. Chaanakya and Dipanker saars, let's move to the states discussion thread.Swamy is a charlatan and a hack. I don't think anyone in BRF should take him seriously. Those ideas of his are straight from the 1950's and proven failures. 2016 will be just fine, there are 2 Indias right now, one that is growing strongly and one that is growing weakly. Nothing that Swamy proposes will hep the weak India, certainly not exporting agricultureA_Gupta wrote:Subramanian Swamy predicts an Indian economic crisis in 2016
http://www.thehindu.com/opinion/lead/th ... 662610.ece
, fixed exchange rate, good god! 
. We are in trouble, in fact we have always been in trouble because of hacks like him who refuse to learn from history and get a disproportionate share of the microphone. What is that definition of insanity again....I think you misunderstood me, I am not saying that at all.rhytha wrote:I am unable to figure out your point of view that "since there are no industries" there are no "engineering colleges". Take the example of KTK right now, the present CM is not very business friendly, why do industries still invest in KTK, so political leadership is not the be-all and end-all.
You are making wrong assumptions, as per stat. (2012) the problem certainly not seem to be that of law & order, Bihar in fact appears to be one of the most peaceful state compared to rest of India! Also not that of human resources, for most jobs you will be able to find sufficient to surplus workforce. When you have a population of 100+ million, even if say only 5% people had the necessary skill to take up jobs, that is still a pool of 5 million people! In reality the numbers will be several times more.Lets assume that Bihar had a good leadership and very friendly industrial policy, good infrastructure etc, my opinion is still it would not attract many industries since you need human resources, good law and order(i did see the stats you had posted, and accept it, but people/industries have voted with their feet, so thats the reality). People from other states will still not be ready to move to Bihar for work for various reasons.
Before the jungle raj South Bihar (now Jharkhand) used to the MOST industrialized region in the entire nation YES entire nation, and I am pretty sure it still must be in top 5 most industrialized region in the nation. There was no reason to partition the state, Laloo agreed it to to consolidate his hold on power (since he did not have any vote bank in south Bihar).Also putting all the blame on the leadership of state is also not good, there was lot of years before jungle raj when people could have chosen a leader who was development orientated.
This is wrong thinking. Our supply of engineers is our competitive advantage. It would not surprise me if the majority never get a engineering oriented job. This is true of the advanced wold too. Many many engineers move onto non-engineering professions. All capitalistic economies are wasteful with people, this is just reality. Companies want to pick from a large pool and only pick the very best, and they want to do it at the lowest possible cost to them, they have no interest in giving everyone a job. For this they need a massive pool of people. What happens to the rest? This is where government must step in with that social safety net and gentle nudge these folks to move on ....Dipanker wrote:What I am saying is when supply of engineers outstrips the demand by 4 fold leading to up to 80% and higher level of unemployment then you do not need more engineering colleges in these areas, and unfortunately that seems to be case pretty much in most part of the nation including the developed states. That's all I am saying!
Hanumadu: all posts are about Indian labor economics which make them firmly on topic or so I opine. Feel free to take it forward or backward (I.e. Oppose that PoV).hanumadu wrote:This thread needs a clean up. Of late, there is more cleaning up in this thread than relevant posts. Suraj bredator to the rescue once again!!
I would like to add that during NDA regime, alongwith job creation, the asset prices (including real estate prices) were very low. This led to lot of benefits to middle class including abilty to buy their own homes. In UPA regime, the prices of real estate (say in Delhi NCR) went up by 10 times alongwith jobless growth, hence UPA regime was a statistical paradise for the nation wherein only super rich benefitted.manoj wrote:http://giffenman-miscellania.blogspot.c ... facts.html
NDA v UPA: Close encounters with facts
1.GDP growth: Average GDP growth in 1998-2004 (NDA) was 6% a year. Average annual GDP growth in 2004-13 (UPA), up to June 30, 2013, was 7.9%.
Caveat 1: The Vajpayee-led NDA battled US-led economic sanctions following the Pokhran-II nuclear test in May 1998. It faced a short but expensive Kargil war in 1999 and the dotcom bust in 2000. When it took office, it had the lag effect of the East Asian financial crisis of 1997-98 to contend with.
