Indian Economy - News & Discussion 27 May 2012

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 07 Jun 2012 09:33

I don't think JSW has their level of energy efficiency yet.

Google around. You will be surprised . Some of the Indian steel producers are among the most efficient (tata steel and also JSW etc) in the world and yes they will match or outperform the best Japanese and Korean mill out there (which achieve their performance by careful selection of the best materials from everywhere in the world, unlike us, who use what is locally available).

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 07 Jun 2012 09:47

Singha wrote: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...


Translated, it means for AIR India. The capacity growth benefited the Indian consumer greatly, liberated them from the clutches of the Air Parasite and hopefully contributed greatly to killing that parasite once and for all. It is only when Air Parasite is killed, you can have rational policies made for the country as a whole and not have idiocies like private guys turning over part of their revenue to IA/AI (like what the private telecom guys were doing for BSNL, once that stopped, BSNL goes to the deathbed. classic definition of a parasite)

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Murugan » 07 Jun 2012 10:34

NaMo speaks about Ineptocracy of UPA

http://economictimes.indiatimes.com/opi ... 878238.cms

They (centre) prepare reports on various issues and then analyse them. Reports take two years to be prepared and then they go an unending analysing trip. There is no real action.


The Centre went to the extent of unleashing enforcement agencies on those who promised investments in Gujarat at the Vibrant Gujarat meet. They should stop preaching and do what they are expected to do - govern.


Only the reality-challenged will buy into this nonsense. How can a state, which has above 10% growth in agriculture, be seen to be having a bias towards big business? This over 10% growth rate is made possible through constructive interventions by the state government. Mind you, the national average of agricultural production is only 3%.


So, why is it that we get to hear praise showered on you mainly by the likes of Ratan Tata and Mukesh Ambani?

That's because the media is not willing to hear beyond what Tatas and Ambanis say. They talked about me and Gujarat at the Vibrant Gujarat meet. It is an event held once in two years. But does the media pay the same kind of attention to the Krishi Mahostavs that are being held here?

For 30 days, every year, one lakh employees of my government hold a farmers' outreach programme. These officials work in sweltering heat to help my farmers increase productivity.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 07 Jun 2012 11:49

Foreign investors, too, have begun to doubt the India story. How can this impression be changed?

First, the government should stop painting a rosy picture. If the prime minister accepts reality, he can find an answer. But the problem is that he does not believe in what he is doing. He is not able to even take his decisions to their logical end.

The Indo-US nuclear deal is a case in point. The prime minister was ready to sacrifice his government for the nuclear deal. Has he been able to implement it? No! Sound policies and stamina to implement them alone can convince the investor.


Will the BJP help the prime minister in taking the deal forward?

Why should the BJP take the lead? We were told that the nuclear deal was his principal achievement. What is he doing to implement it? You should put the question to the prime minister, who claimed that it was the answer to our energy crisis and the biggest policy trophy of UPA-1. :lol:

.......... Gujarat, which accounts for 5% of the country's population, accounts for 16% of the nation's industrial production and 22% exports.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 07 Jun 2012 11:55

Sharing some quotes from ‘GREED & fear’, authored by Christopher Wood.
On Gujarat-

“GREED & fear has been hearing the hype about Gujarat for some time. But a brief visit to the state this week confirms that the praise is warranted.”

“(Gujarat) marks such a contrast to most of the rest of the country that it is no wonder that Gujarat has become the poster child for economic development in India.”

On Gujarat’s infrastructure-

“The roads in the former state capital Ahmedabad are wide and clear while, perhaps most impressive given India’s current circumstances, Gujarat is the only state to enjoy a power surplus. It is also the only state with an integrated gas grid.”

On Gujarat’s development-

“Also, interestingly, Gujarat has not prospered on the back of the software-BPO bandwagon.”

“Gujarat’s economic dynamism has been based on a broader more diversified range of sectors, be it traditional areas of strength like textiles, pharmaceuticals and ports or more recently autos where the state has started to attract critical mass after Tata Motors set off the trend with its decision in late 2008 to move the production of the Nano from the anarchic chaos of West Bengal to Sanand in Gujarat. The word is that it only took 48 hours for Tata to get permission from the state government. There are now six major auto manufacturers having or planning plants in Gujarat.

On Chief Minister Shri Narendra Modi-

“It really seems to be the case that Chief Minister Narendra Modi does run the state like a chief executive officer.”

On functioning of the state Government-

Businessmen report that investment approvals are remarkably swift while the state government is viewed as both clean and highly efficient with the word “pro-active” most often applied to describe the functioning of the bureaucracy.”

On the state of governance and economic bloom in the rest of the nation, Mr. Wood has some extremely sharp observations.

