Indian Economy News & Discussion - Nov 27 2017

Suraj · Post by **Suraj** » 11 Jul 2019 21:29

Rahulsidhu: what sort of unorthodox approaches would you recommend the government follow ? Could you suggest some particular examples in a little more detail than a line or two, if you have time ?

tandav · Post by **tandav** » 11 Jul 2019 22:51

Reduce Stamp Duty to 1% or lower and implement 0.2%/Year of property tax as per circle rate.
Artha kranti folks mentioned transaction tax (equivalent to stamp duty) maybe at 1% instead income tax.

Rahulsidhu · Post by **Rahulsidhu** » 12 Jul 2019 15:33

Suraj wrote:Rahulsidhu: what sort of unorthodox approaches would you recommend the government follow ? Could you suggest some particular examples in a little more detail than a line or two, if you have time ?

Suraj, actually what I am suggesting is not unorthodox at all, it's the oldest trick in the book -- fiscal and monetary stimulus. It's just a different kind of orthodoxy, if you will

. Let me focus on the fiscal part.

By definition, fiscal deficit (in %) := (govt spending - govt revenues)/NGDP.

The hallmark of Modi govt's fiscal policy has been a stern path of "fiscal consolidation" or "fiscal prudence" i.e. reduction of the fiscal deficit. They are doing this on both ends - A. reducing spending (v. little talked about) and B. raising revenue (boosting tax revenues - widely talked about and unpopular). They have a target of 3% and are steadily approaching that. This approach has near unanimous support - analysts and economists far and wide are praising this even as they criticise other aspects (such as tax hikes).

I want to challenge this consensus. Fiscal consolidation should NOT be the target. The target should rather be boosting the denominator i.e GDP and tax compliance. Deficit will take care of itself. GoI has much more room for expanding fiscal deficit than what they think. At the very least, they can take the risk of a higher deficit.

Imagine we are sitting with the Finmin team, finalising budget numbers. The spending needs are what they are- based on the govt's vision/political compulsions etc. It has boiled down to two options:

1) Deficit at 3.3%, corp tax @25% for cos. with revenue < 1000 crore, higher surcharges on income tax.
2) Deficit at 3.8%, corp tax cuts for all cos, no new taxes.

The govt. went with option (1) obviously, but option (2) is much better. In fact I would advocate for

3) Deficit at 4.5%, corp tax @24% for all cos, GST cuts later in the year, no new taxes.

One of the biggest Fund managers in the EM space recently said that India can let fisc. deficit go to 5%

https://www.bloombergquint.com/markets/ ... ark-mobius

Let's not get fixated about whether the right number is 4% of 5% or 6%. GDP number itself is a giant hairball of approximations. What I am advocating is a path away from this mindset of "balancing the books".

Now let's deal with some usual objections:

Q: If the fiscal deficit widens, govt will have to sell more bonds, pushing up interest rates, crowing out private sector?
A: RBI needs to cut rates much much lower.
Q: Even if they do, yield curve will steepen
A: two words: Quantitative Easing. Or in Indian parlance, bond buybacks by the RBI
Q: You crazy? this will cause inflation to spike
A: There is no link between an QE/expanding money supply and inflation- need to learn from the US experience. Also inflation is a very far concern when capacity utilisation is low and factories are shutting down for a lack of demand.

I hope this conveys some of what I'm saying. Hard to do this justice in a single post. My hope is only to get the conversation going so that people start questioning the prevailing consensus.

Yagnasri · Post by **Yagnasri** » 12 Jul 2019 18:31

At about 40+ years back the property tax in my home town is almost 1% of the property value. Now it is almost negligible in % to marker value terms. That has to change. It will give lot of funds to local administration and to the extant the State and Central funding should be cut. As of today most of the salaries etc of local administration is being paid by the State Government party from 8% (IIRC) funds that go to local admins as per the constitutional amendment on Panchayathi Raj.

What I find is lack of investment in green field manufacturing units. May be IT benefit to the tune of 1 Lakh for buying the shares of such units to start with will be great.

Suraj · Post by **Suraj** » 12 Jul 2019 21:01

Rahulsidhu wrote: I hope this conveys some of what I'm saying. Hard to do this justice in a single post. My hope is only to get the conversation going so that people start questioning the prevailing consensus.

Thanks! Definitely - the whole point of armtwisting you here is to distill ideas down into simpler pieces that we can then use SM to outreach to the government with these ideas. It's been an effective approach, and I want to encourage those with good ideas to take the time to rigorously consider some of the details and describe in straightforward terms what could be done, what are potential challenges, and how GoI may still do them.

Rahulsidhu · Post by **Rahulsidhu** » 13 Jul 2019 07:28

Rahulsidhu wrote: IMHO this article is an example of how this whole debate is being handled the wrong way. It is not a question of rich investor class vs poor working class. To frame it thus is not only self-defeating, it is objectively wrong.

