Indian Economy - News & Discussion 27 May 2012

Prem · Post by **Prem** » 24 Feb 2013 23:41

India's rice revolution: Chinese scientist questions massive harvests
No Dong Ling Long Jealousy Case

China's leading rice scientist has questioned India's claims of a world record harvest, following a report in last week's Observer of astonishing yields achieved by farmers growing the crop in the state of Bihar.Professor Yuan Longping, known as the "father of rice", said he doubted whether the Indian government had properly verified young Indian farmer Sumant Kumar's claim that he had produced 22.4 tonnes of rice from one hectare of land in Bihar in 2011.Yuan, director-general of China's national rice research centre and holder of the previous record of 19.4 tonnes a hectare, asked: "How could the Indian government have confirmed the number after the harvesting was already done?"
Many scientists initially doubted whether yields of this magnitude were possible, but peer-reviewed papers have shown consistent improvements over conventional rice farming methods.Yuan told the Chinese press after seeing the Observer Food Monthly article: "I introduced the intensification method to China myself. It could increase yields by 10-15% in low-yield fields, but it's not possible for fields that are already producing relatively high yields."
However, Norman Uphoff, professor of agriculture at Cornell University in the US, defended Kumar and the Indian authorities. "The yield measurements for Kumar and other farmers in the Nalanda district of Bihar, which matched or exceeded the previous record, were at first rejected by Indian scientists, who did not believe such results were possible."The measurements were made by staking out 10 by 5 metre plots in the centre of one-acre fields, not sampled crop-cuts from small areas. The 50 square metre plots were harvested with hundreds of people watching the cutting, threshing and weighing because everyone anticipated unprecedented yields," he said."These results were achieved with hybrid varieties which derive from Yuan's own innovation of hybridising rice, considered for decades by most rice scientists to be impossible."The measurements were later acknowledged as valid by both the Indian Council for Agricultural Research and the Ministry of Agriculture.Last week the government of Bihar, where nearly half the population of 100 million live below the poverty line and 93% depend on growing rice and potatoes, endorsed SRI, saying its rice production increased to a record 8.2m tonnes last year, against 3.1m tonnes in 2010-11. "The quantum jump is due to the use of the new SRI technique of rice production," said the finance minister, Sushil Kumar Modi.

svinayak · Post by **svinayak** » 25 Feb 2013 06:21

They have the record and they dont like to be beaten. It is a loss of face

Singha · Post by **Singha** » 25 Feb 2013 07:40

To complete the cycle we need to start intensive fresh water fish farming as well like tilapia and catfish which is done in east asia for domestic and export use.....our rivers and lakes are unable to sustain the demand for fish and its likely more people will shift to fish from meat for health concerns as time goes on.

Singha · Post by **Singha** » 25 Feb 2013 07:48

Not sure how serious but cameron was claiming bartania wanted to make a mumbai blr industrial corridor same way japan was sponsoring delhi mum, delhi kolkata and now blr chennai.

Aditya_V · Post by **Aditya_V** » 27 Feb 2013 18:38

Singha, but Bartinia is Bankcrupt unlike the Nippons

Prem · Post by **Prem** » 27 Feb 2013 22:31

Singha wrote:Not sure how serious but cameron was claiming bartania wanted to make a mumbai blr industrial corridor same way japan was sponsoring delhi mum, delhi kolkata and now blr chennai.

After TATA issue them bonus check ? Another decade of current economic path will put them in right place. UK need to provide us many good services to get bonafide status before they ask for partnership.

Prem · Post by **Prem** » 27 Feb 2013 23:57

Kushkhabar on Economic Daggar
India calls end to economic downturn

India’s finance ministry expects economic growth to accelerate next fiscal year, but has warned that a return to high growth looks “improbable” in the near term.
Asia’s third-largest economy is likely to expand between 6.1 and 6.7 per cent in the fiscal year to March 2014, higher than the 5 per cent predicted for the current year but well below a peak of 9.3 per cent reached in 2010-11, according to the annual Economic Survey released on Wednesday.The downturn is more or less over and the economy is looking up,” said the finance ministry’s summary of the report, which was released the day before the national budget.However, the authors of the survey, led by Raghuram Rajan, chief economic adviser, argued that the government needed to pursue reforms vigorously to create badly-needed jobs in manufacturing and services as millions of Indians move out of subsistence farming

nawabs · Post by **nawabs** » 28 Feb 2013 17:42

Don · Post by **Don** » 28 Feb 2013 19:05

http://online.wsj.com/article/SB1000142 ... 40946.html

TODAY'S MARKETSUpdated February 28, 2013, 6:17 a.m. ET.

Budget Drags India Shares Lower

By GURDEV SINGH VIRK
MUMBAI--A disappointing federal budget saw India shares reverse early gains to close at a more than three-month low Thursday.

