Indian Economy News & Discussion - Aug 26 2015

hanumadu · Post by **hanumadu** » 21 Dec 2015 14:07

vina wrote: Why is that so ? The Govt has been borrowing like there is no tomorrow. The borrowings have reached a record 5.5L crores, the last two RBI bond issues have flopped, forcing the primary dealers to pick them up. There is no demand for the flood of GOI bonds . And mind you, this year, the Govt has had a windfall in terms of tax receipts from increasing taxes on oil and hence indirect taxes have been massive !

The govt borrowing and fiscal deficit are what has been projected in the budget. So how is it news?

Added Later: http://articles.economictimes.indiatime ... securities

The govt will be borrowing 5.94 lakh crore for this year instead of the budgeted 6 lakh crore.

vina · Post by **vina** » 21 Dec 2015 14:36

The govt borrowing and fiscal deficit are what has been projected in the budget. So how is it news?

The news is, the budget was made with oil penciled in at around $50 and much lower tax rates on oil as per the budget. You have rupee depreciating, oil windfall happening and tax rates on oil increased, and despite all that cash rolling in, we are barely meeting the fiscal deficit.

So govt borrowings should have been FAR lower than budgeted for. So where is the extra cash getting deployed and where is it showing up in the economy ?

Please explain.

Arjun · Post by **Arjun** » 21 Dec 2015 14:50

vina wrote:The news is, the budget was made with oil penciled in at around $50 and much lower tax rates on oil as per the budget. You have rupee depreciating, oil windfall happening and tax rates on oil increased, and despite all that cash rolling in, we are barely meeting the fiscal deficit.

So govt borrowings should have been FAR lower than budgeted for. So where is the extra cash getting deployed and where is it showing up in the economy ?

Please explain.

Direct Tax revenue and disinvestment revenues will be lower than targeted..indirect tax increase will just about make up for this. Fiscal deficit is likely to be in the range targeted and borrowings are also somewhat lower.

Really no news here unless there is confirmation that fiscal deficit will slip as compared to the target.

vina · Post by **vina** » 21 Dec 2015 15:37

Direct tax revenue shortfall of 4% vs 38% more indirect taxes than budget. Indirect taxes historically much greater than direct taxes in India. Despite that just meeting budget deficit target, straining fiscal capacity, yields not dropping despite 125 bps rate cut. obviously much higher than budget. But where is it happening? Can't figure that out

Arjun · Post by **Arjun** » 21 Dec 2015 16:17

vina wrote:Direct tax revenue shortfall of 4% vs 38% more indirect taxes than budget. Indirect taxes historically much greater than direct taxes in India. Despite that just meeting budget deficit target, straining fiscal capacity, yields not dropping despite 125 bps rate cut. obviously much higher than budget. But where is it happening? Can't figure that out

Direct tax shortfall for FY 16 estimated at 30K Cr. Same figure for disinvestment target. Indirect taxes likely to produce surplus of 60K Cr against budget....Meeting fiscal deficit of 3.9% MAY still be a challenge given that now we are talking of lower GDP base than estimated in March (so revenue receipts have to be higher by some 25K Cr as compared to March figures in order to maintain 3.9% promise)

hanumadu · Post by **hanumadu** » 21 Dec 2015 17:18

vina wrote:Direct tax revenue shortfall of 4% vs 38% more indirect taxes than budget. Indirect taxes historically much greater than direct taxes in India. Despite that just meeting budget deficit target, straining fiscal capacity, yields not dropping despite 125 bps rate cut. obviously much higher than budget. But where is it happening? Can't figure that out

Too many lies.

The government has budgeted to collect over Rs 6.47 lakh crore from indirect taxes in the current fiscal, a growth of 18.8 per cent over last fiscal.

The government had budgeted the direct tax collection target at Rs 7.98 lakh crore for the current financial year

Gross Tax receipts are estimated to be 14,49,490 crore.

So how are indirect taxes much greater than direct taxes in India?

34% increase till november (and not 38% as you claim it to be) is over last fiscal and not what is projected in budget. The budget already projected ~19 increase. So its only 15% surprise on the up side for indirect taxes.