Another example:

But if we want to build the infrastructure of the country and reach the ambitious aim of being a $5 trillion economy by 2025 by keeping the growth rate at 9-10% then we will have to sacrifice a bit. Sacrifice by people like you and me will take the country ahead and bring its multiplier effect. So, every Indian should sacrifice their part to see the rapid growth of their country. So, the tax proposals are suitable. -- CEO of Niti Aayog

This is just bizarre. Higher taxes do not lead to high growth. In fact, just the opposite-- tax hikes are a tool to cool down an overheating economy.

All this seems driven by a belief in the magical "crowding out effect". No one seems to have done the math. Their policy actions are in direct opposition to their stated goals. The only silver lining is that rates will continue to come down.

Sorry for the rant!

Karthik S · Post by **Karthik S** » 13 Jul 2019 07:54

Lifting 271 mn out of poverty in 10 yrs, India fastest, Jharkhand No. 1 area: UN
According to the global MPI 2019 report released Thursday, between 2005-06 and 2015-16, India, lifted 271 million out of poverty, significantly reducing deprivations in many of the ten indicators, particularly in “assets, cooking fuel, sanitation and nutrition”.
The MPI captures both the incidence and intensity of poverty. (Image for representational purpose only)

India has registered the fastest absolute reduction in the Multidimensional Poverty Index (MPI) value among ten countries, spanning every developing region, whose combined population is two billion people. And Jharkhand is among the poorest regions in the world improving the fastest.

According to the global MPI 2019 report released Thursday, between 2005-06 and 2015-16, India, lifted 271 million out of poverty, significantly reducing deprivations in many of the ten indicators, particularly in “assets, cooking fuel, sanitation and nutrition”.

The MPI captures both the incidence and intensity of poverty. The global MPI tracks 101 countries on deprivations across ten indicators in health, education, and standard of living. Developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP), it looks beyond income poverty and tracks poverty in terms of the deprivation faced by people in their daily lives.

Between 2005-06 and 2015-16, India, lifted 271 million out of poverty, significantly reducing deprivations in many of the ten indicators.
The report stated: “Among selected countries with a significant reduction in MPI value, India demonstrates the clearest pro-poor pattern at the subnational level: the poorest regions reduced multidimensional poverty the fastest in absolute terms”.

It cites Jharkhand, which reduced multidimensional poverty from 74.9 per cent to 46.5 per cent in the ten years since 2005-06, as an example of the poorest region improving the fastest followed by Rattanak Kiri in Cambodia.

Among the four Indian states with the most acute MPI — Bihar, Jharkhand, Uttar Pradesh and Madhya Pradesh — Jharkhand has made the most progress. Overall, India was among three countries where poverty reduction in rural areas outpaced that in urban areas, which as per the report, is an indicator of pro-poor development.

The National Family Health Survey round three and four (NHFS 2005-06 & 2015-16) is the source for the comparative data on the indicators.

In this period, the report stated, the incidence of multidimensional poverty in India has almost halved, to 27.9 per cent from 55.1 per cent, lifting 271 million out of poverty — from 640 million to around 369 million. With regards to intensity, the reduction is negligible — from 51.1 per cent to 43.9 per cent — which goes to show that the experience of the poor person, how they face deprivation, hasn’t changed all that dramatically.

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“Traditionally disadvantaged subgroups such as those living in rural India, Muslims, the Scheduled Castes and Tribes, and young children are still the poorest in India,” said a UNDP official.

Shoko Noda, UNDP India Resident Representative, said, “The MPI captures the huge progress India has made in reducing multidimensional poverty across the country, while also providing a more complete picture of who is deprived, how they are deprived, and where they live.”

“That the poorest parts of the country are more quickly lifting people out of poverty demonstrates India’s commitment to ensuring no one is left behind, in line with the Sustainable Development Goals and the government’s own priorities.”

The ten developing nations for which the comparison is made include countries across income categories: upper middle (Peru), lower middle (Bangladesh, Cambodia, India, Nigeria, Pakistan, Vietnam) and low (Democratic Republic of the Congo, Ethiopia, Haiti).

Across the 101 countries, 23.1 per cent of the people are multidimensionally poor. Fifty per cent of multidimensionally poor people are children, and a third are children under age 10 with over 85 per cent of poor children living in South Asia and Sub-Saharan Africa.

https://indianexpress.com/article/india ... n-5825985/

vijayk · Post by **vijayk** » 14 Jul 2019 23:45

http://www.newindianexpress.com/opinion ... 03612.html
Modi ne kya kiya? The voters answered!

Under PM Modi’s leadership in the 2014-19 term, the NDA-I government grew the GDP by an estimated Rs 78 lakh crore in nominal terms, a growth of 69.2 per cent over five years at a CAGR of 10.9 per cent. Estimated per-capita GDP grew from Rs 0.9 lakh in 2014 to Rs 1.45 lakh in 2019, a growth of 59.7 per cent in five years—the largest growth witnessed in our recent history. Data from ESI, EPFO and other sources like sale of vehicles shows one crore jobs are being created every year in India. In these five years, providing basic amenities to the poor was prioritised and the results are staggering.

No other prime minister of India has done so much for the poor in one five-year term as PM Modi has. He is ensuring every Indian has access to the basic necessities of life:

A roof over their head—1.53 crore homes were built post-2014, a majority of them in the rural areas.