The markets didn't like the proposed tax increases for rich companies and individuals and more government borrowing.

Don · Post by **Don** » 28 Feb 2013 19:11

http://www.reuters.com/article/2013/02/ ... 8W20130228

Eye on election, India surprises with spending surge

Stocks, bond prices and the rupee all fell despite Chidambaram's vow to cut the fiscal deficit to 4.8 percent of gross domestic product (GDP) in the year starting April 1, which some analysts said rested on questionable revenue assumptions given his hefty spending targets.

"While the finance minister has, we believe, presented a prudent budget, the question is whether the numbers are achievable," investment bank Nomura said in a research note

.

Next year's fiscal deficit target is in line with expectations but assumes hefty revenue growth, including 558 billion rupees from the sale of government stakes in companies, or more than double the 240 billion rupee target for the current year, which falls short of the initial target.

The budget also assumes revenue of 408.5 billion rupees from telecoms sector fees, more than double what it will generate this year, with its next auction of mobile airwaves poised to flop after attracting just one bidder.

RoyG · Post by **RoyG** » 28 Feb 2013 19:29

Everybody was expecting the budget to be a flop. It comes as no surprise. Congress will not deviate from Bahuka economics. We need fiscal responsibility, less regulation, and simplified tax code which will bring in more revenue.

RoyG · Post by **RoyG** » 28 Feb 2013 19:54

If I were the Finance Minister...
February 28, 2013 08:20 IST

In a developing county like India, the role of the Finance Minister is a crucial one, specially when the country is going through it's worst period in recent times. M R Venkatesh, has a few valid suggestions for Mr Chidambaram.

At the outset I will ensure that my Budget speech will not last more than fifteen minutes - not the customary hundred minutes of my illustrious predecessors. That would compel people to read through the Budget documents analyse and then criticise me rather than instantly rating it!

The broad theme, thrust and trajectory of my economic policies for the next five years shall be to:
Eliminate Hunger and with it, associated malnourishment.
Improve business environment and instil confidence in businessmen
Maintain stable simple predictable tax laws
Improve Infrastructure
Reduce deficits and improve overall efficiency
Given this paradigm, now let me take you through with my proposals.

A. Direct Taxes: I will attempt to do away with Personal Taxes. In this connection:

1. Salary Income will be brought out of the tax net but disallowed as expenditure in the hands of the Employer. Partner’s Salary Income shall be also be disallowed in hands of firms and LLPs (limited liability partnership). Self employed will have an exemption of Rs 5 lakh which will be increased substantially over the years. Income above this will be taxed at 20% flat rate of tax.

2. Corporate to pay tax at the rate of 30%, firms and LLPs at 20%.

3. In the alternative Corporate will be encouraged to pay 25% on MAT (Minimum Alternate Tax) basis This scheme will be offered first to listed companies, then to other companies in which public are substantially interested and then to other companies.

4. Interest income will be exempt for deposits in bank exceeding 3 years in line with exemption to Long Term Capital Gains Tax on shares (which will be available only if held for more than three years). This will improve Indian holding in our share markets. Senior citizens shall be exempt from tax on such income out of deposits up to Rs 50 lakh.

5. Deductions for repairs and maintenance for one house to be raised to 100%.

6. Depreciation Rates to be uniform for all assets - at 25%.\

7. Dividend Distribution tax to be at 20%.

8. Education Cess to be done away with.

9. Will work for abrogating the Indo-Mauritius DTAA.

Anti-Avoidance / Revenue raising measures:

S 68 of IT Act [seeking source of Income] shall not apply to a National Infrastructure Bond – an open ended tax amnesty scheme. Consequently any one with untaxed money can invest in this bond which will be redeemed at its face value at the end of five years of investment.
Participatory Notes shall be abolished. Existing PNs will be nationalised and given back to those who are not residents, NRI, PIO and OCBs with more than 60% Indian shareholding.
STT will be extended to all derivative transactions in commodities market, Forex markets and other such transactions on same rates as applicable to Stock markets.
A levy of 40% on tax at source will be levied on gross rental of second house, STCG in any asset, income from modelling by persons who are not professional models, lottery, profit on sale of second house and other such “unearned” incomes.
Chapter VI A of the Income-Tax Act to be eliminated.
STRs and CTRs generated by the Financial Intelligence Unit shall be used along with AIR to bring in new assessee to the tax fold. The target for IT department from these information shall substantially hiked.
Administrative measures

1. GAAR will be introduced forthwith. Any transaction emanating or passing through a Tax Haven will be deemed to be a tax avoidance scheme and the onus shall be on the tax payer to disprove this allegation.

2. Tax payers paying 30% incremental taxes over previous five years will be by statute exempt from the scrutiny provisions of S 143 (3), 147 r/w 148 and 263.

