Indian Economy News & Discussion - Aug 26 2015

[hanumadu]

Exactly. Like someone in Dharavi worrying about how to organize the 60" flatscreen in his living room in future.

Actually that's not a far fetched idea. Most people in Dharavi seem to have a colour TV and cable, which our house did not have when I was growing up. Relative cost of real estate vs TV/salary is why there are slums. In a few years, relative cost of a big flat screen TV will be what a 20 inch colour tv is now

[Suraj]

I don't think there's any connection between encouraging all investment in manufacturing - even low end investment - and the middle income trap. Let's look at the case of the Chennai Nokia plant.

At its peak, Nokia's Sriperumbudur factory was the world's largest mobile phone plant, with 8,000 permanent employees working three shifts, producing more than 15 million phones a month.

Nokia had no such plans when they first opened that plant. It just turned out that productivity and enterprising capabilities of those whom they hired far exceeded expectations, such that at its zenith it was producing nearly 175 million phones a year.

What I'm trying to say here is, in multiple instances we've demonstrated that given a seemingly 'screwdriver job', we end up doing much more and gaining much greater expertise. That plant led to the creation of a network of subcomponent, tool and service suppliers in that area. Most of those will have gone dormant now. But the fact that they accomplished such things matters. It shows that given initial investment in production, our people have the enterprise to make much more of it than just turning screws - which is essentially what the Nokia plant originally was to do.

It's just somewhat laughably premature to bring up issues like the middle income trap to the question of whether or not we should encourage low value mass manufacturing investment.

[Suraj]

Exactly. Like someone in Dharavi worrying about how to organize the 60" flatscreen in his living room in future. Let's worry about getting over the 'low income with lots of new people entering the workforce' trap for now.

China got over that and now laying off millions of steel and coal workers. Do we want to avoid unemployment and unrest now only to cause it later. There has to be a road map to avoid such a situation. Screwdriver giri is fine for now but there must be a plan to absorb those same people into screw driver giri from foreign companies to domestic companies.

Boss, the first step in that plan is to encourage 'screwdriver giri' because there are millions entering the workforce each year without job potential right now, unless we push the Make In India case harder and encourage such manufacturing presence.

FWIW, the Chinese have been through multiple cycles of unemployment and growth, and the steelworker example is VERY bad one. That's entirely a self created problem on their part. They produce more steel than the rest of the world combined. They tried to deal with it by dumping that steel abroad. When they can't they lay off people. That's an entirely different context from our own. Back in the late 1990s, they laid off about 350,000 SOE (their version of PSU) employees while restructuring the SOE sector. Most of those were absorbed into the 2000s infrastructure building rush.

There are things we need to do NOW. There's no point in pausing them while wasting effort considering maybe issues that are at least 1.5 decades out.

[amit]

^^^^^
Let's also not forget that all the Tiger economies, like South Korea for example, started with screwdriver giri and then graduated to more high end world class manufacturing (Samsung is a good example). That's a cycle that India needs to take.

Chinese mobile phone industry is another good example. They also started off with screwdriver giri - they still do that, eg. Foxconn and Apple. But along with that they have also built up the skill and knowledge base to create phones like the Huawei Mate 9 and the Oppo phones. Each one of them can give the best of the best a run for their money. This expertise was not a ab initio development that happened one fine day.

You can't just enter manufacturing at the high end, you need to work your way up. And in the meantime you provide employment to new job entrants. I don't know how many folks are tracking this but a lot of youngsters who are first generation literates (around matriculation or basic college degree) are coming out of the agricultural sector. These folks don't want to work the fields like the parents.

These are the people (and their city equivalents in the prosperity scale) who are the ones who will do the screwdriver giri. In turn their children will get a better education than they have and will then go into more skilled jobs. That's how it has worked in all economies in the world, India can't be an exception.

I'm sorry to say this, but this disdain for screwdriver giri, is an elitist mindset and doesn't take into account the skill level of the manufacturing sector in India. A vast majority of the Indian workforce are only skilled, as of now, for screwdriver giri. You can't just create a German or Japanese workforce, in terms of skill levels, out of thin air. Neither can you wait for it to develop before jumping into manufacturing via Make in India. That will be like waiting for Godot.

