Indian Economy - News & Discussion 27 May 2012

Singha · Post by **Singha** » 20 Nov 2012 06:49

some such outfits are in connaught place as well! they sell nothing, do nothing but squat on the huge premises rented in the pre-independence era.

I believe even in some areas of south kolkata like lake gardens, there are many such homes and apartments which were leased for 50-100 yrs at Re1 and the tenants cannot be outed. neither they take care of the upkeep as they are relatively poor, and have no interest in repairs so long as it doesnt collapse on their heads.

vintage India.

vina · Post by **vina** » 20 Nov 2012 09:43

There are people who have rented shops in Karol Bagh area of New Delhi for the last 40 years. They're paying a pittance, if at all anything, for rent.

Same story with NYC. If you are living in a rent "stabilized" apt, you have it made. You can in a 1500 sqft pre war in Upper West Side facing the river for a ridiculously low rent. This is part of the reason why NYC's rents are sky high for everyone except the old old timers.

Exact same story with the Socialist Paradise of Berkeley. Anyone who has been there and hung around the UC. Berkeley area would testify to the decrepit run down buildings precisely because of rent control.

Bangalore had rent control in the late 70s/early 80s. Grandpa was forced to sell the outhouse on our property he had let out to a tenant to (that must be worth a crore atleast today), because he refused to vacate and threatened to go to court! So much for Socialism.

Sri · Post by **Sri** » 20 Nov 2012 11:26

^^^ We had the same problem in Delhi.

Good for my grand dad, that my dad was in Army. I don't know about now but back then properties owned and necessitated for a serving Armed forces personal and his immediate family (read wife, kids and parents) then the tenant had no option but to vacate. My grand dad had 3 floor and one of them was rented out to a refugee family which refused to budge. If I remember correctly my uncle moved out and the whole property was transferred to my dad's name. It still took 3 years to vacate them.

Suketu Mehta writes beautifully about rent control in Mumbai in Maximum city. There is a whole chapter dedicated to it. Also in chapter about Mumbai Police he says that 70% of time of a SP goes into resolving disputes coming out of rent control issues. Only 1 hour is spent on informers and other gang related issues.

Dileep · Post by **Dileep** » 20 Nov 2012 11:43

Rent control is there in every city and town. Even in downtown DMA.

My SHQ was born and brought up in a small house right at mile 0 of DMA, and I know a number of shabby buildings there that collect pittance as rent. There are lots of pressure tactics, like letting a tree fall on the building.

A friend was running a small shop in the corner there, and they refused to budge. Finally, a scaffolding fell on the building, and that is when they moved.

Yogi_G · Post by **Yogi_G** » 20 Nov 2012 16:44

Dileep wrote:There are lots of pressure tactics, like letting a tree fall on the building.

Finally, a scaffolding fell on the building, and that is when they moved.

krisna · Post by **krisna** » 21 Nov 2012 04:22

It’s a deal

Barter can solve many problems in an uncertain economy

Modern barter is not restricted by geographical boundaries and most barter companies service clientele from across the country. “A bulk of the business is for hotels, conference venues, schemes and promotions for products, which require bulk booking in print and electronic media. Even pharma and consumer goods companies get in touch from far-off locations to facilitate barter,” said Bhatnagar.
One of the pioneers in the business, Bhatnagar started bartering ad space for UTV against outdoor media services and other goods. His firm, Network 4 Barter, now has an annual turnover of 020 crore. “We earn from a transaction fee of about 10 per cent that we charge from both the bartering parties. Our business turnover has been growing at 30 to 35 per cent in the last two years,” he said.
Network 4 Barter is mostly an offline company. The company has started facilitating one-to-many barter, in addition to the conventional one-to-one. “Often goods on offer are above the requirement of what one barter partner needs. In such cases we acquire the excess goods to facilitate one-to-many barter,” said Bhatnagar.
Barter, at times, is a lifeline for many companies. According to Mumbai-based Global Barters, salvaging  value and solving issues of inventory liquidation before they perish is what has kept them going in the last two years. “Anything which is  perishable, say pharma products, tomatoes, services, software [because of newer versions], print and even media subscriptions, have been dealt with by us. The trends in the business are strongly bullish since when we started,” said Vineet Rastogi,  managing director, Global Barters.
Economists say barter is a healthy trend as it could be used as an effective tool against inflation. “In Europe more and more local economies are adopting barter. Barter is not bad for any economy. Especially today when its earlier limitations are almost non-existent,” said Amitayu Sengupta, an economist at Economic Research Foundation, a Delhi-based think tank.

How barter deals work
* The first step is figuring out what do you want to get rid of and what you want in return. It could also be what you need to preserve (say cash) and what you need to get done (services, promotions). He who wants to barter usually knows what is best for him—an Ethiopian proverb.
* Next is to find a barter agency or exchange, which can set you up with interested parties. Most barter exchanges have an online presence, though only a few allow online transactions.
* Signing up with a barter service provider is easy and usually free of cost, but may involve a charge if you want to maintain a credit line in your deals. Service providers may insist on a background check or ask for bank details.
* Once a deal is finalised, there will be some paperwork. Though barter is a cashless transaction, payables like service tax, excise duties and octroi are to be considered when evaluating the cost of goods being exchanged.
* A transaction fee, 5 to 10 per cent, is payable by cash or cheque to the deal facilitator. This is the only cash transaction involved in modern barter deals.

age old solution to new world.

krisna · Post by **krisna** » 21 Nov 2012 04:36

RajeshA wrote:
If and when the pride (self respect , self esteem) in individuals is established, empowered they will never feel inferior because of the job they do.
there is nothing wrong in being the best diamond polisher (ask Neil Diamond), but their aspiration of wanting their progney to prosper is a very noble and deserving ambition.

In the western countries the children of a artisan , blue collar worker, carpenter, baker, welder builder want to preserve the skills out of pride as as artist.
unfortunately in INDIA this trait is encouraged only in politicians like Gandhis, Chidambarams Karuna nidhis Gulam SIngh yadavs etc or movie actors....

this is the reason west is technologically advanced as their invention crucible spans from reasearch labs to garrages. our ways are only for privilaged few.

