Indian Economy - News & Discussion 27 May 2012

RamaY · Post by **RamaY** » 16 May 2013 03:05

http://economictimes.indiatimes.com/mar ... 078122.cms

MUMBAI: The Reserve Bank of India will kick off the sale of inflation-linked bonds for the first time in over a decade to lure investors away from gold, the imports of which have widened India's current account deficit.
RBI will issue the inflation-indexed bonds (IIBs) worth Rs 12,000-15,000 crore this fiscal year, as announced in the Union Budget. Inflation-indexed bonds are a new category of debt instruments to be introduced in India where the coupon and principal amount would be linked to the rate of wholesale price inflation with a lag of four months, said the RBI notification.
"IIBs will be having a fixed real coupon rate and a nominal principal value that is adjusted against inflation," said the notification "Periodic coupon payments are paid on adjusted principal. Thus these bonds provide inflation protection to both principal and coupon payment. At maturity, the adjusted principal or the face value, whichever is higher, will be paid."
The objective of introducing such bonds is to channelize savings into productive sources of instruments from unproductive ones like gold.
"These bonds should ideally attract savers," said Ajay Manglunia, head, fixed income, Edelweiss Financial Services. "The timing of the issue by RBI is very good, and it makes sense to issue these bonds when inflation is low, so investors get higher returns. Retail investors have never been very interested in government securities because of lower returns in a high-inflation environment," he added.
RBI's first tranche of bonds would be issued for retail as well as institutional investors in the first half of the fiscal, and the second series, to be issued in the second half of the current fiscal, would be exclusively for retail investors, the RBI notification said.
Retail participants can place their bids for these bonds by opening subsidiary general ledger accounts with banks or primary dealers, who trade exclusively in the bonds sector.

manish · Post by **manish** » 16 May 2013 09:35

Even as there are some signs and feelers out there about the economy finally turning around, bad news continues to pour out on the jobs front, across several industries:

Slowdown: Flipkart, Jabong cutting jobs

BANGALORE: Online retailers are handing out pink slips in large numbers as they shift attention to controlling costs from acquiring customers, several industry executives said. Among the companies sacking staff are Flipkart and Jabong, which are among the biggest in the business, illustrating the growing pain in India's e-commerce sector.

Nearly 250 employees, or about one-tenth of Flipkart's workforce, are being shown the door, according to at least three people with direct knowledge of the development. At Jabong, too, a similar number of employees have been sacked, but the company employs fewer than 1,000 staff.

Lanco Infratech trimming staff by 20% to reduce cost

NEW DELHI, APRIL 22:
Lanco Infratech Ltd, which has interests in power, engineering, procurement and construction (EPC), infrastructure and natural resources, is cutting down its workforce by nearly 20 per cent.

This is part of the consolidation strategy to save cost, said L. Madhusudhan Rao, Executive Chairman of the 25-year-old Lanco Group. Lanco has been incurring financial losses on lower margins, capitalisation and soaring interest charges.

Lanco’s total loss in the first three quarters of 2012-13 is of the order of Rs 990 crore, shows data compiled by Bloomberg.

Siemens to slash 4,000 jobs in its industrial sector

In India and Pakistan, Siemens plans to cut 300 jobs via plant closures.

EA cull continues with 50 jobs lost in India

Around 50 jobs have gone at Electronic Arts India, according to reports from the Facebook page of the region's software trade organisation Nasscom.

A former employee of the studio detailed the numbers while EA would not confirm figures but instead issued a statement discussing restructures to MCV India.

EA India is a mobile focused studio, based in Hyderbad. The closures will be another blow to the region, following Gameloft's shuttering of its studio in the city, with the loss of over 200 jobs.

subhamoy.das · Post by **subhamoy.das** » 16 May 2013 14:17

Some positive new on economy front. World bets on the power of indian consumption

http://economictimes.indiatimes.com/new ... 081243.cms

Singha · Post by **Singha** » 16 May 2013 16:18

flipkart was paying starting pkg of 10-15L to freshers from prestigious engg colleges I believe ...

