Indian Economy: News and Discussion (Apr 1 2011)

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Theo_Fidel

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

Postby Theo_Fidel » 13 Dec 2011 03:08

The IIP decline is probably a function of Diwali and low working days. Not to worry.

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

Postby vina » 13 Dec 2011 10:00

Undie TV is blaring out headlines such as "Lowest Growth in 30 years!" . Well, that part is true though. This UPA II has been an absolute disaster. The MMS, Pranab Mukherji, Montek Troika have been like bumbling buffoons and the NREGA led fiscal profligacy is coming to bite us hard in the a$$.

Again, with a "line the ducks perfectly all the time " kind of budget based on hope and wishful thinking, they are up a $hit creek without a paddle when a couple of ducks like oil prices, commodity prices and shocks like Eurostan didn't line up.

Time for these jokers to go. Finally, the DDM and spin doctors are realizing what a truly great PM Narasimha Rao was. The reforms were HIS , not MMS and Chidambaram's. MMS was just a "speech reader" as the finance minister. Rao gave him the political cover and the direction to do that. Contrast that with The Shroud From Turin!

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

Postby Singha » 13 Dec 2011 10:22

NDTV being critical of the INC has got be part of a 'plan'. the plan imo is discredit MMS, Pranabda and Chidambaram together lest they have any ambition of a 3rd term as PM or new PM, retire them in next election and project a new 'young face' of the party with RG as PM and 'senior leaders' like Draja, Apatel etc in the cabinet key posts.
the takeover by the NAC would then be truly complete.

thats when many of us might apply for P1 visas outside the paki embassy to go work in peshawar or karachi where opportunities would be better.

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

Postby Vasu » 13 Dec 2011 10:54

Potential corruption case in the making.

Reliance Insurance: Rs 17,500 cr potential fine is finally Rs 20 lakh

Simply put, this is the violation. Reliance sold 3.5 lakh health insurance policies without informing Irda – which is illegal. So when Irda found this out, in an order dated 23 July 2009, it pointed out that it could levy Rs 5 lakh for each policy – but chose not to do so.

The order said: “Under the provisions of section 102(b) of the Insurance Act 1938, the company would be liable for a penalty not exceeding Rs 17,500 crore.”

But, obviously conscious of the fact that a Rs 17,500 crore penalty would sink any company, the regulator whittled it down to Rs 20 lakh, in a “judicious exercise of the powers and the discretion vested in the authority” under section 14 of the Irda Act 1999 read with section 102(b) of the Insurance Act, 1938.”

Firstpost checked to see if similar discretion is exercised in other cases. In another 2009 case, HDFC Ergo was penalised Rs 5 lakh for not fulfilling its rural sector coverage quota by 137 policies. Again the penalty was a maximum of Rs 5 lakh for each instance. But, in this case, instead of a maximum levy of Rs 6.85 crore, Irda used its discretion to levy only Rs 5 lakh on HDFC Ergo.

The wide variance in the use of discretionary power in these two instances – Rs 17,500 crore whittled down to Rs 20 lakh, and Rs 6.85 crore to Rs 5 lakh – suggests that the scope of discretion and its proportionality in connection with the transgression needs to be more transparent.

Irda is chaired by J Hari Narayan, who retired from the Indian Administrative Service in 2008 as Chief Secretary, Andhra Pradesh.

At Rs 20 lakh, the penalty for each violation effectively comes to Rs 5.70 paise when the law provides for a maximum of Rs 5 lakh for each failure, and punishable with fine and imprisonment.

In this case, only a penalty had been imposed, but there was no mention of a fine. Insurance industry sources point out that the fine could have acted as a deterrent for future violations.

But what is an even bigger cause for concern is that Reliance General Insurance could sell 350,000 policies and file monthly returns with Irda about the sales without the latter even realising what was going on. Irda may have eventually fined Reliance, albeit very lightly, but what is also clear is that policyholders’ interest were violated blatantly and with impunity.

According to Irda’s own published figures, during 2009-10, in the list of complaints registered directly by non-life insurers, Reliance General Insurance topped the chart of 24 companies with 65,160 complaints reported out of a total of 1,86,615 complaints.



More details in the story.

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

Postby Arjun » 13 Dec 2011 11:00

vina wrote:Time for these jokers to go. Finally, the DDM and spin doctors are realizing what a truly great PM Narasimha Rao was. The reforms were HIS , not MMS and Chidambaram's. MMS was just a "speech reader" as the finance minister. Rao gave him the political cover and the direction to do that. Contrast that with The Shroud From Turin!

Yes...For the Economic Times, which has lately turned into a pro-INC rag, to run that piece by Bibek Debroy - means that tubelights are finally coming on at the DDM.

I think this whole phenomenon needs more analysis. Also taking into account Salman Khurshid's statement - the genesis of this trouble may very well be as far back as the start of UPA-1. It seems to me Sonia's takeaway from BJP's loss was that the people of India had rejected liberalization and reforms....Favorable global trends sustained a false illusion of complacency for 6 years - but the chickens are now coming home to roost.

