Indian Economy - News & Discussion 27 May 2012

Pratyush
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Re: Indian Economy - News & Discussion 27 May 2012

Postby Pratyush » 08 Oct 2013 15:03

What Chidambaram learnt from Andaz Apna Apna

A hilarious take on the recent comments of the FM. Regarding his ability to control the CAD.

vera_k
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Re: Indian Economy - News & Discussion 27 May 2012

Postby vera_k » 08 Oct 2013 20:17

Hopefully this adjustment is underestimating the eventual performance.

IMF cuts India growth estimate to 3.75% in 2013

Prem
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Re: Indian Economy - News & Discussion 27 May 2012

Postby Prem » 09 Oct 2013 09:12

http://economictimes.indiatimes.com/new ... 675225.cms
Curbing volatility: India, South Africa plan to settle trade in local currencies

NEW DELHI: India may secure South Africa's approval for setting up a mechanism to settle bilateral trade in local currencies, a move aimed at reducing dependence on the dollar and countering exchange rate volatility.Commerce and industry minister Anand Sharma said he discussed the proposal with his South African counterpart Rob Davies during his visit to Johannesburg last week. "Rob Davies and I have discussed about settling payment in local currency. That is the way forward," Sharma told ET. India's trade with South Africa stood at $14 billion in 2012-13, with a deficit of about $3 billion. The move comes at a time when a task force under the commerce ministry is evaluating options to reduce trade dependence on the dollar and identify countries with which India can enter into such an arrangement. The task force, headed by additional secretary in the commerce department Rajeev Kher, is looking at two models to reduce the country's dependence on the dollar for trade—the vostro nostro account and the traditional swap model. A vostro account is an account held by a foreign bank in a local bank. The reverse of this is a nostro account. Trade between two countries can be settled in local currencies through these accounts. Under the traditional swap model, a fixed corpus can be held in rupee terms, say, in one of China's banks and a similar amount in renminbi with an Indian bank to settle trade payments.

Settlement in local currencies can also work in cases where Indian banks have branches in the trading partners' country and vice versa. For instance, South Africa has presence of Indian banks, so a South African importer can pay in rands to an Indian bank in South Africa, while the Indian exporter will receive payment in rupees from the same bank in India. Officials said the taskforce is identifying countries with which India has a large trade deficit such as China, South Africa and Iraq. It is also identifying countries where Indian banks are operating branches. "Yes, this kind of mechanism can work very well with South Africa as a few Indian banks have bank branches there, and also their currency rand has suffered a sharp depreciation like the rupee," said Ajay Sahai, director general and CEO, FIEO. The Indian rupee and the South African rand were among the currencies in developing economies that saw a steep fall against the dollar recently following concerns that the US Federal Reserve may withdraw its stimulus programme.

Pratyush
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Re: Indian Economy - News & Discussion 27 May 2012

Postby Pratyush » 09 Oct 2013 15:29

Sharply lower September trade deficit bright spot for India's ailing economy

Is this the effect of the sudden fall in the rupee?

Is this change sustainable?

Austin
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Re: Indian Economy - News & Discussion 27 May 2012

Postby Austin » 09 Oct 2013 16:20

^^ More like due to curbing gold import that chidu spoke about few day back.


paramu
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Re: Indian Economy - News & Discussion 27 May 2012

Postby paramu » 12 Oct 2013 02:26

One Result of the Fed’s Tapering Plan: Surging Bitcoin Downloads in India
That loss of confidence in the rupee has translated into an opportunity for bitcoin. Indian bitcoin client software downloads increased 17.23% in the third quarter compared with the previous quarter, according to digital currency and research firm The Genesis Block. In addition to bitcoin being an alternative store of wealth, the digital currency also allows people in India to send money offshore without having to clear intermediary banks.


What is not obvious from the blog is how do these people pay for bitcoin? Do they pay in INR? Or do they use their offshore money to download bitcoins? May be GoI has to find out who actually downloads these. Why blame gold that people want to import legally.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Austin » 12 Oct 2013 09:44

India not to seek funds from IMF in next 5 years: Raghuram Rajan
http://profit.ndtv.com/news/economy/art ... ome-latest

India is not facing any economic crisis and won't approach the International Monetary Fund (IMF) for funds in the next five years as the country has enough forex reserves, Reserve Bank Governor Raghuram Rajan has said.

