Indian Economy News & Discussion - Nov 27 2017

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ArjunPandit
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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 29 Oct 2018 10:28

Rbi issues are genuine, although I would have preferred to have the issues resolved in govt meetings.


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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 30 Oct 2018 18:39

Bunch of news.

E-commerce losses.
https://swarajyamag.com/insta/amazon-fl ... -in-losses

Bigbasket may be the next Indian unicorn.
https://swarajyamag.com/insta/bigbasket ... th-unicorn

MH deregulates agricultural marketing. Will energize food retailing.
https://www.financialexpress.com/market ... t/1365924/

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 30 Oct 2018 18:48

One problem with the analysis posted by Vips is that Kerala going from 9 to 1 and Bihar going from 80 to 50 will suggest KL has done great at 90% reduction. But reality is that in terms of sheer numbers the reduction is huge in BH. That article is poor analysis.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 31 Oct 2018 01:07

September steel production data is out: Worldsteel: September 2018 data
Sept 2018: 8.5MT (+2.1% YoY)
Jan-Sept 2018: 79.7MT (+6.1% YoY)

Still in 2nd place, slightly widened the gap with #3 Japan. They've essentially been static YoY, but we've increased output by 4.5MT so far this year. We continue to produce more steel than countries of former USSR, and almost as much as US+Canada+Mexico.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 31 Oct 2018 17:40

India's Infrastructure output growth year over year in September was 4.3% holding steady from August's 4.2%. As of this moment hasn't made the news-outlets, so quoting tradingeconomics.com.
https://tradingeconomics.com/india/construction-output

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JTull » 31 Oct 2018 18:23

Suraj wrote:September steel production data is out: Worldsteel: September 2018 data
Sept 2018: 8.5MT (+2.1% YoY)
Jan-Sept 2018: 79.7MT (+6.1% YoY)

Still in 2nd place, slightly widened the gap with #3 Japan. They've essentially been static YoY, but we've increased output by 4.5MT so far this year. We continue to produce more steel than countries of former USSR, and almost as much as US+Canada+Mexico.


Arcelor-Mittal's plans that have been approved by Essar Steel creditors include increasing it's capacity from 6.5MT to 15MT.

I'm a bit concerned about domestic coal production for power and steel sectors. Coal India is simply not being able to keep up with the demand. Then, there's the coming squeeze in 2019 in Global coal markets. I wonder how it will all play out.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby jpremnath » 31 Oct 2018 18:47

Supratik wrote:One problem with the analysis posted by Vips is that Kerala going from 9 to 1 and Bihar going from 80 to 50 will suggest KL has done great at 90% reduction. But reality is that in terms of sheer numbers the reduction is huge in BH. That article is poor analysis.


How so?...Its an index and not absolute numbers.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby souravB » 31 Oct 2018 18:50

Source:
ANI:Twitter link
India ranks at 77 in the World Bank's 'Ease of doing business' index. India has recorded a jump of 23 positions against its rank of 100 in 2017.

This is getting better :D

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 31 Oct 2018 18:59

souravB wrote:Source:
ANI:Twitter link
India ranks at 77 in the World Bank's 'Ease of doing business' index. India has recorded a jump of 23 positions against its rank of 100 in 2017.

This is getting better :D


http://www.doingbusiness.org/en/rankings

Code: Select all

                       
                                    2019         2018                             
Ease of Doing Business Rank               77         100
Starting a Business                  137              156
Dealing with Construction Permits      52                181
Getting Electricity                              24                 29
Registering Property                           166              154
Getting Credit                                   22                  29
Protecting Minority Investors              7                     4
Paying Taxes                                      121               119
Trading across Borders                         80               146
Enforcing Contracts                            163              146
Resolving Insolvency                           108              103
Last edited by hanumadu on 31 Oct 2018 19:18, edited 7 times in total.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 31 Oct 2018 19:06

You have to extrapolate the index to absolute numbers to get an idea. That article doesn't match published articles that multi dimensional poverty in India has significantly decreased from IIRC 22% to around 5% which will be mostly in BIMARU states. So saying things have not changed and KL has done better than BH is rubbish. KL already had very low poverty. So if reduction in KL is 3 million to 1% and in BH down by 30 million to 50%, BH has done exceptionally well. That is not reflected in the article.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 31 Oct 2018 20:11

India's fist sovereign wealth fund makes first acquisition.

https://swarajyamag.com/insta/indias-fi ... ce-limited

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Trikaal » 31 Oct 2018 20:27

https://www.financialexpress.com/econom ... 7980/lite/

India jumps 23 ranks on World Bank Ease of Doing Business; becomes South Asia leader
Ease of Doing Business 2019:


By improving on six of the ten parameters, India has also made its place among top ten improvers in the world, for the second consecutive year.

