Indian Economy News & Discussion - Aug 26 2015

[SwamyG]

My die hard BJP friend is upset, he says earlier they ate ice creams and paid no taxes. Now they are paying 18% taxes. This is after 30% tax on income. People are adding the numbers and it looks like the middle class is definitely upset. What is happening? Thoughts?

Sounds like he is a well to do person to get in the 30% bracket.

And complains about expensive ice-cream?

Indian Salaried Income tax are some of the most generous on the planet. And I can tell this based on personal experience.

Probably. But if the shoe bites him, you cannot say you are well to do and move on. People in every strata have the right to express displeasure on their experiences. The point is just not one ice cream, the point is a series of increases and the perception that it creates.

[SwamyG]

that is, assuming the guy is not trolling. if so, you have saved yourself a bunch of time...

No he is not a troll, he campaigned for BJP in TN in the late 90s. Hard core Hindutvaadi. Yeah, I have been working on him. From a big supporter he seems to be turning out into a disillusioned voter. He will remain in the stable.

But I was just wondering about the economics of this.

[nam]

Sounds like he is a well to do person to get in the 30% bracket.

And complains about expensive ice-cream?

Indian Salaried Income tax are some of the most generous on the planet. And I can tell this based on personal experience.

Probably. But if the shoe bites him, you cannot say you are well to do and move on. People in every strata have the right to express displeasure on their experiences. The point is just not one ice cream, the point is a series of increases and the perception that it creates.

Ofcourse he has very right to have his perception about what effects his life.

However what I find interesting among us well to do Indians(middle class, upper middle class) complaining about every change in India and creating a perception which may or may not be right. I have done it myself as well. However as I grow older it has brought in more understanding.

If we ignore the way of life between say Indian & Germany for a minute, given an option your friend would pick to live in Germany. He will still do it after coming to know Germany extracts 50% of earnings in taxes!

Ofcourse this is also due to self made perception that everyone in Germany is "rich". Unfortunately it has no cure.

[SwamyG]

...

All valid points saar. No disagreement.

[Supratik]

In general unprocessed food items are not taxed and processed ones are taxed. So he did pay tax before. It has marginally increased depending on where he is having that ice-cream. If he is having that ice-cream in a parlor or AC restaurant or higher he is going to pay the new service tax. If he is having that ice cream in from a local vendor his taxes will not be hugely different. Either he was not aware that his ice-cream was always taxed or he is exaggerating given his income profile.

[SRoy]

Probably. But if the shoe bites him, you cannot say you are well to do and move on. People in every strata have the right to express displeasure on their experiences. The point is just not one ice cream, the point is a series of increases and the perception that it creates.

Ofcourse he has very right to have his perception about what effects his life.

However what I find interesting among us well to do Indians(middle class, upper middle class) complaining about every change in India and creating a perception which may or may not be right. I have done it myself as well. However as I grow older it has brought in more understanding.

If we ignore the way of life between say Indian & Germany for a minute, given an option your friend would pick to live in Germany. He will still do it after coming to know Germany extracts 50% of earnings in taxes!

Ofcourse this is also due to self made perception that everyone in Germany is "rich". Unfortunately it has no cure.

So, Germany extracts 50% of salaried income. India extracts 20% - 30% depending on the slab.

So, that's 40%-60% of what the German govt. demands from us as salaried citizens.

I am guessing you had the privilege of enjoying the proportional service, infrastructure, social security, educational and health standards in India. And I would stress the word proportional. Seems like most salaried people would benefit your advice on how to approach the govt. for delivery of various services, calculated 40%-60% levels taking German standard as the benchmark.

[Supratik]

You are making a false comparison. If India had same per capita as Germany your argument will hold true. But per capita is 30 times less. So you don't have similar level of money to provide similar level of service. You can argue that even within that limited amount of money in India service delivery is poor.

[SRoy]

^^
Actually your argument is meanigless.

