Indian Economy - News & Discussion 27 May 2012

[Hari Seldon]

^^So suraj, is this erosion a (business-)cyclical events only that will go away on its own with time? if so, happy days indeed - no need to expect any vision, will or action from the govt side in that case.

[Suraj]

This wasn't cyclical, as the article describes, and which we've discussed at length here - GoI spent beyond its means on unproductive social sector spending that did nothing more than drive inflation up. For a cyclical downswing to go back up we need a sufficient savings/GDP and investment/GDP base. Even though the latter remains reasonably good at ~33% of GDP, GoI has eroded the savings/GDP base significantly from 37% to 30% in just three years. High growth requires high investment rates and cheap access to capital. We currently have falling investment, high inflation and thereby high interest rates.

We had a rather fiery discussion on a past avatar of this thread two years back between the pro-NREGA folks and the anti-NREGA ones (which included me). Back then, academic documents were presented showing that such programs would not result in inflation, and would be a positive move. Hopefully, now with the indictment of that entire program we will have seen the last of NREGA. What was once a rural infrastructure and roads development program (anyone remember Bharat Nirman and PMGSY ?) was morphed into the dole program of NREGA. None of the objectives of the Bharat Nirman program - all of which targeted connectivity, electrification and infrastructure goals with 2012 deadlines) have been met.

[Singha]

Fiscal deficit can be partially reduced if the tax authorities succeed in the recovery of tax arrears worth Rs 2,12,449 crore from four defaulters including Hasan Ali Group (Rs 1,65,663 crore), Harshad Mehta Group (Rs 39,740 crore), Ketan Parekh Group (Rs 4,477 crore) and Manoj Punamiya Group (Rs 2,569 crore).

[member_20292]

This wasn't cyclical, a..................
None of the objectives of the Bharat Nirman program - all of which targeted connectivity, electrification and infrastructure goals with 2012 deadlines) have been met.

So, all this is confusing;

a. On one had you have Keynes and Paul Krugman and so many other economies like the US, China, etc. promoting govt spending on fixed asset infrastructure.

b. And MNREGA only fuelling inflation. MNREGA has been used to make fixed asset infrastructure too...as it were.

So why is one the devil and the other an angel?

[Suraj]

What fixed assets ?

[member_20292]

^^^ arrey bund dams, check dams, roads, etc.

[Suraj]

MNREGA is not an asset creation program. It is a job dole program . It replaced or superseded multiple asset creation programs, like the previous post mentioned.

[Prasad]

Heck PC is cutting funds for roads!

[RoyG]

MNREGA is not an asset creation program. It is a job dole program . It replaced or superseded multiple asset creation programs, like the previous post mentioned.

Why can't these lefty types see this? Injection of money in the case of MNREGA isn't giving the poor adequate infrastructure or skills to uplift themselves in a sustainable fashion. The scheme is a bubble which will eventually burst.

[Aditya_V]

SO MNREGA was also a Note Lo aur Vote Lo programme, yet anther sabotage to the economy. Rather than generating millions of well meaning jobs uplifting people in poverty to a better state of living

[Theo_Fidel]

There are specific strictures in the MNREGA saying that machinery can not be used and building materials like say Asphalt can not be bought with it. This meant that the 'work' done is completely useless to raise productivity. Not only that making the old, sick and destitute become manual laborers was particularly cruel.

Still the poorest of the poor need help. Question is how to get it to them.

[krisna]

Hindu nehruvian rate of growth

as usual by the al hundi paper.
after only 8, comments are closed as usual due to the yindoo yinternet warriors.

[Supratik]

[quote="Theo_Fidel"]There are specific strictures in the MNREGA saying that machinery can not be used and building materials like say Asphalt can not be bought with it. This meant that the 'work' done is completely useless to raise productivity. Not only that making the old, sick and destitute become manual laborers was particularly cruel.

Still the poorest of the poor need help. Question is how to get it to them.[/quote

They could have avoided the pretense of "employment" in MNREGA and made it a cash transfer scheme. But I guess they do not have the wherewithals of setting up a cash transfer scheme, yet. The Congress wants to position itself similar to socialists in the developed world as they have lost the nationalist space to BJP. The best way to do that would be social security but the question is are we there yet economically. Also you would require technological and governance upgradation e.g. how do you know that the cash is reaching the right person. Right now there are too many schemes full of corruption and the schemes are increasing as the UPA becomes nervous about its reelection. Adhar is a step in the right direction and will form the basis of future social security.