You seem to have a penchant to shoot and scoot every so often on this thread.

geeth · Post by **geeth** » 21 Dec 2015 17:41

^^That is because you are fishing for info and you are feeding him

vina · Post by **vina** » 21 Dec 2015 18:33

hanumadu wrote:So how are indirect taxes much greater than direct taxes in India?

They are. Historically indirect taxes receipts were much higher than direct taxes . It was only as recent as 2007 or so when the direct taxes collected by the Central Govt inched up above that collected by the Central Govt and are roughly similar.

However, if you include the taxes the states get where the indirect taxes split is like 90% and included in total taxes collected, yes, Indrect taxes will be much greater than direct taxes.

34% increase till november (and not 38% as you claim it to be) is over last fiscal and not what is projected in budget. The budget already projected ~19 increase. So its only 15% surprise on the up side for indirect taxes.

You seem to have a penchant to shoot and scoot every so often on this thread.

But look at the bonanza they got from oil. Huge increase in indirect taxes AND a massive compression in subsidy outgo from what they would have budgeted for with oil at $50. Despite that, the borrowing is at what they budgeted for and they are struggling to meet the fiscal deficit.

The one thing that DIDNT happen were divestments (some Rs20,000 crore or so budgeted iirc?), and of course direct taxes fell a wee bit short.

And now they are saying that they are going to defer fiscal consolidation and let the deficit rise the next year ! Why, coz they dont have the one time oil bonanza? What if oil rises next year ? No buffer in the fiscal system and the country is royally SCROOD.

If the Kangress ran amok with fiscal profilgacy and ran huge deficits and funny math with Pranab Mukherjee's budgets and took inflation to 10% for 5 years under UPA II, Jaitely seems to be set on the Pranab Mukerjee esque path for NDA under Modi.

I frankly have not been able to decipher WHERE TF has the spending been going. There have been little or nothing by way of structural reforms other than unclogging the project piplines. At least under Vajpayee, Arun Shourie went about selling white elephants and got the millstones one by one off our necks (he unfortunately was prevented from selling off Air India, oh, what a missed opportunity).

Given the luck they got with the oil, they could have passed through lot more of oil price cuts, compressed fiscal deficit further and cut back borrowing to allow bond yields to fall in line with RBI's 125bps cuts . These two would have kick started spending and also tamed inflation by cutting costs for everyone .

But no, the Govt had to go on a tax, borrow and spend binge, driving up actual interest rates for everyone else , crowding out private borrowing in pursuit of some Keynesian nonsense.

A_Gupta · Post by **A_Gupta** » 21 Dec 2015 18:53

http://www.livemint.com/Money/IosQdBmxt ... nding.html
Roads lead the way in government spending
In November alone, roads comprised 59% of the tenders issued, representing a growth of 62% in value terms over the year-ago period, shows analysis

A_Gupta · Post by **A_Gupta** » 21 Dec 2015 19:45

https://www.equitymaster.com/dailyrecko ... s-money-on

Code: Select all

Year        Salary + Pension    Total govt      Salary + Pension                                 expenditure    as a % of govt expenditure
2005-2006        58,490           506,123       11.56%
2013-2014       196,084         1,559,447       12.57%
2014-2015       219,512         1,681,158       13.06%
2015-2016*      238,045         1,777,477       13.39%
*estimated

A_Gupta · Post by **A_Gupta** » 21 Dec 2015 19:48

Not sure how valid this is:
How the government spends tax money:
http://www.simplifiedlaws.com/how-does- ... tax-money/

The claim is that only 7.5% of government tax receipts go to development work.

If that is true, then even if the government increased development money by 20% because of a windfall from oil prices, etc., development money would amount to 9% of government tax receipts.

chandrasekaran · Post by **chandrasekaran** » 21 Dec 2015 20:21

A nice article by Jaggi on the current state of affairs...

http://swarajyamag.com/economy/govts-mi ... uld-chill/

Suraj · Post by **Suraj** » 21 Dec 2015 22:37

The article is from July, and I can't find newer data:
Surge in government spending to pump up infrastructure, related companies: Analysts

The biggest government spending has been on roads. Plan spending on roads has jumped 1,275 per cent in April-May compared to the same period a year ago. The government has spent 22 per cent of its annual budgeted funds for the sector in 2015-16 in the first two months compared to 2 per cent in the same period a year ago, said Deutsche.

