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Currency Demonetisation and Future course of Indian Economy

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Primus » 12 Jan 2017 19:58

kiranA wrote:If a wholesale economic collapse with loss of income to millions, loss of thousands of jobs, hunger for thousands of people, deaths for few hundreds was "expected" from demon then not only does it make demon stupid but an act of crime to be prosecuted. I dont think they were expected just not thought through. Now govt is tring to spin its way out the mess.


To borrow a phrase from Akshay Ji, Kitna Tha? :)

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 12 Jan 2017 20:22

schinnas wrote:Textiles and jewelery and handicrafts are key export industries in India outside of fully organized sectors such as pharma and IT. Both the jewelery and textile sectors are highly unorganized with multiple levels of outsourcing with actual work done mostly in several SMEs, who mostly run a cash-less enterprise. I have spoken to export supporting entrepreneurs in textile belt in TN and they indicate severe impact to business.


OK, is there a graph of cotton spot prices for October-December? Surely it should show the effect of demonetization with a fall in spot prices.

Also, if the massive economic collapse, etc., is true, then cotton futures prices should also show a steep fall.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 12 Jan 2017 21:03

OK, I have an answer to my own question.
I've downloaded week-wise cotton spot prices from the Cotton Association of India website:
http://www.caionline.in/site/spot_rates

Here's the data for ICS-101, the cheapest grade of cotton, price per quintal, for the dates in 2015-16 and 2016-17.

Sorry, I don't see any sign of economic collapse or slowdown in the yarn industry in these data. Of course, maybe these data don't refer to anything real - in which case, please produce real data.

Code: Select all

Per Quintal  2015-16 2016-17 2015-16 2016-17
ICS-101                      With Nov02 == 100
Nov 02        8605    7705    100.0   100.0
Nov 09        8605    7705    100.0   100.0
Nov 16        8520    7845     99.0   101.8
Nov 23        8464    7592     98.4    98.5
Nov 30        8436    7564     98.0    98.2
Dec 07        8323    7592     96.7    98.5
Dec 14        8323    7367     96.7    95.6
Dec 21        8520    7452     99.0    96.7
Dec 28        8942    8239    103.9   106.9
Jan 04        9195    8211    106.9   106.6
Jan 11        8886    8520    103.3   110.6

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 12 Jan 2017 22:09

kiranA wrote:If a wholesale economic collapse with loss of income to millions, loss of thousands of jobs, hunger for thousands of people, deaths for few hundreds was "expected" from demon then not only does it make demon stupid but an act of crime to be prosecuted. I dont think they were expected just not thought through. Now govt is tring to spin its way out the mess.

Well I can see a wholesale economic collapse of people who had a huge black stash and a business that ran on that. I see virtually zero collapse over most of the system

While there are some who accuse the government of dire errors, I think those people also forget the number of people who were lily white or nearly white and living on very little cash

So the news for the views that you express may be bad. the economy for most people is not about to collapse.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 12 Jan 2017 22:15

A large number of people have money tied up in stock market. Provident fund and bank FDs These people have not lost a single paisa, although falling interest rates will probably affect them For those who had money tied up in PSU banks the worry was the financial health of those banks with bad loans. That worry has now been removed because the banks are not going to collapse soon with so much money in the system. Those who invested in gold remain untouched.

Yes there is a segment of the population who were entirely out of the banking system working on cash alone or mainly cash. I think at least some of them are fckued.


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Re: Currency Demonetisation and Future course of Indian Economy

Postby KL Dubey » 12 Jan 2017 23:47

kiranA wrote:If a wholesale economic collapse ....


If there has been a "wholesale economic collapse", why is the economy growing at 7.1% ? Why did global CEOs flock to India this week for various summits and discussions ? Why they heaped praises on NaMo, with one American CEO saying "I wish NaMo took over our country since we need this kind of courage and decision-making" ?

What is happening is a massive cleanup of many economic sectors by (1) pushing towards digital transactions, and (2) "draining the swamp" of existing black money. That process has dented our already phenomenal growth rate (of 7.6%) temporarily, but India will now grow faster after this "shock therapy" by NaMo Sarkar. India needs many more such "shock therapies".

You also say:

with loss of income to millions, loss of thousands of jobs, hunger for thousands of people, deaths for few hundreds


Even assuming that is true, compare it to seven decades of:

- Hunger and malnutrition of hundreds of millions of people
- Non-creation of hundreds of millions of needed jobs (you can't lose jobs that you don't have)
- Death for thousands at the hands of Pawkee-sponsored terrorists and Maoists
- Trafficking of hundreds of thousands women and children

Forget demonetization. Who is going to prosecute these gigantic crimes against the Indian citizenry ?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby KL Dubey » 13 Jan 2017 00:05

A_Gupta wrote:Here's the data for ICS-101, the cheapest grade of cotton, price per quintal, for the dates in 2015-16 and 2016-17.