Caveat 2: The UPA government, in contrast, benefitted from the economic momentum of the high (8.1%) GDP growth rate of 2003-04 – the NDA government’s final year – and rode that wave. The global liquidity bubble in 2004-08 bouyed foreign mflows, helping UPA-I achieve a high GDP growth rate in its first term. The Lehman Brothers collapse in September 2008 did hurt the Indian economy but the ensuing US Federal Reserve asset buying programme attracted a steady flow of near-zero interest dollars into India from 2009.
Despite these caveats, the UPA government’s average annual GDP growth rate of 7.9% in 2004-13 clearly scores over the NDA government’s average annual growth rate of 6% (though high inflation boosted the former significantly). First strike to UPA.
2. Current Account Deficit:
2004: (+) $7.36 billion (surplus).
2013: (-) $80 billion.
The winner here is clearly NDA. It ran a current account surplus in 2002, 2003 and 2004. Under UPA this dipped into deficit from 2006 and has spun downwards since.
3. Trade deficit:
2004: (-) $13.16 billion.
2013: (-) $180 billion.
Again, advantage NDA.
4. Fiscal deficit:
2004: 4.7% of GDP.
2013: 4.8% of GDP.
Not much to choose between the two.
Caveat: This extract from the Asian Development Bank Institute (ADBI) report, published in 2010, explains why and when the UPA government’s fiscal defict began to spiral out of control.
“The central budget in 2008–2009, announced in February 2008, seemed to continue the progress towards FRBM targets by showing a low fiscal deficit of 2.5% of GDP. However, the 2008–2009 budget quite clearly made inadequate allowances for rural schemes like the farm loan waiver and the expansion of social security schemes under the National Rural Employment Guarantee Act (NREGA), the Sixth Pay Commission award and subsidies for food, fertilizer, and petroleum.”
“These together pushed up the fiscal deficit sharply to higher levels. There were also off-budget items like the issue of oil and fertilizer bonds, which should be added to give a true picture of fiscal deficit in 2008–2009. The fiscal deficit shot up to 8.9% of GDP (10.7% including off-budget bonds) against 5.0% in 2007–2008 and the primary surplus turned into a deficit of 3.5% of GDP.
“The huge increase in public expenditure in 2008–2009 of 31.2% that followed a 27.4% increase in 2007–2008 was driven by the electoral cycle with parliamentary elections scheduled within a year of the announcement of the budget.”
The recent announcement of the Seventh Pay Commission comes again, not unexpectedly, at the end of an electoral cycle.
5. Inflation:
1998-2004: 5%.
2004-2013: 9% (Both figures are averaged out over their respective tenures).
Advantage again to NDA. Inflation under NDA was on average half that under UPA, leading to the RBI’s controversial tight money policy, high interest rates and rising EMIs.
6. External Debt:
March 2004: $111.6 billion.
March 2013: $390 billion.
The UPA suffers badly in this comparision, a result of lack of confidence in India’s economy and currency following retrospective tax legislation and other regressive policies, especially during UPA-2.
7. Jobs:
1999-2004: 60 million new jobs created.
2004-11: 14.6 million jobs created.
Clearly, the UPA’s big failure has been jobless growth – a bad electoral omen.
8. Rupee:
1998-2004: Variation: Rs. 39 to 49 per $.
2004-13: Variation: Rs. 39 to 68 per $.
(Rupee rose from 40-plus to 39 between October 2007 and April 2008.)
The NDA government’s economic and fiscal policies, despite the various crises of 1998-2000 pointed out earlier, evoked more global confidence, leading to a relatively stable rupee (Rs. 10 variation) compared to the Rs. 29 variation during UPA’s tenure.
9. HDI:
2004: India was ranked 123rd globally on the human development index (HDI) in 2004, with a score of 0.453.
2013: India has slipped 13 places to 136th globally on the HDI in 2013 with a score of 0.554.
10. Subsidies:
2004: Rs. 44,327 crore.
2013: Rs. 2,31,584 crore.
Here again, profligate welfarism, as the ADBI report quoted earlier shows, has led to a rising subsidy bill. Worse, a significant amount is siphoned off by a corrupt nexus of politicians, officials and middlemen.