On the India Story-

Not surprisingly, the infectious optimism has entirely disappeared from the Indian story.”

It is a message to the most inept and corrupt person in India.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Prabu » 07 Jun 2012 14:20

Read the Visionary Indian Leader's Interview ! Its none othee than Mr.Modi, the Great. I envy my state tamilnadu does not have such a chief Minister ! Truely he can lead India as PM, and to become a Super power before 2020 !

Red carpet, not red tape for investors, is the way out of economic crisis: Narendra Modi

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 07 Jun 2012 15:17

well JJ in TN is not too bad either. TN has a equally big industrial base and matches Guj growth rate...perhaps the only other large Indian state to do so....TN if run pragmatically is the next Soko of that I have no doubt.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 07 Jun 2012 15:36

well JJ in TN is not too bad either


She is very good indeed. I remember, that when Standard Motors (the only car maker in TN in the old old days) went belly up, Amma went and got in Hyundai AND Ford. Those two were the path breaking investments that made TN build on it's already solid auto ancillary base (all the TVS companies in Padi in Chennai, the ones in Coimbatore and Hosur) and become the true auto capital of India. Modi and Gujarat attracting auto investments is a Jhonny come lately. Guj still lacks the design and engineering base of TN in this. Gujarat might get assembly plant, but true R&D and design work will be done out of Chennai /Bangalore/Pune kind of places, along with probably NCR .

Why even the moribund Hindustan Motors put tail between legs and opened the lancer division in Chennai and dumped Bengal!

It is interesting to see the contrast between TN and Bengal. TN loses a historical auto maker, Amma puts major major fight and gets two large world class investments that grow into large mutli billion operations with a huge number of jobs generated (orders more than were lost at standard motors) and economic benefits to the region and nation.

Bengal, in such a situation would have put up a sea of red flags, gone on strike, made a total nuisance of itself, plant won't have been closed, would have been nationalized by the state govt, no car would have been produced with lungi clad ex workers showing up on the 1st to claim salary, and sitting on charpoys and smoking beedis on all other days, with the plant over grown by weeds, the rusting main doors sagging and falling off the hinges and a pervasive sense of decay. Result, no jobs generated, not even the existing ones meaningfully retained and the entire local economy craters and are a drain on the nation.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby sum » 07 Jun 2012 16:19

Prabu wrote:Read the Visionary Indian Leader's Interview ! Its none othee than Mr.Modi, the Great. I envy my state tamilnadu does not have such a chief Minister ! Truely he can lead India as PM, and to become a Super power before 2020 !

Red carpet, not red tape for investors, is the way out of economic crisis: Narendra Modi

Irrespective of political blinkers, lovely to read such a interview by a Indian politico.

I would applaud even if Rahul-baba or rajmata would have said such things but alas, such a day will never come.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 07 Jun 2012 16:30

as you fly out of dum dum, sometimes the plane will go for a stretch over the hooghly north of CCU....the place seems lined with old industrial sheds and red brick walled kind of factories. signs of activity were minimal. looked kinda like parts of buffalo, NY if you know that look.

does HM still make the ambassador in WB? this pic seems to suggest so!
http://www.oncars.in/Car-News-Detail/Ma ... -on-HM/761

reminds one of old WW2 era factory photos...all handmade.

they offer a pickup truck of sorts named VEER by cutting a Amby in half and welding a cargo bed in the back :rotfl:
http://www.hindmotor.com/files/Veer-Leaflet.pdf

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 07 Jun 2012 16:43

Singha wrote:well JJ in TN is not too bad either.

JJ may not be too bad in terms of implementation track record, but comes nowhere close to Modi in another key area - the ability to articulate big ideas in simple terms.

Indians are way too inured to low articulation standards. Mind-numbing cliches and platitudes are par for the course for Indian politicians - & JJ is not significantly different from INC leadership, at least on this count.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 07 Jun 2012 18:28

^^^
Are you kidding me. AMMA has a first class brain. Have you even bothered to read her Vision 2023 Document. She is aiming for $8,000 per capita for TN in 11 years. Essentially developed status and has meticulously mapped out every item. Having met her personally I have to say she is very much a match for NM and could probably out perform him in certain areas. She has learned the hard way to tone it down and retain the 'humble woman in a cape' image with the big stick. Goes over will with the rural women who are her vote base. And this I say this after opposing her politics. Her problems are in her personal life which is why I oppose her, too much drama. Really....

...people should not be surprised if AMMA becomes a third front PM candidate. She would be able to deliver a swift kick on the backsides of certain, Ahem! under performing states. We could do worse. Now if she could only get rid of that Mannargudi Mafia, but that is asking for too much...