3. S 144C [Dispute Resolution Panel] shall be set up to look into all tax disputes.

4. National Tax Tribunal [NTT] to be set up. Appeal on the order of the NTT to be made only to the SC.

5. Settlement commission will be abolished. Instead a Tax Ombudsman to be created.

6. Wealth Tax will be abolished.

7. Prevention of Money Laundering Act to include concealment of income as a predicate crime. This would instantly mean seizing concealed wealth from tax evaders and mandatory visit to the prison.

B. Indirect Taxes

Will attempt to seek consensus on GST and usher it in by 2014.
Strengthen Anti-dumping and Safeguard mechanism against Chinese exports into India.
Peak Customs to be held at the current rates. Customs for Crude and LPG will be eliminated.
Excise on Diesel will be lowered to less than Rs 2 per litre and this benefit will be passed on to the consumer.
State Government will be directed to lower VAT on all petroleum products to below 20%.
C. Governance

Since our bureaucracy is over paid and highly unaccountable, the salary of the government officials shall be rearranged to reflect national per capita income.
Police and army will be modernized. Expenditure on armed forces to be a minimum 3% of GDP.
All children of those drawing salary from the Consolidated Find of India shall necessarily be required to go to Public schools, government officers must travel by public transport and their immediate relatives take to public health institutions.
Food grain production to be increased to 450 MT from the existing 250 MT in the next five years. Farmers will be encouraged to use modern technology to improve yields. District collectors shall be responsible to improve yields.
As the economic cost of food grains supplied is double the procurement cost and eight times the selling price of food grains through PDS, this mechanism will be disbanded over the next five years. As food will grow in abundance, market forces will take over.
Government however will hold strategic food stock and continue to supply to the BPL families for the next five years. Also states must contribute equal quantity for withdrawing equal allocation from central pool from this year. This will prevent fiscal irresponsibility by states and also encourage agriculture at the state level. Further, all subsidies will be phased out in the next 5 years. Prices of Urea will be fixed at a percentage of international prices and aligned to the same in the next five years.
All our 600-odd districts will have a centrally sponsored Health centres that will take care of primary health care.
Supreme Court shall have more than six benches across the country in Coimbatore, Nagpur, Patna, Shillong, Udaipur and Goa. All states with more than 30 million population to have one additional bench of High Court than the existing ones. Courts to work on two shifts between 8 30 AM and 1 PM and between 2 30 PM till 6 30 PM. Within five years, it shall be my endeavour to bring down judicial backlogs significantly.
A Judicial Accountability Act and Right to Services Act shall be passed. RTI Act will be repealed.
The government shall encourage extensive use of technology on all matters. And every department shall provide time limits for services to be expected. Any violation shall be viewed as criminal misconduct under the Prevention of Corruption Act. All budget allocations will be accompanied by physical targets. Concerned secretaries of the department will be accountable for the same. Failure to do so will be viewed as criminal misconduct.
All government sponsored institutions, ministries and departments that serve no constructive purpose shall be identified and abolished.
I will demonitise Rs 500 and Rs 1000 currency notes.
D. Infrastructure:

Government shall have a mission to double railway tracks in the next five years. These tracks will be state of the art technology and support train travel at speeds in advanced countries.
I will introduce a plan to inter-link all rivers in the country. This will improve irrigation in the country. As a first step all water bodies will be cleaned and repaired by Panchayats out of direct allocations made to them.
Infrastructure development shall be the effective employment guarantee scheme. Physical targets shall be fixed and monitored on a daily basis for every infrastructure project.
Road encroachments will be tackled on a war footing through the Urban Reneval Mission.
Government shall convert NADARD into a Grameen Bank.
Environment shall be treated on par with infrastructure.
E. Finances:

The 14th Finance Commission will be mandated to explore direct transfer of a portion of Central Taxes to Panchayats. Likewise States may be compelled to part a portion of their revenues to the third tier of the Constitution who will necessarily have to assume some functions for the funds given.
Government shall undertake massive disinvestment.
Government to bring in Inflation linked bond. Physical gold can be traded for these bonds. Source for Gold [S 68] will not be questioned by IT Authorities.
FRBM Act will be reviewed and practical targets set.
Under Article 292 of the Constitution, Government will have a ceiling on debt.
The author is a Chennai-based Chartered Accountant. He can be contacted at mrv@mrv.net.in

M R Venkatesh

http://www.rediff.com/business/report/b ... 130228.htm

I don't agree with some of the points like the corporate tax rate but overall this would've been a far better template for the budget session. Notice how he brings in the proposal for trading gold for inflation linked bond which will not be question by IT authorities. This would be a great start to building up our gold reserve and keeping it in the country vs parking it outside. We should do what the German's did...repatriate our gold and construct a fort knox type of facility to house it.