"An intense focus on government led construction spending - particularly in rural India - will help alleviate the pain felt by rural India from recent deterioration in agricultural terms of trade," said the Deutsche analysts. "Construction has the highest spillover benefits for the broader economy apart from the highest employment elasticity, among all sectors," they said.

A section of the economists and the investment community have long argued that the government should increase public spending to kick start economic activity, but India's abysmal finances have been a hindrance.

Non-plan expenditure has declined by 9 per cent in the April-May from the same period a year ago, while plan expenditure has risen by 4 per cent in the period. "Investors should realign their portfolios in line with the shift in government policy from consumption to infrastructure creating investments," said Deutsche Bank.

Separately, more recent news:
Govt gives ultimatum to road developers on stalled projects

Running out of patience for their "lack of commitment and lackadaisical approach", the government has warned non-serious developers and bankers of terminating highway projects worth Rs 20,000 crore.

"The concessionaires and bankers are not realising that we are reaching a stage of impatience, and people who are users of these roads are not going to be waiting any more," Road Transport and Highways Secretary Vijay Chhibber told PTI in an interview.

"If developers and bankers fail to mend their ways and initiate correctives to roll out projects by January-end, the government will start terminating contracts in PPP mode and repackage them."

Out of the total 77 stalled projects, issues have been sorted out for all barring 19, which are still stuck.

The secretary's remarks assume significance as the highway sector has been saddled with stuck projects worth about Rs 3.8 lakh crore ($60 billion).

hanumadu · Post by **hanumadu** » 21 Dec 2015 22:49

vina wrote:
hanumadu wrote:So how are indirect taxes much greater than direct taxes in India?
They are. Historically indirect taxes receipts were much higher than direct taxes . It was only as recent as 2007 or so when the direct taxes collected by the Central Govt inched up above that collected by the Central Govt and are roughly similar.

However, if you include the taxes the states get where the indirect taxes split is like 90% and included in total taxes collected, yes, Indrect taxes will be much greater than direct taxes.

But how is it relevant here? Your implication was short fall in direct taxes is negligible vs surplus in indirect taxes. Center does not get to spend the state's money, does it?

vina wrote:
34% increase till november (and not 38% as you claim it to be) is over last fiscal and not what is projected in budget. The budget already projected ~19 increase. So its only 15% surprise on the up side for indirect taxes.

You seem to have a penchant to shoot and scoot every so often on this thread.
But look at the bonanza they got from oil. Huge increase in indirect taxes AND a massive compression in subsidy outgo from what they would have budgeted for with oil at $50. Despite that, the borrowing is at what they budgeted for and they are struggling to meet the fiscal deficit.

The oil bonanza factored in the increased collection in the indirect taxes. Perhaps, they are keeping the disinvestment for next year in case of an increase in oil price or revenue shortfall for some other reason. That would be the wise thing to do. For the next two years, the fiscal deficit is targeted to be 3.5% and 3%.

disha · Post by **disha** » 21 Dec 2015 23:23

chandrasekaran wrote:A nice article by Jaggi on the current state of affairs...

http://swarajyamag.com/economy/govts-mi ... uld-chill/

Thanks!! Article is a must read.

And I have been pointing out two good points:

1. Indian Economy is heading towards goldilocks economy

2. 2017-2018 will be the time.

And yes there is a distance between cup and lip and all that. But we are moving towards a growing economy with low inflation.

Suraj · Post by **Suraj** » 22 Dec 2015 03:19

The new bankruptcy code has been introduced as a money bill, which means it will go through quickly and cannot be stalled:
Bankruptcy Bill introduced in Lok Sabha as a money Bill

The government introduced the 'Insolvency and Bankruptcy Code 2015', or the bankruptcy Bill, in the Lok Sabha on Monday. The Bill is one of the steps that Finance Minister Arun Jaitley has identified as crucial for India to improve ease of doing business.

The Bill has been introduced as a money Bill, which means it will not have to be passed in the Rajya Sabha, where the government has struggled to get legislative work done.