A large section of population is living on doles. They don't pay taxes, they have MNREGA type loot of exchequer at their disposal, they force politicians to waive of their loans. They have absolutely no incentive to improve their economic situation. They are well aware that a welfare state has come into practice that will ensure their basic needs in exchange of votes.

On the other side the tax paying public is also aware of this trickery. Hence the angst.

[MurthyB]

So, Germany extracts 50% of salaried income. India extracts 20% - 30% depending on the slab.

So, that's 40%-60% of what the German govt. demands from us as salaried citizens.

I am guessing you had the privilege of enjoying the proportional service, infrastructure, social security, educational and health standards in India. And I would stress the word proportional. Seems like most salaried people would benefit your advice on how to approach the govt. for delivery of various services, calculated 40%-60% levels taking German standard as the benchmark.

As a thought experiment, this is interesting:

Germany PPP per capita: $49530
India PPP per capita: $6490

So Germany gets about $25000 in taxes while India gets about 25% of 6500 which is $1600. So the monies India has to play with, even on PPP terms, is about 6-7% of Germany's.

Are Indian highways 6-7% of Germany's? Most major ones that city folks use I would say are at 20-50% of American highways, or even more. At least the mysuru-bengaluru highway is that with a +5% for Maddur tiffanies dosa vs Subway/TacoBell etc.
Slowly cities are getting metros. Delhi metro might be greater than any German one, while the others might be 10-20%. Overall, on average, for Indian metros, the public transport is better than 7% of Germany's. And as bad as other Indian roads are, they are still better than 7% of German ones, although this is all difficult to quantify.

For power, one stat i found from 2006 says that India had about 67 outage days per year, compared to .23 days for Germany. Assuming the goal is 0/365 days of outage representing 100% availability, India is at 82% availability, and about 82% of Germany.

Water, probably 6hrs a day in big Indian cities vs 24hrs in Germany. So India at 25% there.

Education: k-12 govt schools in India are free.. For college: IIT charges about $325 per year, while RECs are more like $800-$900 I think, while German top unis are around $150, for *everyone*, including international students! So here Germany is definitely providing a lot of bang for the buck. But this is very recent, circa 2014. Hard to say how long it will last before they bankrupt themselves. Already one province has reintroduced tuition for non-EU students as of 2017.

Health: Consumer safety etc seems pretty good in India. Haven't heard of any scandals with Gits dokla etc. The biggie is healthcare, and Germany does well here. Everyone is covered with in network full coverage for an additional $7500 per year pay in for the per capita. In India, I assume govt hospitals are free, and I got operated on once in a Bhopal public hospital (hamidya or something). Have had a few more experiences. In general, the cleanliness is quite low (remember having to sit on a blood stained sheet once), but they got the puss out, stitched it up and I am still alive lol. Of-course now middle class goes to private I think. Do the salaried class, who pay most of the taxes, get private health insurance from employer, and how much does it cost, and what facilities are available. Ultimately, given that Indian population is increasing and living longer, one would think that even here India is better than 7% of Germany.

Social security: most government employees get pensions, and from talking to my relatives who retired from PWD, colleges, public banks etc, noone is complaining. Seems like this should be better than 7% of Germany.

So all in all, for a salaried person paying taxes in India, the *perception* I would have is that services are better than 7% of Germany unless free college education in Germany gets a very high weightage..More hard numbers would clarify this.

[SwamyG]

The argument that Indians would be happy to pay more taxes, if they receive comparable services to some of the developed countries is stumbling to growth. Because, it means any government cannot increase revenue via taxes until they have brought all services to the comparable standards. Money is one factor in providing 'world class' services to citizens; the mindset of service providers have to change and corruption in the entire chain has to reduce to an extent that it would only affect a minority.

Everyone knows changing mindset and reducing corruption takes years; does it mean that the taxes can be never raised until that happens? India could 'waste' decades in such a wait. Unearned and deserved revenues loss further ties down India.

[hanumadu]

Composite scheme is doa. You cant sell out of state, you get no credit for tax you pay and you cant sell via ecommerce. Doesnt make much sense.

