Bharat Rakshak Forum Announcement

Hello Everyone,

A warm welcome back to the Bharat Rakshak Forum.

Important Notice: Due to a corruption in the BR forum database we regret to announce that data records relating to some of our registered users have been lost. We estimate approx. 500 user details are deleted.

To ease the process of recreating the user IDs we request members that have previously posted on the BR forums to recognise and identify their posts, once the posts are identified please contact the BRF moderator team by emailing BRF Mod Team with your post details.

The mod team will be able to update your username, email etc. so that the user history can be maintained.

Unfortunately for members that have never posted or have had all their posts deleted i.e. users that have 0 posts, we will be unable to recreate your account hence we request that you re-register again.

We apologise for any inconvenience caused and thank you for your understanding.

Regards,
Seetal

Indian Economy - News & Discussion 27 May 2012

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 27 May 2012 22:59

Official
Ministry of Finance
Ministry of Commerce and Industry
Ministry of Statistics and Program Implementation
Central Statistics Organization
Special Economic Zones
Union Budget and Economic Survey
Finance Ministry : National Summary Data Page
RBI Database on the Indian Economy
Commerce Ministry/DIPP FDI Statistics

Central Bank
Reserve Bank of India
RBI - Economy Handbook

Capital Markets
Bombay Stock Exchange
National Stock Exchange of India

Economic Reviews
Macroeconomic and Monetary Developments: First Quarter 2007-08
Handbook of Statistics on Indian Economy

Other
CMIE
National Council of Applied Economic Research
Economy Watch
Goldman Sachs BRIC Report: India update
Lehman Bros: 'India: Everything to Play For' Report
Key Economic Developments and Prospects 2008: UNESCAP


TNN is quite relaxed...

http://www.business-standard.com/india/ ... ll/475410/

The devaluation is beginning to pay off. Gold imports were down 29 per cent in January-March (compared to a year earlier); after the duty hike on imports announced in the Budget, the fall can only get sharper — one forecast says 38 per cent this year. Meanwhile, it helps that global oil and gold prices have dropped by about 15 per cent from their peak. These are the two largest items in the import basket, but there is also the more general drop in commodity prices (metals, agricultural items, chemicals), reflected in the drop in the CRB commodity price index by 20 per cent from its peak in May 2011. So global price trends have been helpful. The general impact of rupee depreciation will be over and above these, and should in the ordinary course squeeze imports and encourage exports. You might even see the current account deficit drop to 2.5 per cent of GDP (about $47 billion). That would be safe territory because capital inflows (portfolio and direct investment) are usually more than that, so there would be no need to draw down forex reserves.

A falling currency is a sign of weakness, and the decline of the rupee reflects the many ways in which the economy has been mismanaged; the loss of competitiveness gets neutralised through a cheaper currency. Some players may have got caught unawares by the sudden drop, but commentators have woken up to the positive macroeconomic effects of the rupee’s depreciation. Players should be relieved that a key element of macro-adjustment has been more or less achieved — partly through fortuitous commodity price movements. While it is always dangerous to make short-term forecasts about markets, it is logical to assume that the rupee has found an appropriate level. The currency depreciation that has happened so far should give a boost to exports and to import substitution; both will give a fillip to domestic economic activity. This is not the end of the economy’s many problems; the fiscal deficit is still large, and the rupee depreciation will add to inflation. Still, an important macroeconomic imbalance has been addressed.
Last edited by Suraj on 20 Sep 2013 02:35, edited 3 times in total.
Reason: Edited to add first post links

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 27 May 2012 23:04

Looks like roll back time. Sigh! As was predicted....

http://timesofindia.indiatimes.com/busi ... 451350.cms
In the backdrop of strong protests by UPA allies and the opposition over the steep hike in petrol price, Congress on Thursday hinted at the possibility of a partial rollback and expressed hope that the government would be able to find a way out to ease the burden on the common man.

"The party is hopeful that some kind of a modus vivendi involving the central government, state government and the oil companies will be arrived at.... We are hopeful that the government would find a way out so that some of this burden is eased which would provide relief to the common man," Congress spokesman Manish Tewari told reporters here.

RamaY
BRF Oldie
Posts: 17260
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 28 May 2012 00:09

^ Theoji,

Unfortunately the petrol/gas price management has become a media/national management exercise instead of a policy and economics issue.

We never know what should be the real price of gas/petrol due to this. If they announce 7Rs hike and then roll it back to Rs 4.50, then what is the optimal price for the nation?

Long time I ago I said this "the Govt of India is behaving like a vaishya and not like a Kshatriya".

Singha
BRF Oldie
Posts: 60489
Joined: 13 Aug 2004 19:42
Location: Lupine but moderately dharmic

Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 28 May 2012 06:53

media will report that Yuvaraj has taken a huge interest in the matter, being pro aam aadmi and sent a special note to the PMO and FinMin to make this happen.

gakakkad
BRF Oldie
Posts: 4437
Joined: 24 May 2011 08:16

Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 28 May 2012 08:18

a roll back ,even a partial one seems unlikely .. What will most likely happen is a media management strat-e-jee... CON will again create a dichotomy .. CON party v/s the central gov't ...Ra-hool baba will "request" the central gober-mint to roll back the petrol price for the sake of aam aadmi... central gober-mint will not do such a thing..there will be token protests/criticisms by 2 bit congis against there own gober-mint which will be high lighted in the media...by next week people will be used to the new petrol prices ...and life goes on...

other strat-e-jee will be to criticize the state government for imposing too much VAT on petrol...since independence CON party has always created such dichotomies...

tejas
BRFite
Posts: 773
Joined: 31 Mar 2008 04:47

Re: Indian Economy - News & Discussion 27 May 2012

Postby tejas » 28 May 2012 08:28

http://www.moneycontrol.com/news/economy/its-clean-up-time-for-indian-economy-analysts_709681.html

While admitting that the current state of policy inaction could make India pay a price for past excesses through lower GDP growth over the next 1-2 years, the analysts said they "see this as a cross to bear to get rid of a system that fostered corruption in all facets of economic activity."


