Indian Economy - News & Discussion Oct 12 2013

hanumadu · Post by **hanumadu** » 16 Jan 2014 20:37

“This tax terrorism in the country is terrifying. One can’t run the government by thinking that everybody is a thief,” said Modi, to loud clapping from the audience.

Many at BRF including me are guilty of such thinking. When Reliance asks for doubling the gas price, our immediate reaction is they are blackmailing the government. When AK says Delhi power companies are over charging, we think he must be true. We do not trust the government or the industry because of the opaque structures that are in place in India. The public has no way of verifying what the truth is.

hanumadu · Post by **hanumadu** » 16 Jan 2014 20:54

Christopher Sidor wrote: If there is truth that people in Eastern half of India are not willing to give their land away, then GoI and rest of the Eastern State governments should try to do a Green Revolution 2.0 there. Bring all the infrastructure which is present in north-western India along with organic farming in a big way to this area. Encourage more agri-business in these states. For example there was a proposal long-long-long time ago to transport cement in jute bags instead of plastic bags. That would be good for the environment and also give flip to the jute growers in Eastern Part of India. Eventually we could rope in Bangladesh too into this and make it a part of the greater Indian supply chain.

I doubt any kind of green revolution can match up to the growth offered by industry. IMO, the strongest bond to land any one has is sentiment. If there is enough economic incentive to people to part their land they will part their land. Any way, who wants to do the back breaking work in the fields when there are easier alternatives?

Supratik wrote:Theo, you missed on two problems in WB. The first is becoz of land reforms there are many people (tenants) who have a stake in the land. So what you think as Rs 16 lakh per acre will actually translate to 1-2 lakh or even less per head. So industrialization requiring hundreds/thousands of acres is not possible in WB. The TMC Govt is pursuing small and medium industries. The other problem is as there is not much of an economy in WB - what will people do with the Rs 1-2 lakhs they are getting from land acquisition and loose their only means of livelihood.

By your calculations, its comes to 8 people depending on an acre of land. I don't think 1 acre can produce enough for 8 people to survive on it. Many would be marginal farmers, but I would say that it would be on an average at least 1 acre per head in a family. Tata was offering one job per family from whom land was acquired at its Singur plant. I think that would be the norm for most cases where land was acquired from the farmers for setting up an industry.

Suraj · Post by **Suraj** » 17 Jan 2014 04:39

Merchandise trade data:
Exports rise 3.49% in December, imports dip 15.25%

India's exports grew 3.49% in December to $26.3 billion, while imports dipped 15.25%. Imports last month were $36.4 billion.

Commerce secretary SR Rao said export growth slowed mainly because of a drop in petroleum exports.

"It is only one product group which has contributed to (slower growth in exports) and that is petroleum products," he told reporters.

There was an unplanned maintenance shutdown at Reliance Industries, one of the country's largest exporters, Rao said.

However, lower imports helped to narrow the trade deficit to $10.1 billion in December compared with $17.5 billion in the same period of 2012.

Gold and silver imports in December dropped to $1.77 billion from $5.6 billion a year earlier, although they were higher than $1.05 billion in November.

For the April-December period, exports aggregated $230.3 billion and imports $340.3 billion while the trade deficit stood at $110 billion.

Services trade data:
India's services exports fall to $12.32 bn in November

India's services exports in November stood at $12.32 billion, slightly lower than in October, according to the Reserve Bank data.

Services exports were worth at $12.56 billion in October.

Imports of services in November moved down slightly to $6.11 billion from $6.96 billion in the previous month.

During April-November period, services exports were worth $100.41 billion.

Total services imports stood at $53.19 billion during the first eight months of the current financial year.

RBI releases the provisional aggregate monthly data on India's international trade in services with a lag of 45 days.

Total trade for first 3 quarters (Apr-Dec) using extrapolated services estimates for Dec:

Merchandise exports: $230B
Services exports: ~$113B
Gross exports: ~$343B

Merchandise imports: $340B
Services imports: ~$60B
Gross imports: ~$400B

Gross trade: ~$743B
Current account deficit: ~$57B

A strong push in Q4 should get us to the $1 trillion gross trade mark this fiscal year, with close to $750 billion in 3 quarters.

A_Gupta · Post by **A_Gupta** » 17 Jan 2014 07:07

It surprised me, but India consumes as much whiskey as the rest of the world put together.
For example, http://www.businessinsider.com/global-w ... 12-2013-12

Prem · Post by **Prem** » 17 Jan 2014 09:37

Suraj wrote:Merchandise trade data:
Exports rise 3.49% in December, imports dip 15.25%
A strong push in Q4 should get us to the $1 trillion gross trade mark this fiscal year, with close to $750 billion in 3 quarters.

