Indian Economy News & Discussion - Nov 27 2017

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

Postby Suraj » 26 Jun 2019 07:23

kit wrote:I feel Modi 1.0 was a closet socialist despite professing to be capitalist oriented

Argue this in the politics thread please .

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Singha » 26 Jun 2019 08:37

you can use any labels , but fact is Namo wants a broad scale rising tide that will use 6 inches deep 10 miles wide momentum to create huge markets for products and services than just focus on the top 20% of the countrys areas and people.

you all know the vast gaps in healthcare, crop insurance, LPG, banking, toilets that were made up in Namo1.0 - long delayed backfilling because the UPA clowns ignored it in favour of slumlord tactics. Namo2,0 will focus on drinking water, education, water conservation and a big push on transport infra.

before china started ripping along at 10% growth, these basic gaps in the bottom 80% were closed by deng xiaoping in the 70s and early 80s.


in 1980 they had already reached 80% basic literacy https://www.statista.com/graphic/1/2713 ... -china.jpg

we have only NOW - 40 years after china , approaching 80% . in 1980 we were at 45% - a shameful legacy of the gandhi-nehru brand of growth and slumlord politics

Image

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 26 Jun 2019 09:58

Good to see this economic reality being propagated, thanks Singha :) China achieved these between the 1970s and late 1990s . Most of our rural metrics are where China was around turn of century.

The gains at the bottom of the pyramid during Modi 1.0 are heavily under-estimated in terms of its long term economic potential . It frees up over a quarter of a billion people who can more quickly graduate to lower middle income class. That generated gains in productivity, which directly translates to GDP growth . If productivity and investment/GDP both rise, we will touch double digit real GDP growth by the end of this administration.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby darshhan » 26 Jun 2019 12:53

Deleted.
Last edited by Suraj on 26 Jun 2019 13:56, edited 1 time in total.
Reason: No politics

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 26 Jun 2019 18:20

Singha wrote:before china started ripping along at 10% growth, these basic gaps in the bottom 80% were closed by deng xiaoping in the 70s and early 80s.[/b]


Very much so. A more detailed table here.
http://arunsmusings.blogspot.com/2017/0 ... india.html

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby prasannasimha » 26 Jun 2019 18:59

Heslth care access has definitely improved edpecially at tertiary level but we need to improve at basic level and ensure proper diagnosis and triage

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 26 Jun 2019 19:17

https://www.ft.com/content/0851560e-931 ... e35ef678d2

Apple weighs 15-30% capacity shift out of China amid trade war
Tech giant asks suppliers to review costs in south-east Asia and Mexico


The countries being considered for diversification include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphone diversification, the people said, who asked for anonymity as the discussions are private.

Apple has not set a deadline for the suppliers to finalise their business proposals. Both sides are working together to identify the most favourable incentives on offer and to review business environments outside China.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 26 Jun 2019 19:25

https://www.financialexpress.com/market ... l/1619053/
Banks’ gross NPAs to shrink to 8% by March 2020

Reduction in fresh accretions to non-performing assets (NPAs), higher recoveries from existing stressed assets under the Insolvency and Bankruptcy Code and a pick-up in credit growth should help shrink banks’ gross NPAs by 350 basis points to 8% by March 2020, Crisil said in a report on Tuesday.

According to the agency, public sector banks, which account for over 80% of the NPAs in the system, alone could see gross NPAs climb down over 400 bps to approximately 10.6% by March 2020, from a peak of 14.6% in March 2018.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 26 Jun 2019 19:50

https://pmopg.gov.in/pmocitizen/Grievancepmo.aspx (Write to PM) - I wrote about Apple and Vedanta LCD project
https://innovate.mygov.in/new-education-policy-2019/ NEP feedback

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 27 Jun 2019 02:50

https://www.firstpost.com/business/fort ... 81981.html
Forty of 50 cooperative banks in Uttar Pradesh hit by fraud; loan amounts forged, subsidy money siphoned off

This is a classic case of swindling of taxpayers money by bank officials that took place during the erstwhile regime of Mayawati and Akhilesh Yadav, which was buried in the files until now.

A recent probe has unearthed that at least 40 of the total 50 cooperative banks in Uttar Pradesh have been hit by fraud involving various modus operandi like forging loan amounts, siphoning of subsidy money from beneficiary accounts in connivance with bank officials, fictitious fixed deposits and embezzlement of money recovered from the accounts declared as Non-Performing Assets (NPAs).