WOW. An Indian equities firm calling a spade a spade in language I am not used to hearing.

Altair
BRF Oldie
Posts: 2622
Joined: 30 Dec 2009 12:51
Location: Hovering over Pak Airspace in AWACS

Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 28 May 2012 10:29

India WILL be effected by Greece exit of Euro. There are no two ways about it. Indian rupee WILL loose another 20% of its current value. So, what can we do about it?
We must reduce our CAD(Current Account Deficit) as quickly as possible.
Options:
Double Tax, Heck triple the tax from all foreign owned FMCGs, Eateries like KFC, McDs, Auto manufacturers like Audi, Volkswagon, BMW etc..
Basic idea is to Stop the money outflow from India.
If India cannot dare to do that, the only other option is increase prices of Diesel, cooking gas. The resulting inflation will become a serious problem then. But, it has to be done at some point. If it comes to that, Congress can then save lot of money by not contesting in 2014 elections at all because they wont even get back deposits.

putnanja
BRF Oldie
Posts: 4337
Joined: 26 Mar 2002 12:31
Location: searching for the next al-qaida #3

Re: Indian Economy - News & Discussion 27 May 2012

Postby putnanja » 28 May 2012 10:38

It is a sham to say that petrol prices are being sold at below market prices. The landed price of petrol is around Rs 45-50 per litre. The rest is taxes. So if the government is losing say Rs 10 per liter, that is after excise duty, VAT and other taxes are added on. It is below market price only if petrol price is below Rs 50, and it is not low anywhere in India. At best, one can say that the effective excise duty/VAT is half of what the govt would have wanted.

The taxes are anyway pretty high in India, and I for one don't worry about the crocodile tears that govt is shedding on petrol prices being below market rates. Things are different for diesel, LPG and kerosine though. Instead of increasing the diesel prices by a rupee or two every six months, and LPG by around 10-20 twice a year, due to election compulsions, they have left them untouched for long.

Wonder whether the govt will bite the bullet on diesel and LPG.

RamaY
BRF Oldie
Posts: 17260
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 29 May 2012 00:11

The interesting relationship between INC Politics, oil prices, Indian economy, India's national/geopolitical interests and the lives of Indians in WANA.

1. The Oil prices determine the cost of essential goods, transportation etc for ~200+ million BPL (Below Poverty Line) Indians

2. The annual budget 2012-13 estimates a Rs 12,671 Crores revenue from petroleum taxes. In addition to this, under the account of Addtional Duty of Excise on High Speed Diesel Oil, GOI receives another Rs 15,800 crore revenues. In total we are looking at Rs 28,000 crore annual revenue for Govt of India.

3. If we were to assume an average crude oil price of $100*, the average cost of petrol/diesel should be in the range of Rs 47-50 per following table. But the Govt sets the price at ~Rs 70-80 thus putting the additional profits and tax collections at Rs 20-30. That is a ~$40 premium on 1 barrel crude.

Metric Ton--Barrell-----Gallon----Litres----Rs
7.14--------1.00-------31.00----3.79-----INR 56.00
------------$100.00----$3.23----$0.85----INR 47.72
------------$150.00----$4.84----$1.28----INR 71.58


4. Now India imports ~ $90B of energy products from Middle East. Assuming we import ~90% of crude requirements, we are looking at $30b premium on $90B imports - that is >30% profit margins on something that is as basic as crude oil (very little value addition beyond refinement which is very little per $ to $ import.

5. At the same time we have 5+ million Indians working in WANA area. These Indians remit anywhere between $20-25B per year. And end up paying 10% of it thru service taxes whenever those remittances are spent either by them or by their families. That is we are taxing them to the amount of $2.5-3B per year.

6. We in turn buy majority of our energy needs from the WANA area (80%?). That is we are paying ~$70B to these very nations out of which only $20B comes back to India from its expats after investing 5Mx8x250= 10 billion INDIAN man hours of value addition.

7. All these tax revenues = 28000 Cr Petrol Taxes + 10000 Cr Service tax from expat money = Rs 38,000 crore/year money that is derived from this Oil Machine is again spent by our Central Government populist programs like NREGA etc so they can pretend that they working hard for the development of poor and needy in India. Assuming a Rs 38000 per family, we are looking at the INC government spoofing 1 Crore families (2-3 Crore votes = ~100 MP seats) in the name of oil economy.

This is what we call GOVERNANCE and GEOPOLITICS nowadays...

* Source: http://www.harvestenergy.ca/operating-a ... g-101.html
A 2:1:1 crack spread and a sour 2:1:1 crack spread are below, assuming a WTI oil price of US$90/barrel, a gasoline price of US$99 per barrel and a diesel price of US$114 per barrel.

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 29 May 2012 00:57

If I'm not wrong at least some of the Petrol tax is dedicated to road construction. If we start think of a user pays model the tax on petrol should be much higher for all that road use and the principle cause of Indian pollution. I don't think it can be our case that petrol/diesel users are not being subsidized heavily.

AbhiJ
BRFite
Posts: 494
Joined: 29 Sep 2010 17:33
Contact:

Re: Indian Economy - News & Discussion 27 May 2012

Postby AbhiJ » 29 May 2012 01:20

NHAI was Financed by a Special Cess on Petrol. But that was NOT CONGRESS.

harbans
BRF Oldie
Posts: 4883
Joined: 29 Sep 2007 05:01
Location: Dehradun

Re: Indian Economy - News & Discussion 27 May 2012

Postby harbans » 29 May 2012 01:53

We must reduce our CAD(Current Account Deficit) as quickly as possible.
Options:
Double Tax, Heck triple the tax from all foreign owned FMCGs, Eateries like KFC, McDs, Auto manufacturers like Audi, Volkswagon, BMW etc..
Basic idea is to Stop the money outflow from India.