As estimated early this year. Lets hope of its doubing in 5-6 Years. 1.1 T Export and 900B import.

Supratik · Post by **Supratik** » 17 Jan 2014 13:02

hanumadu wrote: By your calculations, its comes to 8 people depending on an acre of land. I don't think 1 acre can produce enough for 8 people to survive on it. Many would be marginal farmers, but I would say that it would be on an average at least 1 acre per head in a family. Tata was offering one job per family from whom land was acquired at its Singur plant. I think that would be the norm for most cases where land was acquired from the farmers for setting up an industry.

No that is mostly the case. It is subsistence agriculture. Distribution of wealth CPI-M style. Even Bdeshis got into the scheme. Say the job goes to someone in the family of the land holder. What do the tenants gain. Rs 50000? Why would they allow the sale?

Aditya_V · Post by **Aditya_V** » 17 Jan 2014 17:18

A_Gupta wrote:It surprised me, but India consumes as much whiskey as the rest of the world put together.
For example, http://www.businessinsider.com/global-w ... 12-2013-12

I am sure alcoholism especially promoted by filmy culture has an impact in productivity and social indicators especially among persons who kids don't have food but go and drink.

Fine with controlled social drinking, but I think this well out of control in our society nd certain ideologies support it.

Like AP which in 10 years since 2004 has seen phenomenal growth in per ca pita alcohol consumption

hanumadu · Post by **hanumadu** » 17 Jan 2014 17:33

Supratik wrote:
hanumadu wrote: By your calculations, its comes to 8 people depending on an acre of land. I don't think 1 acre can produce enough for 8 people to survive on it. Many would be marginal farmers, but I would say that it would be on an average at least 1 acre per head in a family. Tata was offering one job per family from whom land was acquired at its Singur plant. I think that would be the norm for most cases where land was acquired from the farmers for setting up an industry.
No that is mostly the case. It is subsistence agriculture. Distribution of wealth CPI-M style. Even Bdeshis got into the scheme. Say the job goes to someone in the family of the land holder. What do the tenants gain. Rs 50000? Why would they allow the sale?

I think the salary in an industry will be more than 50,000 but 50000 itself is still more than what you can earn on an acre of land. I still don't see how a family of 8 can survive on one acre of land. They will have to supplement their income by doing other work/jobs.

Theo_Fidel · Post by **Theo_Fidel** » 17 Jan 2014 19:58

Suprantik,

The situation is similar in much of SI as well. Esp. in any well watered area. The average farm size in my native is ¾ of an acre. Still you don’t hear of the POSCO or Nadigram types over reactions.

Tenant farmers get very minimal compensation in any case.

What would it take to teach these folks that their children’s future lies in industrialization and moving off abject subsistence farming.

Suraj · Post by **Suraj** » 18 Jan 2014 05:24

Steel production year for calendar year 2013 will be approximately 80MT. We'll retain the 4th spot in the rankings, behind China, Japan and narrowly behind USA, and ahead of Russia and South Korea. The original goal of 120MT by 2012 isn't close to being met, thanks to very poor execution on several major steel production plants envisioned in the mid 2000s - POSCO, Mittal etc. Had we met that target, we'd have been comfortably in #2 spot ahead of the US and Japan.

Prem · Post by **Prem** » 18 Jan 2014 10:17

http://reneweconomy.com.au/2014/even-in ... -2051-2051
Even India could reach nearly 100% renewables by 2051
[

b]One of the last economies imagined going fully renewable would be India, the rising economic giant that is still yet to connect several hundred million people to its mostly coal-fired grid, and is expected to have the highest growth of electricity consumption. But according to environmental group WWF, India could reach a goal of 100 per cent renewables by 2050.[/b]The study examines the possibility of a near 100% Renewable Energy Scenario (REN) for India by the middle of the century against a reference scenario (REF) in which the economy is likely to be dependent primarily on fossil fuels – coal, oil and gas.
. According to the report, aggressive energy efficiency improvements alone can bring in savings of up to 59 per cent (by both the supply and demand sides) by mid-century.Biofuels are set to play a large role, especially in the transport sector accounting for nearly 90 per cent of the industry’s requirements. According to WWF the third-generation biofuels in question are currently still in R&D phase and for the plan to go accordingly they must become commercially viable within the next two decades.Overall, biofuels account for 23 per cent of the total commercial energy supply, most of the transportation needs. Solar thermal accounts for much of industry’s heating needs, and the electricity supply increases nearly 8 fold, with wind contributing the largest component.The report says the reference scenario depicts an unsustainable, polluting and relatively inefficient energy future in 2051. The renewable scenario, on the other hand, presents a modern, cleaner and highly efficient India and shows that it is, in principle, theoretically feasible to achieve close to 90 per cent penetration of renewable energy sources in the energy mix by 2051.““Concentrated solar thermal technologies, many of which are currently still in the research and development phase, will take on a large chunk of the nations electricity needs as well as meeting thermal demand in industries that require temperatures below 700°C.Wind is also set to push India towards its 100 per cent goal. Currently India has no estimates of its offshore wind potential but the WWF predicts that it could have up to 170 GW installed by 2051.Rural households will be forced to change their cooking habits, meeting their needs through improved cook stoves while urban households switch to electrical based cooking.Electricity alone plays a crucial role in improving levels of human development and the quality of modern life – with a strong positive link between human development, economic growth and growth in energy and infrastructure.

