Indian Economy News & Discussion - Aug 26 2015

Yagnasri · Post by **Yagnasri** » 31 Jan 2017 07:29

The actual problem is with the trade schools. We do not have many ITIs and Polytechnics to start with and our BE students are not interested in doing engineering jobs. They only want to software jobs. I am not sure they can do the jobs if they are given to them. The quality of students and quality of education is generally very poor.

hanumadu · Post by **hanumadu** » 31 Jan 2017 08:58

nukavarapu wrote:^^^ Because we never invested in creating a class of highly qualified, highly educated and highly competent Teachers/Professors. I think the change has to start from primary school level. You cannot expect BEds to spurt interest in 10 year olds about fundamental math and science. Heck the whole education has to evolve from marks based system to thesis based system from early ages. Increasing the salaries and social stature of students pursuing a Bachelors/Masters of science degrees should be actively supported.

There are plenty of bright students who are interested and good in pure sciences currently, no need to wait 10 years to prep them. We can start by providing quality education to them in India itself.

Yagnasri · Post by **Yagnasri** » 31 Jan 2017 13:35

There are people with PG etc. who are interested in research sir. But no one is ready to give them jobs in that area. What can we do? My close family member is looking for research opportunities but could not find it. He is now doing teaching job and looking for it even now. He published many papers etc also.

Raghz · Post by **Raghz** » 31 Jan 2017 14:26

I realize that this is off topic for this thread. Please check my post in the "Indian education" thread. Ofcourse we need good teachers and there are good reasons why we do not have them in good numbers. Fortunately, technology comes to our rescue. Those who are really interested in teaching and can make some time, please check out the site www.evidyaloka.org

You can teach students in remote government schools in Karnataka from where ever you are. BRF has so many talented members with quality education and experience to boot. Please check if you can make a contribution.

SRoy · Post by **SRoy** » 31 Jan 2017 21:51

nukavarapu wrote:
hanumadu wrote: There are plenty of bright students who are interested and good in pure sciences currently, no need to wait 10 years to prep them. We can start by providing quality education to them in India itself.
And as I said, how can we prep them with the quality of teachers we have. Desh does not require heros right now, it requires gurus who can create suitable conditions and provide mentoring for normal folks to evolve into heroes!

Without the teaching class in place, there is no way we can prep in considerable numbers. That's the same situation right now, 10% elite end up in IIT, get the right guidance from teachers and end up in USA. 90% are clueless and most of them end up in body shops.

I recently tried to recruit fresh PHDs from Andhra University and was ready to offer up to 2 lakhs pm. The folks were more interested in taking lecturer jobs in the same university and were fine without research opportunities. Such is the state of affairs.

Were you ready to guarantee them job security? Perhaps a small office in Vizag itself?

Suraj · Post by **Suraj** » 31 Jan 2017 23:38

A good news day today. To start with, CSO is done with the final review of data for 2015-16 (fiscal year from April 2015 to March 2016) and has upgraded GDP growth for that year:
CSO revises GDP growth for 2015-16 upwards to 7.9%

Government has marginally revised upwards gross domestic product (GDP) growth for 2015-16 to 7.9 per cent from the earlier estimate of 7.6 per cent after factoring in latest data on agriculture and industrial production.

"Real GDP or GDP at constant (2011-12) prices for 2015-16 and 2014-15 stands at Rs 113.58 lakh crore and Rs 105.23 lakh crore, respectively, showing growth of 7.9 per cent during 2015-16 and 7.2 per cent during 2014-15," stated the Central Statistics Office (CSO) while releasing the revised data on Tuesday.

However, the figure for 2014-15 has remained unchanged at 7.2 per cent in the second revision of the national accounts for the financial year.

Core sector remains strong in December as well:
Eight core industries grow by 5.6% in December

Eight core industries register a growth of 5.6% in December 2016 on the back of healthy output recorded by refinery products and steel.

The growth rate of eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- was 2.9% in December 2015.

It stood at 4.9% in November 2016.

The core sectors, which contribute 38% to the total industrial production, expanded 5% in April - December 2016 compared to 2.6% growth in the same period last financial year, according to data released by the commerce and industry ministry today.

Refinery products and steel production jumped 6.4% and 14.9%, respectively during the month under review. However, crude oil, fertliser, natural gas and cement output reported contraction.

Coal output declined to 4.4% in December 2016 from 5.3% in the same month previous year. Similarly, electricity generation too dipped to 6% as compared to 8.8% in December 2015.

Credit to industry shrinks 4.3% in December quarter

Showing the effect of a slump in demand, bank loans to industry contracted in December, a third month in a row.

