Indian Economy - News & Discussion Oct 12 2013

TKiran · Post by **TKiran** » 24 Aug 2015 22:06

vayu tuvan wrote:TKiran:

"There are two times in a man's life when he should not speculate: when he can't afford it and when he can." - Samuel Clemens AKA Mark Twain

Vayu Bhagavan AKA Mark Twain,

When should I speculate?

KJo · Post by **KJo** » 24 Aug 2015 22:12

Theo_Fidel wrote:
At that point you are speculating not investing. What has changed about the company or market sector to make you sell?
----------------------------

Sometimes this is a good time to re-balance your portfolio. But you need some real cojones of steel to do this at this point. You will have to sell your stronger stocks, say the ones with 5% decline and buy the major losers of 20% or so decline. Personally don't have such cojones so I let it ride....

On July 28, I was up about 15% for the year across my entire portfolio which was awesome. I could see dolla bills everywhere. Now I am negative Year To Date, I bet. I don't have the guts to look at my portfolio. Anyway I decided that I will ride it out since I have market/sector ETFs anyway.

Anyway, over the years, I made sure that I put money from my salary into paying off home mortgage principal. That is why I was able to drive it down and hence monthly payment too. Many of my friends put salary money into the market and lost it by selling low, so now have no market returns, and still have high mortgage balance.

Hitesh · Post by **Hitesh** » 24 Aug 2015 23:09

If you are based in US, you just lost out a significant tax deduction when you paid the mortgage principal off when you could use the higher mortgage payment to move yourself into the next lower bracket and save some money.

srin · Post by **srin** » 24 Aug 2015 23:16

This is probably a good time to clamp down on p-notes. Most of the hot FII money has gone out anyway ...

ShauryaT · Post by **ShauryaT** » 24 Aug 2015 23:17

TKiran wrote: Most of my portfolio is 'blue chips'. I invested 2 lakhs some 18 months ago. It was 4 lakhs a month ago. But as u said I don't understand stock markets so I just see my portfolio and now I thought I can act smart. But I dont know

TKiran: Do not worry 90%+ of the investors do not know, but some pretend that they do and many are gamblers.

Some rules that I follow:

1. Keep a disciplined investment plan - Monthly draws.
2. I do not have an interest and do not want to devote time towards, which investments to pick and why and for how long. This has nothing to do with competence, which I claim to have from education and the environment I live in but purely a matter of choice.
3. If I cannot find a good adviser, who can manage my money based on my preferred investment style and risk parameters, which is to manage a low turnover fund with less than 20 stocks in the portfolio for the long term about 5+years - preferably 10+, I do the next best thing
4. Invest in low cost indexed funds
5. Never sell, unless I need the money
6. Use opportunities presented such as irrational exuberance or undue fear to rebalance portfolios, if needed
7. Look at my portfolio, once a year and generally ignore market movements and ramblings

After about 20 years of following this strategy, the results are, I have never LOST money with the above strategy. I have managed a decent return on investment over the long term. I have never made exorbitant profits and have lost opportunities to time buys/sells and other sophisticated instruments. The only time, I have lost money is the few instances where I thought I knew enough to buy individual stocks and hold it.

Do not get me wrong, I know many who pick things on their own and have made decent returns but it takes time, interest, competence, patience to manage money, which is precious to me and do not want to gamble with it.

Thought will share the experience, since it seems you are just starting out and also, if you do not mind me telling you, do not put the values of your portfolio up in the public. Good Luck.

nachiket · Post by **nachiket** » 24 Aug 2015 23:21

Is this the personal investments thread?

ShauryaT · Post by **ShauryaT** » 24 Aug 2015 23:43

^Sorry.

Vayutuvan · Post by **Vayutuvan** » 24 Aug 2015 23:52

KJo: That is one strategy I recommend to everybody. Pay off mortgage as quickly as possible, absolutely no CC debts, and drive every car into the ground before moving up. Always buy during a model change year but buy the previous model. Pay it also ASAP. Living without debt is the best medicine for hypertension.

Gus · Post by **Gus** » 25 Aug 2015 00:10

err..

Pay off mortgage as quickly as possible - why? if you have it in low interest, then is it not better to have your money earning more elsewhere, than paying this off?

Always buy during a model change year but buy the previous model - yea you may get good deals, but you will also miss out on lots of features. many times what was premium before becomes standard later. newer honda cars come with cameras for lane changes as well, not only on reverse, this was a major plus for wimmin. i don't mind paying a few thousands more for a car with premium features on new model - spread over a decade and half, that is just a couple hundreds a year.

