2021. This makes India the only major economy of the world to register a double-digit growth in 2021, it said.

China is next with 8.1 per cent growth in 2021 followed by Spain (5.9 per cent) and France (5.5 per cent).

Revising its figures, the IMF said that in 2020, the Indian economy is estimated to have contracted by eight per cent. China is the only major country which registered a positive growth rate of 2.3 per cent in 2020.

India’s economy, the IMF said, is projected to grow by 6.8 per cent in 2022 and that of China by 5.6 per cent.

SRajesh · Post by **SRajesh** » 26 Jan 2021 22:24

^^this is going to cause a lot of heart-burn for the BIF's/Congi's/Jholawallahs

A Nandy · Post by **A Nandy** » 26 Jan 2021 22:29

https://www.moneycontrol.com/news/busin ... 96871.html

Stocks in the S&P BSE Auto index that rallied over 12 percent in 2020, will be in focus after the policy to scrap more than 15-year-old vehicles owned by government departments and PSUs was approved. The policy is expected to be notified soon.

The government proposed amendments to the Motor Vehicle Act in July 2019, allowing scrapping of vehicles older than 15 years. The much-awaited scrappage policy will be implemented from April 1, 2022, the government said on Monday.

The step is aimed at getting older, more polluting vehicles off the road by providing incentives to vehicle owners to switch to Bharat Stage VI standard, which is the latest emission norm.

Uttam · Post by **Uttam** » 26 Jan 2021 22:31

Suraj wrote:IMF projects impressive 11.5 per cent growth rate for India in 2021

That is a great come back. But, the Covid-19 pandemic has done a very long lasting damage. 8% compression, followed by 11.5% expansion, still leaves us in 2021 just 2.6% ahead of what GDP was in 2019. Without Covid-19 pandemic, assuming 7% growth in 2020 and 2021, would have put 2021 GDP 15% more than 2019. That's a net loss of 12.4% over the two years.

All the above numbers are my informed assumptions.
Edited to remove reference to Chinese virus

Suraj · Post by **Suraj** » 26 Jan 2021 22:52

This isn't really the thread to discuss anything about China's geopolitics though...

Unctad report: India sees sharpest rise in FDI inflows among key nations

India and China were two major “outliers” in a gloomy year for foreign direct investment (FDI ), as global inflows plunged 42% on year in 2020 to $859 billion, the lowest level since the 1990s, according to the latest Unctad report.

While India witnessed a 13% year-on-year rise, the highest among key nations, in FDI inflows in 2020, China’s rose 4%. Of course, in absolute term, China remained way ahead, with an inflow of as much as $163 billion, while India’s stood at $57 billion. Inflows into India were boosted by those into the digital sector, the report said. Analysts have pointed out that a sizable chunk of these was drawn by Reliance Jio alone.

DIPP hasn't yet updated FDI data for Oct-Dec 2020 quarter, so official data remains pending. I'll post when they update.

Cyrano · Post by **Cyrano** » 27 Jan 2021 16:32

Vayutuvan wrote:
Cyrano wrote:Details are emerging of massive swindling of funds in the Polavaram project by TRS govt, whose Baghirathi video is posted above. PILs filed have revealed some data. Just within 4 out of 28 work packages that were allocated, evidence of prices quoted by vendors like BHEL etc overstated by several x fold in govt expenditure details, and a gigantic scam of several 10xthousands of crores is being revealed.

If the centre has even partially funded the project, don't they have a right & duty of oversight to prevent such corruption?

Lack of credible political opposition in TS means this will largely go unchecked and unpunished.
The Chief Engineer, a junior to me, studied at the ZPHS in my native place. Many of my childhood friends were his classmates at the HS. I also studied for a couple of years there. Do you have hard evidence? I will introduce you to local MLAs, left kapu leaders from that area, and others in the know. You can confront them if you are willing. Come up with hard actionable evidence. Then we are talking.

Here is a news report:

Suraj · Post by **Suraj** » 27 Jan 2021 22:53

Please move your AP/TG discussions to the state level discussion thread.

