Indian Economy - News & Discussion 27 May 2012

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 04 Jun 2012 03:03

But the state of Maha would still be poor? The city is developing but not benefiting state. If mumbai's population is 1/4 that of maharashtra then 20 millionx13,000 = $260 billion. The remaining 60 million make do with the paltry $100 billion. There is a case to be made that Maharashtra state is suffering due to the presence of Mumbai as the rest of the state can not compete.
---------------------------------------------------------

WRT Dilli it is not just that infrastructure funding comes easy, but that all the billi's in Dilli have guaranteed government jobs with pension and perks. Most people in India work for a living, Dilli folks get to show up for a living. :P

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Re: Indian Economy - News & Discussion 27 May 2012

Postby KJo » 04 Jun 2012 03:06

Lot of negative feelings about India's economy these days. Can someone explain in brief what is happening?

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Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 04 Jun 2012 03:10

darshhan wrote:This is the link I used.( GDP PPP)

http://en.wikipedia.org/wiki/List_of_In ... ies_by_GDP

Whichever statistics you use it is hard to deny that Delhi/NCR has seen stellar growth. It is closing in on Mumbai very fast. And private players are very much part of this growth story.


Interesting to note that Maha's GDP is $224b out of which $209b came from Mumbai alone. Indicator of an underlying issue.

Will check the other cities and post the comparison. Hyderabad contributes ~50% of AP GDP. That is why it is the bone of contention for T-issue.

This is what I am talking about urban and rural divide. The urban-india argues that it contributes >70% GDP even though it is only 30% of population. Typical democratic issue where (demographic) minorities wanting to have larger say based on a single indicator.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vera_k » 04 Jun 2012 03:23

^^

Hardly true. Pune is reported to be $48 billion, and Nagpur at $10 billion.

That page has several consistency issues.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 04 Jun 2012 03:25

Thanks. Half-knowledge kills :oops:

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Re: Indian Economy - News & Discussion 27 May 2012

Postby svinayak » 04 Jun 2012 11:10

India is suffering an even sharper slowdown. Its economic growth slowed to a 5.3 percent annual rate in the January-March quarter, the lowest in nine years. Output from India's factories has declined. Its consumers have seen inflation — which has averaged 9.2 percent a year since the start of 2010 — devour their wages.
"It's beyond anything that we would have imagined," said Samiran Chakraborty, head of research at Standard Chartered in Mumbai. "Real wages are falling ... The consumption slowdown along with the investment slowdown has been a double-whammy for the GDP number."
As recently as last year, Indian politicians were claiming their economy could rival China's and surge into double-digit growth, lifting hundreds of millions out of poverty in the process.
Instead, India is mired in a deepening crisis of confidence. Asia's third-largest economy is widely regarded as performing below its potential.
Indians are losing hope that their country's fractious political system will deliver the policies that might unlock a rebound — investments in roads, ports and other projects and lighter regulations to attract more foreign investment.


Global economy at risk as US, Europe and Asia slow

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 04 Jun 2012 20:51

Moderation note: The last avatar of this thread was closed after it became too political. Please don't make me close this one. It takes little effort to do a mental cut and paste of your pet rant about some politician. High emotion is cheap, but doesn't contribute much, particularly when the same posters (you know who you are) regurgitate their rants repeatedly. Please desist. It's a better contribution to this thread and forum if you put aside your emotions and anger and explain your POV coherently from an economic perspective.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Rahul M » 05 Jun 2012 01:40

all politics related posts moved to trash.

@all, please heed the warning above. ^^

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vera_k » 05 Jun 2012 09:42

India's economic crisis by the numbers

–In 2007-2008, government revenue from tax and elsewhere totaled 5.4 trillion rupees while total expenses were 7.1 trillion rupees, a shortfall of 1.7 trillion rupees. That was covered by 1.3 trillion rupees in government borrowings and other receipts. So the government overspent its income by one third and financed about one fifth of its expenditure through borrowing.

