Indian Economy: News and Discussion (Apr 1 2011)

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby abhischekcc » 02 Dec 2011 14:08

Actual India - which includes pakistan and BD - is the most populous country in the world.

Actual China - which excludes Tibet and Xinkiang - is not.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby sumishi » 02 Dec 2011 14:23

Wal-Mart and County-Wide Poverty [pdf] -- Stephan J. Goetz and Hema Swaminathan, October 18, 2004
--Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University
Abstract:

Wal-Mart has created tremendous economic benefits for consumers by providing more choices at lower prices, especially in communities that had only local retail monopolies prior to the chain‘s arrival. Yet no retailer evokes stronger negative emotions than this chain. Recent media attention has focused on questionable labor practices and other impacts of the stores, while academic studies have examined impacts on retail wages, employment levels and existing stores. Missing from the literature is an analysis of whether the “Wal-Mart effect” is large enough to influence community-wide poverty rates.

We find, after controlling for other factors determining changes in the poverty rate over time, that both counties with more initial (1987) Wal-Mart stores and with more additions of stores between 1987 and 1998 experienced greater increases (or smaller decreases) in family poverty rates during the 1990s economic boom period. We offer three possible explanations for this finding, including that Wal-Mart stores destroy civic capacity in the communities in which they locate by driving out local entrepreneurs and community leaders.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Supratik » 02 Dec 2011 15:11

[quote="gakakkad"]we do not need to be WTO compliant. What the hell can they do to us . we are not I-rack or Libya . So WTO may kindly go to Bhad .


Well there could be counter restrictions to pressurize GOI on this. But the more important point is that the Govt. maybe
bluffing.

Meanwhile Green card quotas for high tech workers have been lifted. Is this the bargain???

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby sumishi » 02 Dec 2011 15:13

In this today's pro-FDI editorial of TOI -- Stand and fight -- is a statement: "... Let's not forget that the government is well within its rights to take executive decisions and need not seek the consent of Parliament on every single contentious policy...."

Is my saying 'WTF' loudly justified? :-?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 02 Dec 2011 15:34

> Meanwhile Green card quotas for high tech workers have been lifted. Is this the bargain???

why would more brain drain be a +ve bargain.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Supratik » 02 Dec 2011 16:51

> why would more brain drain be a +ve bargain.

Perhaps more overseas workers = more remittances

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 02 Dec 2011 18:04

^^ why such a paki line of thinking ?
Remittances were imp a decade or so ago when people who emigrated could not in any case contribute to deshland due to lack of opportunity . That my dear friend is no longer the case. India after Russia is the 2 largest loser from external brain drain. The negative impact due to immigration has been far higher in Russia than in India. Sergey Brins dad for instance is an immigrant from Russia. If the Ruskies did not make the mess they made , they were very much in a position to utilize such a talent to their advantage . A large number of Elbrus chip designers to emigrated in early 90's. What a waste for mother Russia.

Due to the immense possibilities that arise and will continue to arise in India , we need to retain talent now. From here own wards India would be the biggest loser from emigration. Because now the country is in a position to utilize the geniuses that are born .

[ot]

Regarding the Lee-Chaffetz bill ,it has been put to appease the Mexican voters. Even though it ll hasten things for employment based applicants, raising the per country cap of family based visas to 15 % will delay the cases of Indians seeking family based immigration. I encountered a bunch of naive indians who wanted their sons or spouses or bothers earlier in Khanate , collecting chanda to lobby for the bill . They did not figure it out that India is no longer "oversubscribed" in any family based category ,cut off dates coincide with the rest of the world. the bill would quicken things for mexicans and Filipinos while delaying it for the rest. (the 15% cap is the meximum limit and not the total entitled quota} . Indians are not even issued the complete 7% visa of the present cap , no chance they ll be issue 15 % . In fact increase in mexican cap will probably cause the dates for the others to retrogress.

[/ot]


>>Well there could be counter restrictions to pressurize GOI on this. But the more important point is that the Govt. maybe
bluffing.