[Singha]

a fine example of the failure of old govt led engineering / manufacture I saw on recent mumbai trip

http://www.richardsoncruddas.com/ - must have been acquired by GOI as a sick unit at some point

I dont think they make anything anymore, but are still in possession of prime and large disused industrial property. they have converted one shed into a AC function hall for exhibitions, marriages, ample parking etc. the site I visited was byculla where inevitably it was rented out for 1 day to distribute race bibs. rest of sheds were rusty and had no machinery on the floor....a chowkidar or two is all that remains.

pvt firms like tatas, godrej, ITC in possession of urban industrial or corporate office land have moved into apartments or hotels in these locations like ITC windsor manor in blr

HMT has closed in mekhri circle....prime property....had rented out to IT dept a few floors ... not sure whats the scene.

we need a constant blood of energetic new cos to replace the death of the old herd

[hanumadu]

I don't think there's any connection between encouraging all investment in manufacturing - even low end investment - and the middle income trap. Let's look at the case of the Chennai Nokia plant.

Boss, the first step in that plan is to encourage 'screwdriver giri' because there are millions entering the workforce each year without job potential right now, unless we push the Make In India case harder and encourage such manufacturing presence.

There are things we need to do NOW. There's no point in pausing them while wasting effort considering maybe issues that are at least 1.5 decades out.

This expertise was not a ab initio development that happened one fine day.

You can't just enter manufacturing at the high end, you need to work your way up.

...
I'm sorry to say this, but this disdain for screwdriver giri, is an elitist mindset and doesn't take into account the skill level of the manufacturing sector in India.

Multiple strawmen here. No one implied large investments in manufacturing leads to middle income trap nor did I say we should not encourage screwdriver giri. I only said when we run out of growth through low end assembly job, we must be ready for the next phase and for that investment and preparation should start from now.

1.5 decades is not too far out.

Chinese mobile phone industry is another good example.

But not their car industry. Shouldn't we try to do better than China?

[hanumadu]

At its peak, Nokia's Sriperumbudur factory was the world's largest mobile phone plant, with 8,000 permanent employees working three shifts, producing more than 15 million phones a month.

Nokia had no such plans when they first opened that plant. It just turned out that productivity and enterprising capabilities of those whom they hired far exceeded expectations, such that at its zenith it was producing nearly 175 million phones a year.

What I'm trying to say here is, in multiple instances we've demonstrated that given a seemingly 'screwdriver job', we end up doing much more and gaining much greater expertise. That plant led to the creation of a network of subcomponent, tool and service suppliers in that area. Most of those will have gone dormant now. But the fact that they accomplished such things matters. It shows that given initial investment in production, our people have the enterprise to make much more of it than just turning screws - which is essentially what the Nokia plant originally was to do.

It's just somewhat laughably premature to bring up issues like the middle income trap to the question of whether or not we should encourage low value mass manufacturing investment.

You are only proving my point. Once Nokia decided to leave India, there was no Indian manufacturer to absorb the ancillary industry and skilled work force created by it.

[Suraj]

I think references to middle income trap in any context in the current economic conditions of the country are far too premature to be considered seriously.

You are only proving my point. Once Nokia decided to leave India, there was no Indian manufacturer to absorb the ancillary industry and skilled work force created by it.

That's a fair point, and yet the solution to it is to encourage absolutely anyone who would like to manufacture in India, to come and set shop on our shores without any hesitation, rather than pausing to consider concerns a lot further out. It ensures redundancies such that not everything is tied to the fate of a single company.

15 years may 'not be that far out', but we could have been a lot closer to it if we had not wasted decades sitting around generating very little employment growth in the low value mass manufacturing sector through what was the fastest growth period the world has seen, first sniffing at the low value manufacturing business, and then hamstringing ourselves with extremely poor policymaking.

If anything, India's problem isn't avoiding the middle income trap. It's getting out of the low income trap faster. The likes of Malaysia had no higher engineering and scientific base that we did. We overinvested at the upper end (IITs etc) and underinvested in the lower end (ITIs etc). Given a sufficienty large base of low value manufacturing generating wealth and a larger skilled labor base, we've a far better chance of negotiating the middle income threshold than they did.