–Fast forward to 2011-2012. Revenue = 7.7. trillion. Expenses = 13.2 trillion. Shortfall = 5.2 trillion. The gap was funded largely by 4.4 trillion in borrowing. So the government borrows almost two thirds of what it earns and one third of what it spends. The fiscal deficit now amounts to about 68% of revenue.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby tejas » 05 Jun 2012 10:03

How can the GOI possibly contemplate adding Rs. 1.5 trillion in food security bill expenditure to those numbers? With similar revenue, expenditure will be double
revenue. Bankruptcy would be unavoidable. Oy veh.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Sri » 05 Jun 2012 10:59

^^^ Majority of borrowing is internal. So not as bad as it looks. But future generations and current savings are at risk.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 05 Jun 2012 11:20

GOI has in a manner of speaking done something similar to China... China too created massive and convoluted internal debt pile to fund its investments ... thats where the similarities end...Indian government spent the internal debt on socialist dole schemes and subsidies ,while china spent it in infra..

so ours is a bigger mess ,because the internal debt has not been used for anything and is being repaid by taking more debt ...massive chakravyu onlee ...

Government spending money means that little is left for others...the savings/investment of private sector as a % of GDP have continually come down in the last 3 years.. In 2007 pvt sector savings +investment stood at 25% of GDP..While in 2010 it was only 15% gdp...2011 data when it comes out promises to be even worse..

So IMHO it is as bad as it looks...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 05 Jun 2012 19:20

to spend on electoral politics, naturally things that do not directly fetch votes like infra spending will basically cease. same for higher education. research funds. science. defence.
projects which anyways take 10 yrs will be stretched to 20.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby VKumar » 05 Jun 2012 19:49

First thing GOI should do is to sell off the excess stock of grains, running in millions of tons, rotting outside in the fields or open grounds, before monsoon starts its fury in full flow and thus earn a bit of the money, maybe sell at low cost to any consumer who will buy, and make space for the incoming fresh stock arriving in few months.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby VKumar » 05 Jun 2012 19:53

Next thing is to revamp the Plant Quarantine Act as the PQ Act has many inconsistencies and this is increasing the cost of Food Imports.

Import regulations of Animal Husbandry Department and that of Food Safety also need to be made logical and implementable.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 05 Jun 2012 20:30

>>to spend on electoral politics, naturally things that do not directly fetch votes like infra spending will basically cease. same for higher education. research funds. science. defence.
projects which anyways take 10 yrs will be stretched to 20.

inadequate infra leads to inflation when when consumption reaches a certain level like what is happening now ...I hope the idiots have realised as much..inadequate infra dampens the favourable electoral effects of dole schemes . And poll results have shown as much ...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 05 Jun 2012 21:24

Will post english translation soon
Inlined newspaper article

My bad..
Last edited by RamaY on 05 Jun 2012 22:43, edited 3 times in total.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Fidel Guevara » 05 Jun 2012 22:40

How is the economy of a city calculated in India? If a bank is headquartered in Mumbai, and most of the account-holders live outside Mumbai, then is the entire revenue of that bank counted as part of the Mumbai economy? What about a Mumbai-based manufacturing company with multiple factories, warehouses and retail outlets...how would you allocate the revenue?

What about cases where a company only has a registered office in Mumbai, and everything else is produced and sold elsewhere?

I know from my MBA days how difficult it is to allocate revenue or EBIT for multi-site businesses, especially financial operations, and believe these exercises are only done when a company is going through a major financial review - acquisition, IPO or bankruptcy, etc. I find it hard to believe that each Mumbai-based corporation goes through this detailed and very subjective exercise every year.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Manu » 06 Jun 2012 15:22

Suraj wrote:ashi: I hate to break this to you, but there have been 'revolutions' going on in India nonstop since 1947. The overt anger at corruption is a symptom of the growing middle class heading up Maslows chain after their basic needs for food and shelter have been met - they now want a good quality of life. As the urban/rural population ratio gets closer to the 50% mark this will just become much more strident, and that is a good thing, not a bad situation, as the Economist portrays it. In India, the most amount of things get done when the government has its back to the wall. Foreigners don't really get that.


May one request you to read Ruchir Sharma's "Break Out Nations" and for the benefit of the forum, give us your views on it? Our situation is pretty precarious, back to the wall or not. There may not be much the GOI (this or another) can do to dodge the slow-down that looks like it is coming our way.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 06 Jun 2012 17:29

>>There may not be much the GOI (this or another) can do to dodge the slow-down that looks like it is coming our way.

there is a lot that can be done on the other hand...the slow down was due to anti-business policies of UPA ....Removing those policies can help accelerate growth by several percentage points for starters...