So let not artistic talents vanish
we already lost the skills of investment casting and metallurgy when the British rampages us.
I concur very much with the above sentiment.

One thing we should also strive for is to distinguish between the value of a skill and the value of employment in the field! For some skills today, one may not earn much, but the skill needs to be handed down, both from father to child, but more generally from one generation to the next, and the skill should be nurtured not simply because of reasons of employment, but for reasons of culture and family tradition.

One thing I have noticed in the West, every skill is considered worth preserving. If one goes to the Middle Ages Festivals in Germany, one still sees some people trying to make utensils and clothes the old way. Handicrafts made by hand still fetch premium prices. People are proud of their Home Improvement indulgences. In India many simply like to outsource all this work to the manual labor, considering it often beneath themselves. We don't even make kites now by ourselves!

IMHO one of the prerequisties for preserving age old traditions etc in when one has enough to feed oneself and his family. many of the europeans doing the above have enough to feed themselves -- food clothing and shelter always takes predominance over the rest.
If the skill of manufacturing kites or baskets etc do not fetch enough money- then the skill is lost particularly in India due to precisley roti kapda and makaan issue.

When India has enough to feed its people, then kites, baskets etc will naturally become hobbies and very well preserved. no doubts.

R&D comes about when the conditions are present to foster its growth.
1) culture of the people---our civilisation has and will not hamper science since time immemorial. europe exploded after church was scr*wed. ROPers are still scr*wing middle east.
2) roti kapda makaan conditon improves significantly.

We have our own history which is a testimony to this.

Vipul · Post by **Vipul** » 21 Nov 2012 04:38

In a mumbai suburb, i have seen a rent receipt where the total other charges levied (Municipal taxes and Cess) were Rs 38.56 and the actual rent was Rs 21.00.This for a house with carpet area of 520 Sq Ft. Builders/Investors have kept lakhs of flats/apartments under lock rather then renting for fear of the mumbai Rent Control Act, where a tenant can choose not to pay rent and by just applying a Court Fee Stamp of 65 Paise (as of 2001) on a plain white paper claim protection under Rent Act and be assured from being evicted for atleast 25-40 years before the case is finally decided through the original filing to appeals process.

vina · Post by **vina** » 21 Nov 2012 11:10

krisna wrote:R&D comes about when the conditions are present to foster its growth.
1) culture of the people---our civilisation has and will not hamper science since time immemorial. europe exploded after church was scr*wed. ROPers are still scr*wing middle east.
2) roti kapda makaan conditon improves significantly.

We have our own history which is a testimony to this.

Have to disagree. Until 1991, the ISI/DSE/Planning Commission / JNU ding dongs p*icks and their "Command & Control " Fetish did exactly that.Poured a thick block of concrete over the fertile soil with great underpinnings of potential to innovation and entrepreneurship.

What happened was that thanks to Saddam Hussein's invasion of Kuwait and the oil shock and the bankruptcy, one of the greatest leaders of India .... nope.. not MMS, but the unsung and unheralded Shri Narashimha Rao , took a jack hammer to the concrete and broke it up to allow green shoots to come up through the breaks.

It takes time, but through that breaks in the concrete will giant trees sprout which which when their roots grow deep and strong will break up the concrete and the JNU ding-dong's idiocies forever.

Case in point this example. I am posting an article I was just reading from the latest alumni news letter.

FROM BOLTS AND NUTS TO FRUITFUL NUTS
Our Alumnus Sasisekar Krish(2010–MTEE) who worked for seven years with Wipro in Bangalore before starting,Nanopix, was in 2009 providing image processing services to automotive companies around Chennai, which needed cameras to inspect the dimensions of components such as nuts and bolts.
Nanopix was started in Bangalore, but moved to Hubli where it got incubation space, mentorship and funding from the Deshpande Foundation, set up by another alumnus entrepreneur and venture capitalist Gururaj Deshpande(1973–BTEE).

However a simple sentence in a presentation that he was making to a friend changed his company in ways hecould never ever have imagined. He merely mentioned, "We also sort nuts." This resulted in a castor oil supplier with contacts in the automobile industry of Hubli, misunderstanding "nuts" to mean cashew nuts, and informing a local cashew exporter of the same Krish realizing what had happened, took it as a challenge and sitting in a Cafe Coffee Day in the city, downloaded pictures of cashews and wrote a program that could distinguish the colour and size of the nuts.

He finally informed the unbelieving exporter he had a workable program to substitute the labour-intensive and expensive task of sorting which could be made easy by automating the process.

However this did not result in any business for Krish. Undeterred, he decided to build a machine anyway. The first one was ready by October 2010. Using image processing algorithms, the machine could capture, process and analyse 18 cashew nuts a second, sorting them into 12 varieties based on size, colour, surface finish and shape. He has now sold three machines to date, for Rs 25 lakh each and is all set to grow. Just goews to show the IIT Madras spirit to achieve the impossible.

Now that automation is going to replace the back breaking work of sorting cashews and stuff and increase productivity and grow the country, What The F*ck do you think the commie cretins in Kerala will do when the machines start showing up numbers in all the cashew plantations in Kerala ?

How long is it going to take Krish to realize that if you can sort cashews, maybe the machine can sort prawns too , ooopss and it shows up in prawn hatcheries.. okay.. Krish further realizes, well, prawns and cashews are fine, why not bigger things like Apples, why not Mangoes, why not guavas, why not cabbages, why not caulifowers, why not potatoes, why not carrots, why not okras, .. you get the idea ?.. And it shows up in all over India and addresses the biggest problem of agricultural produce and marketing in India, the lack of sorting and grading and quality, that plagues the supply chain of everyone , especially those of the supermarket chains.

How long will it take for Reliance Fresh, Walmart and others making the entry into India to latch on to it (and if it works well and better than their current stuff , take it globally ?) .

