Indian Economy - News & Discussion 27 May 2012

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

Post by amit »

Theo_Fidel wrote:Yes I have seen those povertywallah statements and personally I'm skeptical on the math. The population has less than doubled from 680 Million in 1979 to 1,170 million 2011. In the same time Wheat production has gone from 34 million tons to 92 million tons. This is a 2.8 times increase. Rice production has gone from 41 million to 104 million a 2.6 times increase. Both these figures tell me that per capita grain availability has increased.

What ever the povertywallahs are seeing, it is a statistically manufactured item. No doubt if you torture the numbers long enough you can make them say what you want.

In terms of nutrition at least here in S.TN food availability has increased quite dramatically. Very few starve on the streets as they used too. While mal-nutition is slow in coming down, it is coming down and is dramatically lower than 1970's. The treatment of women and women s health is light years better. Due to this physical stature is slowly returning to the World/European norm. In terms of stature Indians follow the European profile and not the SE Asian one.
Theo,

Spot on.

Also I noticed, on closer reading of that the operative para of this hack job:
More than three- quarters of the 1.2 billion population eat less than minimum targets set by the government, up from about two-thirds, or 472 million people, in 1983. India’s failure to feed its people came as the economy accelerated, with gross domestic product per capita almost doubling in the past decade.
Has no source to back the data up. I'd certainly like to have a look at the data, particularly where the two-thirds and three-quarters came from.

Rest of the data came from the 2005 survey, it's now 7 years since that survey and the Indian GDP has almost doubled during that period. The writers cleverly do not take that into account. Why does India produce such hacks and unfortunately they always have JNU "egg-spurt" on hand.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Aditya_V »

IF early death is assured as claimed in the Article life expectancy in India should be 40 as this has been happening for years, India's population should have never crossed 500 million and should have kept dropping.

For some people the world is flat.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by vera_k »

One of the points the article makes is that migrating from the countryside to an urban area, causes malnourishment by causing a decrease in availability of food.

Do the Chinese have the right idea in their Hukou system? India can use some permitting system to tackle the growing malnourishment problem. Should be straightforward to implement once enough people have the Aadhar number.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by wrdos »

"Hukou" in China is a bad tradition and institution that systematically discriminating the countryside immigration. It is true and I totally agree that China needs to abolish it.

However, "Hukou" has near 0 power to resist the countryside immigration. A Chinese peasant can move to any Chinese cities, to find a settlement, a job, and a public school for their children. The difference is the welfare only.

And the fact is, during the past 30 years, Chinese urban population has increased from 200 million to 670 million, a more than 3 times increase and by any means the fastest urbanization in the world history. However we do not have malnourishment problem and almost no slum problem.
vera_k wrote:One of the points the article makes is that migrating from the countryside to an urban area, causes malnourishment by causing a decrease in availability of food.

Do the Chinese have the right idea in their Hukou system? India can use some permitting system to tackle the growing malnourishment problem. Should be straightforward to implement once enough people have the Aadhar number.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Aditya_V »

Err Wrdos, just one of many websites says you, my relatives while visting China have been to slums in Shanghai and Beijing, Indian slums are bad but like in Chinese slums is not great either.

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

Post by Singha »

a relative visited china a few times recently. wherever such unsightly areas are there they usually put a tall wall to mask it from passing vehicles. due to colder temp its not really visible to sleep in open there, which is why underground basements or under construction but abandoned buildings would likely server better.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by wong »

amit wrote:
Has no source to back the data up. I'd certainly like to have a look at the data, particularly where the two-thirds and three-quarters came from.
The source is most likely the 2009-2010 economic from your ministry of finance. Mr. Venkatesan thinks its 800 million, not 900 million.

"Other important gauges of national well-being paint a more troubling picture. "What has globalization and industrialization done for India?" asks Mr. Venkatesan, Microsoft's former India chairman. "About 400 million people have seen benefits, and 800 million haven't."