A toilet in the house —Individual household latrine (IHHL) coverage is now over 99 per cent, up from 38.7 per cent in 2014. In five years, 9.67 crore latrines were built, and 94.08 per cent villages and 28 states have been declared as ODF.

Power in their switches —100 per cent electrification was achieved in 988 days, covering 17,181 villages, up from around 96.7 per cent in 2014. 2.5 crore poor households were electrified, and the work to provide reliable power continues.

Food on the table—Food security coverage has been extended to all 36 states/UTs of India from just 11 states/UTs in 2014, as per the National Food Security Act, under which the government is supplying 5 kg of foodgrains each month to over 80 crore people at a highly subsidised price.

Gas connection in the kitchen—13 crore gas connections were distributed in five years, bringing the total to around 25 crores. Of these, 7.19 crore connections have been provided free to rural women, enabling them to cook smoke-free and improving their health dramatically.

Rural road connectivity—Today, 91 per cent of villages are connected with roads, up from 56 per cent in 2014.

Access to education—Apart from schools, enrolment in higher education also jumped from 3.23 crore in 2014 to 3.66 crore in 2018. More Indians, including women, are aspiring to become graduates. The Gross Enrolment Ratio of women has risen from 22.0 in 2014 to 25.4 in 2018. It is essential to create suitable jobs for all of them now.

Mobile phones—TRAI data shows that the wireless subscriber base in March 2019 was 1.16 billion, up from 0.9 billion in 2014. Of this, 511.3 million are in rural areas. Access to mobiles has transformed how people in the rural areas (and urban) do business and earn a livelihood.

Access to the Internet and digital platforms—The Internet subscriber base, as per TRAI, has increased from 251.6 million in 2014 to 563.3 million in March 2019. Apart from this, 1.19 lakh gram panchayats have been connected with optical fiber for citizens to access their bank accounts and DBT digitally.

Bank accounts—Through the Jan Dhan Yojana, 35.65 crore bank accounts were opened in five years. Total deposits have crossed Rs 90,000 crore. Over 53 per cent holders are women.

Direct Benefit Transfer—DBT has enabled the government to provide Rs 7.3 lakh crore under 439 schemes over the last five years, directly to citizens’ Jan Dhan bank accounts.

Small business loans—Through Mudra, loans worth more than Rs 8.6 lakh crore have been disbursed to more than 18.2 crore beneficiaries to start their own businesses and aspire for a better life

Insurance cover—Since 2014, 21.68 crore people have availed of insurance for accident and disability coverage, life insurance, and so on.

Farmer insurance—Over 14.24 crore insurance covers have been provided with increased distress relief for crop damage

Affordable healthcare—Ayushman Bharat was launched in September 2018 to provide health insurance cover of Rs 5 lakh/family/year. In nine months, over 25 lakh people received free medical treatment worth over Rs 3,400 crore. The plan is to benefit 50 crore citizens. Maternal and child healthcare has dramatically improved through Mission Indradhanush, which immunised 86.88 lakh pregnant women and 3.38 crore children. There has been a large decrease in the infant mortality rate and maternal mortality rate. Matru Vandana Yojana provided maternity benefits worth Rs 1,600 crore to 50 lakh women.

Clean water—While piped water supply hasn’t reached everyone yet, this is one of the first mandates taken up by the NDA-II government

vijayk · Post by **vijayk** » 15 Jul 2019 03:27

https://www.indiatoday.in/business/vide ... 2019-07-08

Nirmalaji's India Today TV Budget Roundtable

vijayk · Post by **vijayk** » 15 Jul 2019 04:17

What happened to Jet airways? Is it fraud? Is it simple mismanagement? Is it siphoning off?
Did the Govt. play any negative role intentionally or unintentionally?

Some folks say BJP allowed other airlines to steal all Jet airways business by not bailing out Jet?

Singha · Post by **Singha** » 15 Jul 2019 09:05

a thing not captured in mobile subs is more and more people are moving to 3G and 4G and feature phones to smartphones. its not just increase of numbers which will plateau soon.

sivab · Post by **sivab** » 15 Jul 2019 09:50

vijayk wrote:What happened to Jet airways? Is it fraud? Is it simple mismanagement? Is it siphoning off?
Did the Govt. play any negative role intentionally or unintentionally?

Some folks say BJP allowed other airlines to steal all Jet airways business by not bailing out Jet?

Jet Airways audit shows diversion of funds, fraudulent billing

https://economictimes.indiatimes.com/in ... arebuttons

Yagnasri · Post by **Yagnasri** » 15 Jul 2019 10:54

vijayk wrote:What happened to Jet airways? Is it fraud? Is it simple mismanagement? Is it siphoning off?
Did the Govt. play any negative role intentionally or unintentionally?

Some folks say BJP allowed other airlines to steal all Jet airways business by not bailing out Jet?

It simply failed. Maybe to be business failure or just mismanagement. We know that Airlines Business is a highly comparative one with lot of business failures all around the world. Siphoning off is there or not is not known. There is no role of GoI in this as far as I know. BJP or others did not try anything to make it fail.