What will the Uber JNU ding dong, the card carrying commie, Prabhat Patnaik, the erstwhile "Vice Chairman of the State Planning Commission of Kerala" and his commie CPI-M camp followers of the Karat and Yechury kind do ? Raise the lal jhanda, go on strikes, vandalize the machines that are put up, vandalize the factories.. try delaying the inevitable and the laws of nature.. Sort of the old style displaced mill workers and families breaking the automated Jacquard looms and other stuff which started showing up in Victorian England. The record of the commie unions to bank computerization and ATMs were exactly similar.

Now you know why I think the JNU ding dongs are basically antediluvian and anti modernity , while all the time proclaiming that they are "most modern" . Exactly like the Dravidian parties and their double speak on caste. The only thing "modern" about the Commies is their use of mass violence and terror and totalitarianism on a scale unseen before as perfected by Stalin, Mao and Pol Pot.

RamaY · Post by **RamaY** » 21 Nov 2012 23:12

Govt decides in principle to let Reliance Industries raise KG gas price

A recent high-level meeting convened at the Prime Minister’s Office decided that RIL can begin negotiations with the petroleum ministry on fresh pricing for the gas currently being sold at $ 4.2 mmBtu.

The company had asked for re-negotiating a revised formula with the ministry under the production sharing contract which governs their mutual relationship. “On the issue of price revision, the meeting required that the process of price discovery may be allowed as per the provisions of the (contract) ,” a source told The Indian Express.

However no decision was taken on whether the Comptroller and Auditor General (CAG) should be allowed to inspect RIL’s books.

The move will come as a relief for India’s largest company by market cap. RIL share prices have moved in a narrow range amid concerns that output from the KG basin has been continuously dipping since 2010.
...

The price was set by an empowered group of ministers headed by former finance minister Pranab Mukherjee. RIL said that it has invested about $8 billion in the KG D6 fields, and that it has legitimate expectations of a free market with the ability to obtain competitive arm’s length prices.
...

A related news...

Reliance Industries agrees to KG-D6 audit by CAG; raises hopes of quicker approvals of more fields

NEW DELHI: Reliance IndustriesBSE 0.76 % and the oil ministry have narrowed their differences over auditing of the controversial KG-D6 block and pricing of natural gas, raising hopes of quicker approvals and development of more fields in the gas-rich region, government and industry sources said.

The company has also agreed to cooperate in the audit even if the exercise is conducted after a lapse of two years. RILBSE 0.76 % had earlier argued that the contract allows an audit only within two years of the period being scrutinised, sources said.

Government officials said the contract allows audit in exceptional circumstances even if two years have lapsed.

Reliance executives have also told the oil ministry that the company will not pursue the demand to raise natural gas prices before 2014.

RIL READY TO COOPERATE

This, in effect, removes two major hurdles that had soured the relationship between the country's biggest private oil explorer and the petroleum ministry for more than a year, sources said.

Top RIL executives met Oil Minister Veerappa Moily last week to broadly discuss various pending issues. "Things are moving forward cordially. They discussed gas pricing, delay in approvals and the audit by the Comptroller & Auditor General. RIL is willing to cooperate. We expect all issues to be resolved amicably," said an oil ministry official present at the meeting.

Spokesmen of the oil ministry and Reliance did not respond to ET's queries. Auditing of Reliance's KG-D6 block has been under the spotlight since CAG said in a stinging report in September last year that the oil ministry had been lax in enforcing contracts with oil explorers such as RIL, Cairn IndiaBSE -1.21 % and BG India.

Subsequently, Reliance said it did not dispute a CAG audit but the contract with the government provided for only a financial audit, not a performance audit. The company also cited the contract that allowed a second audit only within two years after the closing of any financial year.

RIL argued that it had adopted internationally accepted practices of the oil & gas industry. It had told the ministry that in a financial audit, as per its contract, the company was required to submit the field's accounts to the ministry, not CAG, and the audit report should not be placed in Parliament.

The ministry has now told RIL that the state's share of the gas field's profit was a non-tax revenue of the government and, therefore, subject to CAG scrutiny. "CAG can conduct both financial and performance audits of the oil ministry, which is the owner of the D6 oil & gas fields, and the contractor cannot avoid its scrutiny," an official with direct knowledge of the matter said.

Earlier, the oil ministry had issued a letter to CAG spelling out RIL's conditions for an audit, which was strongly contested by the auditor.

The oil ministry has also closed the chapter of gas price revision before 2014. "Whenever a new minister takes over, all draft notes and pending policy matters are reviewed afresh. All draft Cabinet notes and draft EGoM notes are automatically withdrawn," another oil ministry official said, requesting anonymity.

"The ministry clarified on November 1 through a press note that the government has taken a consistent stand from 2010 onwards that gas price revision can not take place earlier than 2014," the official added.

krisna · Post by **krisna** » 21 Nov 2012 23:41

vina wrote:Have to disagree. Until 1991, the ISI/DSE/Planning Commission / JNU ding dongs p*icks and their "Command & Control " Fetish did exactly that.Poured a thick block of concrete over the fertile soil with great underpinnings of potential to innovation and entrepreneurship.

What happened was that thanks to Saddam Hussein's invasion of Kuwait and the oil shock and the bankruptcy, one of the greatest leaders of India .... nope.. not MMS, but the unsung and unheralded Shri Narashimha Rao , took a jack hammer to the concrete and broke it up to allow green shoots to come up through the breaks.

It takes time, but through that breaks in the concrete will giant trees sprout which which when their roots grow deep and strong will break up the concrete and the JNU ding-dong's idiocies forever.

have to completely disagree with your analy-sis.
I wrote

R&D comes about when the conditions are present to foster its growth.
1) culture of the people---our civilisation has and will not hamper science since time immemorial. europe exploded after church was scr*wed. ROPers are still scr*wing middle east.
2) roti kapda makaan conditon improves significantly.

We have our own history which is a testimony to this.