The Bill provides for resolution of the bankruptcy process in a time-bound manner. It provides a timeline of six months, or 180 days, to a maximum of nine months, or 270 days, to deal with insolvency and enable winding-up of operations of a company or a limited liability entity.

It also provides for fast-track resolution of corporate insolvency within 90 days. The Bill also proposed early identification of financial distress so that steps can be taken to revive the ailing company.

It also provides for setting up of a 'Insolvency and Bankruptcy Board of India' to regulate professionals, agencies and information utilities engaged in resolution of insolvencies of companies, partnership firms and individuals.

The Bill states that during the insolvency resolution period, an interim resolution professional would manage the debtor. The professional would prepare a plan that needs to be approved by a majority of 75 per cent of voting share of the financial creditors. Once the plan is approved, the adjudicating authority must give its nod. However, if an insolvency resolution plan is rejected, the adjudicating authority will order for liquidation.

Among other recommendations, the Bill suggests an insolvency regulator, for oversight over professionals in this regard. It lays down a transition provision during which the Central government will exercise all the powers of the regulator till the time one is set up. "This will enable quick starting of the process on the ground, without waiting for the proposed institutional structure to develop," the report states.

Supratik · Post by **Supratik** » 22 Dec 2015 18:14

Good idea to introduce it as a money bill.

Suraj · Post by **Suraj** » 23 Dec 2015 04:48

The UDAY program transfers most of the Rs.4.3 lakh crore arrears of the SEBs into the books of state govts; FinMin and PowerMin are debating how it deals with FRBM limits. I expect that ultimately PMO will step in with a final decision:
UDAY's shadow lengthens over states' fiscal deficit

Under the UDAY, the Centre had asked states to take over 75 per cent of the debt of power distribution companies, totalling around Rs 4.3 lakh crore. According to the scheme, states are mandated to take on 50 per cent of the discoms' debt in 2015-16 and 25 per cent in 2016-17.

However, if the 19 biggest states take over 50 per cent of their discoms' debts, their combined fiscal deficit - as a percentage of gross domestic product (GDP) - could cross 4.5 per cent this financial year, as against three per cent mandated under FRBM. The combined Centre-state fiscal deficit could cross eight per cent and even touch 8.5 per cent of GDP.

While the finance ministry is determined to stick to the Centre's 2015-16 fiscal deficit target of 3.9 per cent of GDP, it is learnt that the impact of UDAY scheme over states' fiscal deficit targets has been a cause of discord between finance and power ministries. North Block officials are said to have expressed their concerns in meetings held with power ministry officials.

arshyam · Post by **arshyam** » 23 Dec 2015 07:55

PMO India ‏@PMOIndia 16h16 hours ago

Buoyant capital expenditure propels the economy.

A_Gupta · Post by **A_Gupta** » 23 Dec 2015 17:59

^^^ The electricity debt, not very different from Pakistan's "circular debt",
http://www.reuters.com/article/india-po ... 5H20150913
Basically, there is a huge off-the-budget electricity subsidy.

hanumadu · Post by **hanumadu** » 23 Dec 2015 18:10

Banks see credit pick up as India Inc borrows again

Alarm bells rang when loan growth slowed to 12.6 percent in the financial year to March, making it the weakest pace since 1997. Banks, laden with bad debts, were reining in loans, and firms were warier. For the financial year ending March 2016, India's top bankers expect growth of about 14 percent, closer to the rate of 13.9 percent seen in the financial year ended March 2014, but less than half the heady pace seen about a decade earlier.

"New projects are still few and far between. But having said that, I think you know it's getting closer. The trajectory, if you ask me, is upward, definitely," she told Reuters.

However, India remains the world's fastest growing major economy, and government support for stalled infrastructure projects is beginning to trickle down, bankers say.

Roads and renewable energy are the sectors leading the pack for borrowing, followed by the auto sector, bank executives say.

hanumadu · Post by **hanumadu** » 23 Dec 2015 18:13

http://www.moneycontrol.com/news/econom ... 07981.html

Buoyed by the improved second quarter GDP numbers, Niti Aayog Vice Chairman Arvind Panagariya today said the economy will grow over 8 percent this fiscal.

