Indian Economy - News & Discussion 27 May 2012

gakakkad · Post by **gakakkad** » 02 Sep 2013 07:06

US economy grew better than expected last quarter. so qe3 would be tapered ... so dollar would strengthen again...people into currency hedging are likely to buy dollar...INR will weaken further onlee...

Lilo · Post by **Lilo** » 02 Sep 2013 08:31

Government mulling proposal to shut petrol pumps at night
NDTV - ‎26 minutes ago‎
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New Delhi: The government is considering various proposals including shutting petrol pumps in the night to taper fuel demand as it looks at ways to cut the massive oil import bill, Oil Minister M Veerappa Moily said today.

Tell me... if this is not funny what is ?

member_27444 · Post by **member_27444** » 02 Sep 2013 09:53

USD is a little bit stronger than other currencies because the flight of capital to US or what you call influx of thereof

INR declined against dollar
Dollar has declined against oil and other commodities
( the prices reflect this devaluation, the supply of dollar has increased and the supply of oil is steady or very slow compared to dollar supply

Singha · Post by **Singha** » 02 Sep 2013 09:57

next will be shutting of all govt & pvt offices for 3 days a week to save on power bill and coal import costs.
they might as well shut the govt down.
hospitals can be shut as well or atleast power hungry machines like xrays and MRI eqpt. Soniaji have access to medical care in NYC where there is 24x7 power. rest will have to manage.
diesel supply for generators can be curtailed to 2 liters/office/month

Suraj · Post by **Suraj** » 02 Sep 2013 10:11

GoI cutting down its expenditure is an important part of fixing the mess. They've been spending more than revenues forever, with the budget deficit adding to the fiscal deficit almost every year. We've hardly ever hard a budget surplus or a current account surplus. There's only one administration in recent history that attempted to run a balanced budget and get the finances in order, and they were voted out in favor of the populists who run the show now.

vera_k · Post by **vera_k** » 02 Sep 2013 10:30

The idea of shutting petrol pumps at night is crazy.

But moving to a 5 day work week all over may be a feasible solution. Plenty of establishments including schools and government offices work on Saturdays, which adds to the amount of fuel used.

Javee · Post by **Javee** » 02 Sep 2013 10:31

Most of the talk about reducing deficit is zeroes in on the central government alone. If we add the states debt to the central deficit, we are moving towards a point of no return. Any cost cutting should be implemented by both the states and the central govt. On the states side, 2 departments that needs immediate attention are state electricity boards, transportation dept. Free laptop, free TV, free cows, free goats, free food, free money for not working, all has to stop.

member_27444 · Post by **member_27444** » 02 Sep 2013 10:38

1 RS kg rice
1 RS liter cooking oil
150 subsidy for cooking gas only for greed card holders
3 RS kg dal
Free electricity to farmers
Free cellphones to the poor battery not included
Rs 20 per ltr kerosene. For cooking

Now most of the money in Swiss banks or Bahamas
What else do you want

Since 1978 we have been importing cooking oil from Malaysia Indonesia etc

member_20317 · Post by **member_20317** » 02 Sep 2013 10:38

vera_k wrote:The idea of shutting petrol pumps at night is crazy.

But moving to a 5 day work week all over may be a feasible solution. Plenty of establishments including schools and government offices work on Saturdays, which adds to the amount of fuel used.

Yup even if they increase the daily working hours. I cannot yet find anything wrong with that. In fact this is what we are trying to tell to our seniors. And one of our concern is long commute hours. Commute goes down so should the fuel requirements.

Suraj · Post by **Suraj** » 02 Sep 2013 11:15

Manufacturing PMI declines for first time in 4 years

After a depressing four-year low Gross Domestic Product (GDP) growth of 4.4% in first quarter of 2013-14, there is more bad news in store.

The manufacturing sector deteriorated for the first time in almost four years in August, according to widely-tracked HSBC Purchasing Managers' Index (PMI) released today.

The PMI for manufacturing fell to 48.1 points in August from 50.1 points in July, indicating a contraction in the sector. A reading above 50 points indicate and growth and that below 50 points depict contraction.

This is for the first time since March 2009 that the sector has witnessed contraction and is the lowest number in four-and-a-half years.

"Manufacturing activity contracted in August for the first time since March 2009. This was led by a decline in new orders, especially export orders", said Leif Eskesen, Chief Economist for India & ASEAN at HSBC.

Fragile economic conditions and subdued client demand led to strong fall in the new orders placed at Indian manufacturers this month, the report said. Not only this, but the rate of contraction accelerated to the fastest since February 2009.