Calorie consumption by the bottom 50% of the population has been declining since 1987, according to the 2009-10 economic survey conducted by India's Ministry of Finance, even as those at the top of society struggle with rising obesity. Mainly because of malnutrition, around 46% of children younger than 3 years old are too small for their age, according to UNICEF."

http://online.wsj.com/article/SB1000142 ... 82006.html
Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Post by Theo_Fidel »

All. What kind of garbage is this. These are the very people abandoned to frolic in the fields booka/nanga by the rural wonderland super-patriotic types over the past 80 years. These people have not benefited from an industrializing economy because they have not been invested in to benefit from an industrializing economy. They have zero education, zero skills, zero resources and zero investment in their lives. Unfortunately the only hope lies with their children with whom we can hopefully break this cycle. Honestly one would think the vast majority of government planners have never been to a rural area. I think of the local bai amma who works on my fields and the thought of getting her to benefit from a industrializing economy is laughable. I can't even get her to use the goddam latrine and I pay her daily wages. Mr Vekatasan can go stuff it, sometimes these guys deserve the abuse they get. How the hell is this the fault of industrialization.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Suraj »

800-900 million people allegedly cannot afford food, but 600 million+ unique people (out of 900 million+ total) have and actively use cellphones ? What do these people talk about then ? "Yes, yes, I know I haven't eaten anything since yesterday, but I got this fancy new cellphone" ?

Sorry, these 'boor Indians are starving onlee. Reforms have not done anything for 80% onlee. India not shining onlee' articles don't pass the smell test. Too many entities still depend upon painting a negative picture to gain developmental funding by various means.
Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Post by Theo_Fidel »

Meanwhile it looks like we are headed for a hard deficit monsoon. :( It has rained 2 cm in KKM district in a time we normally get 60 cm. Hope the chattering class keeps this in mind while buying the latest Gucci bag.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by nachiket »

Theo_Fidel wrote:Meanwhile it looks like we are headed for a hard deficit monsoon. :( It has rained 2 cm in KKM district in a time we normally get 60 cm. Hope the chattering class keeps this in mind while buying the latest Gucci bag.
Couldn't have come at a worse time, with the economy already in the toilet. The monsoon has been pretty stable for the last few years (even providing too much rain in some places). So this was going to happen sooner or later.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by amit »

nachiket wrote:
Theo_Fidel wrote:Meanwhile it looks like we are headed for a hard deficit monsoon. :( It has rained 2 cm in KKM district in a time we normally get 60 cm. Hope the chattering class keeps this in mind while buying the latest Gucci bag.
Couldn't have come at a worse time, with the economy already in the toilet. The monsoon has been pretty stable for the last few years (even providing too much rain in some places). So this was going to happen sooner or later.

Actually this may be a blessing in disguise. What is needed is a hard jhapad on the politicos in Naya Dilli to get them off their asses to do something constructive with the economy. As destructive as it may sound a dip in GDP growth below 4 per cent may be just what the doctor ordered.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by amit »

wong wrote:The source is most likely the 2009-2010 economic from your ministry of finance. Mr. Venkatesan thinks its 800 million, not 900 million.
No shit Sherlock! You're so perceptive Wong.

If you haven't read the economic survey then don't try to wisecrack about what's in it or not.

As regards what sh1t heads like Venkatesan says, don't put too much importance to it, we Indians don't. I know it's a bit of cognitive dissonance for the Chinese to see folks like Venkatesan, and one of the world's richest men like Azim Premji openly criticising the government. I mean if they had been Chinese then we all know what kind of treatment these "dissidents" would have received. However, what to do we poor In'juns are like that onlee, we say what we feel.

As regards the numbers, like Suraj said, it does not pass the smell test. 600 million cellphone owners in a country with 800 million out of 1.1 billion in dire poverty, come on even you can't seriously believe that can you?

If you are really interested in looking into this further you could have a look at this paper by Angus Deaton (Princeton University) and Jean Drèze (Allahabad University). Have no fear Drèze is well known as a pinko leftist, so should by just up your street.

Here's the abstract, should give some food for thought
In spite of India’s rapid economic growth, there has been a sustained decline in per capita
calorie consumption during the last twenty-five years. While the decline has been largest
among better-off households, it has taken place throughout the range of household per
capita total expenditure. For both adults and children, anthropometric indicators of
nutritional status in India are among the worst in the world. While these indicators have
shown improvement over time, the rate of progress is slow relative to what might be
expected based on international and historical experience.

This paper presents the basic facts about growth, poverty and nutrition in India, it points to a number of puzzles, and it
sketches a preliminary story that is consistent with the evidence. The reduction in calorie
consumption cannot be attributed to declining real incomes, nor to any increase in the
relative price of food.

Our leading hypothesis, on which much work remains to be done, is that, as real incomes and wages have increased, leading to some nutritional improvement, there has been an offsetting reduction in calorie requirements due to declining
levels of physical activity and possibly also to various improvements in the health
environment.