Well , no possible "counter-restriction" in WTO can create trouble for the Indian economy. The west know it well that if you want to create trouble for the Indian economy , it is best done from within the country . WTO like interpol is a toothless organization.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Supratik » 02 Dec 2011 18:56

gakakkad wrote:^^ why such a paki line of thinking ?
Remittances were imp a decade or so ago when people who emigrated could not in any case contribute to deshland due to lack of opportunity . That my dear friend is no longer the case. India after Russia is the 2 largest loser from external brain drain. The negative impact due to immigration has been far higher in Russia than in India. Sergey Brins dad for instance is an immigrant from Russia. If the Ruskies did not make the mess they made , they were very much in a position to utilize such a talent to their advantage . A large number of Elbrus chip designers to emigrated in early 90's. What a waste for mother Russia. Due to the immense possibilities that arise and will continue to arise in India , we need to retain talent now. From here own wards India would be the biggest loser from emigration. Because now the country is in a position to utilize the geniuses that are born .


>>Well there could be counter restrictions to pressurize GOI on this. But the more important point is that the Govt. maybe
bluffing.

Well , no possible "counter-restriction" in WTO can create trouble for the Indian economy. The west know it well that if you want to create trouble for the Indian economy , it is best done from within the country . WTO like interpol is a toothless organization.


India is still not in a position to retain all the talent e.g. more than a lakh students leave India every year. I am trying to
figure what the quid pro quo was since the Americans have openly come out with statements favoring the Govt. move.

That is easier said. Remains to be seen in future. I am for limited entry of FDI in the metros to see how it pans out. We are talking about millions of middlemen who will go out of business. So the process has to be deliberately slow.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 02 Dec 2011 19:31

The pro quo was not with western gov't . It was with the companies themselves. warren buffet met mms officially in March. Chai-walla says that he gone many time to meet him..

http://economictimes.indiatimes.com/et- ... 788807.cms

contrary to popular perception , most of those who go abroad for studies repatriate eventually .. Its logical . How many Indian students study in Khanate ? 100k / year. How many green cards so far 10-15k per year .By doing away with the cap , the number will increase to 15-25k . Perhaps more. Most Pee chaddi's have thus far repatriated. (univs usually don't sponsor for post docs ,its only rare pee chaddis like RB mullah who manage to stay back in Khanate). Most H1b workers too have to go back.. Thus far ,India has reaped the dividend - in form of repatriated cash and man power. But Khanate is scheming to put an end to both . Similarly , these days most iitians work in India .

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 02 Dec 2011 20:20

the salaries paid to freshers from iit-mumbai by google in india have apparently nudged up to 20L this year.

http://timesofindia.indiatimes.com/tech ... 953857.cms

if we dont retain people now, they will not be ready in 10-15 yrs when they would be in position to make major contribs. by that time they would have EB1 gc, 2 cars in the garage, a mcmansion, a high maintainence wife & lifestyle and a american accent, a fasciantion with buying the latest toys, a vague cholesterol issue and obsession to check the email @ 2am :lol:

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Prem » 03 Dec 2011 00:19

Here comes the Bride , i mean Bribe
How India and Wal-Mart Will Create 10 Million Jobs
New regulations allowing Wal-Mart and other major global retailers to open company-owned stores in India will create
10 million new jobs across the country within the next three years, according to India’s commerce minister.Now that Carrefour, Tesco, Wal-Mart and other global retailers are allowed to control up to a 51% ownership stake in their operations within India, the boom in employment opportunities is expected to extend far beyond store operations, according to an article in the Wall Street Journal:
“Large foreign retailers will reduce waste by creating modern cold storage and supply chains for fruits and vegetables,” the article says. “They will increase choice and lower prices by cutting out middlemen. Commerce and Industry Minister Anand Sharma expects fresh investment to generate 10 million new jobs over three years, about five to six million of them in logistics alone.”And few companies on Earth know more about multi-modal and near-real-time logistics than Wal-Mart, Tesco, and Carrefour. Within their own operations and in collaboration with partners, those three global retailers will offer Indian partners and government officials an unrivaled level of understanding of everything from regional warehouses to RFID to just-in-time delivery to the sophisticated systems necessary to manage all of those demanding and nonstop processes.
Speaking of sophisticated systems, all of that growth—and all of that disruption—will turn something old into something very new and vital: ERP. As millions of jobs are created to allow huge volumes of goods to be moved at great velocity, how will governments plan for new water systems, new electrical grids, new sewer systems, new financial models, new schools, new hospitals, new roads, new levels of security, and new residential neighborhoods?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Prem » 03 Dec 2011 00:23