The export orders also declined for the first time in 11-months in August. Consumer goods producers registered a slight decline despite expectations of a rise considering the upcoming festive season.

New business from abroad also fell, ending an 11-month sequence of growth.

"Indian manufacturers reduced their production volumes for the fourth consecutive month in August and at the fastest rate in four-and-a-half years", said Markit Economics which compiles the data.

India's crisis within a crisis: FM fights on two fronts

Late last month, with their doors shut to the mounting market panic outside as investors fled the country, India's cabinet ministers gathered to give final approval to a cheap food scheme for the poor.

It was hardly a difficult decision for a government that needs to shore up its sagging popularity before elections due by next May. But officials familiar with the discussion say there was one dissenting voice over what is now destined to become one of the world's largest welfare programmes.

Finance Minister P. Chidambaram, already struggling to convince doubters that he will keep the country's hefty fiscal deficit under control, made a last-minute attempt to trim the huge cost of the plan, estimated at about $20 billion a year.

Chidambaram's ultimate failure to win colleagues around - despite his famed eloquence - is emblematic of the predicament he faces: he must stop investors heading for the hills as economic growth skids to its slowest pace in a decade, but he is surrounded by politicians who haven't grasped that there is a crisis at hand and want to spend their way to the ballot box.

An almost comic spectacle of the country's policy deadlock played out in parliament last month as the monsoon session of the legislature got under way.

Lawmakers were so busy bawling at each other over issues that might sway voters - a corruption scandal, the partition of a southern state and communal violence - that over its first seven days the lower house spent just 12 minutes on legislative work and there were 11 sittings before a single bill was passed.

While New Delhi appeared nonchalant at the economy's bind, investors were not: they fled. The rupee has tumbled more than 20% since May and the fall in August was the biggest for any month on record.

In a matter of a few years, India has turned economic expansion of 8-9% into growth now struggling to reach 5%. The current account, the broadest measure of a country's international trade, has a record deficit, the manufacturing sector is shrinking, and credit ratings agencies are hovering.

"Our primary concern is that the policy authorities still don't 'get it' - thinking this is a fairly minor squall which will simmer down relatively quickly with fairly minor actions," said Robert Prior-Wandesforde, head of Asia economics research at Credit Suisse.

For sure, India is one of several emerging markets from Brazil to Indonesia hit by a flight of capital due to rising US interest rates ahead of an expected tapering of the Federal Reserve's massive bond-buying programme that unleashed liquidity across the world. It is doubtful that any policy action in New Delhi could do much to turn the tide.

Nevertheless, India's response has been less decisive than other emerging market economies. Most steps taken so far to address the problem have been small, such as lowering the cap on transfers of money abroad and slapping import duties on flat-screen TVs, measures aimed at reining in the world's third-largest current account deficit that is approaching $90 billion.

Some proposals have smacked of desperation. One minister last week suggested curbing diesel consumption by the railways, a bigger economic lifeline than in most countries, and the armed forces to cut import costs, an idea that got no traction.

The Economic Times newspaper reported on Saturday that the central bank wants Hindu temples to deposit their hoards of idle jewellery for conversion into bullion to meet demand for gold in the world's biggest consumer of the precious metal. The idea is that such a measure would reduce import demand for gold.

The last time Chidambaram was finance minister, in 2004-2008, growth was motoring at a near-double-digit clip: he used to call himself a "lucky finance minister" because of the neat timing. But fortune has hardly been on his side since returning to the job last year.

Aides say he has come under huge stress in recent weeks, but in public he has kept his cool, not surprising for the Harvard-educated lawyer who sharply told an interviewer earlier this year: "When did self-confidence become a vice?"

Financial markets have long had just as much faith in the smooth-talking politician as he has in himself. They remember his pro-business 'dream budget' of 1997 that brought taxes down, and when he returned to the finance ministry last year investors were thrilled, anticipating a new push for economic reform to end years of policy drift and an economic slowdown.

A short burst of reforms, including the opening up of retailing and aviation to foreign investors, followed. Chidambaram also succeeded in bringing down the fiscal deficit to 4.9% of GDP in fiscal 2012/13 from 5.8%, helping avert a sovereign credit rating downgrade.

However, the reform drive soon lost momentum, in part because of the main opposition party's recalcitrance in parliament.

But resistance within Chidambaram's Congress party was as much to blame.

Two senior ministers leaned on Prime Minister Manmohan Singh earlier this year to reverse a decision allowing 100% foreign direct investment in domestic pharmaceutical companies, a finance ministry source said. But Chidambaram pushed back, saying that if they had objections they should take them to the cabinet rather than surreptitiously lobbying the prime minister.