Sounds like you are speaking from your own perspective. I can imagine a lot of businesses who satisfy those conditions.

[pankajs]

http://www.business-standard.com/articl ... 045_1.html
India expected to become $6 trillion economy in 10 years: Morgan Stanley

"We estimate that digitisation will provide a boost of 50-75 basis points to GDP growth and forecast that India will grow to USD 6 trillion economy and achieve upper-middle income status by by 2026-27," Morgan Stanley head India research and India equity strategist Ridham Desai told reporters here.

"We expect India's real and nominal GDP growth to compound annually by 7.1 per cent and 11.2 per cent respectively over the coming decade," he added.

[Suraj]

Modi Lifts India Up

Prime Minister Narendra Modi has lifted the Indian economy up, making it more competitive than it has ever been.

That's according to just published World Economic Forum Report (WEFR), which ranked India 40th out of 137 countries included in the report, the highest it has ever been--up from 71st three years ago.

That may come as a surprise to Modi’s critics, especially after his currency experimentations and the biggest ever tax overhaul that shook up the Indian economy in the last year.

Apparently, Prime Minister Modi did a few things right, as noted in the WEFR. Like improving in country’s infrastructure, where India edged up a couple of points compared to last year; education and training, up six points; technological readiness, the spread of the internet to schools, and efficiency of public spending.

India’s competitiveness is supported and reinforced by steady progress with economic reforms, e.g., the loosening of controls on foreign investment, reduction of export-import taxes, and the removal of price controls.

WEF Global Economic Competitiveness Report 2017-18

[chetak]

x posted from the political, thread

Which bleddy idiot in the govt was responsible for this horrendous decision??

U-turn on GE contract: Narendra Modi's Make in India scheme faces risks due to govt's policy flip-flops

Sep, 28 2017 08:16:54 IST

New Delhi: Surprise policy shifts, such as an apparent U-turn over a locomotive deal with General Electric, risk undermining Prime Minister Narendra Modi’s flagship ‘Make in India’ initiative, which aims to create millions of jobs and boost growth, industry executives say.

GE won a $2.6 billion contract in 2015 to supply 1,000 diesel locomotives - the biggest direct investment in India by a US firm and the first deal awarded to a foreign firm after India allowed 100 percent foreign investment in Railways - part of efforts to overhaul its creaking, colonial-era infrastructure.

But the railways ministry said last week it wouldn’t need diesel after all - hoping to save on fuel and maintenance costs - and suggested GE might want to make electric engines instead.

Electric engines are usually used for passenger trains, while diesel is used for freight. Around 25-30 percent of the country's locomotives are diesel-engined.

The policy shift could cost New Delhi in compensation - GE is already building a factory for the diesel locos - but executives and investors say it is also an important test for a government that needs foreign investment to create jobs and reboot growth ahead of a 2019 general election.

“The GE case is very important symbolically because they have been among the earliest and most committed investors,” said Amitabh Dubey, a political analyst at research firm Trusted Sources.

“People will be watching to see how this plays out, particularly because the railway contracts were initiatives that the government pushed consciously and worked very hard to get these people in. To then turn around two years later and change your strategy will bother a lot of people,” he said.

GE has already shipped its first diesel locomotive to India and is completing a factory in the state of Bihar. It has created around 1,000 jobs at the plant and a maintenance shed, and 5,000 jobs in the supplier network.

In a statement, the US firm said the government’s change would put future foreign investment at risk.

“An alteration of this contract will have serious impact on job creation and skills development, and cause the government to incur substantial costs,” it said. “This will also undermine government’s signature ‘Make in India’ initiative.”

FDI growth slowing

Foreign direct investment (FDI) into India topped $60 billion in fiscal 2016-17, almost double the levels before Modi came to power in 2014.

But after increasing by more than 20 percent in the first two years of the Modi government, FDI growth was less than half that rate in the latest financial year, hit by tax changes and a shock move to withdraw most of India’s banknotes overnight.