According to Reserve Bank of India data, credit to small, medium and large units shrank 4.3 per cent in the 12 months ending December 2016. In the preceding 12 months (ended December 2015), credit to industry had expanded by 4.9 per cent.

Major segments that saw contraction in credit were food processing, infrastructure, chemical and chemical products, engineering, textiles and basic metal and metal products.

The 2016-17 Economic Survey of India is out.

srin · Post by **srin** » 01 Feb 2017 07:14

News reports are all talking about Universal Basic Income. Also please see Arvind Subramanian interview on undietv. http://www.ndtv.com/india-news/live-hou ... an-1654709 making a case for UBI in the economic survey.

Chindu and a few others are opposing it because that would give Govt a pre-text to stop other subsidies. OTOH, the CEA wants to stop the other subsidies (leaves it open as to which one) and just transfer money,as that would be more affordable and definitely less leaky (think JAM).

I'm a bit ambivalent about the entire UBI scheme. But if it removes other subsidies that today distort market prices, I'm more inclined.

Thoughts ?

Yagnasri · Post by **Yagnasri** » 01 Feb 2017 09:42

Sir,

I have sent a mail to you. Please check it.

Personally, I am a crow. So can teach civics class or History class at High School in Telugu. I can not do much more as my knowledge on other matters is very limited.

Patni · Post by **Patni** » 01 Feb 2017 11:22

Budget 2017 can be viewed on live webcast from government portal:
http://webcast.gov.in

Patni · Post by **Patni** » 01 Feb 2017 11:31

FM :
Going to spend more on infrastructures.
No more plan and unplanned classification.

Suraj · Post by **Suraj** » 01 Feb 2017 12:02

PMI data is sequential and not year on year, so a 50+ number is a significant indicator of positive business sentiment and investment:
Manufacturing PMI rises to 50.4 in January

Manufacturing sector activity rebounded in January and registered positive growth after contracting in December due to demonetisation, according to a private monthly survey.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rose to 50.4 in January from 49.6 in December.

“The main factors contributing to the above-50 PMI reading were growth of both new orders and output,” said Nikkei in a statement, adding that the rates of expansion were only slight, but reversed the contractions noted in December.

A reading above 50 on the index denotes expansion while that below the mark indicates contraction.

Budget Updates:
* Affordable housing to get infrastructure status. Interest rates to be brought down for rural housing.
* Rs. 1,87,223 cr allocation for rual, agri which is a record, says Arun Jaitley
* India is now 6th largest manufacturing country in the world, up from 9th previously. We are seen as engine of global growth. India is among economies undertking transformational reforms.
* 36% rise in FDI in first half of current fiscal to Rs. 145,000 crore
* Agriculture expected to grow at 4.1 % this fiscal. Total area sown under current rabi season higher than last year. Target for agri credit at Rs. 10 lakh crore in 2017-18. 10 lakh farmers have been given credits this year. Fasal Bima yojana, a major step to secure farmers against natural calamities. Fasal Bima Yojana coverage to be increased from 30 to 40 per cent in 17-18 and 50% in 2018-19. Budget targets to double farm income in five years.

Added:
* Propose to double the lending target of Pradhan Matri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18: FM
* 3.5 Crore youth will be trained under Sankalp program launched by the government, says FM Jaitley
* Action plan to eliminate Kala Azar & Filariasis by 2017, Leprosy by 2018, Measles by 2020 & Tuberculosis by 2025, says FM
* The Foreign Investment Promotion Board has been abolished, says FM Jaitley
* Service charges on e-tickets booked through IRCTC will be withdrawn, says FM Arun Jaitley
* Transport sector allocated Rs 2.41 Lakh crore and Bharat Net Project allocated Rs 10,000 crore, says FM Jaitley
* Rail safety fund with a corpus of Rs 100,000 crore to be created over a period of 5 years, says FM Jaitley
* A new metro rail policy will be announced, this will open up new jobs for our youth, says FM Jaitley
* By 2019, all coaches of Indian Railways will be fitted with Bio-toilets, says FM Arun Jaitley

amit · Post by **amit** » 01 Feb 2017 13:06

Suraj wrote:PMI data is sequential and not year on year, so a 50+ number is a significant indicator of positive business sentiment and investment:
Budget Updates:
* Affordable housing to get infrastructure status. Interest rates to be brought down for rural housing.
* Rs. 1,87,223 cr allocation for rual, agri which is a record, says Arun Jaitley
* India is now 6th largest manufacturing country in the world, up from 9th previously. We are seen as engine of global growth. India is among economies undertking transformational reforms.
* 36% rise in FDI in first half of current fiscal to Rs. 145,000 crore
* Agriculture expected to grow at 4.1 % this fiscal. Total area sown under current rabi season higher than last year. Target for agri credit at Rs. 10 lakh crore in 2017-18. 10 lakh farmers have been given credits this year. Fasal Bima yojana, a major step to secure farmers against natural calamities. Fasal Bima Yojana coverage to be increased from 30 to 40 per cent in 17-18 and 50% in 2018-19. Budget targets to double farm income in five years.