Sorry, I don't see any sign of economic collapse or slowdown in the yarn industry in these data. Of course, maybe these data don't refer to anything real - in which case, please produce real data.


There is one fella named Chengal Reddy who shows up on the Times Now master(de)bates. Dis 'bator keeps insisting dat da farming sector has collapsed since "nobody is there to buy the farmers' produce since there is no cash available". Never produces any data to back it up other than some newspaper clippings.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby UlanBatori » 13 Jan 2017 00:56

This is why we need to close the deMo thread and start listing those who are upset by deMO.

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Currency Demonetisation and Future course of Indian Economy

Postby Peregrine » 13 Jan 2017 02:16

X Posted on the Indian Economy Thread

Contrary to fears of slowdown, factory output grows 5.7% in November

NEW DELHI: Industrial production in November grew by 5.7 per cent compared to a contraction of 3.4 per cent in the same month a year ago, contrary to expectations of a slowdown due to demonetisation.

Factory output measured in terms of Index of Industrial Production (IIP) got a push in November 2016 due to better performance of manufacturing, mining and electricity sectors coupled with larger offtake of capital goods, considered a barometer of investment.

Following demonetisation of Rs 1,000 and Rs 500 notes announced on November 8, 2016, it was feared that cash crunch will hit all sectors.

According to data released by the Central Statistics Office today, IIP for the month of October last year was revised slightly upwards to a contraction of 1.8 per cent from provisional estimates of (-) 1.9 per cent released last month.

As per the data, IIP growth during April-November period this fiscal remained almost flat at 0.4 per cent compared to 3.8 per cent a year ago.

Manufacturing sector, which constitutes over 75 per cent of the index, grew at 5.5 per cent in November compared to a decline in output by 4.6 per cent earlier.

However, during the April-November period the sector recorded a contraction of 0.3 per cent compared to a growth of 3.9 per cent.

Similarly, electricity generation grew at 8.9 per cent in November compared to a meagre 0.7 per cent a year ago. Mining output grew 3.9 per cent in November compared to 1.7 per cent same month a year ago.

Capital goods production increased by 15 per cent in November compared to a decline in production by 24.4 per cent earlier.

As per use-based classification, growth rates in November 2016 over November 2015 are 4.7 per cent in basic goods and 2.7 per cent in intermediate goods.

Consumer durables and consumer non-durables recorded growth of 9.8 per cent and 2.9 per cent respectively, with the overall growth in consumer goods being 5.6 per cent.

In terms of industries, 16 out of 22 industry groups in the manufacturing sector have shown growth during the month of November 2016 as compared to the corresponding month of the previous year.

Cheers Image

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Re: Currency Demonetisation and Future course of Indian Economy

Postby disha » 13 Jan 2017 02:18

disha wrote:7% growth is WB projections. They are no better than an IT-Vity simple-wild-assed-guestimate on project duration. In fact a IT-Vity SWAG may get it more right than the WB projections.

I am expecting a growth of 8-10% and more towards 10% for the current fiscal. Why? The drop in sale of scooters/cars will bounce back. It is the capital infrastructure projects that are taking rapidly off the ground will provide substantial continuing growth. Currently (for 2016-2017) some $30-40 B was invested in infrastructure projects. I would expect the budgetary support for 2017-2018 will cross $40 B and another $20 B will be coming in as FDI. That will be $60 B for the next year invested in infrastructure projects.

RE will rebound towards 2019. Till then it is better that RE stays low and instead of going quantitative goes qualitative.


Plug'in of my own post in light of new data coming on factory output. We are back on 8-10% growth rate with <4% CPI.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 13 Jan 2017 08:46

The IIP data is pretty solid for a month that was supposed to have seen a massive contraction in economic activity. It's attributed to 'base effect' but that's odd - DeMo was supposed to have 'completely destroyed the economy and we're all going to dieeeee', so base effect should not have matter since DeMo itself should have destroyed more of the current base. But the IIP data doesn't agree with that claim. Consumer durable goods in particular grew almost 10% after growing 12.5% in the 2015-16 fiscal year. Here's a report from last Jan covering the Nov 2015 performance for reference data: link

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 13 Jan 2017 09:43

Paid to our vegetable vendor on cart who kept us on credit since demonetization. Thanks Ezhumalai
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Re: Currency Demonetisation and Future course of Indian Economy

Postby Sachin » 13 Jan 2017 11:37

Sorry, I could only find this news in Malayalam (even the portal's English edition seems to have kept this news aside). സഹകരണബാങ്കുകള്‍ക്ക് നല്‍കാവുന്ന വായ്പാപരിധി കൂട്ടി.. (increase in loan amounts which can be disbursed by Co.Op banks). So looks like state's co.op banks are loaded with cash, which they can utilize better. My worry, how ever is whether the tax dues have been collected from the defaulters. There is a rumour already floating around that the earlier "black money" champions can now get their money back through loans (which they can dodge later, or at least get a chance to utilize the money).