Prem · Post by **Prem** » 16 May 2013 23:14

For India, Better Growth This Year, Even Better Next Year

http://www.forbes.com/sites/kenrapoza/2 ... next-year/

India’s economy will grow more this year than it did in 2012. And if that’s not good news for this once “gasping elephant”, next year will be even better.
On Wednesday, Moody’s Investors Service estimated Indian GDP to grow somewhere between 5.5% and 6.5% this year, up from around 4% last year. In 2014, India will do even better — following a generally perceived uptick in the global economy — and grow as much as 7%.India’s fourth quarter 2012 GDP was just 4.5%, its lowest in more than 10 years. The country’s growth has been on a steady decline since 2010, when 9% growth was once common for at least two quarters before slipping below 8% quickly.
Policymakers’ efforts to provide incentives to foreign investment and local savings have been relatively small in scope, and are unlikely to presage a pronounced increase in capital spending in the near term. India is “struggling to boost investment and wider economic growth in the face of private- sector caution and relatively high inflation”, Moody’s analysts said.The possibility of slower-than-expected growth in key emerging markets — China, India and Brazil — is a serious threat to the global recovery. Short term indicators such as industrial production and business surveys suggest that Indian economic activity has remained weak in recent months. Even though GDP growth is likely to pick up during 2013, it will probably take at least another year or two before the economy matches the pace of expansion seen during 2010.

Austin · Post by **Austin** » 17 May 2013 20:29

S&P affirms negative outlook on India, says chances of downgrade remain

Ratings agency Standard & Poor's affirmed India's sovereign rating at " BBB-minus" with a "negative" outlook, reiterating there was a one-in-three chances of a ratings downgrade over the next 12 months, a statement said on Friday.

S&P said the government's ability to prop up investment growth remained uncertain.

The ratings agency, however, said there was scope to upgrade the sovereign ratings if the government unleashes public and private investments to spur economic growth of India.

sum · Post by **sum** » 17 May 2013 21:50

Singha wrote:flipkart was paying starting pkg of 10-15L to freshers from prestigious engg colleges I believe ...

6-7 years exp types were getting 30-35L from what i heard( for all the retail cos like Myntra, Flipkart etc) and were exclusively only from MSFT, Google, Yahoo, Amazon type cos onlee.

Anyways, IIRC, engineers havent been hit by current layoffs, only the support staff

vivek.rao · Post by **vivek.rao** » 18 May 2013 04:59

http://www.niticentral.com/2013/05/17/s ... 79002.html

Global rating agency Standard & Poor’s on Friday threatened India to downgrade its credit rating to a ‘junk’ status if the Government fails to pursue reforms and check deterioration in fiscal and current account deficits.

While retaining India’s sovereign rating at ‘BBB-’ with a negative outlook citing high fiscal and current account deficits, S&P said there is at least a one-in-three likelihood of a downgrade within the next 12 months.

“We may lower the rating if we conclude that slower Government reforms than we currently expect would not lead economic growth to recover to levels experienced earlier this decade,” the rating agency said in a statement.

‘BBB-’ is the lowest investment grade and a downgrade would mean pushing the country’s sovereign rating to junk status, making overseas borrowings by corporates costlier.

Reacting to the warning by Standard & Poor’s, the Government has said there is nothing to be worried about.

Arjun · Post by **Arjun** » 18 May 2013 09:18

How India is throwing away the world’s biggest economic opportunity

But although India’s dreamers have faith in its youth, the country’s youngsters have growing reason to doubt India. The economy raised aspirations that it has subsequently failed to meet. From 2005 to 2007 it grew by about 9% a year. In 2010 it even grew faster than China (if the two economies are measured consistently). But growth has since halved. India’s impressive savings rate, the other side of the demographic dividend, has also slipped. Worryingly, a growing share of household saving is bypassing the financial system altogether, seeking refuge from inflation in gold, bricks and mortar.