If correct, this analysis does not imply that Indians are currently adequately
nourished; nothing could be further from the truth. Calorie intake has serious limitations
as a nutritional intake; while calories are extremely important, there are too many sources
of variation in calorie requirements for standard, invariant, calorie-norms to be usefully
applied to large sections of the population. We conclude with a plea for better, and more
regular, monitoring of nutritional status in India.
Some more information:
Three, it would be difficult to attribute the decline in calorie consumption to declining percapita incomes, or to changes in relative prices. Indeed, the evidence points to rising per-capita
incomes (especially--but not exclusively--among the better-off), with little change in the price of
food - or calories – relative to other commodities. Thus, the main point is that calorie
consumption is lower today at a given level of per-capita household expenditure, and this applies
across the expenditure scale, at low levels of per capita expenditure as well as high.
In other
words, the decline in calorie consumption in rural areas is associated with a steady downward
drift of calorie Engel curves, the plots of per capita calorie consumption against per capita total
expenditure.
Four, one possible explanation for this drift is that calorie requirements have declined, due to
better health as well as to lower activity levels.
There are fragments of evidence to support this
hypothesis, such as major expansions in the availability of safe water, vaccination rates, transport
facilities, and the ownership of various effort-saving durables. Given that calorie requirements
rise sharply with activity levels, fairly moderate reductions in activity levels (reductions that
appear to be well within the realm of plausibility) would go a long way to explain the 10 per cent
reduction in average calorie intake since 1983.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by wong »

^^^^

Dig deeper Watson!

blah, blah, blah. Not my problem, so I'll pass.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by amit »

OK here is the source material:

NUTRITIONAL INTAKE IN INDIA
2004-2005


Some of the highlights which are significant:
™ * The consumer expenditure survey shows that the percentage share of food
expenditure in total expenditure by Indian population was 55.0% in the rural areas
and 42.5% in the urban areas. Relative to the comparable survey results for 1993-
94, the share of food expenditure has dropped by 8.2 and 12.2 percentage points
in rural and urban areas respectively.


{This implies that as disposable incomes have gone up the percentage sent on food has gone down, shows that folks are better off and if they spend less - in percentage terms - on food its a self-made choice. This is not exactly a scenario of a starving population, na?}

™ * At all India level the number of meals eaten at home by household members had
decreased by 0.57% in the rural areas between 1993-94 and 2004-05. In urban
India popularity of home kitchen had declined by 1.66% over last ten years.


{This means people are eating out more often, again a sign of prosperity. But I wonder does the nutritional value of eating out get captured in the survey? I mean in my own family's case if we just go by the amount of food we buy everymonth we'd probably fall below the nutritional level, we eat out very often because both of us work and there's hardly time to cook at home.}

™ * Average daily intake of calories by rural population has dropped by 106 kcal (4.9
percent) from 2153 kcal to 2047 Kcal from 1993-94 to 2004-05 and by 51 Kcal
(2.5 percent) from 2071 to 2020 Kcal in the urban area.

*™ Population reporting a calorie intake level of “less than 100%” of the norm of
2700 kcal, formed 66 percent of the total in rural areas and 70 percent of the total
in urban areas.

*™ Average daily intake of protein by the Indian population has decrease from 60.2
to 57 grams in the rural area between 1993-94 and 2004-05 and remain stable
around 57 grams in the urban area during the same period.

A significant rise in per capita daily average intake of fat is observed during the
decades (1993-94 to2004-05) in both rural and urban areas. It has increased from
31.4 gms. to 35.5 gms. (13.1 percent) in rural areas and from 42 gms. to 47.5 gms.
(13 percent) in urban areas.
amit
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Re: Indian Economy - News & Discussion 27 May 2012

Post by amit »

wong wrote:^^^^

Dig deeper Watson!

blah, blah, blah. Not my problem, so I'll pass.
:D

If it's not your problem take your wisecracks elsewhere. Don't comment on something you don't understand.

Cheers!

