Indian Economy - News & Discussion Oct 12 2013

[panduranghari]

It is going to hit ground so hard.. This is not a healthy growth. this is not even a growth, this is swelling, edema.

[ramana]

An old Finance Ministry report on Mumbai by Percy Mistry:

http://finmin.nic.in/the_ministry/dept_ ... report.pdf

[svinayak]

Can India live up to its promise this time?

Can India live up to its promise this time?

About Peter Kohli
Peter Kohli is the chief executive officer of DMS Funds and an independent wealth manager specializing in estate planning under the name DMS Financial. He was also a financial advisor with PennCorp Financial Services (now Primerica), and holds a Chartered Financial Consultant designation from Bryn Mawr. DMS funds currently offers the DMS Baltic Index, DMS India Midcap Index, the DMS India Bank Index and DMS Poland Large-Cap Index funds.

By Peter Kohli
I get investors' frustration with India, I really do. Just because I'm bullish on the world's third-largest economy for the long term doesn't mean I can't see the ironies of the current situation.

I'll give you an example. I was in Los Angeles giving a talk and I opened the Times of India to read that India is going to launch a Mars probe. I told the group I was addressing that maybe they should build some roads and bridges here on earth first.

This is the same country that just passed legislation providing 67% of the population with food aid in a blatant attempt to buy votes. Who's going to pay for the project was, of course, not addressed. And they're going to Mars?

India has many of the right ingredients for a first-world country. It has a 250-million-strong middle class with money to burn. It has 600 million people under the age of 29, many highly educated and eager to contribute to society. It has multinational companies like Tata IN:500570 -1.28% and Mahindra & Mahindra IN:500520 -0.44% in its borders.

So what's the problem? I would say that sometimes Indians need to get out of their own way. Like the food-aid program. Often, things are done for populist and ideological reasons which cause investors both inside and outside the country to shake their heads in disbelief — and hinder the country's progress.

A perfect example is what happened to Vodafone Group PLC VOD -1.21% . In January 2012, India's Supreme Court ruled the UK-based telecom giant was not liable to pay $2 billion in taxes for its $11.2 billion acquisition of a controlling stake in an Indian cellphone company held by a Hong Kong company. The verdict overturned a ruling by a lower court in Mumbai after a four-year legal fight by Vodaphone and signaled encouragement to foreign investors concerned about India's investment climate when it ruled that Indian authorities don't have jurisdiction to tax the deal because it was structured as a transaction between two foreign entities. Then, in March of 2012, India changed its taxation laws, essentially overturning the Supreme Court judgment and brought under scrutiny similar deals involving multinational companies.

Nevertheless, I think the turnaround for the Republic of India is close at hand. It will come after the May 2014 national elections if the country elects the Bharatiya Janata Party (BJP), and Raguram Rajan, the Governor of the Reserve Bank of India (RBI), is given the opportunity to further work his magic.

Rajan is one of the main reasons to be bullish on India right now. In fact, things at the macro level have already started to improve due to his actions guiding the RBI. For instance, during the summer, the rupee slumped to a record low of 68.85 to the dollar; his policies have helped raise it to around 63 today. Also, Rajan (pleasantly) surprised many when he said India's current account deficit (CAD) for the fiscal year was $56 billion, well below estimates of $70 billion. India's large CAD, which stood at $88 billion the previous fiscal year, was one of the main reasons for the rupee's fall. At $56 billion, the CAD is now less than 3% of India's GDP, well below the anticipated 7%, and India is well positioned to weather the eventual tapering of the U.S. Fed's bond-buying program.

In my opinion, the defeat of the BJP in the 2004 general elections contributed to derailing India's progress. We can see this in the country's GDP growth, which slowed to 4.4% this year, a five-year low.

I've been asked if there are any good entry points to India before the elections. The answer is yes and no.

Yes, in that companies like Tata (the steel-auto-tooling conglomerate) and Mahindra & Mahindra (an auto, farm-equipment and IT conglomerate) are strong plays. However, it's interesting to note that a majority of their income comes from non-domestic sources. When companies like this can capitalize on the opportunities within their own borders as well as internationally, that's when Indian equities will really show their promise.

And no, because there are significant risks to my thesis. The BJP party must win the elections in May of 2014. If they do, then I say throw as much money as you can at India.

[ramana]

^^^

This is the same country that just passed legislation providing 67% of the population with food aid in a blatant attempt to buy votes. Who's going to pay for the project was, of course, not addressed. And they're going to Mars?
...

But same government signed deal with WTO to stop food subsidies in four years!!!!

That means no intention of honoring the FSB after getting elected.