"Factors beyond our control" , "eurozone crisis" , "not much can be one" etc are excuses given by goi to shy away from responsibility ....

added later: What a morgan Stanley fat kat things about "break out nations" merely gives an idea about where ms intends to invest moeny...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Manu » 06 Jun 2012 18:40

I don't deny it. The socialism that comes from 10 Janpath (and not 7 Race Course Road, from where nothing comes out at all) for starters is something poor countires can ill-afford. Sharma mentions that in his book as well. But just as a rising tide lifts a lot of countires, a downer brings a lot of them down too.

Sharma forecasts that Brazil and Russia are on their way down (end of commodity boom). Poland, Turkey (surprisingly) and of course USA will make it.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 06 Jun 2012 18:51

which means that MS will be hedging against commodities ...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby AbhiJ » 06 Jun 2012 18:54

Something Interesting.

PTI reported that India's per capita consumption of steel has gone up by around 25% in the last five years to 57 kg in 2011 against 45.8 kg in 2007.

Notwithstanding the marked improvement, India still lags far behind the world average of 214.7 kg and China's average of 459.8 kg. The average is worse when compared with other Asian peers like Japan and South Korea at 506.7 kg and 1,156.6 kg, respectively.

The Asian average stood at 238.8 in 2011. In the EU, it was 310 kg and in Commonwealth of Independent States it was 212.3 kg. Per capita steel consumption was 263 kg in Nafta and 233.9 kg in the Middle East.


http://www.steelguru.com/indian_news/In ... 67185.html

Speaks of Utter Lack of Mass Industrialization.
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Re: Indian Economy - News & Discussion 27 May 2012

Postby harbans » 06 Jun 2012 19:03

There was a report i read yesterday that many steel plants in India are now importing Iron Ore! :evil:

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 06 Jun 2012 19:37

does not India have the worlds largest ore reserves ? bhy for import ore ? mining mafia ? greens ? could you post link ?

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Re: Indian Economy - News & Discussion 27 May 2012

Postby sum » 06 Jun 2012 19:40

gakakkad wrote:does not India have the worlds largest ore reserves ? bhy for import ore ? mining mafia ? greens ? could you post link ?


Here you go sire:
India’s Steel Companies Start Importing Iron Ore – Report

The paper said a Vale SA vessel made a call at Paradip Port, located at India's Odisha province, the country's biggest producer and exporter of iron ore.

But the Vale SA vessel was not there to get iron ore from India. It was there to deliver iron ore to India.

"Selling iron to Odisha is akin to selling ice to Eskimos. Iron-ore imports on the eastern coast were unheard of yet," the Economic Times quoted as saying a head executive working for one of the world's largest miners. Suffice to say, the Vale SA source precisely knew what he or she was saying. The person was an Indian.Though India may not turn into a net iron ore importer, still, the hurdles its steel mining companies face leave them no choice but to source the ingredient overseas.



India is now facing diminishing iron ore inventories, attributed mostly to the government's massive crackdown on illegal mining activities.

Though iron ore imports are still recognisable by the numbers, observers and analysts say this could increase and make India overly dependent on overseas mineral resources which it has so abundantly on its own.


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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 06 Jun 2012 19:51

.
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Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 06 Jun 2012 19:54

Many Indian plants need higher iron content ores as they are older model. Indian ores are typically lower in iron content.

This was the entire point behind the POSCO type furnaces. They are modern and can take the lower metal content ores India produces. This way we can avoid the present situation where India exports low quality ore at cheap price and imports high quality ore at inflated price. Even POSCO has said it will have to import higher quality ore to mix with lower Indian quality ore. To offset this import cost POSCO planned to export some Indian ore so they can hedge prices. There was a big uproar on this very board about that export business some time back. As it is when POSCO comes on line expect iron ore imports to skyrocket.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby harbans » 06 Jun 2012 19:58

Theo the Indian Iron Ore is of extremely good quality. It's not like our low CV, high ash content coal reserves.