http://online.wsj.com/article/SB1000142 ... 85104.html\
India Goes Wild Over Wal-Mart
Against this backdrop, the average resident of New York, Shanghai or Jakarta may wonder what all the fuss is about. Why should Indians care whether their televisions and tomatoes come from a store owned by a German or a Gujarati? New Delhi allows foreign investment in the sensitive retail business, but is it serious about more reforms? Abheek Bhattacharya and Hugo Restall of the WSJ Asia editorial page discuss.
The answer is that India's economy may have progressed over the last 20 years, but much of its political class remains rooted in the failed ideas of the past. They see the poor as capitalism's victims rather than as its biggest potential beneficiaries. Foreign profits are synonymous with loot rather than with wealth creation that benefits all.A sampling of opposition to the retail opening captures this neatly. In Uttar Pradesh, Uma Bharti, a senior leader of the opposition Bharatiya Janata Party (BJP), threatened to "set fire to the first Wal-Mart store whenever it opens." Her colleague Sushma Swaraj has been busy tweeting up a storm of misinformation about how Wal-Mart allegedly ruined the U.S. economy. Not to be outdone, party stalwart L.K. Advani has temporarily abandoned a quixotic quest to repatriate wealth held by Indians abroad to focus instead on the more pressing task of saving Indian sovereignty from the dangers of cheap cauliflower and cut-price T-shirts.
The BJP's response threatens to cement its reputation as a party of small minds and petty resentments. But it's hardly alone in its outrage. Uttar Pradesh Chief Minister Mayawati, perhaps best known for using taxpayer rupees to dot her state with statues of herself, dubbed the move "anti-people" and warned it would benefit foreign companies at India's expense. A plethora of politicians have echoed this sentiment.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 03 Dec 2011 01:47

Singha wrote:the salaries paid to freshers from iit-mumbai by google in india have apparently nudged up to 20L this year.

http://timesofindia.indiatimes.com/tech ... 953857.cms

if we dont retain people now, they will not be ready in 10-15 yrs when they would be in position to make major contribs. by that time they would have EB1 gc, 2 cars in the garage, a mcmansion, a high maintainence wife & lifestyle and a american accent, a fasciantion with buying the latest toys, a vague cholesterol issue and obsession to check the email @ 2am :lol:


salaries have approached the MIT level. US is playing true evil. India can easily provide them with decent stimulating jobs..But sadly communism prevails.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby svinayak » 03 Dec 2011 02:25

Remove socialism from the constitution from India . Remove all ism such as leftism, communism etc from the Indian academic.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby rishabhsood » 03 Dec 2011 03:43

Household savings in India is powerful factor which has protected it from recession in years that have passed.

First, the governor of RBI under the directions of finance ministry invites private players for setting up banks ( the last time it happened in 2004 with Kotak Mahindra and Yes Bank). The FDI is capped at 49%. However, the noteworthy point is the way of extracting common man savings.

Next the UID project (Aadhar) tends to create a strong data bank of all the citizens of the country. Another way of looking at it is the strong market study details which can be exploited to target the 'needs' of Indian consumers by offshore companies ( we do not know about all the private companies involved in storing this data).

And now, FDI in retail that too 51%. They want to exclude the middlemen in 'field to store' transaction. The retail sector which is $500 billion or more will depend entirely on these offshore players.

This riddle needs to get solved.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby sumishi » 03 Dec 2011 08:28

rishabhsood wrote:...
Next the UID project (Aadhar) tends to create a strong data bank of all the citizens of the country. Another way of looking at it is the strong market study details which can be exploited to target the 'needs' of Indian consumers by offshore companies ( we do not know about all the private companies involved in storing this data).
...

See this post on IF

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Abhijeet » 03 Dec 2011 16:13

I think successive governments have failed miserably in marketing the benefits of liberalization to the Indian people.

When you consider all of the positives that have come out of opening up the economy since 1991 -- a much higher trend growth rate, a quadrupling of per-capita income, the telecom revolution, infinitely more choices available to consumers in every market segment, etc -- it's absurd that so many people, even on this forum, are still ambivalent or downright negative about further reforms. It's ok if people want to critique specific aspects of the FDI policy, but I find it ridiculous that so many people can still make blanket statements to the effect of "those foreigners will exploit us poor Indians, put all Indian companies out of business, and loot our money" without fear of ridicule. Those statements should qualify anyone as a crank not to be taken seriously -- but they are made regularly by people who should know better.

In many ways, the level of discourse about reforms is not any more sophisticated than in the early 90s -- then it was people threatening to burn down the first KFC, now it's about the first Walmart. Given the changes between now and then, this is sad.