Vayutuvan · Post by **Vayutuvan** » 25 Aug 2015 00:23

Moved to appropriate thread.

nachiket · Post by **nachiket** » 25 Aug 2015 00:27

Again, why here? We have a thread for this: Personal Finance, Investing, Retirement Planning thread

Vayutuvan · Post by **Vayutuvan** » 25 Aug 2015 01:22

nachiket. OK. Moved to that thread.

vina · Post by **vina** » 25 Aug 2015 04:36

Yawn.. Down Jones opens down 1000 (what like 5.2%)points yesterday, locked in circuit, Nasdaq opens down 8%, S&P 500 gap down open of like 5% . This is unprecedented. Now if this doesnt look like and smell like a global panic, I don't know what is.

Ol' vina did give you the heads up Monday morning from ye Olde country. I had foreboding of this on Friday evening seeing on seeing the dow close and had red hot coals in my belly over the weekend and the only hope for Monday open was for the Chinese to do something meaning fully over the weekend.

But no, no shock and awe and credible action , but some inane phampleteering and trying to talk up the market (parallels of our Dilli Babooos now promising overnight that they won't be a nuisance on MAT on FIIs and "notify their CBDT alphabet soup Kakkoose" and "Publish White Paper on Taxation Kakkoose" .

Poor me, could do the only thing I could Monday morning. Took the initial blow and wrapped myself with protection that can survive a nuclear war and the ensuing nuclear winter. Got away with a flesh wound and will survive.

But with the NSE Midcap index dropping like 9% yesterday, a lot of the "mania" of investing in Midcaps is now going to see searing pain. That index has next to no liquidity when selling happens and if you are in speculative positions in small and midcap stocks and want to get out, well good luck. If you are an "investor for the long term" , good luck again and I hope you are well diversified , are invested in the really strong names with a sound business model and earnings, but still are going to see deep gashes in your value over the next few weeks and a while before your portfolio looks up and you will need to do some spring cleaning.

The only thing that can reverse this is some credible stuff from the Chinese and not some half assed king canute waving back the ocean of supporting the stock market (Shanghai Comp has to fall like the turd it is) and get the real economy moving . China needs an emergency 150 bps interest rate drop for the real industry and let the stock deflation play out.

Kakkaji · Post by **Kakkaji** » 25 Aug 2015 05:29

China has built excess manufacturing capacity, and the raw material prices are currently low. So, can't they just devalue/ dump/ export their way out of this crisis?

Kakkaji · Post by **Kakkaji** » 25 Aug 2015 05:57

The Chinese Govt should have encouraged consumption of goods, instead of purchase of stock, by its people.

Vayutuvan · Post by **Vayutuvan** » 25 Aug 2015 06:18

nachiket: Now that those few posts have been moved to personal finance thread, could you please comment there instead of hovering in this here dhaga? Some of us plebs complied with your edict to move there. It is only fair that aap woh dhaga padaAraein, hain?

member_28108 · Post by **member_28108** » 25 Aug 2015 06:20

Problem is they have excessive real estate , pumped money into virtual ghost town etc so they have ended up also spending money that they had earned without getting its worth back.You can do this only so much.Also note that people like Foxconn etc are trying to move out as most people are uncomfortable with Chin.This will slowly lead to a leveling out.

While investors may panic geopolitically it may be a needed correction.

Singha · Post by **Singha** » 25 Aug 2015 07:55

Kakkaji wrote:China has built excess manufacturing capacity, and the raw material prices are currently low. So, can't they just devalue/ dump/ export their way out of this crisis?

let us take cement and steel. they produce more of it than next 20 combined. even if they sell for below cost price, who wants so much of it? not unless someone has a fetish to stockpile 10 years usage.

in any field they have surplus capacity, down to smartphones, electrical machinery, construction sector, ship building...how many greenfield projects will they start in africa and latin america to occupy this excess capacity and export hordes of workers.

there will have to be liquidation of productive assets for scrap value to get rid of overcapacity or else idle plants at 20% capacity and lay off people which inevitably leads to the social unrest the ccp is so scared of

the whiplash effect is going to hit commodity exporters like russia, indonesia, australia, brazil and canada. even india we better stop the mania of exporting ores and start / expand our own plants asap

Yagnasri · Post by **Yagnasri** » 25 Aug 2015 08:19

How does this effect Indian real estate?? I mean already there is huge "stock" of flats with most of the builders. Is the money going to come to real estate now that Share market is down? Or people will be more worried and sell their stock of flats asap?