A Nandy · Post by **A Nandy** » 15 Jul 2019 12:11

Budget boost for Electric Vehicles will give India a first mover advantage: NITI Aayog’s Rajiv Kumar
"In most other industries, we have been followers. But in this case, we can take the lead and crack the world markets by expanding exports of electric vehicles. Electric mobility is a sector which will drive economic activity in [the] coming years."

How can the challenges of charging infrastructure at a mass scale be overcome?

I am convinced that the private entrepreneurs in this country will find a solution for that. I have no doubt. I can also see that people who build houses, once electric mobility is promoted, they will make provision for charging infrastructure in new projects. Another point is that if one focuses on battery swapping technology, then you don’t need any of that, especially in two-wheelers where the battery size is so small and so convenient, always shrinking.

For example, in IIT Madras, all the three-wheelers inside the campus are now Lithium-ion battery operated. What they do is that there is a centralised place where the batteries are charged and batteries are swapped. Such swapping stations can emerge all over the urban locales and we may not need the kind of charging infrastructure that we are imagining. Similar is true for public buses, for which the average daily commute in a city like Delhi is not more than 50 km and every battery lasts you more than 100 km even in the present technology. Every time the bus goes into the station, it can be charged once. So the challenge that whole of city will be dug out for charging stations is entirely misplaced. And finally, for long distance travel, the government has already declared that every gas station along the highway will have [the] charging infrastructure.

What, then, is the challenge?

The issue is whether the grid system can take this extra load. But because this (complete rollout) is 6-10 years away and now we know the challenge, we can start working on it, we can improve the quality of the grid. But all that thinking can start if you have a target date in mind.

https://indianexpress.com/article/busin ... r-5829232/

The existing petrol pumps can gradually be converted too as demand picks up.

vijayk · Post by **vijayk** » 15 Jul 2019 19:02

vijayk wrote:https://www.indiatoday.in/business/vide ... 2019-07-08

Nirmalaji's India Today TV Budget Roundtable

Pretty interesting ... Talks about Sovereign debt too

Rishirishi · Post by **Rishirishi** » 16 Jul 2019 01:42

A Nandy wrote:
Budget boost for Electric Vehicles will give India a first mover advantage: NITI Aayog’s Rajiv Kumar
"In most other industries, we have been followers. But in this case, we can take the lead and crack the world markets by expanding exports of electric vehicles. Electric mobility is a sector which will drive economic activity in [the] coming years."

How can the challenges of charging infrastructure at a mass scale be overcome?

I am convinced that the private entrepreneurs in this country will find a solution for that. I have no doubt. I can also see that people who build houses, once electric mobility is promoted, they will make provision for charging infrastructure in new projects. Another point is that if one focuses on battery swapping technology, then you don’t need any of that, especially in two-wheelers where the battery size is so small and so convenient, always shrinking.

For example, in IIT Madras, all the three-wheelers inside the campus are now Lithium-ion battery operated. What they do is that there is a centralised place where the batteries are charged and batteries are swapped. Such swapping stations can emerge all over the urban locales and we may not need the kind of charging infrastructure that we are imagining. Similar is true for public buses, for which the average daily commute in a city like Delhi is not more than 50 km and every battery lasts you more than 100 km even in the present technology. Every time the bus goes into the station, it can be charged once. So the challenge that whole of city will be dug out for charging stations is entirely misplaced. And finally, for long distance travel, the government has already declared that every gas station along the highway will have [the] charging infrastructure.

What, then, is the challenge?

The issue is whether the grid system can take this extra load. But because this (complete rollout) is 6-10 years away and now we know the challenge, we can start working on it, we can improve the quality of the grid. But all that thinking can start if you have a target date in mind.
https://indianexpress.com/article/busin ... r-5829232/

The existing petrol pumps can gradually be converted too as demand picks up.

Indians oil import bill is 115 billion dollars per year. That money goes out of the country and part of it ends up in TSP.

India has 180 000 km of national and state roads. Each charging station costs 500K dollars. for a mere 10 billion one could set up 20 000 charging stations. That would be sufficient to have a charging station every 10Km. In cities charging can be made available in all parking lots. Such plug-points are relatively inexpensive (in the thousands of rupees).
Once the charging is in place the electric cars would follow. Taxis and trucks would go electric very fast, as electric is much cheaper to run but a bit costly to purchase. A typical car can drive about 4km on 1 unit of electricity About Rs 2 per km. For petrol the cost is around Rs 6 per km. If the car does an average of 200km per day (taxi) The saving would about Rs 288 000 per year. The EV car would typically cost an addition of Rs 500 000. Hence a payback of only 18 months. Similar example exist for trucks. The charging takes about 30 min.

kit · Post by **kit** » 16 Jul 2019 15:20

Rishirishi wrote:
A Nandy wrote:

https://indianexpress.com/article/busin ... r-5829232/

The existing petrol pumps can gradually be converted too as demand picks up.
Indians oil import bill is 115 billion dollars per year. That money goes out of the country and part of it ends up in TSP.