The above bolded statement is self explanatory or so I thought. You bring in commie discussion.

The one I was talking was different.

Arjun · Post by **Arjun** » 22 Nov 2012 08:32

I tend to agree with the OECD analysis below...unless India gets a government that delivers efficient governance and leadership that urban Indian can rally behind - China will continue to outperform India in growth.

Post-crisis, will India be a loser and China's surge continue unabated?

What are the prospects for the world economy once it recovers from the present crisis? And where would India figure in the emerging global scenario?

The OECD has peered into the crystal ball and come out with forecasts right up to 2060 ( Looking to 2060: Long-term global growth prospects). The forecasts indicate that India will be something of a loser in the post-crisis scenario: it will take longer to catch up with the advanced economies than most people had thought earlier. In contrast, the OECD believes China's surge will continue unabated.

The global boom of the middle of the last decade is unlikely to recur, that is for sure. The OECD sees the world economy returning soon to the average growth rate of the past decade and a half. During 1995-2011, the word economy grew at 3.5% in purchasing-power-parity ( PPP) terms.

The OECD expects it to grow at 3.7% up to 2030. (World GDP is taken as the weightage average sum of GDP for 34 OECD and eight non-OECD countries.) Not bad, considering that 1995-2011 was a period that embraced the east Asian crisis and the Russian default, the internet bubble and the subprime crisis.

You may wonder how the OECD is so optimistic on growth in these bleak times. The eurozone is in recession and not expected to return to modest growth at least for another half a decade. US growth is anaemic five years after the crisis.

It turns out that it is the emerging economies that will power global growth in the years to come, although the group's growth will slow down from 7% in the recent past to 6% until 2030. In the same period, the OECD group will crawl at 2.2%. So, we will see some partial decoupling of emerging economies' growth from OECD growth.

There is an important catch to the OECD's projections. The pattern of savings in the world will be skewed until 2030. India and China will together account for 50% of the global saving by 2030.

This means that global imbalances will begin to widen once the world economy recovers and will reach the pre-crisis (2007) peak by 2025-30. Get set for another first-class global crisis! The OECD thinks greater fiscal consolidation in the developed world is the key to preventing another crisis. Since there is only so much that can be done about fiscal consolidation in the OECD right now, perhaps getting a grip on the banking sector should be the greater priority.

member_23686 · Post by **member_23686** » 22 Nov 2012 17:43

^^^ With the "giveaway season" coming soon, I'm going to agree with this analysis.

member_23686 · Post by **member_23686** » 23 Nov 2012 20:08

shyam wrote:Austrian Parliament Hears 80% Of Austrian Gold Bullion Reserves In London

The Austrian central bank keeps most of its 280 metric tons of gold reserves in the United Kingdom, Vice Governor Wolfgang Duchatczek was quoted as saying in the finance committee of the country’s parliament today, according to Bloomberg.

Answering lawmakers’ questions, Duchatczek said 80%, or 224.4 metric tons of the metal was stored in the U.K., 17% or 48.7 metric tons in Austria and 3% in Switzerland, according to a summary of a closed-door committee meeting provided by the parliament.

^^^
Where is Indian gold bullion? Do they have it in India or is it somewhere else?

member_23677 · Post by **member_23677** » 24 Nov 2012 06:21

Where is Indian gold bullion? Do they have it in India or is it somewhere else?[/quote]
IMF and RBI is the best bet, with some small amount in UK-US brotherhood

member_23686 · Post by **member_23686** » 24 Nov 2012 11:18

http://www.rbi.org.in/scripts/Publicati ... d=12476#17

I.7. Management of Gold Reserves

The Reserve Bank held 557.75 tonnes of gold forming about 6.0 per cent of the total foreign exchange reserves in value terms as at the end of March 2010. Of these, 265.49 tonnes are held abroad (65.49 tonnes since 1991 and further 200 tonnes since November 2009) in deposits / safe custody with the Bank of England and the Bank for International Settlements.

In November 2009, the Reserve Bank concluded the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF), under the IMF's limited gold sales programme. The purchase was an official sector transaction and was executed over a two week period during October 19-30, 2009 at market-based prices. As a result of this purchase, the Reserve Bank's gold holdings have increased from 357.75 tonnes to 557.75 tonnes.

member_23686 · Post by **member_23686** » 24 Nov 2012 11:20

you see saar. the gold purchased from IMF stays at IMF. so we have nearly 300 tonnes at home.

member_23686 · Post by **member_23686** » 24 Nov 2012 15:33

http://en.wikipedia.org/wiki/Federal_Re ... f_New_York

The Federal Reserve Bank of New York maintains a vault that lies 80 feet (24 m) below street level and 50 feet (15 m) below sea level,[8] resting on Manhattan bedrock. By 1927, the vault contained 10% of the world's official gold reserves.[6] Currently, it is reputedly the largest gold repository in the world (though this cannot be confirmed as Swiss banks do not report their gold stocks) and holds approximately 7,000 tonnes (7,700 short tons) of gold bullion ($415 billion as of October 2011), more than Fort Knox. Nearly 98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.[9] The rest is owned by the United States and international organizations such as the IMF.

member_23686 · Post by **member_23686** » 24 Nov 2012 15:34

http://en.wikipedia.org/wiki/United_Sta ... Depository

The United States Bullion Depository, often known as Fort Knox, is a fortified vault building located adjacent to Fort Knox, Kentucky, used to store a large portion of United States official gold reserves and occasionally other precious items belonging or entrusted to the federal government.

The United States Bullion Depository holds 4,578 metric tons (5,046.3 short tons) of gold bullion (147.2 million oz. troy). This is roughly 3% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7,716 tons) of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

member_23686 · Post by **member_23686** » 24 Nov 2012 15:37

so, where is Indian Bullion Depository? We have 292.26 tonnes of gold bullion at home. There must be a vault. Where?

shyam · Post by **shyam** » 24 Nov 2012 15:52

^^^
I would not ask for those details, because once that is revealed, RBI will end up spending a lot more money to protect them. Apparently, RBI seems to be honest in revealing its gold holding, unlike many other countries.

member_23686 · Post by **member_23686** » 24 Nov 2012 15:58

I agree with you Shyam ji. I just thought that they have a known vault location and I'm the one who is unable to find it on google. If they have kept location secret then let it be.