We have people skilled at building rockets to Mars and make $100 billion a year in IT services exports, but have trouble building something as simple as ergonomically designed footpaths, kerbs and basic cement-pouring-giri urban infrastructure work of the kind, uniformly across the country. So while your point is valid, it's premature, by a long shot.

[A_Gupta]

From the Financial Express:
http://www.financialexpress.com/opinion ... th/524058/
"Indian economy at cusp of recession? Reforms fail to provide critical mass to push up growth"

A health-check shows most lead indicators still weak, some more fragile than before. Exports and IIP gained some traction over a negative base, but it is uncertain if these will hold up beyond a few months. Capacity utilisation remains where it was in last several quarters. Real bank credit growth has fallen further to zero; credit to industry saw deep contraction. Non-performing assets rose sharply; with demonetisation, these could deteriorate further.

Corporate top line, volumes’ growth is mostly subdued; margin pressures re-appeared with trend reversal in input prices. The infallible proxy for business health could be real corporate tax revenues-trend growth fell sharply to 1.5% in April-December 2016 from 8.1% in 2015-16 when deflated with WPI and turned negative when adjusted with CPI. Likewise, real excise duty collections (corrected for additional revenue measures, ARMs) that track manufacturing activity dropped to 2.3% in April-October, 2016 from 7.5% in 2015-16 when deflated with WPI for manufacturing.

Post-demonetisation, these trends have worsened further. Puzzling where the optimism comes from!

[A_Gupta]

http://www.forbes.com/sites/timworstall ... e6ae0b72fc
"Arun Jaitley: India's Tax Revenues Are Above Budget Despite Demonetisation"

[A_Gupta]

"Fiscal deficit for FY16 was 4.31 per cent: CAG
According to India’s top auditor, fiscal deficit stood at 4.31 per cent of the GDP in FY16 versus the provisional actuals of 3.9 per cent, reported by the government."

http://indianexpress.com/article/busine ... g-4490185/

[Suraj]

GST to ease loan access for millions of firms

The implementation of Goods and Services Tax (GST) should drive nearly seven million small businesses to the formal digital economy and help them get easy access to loans, said Nandan Nilekani, the technology entrepreneur and co-founder of Infosys who was tapped by the government to run an ambitious identity-recognition programme, on Friday.

The new unified taxation system, which is scheduled to be implemented later this year, will bring in millions of unorganised businesses on one platform. This would effectively, Nilekani believes, help them get loans using digitalised data.

Nilekani pointed out, though the country has over 60 million businesses, fewer than one million are incorporated and only a few thousand are listed. A digital trail through GST would help these firms get access to formal credit at a much lower cost, which would help more small enterprises get into the formal economy.

Nilekani headed the empowered group on information technology infrastructure on GST.

Rural wage growth defies demonetisation, rises to 7.3%: Nomura

Defying demonetisation, nominal rural agricultural wages growth rose to 7.3% in November on year-on-year basis, largely owing to hike in minimum wages announced by the government in September last year, financial services major Nomura said in a report.

Interestingly, the report said that the steady wage growth suggests a likely release "of pent up demand after remonetisation".

"Nominal rural agricultural wages growth rose to 7.3% year-on-year in November 2016 (the month demonetisation was announced) from 6.9% in October, remaining well above the previous 12-month average of 4.8%," Nomura said in the report.

"We expected rural wage growth to moderate in November as we thought demonetisation would hurt the more cash-reliant rural economy (two-wheeler sales did indeed decline by 5.9% year-on-year in November and by 22% in December)," it added.

Currency-GDP ratio to reach 9% by March: Nomura

Money in circulation is rising again in India post-demonetisation period and at the current rate, currency-to-GDP ratio will reach about 9 per cent by March -- sufficient to stabilise economic activity, says a report.

According to Japanese financial services major Nomura, from 11.8 per cent of GDP on November 4, 2016 (pre- demonetisation), currency in circulation dropped to all-time low of 5.9 per cent on January 6; since then, it has risen for two straight weeks to 6.5 per cent as of January 20.

"This suggests that remonetisation is progressing well, as deposits of old notes into banks (currency outflow) has stopped (the window to deposit old notes ended on December 30), while the Reserve Bank is printing new notes (currency inflow) for circulation," Nomura said in a research note.

It believes that at the current pace, the currency-to-GDP ratio will rise to around 9 per cent by March-end.

