Indian Economy News & Discussion - Aug 26 2015

Rahul M · Post by **Rahul M** » 06 Nov 2016 16:43

most retailers dont have rupay options either. I cant even recharge my cellphone using rupay.

Bart S · Post by **Bart S** » 06 Nov 2016 17:43

JayS wrote:
rahulm wrote:I would like to see a reduction, even if gradual, in paper notes being issued with a corresponding increase in use of electronic payments-payTM, RuPay, credit and debit cards. Most government services require payment to be made at a grubby nationalised bank and then producing a stamped challan. For starters, why can't payments for all government services also have a EFT pyaments option? Ever tried to buy stamp paper for large property transactions? You need an armoured car and Popeyes's arms and shoulders to carry all that cash around.

Require all registered businesses, big or small to have an EFT option. And while at it, mandate all autos and kaali peeli taxis to accept payTM. If the Sarkar can mandate it for Uber and Ola,then why should the auto and taxi goons be untouchable ?

Finally, can we move to polymer notes please ? Easier for all and harder for counterfeiter's aka TSP.
And its not that difficult to. I hardly need to pay by cash except to roadside subjiwallas and to maid. 90% transaction I do on daily basis are all by cards. I have paid as low as Rs.28 by cards. We need a system which charges very low per transaction for digital money unlike VISA/Mastercard or even better - is free. Mobile based payment is great. Then even small vendors can afford to have e-payment option.

We have IT power to implement systems, market to justify any amount of investment on the infrastructure. Only will power and vision is missing.

We had that Uniform Payment System or something proposed right? What happened to it??

Proposed? It's already operational and there are a dozen banks with apps out already for it. Works great and instant transfer (via IMPS) that works 24x7 regardless of bank holidays etc.

Bart S · Post by **Bart S** » 06 Nov 2016 17:45

Gus wrote:
JayS wrote: And its not that difficult to. I hardly need to pay by cash except to roadside subjiwallas and to maid. 90% transaction I do on daily basis are all by cards. I have paid as low as Rs.28 by cards. We need a system which charges very low per transaction for digital money unlike VISA/Mastercard or even better - is free.
well, rupay was that idea. charge less. and money stays inside the country. adoption is still slow i think. I have to actively observe and report, as Suraj tells me everytime this comes up

I do see places that take cards for 15 rupees. This was a food court joint which probably favored no cash transactions to reduce handling paper money.

Rupay is old news, and it anyway is not a fix for that requirement but a domestic alternative to the Visa/Mastercard cartel (just like China has).

UPI is the fix for that, and it is already rolled out. Not only is it totally free, but it leapfrogs well beyond card payments and actually past the likes of Apple/Google/Samsung pay. Which is why this 2000 Rs note is quite disheartening. We should be moving towards a 100% cashless economy.

JayS · Post by **JayS** » 06 Nov 2016 18:17

Rammpal wrote:
JayS wrote:^^ Easy t carry out black money transactions/hide black money with bigger denominations. Imagine if you have to give 1Cr cash in Rs.100 notes instead of Rs.1000 notes.

Its a very old proposal being floated around for many years, to stop 1000Rs notes.
I'd be very worried if I were you!
You reckon they don't know that already

Suraj · Post by **Suraj** » 06 Nov 2016 22:40

Gus wrote:well, rupay was that idea. charge less. and money stays inside the country. adoption is still slow i think. I have to actively observe and report, as Suraj tells me everytime this comes up

I do see places that take cards for 15 rupees. This was a food court joint which probably favored no cash transactions to reduce handling paper money.

Haha, but yes GoI needs to push RuPay card adoption more strongly, now that the base of actual cards issued is already there. A look at the PMJDY site says 190 million RuPay cards have been issued. It must be made a binding requirement for any card payment portal to provide RuPay support . This is not merely a matter of convenience or of lower cost. V/MC transactions are outside of our control and scrutiny. RuPay ensures all data about financial transactions are managed by our own card payment service. Remember, during the Ukraine conflict, they shut off V/MC authorizations in Russia, and they subsequently came up with Mir.

pankajs · Post by **pankajs** » 07 Nov 2016 20:24

https://www.valueresearchonline.com/sto ... ?str=32418
The GST revolution is right on track

As far as the supposed complexity of the four rate structure, I'm completely puzzled by this criticism. And I say this not as a newspaper columnist, but as an entrepreneur and a businessperson who has dealt with these issues personally for the last two decades while running Value Research. Here's what I think--it absolutely does not matter whether GST has one rate or four or ten. Those who think that 'one country one tax' meant 'one country one tax rate' probably do not have a first hand understanding of where the pain points lie for businesses. The magic of GST comes from having the same tax system across the country, and across all services and (almost) all goods. Was there anyone out there who was naive enough to think that food staples could ever be taxed at same rate as a stay in a luxury hotel?