I wish there was more of an attempt from the government and industry to explain to the average Indian how reforming the economy further is essential for getting rid of poverty. The evidence of how much things have gotten better in the last 20 years is not shoved in the faces of people who get their knowledge of the world from TV and regional language newspapers.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Supratik » 03 Dec 2011 19:19

Reforms in India will happen in fits and starts. No need to get frustrated by it. This way it
will make sure that we take from outside ideas which are beneficial to us and not follow blindly
as we did before 1991 with disastrous results.

I will not read too much into the opposition ruckus. It is simple politics. The Congress did the same when BJP Govt. divested and removed control over petrol prices. However, both have
eventually happened e.g. petrol prices have been eventually deregulated and the Congress is
selling PSUs in bits and pieces. If the FDI policy is beneficial then more states will adopt it.
Bengal is a special case. As the atmosphere in Bengal is essential leftist (everyone and his Uncle is a leftist of different degrees) Mamata has very little elbow room. IIRC, Bengal is the only place
where Urban land ceiling act is still in place and modern retails penetration is poor. So change in Bengal will take time as the mindset of people has to change. However, Mamata should not prevent other states from adopting FDI in retail if they wish to.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Nihat » 03 Dec 2011 19:46

this suspension reflects very poorly on the nation and especially national party like BJP. The congress will exploit this to show how backward NDA is.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby gakakkad » 03 Dec 2011 20:13

@ Nihat , When Congress is getting GUBOed from all directions , why would the BJP commit the tactical brilliance of supporting the congress ? Most educated people are aware that the reforms in NDA were at least as extensive as the ones in 1991 , if not any more .

Abhijeet wrote:

The evidence of how much things have gotten better in the last 20 years is not shoved in the faces of people who get their knowledge of the world from TV and regional language newspapers.



What else do you expect from a country that follows a constitution that is more a peace of rhetoric than sensibility ? A country that accepts maliciously fabricated history and twisted propaganda as official versions of truth.

The atrocities committed by the British , formed a convenient basis by the CON party to base its propaganda upon . Right from he time of independence a sense of fear against private enterprise was instilled. It served the purpose of the CON dynasty rather well .

A sense of inferiority was inscribed in the minds of the then citizens . That the white foreigner can rule the brown Indians at will . This made the country xenophobic and unwilling to accept competition .

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Singha » 03 Dec 2011 21:08

FDI issue is a masterstroke to keep political parties and people diverted away from the fires of corruption that was burning both the INC and BJP. now both will by mutual agreement 'fight' both in media and parliament, do nothing but drink tea and eat subsidized dosas in parliament canteen and slowly all the korrupt due to be sarkari mehmaan will crawl away again and those already mehmaan will obtain bail like the daughter of the great artiste did.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Nihat » 03 Dec 2011 21:19

@ gakakkad. i dont care about politics but i was exprcting the BJP to act on the larger national intrest but alas they seem to be of no less nuisence value than the congress when in opposition.

both of them make me sick with their narrow mindedness which is hurting the economy.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Muppalla » 03 Dec 2011 21:28

I have a fundmental question - Why India needs FDI in retail?

It it because Indian biggies does not have money? Or is it bacause Indian companies does not have supply chain experience. Is it really necessary to have FDI. About few years back when the government allowed big retail, Reliance fresh etc came into existence. Later there was a huge protests from all the "middlemen" type businesses as Reliance thought of sourcing directly from the farmer. In that pursit a substantial farm land was leased by Indian biggies to grow organic food etc.Later they rolled back that policy of allowing big Indian retail. Even going away from agri products, by means of liberal small scale manufacturing policies, some controlled imports to deal with Chine etc. the types of Shoppes, LifeStyle, BigBazar etc would give the same scale as like Walmart etc.

What is the big need for FDI in retail as though there is no scale of investment money in India. What does India get as a result?

It is not black and white regarding FDI in retail. I strongly think it is a distraction from 2G scam and the government was really successful.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Pranay » 03 Dec 2011 22:28

Muppalla wrote:I have a fundmental question - Why India needs FDI in retail?

It it because Indian biggies does not have money? Or is it bacause Indian companies does not have supply chain experience. Is it really necessary to have FDI. About few years back when the government allowed big retail, Reliance fresh etc came into existence. Later there was a huge protests from all the "middlemen" type businesses as Reliance thought of sourcing directly from the farmer. In that pursit a substantial farm land was leased by Indian biggies to grow organic food etc.Later they rolled back that policy of allowing big Indian retail. Even going away from agri products, by means of liberal small scale manufacturing policies, some controlled imports to deal with Chine etc. the types of Shoppes, LifeStyle, BigBazar etc would give the same scale as like Walmart etc.