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 06 Jun 2012 21:17

Many things are getting mixed up here. Iron ore has both Iron content and purity issues. This affects quality and grade. Also older steel plants prefer Fe3O4 over Fe2O3. AFAIK both Keonjhar and Sindhura, which make up 80% of Odisha ore are Fe2O3. Now sintering allows this to be boosted but at a cost and also pollution. Indian ores also contain a lot of trace impurities which must be reduced through washing and concentrating, still higher trace elements mean challenges to high quality steel. When POSCO talks about reducing land use , it is talking about the Sinteriing and concentrate operations. Both are highly polluting and both got POSCO into serious trouble with the state and environmental groups for it must be admitted real reasons.This is what POSCO means by importing higher quality material to improve the output quality.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby RamaY » 06 Jun 2012 21:20


harbans wrote:There was a report i read yesterday that many steel plants in India are now importing Iron Ore! :evil:

gakakkad wrote:does not India have the worlds largest ore reserves ? bhy for import ore ? mining mafia ? greens ? could you post link ?


I think we need not worry about this. US imports oil, while saving Alaska. KSA wants nuclear energy while exporting 10mbbl oil every day and so on...

If we can make a profit while importing the resources, we should do that.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 06 Jun 2012 21:21

Theo_Fidel wrote:Many Indian plants need higher iron content ores as they are older model. Indian ores are typically lower in iron content.

This was the entire point behind the POSCO type furnaces. They are modern and can take the lower metal content ores India produces. This way we can avoid the present situation where India exports low quality ore at cheap price and imports high quality ore at inflated price. Even POSCO has said it will have to import higher quality ore to mix with lower Indian quality ore. To offset this import cost POSCO planned to export some Indian ore so they can hedge prices. There was a big uproar on this very board about that export business some time back. As it is when POSCO comes on line expect iron ore imports to skyrocket.


Indian ore is generally of good quality. The ones that get exported from Goa, karnataka etc are generally lower quality with lower iron content. The best ores in India are used domestically probably with the exception of the Bailadilla Mines output of Dantewada exported via Vizag.

POSCO set off an uproar because it wanted a huge iron ore allocation ,way beyond what the Indian operations would use , to be able to export iron ore back to Korea. It was a round about way to get high quality ore, while at the same time getting a foot hold in the Indian market. A killing two birds with one stone thing.

Oh, it is not as if the iron ore fines/etc are useless. It needs a sintering and /or pelletizing plant anyways before being used in a blast furnace.

What the Corex process like the Jindal Vijaynagar /JSW steel plant does is that it does away with the coke oven batteries (they make coke from coal) and the Corex gas can be used to generate power. In fact JSW has one of the largest corex capacities in the world (nearly twice Posco's) I think. Posco doesn't bring anything new to the table, in terms of technology or anything (all steel making technology is from major vendors), just investments, which is welcome of course. But other than that, no great shakes.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 06 Jun 2012 21:28

>>while saving Alaska.

i doubt oil reserves in alaska can ever be utilized...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 06 Jun 2012 21:29

Theo_Fidel wrote:Many things are getting mixed up here. Iron ore has both Iron content and purity issues. This affects quality and grade. Also older steel plants prefer Fe3O4 over Fe2O3. AFAIK both Keonjhar and Sindhura, which make up 80% of Odisha ore are Fe2O3. Now sintering allows this to be boosted but at a cost and also pollution. Indian ores also contain a lot of trace impurities which must be reduced through washing and concentrating, still higher trace elements mean challenges to high quality steel.

Most of the ore that can be used directly in the iron making (60% Fe) are haematite only and that kind of high grade ore is depleted. There is no alternative to benefaction and sintering anyway is done becuase the blast furnaces cant use fines.
Panda buys a lot of Indian ore anyway, in addition to from Brazil and AUstralia for a good reason.

This is what POSCO means by importing higher quality material to improve the output quality.

What POSCO will REALLY need to import is high quality coking coal, if it does not go the Corex route.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby VKumar » 06 Jun 2012 21:39

There are two ways that GOI and the States can reduce the cost of Petrol.

1. Reduce the %age excise and VAT. As the price increases, by lowering the %age rate, the amount collected for excise and VAT will be as earlier, and so the increase need not be so heavy.