Mollick.R · Post by **Mollick.R** » 28 Jan 2021 11:11

Total FDI up 22% in April-November, highest so far in first eight months of any fiscal
ET Bureau Last Updated: Jan 28, 2021, 08:44 AM IST

NEW DELHI: India received $58.37 billion foreign direct investment during April-November 2020, the highest so far for the first eight months of a financial year, the commerce and industry ministry said in a statement on Wednesday.

https://economictimes.indiatimes.com/ne ... content=23

Mollick.R · Post by **Mollick.R** » 28 Jan 2021 11:15

Mollick.R · Post by **Mollick.R** » 28 Jan 2021 11:17

Push for artificial intelligence: India is turning from man to machines to get its economic data right
By Vrishti Beniwal, Bloomberg Last Updated: Jan 28, 2021, 08:25 AM IST

The Ministry of Statistics is ramping up use of artificial intelligence for collecting, analyzing and reporting data to better monitor the economy. The measures include a $60 million program with World Bank help using an information portal that collates real-time data.

Read Full Article from Economic Times//ET Link

https://economictimes.indiatimes.com/ne ... content=23

DavidD · Post by **DavidD** » 29 Jan 2021 04:40

Mollick.R wrote:

Is that net inflows? How can a country get over 100% reduction?

hanumadu · Post by **hanumadu** » 29 Jan 2021 10:13

Mollick.R wrote:Push for artificial intelligence: India is turning from man to machines to get its economic data right
By Vrishti Beniwal, Bloomberg Last Updated: Jan 28, 2021, 08:25 AM IST

The Ministry of Statistics is ramping up use of artificial intelligence for collecting, analyzing and reporting data to better monitor the economy. The measures include a $60 million program with World Bank help using an information portal that collates real-time data.

Read Full Article from Economic Times//ET Link

https://economictimes.indiatimes.com/ne ... content=23

Why do we have to go to world bank for every thing. The new GDP measurement process was also developed with World Bank help and yet there are constant question marks over our GDP.

Suraj · Post by **Suraj** » 29 Jan 2021 11:10

I think the argument about the World Bank is a little unnecessary. Not every fight has to be fought, to reason about this generally.

India and the International Bank of Reconstruction and Development (aka 'World Bank') have had a long and mutual beneficial relationship. India is, to the best of my recollection, cumulatively the largest borrower in the World Bank's history. They lend us money because we've never defaulted, and we borrow money because the rates are better than what our capital deficit banking system can manage. Even China, with $3 trillion in reserves, is a big World Bank user: Flush With Cash, China Continues to Borrow Billions From The World Bank. It is a similar story with ADB. India has never defaulted on external borrowings, and is a reliable borrower. Banks love repeat business with reliable customers.

The GDP revision wasn't World Bank driven. It was a large effort aimed among other things, to align with the UN SNA 2008 recommendations. Given that the CSO/MOSPI isn't quite a focus ministry, I think this effort took longer and was messier than necessary, leading to too many opportunistic political arguments.

hanumadu · Post by **hanumadu** » 29 Jan 2021 14:13

To be clear, I don't have anything against taking loans from World Bank. But what is it that they know about our economy that we do not know that we have to take their help in collecting and measuring our data. Or do their economists know best practices that ours do not? Of course, I am assuming here 'World Bank help' refers to know how help in setting up the portal and not necessarily monetary help since we have 'consulted' them for our new GDP measurement. I am unable to find references to such consultancy help but that's what I remember reading.

kit · Post by **kit** » 29 Jan 2021 15:33

DavidD wrote:]

Is that net inflows? How can a country get over 100% reduction?[/quote]

means no net inflows, more than 100 reduction would be net outflow

Suraj · Post by **Suraj** » 29 Jan 2021 22:29

hanumadu wrote:To be clear, I don't have anything against taking loans from World Bank. But what is it that they know about our economy that we do not know that we have to take their help in collecting and measuring our data. Or do their economists know best practices that ours do not? Of course, I am assuming here 'World Bank help' refers to know how help in setting up the portal and not necessarily monetary help since we have 'consulted' them for our new GDP measurement. I am unable to find references to such consultancy help but that's what I remember reading.

I think the general standard of ToI is a factor here. But in general that piece of news seems relatively small potatoes and not worth much concern. China and India are active World Bank borrowers, having long figured out that as mature stable economies they can cheaply borrow lots of funds even if they don't "need to", just because it's cheaper and easier.