Aditya_V · Post by **Aditya_V** » 28 Feb 2013 20:15

Nawabs, you left the Surcharges, devil is in the details. Refer

Finance Bill 2013

RoyG, dont agree with this Dividend Distribution tax of 20%, profits of the Company have aldready been taxed, why tax the dividends again. I would reduce this to 5%

RoyG · Post by **RoyG** » 28 Feb 2013 20:23

Aditya_V wrote:Nawabs, you left the Surcharges, devil is in the details. Refer

Finance Bill 2013

RoyG, dont agree with this Dividend Distribution tax of 20%, profits of the Company have aldready been taxed, why tax the dividends again. I would reduce this to 5%

I agree. The corporate tax should also be reduced to 20-25% and should be lowered overtime as we pay off our debt and achieve budget surplus. I think he is going in the right direction wrt to black money and income tax. MNREGA scheme should be completely eliminated.

RamaY · Post by **RamaY** » 28 Feb 2013 23:08

Arjun wrote:Budget lacks strategy and vision for India's development: Modi

The 2013-14 budget has Rs 4Sanku (4,00,000 crores) of planned expenditure. This does not include the non-plan expenditure like govt functioning, salaries, interest payments etc.,

One estimate (circa 2000) puts the number of permanent jobs created for Rs 1000 crore at 15000. Let us assume we can create only 10,000 permanent jobs for every 1000 crore investment. The planned expenditure should lead to create at least 4million "permanent" jobs in 2013-14 alone. But what is the efficiency of GoI?

India's GDP is $2T. Assuming a 30% savings rate, a 100% efficient investment of these savings should create ~30million permanent jobs per year by Indian economy.

Look at this WEF madarsa math - http://www.weforum.org/content/generati ... tion-india

The World Economic Forum and the International Finance Corporation, a member of the World Bank Group, have announced the winners of their global essay competition on youth unemployment, The Youth Jobs Innovation Challenge. The competition aims to give voice to young people on how to tackle the growing crisis of youth unemployment. More than 1.2 billion young people will enter the labour market in the next 10 years with only 300 million jobs awaiting them. Ravi Subramanian was awarded third place for his entry.

How can India have 1.2 billion young people enter the labour force if entire population of India will be ~1.3billion in next 10 years? Given the fact that India will have (~30% population under 18yrs and 5% population >65 yrs, the total employable population cannot be more than 65% of over all population).

Given the fact that ~200 people are already employed (source) in Service and Industrial sectors, we are looking at the facilitating ~300 million people into new permanent employment sectors (irrespective of sector). This would leave ~150-200 million labor force in Agri sector, making it a competitive sector given the technological infusion.

Suraj · Post by **Suraj** » 28 Feb 2013 23:14

Investment/GDP exceeds savings/GDP by a few percent. See col 5 and col 17 data on page A10-A11 from Economic Survey data released with budget yesterday.

Savings/GDP: 30.8%
Investment/GDP: 35%

RamaY · Post by **RamaY** » 28 Feb 2013 23:34

^ Yes sir.

I think that is because ~9% of GDP (2012 numbers) is collected as Taxes and gets pumped back into economy in one way or other.

I am taking a conservative approach (75% investment at 100% efficiency).

My key point is that India has all the resources it need to move towards developed nation state. The only hurdle in this path is the Congress System and its politics.

Suraj · Post by **Suraj** » 28 Feb 2013 23:39

The addition investment over domestic savings rate comes from external capital inflows in the form of FII/FDI/PE/remittances...

I think you have your assumptions in reverse - all of what's invested is invested, but efficiency of investment isn't 100%. Cost of money tends to play a significant role pushing down efficiency, since a lot more is then spend on debt servicing as opposed to productive spending.

PS: please don't 'yes sir' me

Sushupti · Post by **Sushupti** » 28 Feb 2013 23:59

‏@centerofright

NDA GDP Growth trends with UPA1 & UPA 2

UPA 1 2004 - 2009 Growth trend

UPA 2 2009 - 2013 GDP growth trend

Supratik · Post by **Supratik** » 01 Mar 2013 00:37

Sushupti, I don't think those numbers are correct.