To sustain India’s own growth it requires large amounts of energy, with little oil reserves and much of its large coal reserves being inaccessible due to technological, social or geological factors, the country has many push factors to get its renewable base up and running. Due to the low oil reserves India has a high import dependence making it more economically vulnerable and well as supply issues.India started its National Solar Mission in 2010 and is aiming to get 20 GW of grid connected solar power by 2020. As well as this, the Mission is promoting 2,000 MW of off-grid applications; including 20 million solar lighting systems and 20 million square metres of solar thermal collector area by 2022.In general, India has a vast potential for solar power generation, with about 58 per cent of the country’s total land area receiving an annual global insolation about 5 kWh/m2/day. These areas with 5 kWh/m2/day or above can generate at least 77 W/m2 at 16 per cent efficiency.Rooftop PV is likely to play a major role in both rural and urban areas with residential, agricultural and industrial priorities reducing the amount of available land for solar programs.
It was estimated that almost 30 per cent of industrial processes in India require heat below 250°C which can be supplied with heat from solar thermal concentrators. Temperatures below 80°C can be met through solar air heaters and solar water heaters. Industries – with the exception of iron, steel, cement and fertilizer – could in theory shift to CST based heating.

Wind energy in India currently ranks second to hydro in renewable energy’s generating electricity. With 17,700 MW of installed capacity India’s rank in harnessing wind energy is fifth in the world after USA, China, Germany and Spain. Over the period of 1992-2010 the wind energy installed capacity in India witnesses an annual growth rate of 37 per cent.According to the Centre for Wind Energy Technology, most of India’s wind energy is concentrated in five states – Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and Gujarat.
The WWF estimates that India’s total wind potential in megawatts stands at 49,130 at 50 metres, when taken up to 80 metres the reading more than doubles at 102,788 MW.Hydropower is also being considered, with estimates around 148GW of energy potential. Two rivers, Brahmaputra and Indus, have the highest potential, with only 11 and 50 per cent respectively being utilized thus far.

India’s first tidal power project, with a 3.75 MW capacity, is being set up as well as the Kapasar project which involves building a 30 km-long dam. A recent study cited in the report suggested that also tidal power generation is feasible in certain areas it may not be commercially viable due to diesel costs. Currently, The Comparing the REF’s and REN’s final energy demands in 2050 highlights not only a stark mix of energy uses but also efficiency levels. In 2051 the REF is approximated to have increased the countries’ energy demand up to 2,545 Mtoe when compared to the REN sitting at 1,461 Mtoe – highlighting an overall energy savings of 43 per cent.Modeling done by the WWF has estimated that the total undiscounted technology investment cost for the renewables scenario is 42 per cent more than the reference (fossil-fuel) scenario, requiring 544 trillion Indian Rupees from 2011 to 2051. Although the figure sounds quite high it is only around 10 per cent higher than if India was to stick to its reference scenario.In the renewables scenario, India will have almost a quarter more electrical generation capacity (in GW) than if it continues along the reference scenario path.

Supratik · Post by **Supratik** » 18 Jan 2014 20:26

hanumadu wrote: I think the salary in an industry will be more than 50,000 but 50000 itself is still more than what you can earn on an acre of land. I still don't see how a family of 8 can survive on one acre of land. They will have to supplement their income by doing other work/jobs.

They survive with additional non-farm work but the land gives them a minimum livelihood. IIRC, there was no issue of giving employment to everyone including tenants. So what is he going to do with Rs 50000?

Supratik · Post by **Supratik** » 18 Jan 2014 20:34

Theo_Fidel wrote:Suprantik,

The situation is similar in much of SI as well. Esp. in any well watered area. The average farm size in my native is ¾ of an acre. Still you don’t hear of the POSCO or Nadigram types over reactions.

Tenant farmers get very minimal compensation in any case.

What would it take to teach these folks that their children’s future lies in industrialization and moving off abject subsistence farming.

Except Kerala, I don't think the population pressure is as high as in WB. Also I don't think the number of dependents per acre will be as high as WB. Kerala, BTW has no industry and land is one of the issues.