Added:
* Propose to double the lending target of Pradhan Matri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18: FM
* 3.5 Crore youth will be trained under Sankalp program launched by the government, says FM Jaitley
* Action plan to eliminate Kala Azar & Filariasis by 2017, Leprosy by 2018, Measles by 2020 & Tuberculosis by 2025, says FM
* The Foreign Investment Promotion Board has been abolished, says FM Jaitley
* Service charges on e-tickets booked through IRCTC will be withdrawn, says FM Arun Jaitley
* Transport sector allocated Rs 2.41 Lakh crore and Bharat Net Project allocated Rs 10,000 crore, says FM Jaitley
* Rail safety fund with a corpus of Rs 100,000 crore to be created over a period of 5 years, says FM Jaitley
* A new metro rail policy will be announced, this will open up new jobs for our youth, says FM Jaitley
* By 2019, all coaches of Indian Railways will be fitted with Bio-toilets, says FM Arun Jaitley

Suraj,
Thanks for this update.

May I suggest a dedicated thread for the Budget where only news is posted without any discussion? That could form a good repository of information which can then be analysed in this thread.

Just my thoughts.

Yagnasri · Post by **Yagnasri** » 01 Feb 2017 13:08

No reduction in IT other than 10 to 5% up to 5 Lacs. This fellow ensuring that the core BJP voting middle class do not support BJP in 2019 by acting like PC 2.0.

Suraj · Post by **Suraj** » 01 Feb 2017 13:08

I don't know about that. Usually people are quick to propose a new thread, but there's no stewardship of the thread and it gets buried, such that whatever useful information was in it, loses eyeballs too. Generally, the budget items invite discussion. Perhaps the better option is to split off psots from this thread if there's enough traction.

hanumadu · Post by **hanumadu** » 01 Feb 2017 13:09

Roads to receive 65,000 crore this year. At 20cr/km of 4 laned road, this alone will built 9km/day of 4 laned roads. If private companies participate in PPP/BO0T or Gadkari can raise more money, more kms can be built

1.31 lakh crore for railways.

Total infrastructure allocation to nearly 4 lakh crore or 60 billion dollars.

amit · Post by **amit** » 01 Feb 2017 13:12

Some important updates, which IMO have far reaching consequences:

* Political funding reforms: Max amount political party can receive in cash donation will be Rs 2000 from any one source
Political parties will be entitled to receive donations by cheque or digital mode
Additional step amendment proposed to RBI act to enable issuance of electoral bonds in accordance to scheme by GOI. Donor could purchase bonds from authorised banks. Redeemable only in registered accounts of party.
* A proposal to receive all government receipts beyond a certain threshold through e-modes under consideration
* No cash transactions above Rs 3 lakh, announces Arun Jaitley

Link

amit · Post by **amit** » 01 Feb 2017 13:14

Yagnasri wrote:No reduction in IT other than 10 to 5% up to 5 Lacs. This fellow ensuring that the core BJP voting middle class do not support BJP in 2019 by acting like PC 2.0.

I think you're forgetting that elections are on 2019. Any reduction this year will have no impact on an election held two years later. 2018-2019 budget, however...

hanumadu · Post by **hanumadu** » 01 Feb 2017 13:16

Fiscal deficit to be 3.2% this year, 3% for the next two days.
Debt to GDP to be 60% by 2020 (or is it 2023?). 40% for centre, 20% for states.

chandrasekaran · Post by **chandrasekaran** » 01 Feb 2017 13:16

Yagnasri wrote:No reduction in IT other than 10 to 5% up to 5 Lacs. This fellow ensuring that the core BJP voting middle class do not support BJP in 2019 by acting like PC 2.0.

It would have been a game changer if he had abolished IT for income less than 10L. Another lost opportunity, IMHO

AdityaM · Post by **AdityaM** » 01 Feb 2017 13:17

No transaction over Rs. 3 lakh will be allowed in cash, says Arun Jaitley

How can this be enforced?