Govt plans to revive colonial-era gold mines with $2 billion reserves

Government is planning to revive a cluster of colonial-era gold mines - shut for 15 years but with an estimated $2.1 billion worth of deposits left - as the world's second-largest importer of the metal looks for ways to cut its trade deficit, officials said.

State-run Mineral Exploration Corp Ltd has started exploring the reserves at Kolar Gold Fields, in the southern state of Karnataka, to get a better estimate of the deposits, according to three government officials and a briefing document prepared by the federal mines ministry that was seen by Reuters.

The ministry has also appointed investment bank SBI Capital to assess the finances of the defunct state-run Bharat Gold Mines Ltd, which controls the mines, and the dues the company owes to workers and the authorities, said the officials, who are involved in the process.

India, the world's biggest gold importer behind China, spends more than $30 billion a year buying gold from abroad, making the metal its second-biggest import item after crude oil.

[Kakkaji]

On the "screwdrivergiri", and "foreign companies will not teach us anything and keep us backward" debate:

Name one foreign MNC that has been in India for 10+ years and still maintains a monopoly.

OTOH, name any global MNCs that do not have Indians in middle and high ranks in management or technical areas.

We Indians (and Chinese) are clever, hardworking, and ambitious people who, when they are not held back by the political set-up, work, learn, and advance whenever/ wherever we get a chance.

Bring LM/ Boeing/ Dassault to India, initially with screwdrivergiri, and I can bet you my pension that in 10 years, a large percentage of their global supply chain, and their management, will be in India.

For God's sake, drop your Nehruvian blinkers, folks!

[A_Gupta]

Indian consumers' confidence remains high:
http://indianexpress.com/article/busine ... e-4477032/

Indian business's confidence dipped, but remains optimistic:
http://www.business-standard.com/articl ... 048_1.html

Investor confidence seems to be there (I can't point to anything specific) and of course the government is bullish.

It is funny how all this is at variance with the Financial Express data I posted above which makes for a gloomy outlook.

[Suraj]

Consumer and investor confidence is a leading indicator of future growth while NPA and capital formation data is a trailing indicator of past problems.

[Suraj]

World Steel output data is available for all of 2016 now:
WorldSteel 2016 data
India produced 95.6MT of steel, up from 89MT in 2015. Very close to Japan, who are at 104.7MT. Strong performance this year will enable us to overtake them as the second biggest steel producer after PRC, since they've been stagnant at 105ish for a while now. The remaining spots in the top 5 are taken by US with 78MT and Russia with 70MT, and SoKo close behind at 68MT in #6 position.

[Singha]

Worth a read...mohandas pai

http://www.bloombergquint.com/union-bud ... handas-pai

[g.sarkar]

World Steel output data is available for all of 2016 now:
WorldSteel 2016 data
India produced 95.6MT of steel, up from 89MT in 2015. Very close to Japan, who are at 104.7MT. Strong performance this year will enable us to overtake them as the second biggest steel producer after PRC, since they've been stagnant at 105ish for a while now. The remaining spots in the top 5 are taken by US with 78MT and Russia with 70MT, and SoKo close behind at 68MT in #6 position.

That is great news. I remember a time when the US produced more steel in one day than what India produced in one year. This changed in my own lifetime. If we can beat that, we will also beat the lizard, just a matter of time. Western Europe and UK has no business producing steel, with its high cost of labor and other running costs. India should take that over.
Gautam

[NRao]

Worth a read...mohandas pai

http://www.bloombergquint.com/union-bud ... handas-pai

Actually, the legacy of MMS. Or the puppeteer.

Job creation sank from 2004ish onwards. Even while the GDP grew.

What s/he started, the bureaucracy will complete.


Job creation is - by far - the number 1 priority of the nation.

[Suraj]

World Steel output data is available for all of 2016 now:
WorldSteel 2016 data
India produced 95.6MT of steel, up from 89MT in 2015. Very close to Japan, who are at 104.7MT. Strong performance this year will enable us to overtake them as the second biggest steel producer after PRC, since they've been stagnant at 105ish for a while now. The remaining spots in the top 5 are taken by US with 78MT and Russia with 70MT, and SoKo close behind at 68MT in #6 position.