The last time a Congress-led government liberalised the economy in earnest—in 1991—over 40% of today’s Indians had yet to be born. Their anxieties must seem remote to India’s elderly politicians. The average age of cabinet ministers is 65. The country has never had a prime minister born in independent India. One man who might buck that trend, Rahul Gandhi, is the son, grandson and great-grandson of former prime ministers. India is run by gerontocrats and epigones: grey hairs and groomed heirs. The apparent indifference of the police to the way young women in particular are treated has underlined the way that old India fails to protect new India.

The list of necessary reforms is familiar. It includes measures to streamline decision-making and curb corruption, fiscal discipline that would free the central bank to tame inflation, and banking reforms to recapture the saving now lost to the financial system. The government needs to rethink its approach to the acquisition of land, on which flawed legislation is pending, to ease investment. And it needs to unclog the energy sector: India’s new power stations are worth little without enough domestic coal and gas to feed them.

Such reforms would benefit all Indians and all areas of the economy. But there is one particular industrial shift that should concentrate minds (see article). As China’s workforce shrinks and its wages rise, up to 85m manufacturing jobs might migrate elsewhere, according to Justin Lin, a former chief economist at the World Bank and now at Peking University. Here surely is an opportunity for India’s underemployed young hands. Why shouldn’t those jobs come to India?

The answer is that, set alongside other fast-emerging Asian countries, India has too few of the right sort of firms or workers and too many of the wrong rules. There are certainly some impressive Indian manufacturers, especially in carmaking. But the likes of Bharat Forge and Mahindra & Mahindra prefer to employ sophisticated machinery rather than abundant labour. At the other end of the spectrum are innumerable tinpot workshops, employing handfuls of people and outdated methods. What India lacks is a Mittelstand of midsized, labour-hungry firms. Even during the boom years, it created many more jobs in construction than in manufacturing. It is hard for India’s young to raise their sights when they are carrying bricks on their heads.

To fill this “missing middle” the government should remove some of the bureaucratic bricks that now weigh on the heads of India’s entrepreneurs. These include India’s notorious labour laws which, on paper, prevent factories firing anyone without the state’s permission. It is true that by hiring labour from third parties the country’s employers have blunted the law’s effect. But in so doing they have also blunted their own incentive to train their workers—and lead to more abuse.

And a lot of training is required. Many of India’s young leave school ill-prepared even for rudimentary jobs. Standards are stagnant, even slipping. By their fifth year of schooling, only half of rural pupils can solve a calculation like 43 minus 24, according to the Annual Status of Education Report. Barely a quarter can read an English sentence like “What is the time?”

Anthem for foiled youth

A focus on capturing the manufacturing jobs fleeing China is not an excuse for industrial policy, let alone a return to a Licence Raj picking favoured factories. Most of the reforms that would help young factory workers would help the whole economy as well. Less bureaucracy, better schools and decent electricity would give a boost to India’s services industry and to older workers too. But at the moment it is India’s young who bear the brunt of their elders’ complacency.

“Why are the youth angry?” the young Gandhi asked earlier this year. The real wonder is why they are not even angrier. In the rural districts the government has bought social peace with public works and subsidised food. In the cities the young have taken to the streets only sporadically. In 2011 they rallied to the banner of an eccentric anti-corruption campaigner. In December they expressed their outrage at the brutal gang-rape of a young woman whose aspirations mirrored their own. In India great hardship is often suffered in silence. However bad things get, someone nearby is enduring worse, and even the poor are acutely aware of how much they have to lose.

Social peace is no bad thing. But India could do with a sense of urgency about the reforms needed to generate jobs and rejuvenate politics. “India’s century” is not an inevitability. It is a giant opportunity that India is in danger of squandering.

Austin · Post by **Austin** » 18 May 2013 09:49

Government attacks S&P's rating outlook

Theo_Fidel · Post by **Theo_Fidel** » 18 May 2013 09:50

Monsoon has begun!!

http://online.wsj.com/article/SB1000142 ... 37118.html

Monsoon rains have reached India's Andaman Sea and parts of Bay of Bengal, the state-run India Meteorological Department said Friday.