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Re: Currency Demonetisation and Future course of Indian Economy

Postby habal » 13 Jan 2017 11:56

Sachin, I had already said those with current a/c's have no constraint in depositing or withdrawing cash esp current a/c holders with pvt banks. Only problem is with those with SB a/c.

secondly pvt banks like icici, axis, hdfc spend a lot of effort to 'cultivate' + wine & dine auditors in charge of annual audit also they cultivate contacts at RBI staff who will provide them with as much currency as needed at expense of PSU banks who do not have funds set aside for such pruposes. So PSU bank will get like 20 lakh/branch on avg while pvt banks with heavy current a/c's and high net worth a/c's will hog all the cash by hook or crook.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Sachin » 13 Jan 2017 12:24

habal wrote:Sachin, I had already said those with current a/c's have no constraint in depositing or withdrawing cash esp current a/c holders with pvt banks. Only problem is with those with SB a/c.

I am not denying that. But was surprised with this move from Co-Operative banking sector in Kerala. The state even had a harthaal to fight the "injustice" against Co.Op sector. State Fin.Min has been crying so hard, that every reservoir in Kerala is now full with his tears. And now we hear a statement that these banks are going to increase their loan disbursement. How is this possible? Where did this new cash come in from? How did these Co.Op banks get such huge amounts to disburse in the new currency? If the black money hoarders have dumped in all the cash, have their identities got established by now? Or else won't this lead to a situation where unaccounted (and tax dues NOT collected) money all goes back to the market?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby nandakumar » 13 Jan 2017 13:47

habal wrote:Sachin, I had already said those with current a/c's have no constraint in depositing or withdrawing cash esp current a/c holders with pvt banks. Only problem is with those with SB a/c.

secondly pvt banks like icici, axis, hdfc spend a lot of effort to 'cultivate' + wine & dine auditors in charge of annual audit also they cultivate contacts at RBI staff who will provide them with as much currency as needed at expense of PSU banks who do not have funds set aside for such pruposes. So PSU bank will get like 20 lakh/branch on avg while pvt banks with heavy current a/c's and high net worth a/c's will hog all the cash by hook or crook.


Not correct. This is the extract from the RBI website on cash withdrawal from current accounts.
Quote:
Business entities having Current Accounts which are operational for last three months or more will be allowed to draw ₹ 50,000 per week. This can be done in a single transaction or multiple transactions. This facility has been extended to Overdraft and Cash Credit accounts and traders registered with the Agricultural Produce Market Committee (APMC) markets or mandis. Accordingly, holders of current/overdraft/cash credit accounts, which are operational for the last three months or more, may withdraw upto ₹ 50,000 in cash, in a week. Such withdrawals may be disbursed predominantly in ₹ 2,000 denomination bank notes. This enhanced limit for weekly withdrawal is not applicable for personal overdraft accounts. Farmers are allowed to draw upto ₹ 25,000 per week in cash from their loan (including Kisan Credit Card limit) or deposit accounts subject to their accounts being compliant with the extant KYC norms. Unquote.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 13 Jan 2017 14:24

Bloomberg reports (emphasis added):
http://www.bloombergquint.com/markets/2 ... i-cash-ban
"Indian Bank Unveils Surprise Repayment Boost From Modi Cash Ban"
IndusInd Bank Ltd., the first Indian lender to report earnings following the government’s ban on high-value rupee notes, revealed a surprise boost from the so-called demonetization policy on Tuesday, saying that it had driven delinquent borrowers to repay loans with their invalidated currency.

“Demonetization had a beneficial impact on asset quality as repayments came in faster,” Chief Executive Officer Romesh Sobti told reporters on after IndusInd posted a surprise record profit for the December quarter. “We were surprised to see some of the written-off assets also getting repaid,” he said.

He was speaking after IndusInd said its net income for the December quarter had climbed 29 percent to 7.51 billion rupees ($110 million). That beat the 7.3 billion-rupee average of analyst estimates compiled by Bloomberg and defied earlier worries that the Nov. 8 ban would hurt IndusInd’s customers in the cash-intensive trucking industry -- concerns that dragged the bank’s shares down as much as 14 percent.