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 07 Jun 2012 18:39

no wonder she has always gotten along well with Modi...she is right winged and will not indulge in economic quackery ..in one of the interview she said that she visualises India as a super power..emphasis on per capita income means that she has got the right ideas...

one can tell a good admin from a pretentious quack by his economic ideas...it one talks about investment ,per capita income ,infra, etc the guy seems to have te right ideas..if f the guy talks of poverty eradication , 2 rupee a kg rice ,malnutrition etc than the guy will more likely than not indulge in commie giri...

.i ll rate her above nitish ..patnaik too seems to be doing well administratively ..

the best thing I like about Modi is austerity , and no drama ...i have seen him sit on floor and eat with hands ...and that was not a media photo ops ...media did not even know he was coming ..

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 07 Jun 2012 19:16

Don't get me wrong....JJ is right up there when it comes to implementation. Also, both Modi and JJ understand the importance of GDP growth and both are business-friendly leaders who would go all out to attract investment.

But the importance of articulation & of leadership in general, comes in when the chips are down and unpopular measures are called for (like say removing subsidies). JJ has tended to fight DMK freebies with more freebies of her own, and my personal guess is that she would be more likely to gauge the populist direction when called on to take a decision. Modi, on the other hand, is somewhat more likely to base his decisions on his personal principles - and attempt to sway the masses by articulating and communicating his decision in an effective manner. And this ability really goes to the heart of leadership.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 07 Jun 2012 19:25

>> Modi, on the other hand, is somewhat more likely to base his decisions on his personal principles - and attempt to sway the masses by articulating and communicating his decision in an effective manner. And this ability really goes to the heart of leadership.


true..he removed many small temples to widen roads...there was criticism by vhp , but once the roads were done people swayed to his side ..this was before 2007 elections ...

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 07 Jun 2012 20:06

Arjun wrote:Modi, on the other hand, is somewhat more likely to base his decisions on his personal principles - and attempt to sway the masses by articulating and communicating his decision in an effective manner. And this ability really goes to the heart of leadership.


He hasn't lost 5 election cycles, where he absolutely got crushed by the electorate. To my mind this gives AMMA a perspective Modi lacks. A perspective that will be necessary to lead all of India. And I definitely don't agree with the claim that AMMA is right wing. She does what works. If industrialists bring her jobs she welcomes them, if she needs to give 2 color TV's she will, she instituted the cradle baby scheme for instance essentially absolving parents of a criminal act pretty close to murder IMO.

The problem all these leaders have is that they are perfectly fitted to their particular state. If TN got NM and GJ got AMMA on can only imagine the explosions that will result, esp. in the case of AMMA. Even NM would have serious difficulty dealing with the Tamil ego. As a nation we are not grooming capable people to rise to the very top. Like it or not the only leader being groomed is Rahul princeling. The BJP is not doing it, the AIADMK is not and neither is even NM. After NM who... ..good governance is not being institutionalized... ..We got AMMA but it could very easily have been VN Janaki. Remember she was the true inheritor and nepotistic to the core. Her 24 days are still remembered for the damage it did and her breath taking ineptitude and corruption. The one time TN supported presidents rule. We were also lucky MGR died before destroying AMMA.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vijayk » 07 Jun 2012 20:14

http://www.firstpost.com/politics/on-ec ... 34890.html

On economy, PM offers tired cliches; Modi offers a Big Idea

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 (the) 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, are “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.”

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 07 Jun 2012 20:18

>>He hasn't lost 5 election cycles, where he absolutely got crushed by the electorate.

can't blame him for that...the inept opposition that he's got , he can pretty much carry on for life...

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 07 Jun 2012 20:37

For those interested here is AMMA's vision 2023 document.

http://www.tn.gov.in/departments/financ ... =ot4%20%29.

Economic prosperity
Tamil Nadu will increase its per capita income (at
current prices) by 6 times from Rs. 73,278 (US$
1628)4 in 2010-11 to Rs. 4,50,000 (US$ 10,000) in
2023, in line with per capita income of Upper Middle
Income (UMI) countries. Over the next 11 years,
Tamil Nadu, given its factor endowments and the
combination of strengths and opportunities, will
aim to grow its GSDP at 11% or more per annum
- about 20% more than the expected growth rate
of India’s GDP over the same period. Given the
expected increase in population of 15% over the
next 11 years, the increase in per capita income
would amount to 6 times over this period. Several
countries in Asia (in particular, Thailand, Malaysia
and China) have grown at around 7% to 10% per
annum for more than 20 years during the 1980s
and later. The fast growing states of India, namely
Maharashtra and Gujarat, have grown at double
digit rates over the past 10 years. Considering the
aspiration to increase real incomes by six times
and the fact that several countries in Asia and a
few states in India have consistently grown at high
rates, the aspiration for Tamil Nadu is to grow its
economy at over 11% per annum (in real terms)
over the next 11 years and become a prosperous
state.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 07 Jun 2012 22:08

Deleted off topic posts. Please stick to topic.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby AbhiJ » 07 Jun 2012 22:37

Singha wrote:well JJ in TN is not too bad either. TN has a equally big industrial base and matches Guj growth rate...perhaps the only other large Indian state to do so....TN if run pragmatically is the next Soko of that I have no doubt.