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

Postby Aditya_V » 13 Dec 2011 11:06

ArmenT wrote:From Bloomberg:
India overstated exports by $9 billion this year
India’s commerce ministry said it overstated merchandise exports by $9 billion in the eight months through November because of “misclassification and errors” in computing overseas sales.
“Notwithstanding the misclassification, there were errors in double counting and all sorts of things which inflated exports by about $9 billion,” Commerce Secretary Rahul Khullar told reporters in New Delhi yesterday. Overseas sales in the April-to-November period now stands at $192.7 billion, Khullar said.


Wasn't there a discussion earlier that the Higher than expected exported figure was black money coming due to fictitious invoices?

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

Postby Airavat » 13 Dec 2011 12:14

Bumper potato crop effect on the economy
The WB state government on Thursday announced it would offer subsidies for export of potatoes after it failed to find takers for nearly 6 lakh tonne of the crop lying in cold storage units. However, the question that immediately cropped up regarding export was that where could the potatoes be routed and who would buy them from Bengal? According to an official, Sri Lanka buys potatoes from Bangladesh and there is a long-term agreement. But Bangladesh, too, has produced a bumper crop this year.

Cold storages are usually cleared and shut on November 15 for annual maintenance and reopens on February 15. The government is now pleading with the owners to allow them store the potatoes till December 15, but time is running out.

Link

potato growers of Punjab threaten to dump potatoes on the streets of Jalandhar The potato growers have been forced to announce dumping of their produce with the prices hitting an all time low of Re.1 per kg and farmers saying that growing potato costs them at least Rs.5 per kg due to increased farming input costs.

Harmilap Singh, a potato grower, said: “We have no option but to dump our potatoes on Jalandhar streets to wake up this government. How can the government let down farmers?”

However, in a symbolic gesture some farmers have started distributing potatoes free of cost to people. “What is the use of wasting the crop. We are giving it free also,” farmer Baldev Singh said.

link

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

Postby gakakkad » 13 Dec 2011 17:34

The government expenditure in Subsidies and NREGA grows at 20% each year .

We ll spend close to 200b on in in fiscal 12. So if the spending increases @ compounded 20% per annum , by 2022 we cauld spend 200b * Σ (1+0.20)^n where n= number in years . (formula for compound interest A=P(1+R/100)^n .. where n = number of years r = rate . Money wasted till 2022 = sum of it wasted every year starting from 2012.

Image

32 * 200 B = 6.4 TRILLION .

So at the present rate , gov't would splurge 6.4 trillion till 2022 . I have made 2 critical assumptions here. 1) government spending shows a secular (in statistical sense) trend of increase ,by 20% per annum. 2) UPA gets re elected and carrys on splurging.

Note the magnitude of the figure. The total endowment of all American Universities is 327 billion dollars. This figure is 20 times the total worth of all American univs .Imagine the productive areas the money could have been spend.

India could easily build US styled infrastructure. Triple its power generation capability to 600k MW (50% MORE than khanate ) . Build thousands of KM of HSR . etc etc etc. And it could be all done in a decades time.

But instead it will be wasted on subsidies and nrega .

You cannot burn this kind of money and hope that there will be no consequence .

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

Postby vera_k » 13 Dec 2011 21:51

What is the 200b in subsidies composed of? Also, China and USA power generation capacity is about 1.2 million MW in 2012.

There could be uses of the money to build infrastructure, but it is also true that the GoI has underspent on social sectors for a long time (for e.g. education and healthcare). It might be more palatable to simply move the spending around from one social sector to another.

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

Postby abhischekcc » 13 Dec 2011 22:33

Arjun wrote:
vina wrote:Time for these jokers to go. Finally, the DDM and spin doctors are realizing what a truly great PM Narasimha Rao was. The reforms were HIS , not MMS and Chidambaram's. MMS was just a "speech reader" as the finance minister. Rao gave him the political cover and the direction to do that. Contrast that with The Shroud From Turin!

Yes...For the Economic Times, which has lately turned into a pro-INC rag, to run that piece by Bibek Debroy - means that tubelights are finally coming on at the DDM.

I think this whole phenomenon needs more analysis. Also taking into account Salman Khurshid's statement - the genesis of this trouble may very well be as far back as the start of UPA-1. It seems to me Sonia's takeaway from BJP's loss was that the people of India had rejected liberalization and reforms....Favorable global trends sustained a false illusion of complacency for 6 years - but the chickens are now coming home to roost.


Stop thinking that the NREGA was because INC/Sonia thought that India had rejected BJP/economic reforms. NREGA was designed by Sonia's foreign handlers to derail the Indian economy by creating unproductive expenditures.

It has nothing to do with any 'lesson'. Those people were going to implement it regardless of people's voting anyway.