Land was one of the core issues of the Communist movement in WB. So it is a very sensitive issue in WB. I think what the TMC govt is pursuing if successful is the right way to go. Have lots of small and medium industries. In any case SMEs provide more jobs per crore than a few large industries.

Theo_Fidel · Post by **Theo_Fidel** » 18 Jan 2014 23:32

Kerala argument against industry is more do do with environment than agriculture vs industry. Any industry in Kerala would be coming up inside a dense city or pristine forest. It flat land area is very very limited. This is not so with WB. Kerala also has a very highly educated population and is not at destitution level. I think this argument is weak. And this doesn't explain the relentless opposition from Odisha.

In the recent economic budget survey GOI released the small fact that large organized industry is 5-10 time more efficient and produces more wealth than SME's. WB will not make any progress until it gets large industry and land acquisition into its economy.

Folks need to be reasonable. WB has 15 Million acres of agricultural land. For a proper large industry complex about (20) x 5000 acres SEZ's out to be a good start. This is about 100,000 acres of land or less than 1% of the agricultural land available. You can't even give up that much? To ensure prosperity for your state?

Yagnasri · Post by **Yagnasri** » 19 Jan 2014 10:18

Theo_Fidel wrote: Folks need to be reasonable. WB has 15 Million acres of agricultural land. For a proper large industry complex about (20) x 5000 acres SEZ's out to be a good start. This is about 100,000 acres of land or less than 1% of the agricultural land available. You can't even give up that much? To ensure prosperity for your state?

WB fed leftist rubbish for decades, huge gangs of politicos and jholawalas decide what is good for people. TMC and left has some ideas in this regard. WB needs a generation or so to come out of this.

Supratik · Post by **Supratik** » 19 Jan 2014 14:07

Narayana is right. WB was a democratic NK. The party decided what Bengalies should even think. It is not yet ready for 1000 acre SEZs. The opposition in Orissa is localized led by Maoists and NGOs. In the interim SMEs is the right way to go in WB. It is still an improvement considering 30+ yrs of stagnation.

Austin · Post by **Austin** » 19 Jan 2014 21:57

Doing Business 2014 data for India

http://www.doingbusiness.org/data/explo ... mies/india

Arjun · Post by **Arjun** » 21 Jan 2014 12:13

India Inc finally getting more activist on politics. This is a welcome and much required sign of hope....

AAP can’t depend on 40s’ economics: Narayana Murthy

kumarn · Post by **kumarn** » 22 Jan 2014 21:18

Currency notes issued before 2005 to be withdrawn post March 31: RBI

The Reserve Bank today decided to withdraw all currency notes issued prior to 2005,
including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently
aimed at curbing black money and fake currencies.

What happens to people with sackful of cash?

chola · Post by **chola** » 22 Jan 2014 23:38

kumarn wrote:Currency notes issued before 2005 to be withdrawn post March 31: RBI

The Reserve Bank today decided to withdraw all currency notes issued prior to 2005,
including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently
aimed at curbing black money and fake currencies.

What happens to people with sackful of cash?

Most of the smart ones already started with gold and US dollars since the rupee depreciates like mad anyways.

Austin · Post by **Austin** » 23 Jan 2014 08:42

India headed for 8% growth: Finance minister

nawabs · Post by **nawabs** » 23 Jan 2014 09:16

RBI panel wants retail inflation as new policy benchmark

http://www.business-standard.com/articl ... 310_1.html

The Urjit Patel committee on monetary policy framework has proposed setting up of a monetary policy committee (MPC) that will be headed by the Reserve Bank of India (RBI) governor and accountable for achieving inflation target set by it.

The report of the Patel committee, set up by RBI in September last year, has recommended that retail inflation, measured by the Consumer Price Index (CPI), replace wholesale inflation as the price anchor. The responsibility of the central bank, the panel has suggested, should be to bring the retail inflation rate down at four per cent, with a variation of 200 bps on either side, in three years. “The nominal anchor should be defined in terms of headline CPI (-based) inflation, which closely reflects the cost of living and influences inflation expectations relative to other available metrics,” the report has said.

If the MPC fails to achieve its target for three quarters in a row, it has to issue a public statement, mentioning reasons for failure and remedial measures, with signatures of all the five members.

Observers said if this practice was followed, the central bank would have valid reasons not to pay attention to any advisory from the government on its monetary policy stance. In recent times, finance ministers have repeatedly pressured the central bank to cut interest rates, even if the situation does not warrant such an action.

The observers also said the lines between the government and RBI were set to be re-drawn if the recommendations of the committee were accepted. Indicating a shift from a discretionary policy to a rule-based one, the panel has advocated adoption of a policy rate that is easily communicated and understood; it will be positive when inflation is above the nominal anchor.