[RoyG]

There are specific strictures in the MNREGA saying that machinery can not be used and building materials like say Asphalt can not be bought with it. This meant that the 'work' done is completely useless to raise productivity. Not only that making the old, sick and destitute become manual laborers was particularly cruel.

Still the poorest of the poor need help. Question is how to get it to them.[/quote

They could have avoided the pretense of "employment" in MNREGA and made it a cash transfer scheme. But I guess they do not have the wherewithals of setting up a cash transfer scheme, yet. The Congress wants to position itself similar to socialists in the developed world as they have lost the nationalist space to BJP. The best way to do that would be social security but the question is are we there yet economically. Also you would require technological and governance upgradation e.g. how do you know that the cash is reaching the right person. Right now there are too many schemes full of corruption and the schemes are increasing as the UPA becomes nervous about its reelection. Adhar is a step in the right direction and will form the basis of future social security.

A social security system modeled like the US would be disasterous for India. It is social security which has helped bankrupt the US. We need to let people be responsible for themselves and their families. Nationalization of the family which has preserved our values and wealth is the last thing we need.

[Suraj]

I believe Theo is talking about the destitute class who lack education, skill and physical ability due to decades of malnutrition. Appealing to them by any means besides a cash transfer program is difficult, even though the spoils of such a program tends to be appropriated by more dominant classes, leaving the destitute as they were. Such problems were reported during MNREGA audits too. Helping this class will require substantial investment and time, and from a political perspective, it's a much more sureshot approach to just fling them some cash for votes, even if it does nothing for them in the long term...

[RamaY]

The destitute deserve a social security system. I do not think it is that difficult to implement a reasonable social security system if that is the purpose and intent of a government.

The moment INC brought NREGA or Cash Transfer schemes to win the next elections, the purpose is gone into the dustbin.

The problem is the C-system and not the programs. The entire C-system needs to be gutted down. This is not possible as long as people support that system in the name of secularism, democracy, constitution etc., the problem will not be solved.

People need to make a choice - a strong and healthy India or secularism (the kosher one or the pseudo one).

[Virupaksha]

I believe Theo is talking about the destitute class who lack education, skill and physical ability due to decades of malnutrition. Appealing to them by any means besides a cash transfer program is difficult, even though the spoils of such a program tends to be appropriated by more dominant classes, leaving the destitute as they were. Such problems were reported during MNREGA audits too. Helping this class will require substantial investment and time, and from a political perspective, it's a much more sureshot approach to just fling them some cash for votes, even if it does nothing for them in the long term...

wasnt NDA's antyodaya meant for particularly that demographic?

[shyam]

Adhar is a step in the right direction and will form the basis of future social security.

We don't need a western style social security. That is just a Ponzi scheme. As someone said, west has privatized the government and nationalized the families, not a system we should emulate. Rather we should have the system where people are taken care of their elders and not by the government. If you can't trust your own children to take care of you, how can you trust a stranger who is running the welfare program to take real care of you? He might do as long as the Ponzi scheme is running fine.

[Supratik]

We are talking about the destitutes - those at the very bottom - e.g. if you visit Kolkata you will see countless numbers have taken over the streets and canals and drains. US style social security is better than European welfare states which are better suited for extremely low population countries. Some form of state intervention will be necessary for them. The INC and BJP are in agreement about this as even Modi and other BJP Govts have such schemes. The difference is in intent and implementation with the BJP doing well on both counts. We are not talking of a welfare state that Amartya Sen would like us to have but enough state intervention for those right at the bottom. So like it or not we are headed for social security.

[KrishnaK]

If you can't trust your own children to take care of you, how can you trust a stranger who is running the welfare program to take real care of you?

For the very same reason you trust a stranger to ensure your safety, build roads, run courts and all the myriad other functions that a government provides.

[shyam]

We are talking about the destitutes - those at the very bottom - e.g. if you visit Kolkata you will see countless numbers have taken over the streets and canals and drains. US style social security is better

It is pretty clear that you don't know what social security is. It is not going to address what you mentioned here. If you don't contribute to social security fund when you are working, you won't get social security payment when you are old.

BTW, just giving money to destitute is not going solve the problem. It needs coordinated social program to prevent creation of such destitutes.