When you have too much money chasing too few goods, you have high inflation. This is what you are seeing in India now. The current inflation and economic mess is made by Sonia Gandhi and promoted by NAC. Those people should be strung up from the nearest lamp-post.

The entire lot of ministers in UPA should be arrested for treason. Where is Jean dreze these days, BTW?

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

Postby gakakkad » 13 Dec 2011 23:19

^ very true . Sadly , India is a country in which electoral results are not linked to economic performance . People often think that UPA was re-elected due to the N-Deal . Truth is way different. Likewise UPA1 came to power due to sickoolar issue's . There was not much difference in vote-share in04 elections.

NREGA is indeed a malicious scheme.

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

Postby Upendra » 13 Dec 2011 23:39

another loony scheme to bankrupt indian economy and wasting precious national wealth. first entice the poor with promise of loans and then when it becomes NPA, right before election waive of the loan to reap electoral benefits.

New fund to guarantee lending for poor: PM
NDTV, 13 Dec 2011 | 01:04 PM

The central government is planning to set up a credit risk guarantee fund with a corpus of Rs 1,000 crore to encourage banks to lend in significant volumes to the economically weaker sections and low income groups.

Prime Minister Manmohan Singh made this announcement while speaking at a national conference on Jawaharlal Nehru National Urban Renewal Mission (JNURM) in New Delhi on Tuesday.

He maintained that the experience of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has been "mixed" since it was launched in December 2005. {meaning failed}

"But we are encouraged by the good work that has been done and also the lessons learnt. Perhaps, the most important achievement of JNNURM is that there is much greater awareness today of the need to plan for urban habitats consistent with aspirations of modern India," he added.

The government had appointed two committees- headed by Arun Maira and Isher Ahluwalia- and is likely to implement some of the recommendations made by them to improve JNNURM.

Referring to Ahluwalia's recommendations, Singh said, "Some of these include introducing a local bodies finance list in the Constitution, empowering the bodies with exclusive taxes and unlocking land value by putting in place a transparent and accountable mechanism of public land." {more taxes - dream of a every tyrant}

He cautioned against having an all encompassing policy. "Our policies cannot have a one-size-fits-all approach towards both big and small cities," Singh said.

He did not announce any further details.

A credit guarantee fund exists for small and micro enterprises. The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was launched by the government to make available collateral-free credit to the micro and small enterprise sector.

The Credit Guarantee scheme (CGS) seeks to reassure the lender that in the event of a default in repayment by the borrower, the Guarantee Trust, set up under such a scheme, would make good the loss incurred by the lender of the credit facility.

As on March 31, 2010, government data shows that 300,105 proposals from micro and small enterprises have been approved for guarantee cover for aggregate credit of Rs.11,550.61 crore.


Interesting character Arun Maira http://planningcommission.nic.in/aboutu ... nmbody.htm
Arun Maira is a Member of the Planning Commission chaired by the Prime Minister of India. In this ministerial level position, he is responsible for facilitating the shaping of policies and programs relating to industrialisation and urbanisation in the country, and tourism.

Arun Maira was Chairman of Save the Children, India, and Chairman of the Axis Bank Foundation. He has served on the boards of several Indian and international management education institutions. He was also on the boards of the Indian Institute of Corporate Affairs, the India Brand Equity Foundation, and the Public Interest Foundation, as well as a trustee of WWF India, the World Food Program India Trust, and Aspen India.

Arun Maira was born in Lahore on 15 August 1943. He received his M.Sc. and B.Sc. in Physics from St Stephen's College, Delhi University.



http://en.wikipedia.org/wiki/Aspen_Institute
The Aspen Institute is an international nonprofit organization founded in 1950 as the Aspen Institute of Humanistic Studies. The organization is dedicated to "fostering enlightened leadership, the appreciation of timeless ideas and values, and open-minded dialogue on contemporary issues."

The Aspen Institute is largely funded by foundations such as the Carnegie Corporation, The Rockefeller Brothers Fund and the Ford Foundation, by seminar fees, and by individual donations.


The India Leadership Initiative (ILI) is a collaborative venture between the Aspen Institute, the Aspen Institute India, and the Global Markets Institute of Goldman Sachs. Like the Henry Crown Program, ILI focuses on young (ages 30–45) entrepreneurial, government, and civil society leaders from across India.


The India Leadership Initiative (ILI) http://www.aspenindia.org/intro_leadership.asp
Introduction
One of the primary programs run by Aspen Institute India is in the realm of leadership development. The India Leadership Initiative (ILI) is a unique leadership building programme which has been running successfully since 2006. Initiated as a joint collaboration between Aspen Institute India and Aspen Institute USA, the ILI was established to meet the need for values-based leadership in India— a need more pressing than ever.

India is entering a “demographic dividend” and is reaping an increasingly young population. Yet, there are concerns that this same scenario could lead to a leadership deficit if this upcoming generation does not have its leadership potential harnessed and nurtured. ILI recognizes that a country can only be as good or as great as the leaders that guide and steer it.