What is the big need for FDI in retail as though there is no scale of investment money in India. What does India get as a result?

It is not black and white regarding FDI in retail. I strongly think it is a distraction from 2G scam and the government was really successful.


Lets begin with late breaking news...

http://news.outlookindia.com/items.aspx?artid=743293

Under relentless pressure from allies and Opposition, the Government today put on hold its controversial decision to allow FDI in retail in a bid to end the stalemate in Parliament.

The announcement was surprisingly made by West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee after a telephonic talk with Finance Minister Pranab Mukherjee, who himself declined to speak on the subject saying any official word on this will be made only in Parliament.

Banerjee, whose party is strongly opposed to the decision, revealed that Mukherjee told her that the FDI decision has been "suspended".

"It is not temporary...Until and unless consensus is evolved, the issue (decision on FDI in retail) is suspended," she told reporters in Kolkata.


"Pranabda sought our opinion on the issue and we told him that the Trinamool Congress remains firm. He informed me that the cabinet decision on FDI entry in retail will be suspended until and unless a consensus is evolved," Banerjee said. "If that is so, the issue is settled," she said.

"The matter is crystal clear and you may ask Pranab Mukherjee," the chief minister added.

Mukherjee, who is in Kolkata today and visited the ailing mother of the Chief Minister at a local hospital, later said: "I cannot announce anything because Parliament is in session. Any government decision will be made in Parliament."

"I talked to her twice, but officially I can't make any announcement as Parliament is in session," he told reporters at his residence.


http://www.ndtv.com/video/player/politi ... /217535?hp

An excellent "intellectual" debate on FDI in retail in India @ IIMC, between the panelists (Mani Shankar Iyer and Swapan Das Gupta) and also some very pertinent questions by an informed audience.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Muppalla » 03 Dec 2011 23:51

^^^
Out of 45 minutes, I am already at 25 minute. The debate is a major high level rhetoric. No one is answering WHY do we need FDI? Why not with Indian money and Indian private sector? Are Indian companes not capable of creating it's Walmart equivalants? What is FDI FDI FDI. Someone is killing the Indian reform by bringing the topic of FDI here.

Added later:
I generally do not watch entire program of NDTV. However, I watched it and it is a personal record to watch the crap called Mani Iyer. However, I was able to refresh my memory.

(1) In early 2000 the NDA proposed big retail (not FDI) so that Indian biggies can create Walmart type retail chains that will improve the supply chain mechanism as an alternative to FCI etc. The idea was to create cheap consumable while giving the max to producer/manufacturer. However the middlemen are tooo many in India and they will have to adjust to new style of organized retail.

(2) In 2006, UPA-1 thought we are the boldest and definitelywith longer stuff can pull this off. They did a good thing by opening the retail to Indian biggies. Immediate we have seen chains like Reliance fresh.

(3) However, after vehement protests and also as they are hugely dependent on Left for their survival, they changed to clause to only cities and that to delegated the decision to states.

(4) Now comes FDI based on (3) above.

I think they should first try (2) in true sense before this FDI hangama if there really want to do good to India's retail and also to agriculture and inflation control. Instead, using their foreign spouses ;) influences they jumped to (4).
Last edited by Muppalla on 04 Dec 2011 00:19, edited 1 time in total.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby disha » 04 Dec 2011 00:15

Muppalla wrote:^^^
Out of 45 minutes, I am already at 25 minute. The debate is a major high level rhetoric. No one is answering WHY do we need FDI? Why not with Indian money and Indian private sector? Are Indian companes not capable of creating it's Walmart equivalants? What is FDI FDI FDI. Someone is killing the Indian reform by bringing the topic of FDI here.


FDI is euphemism for bringing the black money in. Hence it is all about "FDI"

With Eurozone going through a turmoil and slow growth in the US Economy, where are the options for black money to go? Hence the "congress lining up behind Manmohan" for FDI.

Somebody pointed out why the BJP does not say anything., well not that the supporters of BJP have black money! It is just a fight of whose Black money is "bigger"., and who is going to take the credit - in such a way that it benefits electorally. Jingoes think of a la-la land when all the black money comes in., for the aam admi it is only about bijli-sadak-pani-roti-kapda-makaan-padhai-paisa-daava-daaru. Anybody who visibily provides the most of the above (and not necessarily in that order) is the winner (electorally).

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby RamaY » 04 Dec 2011 00:58

Watched the whole episode.