Repeating last year’s huge success, India, once again, made a huge jump of 23 places on World Bank’s Ease of Doing Business to secure 77th rank — indicating Prime Minister Narendra Modi’s commitment towards business-related reforms.

Not only has India made remarkable progress but has also become the highest ranked economy in South Asia, leaving Bhutan behind. India’s huge stride towards becoming a business-friendly nation has come in the last two years, with a total jump of 53 places.

New Zealand, Singapore and Denmark secured the first three ranks in the 190-country list, while Afghanistan made a huge progress among South-Asian countries besides India.

By improving on six of the ten parameters, India has also made its place among top ten improvers in the world, for the second consecutive year. Last year, India had jumped 30 ranks to break into top 100 of the elite list for the first time.

From the implementation of the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC), labour laws reforms to electronic trade documentation, World Bank said, several big and small reforms made India advance to the 77th place in the global ranking.

“India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country,” the World Bank said, giving thumbs up on Paying Taxes indicator.

The recent corporate tax rate cut for small businesses in the Budget 2018 also got praise from the World Bank.

On the new-adopted IBC law, which is likely to help lenders recover over Rs 1 lakh crore of bad loans soon, the World Bank noted that the establishment of debt recovery tribunals reduced nonperforming loans by 28% and helped in lowering interest rates on larger loans.

Moreover, India’s efforts towards reducing time and cost of trade by the electronic sealing of containers, upgrading of port infrastructure, and submission of electronic documents with digital signature also won big for the country.

Other reforms such as streamlining the process of obtaining a building permit and making electricity available faster and cheaper were also received well.

The World Bank’s Doing Business report assesses 190 economies on ten parameters — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

In India, reforms undertaken by Delhi and Mumbai were considered by the World Bank.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 31 Oct 2018 20:37

hanumadu wrote:

Code: Select all

                       
                                    2019         2018                             
Ease of Doing Business Rank               77         100
Starting a Business                  137              156
Dealing with Construction Permits      52                181
Getting Electricity                              24                 29
Registering Property                           166              154
Getting Credit                                   22                  29
Protecting Minority Investors              7                     4
Paying Taxes                                      121               119
Trading across Borders                         80               146
Enforcing Contracts                            163              146
Resolving Insolvency                           108              103


Some of my observations about the improvement in rankings:
I don't think these improvements have captured all improvements that have happened in the last year. For example:
>> The ranking for "resolving insolvency" is worse in 2019 than in 2018. The Supreme Court judgement in the Essar Steel case as well as other reforms through executive orders have made IBC even more potent. This is revealing in lower haircuts. These will show up in the next years rankings.
>> The ranking for "paying taxes" is worse in 2019 than in 2018. This may be due to the teething problems in GST at its beginning. Most of these problems have been resolved and should show up as significant improvements next year.

"Enforcing Contracts" is not just about making better laws, it is also about efficiency of judiciary. Our rank at 163 is horrible and therefore a lot of room for improvement. There is a need to invest in improving court systems as well as increasing number of judges. May be the next Swatch Bharat campaign will be about cleaning up the legal enforcement system. This is also a State subject and not a lot can be done at the Central level.

"Registering Property": Another one with a lot of room for improvement. Also a State subject. Hopefully, the states will start competing to attract more business.

"Starting a Business" has improved but not enough. Again, a lot of approvals come from the states.

Overall, I believe that rankings will improve further as some of the recent changes show their effect. But for any quantum jump in rankings, the states have to start doing their due.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 31 Oct 2018 22:11

Great summary, Uttam. I was going to mention state vs federal items in that list of measurables, but you've covered that already. The 'paying taxes', 'enforcing contracts' and 'resolving insolvency' articles are curious. Generally if they metric doesn't make sense under the circumstances, I'm going to question the metric before I question the progress that's clearly obvious.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 31 Oct 2018 23:13

Suraj wrote:Great summary, Uttam. I was going to mention state vs federal items in that list of measurables, but you've covered that already. The 'paying taxes', 'enforcing contracts' and 'resolving insolvency' articles are curious. Generally if they metric doesn't make sense under the circumstances, I'm going to question the metric before I question the progress that's clearly obvious.


The Doing Business Project of World Bank that produces these are reports uses long questionnaires to assess Ease of Doing Business. The questionnaires typically start with asking whether or not there has been any change in rules and regulation with respect to that aspect of Ease of Doing Business. This is followed by a Case study describing a hypothetical situation, which is usually 1/2 a page long. The respondents then answer questions based on this case study. This method was being widely used in the academic literature before the World Bank adopted. It has shortcomings but at least it is used uniformly across countries.