Yes.. we have to bring back the License Raj too.

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 29 May 2012 04:11

Guys this is economy thread.
All our previous posts have been consigned to dustbin because people have political point scoring on their mind. Please contribute something more than yelling, which any random person can.
-----------------------------------------

Meanwhile...
I can't believe this charlatan would say this. This was the same cretin who said growth was bad for the poor in India. Who allows him media access now that he is out of the NAC.
And what does he mean by otherwise. Without growth the share is zero. How can it be otherwise.
http://ibnlive.in.com/news/slowing-econ ... 35-70.html
"The benefits of growth are very unequally shared, and the poor are gaining much less from it than they would otherwise. This applies at 8 per cent as well as at 6 per cent," says Jean Dreze, a development economist. "Having said this, the decline from 8 per cent to 6 per cent could certainly make things more difficult for them."

Another gem.
"Little was done before to share the benefits of high growth, now we can expect even less," says AK Shivakumar, a member of India's National Advisory Council.

Back in the real world Mr Dreze is unceremoniously told what no growth means.
However, back on Harola Labour Chowk, day laborers say they cannot wait for two years for the economy to recover. "If this goes on [like this] I think its best for my family to eat poison," says Mr Singh. "There is no other choice."

--------------------------------------------------------------------

another little noticed revolution....
http://www.voanews.com/content/india_ag ... 20525.html
Life in India's countryside still involves plenty of hard work. But standards of rural living have gone up dramatically in recent years.

Inflated food prices - otherwise a headache for politicians and urban consumers - have put more money in the pockets of farm workers. Generous government subsidies and lenient credit policies have helped fuel investment in tractors and other heavy equipment. It also has created a consumer market that makes many of India's hundreds of thousands of remote villages look a little more like cities.

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 29 May 2012 04:29

This business of stopping money flow is quite silly. Lets keep in mind that investment flows to India are a massive positive number. Attacking investment flows is no a well thought through policy. Our two problems are oil imports and gold. We are importing about 50% more oil than just 5 years ago because as the economy grows people want more vehicles, etc. In some ways we are becoming a victim of our own success.

We need to find other sources of liquid fuel. CNG & Ethanol & Bio-diesel have to be brought in on a war footing.

tejas
BRFite
Posts: 773
Joined: 31 Mar 2008 04:47

Re: Indian Economy - News & Discussion 27 May 2012

Postby tejas » 29 May 2012 08:53

Can India devote enough land to ethanol/bio-diesel to make a significant dent on oil imports and still have enough land for agricultural production to remain food self sufficient?

Altair
BRF Oldie
Posts: 2622
Joined: 30 Dec 2009 12:51
Location: Hovering over Pak Airspace in AWACS

Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 29 May 2012 09:38

Theo_Fidel wrote:This business of stopping money flow is quite silly. Lets keep in mind that investment flows to India are a massive positive number. Attacking investment flows is no a well thought through policy. Our two problems are oil imports and gold. We are importing about 50% more oil than just 5 years ago because as the economy grows people want more vehicles, etc. In some ways we are becoming a victim of our own success.

We need to find other sources of liquid fuel. CNG & Ethanol & Bio-diesel have to be brought in on a war footing.


The ONLY other alternative is rising cost of Diesel and LPG. It is the fastest way to cut CAD but inflation control will be tricky.
Gold is source of alternative economy for India. People buy gold to raise more funds.
For example, I bought 10 tolas or 100 grams of gold in 2011-12. I dont just put it in bank safe. I use the 100 grams to raise a loan of 10 x 18,000 = Rs. 180,000 at an interest of 11%. It is much easier to raise a secured loan than unsecured ones. Not just banks, small business owners use gold to raise their working capital needs by using gold. according to Mannapuram, An average small business man in India holds approximately 12 tolas or 120 grams of gold which gives him a liquidity of 2 lakh Indian rupees.
So raising import duty on gold will have negative effect on the economy. simply put, It wont work.

Yogi_G
BRF Oldie
Posts: 2387
Joined: 21 Nov 2008 04:10
Location: Punya Bhoomi -- Jambu Dweepam

Re: Indian Economy - News & Discussion 27 May 2012

Postby Yogi_G » 29 May 2012 09:46

Sigh, scum govt not only hiked petrol prices but now there are what is said to be artificially induced shortages in Chennai. I, as the common tax-paying man am made to suffer. Many petrol banks say there is no stock of fuel. What's our life come to? The common middle class man is always made to suffer.

Altair
BRF Oldie
Posts: 2622
Joined: 30 Dec 2009 12:51
Location: Hovering over Pak Airspace in AWACS

Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 29 May 2012 09:53

Yogi_G wrote:Sigh, scum govt not only hiked petrol prices but now there are what is said to be artificially induced shortages in Chennai. I, as the common tax-paying man am made to suffer. Many petrol banks say there is no stock of fuel. What's our life come to? The common middle class man is always made to suffer.


Many of us will be buying bicycles in near future. Electric kit attached to a regular bicycle and costs around Rs.6,000/- which gives a range of 45 KM per charge are already in the market. BSA cycles, HERO have entered into electric bicycle market last year itself.