I guess its not the full year growth he is talking. I think he means by the fourth quarter, India will reach 8% growth.

chetak · Post by **chetak** » 23 Dec 2015 18:19

Prasar Bharati ‏@prasarbharati 4h4 hours ago

Prasar Bharati Retweeted Department of Posts

India Post is flying high!
More than 10,000 Post Offices are 'Core Banking Solutions' Enabled and Counting…!

Kakkaji · Post by **Kakkaji** » 24 Dec 2015 06:12

The bottlenecks are being addressed:

Railways signs Rs 500-cr pact with CIL for supply of wagons

The railway ministry on Wednesday signed an agreement with state-owned miner Coal India Ltd (CIL) for procurement and supply of 2,000 high capacity wagons. The move is aimed at ramping up coal loading for Indian Railways amid a shortfall in freight traffic and helping CIL meet production targets.

“This agreement will result into speedy supply of wagons for coal loading in dedicated circuits. The initial investment of Rs 500 crore will lead to an anticipated investment of Rs 5,000 crore (over years),” said railway minister Suresh Prabhakar Prabhu.

Power, coal and renewable energy minister Piyush Goyal, who was also present, said the initial agreement will help CIL meet its target of producing one billion tonnes of coal annually over the next five years. “There is not a single power plant today that falls in the critical (coal shortage) category. This became possible only because of the support of the rail ministry,” he said.

Kakkaji · Post by **Kakkaji** » 24 Dec 2015 07:16

Govt to soon come out with coal linkage, new tariff policies: Piyush Goyal

Government will soon come out with a coal linkage policy to ensure supply of fossil fuel and a new tariff policy aimed at boosting regulatory mechanism for discoms and attracting investments.

“In the coal sector, a lot of policies are being changed. The process (for coal linkage policy is underway). Both (the policies) are coming out very soon,” Coal and Power Minister Piyush Goyal told reporters here.

When asked will the government go ahead with one billion tonnes of coal production target when there are raging concerns about rising pollution level Goyal said “100 per cent we will make one billion tonnes. May be more than that.”

On the concerns expressed by the Finance Ministry that the implementation of bailout scheme for discoms UDAY will push up the combined fiscal deficit of states and Centre, Goyal said “They have not raised concerns to me. They are all delighted.

“Every banker, both the ministers, junior and senior, have thanked me,” he said.

Sounds like UDAY will be a game changer. I hope it kills the apetite of politicians for granting power subsidies forever.

Picklu · Post by **Picklu** » 24 Dec 2015 07:53

^^ What would be a game changer is an constitutional amendment that any subsidy announced by the govt of the day or any price control exercised by govt of the day (both federal and state) must be supported by budgetary allocation and should not become a loss on the org even in private sector.

That policy would not only turn around the discoms but BSNL, MTNL, AIR India, OIL PSUs and host of other.

The govt declares subsidy but does not provide budgetory allocation for the same, the loss keep on accumulating on the PSU. Politicians make merry.

This policy will also kill most of the excuses by the PSU for their inefficiencies and they would be forced to reform.

Suraj · Post by **Suraj** » 24 Dec 2015 23:41

We've previously discussed how RBI's rate cuts aren't being reflected in the rates charged by banks, and that often banks lower deposit rates but leave borrowing rates unchanged, which just benefits them more. RBI has now issued a notice requiring that from April 1 2016, all banks have to now adhere to a standard set of norms: they have to adjust both deposit and lending rates by the same amount.
Explained: What Raghuram Rajan Just Did To Make Monetary Policy More Effective

In a release last week, the RBI said that from April 1, 2016 onwards it wants all banks to follow the marginal cost of funding method to decide on their base rate. This means that if the banks cut their deposit rate in the aftermath of a RBI repo rate cut, they will have to cut their lending rates as well, because their marginal cost of funding will automatically fall. By doing this the RBI has essentially ensured that new borrowers of the bank will have access to lower interest rates automatically once the bank decides to cut its deposit rates.