In what could be construed as paying more if the government’s market borrowing is high, the panel has said that RBI’s open-market operations should be only for liquidity management and not for managing yields — a practice widely followed now, though not formally admitted to.

The panel has proposed a two-phased transition to the new operating framework. In the first phase, the weighted average call rate will remain the operating target and repo will continue as the single policy rate. It has emphasised the need for a spectrum of term repos of varying maturities, with 14-day as the anchor rate. In the second phase, the 14-day term repo will emerge as the policy rate.

To support the operating framework, the committee has recommended some new instruments in the monetary policy toolkit, such as a standing deposit facility. It has also called for market stabilisation and cash management bills to be phased out, since the government debt and cash management is being taken over by the government’s debt management office. The report has also elaborated on the impediments for transmission of the monetary policy. It has said, “the government should eschew suasion and directives to banks on interest rates that run counter to monetary policy actions.”

Highlights of Patel panel report

Nominal anchor: A shift to headline retail inflation
Road map: Cut inflation from 10% to 8% in one year; and to 6% in two years
Target: Retail inflation rate of 4% (+/- 200 bps)
Rule-based framework: To make conduct of monetary policy more predictable and transparent
Fiscal consolidation: Firm govt commitment to cut fiscal deficit to 3% of GDP by FY17
Composition of monetary policy committee (MPC): RBI governor, a deputy governor, an executive director and two external members
Tenure of MPC: Three years (to meet once every two months)
Accountability: MPC to be responsible for meeting inflation target; to issue public statement with members’ signatures if it fails to achieve the target for 3 quarters
Phased refinement of operating framework: LAF, repo rate to continue as single policy rate in Phase-I; 14-day term repo will emerge as policy rate in Phase-II

Some may call the MPC as RBI activism and others an implicit acceptance of Finance Ministry failure to fulfill it's directives and need for RBI to balance it out. Will the Gov. be willing to let RBI take on the mantle to officially lead the charge against inflation? I wonder how the babus in the finance ministry will be feeling about this proposal.

Austin · Post by **Austin** » 24 Jan 2014 09:08

Raghuram Rajan terms inflation as a 'destructive disease'

Terming inflation as a 'destructive disease', Reserve Bank of India (RBI) Governor Raghuram Rajan on Thursday said there can be no trade off with growth and prices have to be brought down.

"Inflation is a destructive disease. Industrialists complain about high interest rate but we don't have a choice but to keep interest at high rate because inflation is high at 8 per cent," he said in the 8th R N Kao Memorial Lecture organised by Research and Analysis Wing (RAW) here.

While industrialists want an interest rate of about 5 per cent, a citizen would like the saving interest rate to be 10 per cent. The mismatch between industrialists' demand and account holders is because of inflation.

"The point is inflation is hitting the growth in the long run. There can be no trade-off. There is need to bring inflation down. Can we get inflation under control and get high growth," he said.

Mr Rajan, however, said policy makers have to face the problem upfront and not keep postponing facing it.

"We have to examine the Urjit Patel Committee report (asking RBI to calibrate monetary policy to retail inflation rate and not wholesale inflation as is policy presently)," he said."We can't push inflation under the carpet as a central banker. We have to deal with it."

Atri · Post by **Atri** » 24 Jan 2014 14:14

Reserve Bank to withdraw all pre-2005 currency notes from circulation

MUMBAI: The Reserve Bank on Wednesday decided to withdraw all currency notes issued prior to 2005, including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently aimed at curbing black money and fake currencies.

"After March 31, 2014, it (RBI) will completely withdraw from circulation all bank notes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes," the RBI said in a statement.

BUT

Secret Indian currency template compromised: CBI

NEW DELHI: The secret template India uses to print currency notes has been "compromised" and that is possibly why fake but real-looking Indian currency notes are being pumped in to subvert the country's economy, says the Central Bureau of Investigation.

The CBI, the nodal agency for checking fake notes, has now formed a special team comprising its sleuths and officials from the Directorate of Revenue Intelligence, the Reserve Bank of India and the Central Forensic Science Laboratory to find out how and at what level the design got "compromised".

"Our investigations have revealed that the 2005 secret security template which was introduced as part of the new design adopted then has been compromised," CBI Director Ashwini Kumar said.

Asked, if the country was still using the security template, he said, "yes".

If 2005 template is compromised, then why pre-2005 notes are being recalled? One of the biggest scam happening right in front of our eyes.