There should be low wealth tax (0.5-2% at most) and moderate inheritance tax, with minimal loop holes. A country progresses only if it broadbases wealth. The only countries which have escaped middle income trap are those which have broadbased their wealth. If India has to progress to a developed country status, there is no way except dispersal of wealth.prasannasimha wrote:Wealth tax actually was a retrogressive step wherever it was introduced.
short term there will be huge disruption and property prices will crash, but lower middle class would start owning property as a result of that.Theo_Fidel wrote:Typically stock market money has already been taxed once. Only capital gains should be taxed.
Property is taxed to pay for the infrastructure behind it, roads, water, police, schools, etc. A 1% tax would unfortunately bankrupt a large portion of Indian land/property owners.
Why shouldnt stock market for short term gains be taxed? Is a rupee earned from stock market not equal to rupee earned from selling books or person behind a IT cubicle?vayu tuvan wrote:Stock market should not be taxed except for long term capital gains of course. Are there rules to prevent speculation? I.e frequent trading by individuals with the help of brokers? What is the friction in the stock market compared to US where it is quite high.
Just want to understand for the following scenario. X a normal middle class inherits land in a city. Now with city development the cost of land has gone to say 2 crore. He does not want to sell the land due to emotional connect, but due to the above new tax suggestion, a fixed amount of 2 lac he needs to pay for tax which he may not afford. So indirectly he is being forced to sell his land. Is this fair ?Yagnasri wrote:All immovable properties including land etc shall be taxed at least 1% of their value
generally Short Term gains are taxed as they are treated as speculative. Ling term is encouraged as they are investment. But all at speculation at one level or the other since all hope for gains . Nobody worries about dividends which are pittance.vayu tuvan wrote:Stock market should not be taxed except for long term capital gains of course. Are there rules to prevent speculation? I.e frequent trading by individuals with the help of brokers? What is the friction in the stock market compared to US where it is quite high.
Why not?? Did he earn the land?? He got it not from his efforts but from some body else's effort. Now he is not utilizing his 2 cr asset productively and is showing a rent seeking behavior. If he doesnt want to use his land productively and is keeping others from using it, that kind of behavior destroys the productive capacity of India. There could have been a mall or some other productive use, which could have generated employment to tens of people. He is actively blocking the development, such behavior should not encouraged, if you want India to develop. You have an emotional connect to a land, good - use it productively and show the emotion instead of sitting on the land and stopping others also from using it.dhiraj wrote:Just want to understand for the following scenario. X a normal middle class inherits land in a city. Now with city development the cost of land has gone to say 2 crore. He does not want to sell the land due to emotional connect, but due to the above new tax suggestion, a fixed amount of 2 lac he needs to pay for tax which he may not afford. So indirectly he is being forced to sell his land. Is this fair ?Yagnasri wrote:All immovable properties including land etc shall be taxed at least 1% of their value
Better would be to ensure that Govt rate of property should be closer to market rate so that there is lesser chance of by passing registration cost etc. Once black money is reduced in such deals prices in the market will stabilize to real values. Tax transactions which should be proportional to current holdings of assets by the person.
Thanks, For whatever it is worth I think they have better record than others in quality of goods, delivery of the same in shortest possible time and their return and refund policy. I have used all the three or four e-commerce companies in India including Amazon. I would rate Flipkart operations far above all of them. So surely they have some top notch brains working for them. Probably they look to IIT for sourcing their top manpower needs for "best of the best of the best" . Their test will come when they scale up their operations. right now I am quite satisfied customer and would confidently place order.vayu tuvan wrote:Chanaakya: yes. I am generalising from flipcart. Flipcart like businesses have a long supply chain tail including logistics. If they don't improve their operations with fast growing business, they will fall flat on delivering the service. This is true for both services and production companies. Are people with Engg backgrounds put into mktg. positions - top or middle? Then they are setting themselves up for failure in two counts - people will leave after a year or two to get MBA. Those who stay would lose all their knowledge in a couple of years and will be reduced to glorified mktg., I.e. Sales.
This is true full on capitalism, for which there is no consensus within India. I agree it is required to lower land costs and increase transactions, but when we get there, who knows....Virupaksha wrote:Why not?? Did he earn the land?? He got it not from his efforts but from some body else's effort. Now he is not utilizing his 2 cr asset productively and is showing a rent seeking behavior. If he doesnt want to use his land productively and is keeping others from using it, that kind of behavior destroys the productive capacity of India.