Viv S · Post by **Viv S** » 25 Dec 2015 00:08

Suraj wrote:We've previously discussed how RBI's rate cuts aren't being reflected in the rates charged by banks, and that often banks lower deposit rates but leave borrowing rates unchanged, which just benefits them more. RBI has now issued a notice requiring that from April 1 2016, all banks have to now adhere to a standard set of norms: they have to adjust both deposit and lending rates by the same amount.

But why is that happening? Unless there's a cartel at work, just one bank cutting lending rates would force its competitors fall suit or risk losing market-share.

And if there is a cartel at work, cutting across private-public lines, I'd like to see much more than just some added regulation from the RBI to tackle this far more serious problem.

Suraj · Post by **Suraj** » 25 Dec 2015 00:29

As the article states, the banks are not really cutting lending rates much, just deposit rates.

Kakkaji · Post by **Kakkaji** » 25 Dec 2015 05:18

Skill training soon to get labour for 3 crore houses under Indira Awaas Yojana

NEW DELHI: India will embark on a massive skilling exercise to train workers in construction under its 'rural mason' programme, the first time it's planning such an initiative at this scale.

The rural development ministry, which has the task of building 3 crore houses in the next seven years under the Indira Awaas Yojana, wants to ensure there is enough skilled labour available to meet this goal.

Funding for the training will come from the capacity building component of the Rs 35,000-crore Mahatma Gandhi National Rural Employment Generation Scheme,

A pilot programme will be launched in Jharkhand, Maharashtra and Uttarakhand to train 50,000 workers in 35 days, after which it will be rolled out across the country. The Construction Skill Development Council of India will provide the training to unskilled workers besides mentoring them at worksites. It will also issue certificates to workers after they complete the master training programme.

"We are trying to work out a completely new profile for a rural mason since such a course does not exist presently," the official cited above told ET. The idea is to train workers onsite in broad areas of construction and the new technology. Rural masons will be trained in scaffolding and bricklaying besides casting of cement and concrete. These skills will help in upgrading the quality of rural housing India as well, it is expected.

hanumadu · Post by **hanumadu** » 25 Dec 2015 19:55

Electronics import may rise to $40 billion in FY16 due to smartphone-led surge

Led by a surge in smartphone shipments, India's electronics imports could for the first time exceed overseas purchases of bullion this year, highlighting an urgent need to direct the focus of the 'Make in India' initiative on the sector.

While the government expects demand for electronics to cross $400 billion by 2020, the industry estimates that at the current rate, domestic production can at best be $100 billion.

chetak · Post by **chetak** » 26 Dec 2015 00:44

Viv S wrote:
Suraj wrote:We've previously discussed how RBI's rate cuts aren't being reflected in the rates charged by banks, and that often banks lower deposit rates but leave borrowing rates unchanged, which just benefits them more. RBI has now issued a notice requiring that from April 1 2016, all banks have to now adhere to a standard set of norms: they have to adjust both deposit and lending rates by the same amount.
But why is that happening? Unless there's a cartel at work, just one bank cutting lending rates would force its competitors fall suit or risk losing market-share.

And if there is a cartel at work, cutting across private-public lines, I'd like to see much more than just some added regulation from the RBI to tackle this far more serious problem.

there is a cartel at work led by private banks. Some PSU banks are also taking shelter of the benign regulatory climate. This is a sneaky way of recouping some losses from bad debts/NPA's that these banks were holding from some bad loans given out earlier.

Good for RR, slapped them down pretty hard.

NRao · Post by **NRao** » 26 Dec 2015 08:17

Oil prices will reach $70 a barrel by 2020, says Opec

Prem · Post by **Prem** » 27 Dec 2015 10:20

http://economictimes.indiatimes.com/new ... s?from=mdr

Interlinking of rivers is PM Narendra Modi's priority: Suresh Prabhu

MUMBAI: Former Prime Minister Atal Bihari Vajpayee's rivers interlinking project is a priority of Prime Minister Narendra Modi and it will be "considered" very soon by the Union cabinet, Railway minister Suresh Prabhu said today."The dream project of former Prime Minister Atal Bihari Vajpayee ji, the interlinking of all rivers is a priority in Prime Minister Narendra Modi's agenda and the project will be considered very soon by Union cabinet as it would be beneficial for the entire nation

Kashi · Post by **Kashi** » 28 Dec 2015 12:19

The rising commodity prices, especially food, are major problem. I wonder what should be done to bring the prices down a bit. This has the potential to undo a lot of good work achieved in other spheres of the economy.