[Christopher Sidor]

India's ratings already reflect Fed tapering fears: Fitch --- NDTV Profit Dated 21-Nov-2013

From the article

India's narrowing current account deficit will not be enough to shield the country from pressures tied to Fed tapering, says Fitch Ratings.
...
...
Fitch rates India at "BBB-minus", the lowest investment grade rating. It revised its outlook for the country to "stable" from "negative" in June.

10 years of the dream economic team, has led to this. UPA-II is going to be a wasted mandate. 5 years of utter desolation.

[RoyG]

Must watch video on functioning indian economic models and economic history.

https://www.youtube.com/watch?v=KB9L9nj6vyo

[Rahul Mehta]

There is no forexr shortage folks. Those who cry about forex shortage must be drunk. If there is forex shortage, then well, now here is cheap foreign liquor to drink more and forget the forex problem.

====

India offers to slash import duty on wines, spirits to 40% (from existing 150%)

http://business-standard.com/article/ec ... 046_1.html

In a make-or-break scenario for signing of the free trade agreement (FTA) with the European Union, India has offered to drastically cut Customs duties on wines and spirits to 40 per cent from the current 150 per cent. The offer - made by Commerce and Industry Minister Anand Sharma to EU trade commissioner Karel de Gucht on the sidelines of the Organisation for Economic Co-operation and Development summit in Paris recently - was huge, compared to India's earlier proposal to cut the Customs duty to 80 per cent. It would mean up to a 73-percentage-point cut in India's Customs duty. India also proposed to cut the entry price per bottle of wine to $3.7 and whisky to $5.5.
However, the EU is bargaining for concessions. According to senior officials involved in the talks, the Europeans want the duties for wines and spirits reduced further to 30 per cent and the prices of a bottle of wine and whisky to $3.5. .....

===

How many bottles of wine were offered as bribe to Ministers to cut these duties? Or did Ministers refused to take wine, because Gandhiji opposed liquor, and demanded cash only?

Can anyone suggest what can be done to force MPs to cancel this duty cut?

[Uttam]

How many bottles of wine were offered as bribe to Ministers to cut these duties? Or did Ministers refused to take wine, because Gandhiji opposed liquor, and demanded cash only?

Can anyone suggest what can be done to force MPs to cancel this duty cut?

The forex problem is not because Indians drink too much of foreign wines and whiskies or will start doing so. It is mainly because of market distorting subsidies handed out by government and massive bottlenecks that prevent local business to flourish and increase exports. If anything a nice glass of Scotch on the rocks will make those minister think straight

Protectionism is no cure for balance of payment problem. It is a symptom of being meek. Take the bull by its horns by opening up markets, increasing efficiency, reducing corruption. India is at the bottom of spectrum when comes to ease of doing business. That is core problem.

[gakakkad]

With the CAD in present shape,last thing goi should do is to take steps that worsen the crisis...reducing import duty on liquor is one such step... all the arguments about proctectionism being the last resort are specious only...

besides no benefits of reducing import duty of forin daroo...

[paramu]

If they could cut duty on EU import items, why can't they cut the duty on gold imports?

Other countries may want to sell daru, but Indians want to buy gold. Why can't the GoI listen to its people instead of foreigners?

[Suraj]

I am not in favor of India making concessions on the EU FTA unless the EU is open to concessions on the free movement of labor. They all talk a good talk when it comes to finding demand for their goods as the own domestic demand shrinks, but choke into their Bordeaux at the mention of greater access for Indian IT and other firms.

The global economic system has three components - capital, labor and goods. Western nations with a capital and goods output surplus happily push for free movement of both. But the question of freer movement of surplus developing world labor is something they're extremely averse to, because it leads to greater wage competition and threatens them. Of course, the fact that free access of their goods into India can hollow out our manufacturing is not a problem for them.

I hope the Commerce Ministry is careful about opening up, and pushes for opening up those sectors where our increasingly powerful export engine can push out more products into the EU. As much as we may all criticize the poor performance of the last two administration, trade growth is one area where they have maintained a good record, despite some poor individual decisions (e.g. exports have grown strongly, but imports were not managed with as much care as they could have been), I think the ComMin has earned some measure of respect in their push for greater access for Indian goods.

[Theo_Fidel]

WRT to Whiskies at least, big fraction of whiskies are blends. For instance the Indian AMRUT blended stuff is roughly 50% imported IIRC. The entire business of India whiskies began when whisky used to be transported in oak casks to India from Scotland. So no import = no India Whisky. This is how all our other export industries have developed, we import dross no one else wants, work on it and export high quality product. From toxic, high sulphur sour crude to scrap iron to teeny tiny diamonds to now Whiskey. Also Indian tropical climate allows whiskey to mature much much more rapidly. I have posted on this before I think. In the right climatic condition, high constant average temperature with low humidity, whiskies can age 3-5 times as fast as in Europe! And certain areas of India, being on the thermal equator have these exact necessary conditions. You can get a 12 year malt in 2-3 years in India, think of the cost benefits! I think there is still a strong market for India Whiskey in the west. We should exploit it with good quality products. In fact India is perfect made for whiskey maturing IMHO, and I can see a time when ALL/Majority of the world's whiskey maturing is done in India.