Let's leave behind this illusory deficiency and go back to how real problems will get solved for businesses. The huge promise and potential of GST rests on the core deliverable: No matter where in the country you buy your inputs and no matter where you sell your outputs, there will be a single tax chain where each stage will be offsettable against the last. And, all this will happen through a single, transparent, digital interface to which all governments and all businesses in the country will be connected. At the end of the day this is the only thing that matters. I'm constantly surprised at how anyone can not understand the scale of the revolution that this will be.

And now back to the other side of the story--the whole messy legacy that is symbolised by the states' fight to retain the right to bribery. They'll probably win a share of the spoils at this stage, but GST is still a step forward in the right direction. The reason is simple--corruption in indirect taxation is essentially a collusion between the business and the tax system. The digital web of interconnected offsets that GST will establish will make it progressively more difficult to avoid taxes, and whittle away at the reasons to ask for and give bribes. It won't happen overnight--and will obviously be mightily resisted by everyone who has a stake in this--but it will start happening. Not just that, but there will surely be a hidden bonus in the form of higher direct taxes since it will be increasingly more difficult to understate income when expenses and revenue are visible in the GST system.

You might have seen a little cooling in the GST fervour as the details have come out, but make no mistake, this is a revolution and the sooner it starts, the better it is.

Suraj · Post by **Suraj** » 08 Nov 2016 02:23

India rises to second spot on global business optimism index

India improved its ranking by one spot in a global index of business optimism, with policy reforms and Goods and Services tax (GST) expected to become a reality soon, says a survey.

According to the latest Grant Thornton International Business Report, India was ranked second on the optimism index during the third quarter (July-September 2016).

Indonesia took the top spot, with the Philippines coming in third.

India was ranked third during the April-June period after being on top for two consecutive quarters.

“The improvement in the optimism ranking in the recent past clearly reflects that the reform agenda of the government and its efforts on improving the climate for doing business are having an impact,” Grant Thornton India LLP Partner – India Leadership Team Harish H V said.

Economy to grow 7.6% in current fiscal year: NCAER

Economic think-tank NCAER has pegged India’s GDP growth at 7.6 per cent for the current fiscal on back of pick-up in rural demand and “positive signals” on the manufacturing front. India’s economy had expanded at 7.6 per cent in 2015-16.

On one hand, it said the anticipated improvement in the agricultural sector and the associated increase in rural demand will give an upward push to economic growth. The manufacturing sector is also giving positive signals with Purchasers’ Managers Index, Index of Industrial Production for core sectors and auto sales going up. The domestic aviation sector growth continues to be robust.

“However, other service index indicators continue to be muted. Food inflation is also showing signs of dampening in the latter part of the second quarter. However, fuel inflation may revive. Although urban demand is predicted to remain strong, external demand continues to be volatile,” NCAER said in statement.

Its estimates show that the output of kharif foodgrains is expected to reflect an increase of 10 per cent to 11 per cent over last year’s output of 124 million tonnes.

It further said that India’s fiscal position remained under stress during first half of the current fiscal.

Despite healthy growth in tax revenues, the combination of rising expenditure and lower-than-expected non-tax revenues is likely to “test the government’s resolve” to abide by the fiscal deficit target set out in Budget 2016-17, NCAER added.

Bloomberg: GST is a big achievement and a game-changer for PM Modi’s economic reforms

India has backed a multi-tier national tax regime that even in its not-so-perfect form will be a game-changer for Prime Minister Narendra Modi, who is trying to revive manufacturing and boost foreign investment in the world’s fastest growing major economy.

Moving away from the ‘one market, one rate’ tax model, the Goods and Services Tax Council decided on standard rates of 12 percent and 18 percent and two more rates of five percent and 28 percent for the tax’s implementation. Officials are still meeting to finalize details of which goods and services will fall into each bracket.

Finance Minister Arun Jaitley said a zero tax rate would apply to 50 percent of items in the retail inflation basket to protect consumers from price rises on goods such as food grains. Tobacco products will continue to be taxed at 65 percent, he said, adding luxury goods will also be taxed at a higher rate.