RoyG · Post by **RoyG** » 24 Jan 2014 22:23

And we still have to rely on foreigners for the paper to print the notes on. What a load of garbage. Things like this need to be guarded just as much as our nuclear arsenal. If you economically subvert a country, what's the point of nuclear deterrence, planes, soldiers, etc. The only benefit I see in the RBI's actions is phasing out of higher denomination currency. Ideally it should stop at 50 but 100 will be fine.

nawabs · Post by **nawabs** » 26 Jan 2014 14:38

India’s unemployment rate may rise to 3.8% this year: ILO

http://www.thehindubusinessline.com/eco ... 620078.ece

The count of people being without a job is on the rise in India as economic slowdown and slower business expansion activities cast a shadow on employment generation, according to experts.

Indicating sluggishness in the country’s job market, the International Labour Organisation (ILO) has said in its recent report that the unemployment scenario in India over the last two years has been showing a rising trend.

Going by ILO’s latest estimates, India’s jobless rate could be 3.8 per cent this year.

Ritu Mehrotra, VP Global HR and Talent Management of Bristlecone, a Mahindra Group company, said that due to migration to urban areas there is a sharp rise in the unemployment rate in rural areas as well.

“Government should step up their efforts to support skill and retraining activities to address the gaps between demand and supply of work skills and qualifications and to address long-term unemployment,” she told PTI.

In South Asia, labour markets continued to suffer from high rates of informal/agricultural employment where jobs are poorly paid and unprotected, ILO said in the report.

Unemployment rate in India is showing an increasing trend since 2011 when it was 3.5 per cent. The same rose to 3.6 per cent in 2012 and climbed to 3.7 per cent last year.

This year, jobless rate is expected to rise to 3.8 per cent, according to the report ‘Global Employment Trends 2014’.

According to the ILO report, it has been argued that India was experiencing ‘jobless growth’ due to the fact that total employment grew by only 1.1 million from 2004/05 to 2009/10 (based on the National Sample Survey), representing an employment elasticity of almost zero.

Executive search firm GlobalHunt’s MD Sunil Goel said in the last couple of years Indian and global economies have been facing slowdown. New business expansions are also not happening at all or has gone down, he added.

A large pool of youth in the age group of 18-25 years despite being skilled are facing unemployment issues since there are not enough opportunities for them, Goel said.

Austin · Post by **Austin** » 26 Jan 2014 18:44

Do we have any official figures on consolidated Indias State and Central Debt in USD ? Thanks.

Christopher Sidor · Post by **Christopher Sidor** » 27 Jan 2014 22:17

If ones want to know what UPA-II was thinking in the second term go through the interview of Rahul Gandhi with Arnab Goswami on times now. There is slant mention of inflation. There is no mention of Green Revolution 2.0. There is all talk of thinking deep, of changing the system of making it more representative.

Why is it that there is a disconnect between what a common man needs or wants and what these characters are talking, thinking and doing? And not only UPA even BJP is the same, all they do is criticise Congress without offering a valid alternative.

This economy has gone to dogs thanks to the inaction of these characters. There is despondency on the streets.

Supratik · Post by **Supratik** » 27 Jan 2014 22:25

Christopher Sidor wrote: Why is it that there is a disconnect between what a common man needs or wants and what these characters are talking, thinking and doing? And not only UPA even BJP is the same, all they do is criticise Congress without offering a valid alternative.

It means you haven't really followed any of Modi's non-political speeches and are trying to do an equal-equal.

Christopher Sidor · Post by **Christopher Sidor** » 27 Jan 2014 22:49

If there is something that the financial crisis has shown us is that self-regulation or non intrusive government or so called minimum government is equal to no regulation. So I don't agree that what we need is less or minimum government.

What A Raja did was what NDA did with respect to the so called limited mobility licenses and how for one day BSNL switched off interconnect to the then non CDMA license holders to bring them to kneel. Recall how within one week of that incident CDMA telephone operators got their inter networks calls operating.

What has BJP said about bringing down inflation? What has BJP said about putting in system which actually rewarding lower electricity rates, about stopping large scale thefts in Electricity distribution which get reflected in so called transmission losses? What have they said about reversing the pollution levels which in many cases are worse than the Chinese? These are the parties of big business.

svinayak · Post by **svinayak** » 28 Jan 2014 07:49

Suraj · Post by **Suraj** » 28 Jan 2014 10:40

Rajan again steps up to assert inflation targeting:
Rajan Unexpectedly Raises India Rates as Inflation Target Mulled

India’s central bank unexpectedly raised its benchmark interest rate as it considers revamping the monetary policy framework to more than halve Asia’s highest inflation.

Governor Raghuram Rajan boosted the repurchase rate to 8 percent from 7.75 percent, the Reserve Bank of India said today. Only three of 45 analysts in a Bloomberg News survey predicted the move, with the rest expecting no change. He left the rate unchanged last month.

An RBI panel last week proposed adopting a 4 percent target for consumer-price gains by 2016, signaling a need for elevated borrowing costs to stem inflation that’s running close to 10 percent even as the economy struggles. Further tightening is not anticipated in the near term if CPI slows to 8 percent by March 2015, consistent with the panel’s recommendations, the central bank said in a statement.