Yogi_G
BRF Oldie
Posts: 2387
Joined: 21 Nov 2008 04:10
Location: Punya Bhoomi -- Jambu Dweepam

Re: Indian Economy - News & Discussion 27 May 2012

Postby Yogi_G » 29 May 2012 11:22

Altair wrote:
Yogi_G wrote:Sigh, scum govt not only hiked petrol prices but now there are what is said to be artificially induced shortages in Chennai. I, as the common tax-paying man am made to suffer. Many petrol banks say there is no stock of fuel. What's our life come to? The common middle class man is always made to suffer.


Many of us will be buying bicycles in near future. Electric kit attached to a regular bicycle and costs around Rs.6,000/- which gives a range of 45 KM per charge are already in the market. BSA cycles, HERO have entered into electric bicycle market last year itself.


Thank you so much for this info, I was actually looking out for such info given that I am also looking to trim my tummy and get in shape. I thought initially you were joking but then on googling I found out otherwise. I showed it to a couple of colleagues. I am not seriously considering this option.

Altair
BRF Oldie
Posts: 2622
Joined: 30 Dec 2009 12:51
Location: Hovering over Pak Airspace in AWACS

Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 29 May 2012 12:59

Yogi_G wrote:Thank you so much for this info, I was actually looking out for such info given that I am also looking to trim my tummy and get in shape. I thought initially you were joking but then on googling I found out otherwise. I showed it to a couple of colleagues. I am not seriously considering this option.

You are welcome, that electric kit for bicycles has sold 1.5 lakh kits in the last financial year. Its primary market is villages across India. They say they can sell 10 lakh in 2012-13. No kidding here!

Aditya_V
BRF Oldie
Posts: 9283
Joined: 05 Apr 2006 16:25

Re: Indian Economy - News & Discussion 27 May 2012

Postby Aditya_V » 29 May 2012 13:52

Yogi_G wrote:Sigh, scum govt not only hiked petrol prices but now there are what is said to be artificially induced shortages in Chennai. I, as the common tax-paying man am made to suffer. Many petrol banks say there is no stock of fuel. What's our life come to? The common middle class man is always made to suffer.


OT-> But this Petrol/ crude supplies is required for Export to Pakistan which will begin shortly. :lol:

Meanwhile ruppee falls further well , I am thinking corporates should think of long term hedging strategies.

Rupee down 42 paise against dollar in early trade

Yogi_G
BRF Oldie
Posts: 2387
Joined: 21 Nov 2008 04:10
Location: Punya Bhoomi -- Jambu Dweepam

Re: Indian Economy - News & Discussion 27 May 2012

Postby Yogi_G » 29 May 2012 14:39

Aditya ji, how are you managing for fuel? Most of Chennai city is dry. Just went to nearby shell which was jam-packed (saw 2 fisticuffs over queue breaking), waited for 20 minutes and filled up 500 rupees of petrol for my bike.

Aditya_V
BRF Oldie
Posts: 9283
Joined: 05 Apr 2006 16:25

Re: Indian Economy - News & Discussion 27 May 2012

Postby Aditya_V » 29 May 2012 17:34

SInce I shifted from Manufacturing to ITES company my commute 1 way to Office is 8KM i.e 16km travel perday.

So my car has enough fuel to last me this week. Hopefully I can tank up on Saturday.

Singha
BRF Oldie
Posts: 60489
Joined: 13 Aug 2004 19:42
Location: Lupine but moderately dharmic

Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 29 May 2012 17:55

looks like running / cycling as a sport will surely take off now :twisted:

svinayak
BRF Oldie
Posts: 14220
Joined: 09 Feb 1999 12:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby svinayak » 29 May 2012 20:02

Theo_Fidel wrote:
another little noticed revolution....
http://www.voanews.com/content/india_ag ... 20525.html
Life in India's countryside still involves plenty of hard work. But standards of rural living have gone up dramatically in recent years.

Inflated food prices - otherwise a headache for politicians and urban consumers - have put more money in the pockets of farm workers. Generous government subsidies and lenient credit policies have helped fuel investment in tractors and other heavy equipment. It also has created a consumer market that makes many of India's hundreds of thousands of remote villages look a little more like cities.

No need to reply on voa. They are feeding their audience about rural India. What about China rural area

Prem
BRF Oldie
Posts: 20418
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: Indian Economy - News & Discussion 27 May 2012

Postby Prem » 29 May 2012 22:18

......Posco completes steel mill in India

South Korea's Posco, the world's third largest steelmaker by output, said on Tuesday it has completed construction of its first steel mill in India.The mill in the west-central state of Maharashtra, is capable of producing 450,000 tonnes of hot galvanized steel plate per year for cars and household goods in India and other countries.Maharashtra has auto plants run by GM, Volkswagen, Tata Motors and Mahindra.In the same state, Posco plans to open a 300,000-ton electric steel plate facility by October 2013 and a 1.8 million-ton cold-rolled mill in June 2014.The company also hopes to start work in the second half of this year on its long-delayed plant in Orissa state on the east coast, a spokeswoman told AFP.The $12 billion project, which would be India's biggest foreign investment, has been the focus of protests by locals and rights

Suraj
Forum Moderator
Posts: 11035
Joined: 20 Jan 2002 12:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 29 May 2012 22:41

There's been no news on the SEZs recently. Here's an update. It looks like export performance has risen strongly even though most of the approved SEZs have not even become operational, with just 153 of the nearly 600 approved SEZs up and running.
Exports from SEZs up 15% to Rs. 3,64,478 cr (approx $75 billion)
India's exports from special economic zones (SEZs) went up by 15.39% to Rs. 3,64,478 crore in 2011-12 from Rs.3,15,868 crore in the previous fiscal, Export Promotion Council for EOUs and SEZs chairman Jatin Mehta said.

He said investments of Rs.2,01,874.76 crore have been made in the tax-free enclaves which have given employment to 8,44,916 people.