India has 180 000 km of national and state roads. Each charging station costs 500K dollars. for a mere 10 billion one could set up 20 000 charging stations. That would be sufficient to have a charging station every 10Km. In cities charging can be made available in all parking lots. Such plug-points are relatively inexpensive (in the thousands of rupees).
Once the charging is in place the electric cars would follow. Taxis and trucks would go electric very fast, as electric is much cheaper to run but a bit costly to purchase. A typical car can drive about 4km on 1 unit of electricity About Rs 2 per km. For petrol the cost is around Rs 6 per km. If the car does an average of 200km per day (taxi) The saving would about Rs 288 000 per year. The EV car would typically cost an addition of Rs 500 000. Hence a payback of only 18 months. Similar example exist for trucks. The charging takes about 30 min.

I guess some sort of subsidy by making purchase of electric cars VAT free will boost up their uptake many times .. without much expenditure from the government !

Yagnasri · Post by **Yagnasri** » 16 Jul 2019 17:46

Very interesting idea. Needs further examination.

Suraj · Post by **Suraj** » 16 Jul 2019 21:28

kit wrote:I guess some sort of subsidy by making purchase of electric cars VAT free will boost up their uptake many times .. without much expenditure from the government !

It's not a good idea to view a new manufacturing supply chain from the end user perspective alone. The reason is that if we ignore the supply chain, it might be taken over by a foreign party importing most of the high value add pieces. For example, in telecom our handset consumption significantly exceeds the domestic manufacturing base, and this accounts for a significant electronics import bill.

Thinking about EV incentives must first consider and seek to avoid the potential that we'd simply swap an oil bill to Saudi Arabia with a similarly large battery bill to China or US. That cannot be allowed to happen, and right now we have the ability to ensure it doesn't, by first giving the supply chain time to establish itself, then make consumption easier, otherwise a large importer can easily overwhelm a nascent local EV supply chain.

Prasad · Post by **Prasad** » 16 Jul 2019 23:18

Karect. Look at China. Subsidies, tax rebates etc should be given to subsystem makers. Battery cell makers (not just battery pack makers), BMS makers, motor designers&makers (obviously must target higher levels of the value chain while you're at it), R&D (duh), charging/battery swapping companies (be it manufacturer chains or 3rd party like petrol bunks who want to convert/add EV service).

Suraj · Post by **Suraj** » 17 Jul 2019 01:00

Yes, when starting the development of a new industry, the priority is not towards the end consumer but enabling the producer and supply chain to develop. Then involves emphasizing subsidies, enabling others to build facilities in India while requiring transfer of technology and local manufacture and R&D . With the latter able to develop without being overwhelmed by outsiders, define tariff barriers to keep outside products out while encouraging exports and domestic consumption of the value added product range, from batteries to charging stations to full EVs.

Rishirishi · Post by **Rishirishi** » 17 Jul 2019 04:23

Suraj wrote:
kit wrote:I guess some sort of subsidy by making purchase of electric cars VAT free will boost up their uptake many times .. without much expenditure from the government !
It's not a good idea to view a new manufacturing supply chain from the end user perspective alone. The reason is that if we ignore the supply chain, it might be taken over by a foreign party importing most of the high value add pieces. For example, in telecom our handset consumption significantly exceeds the domestic manufacturing base, and this accounts for a significant electronics import bill.

Thinking about EV incentives must first consider and seek to avoid the potential that we'd simply swap an oil bill to Saudi Arabia with a similarly large battery bill to China or US. That cannot be allowed to happen, and right now we have the ability to ensure it doesn't, by first giving the supply chain time to establish itself, then make consumption easier, otherwise a large importer can easily overwhelm a nascent local EV supply chain.

I think the whole game is about creating the demand for electric cars. As of now, people will not purchase one, because they have no charging facility. Without electric cars, no one wants to build charging stations. Hence gov must step in to help it make possible to own an electric car. As for supply chain, i do not think it is a problem. There are so many Indian companies who are more then capable to manufacture battery and EV. Tata\s Jaguar I/pace (EV) was chosen the car of the year.

Suraj · Post by **Suraj** » 17 Jul 2019 04:41

The government IMHO should not to focus on creating domestic demand before it focuses on giving businesses a reason to invest in a domestic EV supply chain. A situation where there's no domestic supply chain but some very mature ones elsewhere, and trying to stoke domestic demand, is a situation ripe for outsiders to corner the market before a domestic supply chain even comes into existence.

Kashi · Post by **Kashi** » 17 Jul 2019 07:13

Something that government does not seem to have addressed is that where will all the new vehicles be parked in our increasingly crowded towns and cities.

It's high time we had a rule that once can buy a car only if they have a spot (owned or rented) to park it.

A Nandy · Post by **A Nandy** » 17 Jul 2019 08:23

Another issue is where to source enough lithium if we are to encourage local battery manufacture. Tata seems to be setting up Giga units in Gujarat after the tech transfer from ISRO:

https://timesofindia.indiatimes.com/cit ... 183584.cms

Tata Group to set up Rs 4,000 crore lithium-ion battery plant

Shivhare said that the ultimate manufacturing capacity would be 10 giga watts (GW).
“Government of India will soon roll out policy incentives for battery manufacturers for electric vehicles.
In fact, incentives for capacities up to 50GW will also be offered. This will be a further push for investments in this sector,” he explained.
According to the IAS officer, Dholera is an ideal destination for manufacturing of batteries. “DSIR fulfils all the key parameters making it ideal for battery manufacturing. We are offering title-cleared land with ready possession, in addition to necessary infrastructure to make it a plug and play system for upcoming units. Moreover, we are also in a position to offer the cheapest power tariff,” said Shivhare.