Too much on daaru, now where is my Lavagulin....

We are not going to get free labor movement without allowing free labor movement into India BTW. We don't allow TSP & even BD folks to freely move to India for work, for admittedly excellent reasons. We live in a rough neighborhood. We don't even allow westerners to freely move to India for work. So we just have to depend on western goodwill WRT labor movement.

[Suraj]

Theo: I was referring specifically to free movement for certain industries within the particular FTA agreement under discussion. Nothing to do with our neighbors - they won't get into a trade agreement with us because we will overwhelm them with our exports.

[Atri]

Again, more material on Arthakranti Proposal..

[nawabs]

Bitcoins gain currency in India

http://www.livemint.com/Industry/LI2IgS ... India.html

According to SourceForge, 70% of the 35,648 downloads in India since the November 2008 launch took place in 2013. US-based Buttercoin, a free Bitcoin exchange backed by investors such as Google Ventures, says it is in talks with Indian banks to launch an exchange in India to allow for the purchase and sale of Bitcoins—a virtual currency that has caught the world’s fancy. “Most users of Bitcoins in India are people who are employed with the IT (information technology) sector. One of the beneficiaries of the proliferation of Bitcoins is remittances which NRIs (non-resident Indians) send back to their dependents in India,” Sunny Ray, director of business development at Buttercoin, said.

No one owns the open-source peer-to-peer payment network called Bitcoin, but it is gaining in popularity and legitimacy. In fact, Bangalore will host India’s first two-day conference on 14 December to discuss the virtual currency industry and its future potential since Bitcoins are not yet regulated by India’s central bank. The Reserve Bank of India (RBI), though, is closely watching the developments, said Alpana Killawala, principal chief general manager, RBI.

Benson Samuel, founder of an exchange rate setter Coinsecure, recalls selling Bitcoins in India at Rs.450 last September. On Wednesday, the Coinsecure Price Setter pegged the average price (of top global exchanges including Mt Gox, Buysellbitco.in, Coinbase and Bitstamp) of buying Bitcoins at Rs.57,360.06 and selling at Rs.57,235.87. “Many people are gradually getting aware and getting on board, and lot of businesses want an official to come on board before they start using Bitcoins… I work with Coinsecure which aims at setting exchange rate after taking feedback from the top three global exchanges and comparing it with few exchanges in India,” said Samuel.“Currently, any one can charge any rate in India as Bitcoin is decentralized. Sellers in India are charging a margin of 20-30% while selling Bitcoin, which is unjustified. We plan to bring about awareness which can reduce this margin amount.”

Mike Jain, a consultant to the Satoshi Foundation—an organization that works to bring awareness on Bitcoin—said: “Bitcoins are generated in two ways—miners solving mathematical problems and miners helping transactions go through. This way usage of Bitcoin cannot lead to inflation and rules out the possibility of hacking. “Argentina, one of the countries badly affected by rising inflation, has been the largest user of Bitcoins.” He pointed out that Bitcoins were introduced as coins for online games, but added that the transactions involving Bitcoins are very safe since it “takes 21 confirmations from various miners before a transaction gets settled and each of the transactions details gets logged into a public ledger.”. Currently, he said: “It costs about $300 to send $100,000 across the border from India. Bitcoins can reduce this amount down to only four cents. Exchange value of Bitcoin is currently determined on basis of supply and demand. Bitcoin users never would want Bitcoins to be regulated.”

[panduranghari]

If Satoshi Nakamoto controls most of the bit coins how can they be considered as open source free market resource?

[panduranghari]

Based on Cantillon effect, the intrinsic value of bit coin will fall back to somewhere closer to zero than the current $1000.

Also if we look at who owns most of the bit coins, here is a list of the top holders.

Satoshi Nakamoto
Gavin Andresen
Martti Malmi
Amir Taaki
Pieter Wuille
Nils Schneider
Jeff Garzik

How is this different from;

Goldman Sachs
Citigroup
HSBC
JP Morgan
Wachovia
Barclays
BNP Paribas
RBS
Bano Santander

[dhruvM]

^ AFAIK, Satoshi Nakamoto is rumored to have a big cache of bitcoins as he was the guy who wrote the initial mining and blockchain code. Subsequently this Satoshi guy disappeared (smart bugger) and the open source code is now maintained by the bitcoin foundation.