Of the total 589 SEZs approved by the government till March 31, 2012, 389 have been notified and 153 are operational.

With $75B of $310B exports from SEZs, they now account for almost a quarter of India's exports.

Historical export performance from SEZs:

Code: Select all

FY             Rs.Cr.    Growth
2003-2004      13,854      39%
2004-2005      18,314      32%
2005-2006      22 840      25%
2006-2007      34,615      52%
2007-2008      66,638      93%
2008-2009      99,689      50%
2009-2010      2,20,711    121%
2010-2011      3,15,868    43%
2011-2012      3,64,478    15%

Yogi_G
BRF Oldie
Posts: 2387
Joined: 21 Nov 2008 04:10
Location: Punya Bhoomi -- Jambu Dweepam

Re: Indian Economy - News & Discussion 27 May 2012

Postby Yogi_G » 30 May 2012 13:59

Was recently looking at property offers near the SEZs near Vizag and Pondicherry. Hotspots of realty activity. The extra benefits they bring apart from the exports make them really attractive proposition for any country.

vina
BRF Oldie
Posts: 6018
Joined: 11 May 2005 06:56
Location: Doing Nijikaran, Udharikaran and Baazarikaran to Commies and Assorted Leftists

Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 30 May 2012 15:54

Cross posting.
For any proponent of renewables, this must be extremely, extremely disquieting. Fundamentally, renewable as a base grid app , is not a proven business model in the long term and is backed by massive and huge subsidies all over the world.

Trouble is , what will happen when the music stops and the subsidy gravy dries up. Is it still competitive. Fundamentally, question is WHERE is the Payback economically for all that clean power investments?

The experience of Spain a world leader in renewable seems TERRIBLE.
Spain Ejects Clean Power Industry with Europe Precedent

By Alex Morales and Ben Sills - May 30, 2012

Spanish renewable-energy companies that once got Europe’s biggest subsidies are deserting the nation after the government shut off aid, pushing project developers and equipment-makers to work abroad or perish.

From wind-turbine maker Gamesa Corp. Tecnologica SA (GAM) to solar park developer T-Solar Global SA, companies are locked out of their home market for new business. These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.

Saddled with a budget deficit more than twice the European Union limit and a ballooning gap between income and costs in its power system, Spain halted subsidies for new renewable-energy projects in January. The surprise move by Prime Minister Mariano Rajoy one month after taking office helped pierce investor confidence in stable aid for clean energy across Europe.

“They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. “The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”

Spain’s $69 billion of investment in power capacity from 2004 to 2011 was about triple the spending per capita in the U.S. in that period, according to Bloomberg New Energy Finance data and U.S. Census Bureau population estimates. Most of the 2012-2013 spending will be for the legacy of projects approved before the aid cuts to wind, solar, biomass and co-generation.
Spending Skids

Investment in solar photovoltaic alone is headed to skid to as little as $107 million in 2013 from $879 million this year and $1.5 billion last year, New Energy Finance estimated. For new wind projects, investment should plunge to $963 million in 2013 and $244 million in 2014 from $2 billion this year.

T-Solar, which became the world’s biggest solar-farm operator by leveraging its Spanish business, currently has more than 40 running in Spain, Italy and India. While it still makes solar panels in Orense, Spain, they’re bound for Peru.

“We have an important pipeline of projects, and it’s 100 percent outside Spain right now,” T-Solar Managing Director Juan Laso, who also heads the country’s photovoltaic power association, said in a telephone interview. “If you take such a brutal measure, what you do is oblige the industry to move out,” he said of the January moratorium.
Solaria, Gamesa

Solaria Energia y Medio Ambiente SA (SLR), a Madrid-based solar panel maker, slumped as much as 19 percent today to 30 euro cents a share after restating its 2011 earnings. The company lost 96 million euros last year compared with a 6.5 million-euro profit in 2010.

Gamesa, the world’s fourth-biggest wind-turbine maker by market share according to Navigant Consulting Inc. (NCI)’s BTM Consult unit, plans to reduce the factory output of its Spanish plants to 1,000 megawatts by 2013 from 1,200 megawatts at the end of last year.

Instead, Zamudio-based Gamesa is adding capacity in India where it plans to open a third factory this year. In 2011, the company got less than 9 percent of its revenue in its home nation, down from almost 33 percent in 2009. Former CEO Jorge Calvet didn’t mention Spain on a May 10 call with analysts after announcing the company’s first quarterly loss.

“The future is outside of Spain,” said Sean McLoughlin, clean energy analyst at HSBC Bank Plc in London. “Gamesa already moved most of their business out of Spain and the moratorium only helps to accelerate and complete that process.”

Thirty-one years ago, Spain erected its first wind turbine at Tarifa, a city on the peninsula’s southern tip that juts into the gusty Straits of Gibraltar which divide Spain from Morocco.
German Model

In the 2000s, Spain copied the German clean-power aid model, as did nations from Portugal to Israel and Japan, increasing subsidies to a pinnacle in 2007. That’s when a law granted 444 euros ($556) a megawatt-hour for home rooftop solar panels feeding the power grid, compared with an average 39 euros paid to competing coal- or gas-fired power plants :eek: :eek: .

By 2009, the consumer bill for clean-energy aid had risen to 6 billion euros a year, ahead of the 5.6 billion euros in Germany, whose economy is almost four times bigger, according to the Council of European Energy Regulators.
Rolling Subsidy Cuts

After four successive reductions in subsidies since then, the government on Jan. 27 this year announced the moratorium on aid for new projects. The next month Spain saw itself drop out of the 10 most attractive markets for renewable-energy investors for the first time, due to reduced aid, on an Ernst & Young ranking. Spain led the list from October 2003 through July 2006.