You Forgot the Baap... Maharashtra.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Altair » 07 Jun 2012 22:47

India's NE has long been a neglected investment destination. NaMo is focusing lot of attention in his recent speeches on NE and is asking business houses to invest in NE.
If he is successful and attracts investment and integrate NE more into mainstream Indian economics we can see a paradigm shift in our baselines.
NM says that India's NE's Hydro power projects can solve many of our current power problems and he will implement those projects.
NE HydroPower potential

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 07 Jun 2012 23:12

Reliance to invest $18 billion
India's largest private company, Reliance Industries, said Thursday will invest $18 billion over the next four to five years to expand in the country and more than double operating profit.

Mukesh Ambani, India's richest man, also told the firm's annual general meeting in Mumbai that he had faith the nation's economy, which is struggling with slow growth and high inflation, would beat its woes to "emerge stronger".

"The current difficulties faced by the Indian economy in my belief are temporary," he said.

Energy giant Reliance in April said consolidated net profit fell 21.2 percent to 42.36 billion rupees ($830 million) in the three months ended March, from 53.76 billion rupees a year before.

The firm blamed the weak results on declining output from its offshore gas fields. And last month, India's oil minister said production from the Reliance's main gas fields was expected to fall to a record low.

However, while announcing the 1 trillion rupee ($18 billion) investment move Ambani told the AGM the firm planned to achieve production of 60 million cubic metres of gas a day at the fields in the next three to four years.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 08 Jun 2012 08:26

United Nations: India's economy will grow at a slower pace of 6.7 per cent in 2012 instead of a previous 7.7 per cent forecast, according to the United Nations, which warned that the euro area debt crisis will remain the biggest threat to world economy this year.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby ashi » 09 Jun 2012 10:42

Don't Believe the India Hype

But elections are taking place when the Indian economy has taken a sharp turn for the worse, in a climate of global economic crisis. This exposes the pathetic, do-nothing, zero-reform record of Prime Minister Manmohan Singh and his government. More generally, it lays bare India's huge reform gaps and its brittle, decaying institutions. Finally, it deflates the "India Hype" peddled by smooth-talking, upper-caste politicians, ambassadors, businessmen, management consultants and indeed some academics.

A word about India Hype. One aspect of it is the thesis that India is forging a separate successful path to development, in contrast to the traditional comparative-advantage-based development of China and the other East Asian Tigers. At its extreme, this argument holds that India's growth engines are its high-end services, and now manufacturing sectors with their globalizing, world-beating companies.

This is a fundamental misdiagnosis. The vaunted successes in information technology-based services and in manufacturing niches are welcome. But they are a high-wage, capital- or skill-intensive drop in India's low-wage, unskilled, labor-abundant ocean. India's growth should be focused in the labor-intensive sectors, but it isn't.

Agriculture is stagnant, hobbled not just by very high external protection but also by crazy subsidies captured by comparatively rich farmers and middlemen, absence of property rights, terrible rural irrigation and infrastructure, and draconian domestic restrictions that fragment the internal market. Nontradable services sectors—where potential employment generation is huge—are also crippled by domestic restrictions. Backbone services sectors (such as banking, insurance and retail) suffer from external protection as well.

Last, and crucially, India's glaring development gap is in manufacturing, for all sorts of Union and state-level policies—on labor markets, infrastructure, power generation, subsidies, the public sector, repressed agriculture and services sectors, uncertain property rights, and remaining zones of protection against imports and inward investment—conspire to prevent labor-intensive industrial production. India needs its Industrial Revolution if it is to grow out of poverty. That means putting the impoverished in the countryside into (initially) low-wage work in mass manufacturing. That is what China and other parts of East Asia have done. But not India.

India Hype extends to "Chindia," the notion that India plays in the same league as China as an emerging superpower. This is pure myth. China plays in a league of its own; India, Brazil and Russia play in a far inferior league. China's economy is thrice the size of India's; its goods exports are 10 times bigger; it is even ahead of India in the world services trade; it spends about 10% of GDP on infrastructure compared to about 5% in India; and its carbon emissions—a sure indicator of industrialization—are about four times higher.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby svinayak » 09 Jun 2012 11:16

If this is coming from US media reports then it is done by the Chinese lobby in the US

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 09 Jun 2012 12:02

Acharya wrote:If this is coming from US media reports then it is done by the Chinese lobby in the US

Irrespective of which lobby is responsible, the facts are broadly correct.