Singha · Post by **Singha** » 24 Nov 2012 17:08

each major office of RBI (state capitals) does have high security vaults where cash and coins from Govt mint is stored. these get distributed periodically to the banks for onward feeding into the economy via in-person withdrawals, online transfers, ATM withdrawals and so on.
they also periodically collect old soiled notes in sacks and burn them under high security.

Arunkumar · Post by **Arunkumar** » 25 Nov 2012 12:18

slight OT. RBI has a nice monetary museum in Fort area of mumbai. Pretty much covers currency usage for a period of 1000 years with good explanation. Highly recommended for a visit specially for school kids.

subhamoy.das · Post by **subhamoy.das** » 25 Nov 2012 12:20

varunkumar wrote:
In the western countries the children of a artisan , blue collar worker, carpenter, baker, welder builder want to preserve the skills out of pride as as artist.
The entire caste system of India was built around this concept, with skills passed down from generation to generation. This had allowed us to excel in craftsmanship for 2,000 years before Brits came and destroyed the occupations in 18th century by regressive taxes and monopolies.

We cannot blame the Brits. The caste system became a tool for dividing the society and for preventing the wealth and power distribution and that is why it started to fail. I cannot image in the west a cobbler will be prevented from entering a church or going to school and even be elected to a post of authority and hence a western cobler will be proud to preserve his skill. An indian cobler will have a very hard life to live and he cannot get to a school or enter a temple or even stand in a election. So he has all the incentive of not being a cobler. In Ramanyan, even Lord Rama acknowledged the service of a fisher man and saluted him for his service and in those times caste system was welcomed as folks did not have to have a hard life for belonging to a specific caste. All castes were admired including the ones which were engaged in un-clear work and the word "namo-shurda" actually was meant to show respect and thank them for their service. So we INDIANs are to be blamed for killing the caste system.

subhamoy.das · Post by **subhamoy.das** » 25 Nov 2012 12:29

dharmaraj wrote:^^^ With the "giveaway season" coming soon, I'm going to agree with this analysis.

The only silver lining is that fact that the UPA has started to see the political need for doing the right thinks so that Indian sales ( read growth ) remain above 8% other wise their flag ship welfare programs - which are potent tools to remain in power in absence of any mass leaders - will falter due to lack of fund which is direct proportion to total sales India makes. I heard FM saying that 8% is a must and anything above that is nice to have.

subhamoy.das · Post by **subhamoy.das** » 25 Nov 2012 12:30

dharmaraj wrote:you see saar. the gold purchased from IMF stays at IMF. so we have nearly 300 tonnes at home.

So in the event of a war the countries are at mercy of the Ango-Saxon brigade and access to gold can be prevented. Does China keep its gold in NY also?

Rishirishi · Post by **Rishirishi** » 25 Nov 2012 18:46

subhamoy.das wrote:In the western countries the children of a artisan , blue collar worker, carpenter, baker, welder builder want to preserve the skills out of pride as as artist.

The entire caste system of India was built around this concept, with skills passed down from generation to generation. This had allowed us to excel in craftsmanship for 2,000 years before Brits came and destroyed the occupations in 18th century by regressive taxes and monopolies.[/quote]

We cannot blame the Brits. The caste system became a tool for dividing the society and for preventing the wealth and power distribution and that is why it started to fail. I cannot image in the west a cobbler will be prevented from entering a church or going to school and even be elected to a post of authority and hence a western cobler will be proud to preserve his skill. An indian cobler will have a very hard life to live and he cannot get to a school or enter a temple or even stand in a election. So he has all the incentive of not being a cobler. In Ramanyan, even Lord Rama acknowledged the service of a fisher man and saluted him for his service and in those times caste system was welcomed as folks did not have to have a hard life for belonging to a specific caste. All castes were admired including the ones which were engaged in un-clear work and the word "namo-shurda" actually was meant to show respect and thank them for their service. So we INDIANs are to be blamed for killing the caste system.[/quote]

I do not think we should blame the cast system for this. The cast system actually strengthened the carftmanship traditions. I think the problem has been the low respect such occupations has been given. India has only focussed on IIT, and universities. There has been very little attention given on vocational training. India needs to formalise craftmanship training and certification. Build strong guidelines to building techniques, so that it becomes possible to punish bad and shoddy work.

subhamoy.das · Post by **subhamoy.das** » 25 Nov 2012 22:15

I was blaming that misuse of the cast system by vested interests for the failure of this model in India. The low respect u pointed out is exactly that point. Caste system was a perfect example of vertical based center of excellence. All verticals in a organization should be treated as equal and people should be able to join any vertical as long as they have the merit to do the job in that vertical regardless of which vertical they were inducted into the company initially. This did not happen and some verticals became strong and powerful and killed the other verticals.

Theo_Fidel · Post by **Theo_Fidel** » 26 Nov 2012 00:40

Meanwhile....

Gold is racing to exceed oil in India's import bill. 1/4 of world gold production is imported by us, up from 1/10. This simply not sustainable and a complete waste to the economy. The single largest deadweight on investment and growth.

http://www.thehindubusinessline.com/ind ... 133362.ece

India’s gold imports will reach a “substantial” two per cent of gross GDP in the next few years, and there is a need to offer alternative instruments with “gold-like qualities,” Subir Gokarn, Deputy Governor, Reserve Bank of India, said.

“People are buying gold despite the high price. This in some ways challenges the supply-demand dynamics,” he said at the Indian Banks’ Association’s annual Bankers Conference here.

Gold imports grew 39 per cent in financial year 2012 and accounted for almost three-fourths of current account deficit (CAD). India’s current account deficit was 4.2 per cent of GDP, or $80 billion, in FY 2012.