2. More fundamental change will be help speeden up the traffic. For example, by reducing pot holes, by better implementation of traffic laws. In Mumbai, it is my experience that in a life time a driver does not exceed an average of 17Km/hr. This means that most drivers are consuming about 2 litres/hr (average consumption of many cars - at least my lifetime experience is not more than 8 km/Litre). If even the average speed can be increased by 1Km/hr, the fuel consumption will reduce by about 5% and this is the same effect as reducing the cost of petrol by 5%, not to mention the saving of time and thus improved productivity.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 06 Jun 2012 22:05

AFAIK the Koreans truly specialize in low energy use. One report shows them using 1/3 the energy as China per unit of steel. That is their USP and India would be wise to get them on board. I don't think JSW has their level of energy efficiency yet. To say they bring nothing new and dismiss their technology is wrong in so many unfortunate ways. COREX is useful but I believe it still needs some coking coal. The COREX design has its own challenges. IIRC the COREX needs high quality ore, often 60% or higher. They asked for higher ore allocation as they planned to up their output quite rapidly. Not only that they planned to export some of it to Korea in return of Concentrated pelletized material that was low in impurities, esp. Alumina. Alumina wrecks havoc with their high efficiency processes. They still need 30% of their input to be essentially 0% Alumina and AFAIK it is not available in India yet. Right now they are casting about for options within India. Without low Alumina they may not be quite as world beating in their India operations. By the way they had asked for 600 million tons of ore. When you consider their plans to build about 12 million tons of capacity in 3 phases this is not excessive. About 25 years worth.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 07 Jun 2012 08:56

PM sets infrastructure ball rolling
SECTOR-WISE BLUEPRINT FOR THE YEAR
Ports: Two major ports in Andhra Pradesh and West Bengal at an investment of Rs 35,000 crore
Roads: 9,500 km to be awarded
Civil aviation: Work to start for the Rs 2,100-crore Itanagar airport.
Three new projects to be awarded in Navi Mumbai, Goa and Kannur
* International airports to be announced for Lucknow, Varanasi, Coimbatore, Trichy and Gaya
* An airline hub policy to be finalised. Hubs to be operationalised in Delhi and Chennai
Railways: Elevated rail corridor to be awarded for Mumbai, with a total investment of Rs 20,000 crore
* Plan to be finalised for Mumbai-Ahmedabad high-speed corridor or bullet train project
Power: 18,000-Mw capacity to be added, including 2,000 Mw to be added by the Kudankulam Atomic Power Project
Coal: Coal India to dispatch 470 MT of coal to all sectors; power sector to get an increase of 8.8 per cent at 347 MT

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 07 Jun 2012 09:01

http://economictimes.indiatimes.com/opi ... ms?curpg=4

narendra modis interview...the best pm candidate India has ever had...

excerpts


Do small businessmen get the same treatment as big players under your regime?

I must tell you about this visit of a young boy to my office. He was a Gujarati Muslim boy, born and brought up in South Africa. He sought my help to set up a unit in the state. I spent 10 minutes with him and it did not appear to me that he had the wherewithal to set up business.

I directed him to the collector of Vadodara. He turned up 13 months later with an invitation for the inauguration of a factory that he was associated with. The next time I saw him was three months later. I was told that he was working with the Bombardier plant in Gujarat.

They supply coaches to the Delhi Metro. In 19 months, he was part of an established business. That is what hassle-free governance can do to people.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 07 Jun 2012 09:06

A red-letter day for all those on the economic right in India. For the first time, a major politician has articulated in clear, unambiguous terms a view of the government's role as facilitating business that would warm the cockles of every rightist's heart. In a scenario where each new edition of the Gandhi family has successively lowered the bar for articulation abilities and economic IQ - this is in some ways a revolution in India's polity that needs to be actively supported.

On Economy Manmohan offers Tired Cliches, Modi Offers a Big Idea

In an early episode of the teleseries Yes, Minister, a Whitehall bureaucrat uses the furniture in a minister’s office as a metaphor for the minister’s inability to get anything done.

“There are two kinds of chairs to go with two kinds of Ministers,” the bureaucrat says. “”One sort folds up instantly; the other sort goes round and round in circles.”

Wednesday’s meeting of key economic ministries, presided over by Prime Minister Manmohan Singh, shows an entire government that is going round and round in circles.

Like a truant schoolboy who, having played hooky for much of the academic year, begins desperately to cram come exam-time, Singh and the UPA government he notionally heads have bestirred themselves from their slumber – and are scrambling to show some signs of life.