Cooperative and regional rural banks play a crucial role in the rural financial system of the country and are expected to take care of the expanding and diverse credit needs of agriculture and rural development. More than 50 percent of the rural credit is disbursed by the cooperative banks and the National Bank for Agriculture and Rural Development (NABARD) is responsible for the regulation and supervising of the functions of these banks.

Documents accessed by Firstpost reveal that almost all the 46 branches of Zilla Sahkari Bank in Muradabad have been hit by fraud. At least four of the 19 branches of the Aligarh Zila Sahkari Bank Limited have also been compromised. A committee which was constituted to investigate the fraud discovered that Rs 9.5 crores were swindled through fake loans and more than Rs 1.70 crore was siphoned off from saving accounts. A detailed questionnaire sent to MVS Rami Reddy, principal secretary, Uttar Pradesh Cooperative Department and Jiji Mammen, chief general manager, NABARD remained unanswered.


According to the internal investigation team, the fraud started during the Bahujan Samaj Party regime in 2011 and various methods were used for fund embezzlement like loan amounts were released without obtaining details of borrowers, fixed deposits were closed before maturity and amount transferred to certain fraud accounts in a pool. Term loans were arranged fraudulently and the amount was transferred to third-party accounts and subsequently siphoned off through cash payments and online transfers.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rishi_Tri » 27 Jun 2019 05:41



Listen 48:38 onward.

PM mentions about Make in India and then contrasts India with China in Defense using 1947 as the time stamp. PM Modiji understands very well the challenge that we face in Defense and consequently the impact it can have. Hope it translates into more action on the ground. Early signs are already there - SSK production being pushed and Submarines in SP mode being given new thrust.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 27 Jun 2019 09:31

abhik wrote:This is only validating screwdriver-in-India, most of this is defense offsets, as discussed in mil forum.


Twitter thread:
https://twitter.com/bennedose/status/11 ... 5562890240

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 27 Jun 2019 10:15

In a large nation like ours with huge hunger and proverty we have to be welfare state. There is no escape from that.

The major problem is lack of policy and investment in job creating areas like garments for example. Even B'Desh exports more garments than us. This was attended to some extant in Mobiles etc manufacturing but with huge number of unqualified youth joining job market every year we need a lot to make them employed.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 27 Jun 2019 10:53

Bangladesh gets greater preferential access to US and EU as a lesser developed country , whereas we do not. Of course, we should really be benchmarking ourselves against PRC, but we did quite badly in textile exports in comparison to them - we simply do not have the scale and infrastructure to compete on bulk orders like they could. Bangladesh to their credit have used their opportunity well, though that's for the Bangladesh thread.

Textiles no longer ranks at the top of our export basket. In a typical month, our top export components are:
engineering goods: ~$8 billion
refined petroleum products: $5-5.5 billion
gems/jewelry: $3.5 billion
engineered chemical goods: $2 billion
pharma goods: $1.7 billion
textiles: $1.5 billion
electronic goods: $1 billion
yarn: $0.8 billion

Monthly merchandise exports: ~$30 billion
Monthly services exports: ~$17 billion
Monthly total exports: ~$47 billion

So, despite comparisons of single category exports, e.g. textiles, the larger picture is that our monthly exports significantly exceed the annual export of any subcontinental neighbour.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 27 Jun 2019 11:35

So does the number of new people entering job market and looking jobs. I gave Garments are one of the examples as it can create huge employment. As you said we can not compare with other smaller countries. We need to create huge levels of employment year after year so that the people are gainfully employed. If we fail to do that there will not be just joblessness, but joblessness and serious social and other problems.

In respect of the jobs also we have lot of problems. Lack of data, lack of labor mobility, lack of trained workers, lack capabilities in most of the job seekers, very low quality general education, lack of large scale professional training facilities to name a few.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Singha » 27 Jun 2019 11:38

BD textile industry is driven by investments from south korea and japan I believe. and as you said they get preferential tariffs as a "most poor" country, a status they might soon outgrow technically.

they are hovering on the verge of overtaking TSP GDP, aided by the steep devaluation of the TSP Rs which is heading to 180/$1

yes we can and should do better on textiles, esp as it generates lot of jobs for women.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A Nandy » 27 Jun 2019 12:15

https://www.moneycontrol.com/news/busin ... 34871.html

Following multiple instances wherein the 2016 Press Note 3 was flouted by the e-commerce companies, the government, in December, introduced Press Note 2. The aim was to make it more difficult for the e-tailers to use their nearly endless stream of foreign capital to fund high discount and have exclusive tie-ups with brands, stressing upon the need for a level-playing field. On the face of it, the rules seemed to be a death knell for e-commerce companies. who were circumventing Press Note 3 by means of tie- ups or having stakes in third party entities.