According to Gokarn, “India imports about one-fourth of the total global supply of a little over 4,000 tonnes, and this excess gold demand is creating stress on the system, particularly on the balance of payments.”

The reasons for the huge imports are: Indians’ affinity for gold; the perception that the yellow metal provides a hedge against inflation; and the relatively high returns — in the last three years, investment in gold has given a whopping 70 per cent return.

“People cannot be denied an opportunity to invest in gold. Gold returns have been higher than those of the Nifty, one-year bank deposits and 10-year-government bonds over the last few years,” he said.

Don · Post by **Don** » 26 Nov 2012 04:58

http://ca.news.yahoo.com/analysis-india ... ector.html

Analysis: India's deficit-cutting plan faltering as clock ticks

By Ross Colvin and Rajesh Kumar Singh | Reuters – 2 hours 0 minutes ago

NEW DELHI (Reuters) - India's finance minister has banned government officials from holding conferences at five-star hotels, restricted travel and ordered a freeze on hiring to fill vacant posts.

A single-minded political veteran who commands both fear and respect in Indian officialdom, P. Chidambaram is squeezing government ministries hard to cut spending wherever they can, and quickly, to help rein in a widening fiscal deficit.

He is a man under pressure and with an eye on the clock.

Four weeks ago to the day, he set himself an ambitious target: to hold the government's fiscal deficit for 2012/2013 to 5.3 percent of gross domestic product, even as skeptical private economists forecast a deficit closer to 6 percent.

But a series of revenue-raising setbacks since October 29 now means it will be almost impossible for the government to meet that target, economists say, and some finance ministry officials privately agree. That increases the risk that credit rating agencies could downgrade India to junk in the coming months.

"This has taken on a very great sense of urgency," said Rajiv Biswas, chief Asia economist at market information and analytics company IHS, as he called on Chidambaram to draw up a credible medium-term road-map for cutting the deficit.

The deficit reduction plan unveiled by Chidambaram last month was panned by economists for being short on specifics and putting a firewall around fuel subsidies and expensive social welfare programs for the country's millions of poor.

A month earlier a deficit reduction panel appointed by Chidambaram had urged the government to cut such spending. Their language was dramatic: India was on the edge of a "fiscal precipice" and the economy was "flashing red lights", they said.

"BAND-AID APPROACH"

The government is pursuing a "band-aid approach" to deficit reduction, favoring quick fixes instead of implementing structural reforms to slash the deficit, said economist Rajeev Malik of CLSA in Singapore, who is sticking to a deficit forecast of 6 percent of GDP.

Financial markets are already expecting the Indian government to overshoot its target and hit around 5.6 percent of GDP, which helped push benchmark 10-year bond yields to the highest in nearly three months late last week.

But the big unknown is the response of the rating agencies, which have repeatedly warned India to get its finances in order.

The agencies are unlikely to reveal their thinking until after Chidambaram unveils his budget in February, analysts said.

But in October, Standard & Poor's said India still faced a one-in-three chance of a downgrade within the next 24 months. Such an outcome would hurt investor sentiment and push up overseas borrowing costs for Indian companies.

Chidambaram, 67, a lanky politician with a disarming smile that belies a sharp tongue and an intolerance for time-wasting, charmed financial markets with his can-do attitude and burst of economic reforms in September, after years of policy inaction by Prime Minister Manmohan Singh's weak coalition government.

India's benchmark BSE index <.BSESN> rallied more than 6 percent after the reforms were announced in mid-September. But concerns over implementation, the fiscal deficit and falling foreign fund inflows have since pushed it down 3.3 percent.

"We believe that this is the beginning of the realization that a sustainable turnaround in India's growth prospects would require considerable effort, well beyond the burst of measures seen in September," Deutsche Bank said last week in an analyst note headlined "Reality Check".

MAN ON A MISSION

Chidambaram's deficit reduction plan banks heavily on raising billions of dollars by auctioning off cellphone airwaves and selling shares in state companies.

Neither effort is going particularly well.

The government raised less than a quarter of its 400 billion rupee ($7.3 billion) target in a 2G spectrum auction in mid-November. A second auction is planned before March, but a senior government official told Reuters there would likely be at least a 200 billion rupee shortfall.

India succeeded in raising 8.1 billion rupees ($147 million) by selling shares of state-run Hindustan Copper Ltd on Friday, although the deal was supported by buying from state institutions.

To put the deal in context: New Delhi aims to raise 300 billion rupees by selling shares in state companies this fiscal year, which ends in March. Excluding the latest sale, it has managed just 1.25 billion rupees so far.

The government is staring at an overall shortfall of nearly 500 billion rupees in revenues this year, the government official said, speaking on condition of anonymity because of the sensitivity of the subject. This may require additional borrowing from the market.

Chidambaram's battle to tame the deficit takes place against the backdrop of a continued economic slowdown, and a fractious parliament where the government has lost its majority after its biggest coalition ally withdrew support to oppose its reforms.

Manufacturing is contracting and exports are falling. India's October trade deficit of nearly $21 billion was its worst on record.

And a second round of reforms aimed at liberalising the pension and insurance sectors has fallen victim to gridlock in parliament. It is not clear if the measures, long sought by investors, will be passed in the current winter session.

But Chidambaram, who began his second stint as finance minister in August, gives no appearance of being disheartened and as recently as Saturday was confidently predicting he would be able to contain the deficit to 5.3 percent of GDP.

Inside his ministry, officials said the target looks daunting but they have had no word of a revision from the minister. Instead, he has intensified pressure on them to find ways of meeting the target, they said.

Chidambaram's credibility is not yet on the line, said analysts. In fact, perhaps the opposite. His credentials as an economic reformer during two previous stints as finance minister are buying him time to pull India back from the fiscal precipice.