Interesting to see.

nachiket · Post by **nachiket** » 25 Aug 2015 08:43

vayu tuvan wrote:nachiket: Now that the a few posts are moved to personal finance thread, could you please comment there instead of hovering in this here dhaga? Some of us plebs complied with your edict to move there. It is only fair that aap woh dhaga padaAraein, hain?

I'm not a mod, so I have no authority to make edicts. It was a request with a link so you guys don't have to go digging to find the right thread.

I come to this thread to get latest updates and comments of the jirga about the state of Indian economy. Instead I found it filled with personal investment advice and requests. Also, if someone was looking for such advice, they would go to that thread and miss out on the relevant posts here. What else to do onlee? Sorry if it sounded like a fatwa or something.

Vayutuvan · Post by **Vayutuvan** » 25 Aug 2015 09:39

nachiket: gentle leg pulling onlee. chillax. me no mod either. roger and out for now.

somnath · Post by **somnath** » 25 Aug 2015 10:02

Singha wrote:let us take cement and steel. they produce more of it than next 20 combined. even if they sell for below cost price, who wants so much of it? not unless someone has a fetish to stockpile 10 years usage.

This is a typical commodity cycle phenomenon. All commodities follow the same cycle - high demand, build up of capacities, over-capacity, falling off of demand and prices, some capacities shut down, demand slowly rises again. Happened with fibre optics as well in 2001.

The Chinese over capacities too will get dealt with over the next few years - either by banks (who write off the assets), or by utilisation as demand catches up.

Yagnasri wrote:How does this effect Indian real estate?? I mean already there is huge "stock" of flats with most of the builders. Is the money going to come to real estate now that Share market is down? Or people will be more worried and sell their stock of flats asap?

Interesting to see.

In general, residential real estate is in dire straits. There wont be any price appreciation for quite a few years to come. If the govt is truly interested in tackling black money, they need to tackle this sector.
Commercial, on the other hand is in much better shape. There is overcapacity, but there is good investor demand as well - the largest landlord in the country is Blackstone.

vina · Post by **vina** » 25 Aug 2015 11:16

somnath wrote: This is a typical commodity cycle phenomenon. All commodities follow the same cycle - high demand, build up of capacities, over-capacity, falling off of demand and prices, some capacities shut down, demand slowly rises again. Happened with fibre optics as well in 2001.

The Chinese over capacities too will get dealt with over the next few years - either by banks (who write off the assets), or by utilisation as demand catches up.

Ah, missing all the Comprehension Ji, but China is a Command e-Con-o-mee. Their state owned companies don't operate by market dynamics, especially capacity creation and destruction (same story in India, can anyone imagine Air India getting liquidated, HMT, ITI, Hindustan Photo Film (we are in digital age remember?)) .

So, yeah, no way in hell are the Chi Coms going to allow capacity destruction in the govt sector and their private sector is even more mai-baap, crony capitalist than ours. So won't happen those either.

So what to do ji , export like crazy at dumping prices. Ploom-e-perg is reporting that that Chinese "researchers" are penciling in 7 Yuan to the dollar by end of 2015 and 8 yuan to the dollar by 2016! So THAT is a good 33% devaluation from from 6 to 8 yuan per dollar! What does that do to the nominal GDP of the 2nd largest economy ji ? What will it do to imports there ji, what will it do the competing exports from surrounding S.E Asia ji ?

Raghuram Rajan's nightmare of currency war and beggar thy neighbour competitive devaluation seems all set to come true. The only out will be for China to either play by market rules or be hit by anti dumping and quantitative restrictions from EU, US , India and other geographies when the Chinese dumping of commodities start.

Also remember doing that 2009 that I said that this was like a thermo nuke design with each layer compressing the other and the final kaboom will come from China. Yes, Chinese by their idiotic pumping of the market have set themselves for the classic financial market led collapse of the economy. History is replete with those examples in France, Netherlands, Argentina (1920s) and latest Japan (1980s). This NEVER ends well. One of the great reasons for the resilience of the Anglo Saxon economies historically (US and UK) was their financial system which could withstand stocks and the discipline of the markets which despite boom and busts could allow capital to be raised and allowed intermediation between supply and demand of capital on a long term basis.