PS: You'll notice that we don't push anything under the carpet, we are open about stuff and discuss, comment and write about it without having to look back over our shoulders.
Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Post by Theo_Fidel »

I was talking my uncle who work as the collector in this area for a long time and he is of the view that wastage has declined dramatically. He says it was not unusually to lose 50% of a harvest to fungus, rot and rodents all the way to the mid 1990's. Now all the grain is stored on concrete pads and high quality (nylon/polyethylene not canvas or rubberized fabric) tarps and regular fumigation and animal control is used. It is not perfect but it is light years better than before. At least here in S.TN he is of the view godowns are inspected every week and wastage is now in the low single digits.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Singha »

a good metric would be sampling the density and size/shape of the rodent population around the grain storages. if they are thin and sdre means we are doing good. if they are http://imageshack.us/photo/my-images/45/1h5ffkjs8.png/ we do have some "challenges" as a manager would say.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Suraj »

More on the monsoons:
23% monsoon shortfall for June upto 26th
“Around June 15, the deficiency was about 42 per cent. Now it has come down to 23 per cent. So things can improve further. July is going to be absolutely crucial. That is when the paddy-sowing will take place. That requires at least five inches of standing water. If it rains well in July—and the prediction says it would be almost normal—we should not have much problem as far as sowing is concerned,” (Dr M Mahapatra of the Indian Meteorological Department) said.
Theo_Fidel

Re: Indian Economy - News & Discussion 27 May 2012

Post by Theo_Fidel »

Suraj,

I don't know what these guys are smoking but on the ground it is already big time failed monsoon. Esp. in the South. Around here you need at least 20 cm of rainfall for the nurseries to set and to prepare the soil for tilling. 2 cm ain't gonna cut it. I have heard North Keral got some rain but the interior palakkad area got almost no rain. TN has got almost no rain. July no July the crops are going to come in short big time this year. All the reservoirs are empty as well so no no second crop as well.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by sum »

Bluru has got zilch rainfall ( some areas received a few showers now and then) but ZERO rainfall in our area since May
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Re: Indian Economy - News & Discussion 27 May 2012

Post by krishnan »

Chennai hasnt received decent railfall in more than 5-6 years...last good one was in 2006...
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Singha »

in 2005 also chennai got some heavy showers..i recall the weak dry trees by the roadside all broken down.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by habal »

this year it's going to be a massive load-shedding year, since most of the southern reservoirs have only storage worth 18-20 days generation.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Pranay »

http://www.bbc.co.uk/news/business-18605454
Coca-Cola has said that, together with its bottling partners, it will invest $5bn (£3.2bn) in India in a bid to increase its market share.

The investment, which will be spread over eight years, is $3bn more than it had previously announced.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Bade »

http://www.imd.gov.in/section/nhac/dyna ... lish_2.pdf
This year (2012), the first stage forecast for the nation-wide season rainfall was
issued on 26th April. The summary of the first stage forecast given below.
(a) Southwest monsoon seasonal rainfall for the country as a whole is most likely
to be Normal (96-104% of Long Period Average (LPA)) with the probability of 47%. The
probability (24%) of season rainfall to be below normal (90-96% of LPA) is also higher
than its climatological value. However, the probability of season rainfall to be deficient
(below 90% of LPA) or excess (above 110% of LPA) is relatively low (less than 10%).
(b) Quantitatively, monsoon season rainfall is likely to be 99% of the LPA with a
model error of ± 5%. The LPA of the season rainfall over the country as a whole for the
period 1951-2000 is 89 cm.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by krisna »

MMS ever a courtier never the king
India’s much vaunted economic growth has slowed down to 5.3%. Its current account deficit has been pushed to the highest level ever. Manmohan Singh, India’s Prime Minister, has increased subsidies, failed to formulate any reforms and continued to borrow merrily with no qualms or concerns.
The myth is that Manmohan unleashed India’s economic growth after reforms in 1991. The reality is that India faced a balance of payments crisis in 1991. The government had to pledge 20 tons of gold to Union Bank of Switzerland and 47 tons to Bank of England as part of a bailout deal with the International Monetary Fund (IMF). Manmohan had hitherto been a left leaning economist and a loyal servant of his socialist Congress bosses. So far, he had not even argued for market oriented reforms. By 1991, the Soviet Union was stumbling and the attempted August coup led to its end by the end of that year. Unable to rely on the superpower with which it had allied itself for decades, India had no choice but to implement some reforms proposed by the IMF. Manmohan inadvertently became a hero and the English media trumpeted his credentials as a savior of the Indian economy and thrust greatness upon him.

In 2004, Manmohan became de jure Prime Minister. India witnessed near double-digit growth rates until 2008. This growth was a result of the reforms initiated by the Vajpayee government but again Manmohan got the credit for something he did not quite deserve. The fact of the matter is that Manmohan got away with a lifetime of failed economic policies because of sheer luck. He was in the right place at the right time and, in a country with half-literate politicians, became a repository of the hopes of a people yearning for something better.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Theo_Fidel »

Looks like a drought year. :( I have never seen so much deficit....

http://www.thehindu.com/news/states/kar ... 577688.ece
The State has received 90.1 mm of rain against the normal rainfall of 151.9 mm from June 1 to 24. Bangalore Urban district received only 11.2 mm of rainfall against the normal 62.8 mm.