Patni · Post by **Patni** » 19 May 2013 18:32

PRESS RELEASE
CONSUMER PRICE INDEX NUMBERS

Provisional annual inflation rate based on all India general CPI
(Combined) for April 2013 on point to point basis (April 2013 over April 2012)
is 9.39% as compared to 10.39% (final) for the previous month of March 2013.
The corresponding provisional inflation rates for rural and urban areas for
April 2013 are 9.16% and 9.73% respectively. Inflation rates (final) for rural
and urban areas for March 2013 are 10.41% and 10.38% respectively.

Abhijeet · Post by **Abhijeet** » 20 May 2013 12:42

Prices have doubled in 10 years? Wow -- but very believable.

What percentage of the population would have seen their incomes double in 10 years? In India, you need to get raises of 10% a year or above just to keep up with inflation.

Austin · Post by **Austin** » 20 May 2013 12:55

Abhijeet wrote:Prices have doubled in 10 years? Wow -- but very believable.

More like tripled or more because i know many commodity that i used to purchase 10 years back now costs 3x or more than that , the CPI would hide more facts then they would revel and I am not sure even if its accurate to reflect the ground reality

What percentage of the population would have seen their incomes double in 10 years? In India, you need to get raises of 10% a year or above just to keep up with inflation.

A small percentage of population would have seen their incomes more than double , thats the key problem facing common man in this country the galloping prices of food and other items making it hand to mouth living for many in this country and corruption that has spread like cancer affecting many aspect of society.

Theo_Fidel · Post by **Theo_Fidel** » 20 May 2013 19:23

How much of this commodity price increase is due to release of price controls.
IIRC the price of domestic coal is still 1/2 - 1/3 the international price and set that way by GOI.
Many other commodities too.

Austin · Post by **Austin** » 20 May 2013 22:23

India, China agree to take steps to address trade imbalance

TSJones · Post by **TSJones** » 20 May 2013 23:21

Austin wrote:India, China agree to take steps to address trade imbalance

Good luck with that. Seriously.

Rishirishi · Post by **Rishirishi** » 21 May 2013 02:12

Austin wrote:India, China agree to take steps to address trade imbalance

Havent we all heard that one before

Nothing is going to happen.

Why; Because a lot of the imports are only marginally chinese. Computers, cameras, mobile phones, branded toys, and a whole range of other goods carry the China tag, but are actually products from other countries.

However we find all kind of Chinese products like suitcases, bags, pencils etc, that India should be manufacturing itself.

krishnan · Post by **krishnan** » 21 May 2013 06:21

Wont, we are obsessed with anything phoriegn

Vipul · Post by **Vipul** » 21 May 2013 07:51

Comptroller and Auditor General Vinod Rai may have changed institution forever.

Comptroller and Auditor General Vinod Rai demits office on May 23 as one of the most politically divisive CAG in Indian history. Rai's audit reports on 2G spectrum allocation and the coal block allocations have arguably brought 'policy paralysis', but his earlier stint in government was known for just the opposite.

"Rai, in his tenure as economic affairs secretary was particularly known to cut through red tape," said his junior in the ministry. He reportedly got the incorporation of India Infrastructure Finance Company done in a weekend, just because finance minister P Chidambaram wanted to announce it in the 2006 budget speech. A 1972-batch Kerala cadre officer, Rai was known in the state, and during central deputation, for his impeccable integrity.

"We were batchmates and cadre mates, and had district postings for many years in Kerala. His stint in the state never saw him come into conflict with the political class. This is the first time that criticism from any politician has come his way," said former planning secretary Sudha Pillai.

Indeed high praise from the contingent of Malayali politicians in Delhi helped swing opinion in his favour for appointment as CAG. "As a CAG, he is a constitutional authority. In my view, he has done to CAG's office what TN Seshan did for the Election Commission," said former cabinet secretary TSR Subramanian. "Even then, politicians complained about interference but elections have been the better for it," he added.

However, government managers say that Rai should have calculated not just the intended consequences of his actions, but unintended ones too. "It was one of UPA government's biggest mistakes," says AICC general secretary Digvijaya Singh, on Rai's appointment.