Yashwant Sinha, a veteran leader of Modi’s Bharatiya Janata Party (BJP) and a former finance minister, said poorly executed policy shifts had stalled growth. “Economies are destroyed more easily than they are built,” he wrote in a newspaper column on Wednesday.

India’s economy, Asia’s third-largest, grew at a 3-year low of 5.7 percent in April-June.

In another example of shifting goalposts, India this month blindsided the auto industry by almost doubling the maximum levy on luxury cars and sport-utility vehicles (SUVs) - just weeks after first setting the rate as part of a major tax change.

Rahil Ansari, head of Audi India, said sudden shifts affect companies’ ability to plan ahead, and could force changes.

“This is bound to adversely impact sales, by possibly a double-digit reduction, and will reduce revenues for the company, dealers and perhaps also tax revenue for the government,” he said.

Rival Mercedes-Benz also said the luxury car industry has been at the receiving end of arbitrary policies, and a hike in levies would affect its future expansion plans under the ‘Make in India’ initiative.

For change to happen in a country like India, it sometimes has to be done in a disruptive manner, and foreign investors should expect that and plan for it, said Sandip Beri, partner at Delhi-based law firm Shardul Amarchand Mangaldas.

However, the government should give industry fair time to comply with new rules, and analyse its own contractual obligations, before changing policy, he added. “There is no question that industry wants stability and predictability.”

India’s inability to make up its mind on its tax structure and how it responds to foreign companies pre-dates the Modi government, says Saurabh Mukherjea, CEO of Mumbai-based brokerage Ambit Capital.

“I can understand why GE is peeved, but (I‘m) not sure how one should take their broader point on the impact on the economic climate in India,” he said.

[vish_mulay]

https://www.kenfolios.com/iim-topper-ma ... mers-life/

IIM graduate making crores selling Veg

[Bart S]

My die hard BJP friend is upset, he says earlier they ate ice creams and paid no taxes. Now they are paying 18% taxes. This is after 30% tax on income. People are adding the numbers and it looks like the middle class is definitely upset. What is happening? Thoughts?

Sounds like he is a well to do person to get in the 30% bracket.

And complains about expensive ice-cream?

Indian Salaried Income tax are some of the most generous on the planet. And I can tell this based on personal experience.

If you mean the salaried tax payers, you are probably correct.

[chetak]

How to verify fake GST Bill and GST number?

August 22, 2017 | by Basavaraj Tonagatti

All of you might be aware that now instead of VAT, GST is the norm in all our shopping bills. However, there may be few instances where shops or hotels may use fake GST Bill or GST number and may dupe you. Hence, let us understand how to identify or verify fake GST Bill and GST number.



We usually go for shopping. Do the shopping and get the bill for the same. But whether you cross checked the GST rate which is collected from you? Also, whether you cross check the genuineness of GSTIN?

As per the rule, shops or restaurants which not registered under GST must not be eligible for a collection of GST tax. However, few shops and restaurants not registered their business under GST regime (may be due to their less business or to avoid taxation issue). But generating GST Bill and collecting the money from customers.

How to verify fake GST Bill and GST number?

Following the below process, you can verify the verify fake GST Bill and GST number. Before proceeding further, let us understand the basics about GST number or GSTIN (Refer old post:-All about 15 digit GSTIN (Goods and Services Tax Identification Number) format).

GSTIN is a 15 digit unique code which is will be assigned to each taxpayer, which will be State-wise and PAN-based. The structure or format of 15 digit GSTIN (Goods and Services Tax Identification Number) will look like below.



Format or Structure of 15 digit GSTIN (Goods and Service Tax Identification Number)

First two Digits-The first digit of GSTIN is state code as per Indian Census 2011. The state codes are as below.