The rainfall deficit is 68 per cent in south interior Karnataka, 52 per cent in north interior Karnataka, 40 per cent in the Malnad region and 27 per cent in the coastal districts, according to V.S. Prakash, Director, Karnataka State Natural Disaster Monitoring Centre (KSNDMC).

The acreage of all kharif crops has declined owing to deficient rainfall. Only 7.79 lakh hectares has been sown against the targeted 74.77 lakh hectares. In 2011, as on June 24, the coverage was 18 lakh hectares, Agriculture Department officials told The Hindu.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by krisna »

Pranab says not all my decisions right
In the backdrop of sharp criticism from some quarters over his performance as finance minister, Mukherjee said, “Not every decision I have taken might have been right. But I took them keeping in view the interest of the people whose faces appeared before me more than often.
whose faces-- 2G NAC MMS etc scr*wing aam aadmi in the process. :((
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Re: Indian Economy - News & Discussion 27 May 2012

Post by vijayk »

krisna wrote:Pranab says not all my decisions right
In the backdrop of sharp criticism from some quarters over his performance as finance minister, Mukherjee said, “Not every decision I have taken might have been right. But I took them keeping in view the interest of the people whose faces appeared before me more than often.
whose faces-- 2G NAC MMS etc scr*wing aam aadmi in the process. :((
So he admits that his decisions are not in the interests of India or for Indians... :lol
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Yayavar »

krisna wrote:MMS ever a courtier never the king
India’s much vaunted economic growth has slowed down to 5.3%. Its current account deficit has been pushed to the highest level ever. Manmohan Singh, India’s Prime Minister, has increased subsidies, failed to formulate any reforms and continued to borrow merrily with no qualms or concerns.
The myth is that Manmohan unleashed India’s economic growth after reforms in 1991. The reality is that India faced a balance of payments crisis in 1991. The government had to pledge 20 tons of gold to Union Bank of Switzerland and 47 tons to Bank of England as part of a bailout deal with the International Monetary Fund (IMF). Manmohan had hitherto been a left leaning economist and a loyal servant of his socialist Congress bosses. So far, he had not even argued for market oriented reforms. By 1991, the Soviet Union was stumbling and the attempted August coup led to its end by the end of that year. Unable to rely on the superpower with which it had allied itself for decades, India had no choice but to implement some reforms proposed by the IMF. Manmohan inadvertently became a hero and the English media trumpeted his credentials as a savior of the Indian economy and thrust greatness upon him.

In 2004, Manmohan became de jure Prime Minister. India witnessed near double-digit growth rates until 2008. This growth was a result of the reforms initiated by the Vajpayee government but again Manmohan got the credit for something he did not quite deserve. The fact of the matter is that Manmohan got away with a lifetime of failed economic policies because of sheer luck. He was in the right place at the right time and, in a country with half-literate politicians, became a repository of the hopes of a people yearning for something better.
Many have said it over time but now it will be said more often. As I've noted before even Chandrasekhar govt had started taking the right steps. It was that short-lived govt which had pledged the gold.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by krisna »

Image
Image
The prime minister should explain to the people of the nation as to why only the Indian rupee is depreciating while the currencies of the neighbouring countries are not facing such a challenge." NaMo at the Gujarat BJP executive in Rajkot on June 8
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Arjun »

Good article...This section in particular is insightful:
The media, especially the English language media, has long been partial to the Nehru dynasty. Key figures in the English media are often descendants of the powerful who benefited from the patronage of the government and are dynasts themselves. They therefore see dynasties as the natural order of society and are overtly or covertly loyal to the Nehru dynasty.
Economic mismanagement is, quite frankly, not the core issue... It's always been the symptom of a deeper malaise in Indian politics / society.

Unless the deeply feudal mindset of a vast cross-section of Indian society - those who don't see a problem with dynastic parties like INC/SP/DMK, changes don't see much hope for the future of the country.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by sum »

“Not every decision I have taken might have been right. But I took them keeping in view the interest of the people whose faces appeared before me more than often.”
WTF is this supposed to mean?
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Yayavar »

^^Nepal??