“What happened in Spain is that abruptly, they changed the industry by changing the policy, and that doesn’t help build a sustainable industry,” said Stephan Ritter, general manager of General Electric Co.’s European renewables unit.

“The history of Spanish wind energy policy is ‘We’re going to keep it stable’ and suddenly out of the blue this comes, and it’s a bomb,” the EWEA’s Kjaer said.

The decline started before this year. The 75,466 renewable energy jobs that existed in Spain at the industry’s peak in 2008 shrank to 54,925 in 2010, according to the Renewable Energy Producers Association’s most recent data. Including indirect jobs, the tally slumped from 131,229 to 111,455.

Iberdrola SA (IBE), based in Bilbao, became the world’s biggest owner of wind farms, taking its Spanish experience abroad over the past decade. It campaigned for solar subsidies to be ended, because much of the power-tariff deficit sits on the utilities’ balance sheets straining their finances. Iberdrola, which also runs gas, hydro and nuclear plants, is Spain’s biggest utility.
Solar Drag

Solar energy was the biggest drag on the system, accounting for almost half of the annual 6 billion euros of liabilities and producing just above 2 percent of the power :eek: :eek: :eek: , said Eduardo Tabbush, an analyst in London at Bloomberg New Energy Finance.

With peak electricity demand at less than half of capacity, the country doesn’t need more power plants, he said. Spain has a capacity of 99 gigawatts, and peak demand of 44 gigawatts.

Spain’s power-system debt swelled to 23 billion euros as successive governments set electricity prices for consumers that didn’t cover the revenue utilities booked. Even with January’s moratorium, the electricity system racked up another 762 million euros of debt in the first two months of the year, according to the energy regulator.

Scapegoat for Policies?

“You’re making renewables a scapegoat for a problem that was created as a result of incredibly bad policies,” said Kjaer.

Spain is the world’s fourth-biggest wind energy market by cumulative installed capacity, and in solar photovoltaic power, it ties the U.S. for fourth, according to data compiled by Bloomberg. The nation installed at least a gigawatt of wind power capacity every year since 2001, peaking at 3.5 gigawatts in 2007, according to the Spanish Wind Energy Association.

“At the moment there’s not a single project planned for 2013,” Heikki Willstedt, director of energy policy at the Spanish Wind Energy Association, said in an interview. “We have to keep a rhythm of installation over the next two or three years to keep the industry here in Spain.”

Solar power installations have been bumpier, totaling 550 megawatts, 2,760 megawatts, 70 megawatts, 390 megawatts and 430 megawatts for the five years through 2011, according to Bloomberg New Energy Finance data.

Even before the moratorium was established, opportunities were dimming for renewable power in Spain. The so-called pre- registry of wind projects, which had been approved to receive above-market electricity prices, was set to expire at the end of 2012. And a retroactive cap was set on the number of hours when solar generators can earn higher rates.
Acciona, Abengoa

Acciona SA (ANA), a developer of wind and solar projects that in 2011 derived more than three quarters of electricity sales in Spain, has less than half of its pipeline of new projects for 2012 in Spain. Energias de Portugal SA’s renewables division, based in Spain, has less than a fifth of its pipeline there.

At Abengoa SA (ABG), the portion of revenue from Spain fell to 27 percent last year from 39 percent in 2007. Abengoa has 1,210 megawatts of solar thermal plants either in construction or in a pre-construction phase, a third of it in Spain.

“It reaches a point where if more interesting markets open up and you have to export to those markets, many times it’s better to take the factories there,” said Willstedt. “All of this know-how could be lost quickly, or it’ll move away, or it could be bought by competitors.”

In a country where unemployment in April rose to 24.4 percent, the subsidy moratorium puts more positions at stake, according to Willstedt.
’Five Years on Ice’

In its March 30 budget, Spanish Premier Rajoy’s government gave no sign of when it would bring back subsidies, and the National Energy Commission, an advisory body, has published scenarios including a suspension until 2017.

“I don’t know any sector that can be put on ice for 5 years and then be taken out intact,” said T-Solar’s Laso.

Abengoa Chief Executive Officer Manuel Sanchez Ortega said Feb. 28 in an interview he thought the moratorium would last 18 months at the most.

“Then the industry will pick up the pace again,” Ortega said. “If it lasts more than 18 months we are running the serious risk of driving all this industry out of the country.”

To be sure, Spain is headed to meet its European Union target of getting 20 percent of all its energy from renewables by 2020. The country generated 23 percent of its electricity from renewable sources in 2010.

vijayk
BRF Oldie
Posts: 3059
Joined: 22 Jun 1999 11:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby vijayk » 30 May 2012 23:05

http://www.firstpost.com/business/cell- ... 25617.html
Anil Ambani’s vehicle for routing investments from Mauritius into Reliance Communications was Pluri Emerging Companies Cell E, a PCC. Sanjay Chandra, Managing Director of Unitech, a 2G scam accused who is currently out on bail, managed to “lose” $51 million by investing in a derivative instrument linked to the performance of Cell G in Pluri. Jagan Mohan Reddy, son of the late Andhra CM YSR and Accused No 1 in several Central Bureau of Investigation (CBI) chargesheets, allegedly received investments in one of his companies from two Mauritius-based entities linked to another PCC Cell. Jagan is currently in CBI custody in Chanchalguda jail.

What is there in a PCC that it is such a lure for domestic hot money? PCCs like Pluri Emerging Companies are umbrella ‘management’ companies that shelter individuals or companies that want to protect their identities from scrutiny. Which is why they are given mere alphabetical names like Cell A, B, C, etc. If the main company runs out of letters, it starts the process again with cells named 1A, 1B, etc.