The Retails Super Stores is a business model to begin with. It was identified as a business opportunity to bring the economies of scale combined with logistic efficiencies and negotiation efficiencies to make reasonable RoI. All the successful retail chains in the world are nothing but "successfull" companies based on a razor-thin efficiencies.

Making a national policy on such ideas is nothing but stupidity and irresponsible on UPA2 part.

The problem definition for India is
- offering better price to the producing side of the society (size ~300 million citizens)
- reducing waste interms of efficient food processing, storage and logistics (existing structure supports ~200 million citizens)
- offering better price to the consumers side of the society (size ~1100 million citizens 100 million citizens can afford the prices no matter what

Really appreciate if someone explains how FDI in retail sector benefits a given segment...

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby svinayak » 04 Dec 2011 01:21

Remove socialism from Indian constitution before this debate is started inside India

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby shyam » 04 Dec 2011 01:57

Muppalla wrote:No one is answering WHY do we need FDI? Why not with Indian money and Indian private sector? Are Indian companes not capable of creating it's Walmart equivalants? What is FDI FDI FDI. Someone is killing the Indian reform by bringing the topic of FDI here.

It is not Indians who need this FDI. It is the foreign companies who want access to vast and growing Indian market. As TFTA economies get into recession, and demographics move into unfavorable territory, those companies need access to the market that is growing, for their own survival. I think the real pressure for opening up is coming from outside.

People who simply cry FDI, FDI either do not understand who is in the position of strength to extract our pound, or are in the payroll. I don't think we will really lose anything by saying no to this FDI.
Last edited by shyam on 04 Dec 2011 02:16, edited 1 time in total.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vera_k » 04 Dec 2011 02:16

Addressing this conspiracy theory.

Supratik wrote:Meanwhile Green card quotas for high tech workers have been lifted. Is this the bargain???


No bargain involved here, and its still not done. This was due to work done by high tech workers over many years. After the Republicans won the house last year, business came out in support of such a move.

gakakkad wrote:Regarding the Lee-Chaffetz bill ,it has been put to appease the Mexican voters. Even though it ll hasten things for employment based applicants, raising the per country cap of family based visas to 15 % will delay the cases of Indians seeking family based immigration.


The 15% provision was put in to get Democrat support, particularly Hispanics led by Gutierrez. The local Indian American family-based immigration community is of no consequence in this equation, since they vote Democrat, and the Democratic party has given the Hispanics a veto on any immigration bill.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vera_k » 04 Dec 2011 02:20

Muppalla wrote:I have a fundmental question - Why India needs FDI in retail?


As always, the reasons supporting FDI are the same. FDI gives investors enough confidence to deploy their technology and expertise. Eventually, this is absorbed by local businesses, but without FDI, the learning cycle is very long.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby svinayak » 04 Dec 2011 02:46

Indian economy has passed the stage which it was in mid 90s when every PM had to keep giving confidence that policy will keep continuing.
The main reason for the FDI is to create a new generation of captive consumerrs to western goods. This needs to be changed so that Indian consumers only will consume Indian products 'World Wide'

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Cosmo_R » 04 Dec 2011 03:10

shyam wrote:
Muppalla wrote:No one is answering WHY do we need FDI? Why not with Indian money and Indian private sector? Are Indian companes not capable of creating it's Walmart equivalants? What is FDI FDI FDI. Someone is killing the Indian reform by bringing the topic of FDI here.

It is not Indians who need this FDI. It is the foreign companies who want access to vast and growing Indian market. As TFTA economies get into recession, and demographics move into unfavorable territory, those companies need access to the market that is growing, for their own survival. I think the real pressure for opening up is coming from outside.

People who simply cry FDI, FDI either do not understand who is in the position of strength to extract our pound, or are in the payroll. I don't think we will really lose anything by saying no to this FDI.


India needs FDI because it runs a current account deficit. The $340 bn whatever FX reserves we all talk about are the result of loans and capital inflows which quickly exit and are not generated by trade balance surpluses (and therefore more stable) as are PRC's.

Once the demand for the INR starts dropping due to investor concerns, as it is now, it will tumble (as it is now doing). For Asian tigers, this is a good thing because they are export led economies and their goods become cheaper and imports more expensive. India OTOH, is a domestically driven economy. That would normally be good except we import all that oil and a lot of other stuff besides. So, when the INR falls, you don't get a huge surge on exports but your imports cost more and lead to inflation. When you get inflation, rates go up. When rates go up, growth stalls and domestic demand falls and people lose or don't get jobs. etc.