So much for the sky falling.


Prime Minister Narendra Modi’s demonetization move had caused speculation on how the policy would impact India’s banks, as millions of Indians lined up at lenders to deposit their now-useless notes or exchange them for new ones. Sobti’s comments provide a glimmer of hope that peers of IndusInd with a big consumer lending book may get a similar boost to asset quality.

“Banks with exposure to sectors in which most of the revenue is generated in cash -- like commercial vehicles, gems and jewelry and small and medium enterprises -- have seen repayment by many delinquent borrowers,” said Siddharth Purohit, an analyst at Angel Broking Ltd. in Mumbai. “They have used the money which has become non-legal tender post the cash ban to repay or prepay, giving a benign push to asset quality.”

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 13 Jan 2017 14:31

Bloomberg reports India consumed 4.3% more petroleum in December 2016 compared to December 2015.
http://www.bloombergquint.com/markets/2 ... mand-grows

Oil consumption in December grew at the slowest pace for the month since 2013, as the government’s cash crackdown skewed the trend. The country consumed 16.5 million tons of oil products last month, 4.3 percent more from the year ago period.


Skewed the trend? What trend?
This is because:
India’s oil consumption surged 11 percent to the most on record last year as rising income levels spur greater use of cars, trucks and motorbikes, expanding fuel demand.

The world’s second most populous nation consumed 196.5 million tons of oil products in 2016, up from 177.5 million tons in 2015, according to the Oil Ministry’s Petroleum Planning and Analysis Cell. Gasoline demand increased 12 percent in the year to 23.7 million tons and diesel consumption grew 5.6 percent 76.7 million tons.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Paul » 13 Jan 2017 15:17

Kallol Bhattacherjee ‏@janusmyth 11m11 minutes ago

Nepal ambassador holds press conference says people in Nepal are suffering due to demonetisation @TheHindu @suhasinih
0 replies 9 retweets 6 likes

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Re: Currency Demonetisation and Future course of Indian Economy

Postby UlanBatori » 13 Jan 2017 16:39

Sachin:
Per acquaintance of my evil 6th coujin in Malloostan: He deposited his retirement funds in CoOpBaink per their come-on with better rates. Then they said breezily that they weren't obliged to do TDS either. Happy.

Right after Nov 8 he got an IT notice demanding explanation for not reporting interests, and with heavy penalty etc. So they ARE going after individual depositors in the CoOps. If they have time for these, they must already have grabbed the huge-mysterious-deposit cases for action. No wonder hartals etc: there's serious pain behind those.

***OT FOR DeMO but relevant to why Indian baboon are "overworked" and "stressed".***********************

I don't see how GOI departments have time for anything useful. My evil 6th coujin noticed a couple of saal pehle that a certain Major Sarkari Baink had taken out much less in TDS than in the prior year (mostly in Supreme HQ's accts) :eek: . So he wrote to the Manager to pls kindly check. No response. Escalated eventually to top of Baink (Board), so none of those oiseueles :twisted: can claim ignorance. No response. Called up a former employee of the Baink to please go there and talk sense to them - she said they were clueless. Apparently the Manager had the same mother as a local Police Chief, so no one could complain that he never paid attention to his job, and he was close to retirement. Sent relatives to try to talk to them. Same problem. Clueless led by crooked and corrupt.

July 31 came and went, Extended deadline of Aug. 31 approached, so E6C put in the Pharm Saral reporting only what was visible on Pharm 26-A at EyeTee site.

Now comes the effect of Modi-Ice-Ashun. :shock: The IT processed the forms, and sent the refunds by October/November, long before E6C could personally go to the Baink and inform of the Birds Bees etc. in chaste Malloostani as planned. So the window for painless Revision of Saral expired. "Revision must be submitted bephor Assessment eej done onlee" etc. Common sense not permitted.

E6C marched in there in December. Demanded that they follow the law exactly, no matter the consequences, and put in the corrected 16A etc so that the right A26 could be generated at IT. They seemed absolutely shocked at this. E6C understood why (see experience below with South Indian Baink) but said no deal, that's what you are going to do or I am going to write to the Union Minister. (nooo clue how to do that...)

After some good jhapad etc, new Manager came with second-in-command to home with corrected accounts to beg, grovel etc. They also deposited in A26 per E6c's order (prescient or what? Experience already said IT may be slow, but deadly accurate, and fair).

Submitted Revision ASAP (in December) explaining that this was due to the errors by a Nationalized Baink, taxpayer had tried everything possible, etc. Didn't actually owe new payments, but the large error meant that a large refund was now firmly stuck in IT.