(Addtional reporting by Frank Jack Daniel in NEW DELHI, Swati Bhat, Sumeet Chatterjee and Subhadip Sircar in MUMBAI; Editing by Alex Richardson)

habal · Post by **habal** » 26 Nov 2012 08:49

India really needed to invest in fabs & engine + huge material research labs + metallurgy and engine/turbine development in the 90s. If so we could have now supported domestic industry with some serious backup power and could have become a player in the now booming mobile phone business by supplying chips and memory modules to world over and our own companies would have been competitive. Nobody then foresaw rise of Indian automative industry and it seems that R&D on engines is going to be the biggest cost component in automobile development. Instead of borrowing AVL designs, which I suspect both Mahindra and Tata's have done with their 2.2 ltr CRDI which is basically an AVL design, they could have moved up the chain and developed some really serious varients for the export market.

Lack of these have really dented competitiveness of Indian industry in coming future & now they are left to their own. It is imperitive for Indian economy to have a 5% trade surplus to sustain growth and there is only so much dough that PSU disinvestment can manage to generate for covering up trade deficit as well as the financial misdemeanors of Indian politicians.

Don · Post by **Don** » 26 Nov 2012 21:22

http://www.btimes.com.my/Current_News/B ... index_html

India sees 5.5pc quarterly growth

Published: 2012/11/26

NEW DELHI: India's economy logged around 5.5 per cent growth in the last financial quarter, its Finance Mminister estimated on Saturday - a rate that could boost calls for lower interest rates to spur activity.

India's once-booming economy has been hit by high interest rates, Europe's debt crisis that has slowed exports, and sluggish investment caused by domestic and overseas concerns about policy and corruption.

Chidambaram said in televised remarks in the western Indian city of Pune that he expected official data to be released next Friday to show that the economy grew by "around 5.5 per cent" in the three months to September 30.

That would be down from 6.9 per cent in the same second-quarter period a year earlier.

"It goes without saying that we face a difficult situation," Chidambaram said at a bankers' conference, adding the "global economy is still in crisis".

India's economy was growing by more than eight per cent before 2011-2012. But it has been performing increasingly worse with the Congress-led government of Prime Minister Manmohan widely criticised for its handling of the situation.

Even though 5.5 per cent growth would be the envy of much of the world, it is not enough for India, which has been aiming for close to double-digit expansion to substantially reduce crushing poverty.

"For us eight per cent growth is not an aspiration but a necessity. India cannot afford to grow below eight percent," Chidambaram said.

The slow growth comes at a time when it is more difficult for the Indian government to pep up the economy than in the 2008-2009 financial crisis.

Then, the government had more fiscal room to stimulate the economy but now it is struggling to cut a widening budget deficit and avert a downgrade of its sovereign debt to "junk" status by global credit ratings agencies.

In addition, the central bank has been keeping interest rateshigh to combat stubbornly high inflation.

Inflation eased marginally in October to 7.45 per cent year-on-year, but economists said the level is still too high to permit the bank to lower rates.

Indian businesses have been calling for lower rates, saying the slowdown is in large part due to high borrowing costs that have curbed consumer spending.

Chidambaram said India must boost growth "through innovation, through finding ways of increasing the production of goods and services".

The weak growth comes as the governmentgears up for elections due in less than 18 months. AFP

Don · Post by **Don** » 28 Nov 2012 05:40

http://www.bbc.co.uk/news/world-asia-india-20512632

27 November 2012 Last updated at 16:10 ET Share this pageEmail Print Share this page

India unveils cash subsidy plan for poor

India has unveiled the details of an ambitious plan for a cash payout of subsidies to the poor from 1 January.

The scheme will be launched in 51 districts initially and will cover the entire country by the end of 2013, Finance Minister P Chidambaram said.

Authorities say it will be a potential game-changer, bringing the country's poorest citizens into the mainstream.

But opposition parties have accused the government of "bribing the voters" ahead of the 2014 general elections.

Mr Chidambaram said the government planned to disburse 3,200bn rupees ($58bn; £36bn) under the scheme.

The money would be transferred to the beneficiary's bank account which would be linked to a unique identification number.

Under the scheme, those living below the poverty line will receive between 30,000 rupees ($542; £338) and 40,000 rupees ($723; £450) per year in lieu of subsidised food, fertiliser and fuel.

Officials say it will reduce waste while ensuring federal welfare money reaches those who need it most.

Analysts, however, say implementing the scheme may not be easy as only 210 million people in India have so far enrolled into a biometric identity scheme, most poor families do not have bank accounts and many villages do not even have a bank.

Indian authorities say around 360 million people currently live in poverty. But one estimate suggests that nearly 77% of India's 1.21 billion people live below the poverty line.

Singha · Post by **Singha** » 28 Nov 2012 09:14

apparently the fuel and fertilizer subsidies will still be left unchanged.
there is no talk of scrapping or scaling back the PDS in lieu of this.

so this is more like a politician going around distributing daaru and blankets to labourers before elections - on a national scale. Yuvaraj has already been appointed the pointman for this scheme....which gives an indication of who came up with the idea...and its not the FinMin for sure.

vina · Post by **vina** » 28 Nov 2012 10:18

Singha wrote:apparently the fuel and fertilizer subsidies will still be left unchanged.
there is no talk of scrapping or scaling back the PDS in lieu of this.

No talk about FOOD subsidy getting scaled back now. This is just an "experiment" being rolled out only in 51 odd districts. If the pilot succeeds it can be fine tuned and rolled out to all districts (just in in time for 2014) election.

so this is more like a politician going around distributing daaru and blankets to labourers before elections - on a national scale. Yuvaraj has already been appointed the pointman for this scheme....which gives an indication of who came up with the idea...and its not the FinMin for sure.

It is a good idea, nevertheless and Kangress wins because of this, just like MNREGA got the UPA second term, Kudos to them. Atleast this will have next to no leakage and after the elections, the food and other subsidies can be quietly capped.