01-Jammu and Kashmir, 02-Himachal Pradesh, 03-Punjab, 04-Chandigarh, 05-Uttarakhand, 06-Haryana, 07-Delhi, 08-Rajastan, 09-UP, 10-Bihar, 11-Sikkim, 12-Arunachal Pradesh, 13-Nagaland, 14-Manipur, 15-Mizoram, 16-Tripura, 17-Meghalaya, 18-Assam, 19-West Bengal, 20-Jharkhand, 21-Orrissa, 22-Chattisgarh, 23-MP, 24-Gujarat, 25-Daman and Diu, 26-Dadar and Nagar Haveli, 27-Maharashtra, 28-Andhra Pradesh, 29-Karnataka, 30-Goa, 31-Lakshadweep, 32-Kerala, 33-Tamil Nadu, 34-Puducherry and 35-Anadaman and Nicobar Islands.

Next 10 Digits-It is the PAN number of a business entity like your shop, mall or company.

13th Digit-It indicates the number of registrations as a business entity has within a state for the same PAN. It will be an alpha-numeric number (first 1-9 and then A-Z) and will be assigned on the basis of the number of registrations a legal entity (having the same PAN) has within one state.

Let say the company ABC registered in the same state for 5 times for different businesses. In such case, this digit will be printed as 5. Let us assume, the same company registered for around 15 times, then it should be represented as F (1-9 numeric and later on 10th registration be named as A and 11th as B and so on up to Z).

Hence, a business entity can register the GSTIN within a single state for the maximum of 35 times (1-9 and later on A-Z).

14th Digit-It will be by default as Z.

15th Digit-The last digit will be a check code which will be used for detection of errors.

Now let us understand the process of identifying or verify fake GST Bill and GST number.

# Check the bill properly for shop or restaurant registered under GST or not.

It is easy to check. The business entity should print the GST Bill which also includes GSTIN and the tax rate should be as per GST slabs. Take the example of below bill. See the difference between earlier Bills (where VAT was in use and TIN number used to be mentioned) and the current bill under GST regime.

https://www.basunivesh.com/wp-content/u ... Number.jpg

Difference between TIN and 15 digit GSTIN (Goods and Services Tax Identification Number)

# Verify the genuineness of GST Number

Yesterday one of my blog readers shared this link to verify the genuineness of GST number of GSTIN.



Link to verify fake GST Bill and GST number

Go to the said link and you will find the below screen.



verify fake GST Bill and GST number

# Cross check the GST rates

Once you checked the GST bill and the genuineness of the GST number or GSTIn, then cross check the GST rates applicable to the goods and service you purchased.

If you are familiar with rates, then it is fine. Otherwise, you can check it by visiting the GST Rates by visiting this LINK of Central Board of Excise and Customs.

# Complain against such fake or fraudulent practices

After going through all above process, if you found the bill, GST number or the rate taxed to you are fake or not in right format, then raise the complaint by using below contacting modes.

Email : helpdesk@gst.gov.in

Phone: 0120-4888999, 011-23370115



Twitter: @askGST_Goi, @FinMinIndia

Hope this information will be helpful for all of you.

[Bart S]

^The average consumer is not going to do this stuff. The govt should mandate that GST number etc be printed as a QR code on bills, and that way people can quickly verify via an app.

[JohnTitor]

Great idea!! Someone should tweet modi

[Philip]

The market tanked yesterday by more than 400,and even a couple of days ago a pal moaned that he'd lost 10L+ in a single day.I'm waiting to hear him groan today! There is no Q that the economy is in deep trouble.Businesses have been collapsing,esp. SMEs and the construction industry has ground to a halt.Cement off-takes down by 30%. GST and rising petro prices with 50% being taxes,are increasing the heat under the middle class collars. GST has seen a spurt in prices of almost everything and some outlets not passing on the benefits to consumers who are confused about it.