There are 2 big threats though -

1. Bitcoin exchanges (where you'd convert BTC to USD/INR etc) are still controlled by central banks, hence vulnerable.

2. There are apprehensions that the bitcoin miners (people who devote resources to authenticate the blockchain, in turn acting as payment processors) can gang up and if 50% or more start acting in concert, the currency will lose its decentralized quality.

The current bull-run in bitcoins has been extremely interesting to follow. I discovered the existence of these around 2 yrs back when some yahoos in college informed us unwashed abduls of this new way to buy zam-zam cola online called Silk Road. If only I had the money that time, and the doordrishti, could have made more than 100x profits. Such is life.

EDIT: panduranghari ji, the biggest difference seems to be the fact that there will never be more than 21 million bitcoins in circulation. Hence it is fundamentally different from fiat. Also, the guys who initially wrote and promoted the code deserve the returns IMO.

I feel bitcoins are the best refuge of the scoundrels. All the drug/terrorism/cayman-island-corruption money types. Bet the hawala networks have already started using this.

[svinayak]

Based on Cantillon effect, the intrinsic value of bit coin will fall back to somewhere closer to zero than the current $1000.

How much of their wealth has appreicated after this
Is this liquid currency

[RoyG]

How do you guys feel about the Arthakranthi taxation regime? Looks interesting.

http://www.arthakranti.org/proposal/benefits

http://www.arthakranti.org/proposal/individual-benefits

[Vipul]

How steel can become the next oil for India.

This year's rise in the current account deficit, the associated impact on the economy and subsequent measures to control the deficit beg the question: apart from oil (and gold), are there other import categories that could derail us in the short-to medium term?

One can't help but think about steel as a possible candidate. On the face of it, this hypothesis is untenable. While both oil and steel are expected to witness continued demand growth, the comparison ends there. India is among the lowest-cost producers of steel and has the potential to emerge as a regional hub.

Sample this: India is home to the fifth-largest reserves of high-grade iron ore and has vast reserves of coking coal. Together, these minerals form the key inputs into steel-making, accounting for over 50% of the total cost of finished steel. With access to cheap labour and technically qualified engineers, and with over half a century of iron- and steel-making expertise in the nation, certainly India should be expected to have a vibrant, not to mention selfsufficient, steel industry.

Strong domestic demand is expected to underpin the growth of the industry in India. While the current demand growth is below the trend in recent history, given India's stage of economic development, we estimate India has the potential to consume about 250 MT of steel per annum by the middle of the next decade. However, will India be able to feed the demand through local production and build a thriving steel industry? The period between 2005 and 2008 witnessed a series of capacity announcements — over 50 million tonnes — which seemed to support the theory of India emerging as a steel hub and being self-sufficient in steel.

However, several large greenfield projects have not taken off and several others have been severely delayed. At around 96 million tonnes per annum (MTPA) of current capacity, India would have to triple its capacity by the middle of the next decade to meet the expected demand. About 60% of this additional capacity is expected to be greenfield projects that take longer to implement due to challenges related to land acquisition, clearances and financial closure. At eight to 10 years to commission a steel plant, India already takes twice as much time as China to put up these capacities. This will only go up due to the changed regulatory and business context.

In a business-as-usual scenario, India is likely to fall significantly short of the capacity required to feed its domestic demand. Assuming no dramatic fall in demand, we estimate a shortfall in capacity of 60-70 MTPA by 2025. We would have no choice but to import steel or curb the rapid development we aspire to achieve.

In an economy already strained by oil and other imports, such a magnitude of import would increase the current account deficit by about $20 billion, or anywhere between 25% and 30% of this year's expected deficit. Differently put, in such a scenario, steel imports would be second only to oil imports. If this were to happen, it would have far-reaching consequences well beyond the strain on our national finances.

Not only is a vibrant domestic steel industry important for a developing economy as it builds its infrastructure and manufacturing, it also has a significant multiplier effect in terms of jobs and economic growth.

It is estimated that for every unit increase in steel output, the economy has a multiplier effect of about five times. Up to eight million additional jobs will be created if India is able to meet its steel demand of 250 MT through domestic production.

Several large economies like the US and Germany to China and South Korea have developed a thriving steel industry during their developmental stages. India is at the crossroads of a similar opportunity and the stakes are high. The window of opportunity is limited before we are compelled to find a solution possibly less optimal.

[Rahul Mehta]

India to become womb a rental super-power ; womb-rental may exceed rest of the exports in few years to come ; Congress, BJP, CPM leaders support the womb-rental law passed in 2005 that promotes womb rental industry in India .