Singha · Post by **Singha** » 28 Dec 2015 16:17

we need to incentivize growing the basket of stuff we eat in the right quantities than just mountains of price supported rice and wheat. for example we need lot of oilseeds and dals.

Austin · Post by **Austin** » 28 Dec 2015 18:55

India Could Become Third Largest Economy After 2030: Report

http://profit.ndtv.com/news/economy/art ... me-topnews

London: India could become the world's third largest economy after 2030 and its ascension could see France and Italy kicked out of the exclusive G8 group or its membership increased to 10 to accommodate India and Brazil, according to a new study.

According to a report by the Centre for Economics Business and Research (CEBR), a UK-based think tank, China will overtake the US as the largest economy in the world in 2029 with the US slipping to second place and India close behind at third.

India's projected GDP in 2030 was $10,133 billion, behind America's $32,996 billion and China at the top with a projected GDP of $34,338 billion.

However, India will become the largest economy in the Commonwealth in 2019 when its economy overtakes the British economy.

The study also says that India is finally starting to catch up with China and will eventually overtake the economy in the second half of the century.

Britain will move up to take fourth spot and Brazil will complete the top five.

Europe's third and fourth largest economies will be replaced by India and Brazil in the G8 over the next 15 years, the report says.

As Brazil and India meet the political criteria for membership of the exclusive G8 club of developed democracies, their ascension could see France and Italy kicked out of the group, or the club expanded to a G10 as more economies join, the report said.

The UK, meanwhile, is set to become the best performing economy in the western world over the next 15 years, boosted by its leading position in global software and IT sectors.

CEBR said France's "dire" economic prospects will see it fall from the world's 5th to 9th largest economy by 2030.

Italy - currently 8th in the global league table - is also going through tough times.

Since joining the euro in 2000, GDP growth has remained flat, making it the slowest growing economy of any major developed nation.

Germany, Europe's largest economy, will maintain its position in the world's leading economies as its declining population receives a welcome boost of a 1.5 million refugees and migrants, according to the analysis.

vera_k · Post by **vera_k** » 29 Dec 2015 00:25

India's impermanent residents

Is behind a pay wall, hopefully google or registered account will allow access to the content. The relevant part is this para pointing to a missing piece in Indian visa rules.

Despite my friends’ long tenure here, and the fact that the husband owns a Delhi-based design company employing 12 Indian professionals, New Delhi still requires them to return to Europe every five years for their permission to live in India to be reassessed. That is because there is no path to legal permanent residency for foreigners who are not of Indian ancestry, except through marriage or by giving up their original citizenship to become naturalised.

ArmenT · Post by **ArmenT** » 29 Dec 2015 07:45

vera_k wrote:India's impermanent residents

Is behind a pay wall, hopefully google or registered account will allow access to the content. The relevant part is this para pointing to a missing piece in Indian visa rules.

Despite my friends’ long tenure here, and the fact that the husband owns a Delhi-based design company employing 12 Indian professionals, New Delhi still requires them to return to Europe every five years for their permission to live in India to be reassessed. That is because there is no path to legal permanent residency for foreigners who are not of Indian ancestry, except through marriage or by giving up their original citizenship to become naturalised.

What's so unusual about that? (See the bolded section I've highlighted above) Almost every country in the world requires you to give up your original citizenship to become a naturalized citizen, except where they have reciprocal treaties to allow dual citizenship.

Viv S · Post by **Viv S** » 29 Dec 2015 08:20

ArmenT wrote:What's so unusual about that? (See the bolded section I've highlighted above) Almost every country in the world requires you to give up your original citizenship to become a naturalized citizen, except where they have reciprocal treaties to allow dual citizenship.

They're talking about the lack of a green card type system wherein foreign nationals don't need to approach the bureaucratic apparatus for renewals. Its not a very serious problem since they only have to do so once every 5 years, but having to return home to apply for a residency renewal is bound to be a hassle.