The full article has not been quoted above. The rest of the article is a good diagnosis of the problem:

Now turn to the Congress-led government. There have been practically no market reforms since it took office in 2004, save for the opening of domestic civil aviation. Nothing has moved on privatization, the reduction of government equity in banks and insurance companies, pensions, competition regulation and the administration of subsidies. Industrial tariffs have come down (as they were doing gradually pre-2004), but otherwise external protection has not been reduced. Indeed, export restrictions were slapped on in response to food inflation in 2008. India remains the most protectionist large emerging market.

Worse, there has been reform backsliding and reversal. Fiscal restraint, put in place by the Fiscal Responsibility and Budget Management Act of 2003, has been thrown to the winds. Now, with an economic downturn, the consolidated government deficit is projected to rise above 10%. This is going to make private capital scarcer and more expensive. Funding for much-needed infrastructure projects will suffer. Administered pricing for petroleum products was reintroduced in 2008. Off-budget expenditure has increased significantly, especially through gimmicky, populist measures to support agriculture and rural employment, and to subsidize the state-owned energy sector when oil prices soared.

The government's response to the present global economic crisis was to introduce further market-distorting restrictions, including higher tariffs, antidumping duties and assorted nontariff barriers to imports. And it is even more resistant to opening up the financial sector to competition. The result will be to entrench the power of inefficient state-owned banks and insurers, and cramp incentives to save and invest in the private sector. Finally, the Congress Party entered the general-election campaign with pledges to expand its hugely wasteful rural employment guarantee program and increase food subsidies.

This is an abysmal record. The government has squandered the boom years, left the country vulnerable to malign global economic conditions, and compromised prospects for a healthy recovery. But Mr. Singh and his "dream team" have been given an easy ride: they have escaped blame, especially in the eyes of the international commentariat. The conventional excuse is that their hands are tied by Sonia Gandhi and her Congress coterie, and by messy coalition politics.

This explanation just does not wash. Mr. Singh has impeccable academic credentials and is by all accounts incorruptible. He deserves credit for his performance as finance minister in the early and mid 1990s—though at least as much credit should go to the then Prime Minister Narasimha Rao, who had to take the tough decisions. But Mr. Singh has proved a hopeless decision maker as prime minister.

He has lacked the political instinct and moral courage to take tough decisions, hiding behind the fig leaf of Mrs. Gandhi and the troublesome left-wing parties that propped up the government. The latter withdrew their support in mid-2008, and the government won a vote of no-confidence, yet—not surprisingly—market reforms did not materialize. Sadly, Mr. Singh proves the rule that academics should generally be "on tap" but not "on top."

The whole reform program depends crucially on the prime minister himself. Mr. Rao and A.B. Vajpayee proved their mettle, despite heavy political constraints. Mr. Singh has failed; he should bear much of the blame. That blame must also be shared with the other sweet-talking, weathervane-members of his dream team. The Congress party does not deserve to be re-elected, and the dream team does not deserve to continue in office.

The question is whether an alternative Bharatiya Janata Party-led government would do any better. Yes, if it has a decisive leader with a core of able reformers. No, if its leader follows the dictates of short-term opportunism and inevitably messy coalition politics. The danger is that the election will create an even more fractured political landscape, with an even weaker, more unwieldy governing coalition. The nightmare scenario is of a new Union government held hostage by surging caste-based parties in north India and their corrupt leaders. That would scotch further major market reforms and deepen India's institutional malaise.

Hence the failure of the Congress-led government should be put into a larger institutional context. The Indian state, led by a neanderthal and venal political-bureaucratic elite, remains unreformed. It comprises a bloated, corrupt, tyrannical and grossly incompetent army of 20 million bureaucrats and their minions. It works for the benefit of the well-off with political connections, but it is still a crushing burden on the one billion-plus Indians outside the charmed circle of the upper and upper-middle classes.

India optimists aver that "stealth reforms" have and will continue to take place outside the state, crowding it in and reducing its ability to do harm. This view is dangerously complacent. To begin with, state institutions—the political class, political parties, parliaments, the bureaucracy, the judiciary –have gotten worse at both Union and state levels.

Arun Shourie, the leading market reformer in the last BJP-led government and one of India's leading intellectuals, argues that modern India has two races going on. One is a backward race of a state "hollowed out by termites"; the other a forward race of market reforms, modernization and globalization. The backward race is led by India's unreconstructed political class. The forward race is led by urban professionals in the private sector. Mr. Shourie says that these two races are fundamentally incompatible. Either the backward race will be arrested by the reconstruction of the state, or it will drag the forward race backward. He notes one silver lining: policies, governance and economic performance have been improving in a minority of Indian states, roughly in an arc from the south to the west. These are the states where the forward race is fastest. They set positive examples for other states to emulate.