That is great news. I remember a time when the US produced more steel in one day than what India produced in one year. This changed in my own lifetime. If we can beat that, we will also beat the lizard, just a matter of time. Western Europe and UK has no business producing steel, with its high cost of labor and other running costs. India should take that over.
Gautam

Yes, we've come a long way from then. A decade ago we were in #5 or 6 spot, behind US and Russia, keeping up with Germany. By end of this decade we'll be clear #2 position as production reaches around 150MT/year or more.

Elsewhere, we're also producting a lot of cement, with production significantly due to improve from this fiscal year on, due to recent production capacity increases, since our production capacity of 285MT/year earlier was almost saturated by 280MT/year consumption

Just the earlier level of 280MT/year is a few times more than that of all following countries. E.g. US produces 90MT. With production enhanced to 400MT+/year, we'd be producing about 300-350MT more than anyone behind us in the list of countries among major cement producers.

[SaraLax]

From the Financial Express:
http://www.financialexpress.com/opinion ... th/524058/
"Indian economy at cusp of recession? Reforms fail to provide critical mass to push up growth"

Really ?

I am an engineering graduate and may not have any academic qualifications to provide a proper opinion on economic forecasts and etc ... but ... To state that the economy is on cusp of recession seems to be a garbage statement from an economist considering that for an economy to go into recession you need atleast 2 consecutive quarters of REDUCTION IN GDP (do not misunderstand it as reduction in growth of GDP).

So compare the title statement of Indian economy at cusp of recession? and the actual reality of an economy growing at 7% nearly (even if you assume a worst case 2% reduction this quarter just because of Demonetization and thus resulting in an economy clocking 5% GDP growth). Does this economist and even Financial Express really mean .. that .. Indian GDP is going to fall in value in absolute terms in the coming quarters ?.

BTW - I hate news articles in any media outlet that uses QUESTION MARKs in their article titles. IMO - it sort of shows that the content in them is mostly not true and could well in reality be a hit-job masked as an opinion article. the news outlet is saving itself from defamation & etc by putting in the stupid question mark in article title.

[nandakumar]

Old school journalism frowned upon question mark in the headline. Unfortunately in this day and age of clickbait digital media journalism question mark headlines have become mainstream journalism.

[A_Gupta]

Not sure where to put this:
https://www.rbi.org.in/Scripts/Notifica ... 839&Mode=0
RBI Notification:

2. At present, there is no restriction on an Indian Party with regard to the countries, where it can undertake Overseas Direct Investment. In order to align, the instructions with the objectives of FATF, on a review, it has been decided to prohibit an Indian Party from making direct investment in an overseas entity (set up or acquired abroad directly as JV/ WOS or indirectly as step down subsidiary) located in the countries identified by the FATF as “non co-operative countries and territories” as per list available on FATF website www.fatf-gafi.org or as notified by the Reserve Bank of India from time to time.

You can see these countries on the map here:
http://www.fatf-gafi.org/countries/#high-risk

[Singha]

x-posted from the understanding the US thread.

imo in the broader context, every ecosystem runs its course and the usa society and economy is no longer in a position to suck a vast number of STEM or itvity students and workers from all over and give them a seat at the table and a long term future. nothing good or bad in it, just evolution and the tides of economic structures as they change over time. whoever has something in hand (ie the country) will always be loathe to welcome more competition just as indians would not welcome 200mil bangladeshis integrated into a economy still struggling to create jobs to match growth rate.

so the fat blob of indics who inside in 90s and early 200s represent the stomach of the python, with the front part reaching back into 1960s in a thin mostly F1->GC STEM chain and another thinning part post 2005 thats likely to get even thinner. in future we are more likely to see just selected Phd students go there as I am sure laws will be enacted to accomodate the local students and minorities more. visa mills will be hit - hard.