Preparing and implanting manchurian candidates deep within the Indian policy making establishment

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

Postby James B » 14 Dec 2011 00:49

abhischekcc wrote: Where is Jean dreze these days, BTW?


you asked for it


Putting Growth In Its Place

It has to be but a means to development, not an end in itself

JEAN DREZE , AMARTYA SEN

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

Postby gakakkad » 14 Dec 2011 07:35

^^ why don't these people just STFU ? Do they understand that in order to improve the mentioned social indicators , you need growth ? And if that kill growth you are committing a genocide far worse than Hitler did ? And that their crime should be punishable to death ?

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

Postby Singha » 14 Dec 2011 07:54

does anyone have a list of members and bios of the planning commission?

it seems I was mistaken in thinking it would be composed of serving IAS officers within the govt only, if the Arun Maira types are members.

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

Postby Santosh » 14 Dec 2011 08:50

abhischekcc wrote:Stop thinking that the NREGA was because INC/Sonia thought that India had rejected BJP/economic reforms. NREGA was designed by Sonia's foreign handlers to derail the Indian economy by creating unproductive expenditures.

It has nothing to do with any 'lesson'. Those people were going to implement it regardless of people's voting anyway.

I fully agree that NREGA is a drag on the economy and is designed to kill the Indian economy. Till now it's been my understanding that NREGA is a product of Sonia and cohort who want to hang on to power at whatever cost. Can you cite a source for the first bolded part? Just for my info so that I can cite it to others when asked. TIA.

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

Postby Murugan » 14 Dec 2011 11:31

Interview of A M Naik, L&T Chief - Published in ET, 13th Dec 11


Quote:
‘We are Asking for Fair Play, Not Protectionism’

After the dismal factory output data added to the general gloom, ET NOW caught up with L&T boss AM Naik to make sense of the numbers and what they mean for the industry and economy, going forward.

The data for the factory output for October has just come in and the capital goods sector has been the worst hit, a contraction of 25.5%. What do you make of these numbers?

Well, I had expected it because for the past one year I have been saying that the GDP growth will not exceed 7%, and now I’m doubtful whether the GDP growth next year would even be 6%. The reason is that as a capital goods manufacturer, project companies get to know first whether the future looks growth-oriented or not. Because people make investments a year or two ahead of what they need to because project implementation takes time. I have been saying since a year ago that industrial growth is slowing down; GDP is going to slow down and had it not been for agriculture, it would have been worse. And this is bound to happen when the country’s policy has gone beyond even the most advanced countries. If you take a look at all the countries today, because of negative growth in most places, they have become increasingly oriented to local-manufacturing. Take Malaysia, for instance — almost everything in the trade agreement with them provides for importing from Malaysia with zero duty, whereas at the same time we cannot even compete there because it is only for domestic companies. Saudi Arabia, too, gives preference to local manufacturing. In its new policy, the country allows only local companies to bid for projects up to . 5,000 crore. And beyond . 5,000 crore, there will be a global pitch. We have everything now at zero duty. And everything comes from China. I have been very vocal for the past three years on the issue of power plants being imported from China. Today, we have already completed imports for the 12th and 13th five-year plans. You follow such kind of policies when the rest of the world is becoming — I don’t want to use the word protective — more and more conscious of what is being made in their own countries, we are today perhaps the most open country in terms of not economic policies and reforms, but the fact that we have the lowest duty in the world. Even Gulf countries have 12% duty. China has 30% duty. I’m not asking for protectionism, I’m asking for fair play. When you have a currency which is manipulated by China, almost 30% undervalued, no Indian company can compete. So it’s expected.

You mentioned that the capital goods sector is a good barometer of what the future growth will look like. What is your sense of what FY13 will look like for the capital goods sector and the economy?

In FY12-13, it may go down to 6%, and unless there is some drastic action, which I doubt because of the current political situation, things may not look up. If it is not done — and obviously we need 12-18 months lead time before we get into production — FY13-14 could be equally bad. So, I think companies are being forced to look outside India. At one time, we were saying we don’t have enough capacity; two years ago we were looking at 9% growth. Today, there’s idle capacity in most industries.

Theo_Fidel

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

Postby Theo_Fidel » 14 Dec 2011 11:54

Jean Dreze types are on their final death rattle. In 5 years when India's per capita income crosses $7000 PPP and $3000 real, poverty will automatically drop below 20%. These charlatans know this, hence their attempts to focus oin HDI items that they can use to keep India looking poor.

WRT NREGA there were 2 definite phases. When it first began, money was diverted from other defunct welfare programs so it did not actually cause too much inflation and disruption. It is the Phase 2 situation where suddenly the entire rural lower middle class is out there digging holes in the country side that is causing the financially explosion that continues to expand.

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

Postby Vasu » 14 Dec 2011 14:45

good article in Firstpost.com today by R. Jagannathan. Sonia Gandhi's pet Food Security Bill will cost the ex-chequer at least Rs. 1,00,000 Crore and create another level of PDS and differential targeting of beneficiaries.