India Hype-peddlers neatly sweep the country's institutional rot under the carpet. However, India cannot be expected to grow and prosper far and fast, not just now but for decades ahead, with such shaky foundations. The upshot is that much-needed market reforms cannot continue to skirt around the reform of the state itself. Politically, that is the hardest nut to crack.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Hari Seldon » 09 Jun 2012 14:44

The doom and gloom in the khanomist rag is well-calibrated for once, seems like.

Farewell to Incredible India

Bereft of leaders, an Asian giant is destined for a period of lower growth. The human cost will be immense

Bingo on the bolded part. And the part we as Indians need to truly care about.

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 09 Jun 2012 20:13

I have often said that full social reform in India has not been completed and will cause these sorts of pinch points. Our politics is poisoned by the underlying lack of social reform that reflects a brutal day to day reality for most Indians. It throws up a certain type of leader, one who resorts to zero sum games and exchanging power for wealth. I don't agree at all that this means we are doomed. That is foolishness. Keep in mind that the original BRIC report had India growing at only 6% and still becoming very wealthy.

Both articles are kinda dumb in that they don't understand how we ended up squandering out human capital for 50 years. Number 1 was failing at the 100% literacy campaign, second was failing to liberate our women and third was ignoring urbanization and the infrastructure necessary to support it. AFAIK all these three are still moving forward full tilt. Literacy rises, our women are freer everday and the population is moving to cities that are being built at break neck pace. So ho exactly does our human wealth get squandered? :roll:

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 09 Jun 2012 21:22

Can't see how one can possibly argue with the point of both articles - that India's current 'leadership' detracts from rather than facilitates the inherent growth potential of the country. As long as there is no change in the quality of leadership - India will always be under-performing as compared to her widely acknowledged potential.

What has been the pet railing point of India's urban internet chatterati over the last few years - has finally emerged as the global consensus.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Suraj » 09 Jun 2012 21:31

I find both those articles to be overly despairing and agenda driven. Do they have valid points ? Absolutely. The reason I still think otherwise is that IMHO, based on data I already posted previously (and to which gakakkad added) my thought remains that our current funk is cyclical rather than structural. Further, from an economic perspective, crisis time is always interesting for what it compels GoI to do. Could the problems become more chronic in nature over a longer period of time, a la Brazil squandering its gains during the 1970s ? Sure. But as long as the data remains what it is now, I cannot really agree with the conclusions or headlines of those articles. They make for nice sensationalism and magazine sales, though.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby gakakkad » 09 Jun 2012 22:00

btw article posted by Ashi is from may 2009 ... In 2009 ,2010 and 11 we had very decent growth.. in fact in 2009 we weathered the crisis better than other countries...

these article speaks of nothing new... yes we have a pathetic goi...and socialistic schemes are wasting india's growth potential...so what is new ?


detractors of Yindia have always had to drink the crow soup..right from 1947 ...churchill thought India would not last a decade...and here we are stronger than ever ...look at comments people made about our space program in 1970s ..and yet we are amongst the top 5 space faring nations..

google search reveals doom and gloom farticles about indian economy dating back from the mid 90s ..And yet we have had a decade and a half of brisk growth...

the present mess up will lead to uncontrolled inflation ,which will have disastrous electoral consequences ..that will be followed by sweeping reforms...

and the economist and razeen sally may prepare there crow soup in advance onlee...rahool baba ,harsh mandar ,the belgian and co will be glad to share the crow soup with them...

wait for a few more quarters...things will be back on track onlee...once in a decade or 2 bad blood needs to be shed...the present "slowdown" is temporary...the bad blood will be shed ,which will follow reforms ,which will follow unprecedented growth....

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 09 Jun 2012 23:58

Arjun wrote:Can't see how one can possibly argue with the point of both articles - that India's current 'leadership' detracts from rather than facilitates the inherent growth potential of the country. As long as there is no change in the quality of leadership - India will always be under-performing as compared to her widely acknowledged potential.


The article also points out that any leadership in India has issues with it. Do you concede that. Atleast we have had 12 years of relative stability compared to the 'Humble Farmer', the 'godman' consultant and the international relations specialist. Stability is not guaranteed with the Indian set up. We went through a investment slow down in the late 90's as no one had a clue what they could expect on any given day. The present opposition has nothing to offer as replacement.
----------------------------------------------------------

Vina,

Here is the specific energy consumption analysis by JSW itself. They have bench marked themselves against POSCO and found themselves lagging. JSW and TATA may be lowest cost producers but were not close to the Koreans in energy and material efficiency. At least not yet. JSW in particular is worried big time.