“The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters

http://www.financialexpress.com/economy ... di/872442/

Yashwant Sinha: Arun Jaitley wants to make Indians see poverty from close quarters like Narendra Modi
Amid fears of an economic slowdown, infighting within the BJP is out in the open.
By: FE Online | New Delhi | Updated: September 27, 2017 11:55 AM

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Amid fears of an economic slowdown, infighting within the BJP is out in the open. In an Op-ed published in The Indian Express today, former Union Finance Minister and BJP leader Yashwant Sinha attacked current Union FM Arun Jaitley, holding the latter responsible for the “mess” in Indian economy at present.
Pointing out that economy is on a downward spiral, Sinha said, “I shall be failing in my national duty if I did not speak up even now against the mess the finance minister has made of the economy. A large number of people in the BJP and elsewhere who are not speaking up out of fear.”
Jaitley has never received such strong criticism from within the BJP in the last three years. Sinha said that the name of Jaitley was already finalised even before the 2014 General Elections. He was appointed as FM even as he lost the election in Amritsar.
Sinha said that Jaitley is considered to be the “best and the brightest” in this government. But, “In challenging times it becomes more than a 24/7 job. Naturally, even a superman like Jaitley could not do justice to the task,” he said.
The former FM claimed that Jaitley was a lucky finance minister, “luckier than any in the post-liberalisation era.”
“Depressed global crude oil prices placed at his disposal lakhs of crores of rupees. This unprecedented bonanza was waiting to be used imaginatively. The legacy problems like stalled projects and bank NPAs were no doubt there and should have been managed better like the crude oil bonanza. But the oil bonanza has been wasted and the legacy problems have not only been allowed to persist, they have become worse,” he said.
On the current status of economy, the former FM said, “Private investment has shrunk as never before in two decades, industrial production has all but collapsed, agriculture is in distress, construction industry, a big employer of the workforce, is in the doldrums, the rest of the service sector is also in the slow lane, exports have dwindled.”
“Sector after sector of the economy is in distress, demonetisation has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labour market,” he added.
The former FM further pointed out that the methodology for calculation of the GDP was changed by the present government in 2015. In what may shock many, he said, “So, according to the old method of calculation, the growth rate of 5.7 percent is actually 3.7 percent or less.”
Sinha said that Jaitley failed to take corrective measures in time as “he was carrying the heavy burden of so many extra responsibilities. The results are there for all of us to see.”

Sinha alleged that Jaitley has resorted to creating fears in the minds of people through CBI and IT raids. “We protested against raid raj when we were in opposition. Today it has become the order of the day…Instilling fear in the minds of the people is the name of the new game.”
The former FM predicted that the economy is unlikely to revive before 2019 General Elections. And concluded, “The prime minister claims that he has seen poverty from close quarters. His finance minister is working over-time to make sure that all Indians also see it from equally close quarters”.

Guru on the issue.
http://www.thehindu.com/news/cities/che ... 740432.ece

Economy has hit rock bottom, can only revive from here, says Gurumurthy
SPECIAL CORRESPONDENT CHENNAI, SEPTEMBER 23, 2017 07:30 IST
Expert view: S. Gurumurthy, Editor of Thuglak, speaks on demonetisation on Friday. | Photo Credit: V. Ganesan
‘Key decisions are required for recovery; demonetisation, despite benefits, was badly implemented’

Economic commentator and Editor of Thuglak magazine S. Gurumurthy said on Friday that the economy needed urgent governmental intervention.

“I have a feeling we are hitting the bottom now. There is no way this situation can continue. Because the government has to take a decision whether to have this whole lot of NPA regulations, the Mudra decision; if these 2-3 decisions are taken in the coming six months, the economy is poised to take off. I have faith that given the right policy input, the economy will pick up immediately,” he said.

Mr. Gurumurthy’s analysis comes less than a week after BJP leader Subramanian Swamy told the CNN-News18 channel in an interview that the economy was in a “tailspin,” warning that it could be moving towards a depression.

Mr. Gurumurthy was speaking on ‘Demonetisation – Its role, Impact and Follow-up,’ at an event organised by the Chennai International Centre at the Madras School of Economics.

“Too many disruptions, too soon. This is one of the things which a government in urgency is doing. Demonetisation, NPA rules, bankruptcy law, GST, thrust against black money — everything at one stretch; commerce cannot absorb all this,” he said.