At a meeting in July, three ministers got together to push through extra funding for roads in the far-flung northeast and Jammu and Kashmir state, overriding cost concerns raised by the finance ministry.

And last month, Chidambaram wanted his colleagues to stick to the original version of the food security bill under which 18 out of 29 states would get less wheat and rice than allotted to them under an existing public distribution system because of a drop in the number of poor there.

But other members of the cabinet resisted him, warning that the opposition could block the landmark bill - which guarantees 810 million Indians grain at a fraction of market prices - when it got to parliament. Their argument carried the day, at an additional cost of 50 billion rupees a year.

"There is no point fighting it beyond a point," said a finance ministry official, recalling the wrangling over the legislation. "What we have said is that it's fine: you do this because that is the demand of the constituents, but you will have to cut somewhere."

Many in the left-leaning Congress led by Sonia Gandhi believe that the fruits of India's fast growth since it unshackled the economy from the grip of the state in the early 1990s were not shared with the country's millions of poor, and that electoral success lies in more distribution.

Critics say the problem is that a new group of aggressive second-rung leaders in the Congress party, pushing for 'inclusive growth', are setting out new principles of economic policymaking, creating further dissonance within government.

"Individual ministers and ministries are all running on their own. Nobody is looking at the national interest," said former Home Secretary G.K. Pillai, who served with Chidambaram when he was brought in to fix homeland security after the 2008 attack by militants on the city of Mumbai.

"Everyone has his own view, which is why you have different interpretations of cabinet decisions. The lack of leadership is telling."

HSBC, Nomura cut GDP estimate to 4-4.2%

Top foreign investment banks HSBC and Nomura have downgraded their Gross Domestic Product (GDP) growth estimates for India after the economy grew lower-than-expected in the June quarter.

While HSBC cut its GDP estimates for the country to 4% from 5.5% in 2013-14, Nomura lowered its expectations to 4.2% from 5%, retaining its negative outlook for the economy over the next three to six months.

“The risk of a pro-cyclical fiscal and monetary policy tightening is rising and the downside risks to our growth outlook have materialized with financial conditions tightening much more than anticipated,” said Sonal Varma, economist at Nomura in a client note.

India grew at 4.4% in the first quarter (April-June) of 2013-14-- its slowest pace in four years—against 4.8% in January-March.

Suraj · Post by **Suraj** » 02 Sep 2013 11:21

To no one's surprise, also known as 'you can't fix stupid':
Gold smuggling zooms

The government may be shouting from rooftops about the need to curb gold consumption, but Indians’ insatiable appetite for the yellow metal has opened up the most obvious route. Gold smuggling has doubled in the April-August period, courtesy the increase in the gold import duty and other restrictions.

Consensus estimates by jewellery industry players and veteran bullion analysts show since April this year, nearly 60 tonnes of gold has entered the Indian market through smuggling compared to 30-32 tonnes in the corresponding period of the previous year.

India has raised the import duty twice during April to August-- first in June when the duty was increased from 6 to 8% and then in August to 10%. This has increased the margins for bringing gold into India through unofficial channels.

At the same time, India tightened the gold import norms. In June, the consignment route for gold import was banned which made official imports costlier. Then in end-July, the Reserve Bank of India (RBI) opened the consignment route but linked imports to exports. However due to several confusions, official imports are virtually on halt giving enough room to smugglers to have a field day.

Interestingly in July, a huge quantity was smuggled into India from Pakistan – a country where exporters have been allowed to import gold by paying zero duty subject to re-exporting it with 4% value addition.

After the country saw huge imports in June -July , the Economic Coordination Committee of the Cabinet in Pakistan banned imports for a month in August. From September, however the ban has been withdrawn, though the import norms under the duty-free scheme and the value additions norms for exports have been tightened.

While that reduced smuggling from Pakistan, other routes, including Bangladesh and other places have opened up, said a big jeweller. He also said that the road route has been the most preferred one for bringing gold unofficially into the country.

Smuggled gold has been selling at Rs 400 (per 10 gram) discount to official prices over the last few weeks which is putting pressure on prices. However, since prices have spurted in the domestic market due to the sharp fall in rupee value, a huge flow of old gold was coming from investors who brought it at lower levels and those who wanted to sell when prices were higher last year end but could not sell.

“In the past few days, investors have brought in huge stock to take advantage of high prices which provided some relief to jewellers who were otherwise starved of gold as imports were virtually on halt in the last one month due to policy confusions,” said Suvankar Sen, ED, Senco Gold Jewellers.