The taxes will replace a welter of state levies that imposed heavy burdens on commerce that crossed domestic borders, creating a single market of 1.3 billion people.

And while the ideal single tax rate system is a long way off, a multiple-rate GST was the only way a complex, politically diverse country like India could proceed, Pratik Jain, Indirect Tax Leader, PricewaterhouseCoopers, said by phone.

“It will appear that the Indian government is serious about reforms and that gives confidence to investors,” he said, noting many companies had put investment decisions on hold until the path of the GST was clarified.

“While it’s not perfect, the government should attempt over a period of time to consolidate those four slabs into two.”

The progressive nature of the GST structure should temper any adverse short-term inflationary and growth impacts, said Tamara Henderson, an economist with Bloomberg Intelligence.

“Excluding half of the items in the CPI calculation will protect the spending power of lower income households, which tend to have a higher propensity to consume disposable income than wealthier groups,” she said.

ShauryaT · Post by **ShauryaT** » 08 Nov 2016 20:39

Rs. 500 and Rs. 1000 current notes to be made illegal from midnight IST today.

Mukesh.Kumar · Post by **Mukesh.Kumar** » 08 Nov 2016 21:12

Hindustan Times
Time

saip · Post by **saip** » 08 Nov 2016 21:50

ShauryaT wrote:Rs. 500 and Rs. 1000 current notes to be made illegal from midnight IST today.

Nitpick. They are not ILLEGAL. They just are not legal tender.

rsingh · Post by **rsingh** » 08 Nov 2016 22:26

IMO Rupee will go up.

Prem · Post by **Prem** » 09 Nov 2016 00:15

rsingh wrote:IMO Rupee will go up.

So many folks are missing this point. Rupee will appreciate and hopefully gain the losses of last 4-5 years . Since we are not heavy on merchandize export , no that useful to keep currency value so low. It will bring inflation too under control. Seed of becoming world class financial market being sowed now.

SBajwa · Post by **SBajwa** » 09 Nov 2016 02:12

I see Indian 50 Rupees equal to $1.00 soon!

Prem · Post by **Prem** » 09 Nov 2016 02:19

SBajwa wrote:I see Indian 50 Rupees equal to $1.00 soon!

Tuhade Munh vich Gheo Shakkar Thaay , Deek Laa Laa peo1
I can live with 50 to 1.
Most of the average rich folks will be able to convert these bills using unemployed folks. Bank guys will just come up with many fictitious Naams etc t do the exchange.20-25% Max loss except for political pigs and Big Biz Crocodiles .

salaam · Post by **salaam** » 09 Nov 2016 02:30

Prem wrote:
SBajwa wrote:I see Indian 50 Rupees equal to $1.00 soon!
Tuhade Munh vich Gheo Shakkar Thaay , Deek Laa Laa peo1
I can live with 50 to 1.
Most of the average rich folks will be able to convert these bills using unemployed folks. Bank guys will just come up with many fictitious Naams etc t do the exchange.20-25% Max loss except for political pigs and Big Biz Crocodiles .

Chart - INR gaining against $

SaraLax · Post by **SaraLax** » 09 Nov 2016 03:42

SBajwa wrote:I see Indian 50 Rupees equal to $1.00 soon!

Hmm .. Should common man like me now start thinking about selling their vested Company RSUs ?.

Have no clue if price of share will increase in $ terms over the next few months but the $-INR conversion value may start coming down ( & that's a loss too, in a relative manner)

Hitesh · Post by **Hitesh** » 09 Nov 2016 06:15

ShauryaT wrote:Rs. 500 and Rs. 1000 current notes to be made illegal from midnight IST today.

If I am in US overseas, how do I currently exchange my stack of Indian rupees? I have about 10,000 rupees.

Yagnasri · Post by **Yagnasri** » 09 Nov 2016 06:23

Some of these issues may have to be clarified. But there are Indian banks in most of the major cities, and if you have an account, they may accept. I am not sure.

saip · Post by **saip** » 09 Nov 2016 06:24

Hitesh wrote:
ShauryaT wrote:Rs. 500 and Rs. 1000 current notes to be made illegal from midnight IST today.
If I am in US overseas, how do I currently exchange my stack of Indian rupees? I have about 10,000 rupees.

You are not supposed to bring ANY rupees from India. You are supposed to exchange them for foreign currency before you left. So the rupees in your possession are really ILLEGAL. I have about 16k. I am thinking of mailing them to India.