CPC B'luru rejected the Revision, but directed taxpayer to Local Assessor in Malloostan.
E6C went to M'stan and got help of the best Auditor firm in town, and explained situation. They said ha ha! IndusInd Baink (not the guilty party here) recently sent a credit card to one of our customers. He brought it in: It was in the name of his late grandfather. When they reported that he had passed away, the bank sent a new card in the name of "The Late XXXXXX".

Anyway, Auditor got new Revisions submitted with Letter to local Ass... Who bounced it to EKM Higher Ups.
Who bounced it back asking to submit Revised Revision of Revision of Revision to CPC B'Luru.

Who bounced it back to Local Assessor.

... it is now bouncing back somewhere between these bozos. The Action List looks like a grocery store checkout tape.
All for a simple error made by the GOI's dear Baink aphsars through sheer laziness and despite dozens of warnings.

Such is the reality of the Tritiya Bhoogol Atishakti.

OTOH, experience from the last time this happened (South Indian Baink blamed Karvy Computing for not reporting the TDS, taxpayer estimated the TDS and reported the unreported interest, and got slammed by IT, rejecting the reported TDS because it didn't show on A26 but gleefully accepting the reported interest and hence demanding back taxes and penalties).
That time, E6C asked SIB to **NOT** report or deduct the TDS because he had already paid it by challan. No dice, the dumbasses went and deposited it. It was now stuck at IT Baboonistan.

(E6C then withdrew all depojits from SIB). Not that the 35 paise hurt them a lot given that they are the preferred Baink of a Certain Community, given the reticence about TDS etc.

Taxpayer put in Revision. Rejected. "No fault of IT dept seen" :roll:
Eventually wrote to Ombudsman. Ignored.
4 years later a mysterious letter came from CPC (this was soon after Modi win) asking WTF all that was about. Provided a succinct form on the web where the facts were reported.

About 2 weeks later, the full refund came with 9.9% compounded interest. :shock:

Such is ALSO the reality of the Tritiya Bhoogol Atishakti.

They just have no Procedures to figure out how to deal with ppl hu r too stupid to be crooked, and hence try to tell the truth. Too rare, hain, in the Land of HarishChandra?

As for the Board of Indian Baink, :evil: :twisted: May their Repaid NPA Loans all be in Paki counterfeit 1000re notes soiled with pakistan. May the ED take away their luxury cars and raid their crooked residences.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby RajeshG » 13 Jan 2017 17:32

http://www.livemint.com/Industry/1lTF2e ... -Cris.html

One in every three micro, small and medium enterprises (MSMEs) has been facing delays in receivables from clients because of demonetisation, causing difficulties in repaying creditors and employees, according to a survey of 1,100 such companies by Crisil Ltd.

Companies in sectors such as steel, textiles, logistics and construction are having a tough time coping with the cash crunch after Prime Minister Narendra Modi announced the withdrawal of Rs1,000 and Rs500 denomination notes on 8 November, the survey said.

However, those engaged in human resource-based services such as recruitment agencies, security services and information technology firms had it relatively easy, the survey said.


At least 9% of those surveyed, accounting for 6% of outstanding debt of the sample, said they will face issues in debt repayment. Most of these are micro enterprises with revenues below Rs2 crore.

Unorganized MSMEs, or those with fewer than 10 employees, are expected to struggle more than their organized counterparts, with 37% of them likely to report negative revenue growth in the second half compared with a quarter of organized players, the survey found.


n terms of regions, south and west India are expected to fare better than the cash-heavy regions of north and east.

“A third of MSMEs in east and north are expected to report negative year-on-year growth in the second half of this financial year compared with 25% in the west and the south,” Crisil said.

Overall, revenue growth estimates for 2016-17, which was expected at 15-20% before demonetisation, is now seen at 6-8%, the survey noted.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby RajeshG » 13 Jan 2017 17:39

http://economictimes.indiatimes.com/ind ... 366040.cms

Growth of bank credit fell to a multi-decade low of 5.1% for the fortnight ended December 23, as drying up of demand in the last two months of the year saw businesses cutting down on borrowing.

Data released by RBI showed that as of December 23, bank lending to businesses individuals and the farm sector stood at Rs 73.48 lakh crore, an increase of 5.1% over the same period of last year.

Going by readily available RBI data, this is the slowest rate of growth since 2000. SBI chief economist Soumya Kanti Ghosh went further to say that credit growth was actually the lowest in over 60 years - since 1954-55 - when it had slowed to 1.7%.

'At 5.1%, credit growth slide reaching a point of no return'

A slowdown to 5.1% in December seems to indicate that credit growth is reaching a point of no return in this financial year.

While there is marginal growth year-on-year, on a year-to-date basis (from April 2016) credit has declined in many sectors," said SBI chief economist Soumya Kanti Ghosh.