[shyam]

For the very same reason you trust a stranger to ensure your safety, build roads, run courts and all the myriad other functions that a government provides.

It is not that I trust them more than my child, it is that I don't have any other choice. BTW, different governments have already started asking private sector to build roads. People who have money keep their own private security.

[Theo_Fidel]

Social security is based on earned income, NOT contribution. As long as you declare income over $4,000 per year you qualify, even though at this low level the deduction is very minimal and far less than the payout and depending on nature of income could even be zero. Those who declare higher earned income qualify for higher payouts.

It not right to say the destitute don't work and don't contribute tax. In India Income tax itself is only 18% or so of GOI revenue. The poor join the rest of the population in paying every other tax that is out there.

I have to say I'm baffled to hear this sort of right wing republican usa agenda popping up in Indian circles. It is one thing to criticize things like social security, it is another to resort to limbaugh style talking points on demagoging them. BTW SS is not bankrupt despite all the talking points. Even medicare can be managed. The real problem is the accumulating interest payments that have not been accounted for.

Bruce Bartlett had an excellent write up about this sometime back...
Ah! Here it is.
http://economix.blogs.nytimes.com/2012/ ... eral-debt/

Still the point that a poor nation should not overspend is a valid question. I don't think anyone is talking of more than very minimal payouts at present. It must be pointed out that studies have shown that the total payout from subsidies, PDS and garibi hatao type programs exceeds Rs 10,000 per person or Rs50,000 for a family of 5. The idea is to get this cash to the folks directly and slowing cut out the other wasteful programs out there. My thought is the desperation on Indian streets is palpable. Some sort of income support is necessary if we are to transition to a society that that can think beyond its next meal. To be honest much of rural India is not sure where its next meal is coming from. Their focus tends to be very limited WRT politics. We should focus on implementation rather that pooh poohing every idea.

A lot of poverty has very much been eliminated. Thinking back to what Chennai/Madurai/Tirunelveli used to be in the 1980's filled with slums and absolute desperation things have improved, even if it is much more crowded. There is still a long ways to go.

[krisna]

One wag commented whatever NREGA is to the population, it is definitely a National Re election Guarantee Act for congis.

[Supratik]

It is pretty clear that you don't know what social security is. It is not going to address what you mentioned here. If you don't contribute to social security fund when you are working, you won't get social security payment when you are old.

BTW, just giving money to destitute is not going solve the problem. It needs coordinated social program to prevent creation of such destitutes.

I used "social security" in the generic sense not specifically the US system. What type of system India will adopt remains to be seen.
But there will be some form of state intervention.

[Mukesh.Kumar]

Amid all this gloom, a glimmer of hope from the agricultural sector in Bihar. X Posting from Agriculture thread-

New technique helps boost rice production while cutting down consumption costs without using herbicides & GM seeds. A case study from Bihar

P.S. For once The Guardian has something positive to say about India.

[member_20292]

^^^ how does it matter what the guardian says? who the fish are they to judge anyone?

[Mukesh.Kumar]

^^^ how does it matter what the guardian says? who the fish are they to judge anyone?

While The Guardian may not be the best when it comes to journalistic rigor, it still is widely circulated and read. Rather than throw a pique, its important to monitor. Try and understand what's changed. Why?

What say?

[Theo_Fidel]

BTW I have posted before about SRI or System of Rice Intensification (which the Guradian incorrectly calls Root). There are some limitations to it. It works well in areas where the land is more dry but fertile. The western ghats areas have failed at it. It works very well in Delta areas lke Ktishna Godavari Cauvery and Ganga but not very well in Highland areas. It worked in the Tamabharani delta but NOT in the Vaigai area. No one is sure why it works in one area and not in another. My cousin who works for an agricultural research station says it is probably due to the different Soils bacteria. Some places it works, Other places not so much. The big problem as been the need for constant weeding. Smal time farmers are able to do it but for anyone with more than 2-3 acres it becomes too much work. Flooding the paddy is lower effort.

[shyam]

I used "social security" in the generic sense not specifically the US system. What type of system India will adopt remains to be seen.
But there will be some form of state intervention.

In fact you clearly said that US system is better than European system.

State intervention should be to remove the root cause of the problem, with clear plan when to withdraw that intervention. If that becomes a permanent feature then that is not a solution. It just shows that government has failed in its expected duty. Permanent hand out of any kind later becomes an addiction and will be abused.