Though the huge inflows have resulted in gold quoting at 3% discount to market price in the Mumbai market making smuggling unattractive, traders say once the rupee stabilises, smuggling could resume again.

vic · Post by **vic** » 02 Sep 2013 11:43

I think that GoI is following the standard pattern of new politics, scr*w the middle class to fund the poor. The elite make merry with Swiss Accounts and French Villas!

Singha · Post by **Singha** » 02 Sep 2013 12:29

icing on cake will be if some "center for turd world solutions" in a ivy league proposes that going electric on our nationwide bus fleet will save $400 billion annually...if uh we invest $4000 billion upfront

or delivering Govt services via their loonatic balloons and everyone using a iphone to avail them

nawabs · Post by **nawabs** » 02 Sep 2013 17:07

Index of Eight Core Industries (Base: 2004-05=100), July, 2013

http://pib.nic.in/newsite/erelease.aspx?relid=99043

The Eight Core Industries have a combined weight of 37.90% in the Index of Industrial Production (IIP). The combined Index of Eight Core Industries stands at 156.4 in July, 2013, which was 3.1% higher compared to the index of July, 2012.

Coal

Coal production (weight: 4.38%) increased by 1.2% in July, 2013 over July, 2012. However, cumulative index for coal during April to July, 2013-14 moderated by 0.5% over corresponding period of previous year.

Crude Oil

Crude Oil production (weight: 5.22%) moderated by 2.3% in July, 2013 over July, 2012. Its cumulative index during April to July, 2013-14 moderated by 1.6% over the corresponding period of previous year.

Natural Gas

The Natural Gas production (weight: 1.71%) declined by 16.1% in July, 2013 over July, 2012. Its cumulative index during April to July, 2013-14 declined by 17.2% over the corresponding period of previous year.

Petroleum Refinery Products (0.93% of Crude Throughput)

Petroleum refinery production (weight: 5.94%) registered a growth of 5.1% in July, 2013 over July, 2012. While, its cumulative growth during April to July, 2013-14 was 4.7% over the corresponding period of previous year.

Fertilizers

Fertilizer production (weight: 1.25%) registered a growth of 0.4% in July, 2013 over July, 2012, and it registered a cumulative growth of 1.9% during April to July, 2013-14 over the corresponding period of previous year.

Steel (Alloy + Non-Alloy)

Steel production (weight: 6.68%) recorded a growth rate of 7.0% in July, 2013 over July, 2012. The cumulative growth during April to July, 2013-14 was 4.1% over the corresponding period of previous year.

Cement

Cement production (weight: 2.41%) increased by 0.8% in July, 2013 over July, 2012, and its cumulative growth during April to July, 2013-14 was 2.7% over the corresponding period of previous year.

Electricity

Electricity generation (weight: 10.32%) increased by 5.2% in July, 2013 over July, 2012, and it registered a cumulative growth of 3.4% during April to July, 2013-14 over the corresponding period of previous year.

Performance of Eight Core Industries : Yearly Index & Growth Rate available in the link.

vishvak · Post by **vishvak** » 02 Sep 2013 19:03

Probably there needs to be clear index of indegenous capabilities in technological aspect of core industries too. Definitely counts.

Example: link

BP, Europe’s second-biggest oil company, bought stakes in KG-D6 and 20 other blocks for US$7.2-billion in August 2010 as Ambani sought the London-based company’s technology to drill and produce gas from deepwater areas. Niko owns a 10% stake in the KG-D6 block.

chola · Post by **chola** » 02 Sep 2013 19:44

RamaY wrote:
Suraj wrote:GoI cutting down its expenditure is an important part of fixing the mess. They've been spending more than revenues forever, with the budget deficit adding to the fiscal deficit almost every year. We've hardly ever hard a budget surplus or a current account surplus. There's only one administration in recent history that attempted to run a balanced budget and get the finances in order, and they were voted out in favor of the populists who run the show now.
Ideas for saving money.

Cancel all SPG protection to netas. All netas, including Sonia must travel at their personal expense.
Cancel NREGA program - saves Rs 50,000 crore per year
Cancel FSB program - saves Rs 120,000 crore per year

Send MMS home, saves India.

Put a finger is one hole and the water will leak out elsewhere. To be perfectly honest if the FSB were corruption free then I wouldn't mind giving it a try. We cannot deny that there are many poor in India and malnutrition is no small matter. Every nation in the world including those of the wealthy free market West gives its poor a leg up.

I say this as a firm believer in the free market. But even in the US there are programs like Food Stamps. Programs so effective that the poor in the US suffer from obesity.