To finance the current account deficit you have two choices, borrow or let in FDI (non financial assets).

Which do you want Greeks bearing loans or FDI?. If you want to look totally inward (as we have done for millenia) then either discover oil and build everything locally (as we tried from 1950 to 1991) or change, globalize and grow. Else no toys like the MMRCA and the like.

Any professional economists here care to affirm/contradict?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby shyam » 04 Dec 2011 04:20

Unlike Chinese FDI, Indian FDI is not for export. Rather it is for internal consumption. This FDI will be followed by permanent import of consumer goods, which will only worsen our current account deficit in the future.

If we need FDI to manage current account deficit, we better look at what is causing that. It is oil import, and we need to look for methods for addressing that.

I am also not happy about the source of FDI money that will come into India. They are not coming from the savings of people of that countries (if it were, they will be very judicious about how they spend). Rather their source is quantitive eased, bailed out - in short, just printed - money. They may solve things mathematically, however I don't consider it as a good source of money and will carry its own problems.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Pranay » 04 Dec 2011 05:27

vera_k wrote:
Muppalla wrote:I have a fundmental question - Why India needs FDI in retail?


As always, the reasons supporting FDI are the same. FDI gives investors enough confidence to deploy their technology and expertise. Eventually, this is absorbed by local businesses, but without FDI, the learning cycle is very long.


Let me beat this dead horse one more time and hope to clarify some questions...

First, I'm glad that this question has been put to rest, hopefully for good.

India does not need foreign FDI in Retail, and going forward never will. Folks who have favored it have used hollow arguments to push an agenda that will only favor certain foreign business interests.

Let's take each segment at a time...

1) The Farmers: The producers of commodities range from subsistence level to industrial scale level. In this spectrum, the only ones to benefit from a "Walmart" would be the very large producers, those that would be able to provide the large quantities required by these retailers. The small and medium producers would not be benefited at all.

Experience in the US has shown that the small farmer has become obsolete. Agriculture has gone on an industrial scale and the small guy has his local farm stand and caters to the "locavore" phenomena. Those curious can check out Food Inc. to clarify their doubts. Over the long term the farmer becomes a disposable commodity that is under the thumb of the big corporations.

The much vaunted "supply chain" - A "Walmart" is going to allocate it's resources for a supply chain that serves it, not the rest of the Indian economy.

2) The Consumers: Let me turn the argument around... What will a big box store sell to the consumer that they currently do not get elsewhere? Does India need a "Walmart" to cater to the Indian consumer? I don't think so. Any Indian retailer can scale up - as required by the economy - and provide the same economies of scale.

3) The Big Box Corporation: The history of the big box store is an open book. They by no way are a sure fire success story everywhere. The failure of "Walmart" in Germany and South Korea are pointers in that regard.

Lessons from Carrefour Korea and Wal-Mart Korea:
academic-papers.org/ocs2/session/Papers/D3/1135-2171-1-RV.doc

http://www.deadlysins.info/wordpress/?p=92

Chinese media has recently reported that Wal-Mart may add yet another country to it’s growing list of international failures. In 2008 Wal-Mart has 208 stores throughout China. Within the past 12 years of trying, Wal-Mart has not only failed to become profitable, but it even had to accept a loss in market share. According to data from the Chinese Department of Trade, it has dropped from rank 17 in 2004/2005 to rank 30 this year. Before the background of previous failures, e. g. the one in Germany, it’s time to think about the reasons for Wal-Mart’s repeated problems in foreign markets.


http://www.nytimes.com/2006/08/02/busin ... wanted=all

Three days after Wal-Mart Stores announced that it would pull out of Germany, Roland Kögel was wandering through the aisles of a somewhat threadbare Wal-Mart in a strip mall in this western German city.

In South Korea, Wal-Mart had only 16 stores — a small presence that contributed to its decision in May to sell out to a Korean discount chain.
“Why are they giving up now?” he asked. “They have good prices and a good variety of products.”

Yet Mr. Kögel, 54, confessed that he never bought groceries at Wal-Mart. Food is cheaper at German discount chains. He also does not visit this store often, because it is on the edge of town and he does not own a car. His one purchase for the day was tucked under his arm: a neck pillow.

Shoppers like Roland Kögel help explain why Wal-Mart raised the white flag in Germany, the site of the company’s first foray into Europe.