Pls google on womb rental. There is NO official statistics because all payments are in cash and contracts are kept confidential. But each womb rental gets about Rs 6 lakhs i.e about $10000 to $12000 of which the lady gets Rs 2 lakhs and rest goes to agents and doctors . And in years to come, some 1 crore couples from USA and Europe may come to India every year for womb rental. Do the maths, and you will see that womb rental may exceed software exports or even all exports put togather

The business is booming because Congress, CPM and BJP MPs passed law in 2005. AAP leaders also oppose the proposal to repeal this womb rental law.

Solution I propose is : http://forums.bharat-rakshak.com/viewto ... 8#p1548808

[nawabs]

India might trip on WTO trade facilitation pact

http://www.business-standard.com/articl ... 761_1.html

Even as India’s demand for exchange of information on Customs cooperation has been accepted under the World Trade Organization (WTO)’s Trade Facilitation Agreement (TFA), a number of loopholes remain, and these may provide developed countries escape routes on this front.

According to the final draft of the negotiating texts, seen by Business Standard, there are a few binding commitments in the chapter on TFA, under Article 13, which talks of Customs cooperation. Subsequently, however, these commitments get diluted under the same article, within various provisions such as the provision of information and postponement or refusal of a request.

Article 13 of the TFA stipulates a member country, upon receiving a request, “shall exchange the information” with the importing country “for the purpose of verifying an import or export declaration in identified cases where there are reasonable grounds to doubt the truth or accuracy of the declaration”. For example, if India is importing a particular product from another country, it might seek details of the value shown in the document concerned in case of any doubt and verify the value of its production, as well as the cost of the product in that country.

However, though Article 13 states the country from which details are sought is liable to provide the information, later, under sub-sections of the Article, the draft text states a country will be able to exchange the desired information “to the extent possible”. Under a separate provision on postponement or refusal of a request, it adds, a country may refuse or postpone giving the information if the country’s domestic legal system prevents this. “There are several loopholes within the TFA that will give developed countries various escape routes. This could prove to be detrimental for India and result in dumping,” said a Delhi-based trade expert, on condition of anonymity.

[Theo_Fidel]

India to become womb a rental super-power

Why is this posted here?
What critical economic problem is this?

[Prem]

PP Cee
India's economy grows faster than expected

India's economic growth rate picked up strongly in the second quarter, according to official figures.he economy expanded at an annual rate of 4.8% in the July-to-September period, up from 4.4% in the previous quarter.The acceleration was faster than analysts had been expecting.Asia's third-largest economy has been weighed down by various factors, such as high inflation, a weak currency and a drop in foreign investment.This is the fourth quarter in a row that India's annual growth rate has been below the 5% mark, and the previous quarter's rate of 4.4% was the lowest for four years.Earlier this year, the Indian prime minister's economic advisory council lowered the growth outlook for the current financial year.It now expects the economy to expand by 5.3% this year, down from its earlier projection of 6.4%.India's economy has been hurt by a range of factors in recent months, including a slowdown in key sectors such as mining and manufacturing.
This has affected India's currency, which dipped nearly 25% against the US dollar between January and September this year.Though the rupee has recovered a little since then, it is still down about 13% against the dollar since the start of this year.That has made imports more expensive and contributed to a high rate of consumer inflation, which was 10.1% October, up from 9.84% in September.High food and fuel prices have contributed to inflation becoming "entrenched", finance minister P Chidambaram said.As a result, the central bank has had to raise the cost of borrowing in a bid to curb inflation.

[Rahul Mehta]

Rahul Mehta: India to become womb a rental super-power

Theo_Fidel: Why is this posted here? What critical economic problem is this?

10s of off-topic posts come and no one show any Takleef. And I post one post, which is very much related and so much Takleef !!

womb-renting industry may become the biggest forex-earner for India and a GDP-booster in times to come], and so IMO it is related with economy of India and related this thread . The womb-renting was less than few thousand cases nation wide per year till 2005 and now it is in lakhs of cases a year. Each womb-rental fetches $10000 to $12000 to the agent , doctor and the lady. And plus, the foreign couples comes to India, stays in hotel etc which boosts tourism , hospitality etc. Lets add another $10000. So each visiting couple will fetch say $20,000 of forex. So if 10 lakh couples from USA\Europe come to India to rent wombs, that will fetch forex of $20,000 * 10,00,000 = $ 20 billion a year !!! And as many as 50 lakh or even 1 crore couples may come every year. Plus the topic has long term impact in US\Wester and India economy. How? Because one reason why immigration from India to USA happened was because Western couples had fewer kids. Now as the Western couples will have more kids via renting Indian wombs , their population growth rate will increase and so the immigration may reduce.

All in all, the decision of Congress, BJP and CPM MPs to give green flag to womb rental in year 2005 may have strong effects on Indian economy in near term, and Indian\World economy in far term.