Dileep · Post by **Dileep** » 09 Nov 2016 06:37

As per the current law, you can take out/bring in INR 5000. I believe it is being changed to 25,000 but it is not yet effective.

Using this, money changers abroad can convert INR to local currency upto INR5000. I did it in Malaysia.Still, I am not sure if SBI will accept INR at their branches abroad.

Do not mail the notes. That is ILLEGAL. Each of your family members can take 5K legally. The customs isn't going to count it anyway.

Hitesh · Post by **Hitesh** » 09 Nov 2016 06:40

saip wrote:
Hitesh wrote:
If I am in US overseas, how do I currently exchange my stack of Indian rupees? I have about 10,000 rupees.
You are not supposed to bring ANY rupees from India. You are supposed to exchange them for foreign currency before you left. So the rupees in your possession are really ILLEGAL. I have about 16k. I am thinking of mailing them to India.

I know but sometimes you need the currency to buy stuff in duty free shops where they take indian rupees. So that's why I didn't exchange them at that time. And also i was trying to save some money on exchange costs the next time I went to India. So I figured it was worth keeping them as pocket change. 10k rupees is really pocket change to me. It only represent about $155 bucks for me. You can easily spend most of that in food and drinks at layovers between India and America.

saip · Post by **saip** » 09 Nov 2016 07:10

Hitesh, I did not ask you why you did it as I also did the same. I kept some cash handy so that next time when I land i will have it for taxis and other expenses until I can make a withdrawal from my bank as the exchange rate at the airport is, I found, terrible. But the problem is when the law says it is illegal to take Indian currency from India, how can we legally exchange it?

JohnTitor · Post by **JohnTitor** » 09 Nov 2016 14:17

salaam wrote:
Chart - INR gaining against $

Pointless to compare the rupee to dollar. To much going on there. Use a stable currency like the Swiss franc

http://www.xe.com/currencycharts/?from= ... R&view=12h

A_Gupta · Post by **A_Gupta** » 09 Nov 2016 18:20

Q: If both the US & Europe are in recession, how much does that affect Indian growth prospects?

E.g., does India lose 0.5% growth rate, or 1.2% or what?

Hari Seldon · Post by **Hari Seldon** » 09 Nov 2016 18:26

^ Compared to what, saar? The range of figures given for India's growth story itself vary from 6.5% to 8%+.

A_Gupta · Post by **A_Gupta** » 09 Nov 2016 22:15

Hari Seldon wrote:^ Compared to what, saar? The range of figures given for India's growth story itself vary from 6.5% to 8%+.

I assume all figures are in the context of some particular economic model.

So, compared to any particular figure. E.g., if IMF's economic model had India growing at 7.5% assuming US, Europe are normal, what happens if US, Europe are in recession. If RBI's economic model had India growing at 8%, how does its estimate change? and so on. I expect that in some models this may not be possible to disentangle; but surely there are estimates of how coupled Indian economic growth is to its trade & investment partners in the US and Europe?

chanakyaa · Post by **chanakyaa** » 10 Nov 2016 08:00

Do not mail the notes. That is ILLEGAL. Each of your family members can take 5K legally. The customs isn't going to count it anyway.

FX in major cities should be able to trade Rupees for local currency, because all the paper currency abroad, especially with money changers, should be honored by the government.

Postal carriers such as USPS, FedEx, UPS etc. prohibit mailing of currency but, that does not mean it is "illegal". I'm no lawyer but is their any legal statute that makes it a "civil" or a "criminal" offense? Out of curiosity, I did a quick search, couldn't find anything.

vera_k · Post by **vera_k** » 10 Nov 2016 09:06

Tip: There's no need to carry rupees around when traveling. Airports have ATMs either inside or outside where rupees can be withdrawn at the inter bank rate-1%.

Mort Walker · Post by **Mort Walker** » 10 Nov 2016 09:49

Apparently gold sales went through the roof yesterday in India. Jewelers jacked up the rate from Rs. 35,000 per 10 grams to Rs. 45,000 per 10 grams.

Mort Walker · Post by **Mort Walker** » 10 Nov 2016 09:54

vera_k wrote:Tip: There's no need to carry rupees around when traveling. Airports have ATMs either inside or outside where rupees can be withdrawn at the inter bank rate-1%.

You will be hit with foreign currency transaction fees and other ATM usage fees. This can amount up to 4% of the transaction. Additionally, the Indian bank ATM may not be able to use foreign debit card.