In an election year, this will make the Finance Ministry and the Government in general deeply unhappy, but the inflationary problems are entirely their creation due to years of unproductive populist spending.

Austin · Post by **Austin** » 28 Jan 2014 12:03

Rupee is now 63 plus , I suspect unless RBI intervenes we might see Rupee touch 65 by April-May..

All the Developing Economies are seeing their currency slide as Euro and Dollar keeps getting stronger.

Supratik · Post by **Supratik** » 28 Jan 2014 14:29

Christopher Sidor wrote:If there is something that the financial crisis has shown us is that self-regulation or non intrusive government or so called minimum government is equal to no regulation. So I don't agree that what we need is less or minimum government.

What A Raja did was what NDA did with respect to the so called limited mobility licenses and how for one day BSNL switched off interconnect to the then non CDMA license holders to bring them to kneel. Recall how within one week of that incident CDMA telephone operators got their inter networks calls operating.

What has BJP said about bringing down inflation? What has BJP said about putting in system which actually rewarding lower electricity rates, about stopping large scale thefts in Electricity distribution which get reflected in so called transmission losses? What have they said about reversing the pollution levels which in many cases are worse than the Chinese? These are the parties of big business.

Why superimpose what happened in the West on India when the two are on different planes? Modi said "India needs more governance and less government" which is different from your Americanism. I can't spoon feed you. What Modi said has already been discussed on BR and is all over the net. Find it out for yourself. His main contention is that things like price rise, inflation, etc are going to reduce if there is good governance.

Austin · Post by **Austin** » 28 Jan 2014 15:26

Chidambaram: No magic wand for Indian economy

India's Finance Minister, Palaniappan Chidambaram has accused his rival BJP leader Narendra Modi of having economic knowledge that could be "written on a postage stamp".

His comments came after Mr Modi said the economy under management of Mr Chidambaram had been a "debacle".

But Mr Chidambaram told HARDtalk that India had seen the highest rate of poverty reduction since independence. More people now had access to drinking water and more children were attending schools, he said.

Christopher Sidor · Post by **Christopher Sidor** » 28 Jan 2014 18:05

Supratik wrote:
Christopher Sidor wrote:If there is something that the financial crisis has shown us is that self-regulation or non intrusive government or so called minimum government is equal to no regulation. So I don't agree that what we need is less or minimum government.

What A Raja did was what NDA did with respect to the so called limited mobility licenses and how for one day BSNL switched off interconnect to the then non CDMA license holders to bring them to kneel. Recall how within one week of that incident CDMA telephone operators got their inter networks calls operating.

What has BJP said about bringing down inflation? What has BJP said about putting in system which actually rewarding lower electricity rates, about stopping large scale thefts in Electricity distribution which get reflected in so called transmission losses? What have they said about reversing the pollution levels which in many cases are worse than the Chinese? These are the parties of big business.

Why superimpose what happened in the West on India when the two are on different planes? Modi said "India needs more governance and less government" which is different from your Americanism. I can't spoon feed you. What Modi said has already been discussed on BR and is all over the net. Find it out for yourself. His main contention is that things like price rise, inflation, etc are going to reduce if there is good governance.

Indian ruling elite, whether Congress of BJP have practised crony capitalism. Assuming that private sector does not need regulation or moderation or that it needs to have its shackles removed puts us right down the path which USA walked down after Regan made the most infamous pronouncement, "Government is the problem". We have to be smart so as not to repeat the mistakes of others.

What Modi has said does not inspire confidence. It is as if he is playing to the gallery and not giving any concrete solutions.

Supratik · Post by **Supratik** » 28 Jan 2014 18:40

Christopher Sidor wrote: Indian ruling elite, whether Congress of BJP have practised crony capitalism. Assuming that private sector does not need regulation or moderation or that it needs to have its shackles removed puts us right down the path which USA walked down after Regan made the most infamous pronouncement, "Government is the problem". We have to be smart so as not to repeat the mistakes of others.

What Modi has said does not inspire confidence. It is as if he is playing to the gallery and not giving any concrete solutions.

What Modi has said inspires confidence in many of us. You are superimposing critics by the American left on India e.g. "regulatory capture" power, environment, less government, "big business", etc. Those issues may be relevant to the west but are irrelevant to India at this juncture. We are looking for some who can fix things e.g. giving 24X7 power, putting one of the largest water pipeline network to carry water from water-sufficient areas to water-deficient areas, have the temerity to compete with biggies by trying to put up a huge financial city, providing piped gas to every home, etc. Who can pull up 700 million people living below the actual poverty line. Provide jobs to 18 million Indians joining the labour force each year. Right now we are not concerned about ideas of the American left and we have seen what the Indian left has done for 60 yrs.