The miniscule probe into what the political class terms its discretionary decision-making abilities has cut deep. In an interview to ET, Agriculture Minister Sharad Pawar said that audits appeared to show that UPA-II was full of scams. "But the time has come to discuss certain organisations and public utterances of certain organisation heads like CAG. At least in the last 45 years, nobody was thinking of reading CAG reports and CAG heads were not addressing press conferences, creating sensation."

Former chief statistician of India, Pronab Sen, attributes Sharad Pawar's reaction to Rai 'reclaiming pre-eminence' of CAG office. "My father was a bureaucrat in the 1960s, and I remember that he panicked before an audit report was due; in the 1990s, nobody bothered about it. Rai has brought back CAG into focus," he said.

The conflict between the political class and Rai stems on different interpretations of the same job. For the political class, CAG is a cut and dried numbers man, whereas Rai feels, "public auditors should seek to sensitise public opinion on our audit observations. It focuses the minds of the custodians of the public purse to use resources effectively, as they know that after audit scrutiny, the public will be aware of their actions". Conflicting semiotics between accounts and accountability, it seems, is here to stay.

Austin · Post by **Austin** » 21 May 2013 16:03

Agreed CAG has now become an institution of its own , In good old time its report used to be tabled in Parliament to discuss which was routine time pass , these days CAG report is used to root out scam.

India's trade deficit with China set to grow: Chinese analysts

HSBC says Indian rupee better suited to stand US dollar strength

vina · Post by **vina** » 22 May 2013 10:19

Amartya Sen - The Nobel Pamphleteer . Literal tearing apart by Swaminathan Aiyar

vina · Post by **vina** » 22 May 2013 12:52

A good sensible article. Gold Rallied For Years on "Misunderstanding"

svinayak · Post by **svinayak** » 23 May 2013 03:22

vina wrote:A good sensible article. Gold Rallied For Years on "Misunderstanding"

Gold is now seen as competing for Dollar supremacy and hence they are shorting Gold so that Dollar remains strong and they can continue in the global trade.

Once gold comes down to $1000 Soros and others will start buying gold which will be start of the inflation and collapse of the trading currencies.

RamaY · Post by **RamaY** » 23 May 2013 05:51

Moorkh Chidambaram's style of disinvestments

PSUs with large cash reserves to buy Govt shares in other PSUs.

Imagine this. GoI has 70% share in PSU-A. PSU-A has 50k crore cash and buys govt share from PSU-B with that money.

GoI claims that it raised 50k crore from divestment? Is it divestment when GoI ends up owning back 35K crore (70%) of it?

Hari Seldon · Post by **Hari Seldon** » 23 May 2013 09:47

India's lost decade

Supratik · Post by **Supratik** » 23 May 2013 12:44

RamaY wrote:Moorkh Chidambaram's style of disinvestments

PSUs with large cash reserves to buy Govt shares in other PSUs.

Imagine this. GoI has 70% share in PSU-A. PSU-A has 50k crore cash and buys govt share from PSU-B with that money.

GoI claims that it raised 50k crore from divestment? Is it divestment when GoI ends up owning back 35K crore (70%) of it?

It is back to good old times. Accounting engineering. I think PVNR was an exception in the INC.

Prem · Post by **Prem** » 24 May 2013 23:24

http://www.marketwatch.com/story/india- ... 2013-05-24
India names Goldman to manage ETF of state firms

NEW DELHI--India has appointed Goldman Sachs Asset Management (India) Pvt. Ltd. to create and launch an exchange-traded fund that will raise money from investors and invest in state-run companies, a senior finance ministry official said Friday."The finance minister [P. Chidambaram] has cleared the appointment. We have issued a letter to Goldman Sachs," the finance ministry official told the Wall Street Journal.The government has also named Luthra and Luthra as the legal advisor for the proposed exchange-traded fund, or ETF, the official said.Initially, the government plans to have 15-20 top state-run companies in the basket of ETFs, the official said, adding that the first ETF may be launched within three to four months.May 1, a panel of India's cabinet ministers cleared a proposal from the finance ministry to launch the ETF, which is expected to help the government's efforts to raise billions of dollars by selling stakes in the companies it manages.Selling shares in state-run companies is a key part of the government's program to raise money to narrow its fiscal deficit, which is expected to have reached 5.2% of gross domestic product in the last fiscal year ended March 31.