[nawabs]

India talks tough on WTO, but does not rule out deal

http://www.livemint.com/Home-Page/Di7BD ... -deal.html

Trade minister Anand Sharma said on Friday he will not compromise on food subsidies for the poor at a WTO meeting next week, but left open the possibility of an interim subsidy deal designed to salvage a trillion-dollar trade pact. India is seen holding the key to the credibility of the World Trade Organization talks and to a global trade deal at the meeting in Bali next week.

India will next year fully implement a welfare programme to give cheap food to 800 million people that it fears will contravene WTO rules that limit farm subsidies to 10% of production. The programme relies on large-scale stockpiling and procurement at minimum prices and is a central plank of the government’s bid to win a third term in office next year. India has demanded that poor countries be exempt from the rule and the issue has threatened to derail the Bali talks after diplomats failed to agree on a compromise last week.Sharma, who will lead India’s delegation to Bali, said the G33, a group of developing countries, supported India’s stand on food subsidies, which he said was non-negotiable.

“As far as what we give to our poor people that is our right, that is insulated in entirety from any multi-lateral negotiations or WTO discussions. That is a sovereign space and for India it is sacrosanct and non-negotiable,” he said. However, he refused to say whether he would accept a proposal led by the United States to waive the 10% rule until 2017. Indian media has reported that India is demanding a guarantee that the waiver will continue after that date if a solution is not found.

“I would like to state it clearly, negotiations are negotiations,” he told reporters. “Final positions will be known when ministers make their country’s statements. What has been said about India’s position is either based on incomplete information or if I may say is speculative.” He said India’s farm subsidies for procurement of foodgrains from farmers were under the 10 percent limit of the current WTO rules, but there was a need for a final settlement on the issue.

On the key issues in the ongoing negotiations, India agreed with three draft proposals on agricultural export subsidies, the reduction in export subsidies and the need to offer LDCs access duty free, quota free markets. He said India has unilaterally decided to raise imports from the LDCs by expanding tariff lines to 96.2% from 85 under which these countries can export to India without any duty or quota restrictions. India has also agreed to draft proposals on trade facilitation measures.

“We believe that facilitating trade brings down transaction costs and is also good for the economy,” he said.
However, there was still disagreement on certain issues under trade facilitation, on which India’s concerns were focused on issues related to bank guarantees for exports and expediting courier services.

[Theo_Fidel]

womb-renting industry may become the biggest forex-earner for India and a GDP-booster in times to come], and so IMO it is related with economy of India and related this thread .

I dunno. Just another 'I Feel' post with no data to back it up.
Still don't see how it is economy item.

BRF definitely needs a conspiracy thread.
All this stuff can be posted there.

[prahaar]

We are not going to get free labor movement without allowing free labor movement into India BTW. We don't allow TSP & even BD folks to freely move to India for work, for admittedly excellent reasons. We live in a rough neighborhood. We don't even allow westerners to freely move to India for work. So we just have to depend on western goodwill WRT labor movement.

This argument is without any sense. We are not asking for labour movement to Pakistan or Bangladesh.

[nawabs]

RBI issues draft norms on banks’ entry into insurance business

http://www.livemint.com/Industry/xz4fk1 ... usine.html

The Reserve Bank of India (RBI) on Friday unveiled draft norms for entry of banks into insurance broking, which would allow commercial banks to offer policies sold by multiple insurers, besides those of their own insurance subsidiaries.The norms, if they come into force, would permit banks to undertake insurance broking departmentally after seeking the specific prior approval of the banking regulator. The move is aimed at enabling banks “to leverage their branch network for increasing insurance penetration”, RBI said.

Finance minister P. Chidambaram, in his February budget speech announced that banks would be permitted to act as insurance brokers. In August, the insurance regulator allowed banks to act as brokers and sell products of more than one insurer to increase the penetration of the sector across the country. Going by the Insurance Regulatory and Development Authority norms, there is no capital requirement for insurance broking business, but the business of the insurance broker will have to be carried out in such a manner that not more than 50% of the premium emanates from any one client.

In the draft norms, RBI said the final approvals for banks to undertake broking business will factor in the regulatory and supervisory comfort on various aspects of banks’ functioning, such as corporate governance, risk management and the arrangements proposed for insurance brokerage and so on. However, banks offering insurance broking services shall not enter into any arrangement for corporate agency or insurance referral business to avoid any conflict of interest, the central bank said. Approvals granted for insurance broking will be initially for three years and will be reviewed after that.

Currently, banks like State Bank of India and ICICI Bank Ltd, among others, distribute insurance products of their own subsidiaries under the so-called bancassurance channel. Under the agency model, they cannot sell products of other insurance companies. However, once they decide to become a broker, they can sell products of multiple insurance companies.