Food security: Easy to feed poor, but not Gandhi family

The Union cabinet is said to have deferred consideration of the contentious Food Security Bill (FSB) because several senior ministers – Agriculture Minister Sharad Pawar, among them – have questioned its viability.

Just as well. The problem is not that the poor do not deserve food security, but a harebrained scheme is not going to deliver it. The FSB, as currently conceived, is a messy compromise between what Sonia Gandhi’s NGO mob wants and what the government thinks its finances can afford.

Net result: the FSB captures the worst of both worlds. It will neither guarantee food security nor help the government keep its finances in some shape in a year in which the world is going downhill.

In fact, we shouldn’t call it the Food Security Bill, but the Sonia and Rahul Political Insecurity Bill. FSB is meant to secure the political fortunes of Sonia and Rahul Gandhi, never mind the cost. Feeding the poor is only incidental to its aims.

To satisfy the National Advisory Council crowd, the FSB seeks to cover 75 percent of rural households and 50 percent of urban ones. (NAC wanted 100 percent.) To satisfy the budget’s minders, it seeks to create two categories of subsidies – very high subsidies for the ultra poor (“priority households”), and moderate subsidies for the rest (“general households”). The cost of FSB will be Rs 1,00,000 crore in subsidies - and this could be an underestimate.

As Pratap Bhanu Mehta argues in his Indian Express column, “the more a scheme relies on complex targeting, the more likely it is to fail.”

Mehta says that the FSB “creates Orwellian categories like priority households and general category households. And it introduces new forms of differential pricing. In short, it willfully incorporates into its design three features that have made schemes in the past a failure: impractical targeting categories, administrative complexity, and incentives to game.”

The more fundamental objection one should have to the FSB is to ask where it fits into the overall scheme of social safety nets for the poor. Currently, we have scores of them, all of them implemented poorly. The two most important ones are universal – the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGA, for short), and the mid-day meal scheme for school children. Then, of course, we have the current public distribution system (PDS).

The UPA government has thrown caution to the winds and is trying to do too many things without thinking about their implications and implementation. Just look at the initiative overload it has convinced itself about: after NREGA, it has legislated the Right to Education, and now is planning the Food Security Bill and universalising health care. It is also planning to legislate tougher land acquisition and mining bills – both of which will take a huge amount of executive time – not to speak of the National Manufacturing Policy.

Quite clearly, the driving force behind all these initiatives is the political interest of the First Family – not national interest or the interests of the poor.


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

Postby gakakkad » 14 Dec 2011 16:59

Theo_Fidel wrote:Jean Dreze types are on their final death rattle. In 5 years when India's per capita income crosses $7000 PPP and $3000 real, poverty will automatically drop below 20%. These charlatans know this, hence their attempts to focus oin HDI items that they can use to keep India looking poor.

WRT NREGA there were 2 definite phases. When it first began, money was diverted from other defunct welfare programs so it did not actually cause too much inflation and disruption. It is the Phase 2 situation where suddenly the entire rural lower middle class is out there digging holes in the country side that is causing the financially explosion that continues to expand.



Perhaps , that is why they don't want India to reach that level . And are fighting tooth and nail to ensure that the economy collapses.

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

Postby Rahul M » 14 Dec 2011 17:28

Singha wrote:does anyone have a list of members and bios of the planning commission?

it seems I was mistaken in thinking it would be composed of serving IAS officers within the govt only, if the Arun Maira types are members.

http://planningcommission.nic.in/aboutu ... rgbody.htm

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

Postby Supratik » 15 Dec 2011 02:30

It seems Pawar has temporarily halted FSB. It is a hair-brained scheme specially given the economic conditions.
Subsidized food should be targeted only to BPL families.

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

Postby Gus » 15 Dec 2011 05:40

rupee is still sliding. where will it stop?

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

Postby vina » 15 Dec 2011 08:08

rupee is still sliding. where will it stop?

When inflation is under control in India and the Euro panic subsides and the flight to dollar safety stops. I would think around another 3 months or so.

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

Postby Vasu » 15 Dec 2011 11:08

Mods, I think we should have another thread here for Corporate Fraud/Cheating. While we cover the political-business nexus such as 2G, covering corporate fraud in the Economy thread dilutes the serious discussion on economics there. Following corporate fraud in a separate thread will allow focus on it better because its been around for ages and it runs into billions as the people are finding out now. It could also cover the regular day to day political-business nexus.

Meanwhile, another Anil Ambani news...

Did Anil Ambani play overseas investor?

Revelations from an ongoing case against two bankers of UBS in a London tribunal could prove potentially damaging to billionaire industrialist Anil Ambani, chief of the Anil Dhirubhai Ambani Group (ADAG). Mr. Ambani has been named as the ultimate owner of a Mauritius-based investment fund called Pleuri that was set up to invest in Indian stocks. As per law, it is illegal for Indian citizens and companies to invest in Indian shares through foreign institutional investors.