However within a few months, the companies smartly made changes in their organisational structure to adhere to the norms without disrupting their business model.


In an earlier interaction with Moneycontrol, Vishal Gondal, founder and chief executive of GOQii had stated that merchants do not have millions of dollars to fund discounts and it is done by deep-pocketed companies.

Interestingly, the meeting took place immediately before the scheduled visit of US Secretary of State Michael Pompeo. The visit is expected to focus on resolving "trade frictions".

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Bart S » 27 Jun 2019 15:52

The main problem with garment industry is labor and other laws that favour SMEs and discourage large scale manufacturing. Unless you can set up factories with 15-20K people employed and have full government support it is hard to compete with China or Bangladesh.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 27 Jun 2019 16:03

Labour laws are a big mess and big problem for manufacturing industry growth. I do hope that this budget brings with it some serious changes as already reported.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 27 Jun 2019 20:51

Please STOP TSP and BD discussions here . The TSP discussions have been moved into the TSP economic stress thread. There are half a dozen threads for that country. There's zero tolerance for bringing the talk here.

The garment sector has been the eternal promising source of mass employment, but which it's never come close to fulfilling. There are multiple reasons, and no one's taken on it . From being our largest export component, it now contributes about 5% of annual exports.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 28 Jun 2019 10:42

I do not think we really tried hard to do better in manufacturing sector. Make in India perhaps is the first major efforts done publicly. If there is anything done earlier and not reported I do not know.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yogi_G » 28 Jun 2019 11:06

As I had mentioned earlier, the left is bruised and battered and needs some ammo to propel itself to national attention again, labour reforms is its opportunity to generate noise chaos and do a Mamata Bannerjee a la Singur. Questions is, will Modi catch the bull by its horns, on the back of a strong mandate and drive through labour reforms. If we think we are somehow immune from the pains that come with an industrial revolution then we are fooling ourselves. Yes, sweatshops and competitive exploitation will be a norm for some time but the smartness of the government lies in how well it can built a social seurity net across blue collar workers. Close friends who are first generation entrepreneurs say finding skilled labour and retaining them is the biggest challenge. Per some of them, India is clearly losing the race in replacing China in building a complete govt backed ecosystem replete with tax holidays, labour supply and infrastructure. While we are power surplus, we are missing the other pieces in building a complete ecosystem. We built a complete automobile industry ecosystem from scratch with strong Govt backing in the past, immediately after our 1991 reforms.

Heck, my maid from Andhra got a total of 20,000 rupees during elections and will not turn up for work for another 4 months. The freebie culture is driving the entitlement culture even deeper into the ground. Targeted land and labour reforms helping to bring in industries in droves is not going to be a easy task in India with the sense of entitlement we have built. BJPs power still doesnt fully reflect in many labour unions across states (BMS) yet and I wait and watch what Modi will do here.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 28 Jun 2019 18:35

Yogi_G wrote:As I had mentioned earlier, the left is bruised and battered and needs some ammo to propel itself to national attention again, labour reforms is its opportunity to generate noise chaos and do a Mamata Bannerjee a la Singur. Questions is, will Modi catch the bull by its horns, on the back of a strong mandate and drive through labour reforms. If we think we are somehow immune from the pains that come with an industrial revolution then we are fooling ourselves. Yes, sweatshops and competitive exploitation will be a norm for some time but the smartness of the government lies in how well it can built a social seurity net across blue collar workers. Close friends who are first generation entrepreneurs say finding skilled labour and retaining them is the biggest challenge. Per some of them, India is clearly losing the race in replacing China in building a complete govt backed ecosystem replete with tax holidays, labour supply and infrastructure. While we are power surplus, we are missing the other pieces in building a complete ecosystem. We built a complete automobile industry ecosystem from scratch with strong Govt backing in the past, immediately after our 1991 reforms.

Heck, my maid from Andhra got a total of 20,000 rupees during elections and will not turn up for work for another 4 months. The freebie culture is driving the entitlement culture even deeper into the ground. Targeted land and labour reforms helping to bring in industries in droves is not going to be a easy task in India with the sense of entitlement we have built. BJPs power still doesnt fully reflect in many labour unions across states (BMS) yet and I wait and watch what Modi will do here.