The command and control mish mash and hubris of the Chinese masters of the Universe led to the the scene they were in. Yeah, what is going to be their response.. a) More easing, via interest rates and direct credit to pump prime the economy, which anyway will lead to long term Keynsian bust or b) Try exporting your way out of trouble and devastate the neighbours and competitors in the process.

Guess which way will China go, if there is no restraint on them from doing so, b) of course. No brainer.

RoyG · Post by **RoyG** » 25 Aug 2015 11:56

And then nations go to war.

somnath · Post by **somnath** » 25 Aug 2015 12:51

Anyone who thinks a slowdown of China is a one way gratification story (oh see, we are better!) is smoking something good. The world's second largest economy, and one of the most mercantile ones at that, a slowdown has large ramifications. Lower commodity prices blow the bottoms out of GCC (our second largest export market), Australia and large parts of Africa (again, our 3rd/4th largest export market). It also adversely affects the Nordic surpluses (2nd/3rd largest FII investors into India).

Slowdown in China also puts large sectors of European industry in a funk (increasingly larger parts of European businesses are now out of the Chinese market - look no farther than our own JLR).

Hopefully we ride this out better. To improve the optics, the govt should convene the special session on GST, whatever form we can pass it in. Also pile on some of the "big bang" stuff.

Arjun · Post by **Arjun** » 25 Aug 2015 13:23

^All of this is obvious and precisely the reason India's exports have slowed down to a crawl in any case in current year. The reason for India's cheer is that it is among the very few countries which will be able to create a high growth rate based primarily on domestic demand and not exports. That is the hope in any case - lets see if reality matches up.

Yagnasri · Post by **Yagnasri** » 25 Aug 2015 13:48

GST is a must more than ever now. Once it is there we will have one of the worlds biggest single market. That will be very helpful. Labour laws and LAB needed to be left to states immediately so that those states which has some good leadership like MP, Raj (hopefully AP and TS) and TN make their own laws and get investment from around the world.

somnath · Post by **somnath** » 25 Aug 2015 15:13

The other big variable is to carefully manage the currency. RBI has a stated policy of not intervening to preserve a level of INR, they try to dampen volatility only.

India has a tricky issue on ccy. On one hand, we are a net importer, which means a stronger ccy feeds into cheaper intermediates for our industry and cheaper consumer goods for the consumers. On the other, it makes exports uncompetitive - and despite the hoopla around "only 25% of our GDP is exports" - fact is that merchandise exports contribute an estimated 25-30% of all manufacturing.

Add on top of it the issue of structural inflation that we are trying to tackle - which a strong ccy obviously helps in.

It doesnt help that the current govt is full of chaps that equate the value of the currency to some sort of national virility.

We need a clearly thought our currency strategy - that is not RBI's mandate, its a public policy (ie, govt) mandate. Unfortunately we have too little discussion around that in policy circles.

RamaY · Post by **RamaY** » 25 Aug 2015 16:40

Singha wrote:
Kakkaji wrote:China has built excess manufacturing capacity, and the raw material prices are currently low. So, can't they just devalue/ dump/ export their way out of this crisis?
let us take cement and steel. they produce more of it than next 20 combined. even if they sell for below cost price, who wants so much of it? not unless someone has a fetish to stockpile 10 years usage.

in any field they have surplus capacity, down to smartphones, electrical machinery, construction sector, ship building...how many greenfield projects will they start in africa and latin america to occupy this excess capacity and export hordes of workers.

there will have to be liquidation of productive assets for scrap value to get rid of overcapacity or else idle plants at 20% capacity and lay off people which inevitably leads to the social unrest the ccp is so scared of

the whiplash effect is going to hit commodity exporters like russia, indonesia, australia, brazil and canada. even india we better stop the mania of exporting ores and start / expand our own plants asap

This has been my argument all along.

That's why India can't be and shouldn't try to be worlds next factory. There is not enough market (upstream) nor resources (downstream) to support industrial production capacity supported by 1+ billion industrial (not services) workforce.

India should become just self sufficient in its civic-economic-military infra that is environmentally self-sustainable.

India's comparative advantage must come from it being ViswaGuru in all fields (all 64 arts plus sciences and other social fields). India should own the world Happiness & well-being (put together they become Dharmic) Index market!