The information emerged during legal tribunal proceedings against Sachin Karpe and another unnamed banker of Swiss bank, UBS. The proceedings were reported by The Financial Times in its edition of Wednesday.

SEBI consent order

In January this year, the Securities and Exchange Board of India (SEBI) had passed a consent order on a case pending against two ADAG companies, Reliance Infrastructure Ltd and Reliance Natural Resources Ltd., along with Mr Anil Ambani and four group executives, Mr. Satish Seth, Mr. S C Gupta, Mr Lalit Jalan and Mr. J. P. Chalasani.

The allegation

The allegation was that the group companies had invested funds raised abroad through external commercial borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) in the Indian market, specifically in the shares of Reliance Communications Ltd., through investment vehicles based abroad.

ADAG reaction

When reached for the company's reaction to the developments, a spokesperson said: “The matter is nearly 5 years old, and has already been closed with Indian regulators under the consent order framework in January 2011.

The matter relates to regulatory action in the UK against former employees of a foreign bank, for unauthorised trades made by them and misuse of a large number of client accounts.

The bank has already accepted the weaknesses in its internal systems and processes, and settled the matter with the U.K. regulators by payment of a fine. There are no charges levelled against us by the UK regulators in these proceedings. As such, we are not party to these proceedings, and not represented therein.”

“All aspects reported by the media today, including the ownership and/or beneficial status of certain entities investing in India, were considered by the Indian regulators, while passing the consent order in January 2011.”


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

Postby Aditya_V » 15 Dec 2011 11:23

Looks like the Indian Economy is in deep shit thanks to last 7 years job done by the JNU Ding Dings running Government Policy. Jean Dreze and the Delhi Cocktail 5 star circuit must be celeberating this news.

Sadly its people like and millions of my citizens who will bear the consequences. Looks like the INC loves Poverty but does not love the poor.

India’s billionaires frustrated, want to shift base overseas


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

Postby KJo » 16 Dec 2011 09:18

Some people going to temples to pray for the Rupee :roll:

http://economictimes.indiatimes.com/new ... 127062.cms

Theo_Fidel

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

Postby Theo_Fidel » 16 Dec 2011 12:07

vina wrote:.... the flight to dollar safety stops.


What! I thought dollah was doomed and being inflated to nothing. Even the Euro has dropped 15% to the Dollah. When the chips are down everyone hold tight to dollah.

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

Postby vina » 16 Dec 2011 12:16

What! I thought dollah was doomed and being inflated to nothing. Even the Euro has dropped 15% to the Dollah. When the chips are down everyone hold tight to dollah.


US is showing strength, labor market is showing gains, no one is even talking about QE3 anymore, so the liquidity fire hose is being gradually turned down , or atleast no new ones are being opened.

The Euros need to do exactly that. So in Euro vs USD, US is going to show growth, Oiero region is dead. ECB needs to start he fire hoses, Fed is shutting it down. So, not rocket science anymore to see which way the Euro vs USD is going to move.

Yes, the corollary there is as the USD strengthens, the Chinese peg is going to draw the real value of the RMB up as well (if they devalue now, they will set of firestorms around the world).

In fact, the USD strengthening and ECB turning on the taps is good for India. With inflation hopefully down, the real effective rate going forward will be stable and with commodity prices falling (oil price specifically), rupee will be fine in the Rs 50 to 52 range, interest rates poised to come down, growth picking up . All this hopefully in the next 3 months.


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

Postby uddu » 16 Dec 2011 18:45

Rahul:“farmers are facing problems as 60 per cent of vegetables go waste… we brought FDI in retail so that they could sell their produce directly”
Now the question is, why is the 60 percent going wasted? Is that not the failure of his own UPA govt? So is he saying that the various programs run by the UPA to improve the infrastructure in villages and connectivity across has failed miserably or is of no use? All the money down the drain?
Now which farming will be there after the FDI in retail takes places.
Will it be this
Image
or this
Image
and which farmer will benefit? This
Image
or this
Image
Seeing the present plight of farmers even without FDI in retail, i can only pray for them if FDI is introduced. No Walmart will go and source farm products from ten thousands of farmers. They will have limited numbers of suppliers who are into corporate farming.

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

Postby James Blonde » 16 Dec 2011 19:33

"What! I thought dollah was doomed and being inflated to nothing. Even the Euro has dropped 15% to the Dollah. When the chips are down everyone hold tight to dollah."

That means

1 Flight of Capital from Euro zone
2 The demand for dollars has increased;
3 The market feels US is sure to enter recession along with EU zone therefore it is difficult to obtain dollars by exports by all sundrie countries
4 It negates the effort of US govt to export itself out of recession.
5 It benefits the Chinese as relative dollar yuan is depreciating and their dollar holding will be more valuable than it were in recent times assuming they really still have a stash of dollars not pledged else where; No wonder Panda is insisting TS paki brothers freshly printed yuans on illegal copies of Hitachi high speed printers.