Austin · Post by **Austin** » 01 Feb 2017 13:19

Jaitley: Defence allocation of Rs. 2.74 lakh crore

Jaitley: Total budget allocation at Rs. 21.47 trillion in 2017-18

Austin · Post by **Austin** » 01 Feb 2017 13:20

How much is Rs 1 Trillion in USD ?

tushar_m · Post by **tushar_m** » 01 Feb 2017 13:22

Jaitley: Defence allocation of Rs. 2.74 lakh crore excluding Pensions

Defence Pension in 2016: A total of Rs 82,332 crore has been budgeted for defence pensions this time, mainly to cater for the announcement of One Rank One Pension (OROP) and the Seventh Pay Commission. In comparison, Rs 54,500 crore were allocated for pensions in the last budget but the actual bill shot up to Rs 60,238 crore.

amit · Post by **amit** » 01 Feb 2017 13:23

AdityaM wrote:No transaction over Rs. 3 lakh will be allowed in cash, says Arun Jaitley

How can this be enforced?

Unless you have Rs 3 lakh in black money, you'll have to withdraw it from the bank and once you complete the transaction, say you pay me Rs3 lakh for whatever reason, I'd have to deposit the amount in the bank. In effect if the transaction is in white, it can be tracked very well. Consider this to be a follow up step to demonetisation. Wouldn't have been possible otherwise.

Kashi · Post by **Kashi** » 01 Feb 2017 13:25

A 10% increase in defence budget? Will it be enough for new acquisitions?

Yagnasri · Post by **Yagnasri** » 01 Feb 2017 13:27

We need to see an increase in capital expenditure in defence. I am not sure it is there.

hanumadu · Post by **hanumadu** » 01 Feb 2017 13:29

Austin wrote:How much is Rs 1 Trillion in USD ?

1 trillion = 1 lakh crores
15 billion dollars.

Marten · Post by **Marten** » 01 Feb 2017 13:37

Austin wrote:How much is Rs 1 Trillion in USD ?

Google says 14,807,140,000 USD based on today's rate.

Suraj · Post by **Suraj** » 01 Feb 2017 13:50

The size of the Indian budget is quite significant now. Rs.21.5 trillion is approx $330 billion. In a few years just our budget will exceed the GDPs - not their budgets but the aggregate economic outputs - of all our subcontinental neighbors, combined. GST plus a significant increase in tax compliance post demonetization should drive the rise to a $500 billion budget in a few years. It was just a few short years ago that the budget allocation was just about $100-150 billion.

Austin · Post by **Austin** » 01 Feb 2017 14:00

Marten wrote:
Austin wrote:How much is Rs 1 Trillion in USD ?
Google says 14,807,140,000 USD based on today's rate.

Thanks roughly $15 billion USD

rvishwakarm · Post by **rvishwakarm** » 01 Feb 2017 15:11

So now 2.5 to 5 lacs will taxed at 5% and 5 to 10 lacs at 20%??

Isn't it an abrupt jump?

I guess relief to tax payers will be provided in staged manner. This year people under 5lacs got relief (bracket, i guess has most % of tax payers). Next year it will be for > 5lacs bracket.

chandrasekaran wrote:
Yagnasri wrote:No reduction in IT other than 10 to 5% up to 5 Lacs. This fellow ensuring that the core BJP voting middle class do not support BJP in 2019 by acting like PC 2.0.
It would have been a game changer if he had abolished IT for income less than 10L. Another lost opportunity, IMHO

chandrasekaran · Post by **chandrasekaran** » 01 Feb 2017 15:18

I was looking at from kick starting consumption perspective. The key to that is folks that have more disposable income be encouraged to spend. The way FM started his direct tax proposal speech, I expected as if he would abolish IT completely but only to see this....

vina · Post by **vina** » 01 Feb 2017 15:24

What an insipid and really pedestrian budget. The saving grace is that there were no hare brained taxation shockers. Funnily enough , NOT a word on how much the demo got in, if at all, and what was the quantifiable purpose of it all .

And frankly absolutely NO structural reform worth talking about. Same old, same old, command control, pumping money into a bottomless pit of state directed spending . And a paltry Rs 10000 for bank capitalisation (okay the banks are flush with cash), nothing in NPA problem getting fixed, bank balance sheets are sitting on huge NPAs which need to be actually marked to market and written off.. But no.

For e.g., the Rs 46,000 cr outstanding of Air Parasite is a a gone case, same with a host of PSUs, but are still marked as "good" in the bank balance sheets! Not a word on privatising it / winding it up, not a word on BSNL...