Detailing the draft norms, RBI said banks that want to offer insurance broking should have a comprehensive board-approved policy. They should also have a net worth of not less than Rs.500 crore and capital adequacy—a measure of financial strength expressed as the ratio of capital to risk-weighed assets—of not less than 10%. The aspirants should not have non-performing assets equivalent to more than 3% of their loans and should have made profits for the last three consecutive years.

[Theo_Fidel]

This argument is without any sense. We are not asking for labour movement to Pakistan or Bangladesh.

That is not the point either.

[nawabs]

India needs decisive govt for next decade: Rangarajan

http://www.livemint.com/Politics/9D9zmH ... rajan.html

Chairman of Prime Minister’s economic advisory council C. Rangarajan said on Saturday that India needed a decisive government as the next decade will be crucial for the country. “I would like to say that India needs a decisive government,” Rangarajan said on a question on current state of politics in the country, when some surveys suggest that no party will get a clear majority in 2014 elections. He was interacting with students of Indian Institute of Management, Ahmedabad (IIM-A).

Earlier in his speech, he said, “The coming decade will be crucial for the country as it needs to maintain decent growth rate of 8-9%. Then only India’s GDP will grow and by 2025 it will be middle income generating country. Stability is required.”

On the “growth versus equity” debate, the former RBI governor said, “You cannot compartmentalize growth and equity in the 21st century. If it would have been 17th or 18th century it could have been done as it was an industrial revolution first and later social reforms. They have to go side by side now. But at the same time we cannot sacrifice growth.”

On government interventions in financial sector, Rangarajan said, “More markets does not mean less government, but it means different governments.” He also expressed hope that the goods and services tax will be implemented in the next fiscal year.

[shyam]

Again, more material on Arthakranti Proposal..

This Arthakranti proposal addresses only taxation and tracking corruption aspects, but it is likely to give the control of entire national economy to bankers. He doesn't say whether banks should be government banks only, allow private banks or foreign banks with access to foreign capital. Should the government still continue to print money to create so called moderate inflation, or no more money printing? How about fractional reserve banking? He seems to be completely oblivious to the banking scams in the west while he praises their actions as the best practices. He doesn't seem to understand that capital is cheap in western world today because of massive quantitative easing. Not sure what his real interests are. But he seems to have taken Hindu religious leaders, who don't understand how modern economies and finances work, on his side.

[Rahul Mehta]

Arthkranti people are proposing an alternate taxation system with NO draft . They have been saying "replace all taxes with one single TT = transaction tax of x%" for over past 10 years, but they still have NOT given law-draft to decide of what would define taxabale transaction and what would not.

Also, they havent clarified what would happen to short term lending.

eg

1. say A lends Rs 1 crore at say interest of 1% per month to B

2. one week later, B returns Rs 1 crore with interest = say Rs 1 crore * 1%/ 4 = Rs 25,000 .

Then will transaction tax of x% will apply on Rs 25000 or whole of (Rs 1 crore + Rs 1 crore + Rs 25 thousand )?

My point is --- even if TT is small as 0.1%, it will kill short term lending business.

Anyway, I can say more only after I see the draft. And I havent seen the TT- draft in 10 years.

===

And even if everything goes by cheque , it only reduce tax evasion not corruption, because since 1950, over 80% corruption has been in white only !! And these days, over 95% bribes are taken in 100% white.

===

Rahul Mehta : womb-renting industry may become the biggest forex-earner for India[/b] and a GDP-booster in times to come], and so IMO it is related with economy of India and related this thread.

Theo_Fidel: I dunno. Just another 'I Feel' post with no data to back it up. Still don't see how it is economy item. BRF definitely needs a conspiracy thread. All this stuff can be posted there.

I am hardly posting 1 post a month in this thread. I am not spamming. Most posts here come with no data . Then why show takleef at my posts? And data on womb-rental is not available with Govt because the law says that womb-rental contracts need not be registered and can remain confidential. The contract becomes public only if there is a court case and the court decides to make it public. And all payments are cash. The womb-renting ladies are NOT taken as industrial workers and so they cannot form union and get registered. And since this is medical service, its advertisement is de-facto banned. And so no one has been able to get any data. But pls google, and you will see how many womb rental clinics have come up. And after Amir Khan and SRK used womb-renting, the legitimacy of this service has increased and business is booming. You might want to ask your gynac friends about rise in numbers. They will give you an idea about it.

[ramana]

India a good bottom-up story

BoA Country head.

[Arjun]

India a good bottom-up story

BoA Country head.

From the interview with Kaku:

The Congress has also realised the pitfalls and will learn from its experience.