As far as INR goes it is doomed to reach very soon INR 65 to Dollar
It benefits the exports especially software
Difficult to import

The Indian Banks are as much hollow as the US and EU banks only saving grace is we can print mint quality INR in Canada on imported rag currency paper; easy way out I suggest is buy counterfeit INR from Pakistan they have excess capacity of INR printing presses. Just like stamp paper scam;

The number of NPAs held by Indian banks belonging to successful industrialist is a scam far exceeding the 2G scam; The latest tycoon to loot Indian banks is King Fisher

Every day a New Scam is India Today;

All confirmed by made moiselle Honey Penny my dear secretary

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

Postby Pranay » 17 Dec 2011 04:25

http://news.outlookindia.com/items.aspx?artid=744568

Boy Wonder and his fulminations...

Notwithstanding the move to bring FDI in retail being put on hold in the face of stiff opposition, Rahul Gandhi today asserted the Congress-led UPA government was determined to bring the proposed legislation in Parliament.

Addressing a series of meetings in Uttar Pradesh, he said FDI in retail would be of immense help to farmers who could save their produce from rotting by taking advantage of cold storage chain that will come with FDI and get the right price.

At a meeting in Farrukhabad, which is the largest potato growing district in the country, Gandhi said 60 per cent of vegetables go waste and FDI would provide a chance to the farmers to directly sell their produce.

On the fourth day of his five-day mass contact programme here, Rahul said "farmers are facing problems as 60 per cent of vegetables go waste..We brought FDI in retail so that they could sell their produce directly".

But the opposition stalled the move in Parliament as they are "anti-farmer", he said.

At another meeting in Kannauj, Rahul, Congress general secretary, said while Uttar Pradesh Chief Minister Mayawati and all opposition parties dourly resisted FDI in retail, the UPA government would certainly bring the legislation in Parliament.

Rahul said when he on his way to Kannauj, some farmers showed him how pigs were eating potatoes littered on the road.

"After a year's hard work, farmers have to see this situation", he said adding had FDI in retail been there the farmers would not have seen such "bad days".

The FDI in retail move had to be put on the backburner in the face of a united resistance from opposition parties and a section of UPA.

Rahul said the UPA government wanted to bring FDI in retail so that farmers getting the right price for their produce and save the crops from rotting by making use of cold storage chain and processing plants to be set up by foreign companies.

Rahul said farmers have complained that the the market price of potato is Rs 2 per kilo while the big companies sell the potato chips at Rs 10 per packet.

The Congress MP from Amethi constituency said FDI in retail will benefit farmers and not harm them in the long run.

Rahul said a measure of how big a well wisher of farmers the Mayawati government in UP is can be had from the fact that a vast tract of land stretching from Noida to Gorakhpur has been allotted to private builders.

Those farmers who had opposed this had to suffer, he added.

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

Postby Vasu » 17 Dec 2011 12:04

You repeat a lie long enough and it starts to feel like the truth. How many farmers in this country need the cold storage as much as this country needs better logistics to allow the good to reach the consumer quickly and efficiently? Can only Walmart and Carrefor take care of the decrepit logistics in this country? Will their money build super highways where giant refrigerated trailers will zip up and down the country side while the happy farmer counts his money that he doesn't have to share with the local administration and middleman?

Its called policy and infrastructure, not FDI.

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

Postby Pratyush » 17 Dec 2011 15:37

Vasu Ji,

You can wake up the sleeping, but you cant wake up someone pretending to be asleep. The nation needs to chart its own course, instead of blindly aping the Khans. But the DIE in power are clueless about it.

Why does India want to import a misery called Wal-Mart?

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

Postby Pratyush » 17 Dec 2011 15:49

Heading for grain drain

It seems that not all the development wallas are comfortable with the food bill as intended.

The proposed right to food Bill may have some serious consequences. It aims to provide rice at Rs 3, wheat at Rs 2 and coarse grains at Rs 1 per kg. Each person in the prio-rity households is to be given 7 kg of grains per month. Other households will get grains at higher prices.

Assuming that all 500 million priority persons belonging to 46% of rural and 28% of urban households get 7 kg per month, around 40 million tonnes of foodgrains would be needed. If, on top of this, 300 million persons get 3 kg per month, an additional 10 million tonnes would be needed. Thus, more than 50 million tonnes of grains would be required.

As per the latest minimum support price (MSP) announced (and farmers are demanding higher prices due to increase in costs) the difference between MSP and the proposed sale price would be more than Rs 10 per kg. To this, we have to add Rs 4 to 5 as the cost of procurement, mandi charges and distribution cost, etc at the Food Corporation of India`s (FCI) customary efficiency.

The cost would be around Rs 1,00,000 crore. The costs would increase over time as the issue price is fixed nominally for 10 years. At least the issue price should be stipulated as a per cent of MSP.