I think its almost certain the indian IT industry will be hit hard on the h1 and L1 front. more preference will be given to US cos hiring locally there other h1 or from f1 opt pool.

in the wider pov, certain nations like india, china, south korea, taiwan and japan whose students have benefitted a lot from the availability of the US univ system to "export" themselves into the US have to plan for a future in which the careers of their bright and aspirational pupils do not depend on the whims and mercies of the US. this means pulling our pants up on a lot of fronts because we have a lot of good students and lag the most among the names I mentioned in the other stuff - liveable cities, promotion of r&d in univs and "national champions" , tieups with foreign univs, bringing down the cost of private education by govt decree and oversight and stop them being black money mills ..... extortion schemes like BLR and GGN which provide poor civic services , extract huge bribes from the upper middle class (tanker water, diesel for generators, road taxes, RTO, property regn) have to wound up with a iron mace and put back on track if we are to compete with east asia....and the world. use of resources like water and improvements in farming are also key. we cannot have a failed farming sector with a rebellious horde of 250 mil peasants always in distress.

else we will have a lost generation of people with jobs well below their education & potential , frustrated, ripped off by all, ... the kind of constituency who formed the initial elite core of naxals in WB. with post grad medical fees in pvt education nearly 1 crore and more than that for fields like radiology, who else but those lucky to get into limited govt medical colleges can dream of being a doctor?

the clock is TICKING and has been ticking since 15 years atleast, while the UPA in turns dithered , robbed, did some good things like expand the II* over the howls of the MUTU crowd ..... Namo has to keep a hawks eye on things, be a 2 term PM and hand over the baton to someone like him for another 2 terms if the country is make it out of the evolving scenario into high middle income league with a stable and slightly declining population graph from then on until end of century.

though the Cheen elite hold the country in suspicion and making sure all their $$ and kids are parked abroad, their middle class is still better off than india in terms of jobs and prospects due to a fat tail of growth since 1980s. competition is still brutal though, as in all of east asia. japanis will build robots to replace humans and manage fine.

[A_Gupta]

I was told recently that in the engineering colleges in Kerala, few want electronics or computer science; the top choices are mechanical and civil engineering.

[Yagnasri]

If kungfu fighter thinks that increased tax collections are a sign of good economy for the political leaders in power, he is mistaken. Job creation is. So far he almost did nothing in that directly. Jobless growth is not going to help our nation wherein huge number of young people are entering job market year after year.

There are virtually no new projects on the production side. None. No significant expansion of existing projects. Most of the infra projects are getting stalled. Unless he do something serious to rectify the situation, it may get worse.

[Prasad]

We needed a massive push into education around 2000 when growth started kicking in. We've lost nearly 15 years' time to setup a whole bunch of world class universities by calling to PIOs and NRIs by playing Swades tune and monetary enticements. Still not too late, if we start showing decent growth again, in terms of jobs and outlook. And ffs, get rid of the 93rd amendment.

[chetak]

If kungfu fighter thinks that increased tax collections are a sign of good economy for the political leaders in power, he is mistaken. Job creation is. So far he almost did nothing in that directly. Jobless growth is not going to help our nation wherein huge number of young people are entering job market year after year.

There are virtually no new projects on the production side. None. No significant expansion of existing projects. Most of the infra projects are getting stalled. Unless he do something serious to rectify the situation, it may get worse.

which infra structure projects are getting stalled??

The congis mined the ground with the land acquisition, MNREGA, RTE act etc before they departed just to hobble this govt. They emptied the banks and also left the cupboard bare and saddled the govt for years to come with massive NPAs on huge loans to friends and family.

The major mistake Modi made was not bringing out a white paper on the state of the economy when he took over. So he kept the petrol prices high so as to to bring in some much needed money. He has done much with the little leverage he had left to play with, mainly because he kept the petrol prices high and the tax moolah coming in.

He has had to watch his back in addition to moving forward, with many mediocre colleagues gumming up the works. He only has a small handful of trustworthy troops. The IAS by and large is silently against him, sabotaging him at every turn with the concerned ministers just unable to control their staff and baboo(n)s. The finance min and the ED are prime examples, with the rampaging MOD baboo(n)s not far behind.

Fingers crossed, but he has done remarkably well against all odds so far. He has rammed through the GST, and if he gains control over the RS he can breathe easier.

The friends and family loans were expected to be extended as something of a fait accompli thus pushing the govt and the banks into greater instability affecting India's international standing and reputation. Some pretty savvy tango has gone on behind the scenes to keep the ship of state steady and moving at a fast clip. Jetli and gang have had nothing to do with any of this, the man simply isn't that much of a risk taker. RRR realized what was happening and he tried to slow things down with his "policies" which ultimately led to his own untimely demise.