RamaY · Post by **RamaY** » 01 Mar 2013 02:10

Good debate on 2013-14 budget. Will be useful for this dhaga..

http://www.ndtv.com/video/player/ndtv-s ... o-featured

Shows the treason of economist trioka MMS/Montek/PC between 2004-2013

And dhimmi Pranay Roy shamelessly licking Congress boots...

putnanja · Post by **putnanja** » 01 Mar 2013 04:14

Achieving the impossible, thrice

By any yardstick, UPA 2's performance has been the worst ever for India, and the worst among most comparable countries in the world. It takes a lot of "talent" to do the following: One, increase the inflation rate from 5 to more than 10 per cent in the short space of three years. And to keep it sustained at double-digit levels for four consecutive years. No other country has been able to achieve this feat. Two, decelerate growth by a full 5 percentage points in the short space of two years, 2010-11 to 2012-13.
...
...
The most important objective of PC, in his own words over the last several months, was to prevent a ratings downgrade. Has he been able to achieve this target? Let us look at some basic numbers. A significant part of the runaway fiscal deficit (and associated current account deficit) has been caused by government expenditures getting out of hand. So what does UPA 2's final budget propose? An expenditure growth of 16.3 per cent, and much, much higher than its estimate of nominal GDP growth of only 10.8 per cent! That is, far from enforcing a decline in the growth rate of expenditures, UPA 2 has actually significantly increased the expenditure to GDP ratio from 14.0 percent to 14.7 per cent! But there is a decline in the fiscal deficit, so all must be OK? Yes, according to the calculations of UPA 2. Tax revenue is projected to gallop by a voodoo 19 per cent with a GDP increase of only 10.8 per cent. Such a swelling is most unlikely, given the slow growth of the Indian economy, and likely to be made slower still by the tax increases announced in the budget.
...
...
I am afraid the talk will soon turn to the credibility of the growth numbers projected in the budget. The first three quarters have grown at an average 5 per cent rate. The GDP for the whole year is likely to be less than 4.8 per cent, which will make the 2012-13 growth rate to be the fifth lowest in the last 20 years! If you believe UPA 2's growth and tax projections embedded in Chidambaram's budget for 2013-14, I have some used cars, a bridge, and snake oil for you to buy.

Sushupti · Post by **Sushupti** » 01 Mar 2013 09:13

Front page of ET today

Singha · Post by **Singha** » 01 Mar 2013 12:49

Maruti Vehicle Sales Drop 8%
Maruti Suzuki India, the country's largest car maker by sales, posted its second straight drop in monthly vehicle sales in February due to lower demand in the local automobile market

Don · Post by **Don** » 01 Mar 2013 14:13

http://www.reuters.com/article/2013/02/ ... ews&rpc=43

India budget disappoints, confuses foreign investors

By Abhishek Vishnoi and Archana Narayanan

MUMBAI Feb 28 (Reuters) - India's budget disappointed foreign investors on Thursday by failing to deliver a much anticipated cut in withholding taxes for debt investments and creating confusion with a proposal that appeared to target tax treaties.

However, the measures on their own were seen as unlikely to significantly boost foreign inflows at a time when India needs capital flows to plug a current account deficit that hit a record high in the quarter ended in September.

Suraj · Post by **Suraj** » 02 Mar 2013 02:04

Should spur investment and therefore growth, but not for a couple of years at least.
http://www.business-standard.com/article/companies/budget-to-help-india-inc-save-rs-25-000-cr-in-2-years-113030100576_1.html

India Inc has a good reason to step up capital expenditure (capex). With the Budget proposing an additional investment allowance of 15 per cent for assets acquired and installed in the next two years for over Rs 100 crore in capital spending, companies are expected to get a total benefit of Rs 25,000 crore.

According to an estimate by the Centre for Monitoring Indian Economy (CMIE), India Inc plans fresh capital expenditure of around Rs 5,00,000 crore ($92 billion) in 400 projects in the next two financial years. “There will be a saving of up to five per cent from our capital cost and this will help new units to break even faster,” said Ashok Bhandari, chief financial officer, Shree Cement. Reliance, the Birlas and the Tatas, which have a number of projects lined up, will benefit from this move. So will public sector companies.

The estimated saving of around Rs 25,000 crore on project cost is equivalent to 7.3 per cent of the aggregate profits of BSE-500 companies in FY12. The savings will flow directly into their bottom line and improve the financial viability of projects.

Long overdue action on GoI's part. So far the market had been distorted towards the high end, pricing many out of the market.
Affordable home sales may go up 20%, luxury sales to crawl

A day after the Budget, the industry estimates the sale of affordable homes could increase up to 20 per cent this year due to an additional exemption granted to first-time buyers. This benefit is for property worth not exceeding Rs 40 lakh.

The first-time buyers, who will avail a loan of up to Rs 25 lakh in 2013-14 for a property value of Rs 40 lakh, will be eligible for an additional interest subvention of Rs 1 lakh, the Budget said. Currently, a tax rebate of up to Rs 1.5 lakh is available.

The other end of the realty spectrum, luxury housing, might be impacted marginally due to another Budget announcement. This is about a provision related to property worth over Rs 1 crore. The rate of abatement on homes and flats of above 2,000 sq ft, or costing Rs 1 crore and above, has been reduced from 75 per cent to 70 per cent in the Budget.