How it will work is like this , Prakash Karat cottoned on to it. In an inflationary environment, if you give cash instead of commodities, you are lowering subsidies in real terms. But while that is true, Karat and co should now therefore logically shift to fighting inflation and not continue singing the tune of getting rid of the FRBM act and going rah rah of the print baby print routine to dole out "welfare" . If the notes they are doling out continue to have value, then they should ensure that inflation is kept firmly in check.

Pratyush · Post by **Pratyush** » 28 Nov 2012 10:38

^^^

Can any of the gurus predict the effect of almost 3.2 lakhs in direct cash transfers on the domestic economy. Coupled with the employment distorting effects of MNREGA.

Theo_Fidel · Post by **Theo_Fidel** » 28 Nov 2012 10:43

I too support it. The key will be ending other subsidies, ending MREGA and ensuring a proper food stamp like control on the cash expenditures. Hopefully women are given control to the lockbox as well.

But GOI must very much demand things from the folks in return. Proper schooling, vaccination, hospital visits, jobs training, etc. It is that carrot and stick approach that has worked in other countries.

Aditya_V · Post by **Aditya_V** » 28 Nov 2012 10:55

Singha wrote: so this is more like a politician going around distributing daaru and blankets to labourers before elections - on a national scale. Yuvaraj has already been appointed the pointman for this scheme....which gives an indication of who came up with the idea...and its not the FinMin for sure.

Thats exactly what this is, it will be targeted and not implemented pan India with the aim of helping INC win in crucial seats. Like Ashok Chavan Maharastra schemes, where streets which voted for him in his contstunecy got the benefit of Govt schemes, it will be based on streets/villages where INC winability depends on its implementation.

And definately once implemented on a wider level, the ususal Politico (including top level), Babu, Nationalised Bank fellow will take a 50% cut. Media will make noise and try to blame one or two babus/ bank employees but on the whole this is anther Hair brained scheme.

Charge ED and VAT on everything including Soap and Oil BPL personal use and they pay it back. Jaimesh Ramesh statement should be slightly changed, Aap se liya gaye paise aap ke vote ke liye Aadhe dey rahe hai vapus.

If only the money saved on 2G, Coal Gate and Thorium, Jalnagyam, Iron ore and various other corrupt practices coupled with Interest savings were there, poverty and lot of the average Aam aadmi would have been much better.

This scheme cannot help where absolute failure in goverence is present.

RamaY · Post by **RamaY** » 28 Nov 2012 20:16

vina wrote: No talk about FOOD subsidy getting scaled back now. This is just an "experiment" being rolled out only in 51 odd districts. If the pilot succeeds it can be fine tuned and rolled out to all districts (just in in time for 2014) election.

It is a good idea, nevertheless and Kangress wins because of this, just like MNREGA got the UPA second term, Kudos to them. Atleast this will have next to no leakage and after the elections, the food and other subsidies can be quietly capped.

How it will work is like this , Prakash Karat cottoned on to it. In an inflationary environment, if you give cash instead of commodities, you are lowering subsidies in real terms. But while that is true, Karat and co should now therefore logically shift to fighting inflation and not continue singing the tune of getting rid of the FRBM act and going rah rah of the print baby print routine to dole out "welfare". If the notes they are doling out continue to have value, then they should ensure that inflation is kept firmly in check.

Theo_Fidel wrote:I too support it. The key will be ending other subsidies, ending MREGA and ensuring a proper food stamp like control on the cash expenditures. Hopefully women are given control to the lockbox as well.

But GOI must very much demand things from the folks in return. Proper schooling, vaccination, hospital visits, jobs training, etc. It is that carrot and stick approach that has worked in other countries.

Do the esteemed posters support this program because it is truly an effective/efficient project and it brings benefit to people OR is it because it is a Congress scheme?

1. We are talking about a single project/scheme that is going to use (final estimate) Rs 3,20,000 Crore annual outlay which is ~30% of the Federal Budget.

2. The objective and purpose of this project is not put for debate, be it in the parliament or in public. The govt declares it (could be legitimate) as mere political ploy than national policy.

3. If this project/scheme to be understood as the Social Security Scheme, given the interlinking of Athar Ids etc, then why this selection criteria, even if it is as genuine as BPL, and why not universal application?

4. Will this benefit be adjusted to inflation? For example, based on Consumer Price Index (CPI) data between 2004 and 2012 today's value of Rs 32000 per family is equivalent to Rs 16,000 in 2004. The fuel prices (Mar'2004 = Rs. 33.71, Sept'2012 = Rs 74) alone rose >100% during this time. It is important to note that this inflation is when there are million different subsidy programs in place.

5. What are the other alternative opportunities? Can this amount be invested differently achieving a higher rate of return? Can this amount be invested so a better long-term financial security is provided to Indians? Will this money pull a family out of BPL? Rs 32,000 for a family of 4 means Rs 22/Day. Is this why Rs 20 is declared as BPL by the planning commission?

6. Assuming this scheme replaces all other subsidy program, what will be the impact on CPI when govt lifts all the other subsidy programs? If the prices have a one-time impact of 20-30% (assuming this is the subsidy govt is providing all these days) wouldn't that bring these families below the poverty line (Rs 22/Day becomes Rs 17/day) again?

7. Assuming the Govt is putting the responsibility of proper food, schooling and health in the hands of the parents; it is a different matter that this means the Govt and its policies completely failed to do the basic governance in spite of 20 million govt employees and immunity from treason etc for their nonsense past 60 years; what is monitoring and enforcement mechanism so this money is well spent? Doesn't people say the Govt subsidy programs and Arogyasree in Andhra Pradesh is causing people to consume more liquor (as witnessed by sharp increases in excise tax revenues) because they have the govt supported insurance programs in place?

P.S: Can it get any sadder than this when senior members of the forum, that too the members who think that the quality of the forum is coming down because people are not able to discuss the right issues and in a proper manner, support nonsensical schemes like this just because they came from the bottoms of political parties of their liking? What is more important to forum quality - The right topics, right logic or mere politically correct (even that is not guaranteed if the issue is not suitable to one's world-view) statements?