Demon was a stroke of genius which barely escaped the massive sabotaging by the mostly foreign owned private sector banks as well as PSU banks. Heads have already started to roll with many be-headings already having taken place and many many more to come. This concerted conspiracy has to be investigated in depth.

In the meanwhile, the payoff has already started to kick in, much to the dismayed chagrin of the opposition.

Job creation has to come from investments by individuals as the govt can do only so much. Credit is available but many are wary of taking it because recoveries will now be swift as well as guaranteed with siezure and auction of assets. Many of the previously well connected big boys have been leaned upon to liquidate assets to pay off their bank liabilities.

Power is freely available, money is also there for serious players, not nautanki artists. Roads, rail and sea connectivity is increasing by the day because of the govt investments and sincere efforts of gadkari as well as prabhu.

so where are the entrepreneurs??, the big industrialists, the MSME and small scale folks who actually form the bulk of the employment generators?? They are probably waiting for "conditions" to improve in terms of assured markets and guaranteed returns with no risk to themselves. This will never happen.

If one doesn't take the risk, then there is no profit. Modi cannot be held responsible for everything. He can provide the infrastructure which he is doing as best as he can under the circumstances.

It takes two hands to clap,no??

[A_Gupta]

I think in raising India's global competitive index from 71st rank to 39th rank in two years the Modi sarkar has done the kind of thing the government is supposed to do; the private sector is supposed to take advantage of that.

[Yagnasri]

I am not holding NM as responsible. But MoF is required to do more. I have some personal knowledge on these projects and that is why I wrote what I wrote. 10 Years of rubbish created over borrowings by cronies and as of now, there is no one left to take more projects other than few like Adani. One of the most worrying aspects of the present conditions is the reported lack of demand for steel. C system depended on real estate speculation, and that got crashed from 2014 and DeMo also ensured that black money can not be used easily now. So RE contribution to GDP growth is gone. SME lending stopped long back when UPA allowed cronies to take huge and unviable loans and bankers have not yet unlearned that idea. So SME lending is gone.

So Unless there is a serious leadership in MoF this situation will not be improved. Kungfu fighter is not doing anything. We have no real motivation to do MII even now.

[chetak]

I am not holding NM as responsible. But MoF is required to do more. I have some personal knowledge on these projects and that is why I wrote what I wrote. 10 Years of rubbish created over borrowings by cronies and as of now, there is no one left to take more projects other than few like Adani. One of the most worrying aspects of the present conditions is the reported lack of demand for steel. C system depended on real estate speculation, and that got crashed from 2014 and DeMo also ensured that black money can not be used easily now. So RE contribution to GDP growth is gone. SME lending stopped long back when UPA allowed cronies to take huge and unviable loans and bankers have not yet unlearned that idea. So SME lending is gone.

So Unless there is a serious leadership in MoF this situation will not be improved. Kungfu fighter is not doing anything. We have no real motivation to do MII even now.

yagnasri saar,

I understand where you are coming from. Always a pleasure to read your informative posts.

I truly appreciate your unique perspective and niche knowledge.

This MOF is not the one to lead by example.

He is a drawing room type, not the rough and tumble type to fight it out in the trenches and take on all comers. His motivations and compulsions are not ideological and hence the passion and fire is not there. He is more of an accommodating, consensuses building and compromising type who is loathe to make the omelette by breaking eggs and sees all connections as valuable assets in terms of resources to be hoarded and used when needed. His baboo(n)s have taken full advantage of his lazy affability and have taken him for a ride. He is too comfortable to be corrupt and hence does not recognize deception when he sees it. The baboo(n)s pass off everything with some excuse that he swallows hook, line and sinker.

Modi also did not do serious housekeeping when he first arrived in dilli. When your opponents expect you to do something and are awaiting the fall of the axe with a fatal resignation, simply go ahead and do it. Just don't over think it.

Instead, if you put someone on your head by declaring him indispensable he will only piss on your head. Modi should have first and foremost sorted out the effing baboo(n)s and the press. The termites have burrowed in too deep for any remedial measures now. The congis are in command of crucial levers as far as information processing, secrecy and control is concerned. Modi has given these baboo(n) guttersnipes a free hand and hobbled his cabinet by tying their hands.