But the problem is we all know that the food security bill will be nothing but another trough for our netas and babus to feed from and we'd be lucky to a have a small portion actually going to people who are supposed to be helped.

Do we need a death penalty for outrageous and to put it bluntly, traitorous, corruption? We need to be like Singapore, they rule by the cane and the noose. Theirs is a society, though populated by the famously corrupt races of chinis and desis, that is clean and efficient. Otherwise, I feel we cannot advance.

RamaY · Post by **RamaY** » 02 Sep 2013 19:51

Chola ji,

Only a dreamer (that too in sleep) will think that anything this govt does will be "corruption" free. This political dispensation created the corruption empire in this nation and sustained it. So how can FSB or any program be corruption free.

I posted a picture of lakhs of Adhaar cards found from a lake/canal by fishermen more than a year ago (few months after Aadhar system started).

Yes we need to give it a try to all ideas. But first in our minds and then on ground. Where is the discussion about FSB and its implementation process? How come Chattisgarh and TN are implementing two different models of FSB successfully but UPA needs a third model? If the logic is a successful model at a state cannot be scaled to entire nation, then why not split the program to implement successfully at state level?

This is what I can say without going OT in this thread.

RamaY · Post by **RamaY** » 02 Sep 2013 19:53

chola wrote: Do we need a death penalty for outrageous and to put it bluntly, traitorous, corruption? We need to be like Singapore, they rule by the cane and the noose. Theirs is a society, though populated by the famously corrupt races of chinis and desis, that is clean and efficient. Otherwise, I feel we cannot advance.

There are many better solutions to solve corruption than executing half of the population (yes, almost entire so-called literate, productive and urban population is corrupt).

member_27444 · Post by **member_27444** » 02 Sep 2013 20:05

I think INR will soar against USD and get back to INR 38.89 to dollar.
A famous maverick blogger has warned the people who are dumping INR of dire consequences.
But what if GOI itself is dumping INR into market by over working the mints?

Lilo · Post by **Lilo** » 02 Sep 2013 20:41

Amy ji,
Do you think that congressis are perverting the economic and fiscal policy at an irreversible rate(to frighten the hot money) to bring back the dollar horde at a more beneficial rate for themselves ?
After all those who will be bought off will be bought off in rupees..

The mango aadmi will be forced to pay though nose for necessities which could only be imported.
Net on net its like middleclass is being levied an election tax (of fuel and food price rise) so it goes into consolidated account of India (and looks legit) while the black dollars stashed abroad rush in through backchannels directly into the congress election war booty unseen and unheard till election eve..

Bloc voting classes and nontaxpaying classes(ex minorities) will in the mean time be fed through govt schemes(FSB,scholarships,DCT) - while the rest have to eke out at market rates.

nawabs · Post by **nawabs** » 02 Sep 2013 20:48

Under Recoveries on Diesel, Kerosene, LPG

http://pib.nic.in/newsite/erelease.aspx?relid=99046

Diesel Under-Recovery rises sharply to Rs 12.12/litre for the Fortnight commencing 1.09.2013
Under-recoveries on PDS Kerosene and Domestic LPG rise higher
OMCs incurring higher Daily Under-Recovery of Rs 461 crore
Daily crude oil price of Indian Basket declines to US$ 112.68/bbl on 30.08.2013

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas has reviewed international prices of crude oil and petroleum products during the 2nd Fortnight of August 2013. Accordingly, the under-recovery on High Speed Diesel (HSD) applicable for Ist fortnight of September effective 1.09.2013 increased to Rs 12.12 per/litre. This was Rs 10.22 per litre during 2nd fortnight of August 2013 w.e.f. 16.8.2013. In the case of PDS Kerosene and Domestic LPG, under-recoveries for the month of September 2013 increased further to Rs 36.83 per litre and Rs 470.38 per cylinder respectively. The under-recoveries on during August 2013 on PDS Keorsene was Rs 33.54 per litre and Rs 412.00 per cylinder on Domestic LPG.

OMCs, effective 1 September 2013, are incurring higher combined daily under-recovery of about Rs 470.38 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This was Rs 389.00 crore for the previous fortnight effective 16.8.2013.

The daily international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas declined to US$ 112.68/per barrel (bbl) on 30.08.2013. This was lower than the price of US$ 114.07/bbl which prevailed on the previous trading day of 29.08.2013.

vera_k · Post by **vera_k** » 02 Sep 2013 22:03

Good feature in LiveMint that covers a lot of ground. Haven't seen all factors contributing to current economic conditions in one place like this yet.