If, and that is a big if, FCI can effectively procure foodgrains at the MSP from all over the country, farmers would have the incentive to produce foodgrains. Since at present FCI operates only in a few selected states, farmers in other states often get a price lower than the MSP. Those who were not covered earlier would now get a higher price and would have the incentive to produce more.

If, on the other hand, FCI is not able to expand its operations to cover the country, farmers who grow foodgrains for their own consumption would stop growing the same as it would be more profitable to grow something else and obtain foodgrains at low price from the public distribution system (PDS).

Total foodgrains production can collapse and, to meet the obligation, the government may be forced to import foodgrains, pushing up world prices.

Even when FCI operations were to cover the whole country, the task would be daunting. Currently 75% of rice and 60% of wheat are marketed out of the around 100 million tonnes of rice and 80 million tonnes of wheat produced. Of this, 40 to 45% is procured by FCI amounting to 50-55 million tonnes of rice and wheat on an average over the last three years.

FCI also procures about 1.5 million tonnes of coarse grains out of a production of 30 to 33 million tonnes. With universal procurement, the marketed surplus would increase by 5 to 10 percentage points for wheat and rice. Thus FCI`s procurement of wheat and rice could reach 70 million tonnes.

Also, nearly 90 to 100% of coarse grains would have to be procured as all poor farmers who retain foodgrains for self-consumption will sell them to FCI. So an additional 30 million tonnes of coarse grains would have to be procured by FCI.

It is unlikely that FCI can gear up to this task in less than two years, if at all. The risks of a breakdown of FCI operations and severe local hardships and unrest should not be underestimated. The low price could also divert foodgrains to feed animals. In the Soviet Union, farmers feed bread to animals.

The experience with the targeted PDS shows that it is difficult to identify the poor, nearly half of whom get exclu-ded and, given the power structure in villages and generally in soci-ety, many rich people get inclu-ded. This would suggest a more universal scheme while excluding the clearly identifiable rich.

If the FCI does not cover the whole country with an effective procurement network that ensures MSP to every farmer, the danger of destabilising food production and unsettling the foodgrains trade is a very real one.

If cash is distributed instead of foodgrains, we can rely on markets and do not have to rely on FCI whose operations are more expensive than that of traders. It would eliminate the need for the FCI and even the PDS itself.

For effective cash transfer, the main requirement is that everyone has a UID card and a bank account with the local bank, post office or a banking agent. With concerted effort, it should be possible to do this earlier than FCI can gear up to procure from every farmer. If the expected expenditure of Rs 1,00,000 crore is distributed to women of all households excluding the clearly identifiable top 30% of rich households, each household will get around Rs 6,000 per year.

This would provide two times as much money as the amount of subsidy proposed to be provided through distribution of foodgrains and provide effective food security at low risk.

The writer is chairman, Integrated Research and Action for Development, New Delhi.

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

Postby Kakkaji » 18 Dec 2011 02:23

Pranay wrote:http://news.outlookindia.com/items.aspx?artid=744568

Boy Wonder and his fulminations...


While I strongly support FDI in retail, I find Rahul Baba's arguments disingenuous.

If FDI in retail is so critical to the farmers' well-being, why didn't his government implement it when they first came to office in 2004?

Somehow Congress makes a pitch in every election that they will remove poverty, conveniently forgetting the fact that they have held power for 50 out of 60 years of independence. So why have they not removed poverty yet, instead of promising to remove it in every election?

And the people fall for these promises again and again. :roll:

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

Postby csaurabh » 18 Dec 2011 10:23

^^ This is why Rahul Baba never appears for public debates as he would get torn apart by simple questions like that.

Their electoral logic however is enviable. It appears that after the Anna/scam fiascos congies have entirely given up on city/middle class.
Uneducated villagers however can easily fall for that sort of thing, and they make up a big chunk of the votebank.

Remember Laloo and his famous 'Bihar mein vikaas bekar hai' and 'Jab tak samosa mein rahega aloo tab tak Bihar mein rahega Laloo'.
Laloo is just a pale shadow of the Kangress party , they have perfected the art of winning elections without any merit.
I just hope and pray that some day the electorate will wake up and relegate Kangress to the same backwaters that Laloo is now.

In the book 1984, it is explained why keeping the populace poor is completely logical. North Korea is a good example of that, where people starve and are still indoctrinated to believe that they have the best living standards and their dear leader is God.

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

Postby Singha » 19 Dec 2011 19:50

WSJ

TCS to Build New Software Center in Nagpur

By DHANYA ANN THOPPIL

BANGALORE – Tata Consultancy Services Ltd., India's largest software exporter by sales, Monday said it will make an initial six billion rupees ($113 million) investment to set up a new software development center in Nagpur, Maharashtra state.

The center will be built in two phases and will house 16,000 employees, the company said.

The first phase will house 8,200 people for information technology and business process outsourcing services, it added.

The technology major's expansion plans come at a time when analysts and investors are worried about a potential slowdown in demand for outsourcing services, as major markets -- the U.S. and Europe -- grapple with slow growth, high unemployment and a debt crisis.


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