Prem · Post by **Prem** » 29 Jan 2014 08:33

Lower CAD, higher savings and better capital productivity can lead to 8.5% GDP growth
IOW, Change The Government to Achieve Normal Growth

he Indian economy is currently passing through a phase of relatively slow growth, but this should not cloud the fact that over the eight-year period beginning 2005-06, the average annual growth rate has been 8%. Does India have the potential to grow at a sustained rate of 8-9%? Normally, potential growth is measured using trends.These are backward-looking measures, since they depend on historically observed data.In the case of determining the potential rate of growth of the economy, one can take the maximum growth rate achieved in the recent past as the lowest estimate of the potential, if there is reason to believe that the maximum growth rate achieved in the recent past was not a one-off event and the growth rate achieved was robust. India achieved a growth rate of 9.5% in 2005-06, followed by 9.6% and 9.3% in the subsequent two years.After declining a bit in the wake of the international financial crisis, growth rate went back to 9.3% in 2010-11. The growth rate achieved during 2005-06 to 2007-08 was robust. The domestic savings rate during this period averaged 33.4% of GDP.Similarly, the gross capital formation rate averaged 34.2%. The current account deficit remained low with an average of 1.1% of GDP. Farm growth during this period averaged 5% and the annual manufacturing growth rate was 11.5%.The capital flows were large but as the current account deficit remained very low, the accretion to reserves amounted to $144 billion.
The growth rate slowed to 6.2% in 2011-12, though this rate may be revised upwards. It came down to 5% last year and this year, it is expected to be around the same level.The savings and investment rates have come down from the peak reached in 2007-08, because of economic and non-economic factors such as perceptions about governance and policy. ( MMS /UPA BDY Stupidity Factor) Nevertheless, recent data indicates that in 2011-12, the gross fixed capital formation rate, a measure of the accumulation of fixed assets by business, government and households, was around 30.6% against 32.9% of GDP in 2007-08.In normal conditions, this should have given us a growth rate of 7-7.5%, but the actual rate turned out to be 6%. Growth has declined much more steeply than what is warranted by the decline in investment.But while the decline in overall gross fixed capital formation from the peak reached in 2007-08 was only 2.2%, the decline for the private corporate sector was as high as 4.6%.The composition of investment has also played a role in the reduction in productivity of capital. While the existing level of investment rate should enable us to grow at 7.5% in the short run, a return to higher savings and investment can take us back to very high levels of growth.

Arjun · Post by **Arjun** » 29 Jan 2014 09:03

Christopher Sidor wrote:What Modi has said does not inspire confidence. It is as if he is playing to the gallery and not giving any concrete solutions.

When compared with the socialist Congress and anarchist AAP - he is most definitely the ONLY alternative that inspires confidence for India Inc. Consider also that some basic economic metrics like GDP growth and fiscal deficit actually matter to him and he would be focused on performing on these benchmarks. That is a hell of lot more than one can say for the economics-challenged leaders of the other principal parties.

Suraj · Post by **Suraj** » 29 Jan 2014 10:20

Christopher Sidor wrote:What Modi has said does not inspire confidence. It is as if he is playing to the gallery and not giving any concrete solutions.

Let's keep the politics of the matter to the Modi thread, but I'll comment on this here - his fundamental credibility is not about his words, but his record.

Is it as extraordinarily spotless as some sources might make it out to be ? No. I don't necessarily believe every glowing statement about Gujarat. There's clearly a lot still to be done, after 12 years of his rule.

However, he's undoubtedly one of the most consistently well performing CMs in the country. He's a very good hands-on administrator and has the extremely important ability to get something done, by getting different departments to work together. Like Vajpayee before him, he also has an emphasis on fixed asset development, something that was saw a marked lack of focus in the last 10 years, except for power generation.

Our system would benefit from the meritocratic elevation of a competent administrator, and give him enough time to put his skills to work. If one disagrees, it would help to provide a competent alternative, and the rationale for choosing that alternative. There simply isn't a single competitor with a similar record - we have a motley crew of career politicians, idealistic anarchists and a baby-faced dynast clearly out of his depth.

Our system doesn't have a dearth of people with ideas and 'big picture' concepts about 'empowerment' and 'inclusion'. The most pressing issue is the lack of administrative skill at coordination and execution. I'd have no problem if we have a leader who doesn't actually come up with any great paradigms in 5 years, but in that time, executes on every current task significantly more effectively.

Considering the desperate lack of effectiveness when it comes to delivery of public sector services as well as both implementation of necessary reforms and coordination of the implementation, I'd readily support anyone who has shown skill at this, over any big talking idealist. We've had plenty of the latter already.