Interesting discussion at team-bhp: https://www.team-bhp.com/forum/indian-c ... plant.html

https://www.livemint.com/Industry/0MxEn ... e-for.html

“Lithium is tipped to be what oil was in the 20th century, and the demand will only increase in the coming years, when lithium-ion battery manufacturing for electric vehicles will gather scale. So, it is natural for Indian companies to explore possibilities in Bolivia, which has one of the largest deposits of lithium," said an analyst requesting not to be identified.

Prasad · Post by **Prasad** » 17 Jul 2019 10:50

Well ideally the govt should push really hard to switch from private vehicles to buses and 2/3 wheelers instead of cars. This way we can enable a solid switchover to public transport which is EV-based. A 2:1 replacement of current bus fleets would be a good start. Most city transport corporations are woefully under-equipped right now. Without increasing number of routes and frequency, public transport will lag and lead to increase in private vehicles in all our cities. But hey, the auto lobby is strong and a major jobs generator.

kit · Post by **kit** » 17 Jul 2019 14:37

Rishirishi wrote:
Suraj wrote: It's not a good idea to view a new manufacturing supply chain from the end user perspective alone. The reason is that if we ignore the supply chain, it might be taken over by a foreign party importing most of the high value add pieces. For example, in telecom our handset consumption significantly exceeds the domestic manufacturing base, and this accounts for a significant electronics import bill.

Thinking about EV incentives must first consider and seek to avoid the potential that we'd simply swap an oil bill to Saudi Arabia with a similarly large battery bill to China or US. That cannot be allowed to happen, and right now we have the ability to ensure it doesn't, by first giving the supply chain time to establish itself, then make consumption easier, otherwise a large importer can easily overwhelm a nascent local EV supply chain.
I think the whole game is about creating the demand for electric cars. As of now, people will not purchase one, because they have no charging facility. Without electric cars, no one wants to build charging stations. Hence gov must step in to help it make possible to own an electric car. As for supply chain, i do not think it is a problem. There are so many Indian companies who are more then capable to manufacture battery and EV. Tata\s Jaguar I/pace (EV) was chosen the car of the year.

Electric cars can be charged at home, all they need is an inexpensive adapter!

Prasad · Post by **Prasad** » 17 Jul 2019 15:54

There are so many Indian companies who are more then capable to manufacture battery and EV.

You are vastly underestimating the inertia of Indian companies. Look at the massive

by all big indian auto companies to the ev switchover. Sure there are legitimate concerns but a lot of it is because we are tech consumers and not generators. So we are forever behind during such times.

vijayk · Post by **vijayk** » 17 Jul 2019 19:15

https://www.firstpost.com/business/bima ... 09941.html

The six-member panel, under former RBI Governor Jalan was appointed on December 26, 2018, to review the economic capital framework (ECF) for the Reserve Bank of India (RBI) after the finance ministry wanted the central bank to follow global best practices and transfer more surplus to the government.

As per various estimates, the RBI has over Rs 9 lakh crore of surplus capital with it.

According to the sources, Wednesday's was the last meeting as of now and the report has been finalised.

Asked about the quantum of surplus transfer from the RBI to the government, sources said, it cannot be disclosed at the moment but the transfer would be periodic and would spread over 3-5 years.

We have $130 Billion in surplus? kidding me?

Lets invest wisely

vijayk · Post by **vijayk** » 17 Jul 2019 20:52

https://www.dailyo.in/politics/union-bu ... 31470.html
Post-Budget Blues: Why the Modi govt must lower taxes to revive growth
The mindset of bureaucrats in the Ministry of Finance remains stuck in the past. It is here that Modi could learn from Donald Trump.

Begin with tax. Before the Budget, I had argued for a simplified flat tax — zero tax for annual incomes below Rs 10 lakh, 10% tax for incomes between Rs 10 lakh and Rs 20 lakh, 20% tax for incomes between Rs 20 lakh and Rs 30 lakh and 30% tax for incomes above Rs 30 lakh.

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Win-win: A simple flat tax structure would increase both compliance and revenue. (Photo: Reuters)

No exemptions, no cesses, no surcharges.

The amount of tax collected from those earning taxable incomes below Rs 10 lakh a year is relatively small. It involves laborious paperwork by assessees and draws valuable monitoring resources from the income tax department. A simple flat tax structure would increase compliance and revenue.

Unfortunately, the mindset of bureaucrats in the Ministry of Finance (MoF) remains stuck in the past. By imposing a surcharge on the very rich, the extra tax revenue is estimated to be less than Rs 10,000 crore per year — but it will cause the flight of several entrepreneurs to foreign tax jurisdictions. This could reduce overall tax collections, the exact opposite outcome of the ill-advised surcharge.