After nearly a decade of trying, Wal-Mart never cracked the country — failing to become the all-in-one shopping destination for Germans that it is for so many millions of Americans. Wal-Mart’s problems are not limited to Germany. The retail giant has struggled in countries like South Korea and Japan as it discovered that its formula for success — low prices, zealous inventory control and a large array of merchandise — did not translate to markets with their own discount chains and shoppers with different habits.


Some of Wal-Mart’s missteps — selling golf clubs in Brazil, where the game is unfamiliar, or ice skates in Mexico — are so frequently mentioned, they have become the stuff of urban legend. But even more subtle differences in shopping habits have tripped up the company.

In Korea, Wal-Mart’s stores originally had taller racks than those of local rivals, forcing shoppers to use ladders or stretch for items on high shelves. Wal-Mart’s utilitarian design — ceilings with exposed pipes — put off shoppers used to the decorated ceilings in E-Mart stores.

Beyond the ambience, Wal-Mart’s shoes-to-sausage product line does not suit the shopping habits of many non-American shoppers. They prefer daily outings to a variety of local stores that specialize in groceries, drugs or household goods, rather than shopping once a week at Wal-Mart.

“They have stacks of goods in boxes,” said Lee Jin Sook, 46, a housewife sitting on a subway in Seoul. “That may be good for some American housewives who drive out in their own cars.” But Koreans, she said, prefer smaller packages: “Why would you buy a box of shampoo bottles?”

“I heard Wal-Mart later tried to change their style,” Ms. Lee added, “but I guess it was too late.”


Another aspect of Big Box retailing, something that the government used to tout as safeguards - why would a big box retailer start a store in let's say Aurangabad over Pune or Bombay? It would just not be viable in any small city/town.


Added Later: The technological inflow that will come into India from the Offset clauses of the MMRCA deal is what India needs at this stage in it's development, not FDI in Retail. There is nothing that International Retail chains bring to the table that the Indians cannot do efficiently themselves.
Last edited by Pranay on 04 Dec 2011 06:23, edited 1 time in total.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Muppalla » 04 Dec 2011 06:15

Pranay wrote:Added Later: The technological inflow that will come into India from the Offset clauses of the MMRCA deal is what India needs at this stage in it's development, not FDI in Retail. There is nothing that International Retail chains bring to the table that the Indians cannot do efficiently themselves.


Bingo. First of all they did not allow Indian retail chains go beyond the cities and the supply chain has a lot of chains and hurdles. Instead of working on the real issues to help the producer/manufacturer and then the consumer, the government is jumping the gun and going for FDI. Indian retail has the capability to create its own walmart's eqivalant.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Neshant » 04 Dec 2011 08:59

The only thing coming from Walmart will be boat loads of stuff from China and an explosion of the budget deficit.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby Neshant » 04 Dec 2011 09:04

The technological inflow that will come into India from the Offset clauses of the MMRCA deal


My view is only screw driver technology will come.

Transfer of technology is one of those useless buzzwords used to extract money out of foolish countries who think they will be able to download the brains of foreign scientists & engineers if only they hand over enough money.

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby vera_k » 04 Dec 2011 11:16

Pranay wrote:3) The Big Box Corporation: The history of the big box store is an open book. They by no way are a sure fire success story everywhere. The failure of "Walmart" in Germany and South Korea are pointers in that regard.


So what's the problem if the big boxes aren't going to be a success? I posted earlier that the big box model is on the way out even in the US due to the rise of online shopping. Why not take the money the newcomers will invest and run figuratively speaking?

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Re: Indian Economy: News and Discussion (Apr 1 2011)

Postby harbans » 04 Dec 2011 12:31

Any professional economists here care to affirm/contradict?


Indeed we are missing some very good points of view..

Debating an issue is one thing. But if debates on sensible reform stall years of growth, then we are also talking treason to a level beyond the corruption debate. Example:

If reforms in India instead 1991 had started in 84, we'd be over a 5 trillion USD economy by now. Every year for the last 6 years we have lost on an average 2 T USD, just because of unfounded fears, partisanism, cheap lobby politics. When one has politcal. legislative and executive powers within the country, the moral compass also must be dangled to those who wish stalling reform for decades. The equation is simple:

A: What sort of energies and capital would these reforms instill in say 5 years, or 10.
B: What sort of economy would we have in 5 years or say 10 if we don't carry forward.

A-B are the losses we sustain because of the opposition we face in our nation to sensible reform. And these are huge losses that will perpetuate poverty, increase lobby politics, decrease money available to Defense, Health, Education, poverty alleviation.


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