Although very little fresh investment was taking place even before demonetisation, there was a consumption push. Crisil's Joshi expects consumption-led growth to return because of "some of the measures likely in the Budget, lower interest rates and if we have good rains. The next fiscal year will see a pick-up. But it will not happen in the January-March quarter." The silver lining appears to be the gains to the government from demonetisation.

"We continue to expect the Income Disclosure Scheme II to net around Rs 1 lakh crore of tax. At the same time, we have cut our estimate of RBI dividend from black cash money not returned to banks to Rs 50,000 crore from Rs 95,000 crore earlier with the bulk (of demonetized currencies) deposited/exchanged," said Bank of America Merrill Lynch in a report.

rahulm
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Re: Currency Demonetisation and Future course of Indian Economy

Postby rahulm » 13 Jan 2017 18:44

Every week the epayments landscape seems to change. For the better.

Yesterday, in Bohari Ali and Budnwar Petha in Pune, even more hardware and electrical vendors have swipe machines and or payTM to the point it has become as common and normal as men peeing any which where :rotfl: good show . Then epayments scene, I mean.

Even my local mithai and hosiery shop now accept payTM.

In Pune's main subzi mandi, a chap squatting in the middle of the road selling only green chillies was accepting payTM payments

Overnight came to Goa and in the morning caught with a a SBI Vengurla staff. According to him, the sarkari officials in the district now prepare lists of items ranging from grain to gold jewellery and give the plebs to buy and provide in exchange for approvals. This way the cash issue is solved, all taxes are paid for and the corruption continues.

So, now, I am making a distinction between BM fuelled corruption and tax paid corrupt transactions. Corruption has now evolved to white corruption :rotfl: how can any gobermint trace bushels of grain and packs of undies ? Will we have a benami chaddi law now ?

this can only be solved by eliminating discretionary powers, simplifying laws and automating a la the passport process.

In Goa things remain the same. Pretty much cash onlee.

TKiran
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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 13 Jan 2017 18:59

^^^^rahulm ji, your confusion is coming from linking demonetization to BM curbing. They are two different things.

Demonetization has totally eliminated fake currency completely. It's a grand success.

Black money is a different beast altogether.

rahulm
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Re: Currency Demonetisation and Future course of Indian Economy

Postby rahulm » 13 Jan 2017 19:02

I understand that. My point is the evolution of BM fuelled transactions to an all taxes paid white corruption. I should find it tragic but I am finding it comedic. At least today.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 13 Jan 2017 19:31

Cement - demonetization.
As a primary ingredient in construction, the cement market might help understand the effect of demonetization.

A Global Cement newsletter has the following:
http://www.globalcement.com/news/itemlist/tag/India

Global Cement is interested in cement markets. Although its early days yet some reactions and data are starting to emerge. Ambuja Cement launched a marketing campaign in December 2016 to help its customers cope with a cashless business environment. The initiative has included working with a bank to operate a helpline assisting people in opening bank accounts as well as putting out the message in various media including sending one million text messages. Clearly, at least one of India’s major cement producers is taking the problems caused by demonetisation seriously.

Alongside this, various reports have trickled out since November 2016 trying to work out the effects of the financial transition on the cement industry. Firstly, the India Cements reported in mid-November 2016 in a financial report that demonetisation had not impacted its cement sales. Deutsche Bank Markets Research then predicted that the policy would reduce cement demand by up to 20% for the last few months of 2016 and then reduce growth by 3% in the first three months of 2017. Its analysts reckoned that the residential sector would suffer the most and that although infrastructure spending might offset this a little, reduced taxation from a punctured property market would also adversely affect infrastructure funding. A report in the Hindu newspaper in early December 2016 feared that cement demand might be reduced by up to 50% in November 2016. It also raised the concerns of the managing director of Shiva Cement who said that contractors were finding it difficult to buy raw materials and pay wages.

Now in early January 2017 the India Ratings and Research credit ratings agency released a research note predicting that cement production growth was likely to fall to 4% for the 2017 financial year ending on 31 March 2017 from a previous estimate of 6%. It reported that production growth rose by only 0.5% year-on-year in November 2016 following a growth rate of 4.3% from April to November 2016 and rates of 5.5% and 6.2% in September and November 2016 respectively. It added that the housing sector constitutes around 65% of cement demand and that this share is likely to fall.

After a strong start to the year the Indian cement industry was looking forward to a growth rate above 5% in its 2016 - 2017 financial year. The figures aren’t out yet and the year isn’t finished but it is looking likely that demonetisation, a direct government policy, has smashed demand for cement in India in the short term.