India's indirect taxes are now 9.5% of Gross Domestic Product, among the highest in Asia. The ratio is 4.7% in Indonesia, 5.6% in Vietnam and 5.8% in China.

What the Indian economy needs today is lower taxes to boost consumption and revive private investment. It is worth examining why the economy of the United States is booming despite an uncertain global geo-economic environment amidst a trade war with China. US President Donald Trump has many flaws — but he was right to slash corporation tax from 35% to 21% in his first year in office.

As a result, US companies are today flush with cash. Net profits have soared. That benefits everyone. Take one example: a firm with a taxable profit of $100 million now saves $14 million through the corporation tax cut.

India's corporate tax rate is 25% for companies with a turnover of below Rs 400 crore. Add surcharges and dividend tax and the net rate though is nearly 30%. Companies with a turnover above Rs 400 crore continue to pay a basic tax rate of 30% which rises to over 35% with various surcharges and dividend tax. While the number of these large companies comprises just 0.7% of India's corporate universe, they account for over 90% of corporate tax revenue.

The Union Budget has suggested the Securities and Exchange Board of India (SEBI) consider increasing the minimum public float of listed company shares from 25% to 35%. While this will impart greater liquidity and lead to better price discovery, several multinationals could delist from Indian stock exchanges.

The best regulatory regime is light-touch and rules-based — India's regulations are heavy-handed and tend to retrospectively overturn established rules.

The government's economic policies have focused (rightly) over the past few years on welfare schemes but ignored the demand-supply side of the economy. The best way to revive broad-based demand is by putting money into the hands of India's aspirational middle-class by moving towards a flat tax regime. And the best way to boost supply is to recapitalise banks, resume lending to corporates and revive the manufacturing industry.

Suraj · Post by **Suraj** » 17 Jul 2019 23:10

In my view, the EV scene provides a very good opportunity for this government to demonstrate its ability to organically cultivate a potential long term industry . This is something that successive governments in India over decades have not shown the ability to support.

In comparison, this is one skill that the Chinese have excelled at - being able to work across ministries on a focused long term goal at developing a base while shielding the domestic market, then progressively dominating both the domestic market and generating exports. They have built up entities like Huawei and others in telecom infrastructure and Xiaomi, Oppo etc in telecom consumer goods, BYD in EVs, or even just their overall export engine for which they provide the credit, infrastructure and supply of energy and raw material as efficiently as possible.

The reason this is a worthy challenge for this government, is that it has so far shown a good record at focused implementation of some fundamental public goods and services. For example, it raised road connectivity, rural electrification, rural sanitation and cooking fuel coverage from the mid 40% to over 90% coverage in just 5 years. Historically, Indian governments have been good at plans and bad at implementation. This government is notable in demonstrating the ability to track and execute a sizable project on an aggressive schedule far beyond historical rate of progression.

Therefore, being able to devise and execute a national EV program is a worthwhile long term goal for the government to consider. It involves getting past many prior failings of past governments - particularly the inability to work between ministries towards a larger overall goal.

vijayk · Post by **vijayk** » 18 Jul 2019 02:01

unil Jain
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Verified account

@thesuniljain

Finally, a clarification on powers of financial creditors (point f) to deal with the Nclat verdict in Essar Steel case! Nclat verdict said financial creditors wouldn't get more than operational ones ... Would have hit banks badly, caused a sharp hike in lending rates
So good move

Taking care of all necessary hurdles for animal spirit economy. Once economy takes off, focus on others

Rishi_Tri · Post by **Rishi_Tri** » 18 Jul 2019 04:00

Prasad wrote:
There are so many Indian companies who are more then capable to manufacture battery and EV.
You are vastly underestimating the inertia of Indian companies. Look at the massive by all big indian auto companies to the ev switchover. Sure there are legitimate concerns but a lot of it is because we are tech consumers and not generators. So we are forever behind during such times.

Agree on 'inertia of India companies'. Not on 'we are tech consumers and not generators'. When it comes to Electric Vehicles, I would say we were definitely one of the leaders in the world or perhaps the leader through Reva Electric. It got sold to Mahindra at the wrong time after toiling for such a long time and Mahindra has killed the brand and the vehicles.

When everyone was talking about Hybrids, Hydrogen Fuel Cell Cars, Reva would do its runs on city streets across length and breadth of India. Not yesterday, not day before but 15 years ago. Sure it had its problems but there was an Electric Car running on India streets and loved by its fans.

The switch to electric is just about starting. Time for new Indian auto firms to come up. ISRO should be willing to license its Li-Ion technology and that should help with 'Made in India' cars, not cars made with imported Li-Ion batteries and other electrical systems.

kit · Post by **kit** » 18 Jul 2019 05:25

Rishi_Tri wrote:
Prasad wrote: You are vastly underestimating the inertia of Indian companies. Look at the massive by all big indian auto companies to the ev switchover. Sure there are legitimate concerns but a lot of it is because we are tech consumers and not generators. So we are forever behind during such times.
Agree on 'inertia of India companies'. Not on 'we are tech consumers and not generators'. When it comes to Electric Vehicles, I would say we were definitely one of the leaders in the world or perhaps the leader through Reva Electric. It got sold to Mahindra at the wrong time after toiling for such a long time and Mahindra has killed the brand and the vehicles.