JSW
Gap Analysis w.r.t Global Best
Gap 1.295 Gcal/Tcs

6.495Gcal/Tcs
Sp. Energy of Similar plant
JSW Steel, Vijayanagar
Works

5.20Gcal/Tcs
Sp. Energy of Similar plant
POSO, South Korea

Not only that POSCO plans to bring its proprietary FINEX technology to Orissa. First outside Korea.
From POSCO direct.

http://www.posco.com/homepage/docs/eng/ ... 0050c.html

What are the benefits of POSCO's FINEX iron making process?

The FINEX process produces hot metal with quality equivalent to the conventional blast-furnace process using a direct charge of iron ore fines and non-coking coal. It is an eco-friendly process designed to meet the increasingly strict environmental regulations of the 21st century.

The FINEX process eliminates the need for the sinter and coke plants required to process raw materials for the traditional blast-furnace process, dramatically reducing the start-up investment costs, operating costs, as well as the pollutant emissions.

In detail, it can reduce the start-up investment costs by 20%, operating costs by 15%. And most importantly, 97% of the SOx, 99% of the NOx, and 72% of the dust can be reduced.

We began laboratory testing of the FINEX process in 1992 and completed a 600,000ton demo plant in May 2003.

In May 2007, we successfully built a commercialized FINEX plant with capacity of 1.5million ton. Since then, FINEX plant has been achieving normal operation targets with superior cost competitiveness and environmental benefits over conventional blast furnace.


We need to do what ever it takes to get this technology into India. Even COREX is fairly primitive and inefficient next to it. I suspect POSCO will become the worlds cheapest steel producer in Odisha, even JSW is likely to get nipped here.

COREX process that has been used by POSCO from 1995 to produce 600,000 tons of iron a year is the only new commercial iron-producing process used until today.  However, although the COREX process using the solids of iron ores and coal can omit the sintering of shaft furnaces and Cokes process, it required the use of expensive source materials and the control of powdered coal generated during the processes.  FINEX process, on the other hand, is an innovative new iron-producing process that does not require preparation stage of the iron ores or other source materials including the Cokes and sintering processes.  Therefore, it needs less investment and generates no pollutants.  Additionally, as it uses the iron ores and other coals that are less than 8mm in diameter and that are worldly abundant and cheap in price, it is even more advantageous than COREX process that can omit the Cokes and sintering processes.

In the aspects of production cost, the powdered iron ores are more abundant than iron ore pellets and are 23% cheaper.  For the cokes, we use general coal that is 20% cheaper than high-class soft coal.  Moreover, FINEX process is very environmentally-friendly.  When FINEX process is applied, the environmental pollutants including SOx, NOx and carbon dioxide decrease significantly compared to the preparation process of sintering and it is because the deoxidizing pipe desulfurizes and the melting pipe uses pure oxygen.


Here is a nice little sketch.

Image

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Deans » 10 Jun 2012 11:22

gakakkad wrote:no wonder she has always gotten along well with Modi...she is right winged and will not indulge in economic quackery ..in one of the interview she said that she visualises India as a super power..emphasis on per capita income means that she has got the right ideas...

one can tell a good admin from a pretentious quack by his economic ideas...it one talks about investment ,per capita income ,infra, etc the guy seems to have te right ideas..if f the guy talks of poverty eradication , 2 rupee a kg rice ,malnutrition etc than the guy will more likely than not indulge in commie giri...
.i ll rate her above nitish ..patnaik too seems to be doing well administratively ..
the best thing I like about Modi is austerity , and no drama ...i have seen him sit on floor and eat with hands ...and that was not a media photo ops ...media did not even know he was coming ..


The good thing is that other States are starting to get Gujarat style leadership and Governance. Goa is one example. HP is another.
In both states, the interesting thing is there is less of a caste divide, hence more people vote based on performance and values rather than caste considerations. Chattisgarh is another candidate.
In TN, the bureaucracy is probably more corrupt than Gujarat, but your work gets done and yes, JJ has learnt with experience and does have a vision for the State which she can articulate.
With Bihar, growth is on a very low base. You would get these kind of growth figures if there is even basic governance & law and order in place.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Arjun » 10 Jun 2012 13:04

Theo_Fidel wrote:The article also points out that any leadership in India has issues with it. Do you concede that. Atleast we have had 12 years of relative stability compared to the 'Humble Farmer', the 'godman' consultant and the international relations specialist. Stability is not guaranteed with the Indian set up. We went through a investment slow down in the late 90's as no one had a clue what they could expect on any given day. The present opposition has nothing to offer as replacement.

This is a dramatic lowering of the bar within a period of less than a year...From a scenario of bravura about India outpacing China in growth rate - we are now iffy even about the second-place position; folks are talking about 6% 'eventually' leading to wealth...and suggesting that having a government that is stable enough to last full-term is a blessing we need to count.