Indian economy: what went wrong

svinayak · Post by **svinayak** » 02 Sep 2013 23:35

Slowing down is not called 'what went wrong'

This is a psy ops title

abhishek_sharma · Post by **abhishek_sharma** » 03 Sep 2013 01:07

India and the Emerging Market crisis

India, like other emerging markets, is having a tough summer. This column argues that India needs to step up reforms and critical infrastructure investment to reboot growth. Its economic health – and that of other emerging markets – is not as dire as headlines suggest. The alarm and pessimism surrounding emerging markets appears to have run well ahead of any deterioration in fundamentals.

svinayak · Post by **svinayak** » 03 Sep 2013 01:36

Look at the marked contrast

RamaY · Post by **RamaY** » 03 Sep 2013 02:30

^ Guru ji,

Some heading please. For a minute I thought that was my forum-life indicator

Prem · Post by **Prem** » 03 Sep 2013 03:21

http://www.forbes.com/sites/donaldkirk/ ... -on-syria/
India Looks To Iran For Oil, Away From U.S. On Syria

It’s fine to talk about India’s improving relations with the U.S. and bonding with Japan and South Korea in the quest for arms, investment and security vis-a-vis the specter of a strong, modernizing China to the North and a perpetually hostile, difficult and uncertain Pakistan to the west.(But guess what? While all that’s well and good, India is also fast improving frayed ties with Iran — and not supportive at all of President Obama’s desire to punish the Syrian regime of President Assad for wiping out more than a thousand Syrian citizens in the most flagrant example of chemical warfare ever caught on television.“There are certain hard realities which say you can’t ignore Iran,” says commentator Swapan Dasgupta, talking to me at the India International Center in New Delhi. “We can’t do very much about sanctions on Iran.”
In other words, while Obama’s wrath over Syria is all over Indian TV, you don’t hear people here saying he’s right, let’s get Assad before he again unleashes sarin gas on innocent civilians. The reason is basic: India really really needs Iranian oil, and it’s not going to risk that all-important source while mired in economic difficulties that have everyone wondering if the Indian success story is over.
“Crisis drives India to turn to Iran for oil,” says the headline over the lead story in The Hindu, reporting India’s plan this year at least to match the import of 13.1 million metric tons of oil in FY 2012-2013 after having cut off the flow for several months while holding back on payments in dollars or euros.That figure in turn was down from 18.1 million tons the previous year so does not represent a statistical improvement, but India in the current fiscal year has imported only two million tons. Now the oil minister, Veerappa Moily, is recommending that India hurry up and import another 11 million tons, for which Iran has agreed to accept payment in rupees.
As a result, according to Moily, the cash-strapped government will save $8.5 billion — the difference between what Iran is charging and what India would have to pay to its other leading sources of oil, notably Saudi Arabia and Iraq. Second only to Saudi Arabia in oil exports to India in FY 2010-2011, Iran ranked sixth last year and, for the month of July, was 15th.
But that’s beginning to change as India approves insurance for Iranian shippers in a desperation move to shore up the economy, suffering from a current accounts deficit of $85 billion.The India-Iran relationship, moreover, rests on other factors that show how difficult is the new Great Game for Asia — and how tenuous are relationships in a time of turmoil. “India has a convergence of interests with Iran,” says Dasgupta, who writes regularly for Indian papers and is a frequent guest on TV talk shows.
Like Iran, India worries about what will happen to Afghanistan as the U.S. withdraws forces and the Taliban count on support from Pakistan, where the Taliban emerged as a full blown force from madrassas along the Afghan border. While Iran discounts the price of oil to India, India sees the Iranian port of Bandar Abbas on the Strait of Hormuz at the mouth of the Persian Gulf as the only way to get to Afghanistan as long as Pakistan is sure to block traffic coming the other way.

“India needs a basket of supplies,” says Dasgupta. “Bandar Abbas is very important strategically for India. That enhances the importance of Iran for India’s foreign policy.” Otherwise, he adds, “We have nothing in common with the regime in Iran.”
As for Syria, Indian strategists have to wonder if Assad should really be India’s enemy considering that he pursues a non-religious policy that distinguishes him from fanatical Islamic forces. Or, as Dasgupta puts it, “He’s a fragile shield against Islamic radicalism.”On top of everything else, however, India also has good relations with the arch-enemy of Iran and the Arab world — namely Israel. From Israel comes sophisticated weaponry including the avionics for Sukhoi fighters that Russia exports to India stripped of a lot that’s needed to fly and fight.All of which no doubt leaves U.S. diplomats wondering how to approach India in the overall scheme of interlocking, often conflicting, always puzzling relationships in the region. Indian leaders and writers no longer yak about “non-alignment” as they once did, but clearly India is not too interested in hewing to the line from Washington either.

kish · Post by **kish** » 03 Sep 2013 05:04

chola wrote: Put a finger is one hole and the water will leak out elsewhere. To be perfectly honest if the FSB were corruption free then I wouldn't mind giving it a try. We cannot deny that there are many poor in India and malnutrition is no small matter. Every nation in the world including those of the wealthy free market West gives its poor a leg up.