Actually it would, with a 50 lakh limit and with our registration values - only the elite would come under it. (Oh! every one here is part of elite 2% in India, whether he/she believes it). Understand even transferring it to benamis would not help much, as now benamis have to start paying taxes.chaanakya wrote:And the best part of it is we don't need LAB either. Just a Guideline values declared from time to time on which to tax. Right now there is clamour to increase GL values without it being connected to actual market demand and supply. But BJP would surely not come in 2019, that much would be pretty guaranteed.
Wait a minute don't mix things. Word "emotional connect" seemed to have cause distraction .Virupaksha wrote:Why not?? Did he earn the land?? He got it not from his efforts but from some body else's effort. Now he is not utilizing his 2 cr asset productively and is showing a rent seeking behavior
Agreed and its fine. But then i would also like to understand how much of black money is involved in property transactions in US. Would like to understand the black to white money proportion in property transaction in US vis a vis India. Can we directly apply it in India without fixing lots of other things ?vayu tuvan wrote:Dhiraj: that's how it is in the U.S.
Couch it in terms of socialism as redistribution of wealth - if it is more politically palatable, I really dont care about labels. World wide experience shows that middle income traps and regressions are avoided only by broadbasing of wealth. I havent seen countries achieving that without wealth or inheritance taxes.Theo_Fidel wrote:This is true full on capitalism, for which there is no consensus within India. I agree it is required to lower land costs and increase transactions, but when we get there, who knows....Virupaksha wrote:Why not?? Did he earn the land?? He got it not from his efforts but from some body else's effort. Now he is not utilizing his 2 cr asset productively and is showing a rent seeking behavior. If he doesnt want to use his land productively and is keeping others from using it, that kind of behavior destroys the productive capacity of India.
As it is the consensus for capitalism is weak within India, all we can get is some states that allow it for private industry, but many states even oppose that. I don't know when this will change.
Short term capital gains for stocks can also be losses. So it will even out and your actual tax revenue will be marginal, probably not worth the effort. Long term stocks capital gains can be counted on.
Land acquisition is different from property or wealth tax.dhiraj wrote:
Wait a minute don't mix things. Word "emotional connect" seemed to have cause distraction .
Land acquisition for productive things for country's development overrides emotional connect IF done properly. I am not against it. It was just on a standalone property tax debate.
Sir, child marriage for hindus was banned by sharda act in 1926. Execution improves with time. It changes behavior with time. It improves slowly. Laws need to consider whether it is right for the future - whether they will be executed 100% on the next day isnt a matter which is stressed on too much.Agreed and its fine. But then i would also like to understand how much of black money is involved in property transactions in US. Would like to understand the black to white money proportion in property transaction in US vis a vis India. Can we directly apply it in India without fixing lots of other things ?vayu tuvan wrote:Dhiraj: that's how it is in the U.S.
http://www.stern.nyu.edu/sites/default/ ... 042974.pdfIt appears that the unequal access to economic and social opportunities that underlies this unequal asset distribution is inimical to sustainable long-term development. Although the data do not contain sufficient structure to allow inferences on the channels through which such an impact would come about, they suggest that, in the process of economic development, policies to improve access to assets and overcome structural inequalities may play an important role.
All the data or papers I have read show that there is a positive corelation between sustained development and gini index. However most scientific papers are circumspect about its causality (as they should be). Proving causality in scientific papers requires much more. Some papers even push for success of south korea and taiwan to their success in land reforms.Four of the six economies that transitioned to high - income, Japan, the Republic of Korea, Portugal and Trinidad and Tobago have lower GINI indexes than each of the economies stuck in the middle - income trap. Hong Kong and Singapore (both city states - my addition) have high GINI indexes when compared within their own subset. But their indexes, of 43.44 and 42.48 respectively, are still relatively low when compared to the set of economies stuck in the middle - income trap
Wealth tax is on the books. But it is not enforced very well.Virupaksha wrote:There should be low wealth tax (0.5-2% at most) and moderate inheritance tax, with minimal loop holes.