My only comment would be - the prospect of the current government getting a full 2 more years to play out its discredited economic policies is obviously not enthusing either Indian or foreign investors. I will grant though that the only scenario worse than the current one is a Third Front coming to power - India will pretty much close shop for business with even a whiff of that scenario playing out.

The primary factor for the current mess is the government's fiscal irresponsibility and zilch decision-making abilities - on these aspects there is very clear demarcation between the rightist opposition and the Gandhi- MMS leftists.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby vina » 10 Jun 2012 18:08

Theo_Fidel wrote:Not only that POSCO plans to bring its proprietary FINEX technology to Orissa. First outside Korea.

Trouble is , theres is nothing "Proprietary" about Finex (which is basically a more evolved version of COREX). That technology is from Voest Alpine ..okay. now Siemens VAI , who anyways are the ones who invented Corex.

Check it out here

The process is still in the Pilot stage, full scale at blast furnace kind of quantities is not proven yet, so it is still some way from maturity. POSCO really doesn't bring anything new to the table. Any other steel maker can get the same tech from Siemens VAI !

POSCO is the first to actually build out using this process and put up a plant. They have taken the first risk. Sure, they probably will have more experience operating it, a worthwhile thing to have if successful.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby Singha » 10 Jun 2012 18:24

AMW (asia motor works) the truck maker also has its plant in Gujarat. their HQ is in mumbai.
http://www.amwasia.com/contact-us

Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Postby Theo_Fidel » 10 Jun 2012 19:40

Arjun wrote:The primary factor for the current mess is the government's fiscal irresponsibility and zilch decision-making abilities - on these aspects there is very clear demarcation between the rightist opposition and the Gandhi- MMS leftists.


I don't think so. Yes there is corruption and MNREGA, etc, but it was there before as well. Primary responsibility rests with us the voters. The source of this present slow down can be traced to WB and the thumping election of DIDI. This is why I have been doing a lot more follow up on what appears to be insanity going on in that state. Getting rid of the LEFT was a nice thought but BUT WB did not have the wisdom to vote to stabilize the center as well. Some states do vote this way now, TN in particular has decoupled its center votes from its state votes. We are in this predicament because the voters put DIDI in charge and she has painted herself into the deep deep left corner. Only the Maoists remain to the left of her. She unfortunately has 5 more year and the voters have essentially put her in charge of the government. As long as she is in power she will bring India down to the WB level, that is clearly the vision she has. Do you disagree.

I'm now coming to the view that India has been flying on 2 engines for the past 20 years. The West, including Delhi/Haryana, excluding Rajasthan and the South, Excluding Keral (edited). There is a limit to how much these engines can push and every time the North/East goes into these reflexive leftist low growth moves the entire nation appears paralyzed. I would point out that much of the West and South are still growing at 10%, still overall growth is now 5.7%.

I brought up that 6% not to say that is now our potential but the claim in the articles that we can not grow or prosper under present circumstance. Which is complete nonsense. The faster we grow the faster we get there, but we are still getting there. TN for instance is shooting for developed status by 2023, I think GJ will get there as well, followed a bit later by the rest of the West and South. What sort of plan does DID have for the North & East? BTW even at 6% we will outpace Panda as China's trend growth drops to 4% or so.
-------------------------------------------------
Vina,

AFAIK VAI has not offered the FINEX technology to anyone else yet. And JSW has tried and is still trying. Only POSCO has it and has access to it and has been running it since 2003. I'm quite baffled when you say they don't bring anything new and then you say it is COREX evolution and then it is too new to be proven. Which one is right? Right now they are building a 1.6 Million ton plant, this is not BF type scale!! The Odisha plant will be the largest of its kind in the world! IMO it is worthwhile to bend heaven and earth to get that technology to India. The risk most definitely is worth it and we should quit our dhoti shiver over new technology. It is the one thing that can cut our $Billion imports of coking coal, improve our efficiency dramatically and work with lower quality materials. It is not just an evolution of the COREX process. There is a lot more going on there. Of course it might increase our imports of lower alumina ore, though the FINEX deals better with Alumina than the COREX. Which is where this entire argument began.
Last edited by Theo_Fidel on 11 Jun 2012 06:16, edited 1 time in total.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby hnair » 11 Jun 2012 02:08

I protest the use of seditious sounding epithets like SRK against any Indian state. Kindly use the official name, Kerala (or KL), which is proud to be a state of the Indian Republic. Thanks.

Admins, I request that this sort of inadvertent self-goals be cautioned against.

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Re: Indian Economy - News & Discussion 27 May 2012

Postby svinayak » 11 Jun 2012 05:54

I agree


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