Vamsee · Post by **Vamsee** » 30 Jan 2021 00:10

Economic Survey 2020-21 is released Link

Suraj · Post by **Suraj** » 30 Jan 2021 00:23

That is a great image. Pity it's only data until 2018, which is still 2-3 years ago. Improving access to basic necessities - bank accounts, roads, electricity, sanitation, cooking fuel and now water - has been central to this administration's policy priorities. It's not glamorous and doesn't do much to move the GDP needle, but a rapid dramatic improvement in basic quality of life goes a long way towards broad based support for greater economic reforms.

disha · Post by **disha** » 30 Jan 2021 03:00

I have been saying that the Indian economy will be going zoom, zoom & zoom. And in 2020, Coronavirus happened. There were dire predictions about India being both an economic and health basket case. Not just that those gloomy predictions came unstuck, the Indian economy stepped up into a 'V' shaped recovery while all other countries in the world are still trying to figure their way out. On the health front, India has become the pharmacy of the world.

The economic survey does indicate a 'V' Shaped recovery. What was intuitively felt is now confirmed in numbers https://swarajyamag.com/insta/v-shaped- ... mic-survey. Note that at one point Indian economy shrank to ~24% compared to prior. It is the underlying resilience of the economy that resulted in a 'V' shaped recovery, ably aided by appropriate inputs by the GOI

So what's the path going forward. Anywhere from 9% to 12% growth is projected for 2021. Remember, for a major economy like India, that is remarkable growth. That is like adding anywhere from Finland to Malaysia/Singapore a year from 2022 onwards.

Here is another article that caught my eye: https://swarajyamag.com/economy/why-raj ... so-foolish.

*Rajiv Bajaj take note, it’s time to acknowledge that you were wrong.
*That goes for a whole host of other globally-acclaimed economists and intellectuals.

Not the above that caught my eye. The above was just a salve to my ego. Here is what caught my eye:

The commercial vehicles sector, which was affected not only by Covid but by the government’s decision to raise axle-load limits and implement the goods and services tax (GST), which improved fleet-owners turnaround times for trucks and slowed down demand for new vehicles, is on the cusp of a huge spurt in demand....

...But the most interesting data point is that the government, thanks to Covid-related inability to spend the budgetary allocations of 2020-21, is sitting on a cash pile of more than Rs 3.29 lakh crore, according to an estimate by The Economic Times.

If the government now borrows even more this year (we still have two months to go), it will have a huge war chest for investing in the first half of next fiscal starting April 2021. Add any infusions from privatisation proceeds, and 2021-22 looks like a good year for infrastructure investment-led growth.

And already like canaries in a mine, the Cassandras are already signaling their intentions, so that they can do their rona-dhona when their own expectations are belied.

https://timesofindia.indiatimes.com/bus ... 564774.cms

However, my is that the GOI will concentrate on just a couple of items. Infrastructure and Infrastructure. The first kind is the rails, roads, bridges, ports kind and the second is the social kind., More toilets, water taps, primary health care & education, electricity, and micro-entrepreneurship.

So hold on to your pants, it will be blown away and you will not even realize it. There will be lot of rona-dhona on what Smt. Nirmaliji, Hon' Finance minister missed and that same rona-dhona will continue well into 2024 when India will be ~3.5 Trillion USD economy.

A Nandy · Post by **A Nandy** » 30 Jan 2021 14:37

https://swarajyamag.com/insta/tamil-nad ... 93935-jobs

Sun Edison will invest Rs 4,629 crore to establish a solar PV module making facility, Ola Electric will invest Rs 2,354 top set up a plant to manufacture electric vehicles and batteries, Taiwanese Luxshare will invest Rs 745 crore to manufacture electronic components and wearables, and Apple Inc's contract manufacturer Pegatron Corporation will invest Rs 1,100 crore n phase-I to make phones.

Further, Lucas TVS will invest Rs 2,500 crore to manufacture Li-ion batteries and Japan's Daicel Corporation will invest Rs 358 crore to set up India's maiden airbag inflator manufacturing unit. Also, Germany's Eickhoff Wind will invest Rs 621 crore to manufacture gearboxes for wind energy generators and relocate its facilities from China and Germany.

chetak · Post by **chetak** » 30 Jan 2021 16:02

nam · Post by **nam** » 30 Jan 2021 16:26

The GST data tells us so much.