It is just like reservation. Earlier it started with the intention of bringing up lower caste population, but later almost all non-Brahmin castes classified themselves as OBC and got into reservation quota. Now removing that has become a suicidal act for any political party. You can not even remove creamy layer from the quota.

[Supratik]

In fact you clearly said that US system is better than European system.

State intervention should be to remove the root cause of the problem, with clear plan when to withdraw that intervention. If that becomes a permanent feature then that is not a solution. It just shows that government has failed in its expected duty. Permanent hand out of any kind later becomes an addiction and will be abused.

It is just like reservation. Earlier it started with the intention of bringing up lower caste population, but later almost all non-Brahmin castes classified themselves as OBC and got into reservation quota. Now removing that has become a suicidal act for any political party. You can not even remove creamy layer from the quota.

Yes, I feel the US system is better than the European welfare state. The bottomline is you cannot have only laissez faire capitalist system. Even the mai-baap of capitalism - the US has social security and affirmative action. Neither is it feasible to have a welfare state for 1.6 - 1.8 billion people IMO. Right now we have poorly targeted, corruption ridden things like MNREGA. We need tech heavy interventions that are correctly targeted. OT but as a UC I have no problem with reservations as about 20-25% population has access to 50% opportunities although I will be pissed off with reservations in promotions as it will be goodbye to meritocracy.

[Theo_Fidel]

BTW India has never been a meritocracy. Truth there is no real meritocracy in the world. Most jobs 100's to 1000's of people can do and perform just fine. What kind of meritocracy can you have here. People are mostly selected on basis of who they know, how they present themselves and if they got there first.

[Prem]

India Cracks Down on Taxation of Transfers Within Foreign Firms
http://www.nytimes.com/reuters/2013/02/ ... .html?_r=0

MUMBAI (Reuters) - India is aggressively pursuing tax claims against multinational firms operating in the country as the government seeks to rein in its budget deficit, taking particular aim at IT and back-office functions, tax officials say. It has targeted several multinational companies in recent years for tax audits on transfer-pricing, but over the past 12 months has widened the scope of the investigations, tax officials said. Authorities are now checking deals involving more than three dozen companies, focusing on transactions worth at least 250 million rupees ($4.7 million), officials said. Having just issued claims for the financial year to March 2009, it has shifted focus to 2009/2010. Transfer pricing is the value at which companies trade products, serviceRevenue authorities in many countries including Britain, France, Germany and the United States are increasingly challenging efforts of companies to minimize tax liabilities by moving taxable income from higher-taxing jurisdictions to lower-tax ones. In India's case, critics worry overly aggressive tax authorities could undermine foreign investment although tax officials say they have been working overtime as Finance Minister P. Chidambaram looks to make up a revenue shortfall and head off the threat of a credit rating downgrade. "On some days we had to work through the night to meet the deadline," said one official. "There are so many cases that are coming to us but we don't have an adequate number of people." s or assets between units across borders, a regular part of doing business for a multinational.

[Prem]

India's rice revolution
http://www.guardian.co.uk/global-develo ... revolution

Sumant Kumar was overjoyed when he harvested his rice last year. There had been good rains in his village of Darveshpura in north-east India and he knew he could improve on the four or five tonnes per hectare that he usually managed. But every stalk he cut on his paddy field near the bank of the Sakri river seemed to weigh heavier than usual, every grain of rice was bigger and when his crop was weighed on the old village scales, even Kumar was shocked.This was not six or even 10 or 20 tonnes. Kumar, a shy young farmer in Nalanda district of India's poorest state Bihar, had – using only farmyard manure and without any herbicides – grown an astonishing 22.4 tonnes of rice on one hectare of land. This was a world record and with rice the staple food of more than half the world's population of seven billion, big news.It beat not just the 19.4 tonnes achieved by the "father of rice", the Chinese agricultural scientist Yuan Longping, but the World Bank-funded scientists at the International Rice Research Institute in the Philippines, and anything achieved by the biggest European and American seed and GM companies. And it was not just Sumant Kumar. Krishna, Nitish, Sanjay and Bijay, his friends and rivals in Darveshpura, all recorded over 17 tonnes, and many others in the villages around claimed to have more than doubled their usual yields.
The villagers, at the mercy of erratic weather and used to going without food in bad years, celebrated. But the Bihar state agricultural universities didn't believe them at first, while India's leading rice scientists muttered about freak results. The Nalanda farmers were accused of cheating. Only when the state's head of agriculture, a rice farmer himself, came to the village with his own men and personally verified Sumant's crop, was the record confirmed.What happened in Darveshpura has divided scientists and is exciting governments and development experts. Tests on the soil show it is particularly rich in silicon but the reason for the "super yields" is entirely down to a method of growing crops called System of Root Intensification (SRI). It has dramatically increased yields with wheat, potatoes, sugar cane, yams, tomatoes, garlic, aubergine and many other crops and is being hailed as one of the most significant developments of the past 50 years for the world's 500 million small-scale farmers and the two billion people who depend on them.Instead of planting three-week-old rice seedlings in clumps of three or four in waterlogged fields, as rice farmers around the world traditionally do, the Darveshpura farmers carefully nurture only half as many seeds, and then transplant the young plants into fields, one by one, when much younger. Additionally, they space them at 25cm intervals in a grid pattern, keep the soil much drier and carefully weed around the plants to allow air to their roots. The premise that "less is more" was taught by Rajiv Kumar, a young Bihar state government extension worker who had been trained in turn by Anil Verma of Professional Assistance for Development Action, an Indian NGO which has introduced the SRI method to hundreds of villages in the past three years.