Companies are borrowing substantially from abroad due to high domestic borrowing costs. They trade interest rate risk for exchange rate risk, probably wagering that the exchange rate will not substantially worsen from the current level:
India Inc raises $3.5 bn through ECBs in Jan 2013

Indian companies raised $3.51 billion through External Commercial Borrowings (ECBs) in January 2013 to fund modernisation, refinancing, importing capital goods and on lending data released by Reserve Bank of India showed.

However there wasn’t a single Foreign Currency Convertible Bond issuance in the first month of the year.

Out of the total amount raised, $637 million was via the automatic route while $2.87 billion was raised through the approval route that requires case-by-case approval by the RBI.

Higher domestic interest rates will crimp consumer debt based spending:
Auto sales decline 16% for 3rd month in a row

Domestic passenger vehicle sales declined for a third month in February with eight Indian car makers posting a combined drop of 15.8 per cent to sell 197,066 vehicles.

While the preliminary numbers are only indicative, as some companies are yet to report their monthly sales data, industry observers say February might have witnessed FY13's sharpest decline.

Prem · Post by **Prem** » 03 Mar 2013 02:29

http://online.wsj.com/article/SB1000142 ... 13880.html
India Borrowing Estimate Includes Bond Swaps

NEW DELHI--The Indian government's gross market-borrowing estimate for the next fiscal year includes bond swaps which will reduce its effective borrowing from the 6.29 trillion rupees ($115.3 billion) target announced in the federal budget.Rajat Bhargava, a joint secretary at the finance ministry, said Friday the government plans to swap 500 billion rupees worth of paper maturing in the next few years with fresh long-term bonds.This will reduce the government's gross borrowing proceeds in the year starting April 1 to 5.79 trillion rupees.Bond prices fell Thursday after Finance Minister P. Chidambaram announced the borrowing plan as the target of 6.29 trillion rupees was well above market estimate of 5.90 trillion rupees.India's benchmark 8.15% 2022 bond fell to 101.79 rupees Thursday from 102.28 in the previous session. It was at 101.60 rupees in afternoon trading Friday.The bond-swap plan "is part of a medium-term correction strategy which will continue for next two to three years," Mr. Bhargava said, referring to the buyback of bonds with very little residual maturity in exchange of fresh paper.Buying back bonds close to maturity helps the government spread out redemption pressure over several years and ease the strain on its finances.The target of net borrowing, which is arrived at after adjusting redemptions, remains unaffected at 4.84 trillion rupees for the next fiscal year.

Prem · Post by **Prem** » 03 Mar 2013 02:32

http://www.reuters.com/article/2013/03/ ... 2Q20130302
Exclusive: Jaguar Land Rover studying full production in India - sources

(Reuters) - Jaguar Land Rover (JLR) is investigating the potential of manufacturing cars in India, company sources said, as the British luxury carmaker looks to build on its growth in emerging markets with the help of Indian parent Tata Motors.JLR, which has ridden a wave of surging demand in China and other emerging markets to post record profits over the past year, is "actively exploring the possibility" of building cars from scratch in India, said one company source."The idea is being looked into, with the (Jaguar) XF and (Land Rover) Freelander the obvious candidates," said another source with knowledge of the matter.The British brands, which already assemble two models in India using parts and engines shipped from factories in the UK, will also begin assembling its popular Range Rover Evoque in the country soon, the first source said without providing details.Building cars in India, which has developed into an emerging market export hub for many global carmakers, would allow JLR to skirt high import taxes on luxury cars, which the country's finance minister proposed raising to100 percent from 75 percent in his budget speech last week."Jaguar Land Rover has ambitious plans to expand its manufacturing footprint and increase production in markets outside Britain," Del Sehmar, a Mumbai-based spokesman for the company, told Reuters. "We continue to examine options to expand our range of locally assembled products," he said, referring to India.LR will exhibit a new 9-speed automatic Evoque and an electric-powered version of its Land Rover Defender at the Geneva Motor Show next week

vina · Post by **vina** » 03 Mar 2013 07:00

There is an article that got posted to me, that is a sham , in terms of set up, location story etc, but I will post it all the same because it has a lot of truisms.

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan".. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.
When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Could not be any simpler than that. (Please pass this on) These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

The first two fits in perfectly with the Kangress version of hare brained socialism and the last three perfectly describe West Bengal and it's penchant for the Koo Aid of the CPI-M and Mamta Di and their politics of entitlement and holier than thou outrage and an expectation that someone else owes them a life and living and that somehow by doing nothing other than being a professional agitator and contributing warm bodies to disruptive and pure nuisance activities, you can become wealthy.