Fascinating how Kerala has sub 20K GST despite having two major industrial states as neighbors! Just like Punjab, no industrial activity of any kind.

Compare this with states who border Guj & Mah.

srin · Post by **srin** » 30 Jan 2021 19:13

^^^ Correct me if I'm wrong. The GST is a consumption oriented tax - not the production oriented.

So, if a state is not paying enough GST, it doesn't necessarily mean lack of industrial activity - it means lack of business activity (includes trading, retail, services etc) and also lack of last mile retail consumption. Additionally, there is also a caveat here - this is true for taxable goods/services (agriculture activity won't show up properly).

isubodh · Post by **isubodh** » 30 Jan 2021 19:29

srin wrote:^^^ Correct me if I'm wrong. The GST is a consumption oriented tax - not the production oriented.

So, if a state is not paying enough GST, it doesn't necessarily mean lack of industrial activity - it means lack of business activity (includes trading, retail, services etc) and also lack of last mile retail consumption. Additionally, there is also a caveat here - this is true for taxable goods/services (agriculture activity won't show up properly).

futher the values are absolute and not per capita, so population will also be a factor in that

Shanmukh · Post by **Shanmukh** » 31 Jan 2021 17:37

Delhi has a GST collection of 44K crore, which is bigger than entire Bengal's! Does anyone have the break up of GST collection by cities? It will be interesting to see how the big cities are contributing to the collection of GST.

Aditya_V · Post by **Aditya_V** » 31 Jan 2021 19:35

Shanmukh wrote:Delhi has a GST collection of 44K crore, which is bigger than entire Bengal's! Does anyone have the break up of GST collection by cities? It will be interesting to see how the big cities are contributing to the collection of GST.

Delhi is where many head offices are located , so it will be natural place GST and IT collections are high . Almost all indirect taxes and direct taxes will be from Urban areas.

SBajwa · Post by **SBajwa** » 01 Feb 2021 02:57

Budget coming up in 12 hours. Mrs. Sitharaman calls it the 100 years budget

vimal · Post by **vimal** » 01 Feb 2021 03:26

I found it surprising that UK has similar GST as Punjab although its got 1/3 the population of PB with similar area.

kit · Post by **kit** » 01 Feb 2021 03:38

Uttam wrote:
That is a great come back. But, the Covid-19 pandemic has done a very long lasting damage. 8% compression, followed by 11.5% expansion, still leaves us in 2021 just 2.6% ahead of what GDP was in 2019. Without Covid-19 pandemic, assuming 7% growth in 2020 and 2021, would have put 2021 GDP 15% more than 2019. That's a net loss of 12.4% over the two years.All the above numbers are my informed assumptions.
Edited to remove reference to Chinese virus

i dont think it works that way., GDP growth works in correlation with other economies , not in isolation so the addition and subtraction is just a theoretical exercise

kit · Post by **kit** » 01 Feb 2021 03:41

https://timesofindia.indiatimes.com/ind ... 619959.cms

vijayk · Post by **vijayk** » 01 Feb 2021 03:43

https://www.hindustantimes.com/business ... 48787.html
GST revenue collection for January almost touched ₹1.20 lakh crore: Govt

The revenues for the month of January 2021 are 8% higher than the GST revenues in the same month last year, which in itself was more than ₹1.1 lakh crore.

Uttam · Post by **Uttam** » 01 Feb 2021 04:44

kit wrote:
i dont think it works that way., GDP growth works in correlation with other economies , not in isolation so the addition and subtraction is just a theoretical exercise

I didn’t quite understand what you mean here. Would you please elaborate? Do you mean to say that economic growth should be looked at relative to other nations? I agree that it should be. However, income increases or decreases are experienced by individuals in absolute terms and therefore they matter.

hanumadu · Post by **hanumadu** » 01 Feb 2021 05:10

But the most interesting data point is that the government, thanks to Covid-related inability to spend the budgetary allocations of 2020-21, is sitting on a cash pile of more than Rs 3.29 lakh crore, according to an estimate by The Economic Times.

What were the programs that could not be implemented? So we won't overshoot the the deficit?