Austin · Post by **Austin** » 25 May 2013 11:28

Seems like Reliance would make some quick buck

Gas price hike a mega scam in the making

The Petroleum and Natural Gas Ministry is on the verge of perpetrating a “gigantic scam” by advocating a gas price hike that would benefit the Mukesh Ambani-owned Reliance Industries Limited (RIL) to the tune of thousands of crores, said CPI MP Gurudas Dasgupta at a press conference here on Thursday. Mr. Dasgupta has sought the intervention of Prime Minister Manmohan Singh in not only putting an end to this “national loot” but also in deciding on whether Veerappa Moily, the Petroleum and Natural Gas Minister, can continue in office.

Mr. Dasgupta, who also released a letter to the Prime Minister along with some documents including parts of a Cabinet note on the gas price hike, said while the Rangarajan panel had recommended almost doubling the $4.2 mbtu price, Mr. Moily had gone much further and recommended that the gas price be $8 mbtu in the first year, $10 mbtu in the second year, $12 mbtu in the third year and $14 mbtu in the last two years — close to what RIL had been demanding. “The Petroleum Secretary and other senior officials had opposed the Moily formula three times and returned the file. But Mr. Moily is putting pressure on them to sign the file that contains his recommendations. If the Moily formula is accepted then the country would be faced with an additional subsidy burden of Rs. 76,000 crore, all this to benefit an industrial house. It is high time that the Prime Minister should intervene in the matter and put an end to this betrayal of the nation and remove Mr. Moily from the Cabinet,’’ he demanded.

Mr. Dasgupta claimed that if RIL’s price of $13.8 mbtu price is accepted, the increase in the subsidy burden would be Rs. 36,000 crore per year and the corresponding profit will be Rs. 32,400 crore for RIL. For the five-year period, this would translate into an additional subsidy outgo of Rs. 1,80,000 crore and an additional profit of Rs. 1,62,000 crore for RIL.

“This is a gigantic scam that is in the process of being enacted through the generous assistance of the petroleum Ministry. This is national loot of the country’s natural resources and will cause deepest anger in our people. This will be the biggest crime if it is allowed to happen in the tenure of UPA II. I therefore request the Prime Minister to personally intervene to ensure that this is pre-empted,’’ he remarked.

“What is even more shocking is that Mr. Moily has been pitching for RIL despite strong resistance by officials in the Petroleum Ministry including the Petroleum Secretary to a massive hike in gas prices. He has been in touch with RIL and has been sharing information with them on the issue. His computer should be probed and all communications should be scrutinised. This is superlative corruption and if A. Raja can go for 2G scam, Ashwani Kumar for tampering with the CBI status report, and Pawan Bansal for the Railgate bribery scam, then there is no reason why Mr. Moily cannot be sacked for being hand-in-glove with RIL and causing loss to the national exchequer and the people at large,” he told a crowded press conference here.

Austin · Post by **Austin** » 26 May 2013 10:25

10 reasons why gold prices may hit Rs. 21000

Austin · Post by **Austin** » 26 May 2013 16:28

Not sure if Indian economy has bottomed out: Moody

Neshant · Post by **Neshant** » 27 May 2013 15:12

Rating agencies like Moody's, Fitch and S&P totally destroyed their own credibility having stamped trillions of sub-prime mortgage derivative junk as AAA grade investments prior to 2008. All that junk got sold to pension funds around the world and its since gone up in smoke - even if the losses are being hidden off balance sheet.

Yet these rating agencies go on rating as if they have any credibility left.

The US govt has shielded them from prosecution by the said pension funds - the idea of fudiciary responsibility having gone out the window.

Beware rating agencies and their bullsh&t rating of countries and bonds.