Arjun · Post by **Arjun** » 03 Mar 2013 10:10

vina wrote:The first two fits in perfectly with the Kangress version of hare brained socialism and the last three perfectly describe West Bengal and it's penchant for the Koo Aid of the CPI-M and Mamta Di and their politics of entitlement and holier than thou outrage and an expectation that someone else owes them a life and living and that somehow by doing nothing other than being a professional agitator and contributing warm bodies to disruptive and pure nuisance activities, you can become wealthy.

Actually all 5 perfectly describe the Congress and more particularly the Dynasty economic philosophy.

Just because the Dynasty can afford to put on extra gloss and sophistication over the same politics of entitlement - does not make them any better than CPI-M or Mamta Di. Suggest you get over your need to keep dumping on West Bengal - and think about the larger country once in a while.

chetak · Post by **chetak** » 03 Mar 2013 10:58

Would some gyani answer, please.

Are there any blogs ( of a BRF standard) covering the Indian economy and it's detailed analysis ??

Singha · Post by **Singha** » 04 Mar 2013 14:55

economy is trending nicely to the "gandhi dynasty rate of growth"..while MUL sales are down 8% in Feb MoM, tata motors is down 33%...I believe it also includes their CV segment which is a good leading indicator of economic growth for next one year..transport operators have their eyes and ears on ground and will put in new vehicles if they see strong demand for freight loads.

Madam has truly done a brilliant job from 2004 onward. hobbled the next admin (if it happens to be non INC) with 5 yrs of trying to patch holes in the hull before even thinking of restarting fwd motion

Theo_Fidel · Post by **Theo_Fidel** » 04 Mar 2013 22:06

^^^
That is unlikely to happen as long as our savings/investment rate remains in the 30% +/- range.

It must be remembered that during the long relatively slow growth 50's -70's the savings/investment rate was an average of 12%. At some points it fell into single digit territory of 8% or so. At one truly depressing point in the 1950's savings/investment fell to 6% which was less than inflation for we were actually heading backwards for a while there.

India is not a rich country yet but it is infinitely more prosperous than those desperate days.

Suraj · Post by **Suraj** » 04 Mar 2013 23:00

Singha: CV sales are indeed a good leading indicator of an uptick in industrial activity and domestic merchandise trade. In the US, the Dow Transports index plays that role - it tracks primarily the trucking and railroad businesses that move freight. Such a similar index for India would be very useful, though there are no sufficiently large players with an equity market presence in India; I am not aware of any large scale trucking company with a significant publicly traded presence, nor does Indian Railways fit the bill.

RoyG · Post by **RoyG** » 04 Mar 2013 23:52

Not importing gold for a year will cut current account deficit by 50 per cent: Chidambaram
NDTV | Updated On: March 04, 2013 23:20 (IST)

Deliberating on the need to narrow down the current account deficit (CAD), Finance Minister P Chidambaram today said that if we don't import gold for one year, half of our current account deficit will disappear, and the only way to meet the target is to increase exports.

The finance minister was fielding questions on the Union Budget he tabled in Parliament on February 28 from the general public on Google Hangout - a multi-person online video chat.

The finance minister was joined by select panelists including Jahangir Aziz, senior Asia economist and India chief economist, JPMorgan; Anand Mahindra, chairman and managing director of Mahindra & Mahindra; and Amit Singhal, senior vice-president, Google.

Alleviating concerns over the worrisome current account deficit figure, the finance minister said the figure is likely to be less than the provisional figure of 5.2 per cent announced in the Budget. " We will not cross the red line of fiscal deficit. It will be kept at 4.8 per cent or below." he said. This reassurance from the finance minister is expected to come as a big relief for the industry.

Current account deficit, or CAD, which represents the difference between inflows and outflows of foreign currency - had touched a record high of 5.4 per cent of the GDP in the July-September quarter.

GROSS DOMESTIC PRODUCT

"Our aim is to achieve 9 per cent growth," the finance minister said, reiterating that in the last six years the country had grown at a rate of 8 per cent.

"No doubt that we have slipped but we can climb again," he said.

DISINVESTMENT

Although it was more or less Life Insurance Corporation (LIC) that bailed out the government's disinvestment programme for the current financial year, to all's surprise retail investors also bet a lot of their money this time around.

This financial year, the government has so far raised Rs. 21,500 crore against the target of Rs. 30,000 crore. The department of disinvestment has said the government would try to raise Rs. 27,000 crore in this financial year ending March.

Sounding positive after this success on the disinvestment front, Mr. Chidambaram said: "We will raise Rs. 40,000 crore via disinvestment in the coming fiscal year (2013-14) ... Will raise Rs. 14,000 crore more by way of selling residual stake of the government in non-government companies."

"Every single disinvestment has been a success since I took over," he added.