Global Cement would be interested to hear from any readers in India for their comments on demonetisation and its effect on the cement industry – contact us here

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 13 Jan 2017 19:43

Steel is another possible indicator. Interestingly, November showed little impact, analysts expect a lag in the impact of demonetization on steel.
This from December 6:
http://blogs.barrons.com/emergingmarket ... -pain-yet/
Domestic steel demand was surprisingly steady in November despite India’s surprise move to remove a majority of its currency from circulation, but demonetization is likely to affect supply and demand.
....
“Domestic steel demand was surprisingly steady in Nov despite demonetization. Impact could come with a lag, in our view. Demonetisation could hit production at secondary mills, but may be offset by softer demand. We believe domestic steel prices to rise in the fourth quarter on cost push, but supply overhang remains. We believe demonetization could affect demand and dampen steel mills’ ability to fully pass thru higher costs. We maintain Underperform on Tata Steel (500470.India), Steel Authority of India (500113.India) and JSW Steel (500228.India).

Our channel feedback indicates, sales in retail/ trade segment has been impacted by demonetization. Cash component in this segment is high. Retail accounts for ~30-35% of Tata and JSW’s domestic sales. We believe impact from other end use sectors would come with a lag as manufacturers adjust production plans. Pig iron purchase by foundry units (supplier to auto cos) has slowed. Interestingly, import bookings started to rise Oct onwards as importers expected steel prices to rise in 4Q. However, this has paused post demonetization.

Demonetization could affect both demand and supply: Production from secondary steel producers was largely unaffected in Nov, despite demonetization as per JPC data. Our channel feedback, on the contrary suggested some disruptions to production at smaller secondary steel mills. We expect production at smaller secondary steel mills to be hit, given higher cash linkage and exposure to construction sector. Primary producers could gain share, though this would be mainly in long products segment. Secondary mills account for 70% of long products production. We believe supply impact would largely be affected by weaker demand from sectors like construction (~35% of steel demand) …”

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 13 Jan 2017 20:00

Regarding cement and steel - I expect a slowdown with respect to huge residential projects but infrastructure projects initiated by the government may take up the slack. If housing demand slows on the back of a loss of cash stashes then property prices may get "readjusted"

I cannot speak for the entire country but in a place like Bengaluru no one - absolutely no one is building houses for those who need housing. Residences are being built as "investments" by people who already have places to live to be sold at a profit at some later date. "Dream homes" are being advertised for sucker itivity types - but those will continue to be sold. It is the second or third (or fourth/fifth) home being bought as "investment" that will probably take a hit. Bangalore is full of people who own more than one home. Owning 2-3 or 4 flats seems commonplace. This nonsense has to end somewhere. This is exactly what fuels the black economy with builders and local government raking in moolah in cash.

I expect a loud louuuuuuuud caterwaul from people who say that construction workers, carpenters and tile businesses are starving to death or simply buying rope to hang themselves in the same way that 200,00,000000,00000 vegetable vendors and growers have died since demonetization. At least sales of nylon rope may go up

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Re: Currency Demonetisation and Future course of Indian Economy

Postby chetak » 13 Jan 2017 20:04

shiv wrote:Regarding cement and steel - I expect a slowdown with respect to huge residential projects but infrastructure projects initiated by the government may take up the slack. If housing demand slows on the back of a loss of cash stashes then property prices may get "readjusted"

I cannot speak for the entire country but in a place like Bengaluru no one - absolutely no one is building houses for those who need housing. Residences are being built as "investments" by people who already have places to live to be sold at a profit at some later date. "Dream homes" are being advertised for sucker itivity types - but those will continue to be sold. It is the second or third (or fourth/fifth) home being bought as "investment" that will probably take a hit. Bangalore is full of people who own more than one home. Owning 2-3 or 4 flats seems commonplace. This nonsense has to end somewhere. This is exactly what fuels the black economy with builders and local government raking in moolah in cash.

I expect a loud louuuuuuuud caterwaul from people who say that construction workers, carpenters and tile businesses are starving to death or simply buying rope to hang themselves in the same way that 200,00,000000,00000 vegetable vendors and growers have died since demonetization. At least sales of nylon rope may go up


+1

At worst, the construction workers et al would have gone back to their villages and on MNREGA doles.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby TKiran » 13 Jan 2017 20:06

My father in law came to my house today for "Bhogi paLLu" ceremony of my daughter. He deals with big black money horders, criminals etc, he was saying that there was absolutely no panic for them when the demonetization was announced. For the first 1week, they were all busy with whatever little change they had, to convert it into the new notes, after that they are all into their usual business. All BM horders are very excited that they don't have to deal with FICN anymore. This FICN was such a nuisance and by 2011, they were complaining to the police and started putting enormous pressure to curb FICN. There was more than 50% time spent by the police to find the source of FICN, but once the currency changed hands 3 times, the police used to face dead end. And what was worse was that by 2012, even police was not able to find the difference between FICN and original. There was enormous pressure on home ministry, but state police could only go to the extent of home ministry, beyond that they could not do anything. Even chandrababu naidu was pleading with Modi to do something about it. Only a leader with b****s could do it, and Modi did it, successfully, Jai Ho.