In the Clash of Ideas over economic policymaking, Modi trumps Manmohan.

At the meeting, Manmohan Singh announced a clutch of infrastructure projects that he identified as being critical to get sinking economic growth back up to respectable levels. Singh also made some boilerplate comments about the compelling need to revive private sector investments – since a fiscally strapped government did not have the capacity to do any heavy lifting.

Singh was particularly at pains to dispel the prevailing perception that the government was seized of a “policy paralysis”, and claimed that on the contrary, his government “meant business”.

The irony of a government whose policy muddles and inability to check corruption on a monumental scale have induced the longest-running Bharat Bandh (in terms of economic policymaking) now pledging to work at top-speed couldn’t have been more stark.

That absurdity was compounded by the absence from the meeting of Pranab Mukherjee, the minister who epitomised a cussed government’s exertions to bludgeon private investors and foreign capital, effectively forcing them to take their money and run.

Perhaps Mukherjee reckons he is merely marking time in the Finance Ministry since he is emerging as the most likely candidate for Presidency. Babus in his ministry too, already sensing the coming change, have stopped working, and are sitting on their files.

To the extent that Singh’s comments reflect an appreciation of the supply-side failures that have choked India’s growth in recent years, they of course reflect a government that’s coming out of abject denial.

But Singh’s manifest attempt to convey a sense of governmental urgency fails to convince because we’ve “been there, done that.” Singh has, since his government was returned to power in 2009, set many such deadlines for key policy decisions to be taken and for projects to be cleared. But in the absence of coherence in economic policymaking and coordinated policy action among the ministries, nothing has been done to change the situation on the ground that holds up implementation.

Whether it’s policy on land acquisition or environmental clearances or telecom spectrum allocation or even just taxation, the government’s mulishness and the reams of red tape it has tied itself up in have beaten back private investor interest and effectively ground projects into the ground.

Which is why the resort to reviving long-delayed infrastructure projects reflects the failure of imagination of a government that has no big ideas to offer.

Ironically, a far better articulation of the problems that beset economic policymaking at the Centre – and the prescription for there remedy – has been offered by Gujarat Chief Minister Narendra Modi in an interview to Economic Times.

In the interview, Modi defines the role of the government in perhaps the most categorical terms ever expressed by a politician.

“The government,” says Modi, “has no business to be in business. It should play the role of a facilitator.” In Gujarat, he adds, “investors don’t have to grease the palm of politicians or bureaucrats. There are well laid-out policies. I believe that country can progress only if we end red-tapism. No red tape, only red carpet, is my policy towards investors.”

Modi identifies the root cause of the economic crisis that confronts India today. “Before any individual or company invests, they look for safety of their money and profit from the investment. We can provide safety for their money through clarity in policies, transparency in decision-making and decent implementation. Is the UPA government able to do these? The answer is: no.”


Modi also points to the cussedness of the UPA government in holding back State governments’ efforts to attract investments. ”Iron ore is available in abundance in Odisha. But the Congress and the government led by it at the Centre are opposing entry of steel companies into the state.”

Such policies, reckons Modi, “is naturally making investors jittery. They want to work with the state governments but the Centre is playing the obstructionist.” In the case of Gujarat, Modi says, “the Centre went to the extent of unleashing enforcement agencies on those who promised investments in Gujarat at the Vibrant Gujarat meet.”

Modi’s prescription: “They should stop preaching and do what they are expected to do – govern.”

It isn’t often that we see a clash of ideas in the economic policymaking space in the public domain. Given the populist instincts of most politicians, we don’t always hear coherent articulations of the role of government in facilitating economic growth.

Manmohan Singh‘s policy pronouncements at Wednesday’s meeting reflect the tiredness of a tired government. In contrast, Modi offers a Big Idea on the role of government – one that he has actually implemented in Gujarat with manifest success in recent years.
Last edited by Arjun on 07 Jun 2012 09:52, edited 1 time in total.

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

Postby Singha » 07 Jun 2012 09:22

GOI finally admitted in a official report without naming a MH politician that during his reign the bilateral agreements given to etihad,emirates, luft to fly into tier2 places , increase flights led to stealing even more of transit traffic without any return benefits for India.
this is something I heard first the civil aviation thread...


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