Austin · Post by **Austin** » 25 Aug 2015 19:02

7 Reasons Why Raghuram Rajan Is The Ultimate Rockstar Of The Indian Growth Story

A_Gupta · Post by **A_Gupta** » 25 Aug 2015 19:32

http://www.canindia.com/2015/08/pe-inve ... ent-in-h1/
PE investment in real estate up 177 percent in H1

Private equity (PE) investments in the country’s real estate sector increased by 177 percent at Rs.11,080 crore during the first six months of this year as against an investment of Rs.4,000 crore during the corresponding period last year.

According to a report from real estate consultancy firm Cushman and Wakefield, PE investments in real estate witnessed the highest inflows during the January-June period this year since 2008 owing to increased exposure from both domestic and foreign funds.

The report said the residential sector accounted for 56 percent at Rs.6,328 crore of the total PE investments while the commercial office sector drew 41 percent of the investment at Rs.4,528 crore.

somnath · Post by **somnath** » 25 Aug 2015 20:18

The Keynesian boost to the economy has to be done smartly. The general view is that we need to invest a lot more in infrastructure in general - actually not true. Barring a couple of areas, notably roads and railways, in most infrastructure areas - steel, ports, power generation - there is massive overcapacity. Building up more infrastructure in the same areas without tackling the structural issues will only cause more NPAs in banks (or wasted public equity).

The biggest pump priming that the govt can do right now is to clean up bank balance sheets, free up space for incremental lending and create the space for transmission of rate cuts in the banking system. the current plan isnt even 25% of the capital required.

Simultaeneously, all the big talk on ease of doing business needs to kick in, and now. Clarity on tax (is retro tax out of the statute books?), clarity on business rules (is FDI in e-comm kosher or not?), ease of trade (Nirmala Sitharaman promised a full review implemented over 6 months back).

As of now, we have seen "more of the same", maybe more efficiently. Time to kick on with the big ones.

Supratik · Post by **Supratik** » 25 Aug 2015 20:30

This is the first time I am hearing about over-capacity in power, ports and other infra. Please don't make manufacture stuff. There are other reasons for NPAs which have been discussed on this forum.

VKumar · Post by **VKumar** » 25 Aug 2015 20:32

implement GST, clean up labor laws, implement a land bill. each will add 1 to 2 % to GDP!

vina · Post by **vina** » 25 Aug 2015 20:57

The Keynesian boost to the economy has to be done smartly

Yawn.. An oxymoron. Govt's and "smart". Didn't we have exactly this "command and control" , we know better , 4 factor model , invest in Capital Goods, and dont fritter resources in hair oil and brylcreem as expounded by the great PC Mahlanobis himself along with the other major panjandrums such as that changing by the minute chameleon, Amartya Sen. Now we know how that entire ISI/DSE/Planning Commision/JNU ding dong giri turned out. A miserable failure.

So comes back to the point, so werent PC Mahlanobis, Amartya and the others of who put in place the command and control stuff among the best in the world at that time or they were no "smart" . Did the success/failure have anything to do with smarts or pushing an inherently flawed idea set up to fail.

Thanks ji.

disha · Post by **disha** » 25 Aug 2015 21:09

KJo wrote:
Theo_Fidel wrote:
At that point you are speculating not investing. What has changed about the company or market sector to make you sell?
----------------------------

Sometimes this is a good time to re-balance your portfolio. But you need some real cojones of steel to do this at this point. You will have to sell your stronger stocks, say the ones with 5% decline and buy the major losers of 20% or so decline. Personally don't have such cojones so I let it ride....
On July 28, I was up about 15% for the year across my entire portfolio which was awesome. I could see dolla bills everywhere. Now I am negative Year To Date, I bet. I don't have the guts to look at my portfolio. Anyway I decided that I will ride it out since I have market/sector ETFs anyway.

Anyway, over the years, I made sure that I put money from my salary into paying off home mortgage principal. That is why I was able to drive it down and hence monthly payment too. Many of my friends put salary money into the market and lost it by selling low, so now have no market returns, and still have high mortgage balance.

Both of the above posts should go to Personal Finances. K'jo - there is a curve where one *needs* to have a good debt to actually gain +ve returns.

However, Theo'ji - do not advice what you yourself pointed out do not do when it comes to finances.

----

Coming back to meltdown., how is the Chinese economic slowdown going to affect India? This is actually an opportunity for India. Also an opportunity for US.

Anyway., the Indian bourses always do a knee-jerk reaction - they follow the global markets - if Greece sneezes, the Indian market catches cold. If one monitors that behaviour and understands it, it is good to play the Indian market.