2G scam accused Sanjay Chandra is being investigated for a $ 51 million transaction where the money was initially transferred to Unitech Overseas Ltd in the Isle of Man, a tax haven, through an order approved by the Unitech board of directors. Later, Unitech Overseas Ltd invested the entire money in a derivative product linked with the performance of Cell G of Pluri, according to Enforcement Directorate sources. However, the $51 million turned to zero in a few months, and, according to the CBI, Sanjay Chandra then issued a “comfort note” to his board saying that he would make up the loss.


In Jagan Mohan Reddy’s case, his Sandur Power Company Ltd had sold 1,75,49,307 equity shares of Rs 10 at a premium of Rs 61 per share to two Mauritius companies, 2i Capital and PCC, during October-December 2005. 2i Capital is also known as a PCC Company.

Jagan Reddy raised Rs 124.60 crore from this deal. According to the CBI, Jagan used this money to float four more companies and also paid back his bank loans. Strangely, 2i Capital had appointed Jagan Reddy’s family chartered accountant Vijay Sai Reddy as its representative in December 2005. After a year, he resigned as 2i Capital’s representative and with this the company also disappeared. Later, Jagan Reddy apparently bought back the shares from the Mauritius companies at throwaway prices.


While the details of Anil Ambani’s and Sanjay Chandra’s Pluri links emerged by accident, observers feel that the CBI is not going to get anywhere with its letter rogatory approach, not least because of the sheer delay in going after the money trail. As in Bofors, by the time the CBI gets its LRs and information, both the money and the identities could have disappeared.


http://www.firstpost.com/business/amban ... 24903.html

A mid-May order of a UK Upper Tribunal Judge, Sir Stephen Oliver, QC, confirming a £1.25 million fine on Sachin Karpe, a former UBS bank wealth manager who handled accounts relating to Anil Ambani’s Reliance ADA Group (R-ADAG), among others, has opened a can of worms both for R-ADAG and the Indian market regulator Sebi.

According to a Business Standard report on Tuesday, a Sebi officer accompanied an unnamed Indian national, Mr X, when he was being quizzed by the Financial Services Authority (FSA), the UK financial watchdog and regulator, in the Karpe case. The Upper Tribunal heard Karpe’s appeal against the FSA’s verdict.

During the FSA interview, which is confirmed in official documents of the Upper Tribunal accessed by Firstpost, Mr X apparently denied that he was linked to Swiss Bank UBS’s Customer Account A, from where Karpe made several unauthorised payments to various other unidentified parties.

Sebi’s linkage to the FSA interviewee (Mr X) is not clear. However, its links to the Karpe case lie through its January 2011 consent order where it settled a case with Anil Ambani and four of his executives for Rs 50 crore for alleged illegal routing of borrowed funds to Indian stocks. The UK Tribunal now establishes that the funds were Reliance ADAG’s, and the money was invested in Reliance Communications (RCom) shares through a Mauritius Fund, Pluri Cell E.

The UK Tribunal’s order is embarrassing for both Sebi and Reliance ADAG for three reasons. Not only does it resurrect old demons, but raises new questions about the purpose of Reliance ADAG’s Mauritius investment structure.

First, one wonders how serious Sebi has been while upholding Indian law which forbids nationals from channelling their own investments through overseas institutions. The FSA and the Tribunal give gory details of how Karpe helped “Reliance investors” to not only break Indian law with an investment structure based in Mauritius, but also hoodwink UBS’s compliance regime.

Second, Reliance ADAG has allegedly been trying to breach Indian law even earlier. Says the Tribunal: “The statement of case (by the FSA) makes the point that Mr Karpe knew that the use of Cell E of the Fund was not the first attempt to use an investment structure for Reliance ADAG for the purpose of breaching Indian law. The first, unsuccessful, attempt was a proposed investment for Mr Ambani and/or his family to invest in Indian securities using an insurance vehicle. To conceal the true nature of that investment, Mr (Jaspreet) Ahuja (a client adviser at UBS) deliberately, and over a prolonged period, provided UBS’ Legal and Compliance Department in Zurich with false and/or misleading information.”

Third, Karpe, who headed Asia Desk II at UBS’s Wealth Management arm before he was dismissed for compliance failures, seems to have put through several unauthorised foreign exchange and structured products transactions which “resulted in significant losses for 21 customers”. According to the Upper Tribunal, “he also carried out unauthorised transfers between unconnected customer accounts (as documented below), in particular using Customer A’s account, to disguise losses which had arisen as a result of the unauthorised trading.”

Prem
BRF Oldie
Posts: 20418
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: Indian Economy - News & Discussion 27 May 2012

Postby Prem » 30 May 2012 23:46

India Eases Investment Rules for Foreign Individuals
NEW DELHI—The Indian government took another step to prop up the rupee and revive capital inflows on Tuesday, saying it will allow foreign individuals to buy as much as $1 billion of local corporate bonds as well as mutual-fund debt. This will be in addition to the $20 billion of local corporate bonds that foreign institutional investors are currently allowed to buy, said Thomas Mathew, joint secretary for capital markets at India's finance ministry. Also, in what could have long-term significance, overseas retail investors can now open rupee accounts with Indian banks and keep the money there for unspecified periods. Previously, they had to go through a complex process of getting a common pooled bank account, and they were limited to investing in stocks. If the money wasn't invested within five days, it had to be taken back.
The two issues "were the major stumbling blocks [stopping retail] investors coming to India," Mr. Mathew. "It will certainly help [improve] the current-account deficit and the rupee," he said, adding that he expects retail investments to start flowing into the country in six to eight months. His announcements pushed up the rupee briefly before it resumed its slide again. The dollar rose to a day's high of 55.87 rupees, compared with 55.65 rupees before the comments. It was trading at 55.67 rupees late. The rupee hit a low of 56.37 to the dollar last week, after falling for several sessions. In other steps announced Tuesday, the government allowed retail investors from the six-nation Gulf Cooperation Council and the 27-nation European Commission to invest in Indian stocks. Earlier, only investors from the 34 countries of the Financial Action Task Force—an anti-money-laundering body—were allowed to invest in Indian equities


http://online.wsj.com/article/SB1000142 ... lenews_wsj

Supratik
BRF Oldie
Posts: 4918
Joined: 09 Nov 2005 10:21
Location: USA

Re: Indian Economy - News & Discussion 27 May 2012

Postby Supratik » 31 May 2012 01:28

So they are allowing more hot money in to compensate for economic mismanagement.