Would not have considered Thailand, Singapore as neighbours.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by member_23626 »

^^ how about chipak it serves their interest well
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Prem »

Will India Implement The First "Executive Order 6102" Of The 21st Century?
Something strange has been happening in India in the last year: while the rest of the "developed" world has been doing all in its power to crush its currency in order to promote exports within a globalist mercantilist system suddenly gone haywire, India has had the opposite problem: with its economy slowing down even as rampant inflation persists, its currency has been sliding against all other currencies. But probably more importantly: plunging against gold, as can be seen on the chart enclosedIt appears that finally after months of "being long of Gold in Indian Rupee terms" having proven to be quite a resilient and profitable strategy, the Indian state has also figured it out. And they are unhappy. Because to them, the key reason for the rupee weakness has nothing to do with the actual economy, and all to do with the Indian population trying to protect against currency debasement coupled with inflation: i.e., purchasing gold. And they will no longer allow it.The Reserve Bank of India (RBI) is likely to clamp down on gold coin sales by banks, amid rising bullion imports adding pressure to the current account deficit and weakening the rupee.The Banking Regulation Act does not allow banks to trade in commodities and they play the role of a financial intermediary. This norm was relaxed in the pre-2008 era when the country saw a dollar influx that resulted in a sharp appreciation of the rupee. To sterilise dollar inflows, banks were allowed to sell gold, as they imported the yellow metal. The measure was temporary.Banks were allowed to sell gold by importing it to fight the excess dollar flows. By the same logic, the measure should be reversed now as we are at the opposite end of the spectrum. It was a temporary measure, which unfortunately was made permanent by banks,” a top RBI official said.
The rupee has depreciated 30 per cent since August amid the sovereign debt crisis in the euro zone, which made investors flee to safer havens. Weakening macroeconomic fundamentals like the fiscal and the current account deficit have resulted in investors pulling out from the Indian market.
http://www.zerohedge.com/news/will-indi ... st-century
Prem
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Prem »

http://online.wsj.com/article/SB1000142 ... 63506.html
NEW DELHI -- A top-level Indian government panel has recommended an overhaul of the nation's diesel subsidy system, which could partially free up the price of the fuel and address a major worry about India's economic future.Currently, the price of diesel is fixed -- at 41.29 rupees a liter in New Delhi, for example -- and subsidies are paid out as needed to maintain that fixed cost, regardless of the international crude price.
The recommendations, contained in a document titled "Position Paper on Policy Options for Diesel Pricing" and reviewed by Dow Jones Newswires, have been sent to the prime minister's office and other ministries.A senior official in the Prime Minister's Office said he wasn't aware of the paper. But a finance ministry official said it will be put up on a government website soon for public consultation.In order to mitigate the impact of fluctuating prices for consumers, the panel also recommends setting a maximum retail price for diesel and limiting the price movement to one rupee every two weeks or once a month.There is no guarantee that the recommendations will be adopted. Even if the government backs them, they could face significant political opposition from within the ranks of the ruling coalition because a higher price of diesel -- which powers farm vehicles, trucks and trains -- is viewed as having a direct impact on the poor and as stoking inflation.Still, the paper is significant as it presents to the government options for addressing one of the major drags on its finances and on the country's economic outlook. The government is now aiming to limit subsidies to 2% of gross domestic product.Under the current system, state-run fuel retailers are losing 10.20 rupees ($0.18) on every liter of diesel sold, for which they are partly compensated by the government. This contributes to India's gaping fiscal deficit -- a major reason given by ratings agencies Fitch Ratings and Standard & Poor's for their recent downgrades of the outlook on India's sovereign debt.India's fiscal deficit widened to 5.75% of gross domestic product in the year ended March 31, while its economic growth slowed to 5.3% in the January to March quarter of this year.The government hasn't been able to raise diesel prices since June 2011 and it has faced severe criticism from foreign investors and domestic businesses over its inability to rein in subsidies.
In a move which might ease political opposition somewhat, the panel also recommended that the government do away with customs and excise taxes on diesel
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Re: Indian Economy - News & Discussion 27 May 2012

Post by vera_k »

Put service tax on NRI remittances on hold:Tharoor
"The imposition of the service tax will adversely affect millions of Keralities, especially those working in low-paid jobs in the Gulf region. This tax of Rs.1,236 for every Rs.10,000 sent home will be an unbearable burden on these ordinary people... and their dependent families at home," he said.
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Re: Indian Economy - News & Discussion 27 May 2012

Post by Dileep »

WTF is Mr. Twitter smoking? I would have expected him to know better!!

The service tax is on the transfer fees, not on the transfer amount. Did he do lobotomy to "fit in with the politician role"?
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