I hope Modiji starts discussions with Trade unions before the reforms are out and offer retirement benefits etc. to soften them up.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A Nandy » 29 Jun 2019 10:53

We need to seriously fix our cropping patterns.

https://www.livemint.com/Opinion/bPPHFH ... water.html

India is the biggest virtual exporter of water

In 2014-15, India exported 37.2 lakh tonnes of basmati. To export this rice, the country used around 10 trillion litres of water. To put it another way, India virtually exported 10 trillion litres of water. At least one-fifth of this would have been surface/groundwater. In these times of global climate change, water is the one commodity where you don’t want a trade surplus (i.e, exports higher than imports).

China is the eleventh largest country in the world in terms of virtual water imports and it runs a virtual water trade surplus in crop and animal products, that is, it has higher virtual water imports. But China ends up exporting more water than importing because of its overseas sales of industrial products.

In contrast, India is a large virtual net export of water because of agricultural products. One policy implication: While the country strives to increase manufacturing exports, care should be taken to maximize water use efficiency lest it ends up virtually exporting more water.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby yensoy » 29 Jun 2019 11:14

^^^^ That's why I keep saying we should import water-hungry commodity crops from Pakistan. Let them grow sugarcane with their allocation of IWT, and let us give them dirt cheap world prices for their produce.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby uddu » 29 Jun 2019 12:52

The livemint article is from a Left leanie. There is news of Govt planning to promote export of agriculture products. So could be a subtle psyops to intervene and to oppose that. There was nothing in the article about water conservation and how better water utilization can help export at the same time keep the water usage low. So should be treated as a psyops article. Also don't know where they are getting these numbers from. They will even count the rainwater that must have reached ocean if not for these cultivation.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 29 Jun 2019 20:40

Not introducing politics, but pointing out that there is policy.
The PM said water scarcity was a big concern. Modi said he has constituted the new Jal Shakti ministry with the purpose of addressing the issue and stressed the need for water conservation. Linking it to agricultural, the PM said sugarcane farmers could do well to adopt micro-irrigation for the crop.


https://www.business-standard.com/artic ... 047_1.html

Regarding this
In 2014-15, India exported 37.2 lakh tonnes of basmati. To export this rice, the country used around 10 trillion litres of water. To put it another way, India virtually exported 10 trillion litres of water.


The question that needs to be asked that if these 37.2 lakh tons of basmati were grown but not exported, what value would it have? Or is the author saying that this rice should not have been grown in the first place? What does the author propose replacing that economic activity with?

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Karthik S » 29 Jun 2019 21:00

Well, we should be more worried about CC and Pepsi co draining precious water resources than basmati rice. Most politicians atleast down south own breweries that also consume plenty of water.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Yagnasri » 30 Jun 2019 07:01

Most of the water used in agriculture can be reduced by effective use of drip irrigation facilities and a small amount of change in good habits which will reduced the consumption of rice. But free power supply to agriculture etc does not make such changes a necessity. In fact, we are cultivating sugar cane in places like Maharastra which is water challenged area.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Singha » 30 Jun 2019 10:05

but there are other factors like climate and soil which impact the viability of crops. one cannot grow tea in mumbai or coffee in kolkata no matter how you slant the playing field.
also poorer farmers prefer storable food crops like rice or wheat which can be safely stored for years to feed the family vs vegetables, herbs or cash crops which are perishable at room temp.

people have been growing the same basket of crops for 1000s of years, first some demos on large scale have to be shown to change the mentality.
one example is west bengal where lot of medical plants are grown.

there is also hold of middlemen and lenders which ensures farmers get low price and consumers pay high price.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 01 Jul 2019 16:52

https://www.business-standard.com/artic ... 501_1.html

The Nikkei-IHS Markit India Manufacturing Purchasing Managers' Index (PMI) was at 52.1 in June, down from May's three-month high of 52.7, but still signalling an improvement in operating conditions across the sector. The average PMI reading for the opening quarter of fiscal year 2019-20 was the lowest recorded since the second quarter of FY18.