When everyone was talking about Hybrids, Hydrogen Fuel Cell Cars, Reva would do its runs on city streets across length and breadth of India. Not yesterday, not day before but 15 years ago. Sure it had its problems but there was an Electric Car running on India streets and loved by its fans.

The switch to electric is just about starting. Time for new Indian auto firms to come up. ISRO should be willing to license its Li-Ion technology and that should help with 'Made in India' cars, not cars made with imported Li-Ion batteries and other electrical systems.

Profits and the early mover advantage. I think the Tatas will do it ,

JTull · Post by **JTull** » 18 Jul 2019 15:49

Some more details on amendments to IBC.

https://www.financialexpress.com/indust ... n/1647787/

To cut delays, the amendments have mandated that the entire resolution process, including litigation, will have to be completed in 330 days. Currently, while the IBC allows a maximum of 270 days for resolution to be over, it doesn’t set any time-frame to complete the litigation process, resulting in several high-profile cases, including Essar Steel, dragging on months together.

Rishirishi · Post by **Rishirishi** » 19 Jul 2019 04:26

Rishi_Tri wrote:
Prasad wrote: You are vastly underestimating the inertia of Indian companies. Look at the massive by all big indian auto companies to the ev switchover. Sure there are legitimate concerns but a lot of it is because we are tech consumers and not generators. So we are forever behind during such times.
Agree on 'inertia of India companies'. Not on 'we are tech consumers and not generators'. When it comes to Electric Vehicles, I would say we were definitely one of the leaders in the world or perhaps the leader through Reva Electric. It got sold to Mahindra at the wrong time after toiling for such a long time and Mahindra has killed the brand and the vehicles.

When everyone was talking about Hybrids, Hydrogen Fuel Cell Cars, Reva would do its runs on city streets across length and breadth of India. Not yesterday, not day before but 15 years ago. Sure it had its problems but there was an Electric Car running on India streets and loved by its fans.

The switch to electric is just about starting. Time for new Indian auto firms to come up. ISRO should be willing to license its Li-Ion technology and that should help with 'Made in India' cars, not cars made with imported Li-Ion batteries and other electrical systems.

Indian companies are agile forward leaning and competitive. They are capable of mastering the EV technologies PROVIDING THEY CAN MAKE MONEY on it. There has to be a demand and they must have a chance to compete. It does not help to come 5 years after the Chinese have mass manufactured the stuff.

There are 2 main areas where the government must step in. 1 They must make available fast-charge stations, so that people can use the car for longer distance driving. 2 Goi must facilitate to build EV battery factories which achieve economies of scale. The tech is available. You just need pay and ask them to set up factory. let us say they build 5 factories for 10 billion dollars.

Imagine having the choice to purchase a car with fantastic pickup, low maintenance and gives 40Km per liter fuel economy. So far it is all good news.

The problem comes with range. Longer range heavier and expensive battery. A car with a range of 400 Km will cost Rs 5 lacks extra. A battery with range of of 200 km will cost 2 lacks extra. The 200 Km option is great if you know you always have a fast charge station (80% in 30 min) within 5 km. Normal plugs will be too slow and take several hours to charge. But if the government spends USD 20 billion, all national highways and most state highways can furnished with fast charging stations. In addition they must also build a new electricity grid along the road to handle such massive loads.

The trucks have their own calculations.

So for a one time investment of USD 30 billion India can over a few years, manage to almost eliminate oil imports.

The oil import bill is a serious problem for Indian growth plans. Imagine being able to put 100 billion dollars in the pocket of the aam janta.

vera_k · Post by **vera_k** » 19 Jul 2019 08:32

In India for a wedding, and the service provider is back to operating with payments made 70 white/30 black.

How does the GST help here, and can I issue something like a 1099 to the service provider so the IRS knows the full amount paid?

Suraj · Post by **Suraj** » 19 Jul 2019 09:56

vera_k wrote:In India for a wedding, and the service provider is back to operating with payments made 70 white/30 black.

How does the GST help here, and can I issue something like a 1099 to the service provider so the IRS knows the full amount paid?

Did you make any efforts to report them to authorities ?

vera_k · Post by **vera_k** » 19 Jul 2019 13:33

^ I found a web form to report them to state GST department. However it needs a local mobile phone, and cannot be done with just Aadhar or PAN card. Will do so once I get a local number.

Hate to say it, but longer term solution may have to be to reduce paper notes and switch to coins. This is also a weak link in the GST as someone paying up under this scheme has no incentive to report similar to how it used to be prior to GST.

tandav · Post by **tandav** » 19 Jul 2019 23:48

Kashi wrote:Something that government does not seem to have addressed is that where will all the new vehicles be parked in our increasingly crowded towns and cities.

It's high time we had a rule that once can buy a car only if they have a spot (owned or rented) to park it.

+100 Indian cities simply do not have space for private car ownership. We will as a nation have to adopt shared ownership of mobility assets