These questionnaires are sent to a sample of business in Delhi and Mumbai, both almost equally weighted. The responses to questionnaires are used to rank countries. Overall, these measures are based on perceptions. Thus, they are also affected by overall optimism or pessimism of the respondents. Sometimes, the pessimism about one aspect of Ease of Doing Business may leach into another. But, the same is expected to happen for optimism about another aspect. One major problem with this methodology is that it is unable to completely remove the effect of overall economy on the measures.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 31 Oct 2018 23:35

Thanks! Sounds like a PMI++ kind of survey. Do you know what it is about the 'paying taxes', 'enforcing contracts' and 'resolving insolvency' sections (which could be viewed as generally state agnostic) where gains were expected but the metric says otherwise ?

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 31 Oct 2018 23:38

JTull wrote:Arcelor-Mittal's plans that have been approved by Essar Steel creditors include increasing it's capacity from 6.5MT to 15MT.

I'm a bit concerned about domestic coal production for power and steel sectors. Coal India is simply not being able to keep up with the demand. Then, there's the coming squeeze in 2019 in Global coal markets. I wonder how it will all play out.

Yes the coal issue is a persistent one, despite recent gains. A lot of fields from the coal auction are yet to come onstream. A useful recent line of discussion on the topic from a month ago:
earlier in this thread

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 31 Oct 2018 23:44

The ease of doing business also has subnational (city performance) data for India:
EODB: India sub data

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 01 Nov 2018 00:27

Here are the questionnaires for:

Resolving Insolvency
The insolvency procedure asks questions about creditor rights and borrower rights. Given that the IBC was still being reformed during the observation period, I am not surprised the survey did not capture much improvement.

Paying Taxes
This questionnaire ask details about taxes paid as well as the procedure for payments. It includes all kinds of taxes, not just Sales Tax.

Contract Enforcement
The questions here are mostly about efficiency of judicial and legal enforcement.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 01 Nov 2018 00:42

Thanks. It doesn't really looking like anything really changed negatively on our part, and the movement on those is just noise related to others moving. At least two of those three - resolving insolvency and paying taxes - should see massive gains in the 2019 rankings.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 01 Nov 2018 03:14

I agree. I’m optimistic about 2019 ranking.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Kashi » 01 Nov 2018 06:38

I think the businesses should also be categorised into manufacturing, services, financial etc to fully realise the data behind these rankings. Starting up a manufacturing business for instance will be much more impacted by land acquisition laws and labour laws as compared to setting up a financial, serives or a marketing firm, where the start up infrastructure requirements are much lesser and easier to achieve.

Perhaps this is why New Delhi ranks No. 1 in "Starting a business category", but if one wishes to set up a Factory somewhere in Delhi, it would be nigh impossible to get around regulations or to find enough land at affordable cost.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 01 Nov 2018 13:05

Arun Jaitley
@arunjaitley
GST collections for October 2018 have crossed Rs. 1 lakh crore. The success of GST is lower rates, lesser evasion, higher compliance, only one tax and negligible interference by taxation authorities.
12:00 AM - Nov 1, 2018

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 01 Nov 2018 18:53


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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Prasad » 02 Nov 2018 10:39



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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 02 Nov 2018 20:44

Supratik wrote:Bunch of news.

IMSME reform.
https://swarajyamag.com/insta/msmes-get ... the-sector


This one needs more elaboration.

1 Approving loans in just 59 minutes, with a sealing cap of Rs 1 crore.
2 Interest rate for GST registered MSME to be 2 per cent lower than the market rate, applicable for loans up to Rs 1 crore. Exporters to get 3 to 5 per cent subvention on loans.
3 Companies having a turnover of over Rs 500 crore to compulsorily register on the TreDS platform. This would help the MSMEs supplying to these companies in case of a delayed payment.
4 Government entities to make 25 per cent of all their purchases through MSMEs.
5 Government entities would also have to get 3 per cent of their procurement done through MSMEs run and owned by women.
6 All central government enterprises to be present on GeM portal helping MSMEs supply directly to them. This will also aid in eliminating the middleman culture.
7 Twenty new hubs and 100 toll rooms to be created at the cost of Rs 6,000 crore to help technological up-gradation of MSMEs.
8 Pharma companies to be part of clusters, which basically means enterprises being physically present in a small 5 km radius. The Central government would bear 70 per cent of all the expenses needed to form such clusters.
9 Returns with regards to eight labour laws and 10 central government rules would only need to be filed once a year.
10 A possible end to inspector raj as inspectors would be allocated the establishment digitally and they would also need to file reports within 48 hours with appropriate reasons.
11 Air and water consents for MSMEs to now be merged together and routine environment inspections would also end.
12 MSMEs would not have to face criminal action for small and inadvertent mistakes, resulting in a reduction of 60 per cent in total cases.