Prem · Post by **Prem** » 28 May 2013 09:13

Diageo closer to control of India’s United Spirits

http://www.ft.com/intl/cms/s/0/bfdbb9b6 ... z2UYZnheyI

Diageo, the world’s biggest distiller by sales, has moved a step closer to securing control of Indian peer United Spirits after paying some £300m for a 10 per cent slice of the group’s enlarged capitalisation from a preferential share allotment on Monday.Announcing completion of the allotment to the Indian stock exchange, the companies also said that Gilbert Ghostine, Diageo’s Asia-Pacific president, would join the board of United Spirits with immediate effect.The move is the second part of a three-step deal valued at about Rp57.2bn ($1bn), which Diageo chief executive Paul Walsh spent years negotiating in on-again off-again talks with mercurial liquor baron Vijay Mallya.The acquisition will give Diageo, maker of Johnnie Walker Scotch whisky, access to United Spirits’ unrivalled distribution network in India, where the alcoholic beverage market is estimated at $6bn and is growing 15 per cent a year.Diageo hopes the takeover will help it build the market for its premium Scotch brands among India’s increasingly affluent middle class. United Spirits controls nearly 60 per cent of India’s drinks market.In a somewhat back-to-front process, Diageo first made a mandatory tender offer for shares it was not acquiring from United Spirits, Mr Mallya and related parties.That offer, which closed on May 15, saw Diageo secure a mere 0.04 per cent – unsurprisingly, since it stuck with the Rp1,440-a-share price paid to acquire shares directly from United Breweries. That price represented a 35 per cent premium over the close on September 24, the day before the talks were announced, but was sharply below the Rp1,755 close on the Bombay Stock Exchange ahead of the mandatory takeover offer.

Austin · Post by **Austin** » 28 May 2013 10:55

Neshant wrote:Rating agencies like Moody's, Fitch and S&P totally destroyed their own credibility having stamped trillions of sub-prime mortgage derivative junk as AAA grade investments prior to 2008. All that junk got sold to pension funds around the world and its since gone up in smoke - even if the losses are being hidden off balance sheet.

Yet these rating agencies go on rating as if they have any credibility left.

Beware rating agencies and their bullsh&t rating of countries and bonds.

All rating agency are funded and based out in the West whose primary task is to give AAA rating to Western countries and their partners no matter how screwed up their economy is and how bad their debts are so that they can avail of cheap loans and its a complete ecosystem that benefits the country and these agency that gets funded by them.

On the contrary emerging markets and even markets in China and BRICS get lower ratings from these agency to keep borrowing cost high and make them less competitive .....reason why BRICS , EurAsEC are creating own banks to fund their development and China have created its own rating agency based out in HK.

You cant get these days a rating agency who are as Hippocratic as S&P , Fitch , Moodys etc are if any thing this crises has exposed them

Vipul · Post by **Vipul** » 28 May 2013 20:05

In a first for India, Gujarat plans 5-yr export policy.

Gujarat, which accounts for about a quarter of India's total exports, is mulling a five-year export policy to focus on value-added exports in sectors such as textiles, agriculture and dairy.

The move by the top exporting state in the country comes on the back of sagging efforts by the centre to boost dwindling exports.

The first state in the country to have an export policy, Gujarat plans to increase the share of exports from the state from 25% to 30% in five years.

As a precursor to the policy, the Federation of Indian Exports Organization undertook a study for Gujarat on the state's export competitiveness and identified sectors with export potential.

"We are working on improving exports from the state and will take steps to increase the share to 35% of total India's exports by 2020," said a state government official.

The government may announce incentives ranging from exemption from value-added tax (VAT) in some sectors to focus market scheme and focus product scheme to offset high freight cost and other externalities to select international markets and promote products with high-export intensity.

India's overall exports declined by 1.76% in 2012-13 to $300.6 billion, as demand in the US and the EU subsided on slowing economy. Following this the centre announced a series of incentives in the annual supplement of the foreign trade policy. "Centre's policies cannot be so specific, whereas the state policies are made as per the needs of the state. So you need such simultaneous policies," said Manoj Pant, professor, JNU.