Paul
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Re: Currency Demonetisation and Future course of Indian Economy

Postby Paul » 13 Jan 2017 22:34

^Philip had posted this a while ago.

UlanBatori
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Re: Currency Demonetisation and Future course of Indian Economy

Postby UlanBatori » 14 Jan 2017 00:38

And it is another Steele Report. Solid pakistan

KJo
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Re: Currency Demonetisation and Future course of Indian Economy

Postby KJo » 14 Jan 2017 01:14



ha ha another trick of defaming Modi by making him look like a US stooge. :rotfl:

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Re: Currency Demonetisation and Future course of Indian Economy

Postby ShauryaT » 14 Jan 2017 03:49

The dilution of the autonomy of the RBI, first with the committee approach with finance ministry on the rate setting committee and with the governor with only a vote as a tie breaker and now this direct appointment of an officer to coordinate currency management. The approach is clearly statist and not towards building of institutions. The loss of transparency post Dec 10 also does not instill confidence.

'Humiliated' By Post-Notes Ban Events, RBI Staff Write To Urjit Patel

Mumbai: Feeling "humiliated" by events since demonetisation, RBI employees on Friday wrote to Governor Urjit Patel protesting against operational "mismanagement" in the exercise and Government impinging its autonomy by appointing an official for currency coordination.

In a letter, they said autonomy and image of RBI has been "dented beyond repair" due to mismanagement and termed appointment of a senior Finance Ministry official as a "blatant encroachment" of its exclusive turf of currency management.

"An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time. We feel extremely pained," the United Forum of Reserve Bank Officers and Employees said in the letter addressed to Dr Patel.

Commenting on "mismanagement" since November 8, when note ban was announced, and the criticism from different quarters, the letter said, "It's (RBI's) autonomy and image have been dented beyond repair."

At least two of the four signatories --- Samir Ghosh of All India Reserve Bank Employees Association and Suryakant Mahadik of All India Reserve Bank Workers Federation --- confirmed the letter. The other signatories are C M Paulsil of All India Reserve Bank Officers Association and R N Vatsa of RBI Officers Association.

The forum represents over 18,000 employees of the RBI across the ranks, Mr Ghosh said.

The letter said appointment of an officer to coordinate currency management is a "blatant encroachment" on the exclusive jurisdiction of the RBI on currency and accused the Government of "impinging on RBI autonomy".

"May we request that as the Governor of RBI, its highest functionary and protector of its autonomy and prestige, you will please do the needful urgently to do away with this unwarranted interference from the Ministry of Finance, and assure the staff accordingly, as the staff feel humiliated," it said, soliciting "urgent action".

Also Read: RBI Says Recommended Notes Ban After Government's Advice

The RBI has been discharging the role of currency management for over eight decades since 1935, it said, adding the central bank does not need "any assistance" and the interference from FinMin is "absolutely unacceptable and deplorable".

The letter comes days after concerns about RBI's functioning being raised by at least three former Governors -- Manmohan Singh (former PM), Y V Reddy and Bimal Jalan. Former Deputy Governors, including Usha Thorat and K C Chakrabarty, have also voiced their concerns.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shiv » 14 Jan 2017 07:09

ShauryaT wrote:
"An image of efficiency and independence that RBI assiduously built up over decades by the strenuous efforts of its staff and judicious policy making has gone into smithereens in no time.

:rotfl: Hyperbole..

The RBI had no image worth writing home about - good or bad.

If they have written to Urjt Patel AND released the letter to the press (NDTV) - clearly the intent is more than just an appeal to the RBI governor.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby UlanBatori » 14 Jan 2017 07:23

They can write a whole page?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby ShauryaT » 14 Jan 2017 07:31

UlanBatori wrote:They can write a whole page?
Apparently....Image

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Re: Currency Demonetisation and Future course of Indian Economy

Postby ShauryaT » 14 Jan 2017 07:41

shiv wrote:If they have written to Urjt Patel AND released the letter to the press (NDTV) - clearly the intent is more than just an appeal to the RBI governor.
The story is in all the channels. Sites like NDTV do only syndicated feeds 80% of the time, the copy is not their original work.


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