I say this as a firm believer in the free market. But even in the US there are programs like Food Stamps. Programs so effective that the poor in the US suffer from obesity.

But the problem is we all know that the food security bill will be nothing but another trough for our netas and babus to feed from and we'd be lucky to a have a small portion actually going to people who are supposed to be helped.

Do we need a death penalty for outrageous and to put it bluntly, traitorous, corruption? We need to be like Singapore, they rule by the cane and the noose. Theirs is a society, though populated by the famously corrupt races of chinis and desis, that is clean and efficient. Otherwise, I feel we cannot advance.

They are not that clean and efficient, corruption and malpractices are there but limited to the top echelons of the Government. The good thing about their style of governance is the public will never realize there is corruption in their government. Because their BASIC public service delivery is exemplary.

I was there during the History haze, which generated a lot of commotion among the public. I was following "The Straight Times" & "Jakarta Post" for relevant information about Haze. Their Foreign Minister Shanmugam was displaying a lot of bravado, threatening action against Indonesia in international court of justice. Indonesia humiliated Singapore by naming Singaporean companies which took large tracts of Northern Islands on a long term lease. Those companies are destroying the forest by setting it on fire to cultivate Palm. And 3 countries suffered because of that Indonesia, Malaysia & Singapore.

Another major scam in singapore is land development. The privileged few with influence in the Government, rewrite the rule book to destroy whatever little forest left for development. It is appalling to see people are oblivious to these incidents.

vina · Post by **vina** » 03 Sep 2013 07:12

I wonder what is it we have done as a people to deserve the likes of Oily Moily. Karnataka has such smart, thinking and competent people who can do a stellar job at the Petroleum Ministry. But no, we don't have any of them, but have this buffoon there.

Like I said earlier, the more incompetent you are, the higher you rise in the Congress Govt (it is like a bad take on Ragnekar's book where he says that in modern management, Everyone rises to his highest level of incompetency) . That list seems endless in the Congress.. Pranab Mukherjee, Sushil Shinde, Shivraj Patil and now joining that illustrious group, Oily Moily and his hare brained ideas of closing gas stations for 12hrs to cut demand.

How about far more realistic steps like full diesel decontrol so that you have actual demand destruction and rationality in use of fossil fuels that must be fully priced in as pass thrus ? Buffoon.

member_27444 · Post by **member_27444** » 03 Sep 2013 08:19

vina wrote:.... (it is like a bad take on Ragnekar's book where he says that in modern management, Everyone rises to his highest level of incompetency) . Buffoon.

I dont know who Ragnekar is but

the correct quote is

"Employees tend to rise to their level of incompetence."

and the kartha of the above is Peter

and is called Peter's Principle

Laurence J. Peter, "The Peter Principle" US educator & writer (1919 - 1988)

For Context of GOI

we should invoke Northcote Parkinson as well

Work expands so as to fill the time available for its completion.

He (Parkinson) explains this growth by two forces: (1) "An official wants to multiply subordinates, not rivals" and (2) "Officials make work for each other." He notes in particular that the total of those employed inside a bureaucracy rose by 5-7% per year "irrespective of any variation in the amount of work (if any) to be done".

In 1986, Alessandro Natta complained about the swelling bureaucracy in Italy. Mikhail Gorbachev responded that "Parkinson's Law works everywhere".

Vayutuvan · Post by **Vayutuvan** » 03 Sep 2013 09:59

I heard of Rangnekar but as Amy bhai jaan said it is called the Peter Principle same same as Moore's law. The former is as much a "principle" as the latter is a "law". Both are a lot of yum bee yeah giri (with all due respect to all MBA bhai aur behen

)

Muppalla · Post by **Muppalla** » 03 Sep 2013 14:24

Chidambaram and Manmohan are the most inefficient congressmen ever in that organization. Hiding them along with dynasty is the tactic of this time period.

panduranghari · Post by **panduranghari** » 03 Sep 2013 15:10

Lilo wrote:
Government mulling proposal to shut petrol pumps at night
NDTV - ‎26 minutes ago‎
Share
New Delhi: The government is considering various proposals including shutting petrol pumps in the night to taper fuel demand as it looks at ways to cut the massive oil import bill, Oil Minister M Veerappa Moily said today.