Indian economy and governance has never been at a better situated as it is currently. Monitor the fundamentals on Indian economy and the only way is up for Indian economy from here. Monitor what the union ministers say. When Union ministers say that we will become a $4T economy by 2019/2020 - they are not joking.

Monitor what Modi says. He clearly says that his focus will be Eastern UP, Bihar, Bengal, NE, Orissa. That is the E. India. Expect 10% or more YoY growth over there. Check out what they do with their agriculture for example. Look at Guj, Raj and M.P as templates on agricultural productivity. That will form the first leg. The second leg will be infrastructure - as in Roads and Electricity and Gas grid. The third leg will be micro/small scale job creation. With PMJDY and JAM (Jan dhan/Aadhar/Mobile) the last mile is being breached.

Hence all the rona-dhona over the bourses is unwarranted. It was slated for a pull back - it rose fast and had to pull back a little. Creating opportunities.

Arjun · Post by **Arjun** » 25 Aug 2015 21:23

somnath wrote:As of now, we have seen "more of the same", maybe more efficiently. Time to kick on with the big ones.

I'd much rather focus on the output parameters....Are we achieving targeted growth rate? Are we doing better than rest of the world? No indication that we are off track yet.

nachiket · Post by **nachiket** » 25 Aug 2015 21:33

Arjun wrote:
somnath wrote:As of now, we have seen "more of the same", maybe more efficiently. Time to kick on with the big ones.
I'd much rather focus on the output parameters....Are we achieving targeted growth rate? Are we doing better than rest of the world? No indication that we are off track yet.

That "more of the same" comment is ridiculous. Do we have another coal scam that has tied up coal supplies and kept thousands of MW of installed power capacity offline? Are big projects getting stuck forever in clearances and red tape? Are subsidies out of control and the fiscal deficit increasing dangerously? No. Exactly the opposite, you say? Then it is definitely, not more of the same. Except in the warped mind of people still seething that the great economists of the NAC, whom they much admired aren't running things (into the ground) anymore.

somnath · Post by **somnath** » 25 Aug 2015 21:42

Arjun wrote:
somnath wrote:As of now, we have seen "more of the same", maybe more efficiently. Time to kick on with the big ones.
I'd much rather focus on the output parameters....Are we achieving targeted growth rate? Are we doing better than rest of the world? No indication that we are off track yet.

The new Indian headline growth numbers are quite problematic. Even RBI doesn't quite "understand" them, a euphemism for saying that it doesn't all add up. Not to talk of analysts like Ruchir Sharma.

Essentially , high frequency data does not match up to the headline GDP numbers.

In any case, macro outputs tomorrow are a function of quality of inputs going in today.

Last, the relative growth argument works in globally sanguine environments. In extreme "risk off" situations, EMs need to demonstrate a lot more than just that.

Supratik wrote:This is the first time I am hearing about over-capacity in power, ports and other infra. Please don't make manufacture stuff. There are other reasons for NPAs which have been discussed on this forum.

Do you follow the macros? High frequency numbers? Capacity utilization numbers? Profitability of metal companies? Price of power in the power exchanges? Banking results? These are the sources of data for professionals - if you did, you wouldn't have had to depend on the "forum" to make up your mind on what is a rather techincal subject.

somnath · Post by **somnath** » 25 Aug 2015 22:01

nachiket wrote:Are subsidies out of control and the fiscal deficit increasing dangerously? No. Exactly the opposite, you say? Then it is definitely, not more of the same. Except in the warped mind of people still seething that the great economists of the NAC, whom they much admired aren't running things (into the ground) anymore.

The NAC did go somewhat warped, indeed. But this govt seems to have retained bulk of the "warpness"! None of the social security programmes have been touched.

The fiscal deficit and overall subsidies are down, overhwlmingly on account of one factor - crashing global oil prices, that has boosted govt revenues (by the govt being able to collect some of that decline, and drastically reduced the oil subsidy (without the govt having to take any politically tough decision).

The one area where this govt has delivered visibly is on elimination of high level corruption. But corruption by itself isnt an economic drag (all Asian economies, including China, Japan and "tiger" East Asia, have been known to be incredibly corrupt). In some cases, corruption compensates for the inefficiencies of factor markets in Asia. So while corruption is taken out, there is even more imperative to ease rules of doing business.

In pure economic terms, the most important issue is around easing business activity - which is what even friends of this govt - Deepak Parekh, Rahul Bajaj et al are saying.