Consumer goods were the key source of growth where robust increases in sales, output and employment were registered. Modest expansions in production and new work were noted in the intermediate goods category but here jobs stagnated. At the same time, operating conditions in the capital goods sector were broadly unchanged.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 01 Jul 2019 23:09

New data for Index of Core Industries:
2019 May: 138.7
2018 May: 131.9
YoY growth: 5.1%
April 2019 revised upwards (6.3% YoY growth instead of previous estimate of 2.6%)
Details:

The Ministry of Commerce and Industry Office of Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), reports a monthly index, ICI, "Index of Eight Core Industries (Base: 2011-12=100)". "The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP)." These are Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, Electricity.
Also see: https://currentaffairs.gktoday.in/tags/ ... industries

The index: (note: reverse-chronological order)

Code: Select all

2019 May   138.7
2019 Apr   132.1 (was 127.5)
2019 Mar   145.2
2019 Feb   125.9
2019 Jan   134.5
2018 Dec   131.5
2018 Nov   128.3
2018 Oct   134.8
2018 Sep   127.2
2018 Aug   128.8
2018 Jul   129.2
2018 Jun   131.2
2018 May   131.9
2018 Apr   124.3
2018 Mar   138.5
2018 Feb   123.2

Notes
0. Revisions of provisional data from the previous report are shown above.
1. Data for March,2019, April 2019 and May 2019 are provisional.
2. Release of the index for June 2019 will be on Wednesday July 31, 2019

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 02 Jul 2019 00:45

Monsoon in India: Country suffers driest June in five years, fears for crops
India had its driest June in five years due to a delay in monsoon rains, the weather department said late on Sunday, raising fears for crops and the broader economy. Overall, rains were a third below average, although in some states, including the sugar cane growing northern state of Uttar Pradesh, they were as much as 61 percent down, data from the India Meteorological Department (IMD) showed.

Over half of India’s arable land relies on rainfall, while agriculture makes up about 15% of Asia’s third-largest economy, which is already suffering a slowdown. The monsoon usually covers nearly the entire country by July 1, but has covered less than two-thirds so far this year, according to the IMD data. If the rains don’t improve over the next two to three weeks, India could face a crisis that hammers harvests and rural demand, analysts said. Companies supplying farmers with everything from tractors to consumer goods would be vulnerable.

The country is still recovering from a drought last year that ravaged crops, killed livestock, emptied reservoirs and drained water supplies to city dwellers and some industries. Rains first arrived in the southern state of Kerala a week late on June 8, but the developing Cyclone Vayu in the Arabian Sea drew moisture from the monsoon and weakened its progress.

Monsoon deficiency comes down to 33 per cent; active monsoon week ahead
June ended with 33 per cent of monsoon precipitation and over 78 per cent of meteorological subdivision recording “deficient” rainfall, according to the India Meteorological Department. However, monsoon is likely to become active this week. IMD’s Additional Director-General Mrutyunjay Mahapatra said formation of a low pressure in the Bay of Bengal will bring good rainfall to central India, including Odisha and parts of Rajasthan.

Parts of north India like Delhi, Punjab and Haryana may not benefit due to this low pressure area and it is unlikely that these states will get rainfall because of it, Mahapatra said. Private weather forecaster Skymet’s Managing Director Jatin Singh said monsoon surge is expected from June 30 to July 15 with a short break in between.

This spell would be a result of a low pressure area which is likely to form in the Bay of Bengal. Odisha, north coastal Andhra Pradesh, south Chhattisgarh, northern parts of Telangana, south Madhya Pradesh, Vidarbha region, parts of central Maharashtra, southwest Madhya Pradesh, south Rajasthan and Gujarat would benefit the maximum from this spell, he said. The official monsoon season in the country starts on June 1 and ends on September 30.

As of June 30, monsoon has reached almost the entire country, except a few parts of north India. It is yet to reach Delhi, Haryana, Himachal Pradesh and Jammu and Kashmir. Of the 36 meteorological subdivisions, 28 have recorded “deficient” rainfall, while two subdivisions recorded precipitation that was classified under the “large deficient” category.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby ArjunPandit » 02 Jul 2019 15:20

corruption in ratings agencies was well known to those in know..but first time a big fish might be in net
https://www.livemint.com/companies/news ... 57442.html

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby vijayk » 03 Jul 2019 00:40

https://www.breakingviews.com/columns/i ... ce-crisis/
Modi operandi

Narendra Modi’s second term will be spent confronting some of the unintended consequences of his first. The Indian prime minister’s corruption crackdown went a long way to helping his Bharatiya Janata Party secure another five years in power. It also chastened tycoons and hurt private investment. A crisis of confidence now hovers over the $3 trillion economy.

Many executives cheered Modi’s efforts to clean up corporate India. These have included an effort to extradite beer baron Vijay Mallya from London to face fraud charges at home while preventing founders of other failing companies including Naresh Goyal at Jet Airways from going overseas. The trouble is that breaking up the cosy nexus between bankers, politicians, and tycoons is causing harm too.