Basically, whatever Rupees PIOs and NRIs have are now just souvenirs and will be worth something on eBay during the Indian centennial in 2047.

Since we travel to India annually, we keep a few thousand Rupees mostly in 500 and 1000 notes. Now we will just keep 100 notes.

vera_k · Post by **vera_k** » 10 Nov 2016 10:49

^
ATM fees are reimbursed by your local bank. The foreign currency transaction fees are just 1%.

Sicanta · Post by **Sicanta** » 11 Nov 2016 12:10

SC Upholds The Constitutional Validity Of Entry Tax by 7:2 Majority

Read more at: http://www.livelaw.in/breaking-sc-uphol ... Yc.twitter

Gus · Post by **Gus** » 11 Nov 2016 13:11

Well the 500,1000 notes are no longer legal currency. So presumably they can be mailed now?

disha · Post by **disha** » 12 Nov 2016 12:29

JohnTitor wrote: Pointless to compare the rupee to dollar. To much going on there. Use a stable currency like the Swiss franc

http://www.xe.com/currencycharts/?from= ... R&view=12h

Why is swiss franc a stable currency?

JohnTitor · Post by **JohnTitor** » 12 Nov 2016 16:34

disha wrote:
JohnTitor wrote: Pointless to compare the rupee to dollar. To much going on there. Use a stable currency like the Swiss franc

http://www.xe.com/currencycharts/?from= ... R&view=12h
Why is swiss franc a stable currency?

The Swiss franc is the most stable currency in the world in the long run as it has one of the strongest banking systems in the western world making the franc a safe currency for decades. Also the Swiss is known for their banking secrecy (though in recent years they have been forced to disclose some of this). Politically, Switzerland is a neutral country that will not be involved in wars (as a state) or other power blocs. The dollar is subject to various decisions not just within the US but outside (such as the ME) - the Franc isn't.

rsingh · Post by **rsingh** » 12 Nov 2016 20:32

^^^^
Which cave you are living in ? Do you know what happened to it in last year?

JohnTitor · Post by **JohnTitor** » 12 Nov 2016 20:45

rsingh wrote:^^^^
Which cave you are living in ? Do you know what happened to it in last year?

err - that is just de-pegging. It doesn't happen regularly. If only you read about why they unpegged it, instead of throwing insults..

http://www.economist.com/blogs/economis ... xplains-13

The SNB suddenly dropped the cap last week for several reasons. First, many Swiss are angry that the SNB has built up such large foreign-exchange reserves. Printing all those francs, they say, will eventually lead to hyperinflation. Those fears are probably unfounded: Swiss inflation is too low, not too high. But it is a hot political issue. In November there was a referendum which, had it passed, would have made it difficult for the SNB to increase its reserves. Second, the SNB risked irritating its critics even more, thanks to something that is happening this Thursday: many expect the European Central Bank to introduce “quantitative easing”.

rsingh · Post by **rsingh** » 12 Nov 2016 22:10

^^^^
What insult sir? just asked about tora-bora cave complex address. Anyway do research about 2011. People are still afraid about it .......in 2016. Do not just follow the stereotype.....if it is swiss it is good,Swiss can not go wrong with money,bank et all. Mon ami I have seen this from very close for last 23 years. Yes they are good but not as good as you are making them to be. salam

disha · Post by **disha** » 13 Nov 2016 13:27

Titorji., your faith in swiss franc is unshakeable., but as a country the swiss is just a "locker"., with its "corrupt" banking system as both lock and key. Corrupt for the rest of the world since it takes in all the blood and the black money the world generates.

As a nation., switzerland is just landlocked country with a geostrategic location between france, germany and italy and has been able to use it to trade in a security. Which is very delicate and go to zero any time there is instability in either of france, germany or italy. Or any of its corrupt client nations - like nigeria or ISIS. Again read it carefully., the current arrangement is delicate and go to zero any time.

It should be reverse., the swiss franc should be compared with a basket of currencies of nations like India, US, China etc. Its volatility is a correlation on how stable its current arrangement is and how stable its neighboring countries are.

Kashi · Post by **Kashi** » 13 Nov 2016 16:05

disha wrote: Which is very delicate and go to zero any time there is instability in either of france, germany or italy. Or any of its corrupt client nations - like nigeria or ISIS.

They seemed to do fine during both the WWs and many conflicts that preceded them. Heck the buggers even managed to provide mercenaries to guard the Vatican. Looks like the leverage goes long back.