This seems to be one of those vacuous, politically correct statements without any basis in fact whatsoever. Is there anything from the Dynasty's multiple speeches to suggest a move away from the left loony-ism that has brought India down ? Is there anything to suggest even remotely that they recognize the depth of the doo-doo they have sunk India in ?

Is there anything to suggest that the ruling party is ever going to move away from its regressive Dynastic rule ?

Is there anything to suggest that the Dynasty's "Make the country and society feel bad about itself" management principle can result in outperformance by any country, leave alone India ?

[chetak]

Any likelihood of this being true??



Massive Oil Discovery Is Deathblow For Saudis

It's the biggest find in 50 years and the media is completely ignoring it...

It is 6 times larger than the Bakken, 17 times the size of the Marcellus formation, and 80 times larger than the Eagle Ford shale.

All told the recent discovery outside a sleepy Australian town contains more black gold than in all of Iran, Iraq, Canada, or Venezuela.

The current estimates of 233 billion barrels are just 30 billion barrels shy of the estimated reserves in all of Saudi Arabia.

Now, one renowned international energy expert predicts the proven reserves will be much bigger.

"The find may land at 300 or 400 billion barrels, making it one of the greatest unconventional oil discoveries any of us will see in our lifetimes," says Dr. Kent Moors and advisor to six of the top 10 oil producers and active consultant to 20 world governments.

"It represents a bona-fide redrawing of the global energy map as we know it," Moors says, "and the mainstream media is completely ignoring it."



The Death Knell for OPEC

This massive find has been likened to the Bakken and Eagle Ford shale oil projects in the U.S., which have created legitimate boom times in Texas and North Dakota.

Even at the lowest estimate, Coober Pedy is set to make Australia a net oil exporter; at the higher estimate, Australia would become one of the world's biggest oil exporters.

"What we're seeing up there is a very, very big deposit," says South Australia's mining minister, Tom Koutsantonis, "This is a key part to securing Australia's energy security now and into the future."

[Prem]

Time to send 30 Million indians to Aussyland. No excuse anymore. Anyhow ,

India wastes Rs 13,300 cr of fruits and vegetables annually
http://zeenews.india.com/business/news/ ... 89813.html

Mumbai: India, the world's second largest producer of fruits and vegetables, throws away fresh produce worth Rs 13,300 crore every year because of the country's lack of adequate cold storage facilities and refrigerated transport, a report said."The value of fruits, vegetables and grains wastage in India, at Rs 44,000 crore annually."Fruits and vegetables account for the largest portion of that wastage. Eighteen percent of India's fruit and vegetable production valued at Rs 13,300 crore is wasted annually," according to data compiled in a new report by Emerson Climate Technologies India, a business of the US-based manufacturing and technology company Emerson.The report says that two of the biggest contributors to food losses are the lack of refrigerated transport as also the lack of high quality cold storage facilities for food manufacturers and food sellers.Without improvements to its cold chain infrastructure, from farm harvest to table, food problems in India, which is the world's second largest producer of fruits and vegetables, will remain vast and are likely to grow, warns the report.
In order to reach that target, the report says an investment of more than Rs 55,000 crore is needed by 2015-2016 just to keep up with growing fruit and vegetable production levels."While progress is being made, this report confirms the cold storage situation is more acute than many realise. Emerson is seeing this in the marketplace and we commissioned this report to keep the spotlight on the issue," said Pradipta Sen, president of Emerson's India, Middle East and Africa region.

[/quote]

[gakakkad]

w.r.t oil in australia..it is shale oil and not easily recoverable...the reserves are estimated between 3.5 and 230 b...shale oil is present in north east Yindia as well..and perhaps many other places...India is greatly under explored...the process of shale oil extraction is called fracking...

this kent moor is a suspicious chap..most probably a quack... he appears frequently on fox news advocating often bizarre stuff..

[nawabs]

India rejects WTO offer on food security rules

http://www.livemint.com/Politics/PigLGM ... rules.html

The present draft text prepared in Geneva provides developing countries temporary relief of up to four years, during which they cannot be challenged under the agreement on agriculture if they cross the permissible food subsidy ceilings, but it does not provide such a guarantee under the agreement on subsidies and countervailing duties.

Stressing that procurement and public stockholding for food security are invaluable instruments used by developing countries to secure interests of the poor and vulnerable, Sharma urged updating of WTO rules under the agriculture agreement to “rectify inherent flaws” and help developing countries carry out such “legitimate” operations without defaulting on their commitments. “The G-33 proposal on food security aims to address the problems faced by developing countries due to outdated WTO rules which base agriculture subsidy calculation on external reference prices of 1986-88, even as global food prices have increased manifold during this period. It is surely reasonable that we should not be asked to peg farm support calculations on prices which were prevailing thirty years ago,” he added.