So we need Modi to allow crooks to loot banks in billions for economy to grow?

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Suraj » 03 Jul 2019 00:57

Let's keep the politics out, since this thread forbids it. However, the general thrust of the article , though poorly argued, is a recurring theme. It is as follows:

For decades, business in India has been conducted by patronage more than by law. It's not a question of which laws to follow as much as whom you know. Even down to the mango person, the "can you please use your influence to assist" is a common view. This is a function of a system where the law is weakly defined and even more weakly enforced.

One of the things Modi has done, is to focus on eliminating the patronage based culture down from the top. In this thread I'll focus only on the economic aspect of this, but the idea is broader. New laws like IBC Act, the FEO Act and more, essentially focus on taking away the patronage aspect. Instead, it is purely a question of law and procedure being followed.

I mentioned this in the context of Mallya's case. He asserted at various points that he had 'written to the bank offering to pay', demanding why his offers were rebuffed. Various responses claimed "he's lying", "he's just buying time" etc. All of these arguments about his action are potentially true, but they ALL miss the point .

The point is that once a creditor has filed bankruptcy proceedings against a debtor and it has been accepted by NCLT and an insolvency professional assigned to the case, there are fixed procedures to be followed. The debtor cannot step forward with earnest letters offering to repay. The whole IBC process is a creditor-in-control mechanism, NOT a debtor-in-possession one. That means that a debtor isn't in a position to write checks against his assets because it's not business as usual for the debtor while in the midst of proceedings - they follow procedures set forth within the IBC . The procedure will determine the disposition of assets, which may decide on what the debtor offered, or it may not, but the choice is not in the debtor's hands.

To move - both in procedure and in mind - from being a nation of patronage based relationships to one based on rules and laws, is a worthwhile one, but it first begins with the need to see things from the perspective of the application of rule of law.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A Nandy » 04 Jul 2019 09:21

https://www.livemint.com/news/india/new ... 78574.html

The new industrial policy was ready by the end of the first term of the Modi government when Suresh Prabhu helmed the commerce and industry ministry; however, it was left to be announced after the general election, fearing its recommendations on labour reforms would have electoral repercussions. Incumbent commerce minister Piyush Goyal is said to have tweaked a few provisions in the policy after taking charge of the ministry.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 04 Jul 2019 10:19

The most important reform, hire and fire is not part of the proposed reforms in the first set (the wages bill). That part is still in the draft phase. It likely won't be passed in this term.

https://www.businesstoday.in/bt-buzz/news/bt-buzz-pm-modi-pushes-for-big-labour-reforms-43-crore-unorganised-workers-to-benefit/story/353426.html

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby nandakumar » 04 Jul 2019 12:24

Regarding IBC the process is as Suraj pointed out, is 'creditor in control' as opposed to 'debtor in possession'. In Vijay Mallya's case, the creditors are in control of Kingfisher Airlines assets which has neglible value in relation to the volume of debts. Lenders therefore face a huge loss on the monies lent. The IBC does not provide for invoking the personal guarantees of the promoters and going after their personal properties. It is for individual banks to file civil suits to recover the monies lost. Additionally PSU banks can complain to CBI alleging diversion of funds and ask it to investigate and prosecute Mallya in Special CBI Courts. These have criminal consequences. Additionally the Govt can take suo moto cognisance of violations under money laundering law. It is this which is bothering Mallya. That is he keeps whining about 'take my money and let me live peacefully'. In effect, Mallya is asking for compounding of criminal offences by paying a fine. Unfortjnately money laundering is not a compoundable offence. If convicted the person has to undergo jail term.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby A_Gupta » 04 Jul 2019 16:05

Swarajya magazine has a series on the Economic Survey of India 2018-19.


The Impact Of Swachh Bharat Mission On Health, Explained
https://swarajyamag.com/health/economic ... -explained


Understanding Government’s Big Push For Data As A Public Good
https://swarajyamag.com/economy/economi ... ublic-good

Resource Efficiency For SDG 2030; Namami Gange Key To Sustainable Water Management
https://swarajyamag.com/insta/economic- ... management


India’s Demography At 2040, TFR To Drop Below Replacement Rate By 2021
https://swarajyamag.com/insta/economic- ... te-by-2021


Road To $5 Trillion Economy Via Investment-Fuelled 8 Per Cent Annual Growth
https://swarajyamag.com/insta/economic- ... ual-growth

Policy Questions And The Economic Survey
https://swarajyamag.com/economy/policy- ... mic-survey


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