CAPITAL GAINS TAX

"There is no case for completely scrapping short-term capital gains tax. When there is a tax on salaries, tax on all other earnings, why should there not be a tax on capital gains ... How many countries in the world have exempt long-term capital gains tax on sale of listed shares ... The capital gains tax regime in India is fair and reasonable. I think it's a fair policy, but I'm open to suggestions on this," Mr. Chidambaram said.

UNINVESTED CASH

One of the biggest problems the Indian economy faces today is that companies and individuals are sitting on piles of cash, and do not want to invest it. This way the money gets hoarded, a bid bad for the economy.

"People, companies and public sector units (PSUs) are sitting on piles of cash. What I intend to do now is that I will ask them every quarter where they are investing. In case they have no plans, I will ask them to let the government utilise the cash," Mr. Chidambaram said.

GLOBAL ECONOMY AND INDIA

The finance minister blamed the uncertainty looming over the global economy for not being able to boost the country's economy. "We haven't gone wrong anywhere ... it is the global situation that has affected us," Mr. Chidambaram said.

"Economies have shrunk globally, we're trying to stabilise ours," he added.

Households buying gold and the global economy are the reasons for our poor economic state onlee

. This guy thinks that by cutting gold purchases for one year he will pay half of the current account deficit. Problem is our spending keeps increasing every year so it won't do sh*t to fix our growing debt. In the face of depreciating currencies gold prices are appreciating and central banks are accumulating. Why would you penalize gold? Bravo Congress.

RoyG · Post by **RoyG** » 05 Mar 2013 00:02

Theo_Fidel wrote:^^^
That is unlikely to happen as long as our savings/investment rate remains in the 30% +/- range.

It must be remembered that during the long relatively slow growth 50's -70's the savings/investment rate was an average of 12%. At some points it fell into single digit territory of 8% or so. At one truly depressing point in the 1950's savings/investment fell to 6% which was less than inflation for we were actually heading backwards for a while there.

India is not a rich country yet but it is infinitely more prosperous than those desperate days.

India is a rich country. The problem is we have leftists running it. They abhor savings and want to spend, spend, spend. This mentality has retarded growth and has ruined the economy. The only way out is to eliminate this spending habit and remove regulations so that people have more investment options. This is the only way we can have a sustainable economy.

amit · Post by **amit** » 05 Mar 2013 11:55

RoyG wrote:Households buying gold and the global economy are the reasons for our poor economic state onlee . This guy thinks that by cutting gold purchases for one year he will pay half of the current account deficit. Problem is our spending keeps increasing every year so it won't do sh*t to fix our growing debt. In the face of depreciating currencies gold prices are appreciating and central banks are accumulating. Why would you penalize gold? Bravo Congress.

Boss, I wonder if you know what you're talking about. You've been one of the advocates of "import more gold" on this forum. Do you have any idea how much in percentage gold imports account for our import bill every year? The figure is easily available and in fact I've posted it before more than once. Have a look at it and then see if Chidambaram is talking sense or not. Of course it would not be possible to stop imports for one whole year but gold import is a problem and it's a horrid investment option for ordinary middle class salary earners.

amit · Post by **amit** » 05 Mar 2013 12:00

RoyG wrote:India is a rich country. The problem is we have leftists running it. They abhor savings and want to spend, spend, spend. This mentality has retarded growth and has ruined the economy. The only way out is to eliminate this spending habit and remove regulations so that people have more investment options. This is the only way we can have a sustainable economy.

This is an interesting perspective. Could you enumerate what restrictions should be removed so that "people have more investment options"? I take it that you think there are investment barriers which is resulting in people splurging on their savings?

Oh by the way, I hope you do understand that China, for example, is run by capitalists whose spending makes Indian leaders look like misers. Yet, I'm sure you've seen comparisons between the growth rate trajectories of the two countries.

Aditya_V · Post by **Aditya_V** » 05 Mar 2013 12:17

Amit, If you have dealt with Service Tax, Excise, Customs, Income Tax and related rules and taxes and way Assessement Officers have been behaving, with the Transportation Bottlenecks, shortage of electricity, plus Labour acts and then Unions, hafta collectors you will understand thanks to Govt rules, manufacturing is very tough in India.

Reforming Import of Service rules 2006, some of Customs and Excise rules after 2005, IT TPO rules since 2006, GST rules along with doing serious work on transportation problems, rail networks and Electricity Will give a big plus to our economy.

amit · Post by **amit** » 05 Mar 2013 13:22

^^^

That's a very nice list of things that needs to be done. Most of it can be fixed if we can get into a GST regime. However, the amount of political opposition that exists would be amazing if it hadn't been so stupid. Kelkar has calculated a GST regime could straight away add around two percentage points to our GDP growth without doing anything else.

But the point is my response was to the point made about giving people "more investment options". I'm curious to know how that can be done. Frankly I can't see the connection between the points you raise and the statement that I reacted to.

Please enlighten me on the connection, if you don't mind.