Tell me... if this is not funny what is ?

They have to first define 'night'. Will they need the parliament to convene and then propose a bill or will they issue an ordinance and thus define night?

Gus · Post by **Gus** » 03 Sep 2013 15:23

these buffoons are always saying something preposterous and outrageous and then retract it the next day. they did that with the 'temple gold' and now 'rationing at night'. idiots are running amok.

panduranghari · Post by **panduranghari** » 03 Sep 2013 16:01

Amyrao wrote:I think INR will soar against USD and get back to INR 38.89 to dollar.
A famous maverick blogger has warned the people who are dumping INR of dire consequences.
But what if GOI itself is dumping INR into market by over working the mints?

Amy ji,

Please give me a link to this blog.

Christopher Sidor · Post by **Christopher Sidor** » 03 Sep 2013 16:31

The rupee is again hovering around Rs 68 to a dollar. Goldman sachs is saying that Rupee will hit Rs 72 to a dollar. With such a steep depreciation, why is that the morons in the finance ministry cannot realize the love that Indians have for Gold is driven by their currency policies?

Add to this certain rating agencies have been saying that India might get downgraded before Indonesia does. We will then rub shoulders with exalted companions such as Greece, Cyprus, etc. And what do our politicians do? Well they can make helpful suggestions like close petrol pumps at night or increase taxes on gold so that Gold smuggling increases once again or start direct cash transfers. i.e. everything which is wrong but not the right thing.

Austin · Post by **Austin** » 03 Sep 2013 18:47

I wonder how it will impact home loan with Rupee sliding and we still have 8 months to go for next election.

When I took home loan Rupee was around 52 and now I am expecting any where between 65 - 70 ..........can we expect a interest rate hike from banks ?

member_27444 · Post by **member_27444** » 03 Sep 2013 19:07

When INR was 44~ TSP Rupee was 90 to a $
I was wearing a smirk on my face

Thanks to our leadership which leaves no stone unturned to make India = = TSP

We are again at the same ratio with a country that survives on dole and baksheesh

SaiK · Post by **SaiK** » 03 Sep 2013 19:21

^you have put a gap between the two equal symbol. that will be deleted as well soon.

Austin · Post by **Austin** » 03 Sep 2013 21:45

A big hurdle cleared for Etihad's over Rs. 2,000 crore deal with Jet
http://profit.ndtv.com/news/economy/art ... test[quote]

The union cabinet today cleared a bilateral accord between India and the UAE, bringing Etihad a step closer to buying a 24 per cent stake in Jet Airways for over Rs. 2,000 crore.

The cabinet today allowed the countries to fly 50,000 additional seats between each other each week over the next three years, up from 13,700 earlier.

This increase in seats had been opposed by several politicians, including Jaswant Singh, Nishikant Dubey (both BJP), Dinesh Trivedi (Trinamool Congress), Gurudas Dasgupta (CPI) and then Janata Party chief Subramanian Swamy (now in BJP), who had shot off letters to Prime Minister Manmohan Singh objecting to the deal, claiming that the government was favouring the private Indian carrier at the cost of others.

So in an unprecedented step, Dr Singh had asked the Civil Aviation Minister to bring the bilateral agreement to the cabinet. This evening, the cabinet has cleared the new deal to increase connectivity between Abu Dhabi and India. Experts say this will facilitate the Jet-Etihad deal to be completed quickly.

Earlier this week, Abu Dhabi-based Etihad had extended its deadline for regulatory approval to the deal till the end of September. The deadline, which had already been extended once, had expired on August 31.

"The revised agreements are expected to be endorsed by the Competition Commission of India and the Indian government imminently," a statement from Etihad had said.

The chief executives of the two carriers had also met last week to "review progress on the finalization" of the deal.

While an additional 11,000 seats per week would be added to the existing 13,700 this year, another 12,800 seats per week would be added in 2014 and 12,870 more in 2015.

The deal between Etihad and Jet would be the first by an overseas operator in an Indian airline since ownership rules were relaxed, and provides India's largest carrier with a deep-pocketed global partner as well as cash to pay down debt.

Etihad had in April agreed to pay $379 million for a 24 per cent stake in Jet. It also invested an additional $150 million in Jet's frequent flyer programme and spent $70 million to buy Jet's three pairs of Heathrow slots through a sale and leaseback agreement.[/quote]