[Theo_Fidel]

Not sure where to put this so here....

A warning on the economic race we are committed to. The state safety net will become more and more important....

http://www.nytimes.com/2013/02/17/world ... wanted=all

But in a telling sign that the root cause of distress — the fraying of the social fabric — has not been dealt with systematically, a small but growing number of elderly Koreans are dying with no one to claim them or perform the traditional rituals thought to ease their way in the afterlife.

Kim Seok-jung, who started a company in the southern city of Pusan to care for their belongings, says he is haunted by the case of a 73-year-old whose body was found last February, months after her death.

“The calendar on her wall stopped at October,” Mr. Kim said. “When I see these old people, I see how my own generation will die.”

[RoyG]

Not sure where to put this so here....

A warning on the economic race we are committed to. The state safety net will become more and more important....

http://www.nytimes.com/2013/02/17/world ... wanted=all

But in a telling sign that the root cause of distress — the fraying of the social fabric — has not been dealt with systematically, a small but growing number of elderly Koreans are dying with no one to claim them or perform the traditional rituals thought to ease their way in the afterlife.

Kim Seok-jung, who started a company in the southern city of Pusan to care for their belongings, says he is haunted by the case of a 73-year-old whose body was found last February, months after her death.

“The calendar on her wall stopped at October,” Mr. Kim said. “When I see these old people, I see how my own generation will die.”

When countries are going further and further into debt and cannot afford to raise taxes or print money a social security system doesn't make any sense. Let families take care of the elderly.

[Austin]

India Said to Plan About 6 Trillion Rupees Borrowing

India plans gross market borrowing of about 6 trillion rupees ($111 billion) in the year through March 2014, a record high, according to three Finance Ministry officials with direct knowledge of preliminary estimates.

The increase from 2012-2013’s level will provide funds for government spending and debt repurchases as existing sovereign bonds near maturity, the officials said, asking not to be identified as the details aren’t public. Another official said borrowings will climb next fiscal year, without giving a figure. Exact numbers have yet to be finalized, all four said.

India’s government faces the task of containing the widest fiscal deficit in major emerging nations to avert a credit- rating downgrade to junk status. Finance Minister Palaniappan Chidambaram, due to unveil the budget Feb. 28, has vowed to pare the gap even as economic growth falters and an election due by May 2014 adds pressure for spending to win the support of voters.

Chidambaram’s goal is a shortfall of 4.8 percent of gross domestic product in 2013-2014, from 5.3 percent this year. Government expenditure has contributed to price pressures that have limited room for interest-rate cuts in an economy expanding at the weakest pace in a decade.

Still, GDP growth will be sufficient for Chidambaram to meet his budget-gap goals as a percentage of the economy even as borrowings climb, the officials said.

Growth Challenge

“There are challenges to the deficit-cut plan given the slow economic recovery and the fact that we are heading into an election year,” said Dhawal Dalal, head of fixed income at DSP Blackrock Investment Managers Pvt. in Mumbai. Whether the budget targets can be achieved remains to be seen, he said.

Gross borrowings are the total amount of debt the government needs to raise including funds to repay maturing debt.