Modi is appearing indecisive by not proceeding against many congi big wigs who are daily mocking him. You have a huge numbers in parliament, just go ahead and leave them bleeding in the dust. A few savage examples will sort out everyone.

No use in having come this far and not living up to the expectations of the people who elected you. They may not be so nice to elect you once again, the next time around.

Roads, ports, etc are OK but the people need some public spectacle like the roman used the gladiatorial shows to keep the public enthralled. Court cases and prison terms will serve the purpose now.

So, why not do the gladiatorial shows and good governance together so that people know that you are on their side and are also looking out for them by taking on the creeps??

[Singha]

+72

We need bread and circus to appease the mob

Inc has become very bold...

[Marten]

Start with the damaad. Do not expect NaMo to forget the entire show of 12 years. Retribution will come and will be harsh.

Focusing on the middle class will get enough votes to help indirect taxes overtake direct taxes.That alone will help garner support. The key is managing the fine balance between populism and better governance. I think the strategic move should be to continue building a broader base with populist measures while also pushing through key reforms.

[Yagnasri]

Please check my personal tweet on this matter.

[chetak]

Start with the damaad. Do not expect NaMo to forget the entire show of 12 years. Retribution will come and will be harsh.

Focusing on the middle class will get enough votes to help indirect taxes overtake direct taxes.That alone will help garner support. The key is managing the fine balance between populism and better governance. I think the strategic move should be to continue building a broader base with populist measures while also pushing through key reforms.

populism always does well in an election year.

Keep the powder dry and don't waste too much of it in state elections. The 2019 is the grand prize after which Modi will hopefully make his mark on history.

[Gus]

I was told recently that in the engineering colleges in Kerala, few want electronics or computer science; the top choices are mechanical and civil engineering.

In TN as well. many of the 'me too' colleges that spring up in the last decade are struggling to fill their CS classes.

but the top colleges still have their mech, civil etc grads hired en masse at campus by IT companies.

[Prasad]

There are fundamental issues that need to be handled by NaMo. Freeing up and lighting up education sector is key to longterm growth. 2.5 years and no movement on this one major issue. With 4 years of Trump, if he goes ahead with the racist nonsense of his 2nd in command, it'll lead to a lot of resentment and movement of educated and trained personnel which oirope and uk and oz can absorb only to a certain level. If given the right nudge, they will come back and work here. How many came back on the prospect of a booming india, just image.

If we can replicate one Tsinghua University in the next five years, I'll be glad. That is part of why the US succeeds. Think china sees it too. We have to get moving.

[Suraj]

Please keep this thread to economics, not political actions. Damaad etc are NOT suitable for this thread.

[hanumadu]

There are fundamental issues that need to be handled by NaMo. Freeing up and lighting up education sector is key to longterm growth. 2.5 years and no movement on this one major issue. With 4 years of Trump, if he goes ahead with the racist nonsense of his 2nd in command, it'll lead to a lot of resentment and movement of educated and trained personnel which oirope and uk and oz can absorb only to a certain level. If given the right nudge, they will come back and work here. How many came back on the prospect of a booming india, just image.

If we can replicate one Tsinghua University in the next five years, I'll be glad. That is part of why the US succeeds. Think china sees it too. We have to get moving.

+1. 20 billion for 10 technical universities with 2 billion endowment each. Make that 20 billion every year for the next 10 years. Pay internationally competitive salaries and attract the best talent to train our students. The problem a lot of countries have is that they possess the infrastructure and qualified people to teach, but lack of students. Even a second tier university in the US has an all PhD staff from a top tier university. But the students are mostly foreign. India's problem is the reverse. Plenty of students eager to learn but no where to learn.

[Hari Seldon]

^+1 on the edu sector. Heck, the sector is a major money-spinner as well. The $$$ US univs get from phoren students! And the forex we lose to student tuitions.... (of course, it comes back as remittances a decade down I guess)...

Just senseless that we haven't freed the edu sector up. We have all the requisite factor inputs lying around - abundant intellectual and human capital in our disapora, HUGE demand or quality edu within the country....

Just give *all* Higher-ed institutions the same rights and privileges currently available only to minority run ones today and you'll see a boom in the sector.

A half-decent regulator can weed out the fly-by-night looters and the market will sort out the rest of them - which univ is how good or bad in which area etc. JMTPs only.