Yagnasri · Post by **Yagnasri** » 01 Feb 2017 15:27

No reforms of any kinds in anything. Consumption is hit after DeMo. Direct tax reduction to salaried class would have encouraged consumption. But alas it is not to be.

prasannasimha · Post by **prasannasimha** » 01 Feb 2017 15:29

I have seen one thing. All politicians give sops on the year of elections.like road tarring on election year! So I really did not expect a major change. Having said that the IT limit is increased to 3 Lakshmi and a 12500 decrease in tax till 5 Lakhs. I think ge demonitization gain will be rewarded in 2018-19. Having said that the salaried classare not significant voters bit largest contributors to income tax

nirav · Post by **nirav** » 01 Feb 2017 15:38

I'm baffled with 'middle class' will stop supporting BJP at any and everything the govt does.

Taxation is slab wise.

The reduction in tax rate for less than 5 lakhs will equally apply to the guy earning more than 10 lakhs as part of his slab based calculation for tax.

@ a pedestrian budget, Nifty is at 8700 for the moment.up 2% for the day.Markets don't think so.

Dilbu · Post by **Dilbu** » 01 Feb 2017 15:56

The focus on agriculture is good. I would have liked a few more structural changes. There is no shakinaw for sure but it is a decent budget.

Yagnasri · Post by **Yagnasri** » 01 Feb 2017 16:00

It is a decent one. But the back idea of a budget is no longer constructive. No stress on investments, no stress on spending, no stress on increasing demand. So there is no idea based budget

amit · Post by **amit** » 01 Feb 2017 16:44

It's interesting that the initial industry reaction to the budget is positive as opposed to some resident eggspurts on all things under the sun and beyond.

Union Budget 2017: Reactions to Arun Jaitley’s budget speech

“The growth will happen because of huge investments that is happening. For example in railways, the provision for Rs1.31 lakh crore for capital expenditure is unprecedented in railway history.”

I wonder what, folks who talk about no sops for consumption after demonetisation, think this money is going to spent on (and mind you that's just for the Railways)? When you spend that kind of money in the economy, you increase demand, which results in more goods and services being produced, and that in turn results in more money in the pockets of individuals. Net result, consumption goes up. I think we have become so used to handouts from the government we want handouts to "increase consumption". If that's not there then: "Oh lookie lookie, FM did so baaad".

“On tax reforms, the only worthy mention, and an intelligent one, is the selective reduction of corporate tax rate for companies below 500 million rupee turnover. This will encourage higher compliance at the lower level of the corporate pyramid where percentage of tax leakages is usually much higher.”

and,

“The fiscal deficit of 3.2 percent missed the target, but laudable efforts nonetheless. Markets should love the lower net borrowing figure of 3.4 trillion rupees. On tax reforms, the reduction of the corporate tax for SMEs to 25 percent is very welcome.”

“If FIPB (Foreign Investment Promotion Board) is abolished it really means that there would be no sector under the approval route and everything will be under the automatic route. I think that’s a great move. Even in sensitive sector like defence, where approval route is required, would be under the automatic sector in some shape or form. Effectively, there is no government approval required even in the sensitive sectors, which is a great development. It will clearly speed up the process. I hope there’s no other authority that they set up because then it will just be a re-nomenclature of FIPB with something else.”

This is IMO a biggie. Should see a spurt in new foreign investment.

The union budget proposed by the FM has some positive measures for start ups. Profit linked deduction for startups extended to 3 years of 7 years is a good move. We were hoping for MAT to go away but its extension up to 15 years is still satisfactory. Ability to carry forward losses if the founder remains involved is a very positive step as is the tax reduction for companies below Rs25 crore.

“He (Jaitley) focused on the rural side more, and he has recognised that demonetisation had brought some hardship to people. So he’s trying to mitigate that as much as possible, with some rural schemes and reduction in taxation for low income people.”

And of course Papu's quote:

“We were expecting fireworks, instead it was a damp squib. It is just ‘sher-o shayari’ in the budget. There is nothing for farmers and youth and nothing for job creation. There is no clear vision,”

Seems that I just read something on similar lines more than once.

And yes where it really matters: Stock markets react positively to Budget 2017

Marten · Post by **Marten** » 01 Feb 2017 16:47

prasannasimha wrote:I have seen one thing. All politicians give sops on the year of elections.like road tarring on election year! So I really did not expect a major change. Having said that the IT limit is increased to 3 Lakshmi and a 12500 decrease in tax till 5 Lakhs. I think ge demonitization gain will be rewarded in 2018-19. Having said that the salaried classare not significant voters bit largest contributors to income tax

OT: Sir, forgive me, but a man is asking for real trouble unless he limits himself to 1 Lakshmi.