Given that over 90% of Gujarat cotton goes to other states for value addition, emphasis would be laid on readymade garments. The state already has potential in the textile sector, as nearly 23% of the state gross domestic product comes from textile and related industries. Other areas that Gujarat contributed to India's exports in 2011-12 include 70% in the gems and jewellery sector, 30% in pharmaceuticals, 20% in textiles, 12% in engineering and 18% in chemicals.

"Gujarat should strive to increase its exports by shifting its focus from lower-end markets to value-for-money markets," said Ajay Sahai, director general and CEO, FIEO.

As of now, it has been supplying domestic and international markets with raw materials but with proper R&D and focused investments, Gujarat should introduce high value-added products of global standards. Only a quarter of export units have an export house or upward status for special benefits, the FIEO study noted.

The state has 41 minor and intermediate ports and 55 SEZs, involved in sectors like biotechnology, power, handicraft, gems & jewellery. Gujarat also has a comparative advantage in many commodities, like spices and seeds, mineral and metals and cotton.

Arjun · Post by **Arjun** » 29 May 2013 11:24

Vipul wrote:"We are working on improving exports from the state and will take steps to increase the share to 35% of total India's exports by 2020," said a state government official.

This illustrates in a nutshell the difference between the Modi-brand of liberalization vs MMS' philosophy. Modi's emphasis will be on export-competitiveness and enabling Indian entrepreneurs to increase global market share and scale. On the other hand - the centerpiece of MMS economics is attracting FDI and foreign capital to take a share of the domestic market.

svinayak · Post by **svinayak** » 30 May 2013 00:05

That also explains the difference in the vision for India between the respective parties. And direction for what will India stand for

ramana · Post by **ramana** » 30 May 2013 03:47

Suraj,

Sun is rising seven years early!!!

India is probably the world's 3rd largest economy now:OECD

India probably world's third largest economy:
PTI | May 29, 2013, 10.36PM ISTLONDON:

India has probably surpassed Japan to become the world's third largest economy after the US and China, Paris-based think-tank OECD said even as it lowered the country's economic growth projection for 2013 to 5.3%.

"China will likely pass the United States as the world's largest economy in the next few years and India has probably recently surpassed Japan to be third largest," said the OECD Economic Outlook report.

Until around 2020, China is set to have to highest growth rate among major countries, but could be then surpassed by India, it further said.

OECD also said that by early 2030s, the BRIICS' (Brazil, Russia, India, Indonesia, China and South Africa) combined GDP should roughly equal that of the OECD (based on current membership), compared with just over half that of OECD now.

"Between now and 2060, GDP per capita is seen to increase more than 8-fold in India and 6-fold in Indonesia and China," it added.

The Organisation for Economic Cooperation and Development (OECD), which in November had projected India to grow at 5.9% in 2013, cautioned that structural bottlenecks in the country could further constrain investment and growth potential.

"GDP growth is projected to rise gradually over the next two years... Significantly more growth would be forthcoming if structural bottlenecks were swept away by fundamental structural reforms," the report said.

Looking ahead, it said India is likely to improve growth to 6.7% next year, after having logged a decade's low of 3.8% in 2012.

OECD said the world real GDP is projected to increase by 3.1% this year and by 4% in 2014. Across OECD countries, GDP is projected to rise by 1.2% this year improve to 2.3% in 2014. Growth in non-OECD countries will rise by 5.5% this year and 6.2% in 2014.

Suraj · Post by **Suraj** » 30 May 2013 03:52

India surpassed Japan in PPP GDP back in 2011. Posted here back then too. Someone at the presshouses just woke up from their nap

cdbatra · Post by **cdbatra** » 30 May 2013 12:45

I would like to understand from all mullahs here on prospects for Indo Nippon Co-operation apart from ususal Freight corridors and how this can contribute to India becoming a serious manufacturing nation.

Contrary to what people believe these days Japan is not a defunct nation and still holds keys to critical technologies and a serious partnership can be mutually beneficial . I feel that this partnership can pose serious challenge to post coldwar washington-Beijing consensus wherein China has emerged as factory of world. Long Live Abe-nomics

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