Benchmark 10-year bond yields have dropped 25 basis points this year. The yield on the 8.15 percent note due in June 2022 rose to 7.80 percent at 12:59 p.m. in Mumbai from 7.78 percent earlier, according to data compiled by Bloomberg. The BSE Sensitive Index declined 0.1 percent. The rupee strengthened 0.2 percent to 54.0950 per dollar.

Indian government notes returned 11.5 percent in the past 12 months, the best performance in Asia, according to indexes compiled by HSBC Holdings Plc.

The government this week reduced its borrowing program for the current financial year, after Chidambaram limited expenditure and raised as much as 220 billion rupees by selling stakes in state companies.

Bond Repurchases

India canceled a 120 billion-rupee bond sale due this month, which would have been the last for the current fiscal year. The 2012-2013 gross borrowing target before the cancellation was 5.69 trillion rupees.

The government may consider buying back as much as 400 billion rupees of bonds next financial year to help manage record redemptions in the following 12 months, two Finance Ministry officials said last week. Notes worth 1.68 trillion rupees are due to mature in the year ending March 2015, budget documents show.

Local fixed-income and foreign-exchange markets were closed yesterday for a public holiday.

Reserve Bank of India Governor Duvvuri Subbarao has indicated that the fiscal shortfall, a record current-account deficit and elevated inflation will limit the magnitude of interest-rate cuts.

Subbarao lowered the repurchase rate to 7.75 percent from 8 percent last month, the first reduction since April last year.

Wholesale-price inflation eased to a 38-month low of 6.62 percent in January, while consumer-price growth accelerated to 10.79 percent, one of the highest levels in major economies.

The statistics agency predicts GDP growth of 5 percent in the year through March 2013, the least since 2002-2003.

Standard & Poor’s and Fitch Ratings lowered the outlook on India’s credit rating to negative from stable last year, citing risks such as the budget and trade deficits. That brought the nation a step closer to losing its investment-grade status.

[Prem]

India, Brazil Glad-Hand To Better Iron Ore Mining, Steel Relationship

http://seekingalpha.com/article/1206901 ... lationship

new alliance on the steel and mining fronts seems to be crystallizing between India and Brazil. Both countries have decided to increase cooperation and encourage investment opportunities in the steel and mining sectors, following a high-level ministerial visit from India to Brazil. India's Steel Minister Beni Prasad Verma headed the team to Brazil last week, which ended up signing a letter of intent for strengthening bilateral ties in the two sectors.The letter aims to encourage investment opportunities in the iron- and steel-related sectors by companies from both nations, and facilitate the exchange of technical know-how for the growth of the steel industry -- including pelletization plants, a statement from the Indian steel ministry said. "Both the governments would jointly work for developing the steel industry and to exchange technically qualified manpower for sustainable growth of the iron and steel industry," the ministry said in a statement.Brazil is the world's No. 3 iron ore producer, and boasts Vale (VALE), the world's largest ore company. Iron ore is something that is in short supply these days in India because of a judicial ban on mining it in some of the leading Indian states. The Indian delegation also reportedly made inquiries about iron ore and manganese deposits for the Indian state-run firms, such as NMDC Ltd. The visit, say Indian government officials, also explored the possibility of signing a memorandum of understanding when the Brazil's president comes to visit India in the next few months

[Austin]

India's external debt nearly trebles as trade deficit widens

With the trade deficit increasing, the country's external debt has nearly trebled and has the potential to fuel an already high inflation. The external debt has risen to $365 billion in the third quarter of 2012 from $137 billion during the same period in 2006.

"These rising deficits are being financed by increased foreign-currency borrowing, raising India's vulnerability to international financial volatility," Moody's Investors Service, a division of ratings agency Moody's said. "Wider trade deficits can also weaken the currency, raising domestic prices of imported commodities, further fueling India's already high inflation rate," said Atsi Sheth, Vice President - Senior Analyst, Sovereign Risk Group, Moody's Investors Service.

Though the country' external debt rose to $206 billion from $94 billion between 1997 and 2007, there was a fall in ratios of debt/foreign exchange reserves and debt/current account receipts. But these ratios have been increasing since 2007, Moody's said. "Should the current trend of more rapid growth in debt and import payments than export earnings and non-debt inflows persist, these ratios, and thus India's vulnerability to external shocks, will deteriorate significantly," it warned.

[shyamd]

You'll see Indian co's enter shale/energy business in south america soon