Look the last four highlighted ones. These are important step in improving Ease of Doing Business. Though all of them may not be captured by the World Bank's measure as they don't direct measures for these improvements in their index.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Uttam » 02 Nov 2018 20:52

UPI transactions have taken off!

Image

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby VKumar » 02 Nov 2018 21:23

hanumadu wrote:
souravB wrote:Source:
ANI:Twitter link

This is getting better :D


http://www.doingbusiness.org/en/rankings

Code: Select all

                       
                                    2019         2018                             
Ease of Doing Business Rank               77         100
Starting a Business                  137              156
Dealing with Construction Permits      52                181
Getting Electricity                              24                 29
Registering Property                           166              154
Getting Credit                                   22                  29
Protecting Minority Investors              7                     4
Paying Taxes                                      121               119
Trading across Borders                         80               146
Enforcing Contracts                            163              146
Resolving Insolvency                           108              103




But in 4 of 10 rankings, it fell and these 4 are important for MSME

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 02 Nov 2018 22:13

Uttam wrote:UPI transactions have taken off!

No wonder mastercard has cried uncle against modi's nationalism. They will have a lot to lose. No one is clean in India and govt can always slap them with retrospective taxes

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 02 Nov 2018 22:14

^^Vkumar, the govt has released today 12 point program for MSMEs
https://economictimes.indiatimes.com/ne ... 477326.cms

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby disha » 02 Nov 2018 22:28

Prasad wrote:Oh the whining and entitlement https://economictimes.indiatimes.com/in ... 466794.cms


The irony of it all:

The note, which was sent by a Mastercard Vice President for Global Public Policy, Sahra English, said that, while Modi's digital payments push was "commendable", the Indian government had adopted "a series of protectionist measures" to the detriment of global companies.


I think Sahra English needs a lesson in Indian history followed by English atrocities in colonial India.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 02 Nov 2018 22:38

Deleted. Don't use this thread to assassinate peoples' character.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Supratik » 03 Nov 2018 00:01

X-post

Bihar has become 100% electrified under Saubhagya scheme.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 03 Nov 2018 00:21

ArjunPandit wrote:Deleted. Don't use this thread to assassinate peoples' character.

Apologies

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 03 Nov 2018 10:20

I make payments regularly using BHIM (UPI) for payments and money transfer. It works like wonder. Much better than any bank online transfer. We need to encourage it further.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahulsidhu » 03 Nov 2018 12:09

Great news!

https://www.livemint.com/Industry/tI3ySlv8mDQfEffEhwwVCL/Govt-working-on-road-map-to-promote-India-asautoexport-hub.html

The Union government is planning to draw up a long-term road map to promote India as a major hub for exports of automobiles and spare parts with a focus on Africa and Latin America.

The commerce ministry is in consultations with industry body Society of Indian Automobile Manufacturers (Siam) and leading auto makers to help prepare the plan, two people directly aware of the development told Mint.


They are probably encouraged by the success of the electronics manufacturing plan. This is the right approach, IMO.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahulsidhu » 03 Nov 2018 12:15

Rare Op-ed worth reading

https://indianexpress.com/article/opinion/columns/rbi-centre-standoff-finance-ministry-urjit-patel-5432024/

I agree with most of it -- the RBI has been wrong to keep policy rates too high and the MPC is also a step backwards. I would also argue that formal inflation targets were also a wrong move though I will acknowledge that all of this is arguable.

To their credit, the RBI did try to stop undue rupee appreciation through FX policy, but they were partly defeated by their own rates policy, which encouraged inwards flow into the carry trade.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby hnair » 03 Nov 2018 18:11

Yagnasri wrote:I make payments regularly using BHIM (UPI) for payments and money transfer. It works like wonder. Much better than any bank online transfer. We need to encourage it further.


That BHIM app is a brilliant idea, with no easy parallels around the world. It has an Apple like minimalist UI and is a cinch to sign upto (it does most of the heavy lifting of identifying your bank, acct, sending OTP, validating OTP etc).

Since I started using it, I have made sure that our regular plumber, electrician, gardner etc have it installed. Reason is the ease with which you can transfer money to them, while they go to shops for supplies or need to get paid in the evening

eg: instead of me giving 5000Rs to an electrician for getting electrical hardware, he goes straight to the shop, gets exact bill amount and I transfer to his account. He then uses his own ATM card or draws from nearest ATM. The advantage is that lots of outside work can be done and paid for, even when I am traveling anywhere.

The only holdout was this milkman. He turned out to be a commie-cadre. Said as per party, no such stupid Modi-schemes. So we got another milkman.
And persuaded a few of our other neighbors to shuck him. He came back to us with a sheepish grin and was introduced to the new milkman, whom I encouraged to show off his BHIM app.

The next Kammie-classes must have had a few raised voices.


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