"There's no way we are close to being a country in financial or economic crisis...There's not a chance we will go to the IMF for money in the next five years," he said at a debate global economy on a private news channel.

The apex bank has taken a series of measures to strengthen rupee and promote growth.

Allaying fears of India not being able to meet its financial obligations, he said, "India's external debt to GDP is 22 per cent. 22 per cent of GDP is external debt and India's has reserve of USD 280 billion which is 15 per cent of GDP."

In other words, the country can pay three-fourth of its debt from its forex reserves, he said.

"Out of total short-term external debt that we have to pay for is 10 per cent of GDP. So, we have enough reserve to take care of that," he said speaking on the sidelines of the IMF meeting in Washington.

"We bought over $60 billion dollar gold last year. $60 billion accounts for three-fourth of our current account deficit. If the push comes to shove, we can pay the world in gold."

He said while India's economy has slowed, the country's forex reserves are large enough.

"We need to bring back growth now. But we're still doing better than a significant number of economies in the world," he said.
Last edited by Austin on 12 Oct 2013 21:21, edited 2 times in total.

vishvak
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Re: Indian Economy - News & Discussion 27 May 2012

Postby vishvak » 12 Oct 2013 18:14

This connection of selling gold to CAD seems to have come from foren lands and certificates.

On one hand he says India won't take new loans but doesn't mind talking about gold as well.

He could have overtaxed luxury goods import or taxed profits of foreign companies in dollars making profit here. But even as boss of RBI he seems to have no plans other than talking of gold.

Is there an economic theory that justifies such behaviour and blabbering about gold?

Austin
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Re: Indian Economy - News & Discussion 27 May 2012

Postby Austin » 12 Oct 2013 21:21


In other words, the country can pay three-fourth of its debt from its forex reserves, he said.

"Out of total short-term external debt that we have to pay for is 10 per cent of GDP. So, we have enough reserve to take care of that," he said speaking on the sidelines of the IMF meeting in Washington.



Cant they roll over short term external debt which is like 10 % of our GDP to the next year or is it necessary that we pay our Short Term External Debt before the end of FY 2013 ?

vishvak
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Re: Indian Economy - News & Discussion 27 May 2012

Postby vishvak » 12 Oct 2013 22:14

They can pay short term debt and raise long term debt worth the same. There are many ways in which this can be done. For example link

Just an example to show options available. Rest of chatter and blabber is just BS. Why should anyone talk like this if these instruments are available.

1,000 tonne gold treasure buried in UP? ASI to probe

vishvak
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Re: Indian Economy - News & Discussion 27 May 2012

Postby vishvak » 12 Oct 2013 22:35

These are complaints and complaints are usually one sided to be presented after initian investments by Indians. Reduction in 30% requirements to 20% or so to increase profits.

Should have done this earlier. Walmart are notorious for scandals in South America; but post scandal US takes over the litigation.

TSJones
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Re: Indian Economy - News & Discussion 27 May 2012

Postby TSJones » 12 Oct 2013 22:47

"Produced locally" or "made in the USA" is a sales come on. Walmart has no feelings one way or the other about these things other than the bottom line. If Walmart will not set up shop in India it is because it feels it cannot meet its financial objectives in India otherwise due to regulations etc. or, believe me, they would start opening stores in a heart beat. They are full scale multi-national capitalist carnivores. Which has it benefits as well as its detractions.

I would also note there is a movement afoot in nutrition and diet in the US called being a "locavore". That is eating fresh produce and groceries produced locally and in season instead of from 1000's of miles away. Walmart wants to capitalize on that movement.

TSJones
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Re: Indian Economy - News & Discussion 27 May 2012

Postby TSJones » 12 Oct 2013 22:51

vishvak wrote:These are complaints and complaints are usually one sided to be presented after initian investments by Indians. Reduction in 30% requirements to 20% or so to increase profits.

Should have done this earlier. Walmart are notorious for scandals in South America; but post scandal US takes over the litigation.


There is a law in the US called the "Foreign Corrupt Practices Act". Last I heard, Walmart is under investigation under this law for it's Mexico dealings. However to be truthful, I am not sure it is possible for an American business to operate in Mexico with out violatng this law.


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