Suraj
Forum Moderator
Posts: 11035
Joined: 20 Jan 2002 12:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 31 May 2012 01:59

The measure targets greater foreign participation in local debt instrument holdings in Rupees. That is not really hot money - liquidating bonds typically entails loss of a fixed number of coupon payments or may not even be possible before a particular duration, depending on rules associated with the bonds in question. Therefore such inflows are typically longterm holders, say debt and income funds like MACSX. Since the holdings are in Rupees, the issuer is not affected by exchange rate risk associated with coupon payments in foreign currency.

Rahul M
Forum Moderator
Posts: 16223
Joined: 17 Aug 2005 21:09
Location: woh log gawad hai, unpad hai !
Contact:

Re: Indian Economy - News & Discussion 27 May 2012

Postby Rahul M » 31 May 2012 02:23

in the SEZ export figures, last year growth was the slowest of all. is it a temp trend due to current problems ?

Suraj
Forum Moderator
Posts: 11035
Joined: 20 Jan 2002 12:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 31 May 2012 02:32

I have no idea, since there's no detailed data to look at. In general a single years data is not enough to establish a trend. Some consolidation would not be out of place before SEZ exports rise again - the previous five fiscal years saw 40-120% annual growth, each time on ever increasing bases. Note that merely a quarter of the approved SEZs are running - many others are in various stages of readiness before they can come onstream. Exports from the existing functional SEZs may just be saturating, with further gains as the rest come online. I would not be surprised if exports from SEZs reach $150-200B by middle of the decade (assuming approx. 35% CAGR, much below the average for last 5 years).

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 31 May 2012 03:26

I' m of the view that the big mac index is a non-trivial exercise even if it comes from the Economist. It been around for 25+ years now and has had time to mature properly. Behind each Big Mac/Maharajah Burger is the entire economic machinery of a country. From transportation to agriculture to mechanized processing to services and marketing.

So why is the Maharajah burger so cheap? Tells me the Rupee is undervalued still, despite inflation. Lets look at another measure - construction costs. 6 months back I was evaluating several different modern apartments in Chennai. Excluding land, the average construction/sales cost was Rs 1,380 per sqft. I have RMS/MEANS construction pricing for Florida condos of similar lower end build excluding land of roughly $140-$160 per sqft. This works out to roughly Rs 8,000 per sqft. Or roughly 4-5 times again.

Of course once you adjust for per capita income & include land cost housing in India becomes horrifically expensive. But the point holds that the Rupee is still undervalued. Mostly because we still don't export enough but once our exports cross the 25% of GDP value from the present 15% the rupee is likely to appreciate again.

svinayak
BRF Oldie
Posts: 14220
Joined: 09 Feb 1999 12:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby svinayak » 31 May 2012 03:35

Theo_Fidel wrote:I' m of the view that the big mac index is a non-trivial exercise even if it comes from the Economist. It been around for 25+ years now and has had time to mature properly. Behind each Big Mac/Maharajah Burger is the entire economic machinery of a country. From transportation to agriculture to mechanized processing to services and marketing.

It does not work out that way. In the west Mac have a large supply chain and big operations. But in India it is still small and cannot represent the operations of other companies or overall economy. I have seen the Indian launch details.
There is a lot of different distribution and optimization with US operations. This is a false comparision.

RamaY
BRF Oldie
Posts: 17260
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 31 May 2012 03:58

Acharya wrote:
Theo_Fidel wrote:I' m of the view that the big mac index is a non-trivial exercise even if it comes from the Economist. It been around for 25+ years now and has had time to mature properly. Behind each Big Mac/Maharajah Burger is the entire economic machinery of a country. From transportation to agriculture to mechanized processing to services and marketing.

It does not work out that way. In the west Mac have a large supply chain and big operations. But in India it is still small and cannot represent the operations of other companies or overall economy. I have seen the Indian launch details.
There is a lot of different distribution and optimization with US operations. This is a false comparision.


India Macs is targeted at middle class income segment and comes with associated pricing model. Comparing USA's poverty line $5587 with UPA's definition of poverty line $256 (at Rs 35 per day) per year the BIG MAC should be priced at Rs 9. But the BIG MAC Index compares it at Rs90.

shyam
BRFite
Posts: 1408
Joined: 29 Jul 2003 11:31

Re: Indian Economy - News & Discussion 27 May 2012

Postby shyam » 31 May 2012 06:41

Big Mac index of India is "wannabe american index of India". It has no value as it is an upper middle class food in India, whereas it is a poor man's food in US.

Theo_Fidel
BRF Oldie
Posts: 7577
Joined: 31 Mar 2006 02:15
Location: MO,US,NCJ TN

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 31 May 2012 07:12

It doesn't matter who is eating it or how or if people are not impressed by the the back end. That is not the concept behind the Big Mac. The questions is the cost of doing things in India & USA. By that measure all ingredients are bought in India for 300+ stores. This is a large enough professional enterprise to compare the cost of national capabilities.


Return to “History & Current Affairs Archive”

Who is online

Users browsing this forum: No registered users and 1 guest