Mr. Gurumurthy, who said, “I have not come here to defend the government,” opined that despite its many benefits, demonetisation was implemented badly. He claimed that due to a communication error between the Finance Ministry and a confidential cell, black money holders escaped the demonetisation dragnet.

Mr. Gurumurthy said the withdrawal of cash crippled the informal sector, which generated 90% of jobs and satisfied 95% of its capital requirements from outside the banking system. As a result, he said, “Aggregate consumption and generation of jobs have stagnated. The informal sector now borrows at 360-480% interest. It is already dealing a big blow to our growth and will continue to do so.”

RBI blamed

Mr. Gurumurthy, though, declined to directly criticise the political leadership and blamed the RBI for the subsequent failure. “The government grievously failed to implement the Mudra first. Then only they should have come for demonetisation. That was the original strategy. The Mudra Bank was stopped by the Reserve Bank, which did not want to give up monetary control,” he said.

Mr. Gurumurthy said political pressures on the government had reduced the many objectives of demonetisation to one: of ending the circulation of black money. “The demonetisation scheme had a big hole. It was because there was no coordination within the government. The advice the government of India received was that demonetisation and the income disclosure scheme should be announced simultaneously. Because of the communication gap within the system, income disclosure was announced first and demonetisation, later.

“Demonetisation became a gas chamber. That was the first major strategic fault,” he said. This has meant that, “Instead of collecting the tax in advance, the government is now chasing the black money to collect taxes.”

“GST is a welcome measure, but it is too ambitious. It wants to formalise the Indian economy in one go. It’s not possible. It has to be a calibrated formalisation of the Indian economy. The media is failing, economic thinktanks are not doing original work for India because they are still on a one-size-fit-all model,” he said.

While he did not blame the Prime Minister, Mr. Gurumurthy blamed the Supreme Court for its interventions during demonetisation. “The media wanted riots, the Supreme Court wanted riots. The people did not riot. It goes to prove the psychology of India as a peaceful nation,” he said.

[vish_mulay]

Cross posting
http://auto.economictimes.indiatimes.co ... l/60530988

Tractor segment peaks all time high sales of August month: Crisil

Just what I was expecting, people will not buy big investment items like tractors during crisis. Either there is no rural economy crisis or these reports are absolutely wrong. From my understanding rural areas are doing good after 2 consecutive good monsoons and emandi initiative by govt.

[vish_mulay]

http://www.livemint.com/Politics/ueEejo ... quote]Niti Aayog says economic downturn has ended, more growth in next 2 quarters[/quote]

[vish_mulay]

http://economictimes.indiatimes.com/new ... harebutton

Here is a quick question for those who have read former finance minister Yashwant Sinha's piece on the economy. Is Sinha just a former Finance Minister or also a spin politician? As FM (whether former or current), you are required to stick to facts and argue on the basis of data. A politician, however, has no such constraints.

He can spin, quote facts selectively, attack without data and also play the sore loser! Sinha's piece yesterday appears to be that of a politician and not  ..

Read more at:
http://economictimes.indiatimes.com/art ... aign=cppst

[chetak]

http://www.livemint.com/Politics/ueEejo ... quote]Niti Aayog says economic downturn has ended, more growth in next 2 quarters

[/quote]

No need for niti aayog to point out this obvious bit of news.

The benefits of both, the demon as well as the GST will start to kick in as they are well thought out disruptive measures to administer the boot to the economy.

Of course, kala dhanda folks will cry for a much longer time.

Also, good that RRR was shown the door and he is back in chicago, hopefully freezing his ass off.

let him continue to "I do what I do", just so long as he does not do it here in India. Mudra will take off now.

[nam]

Here is a wonderful article comparing the tax rates on earnings across European countries.

https://www.theguardian.com/money/2017/ ... stralia-us

This is only tax at earning. You would be paying additional VAT for the stuff you buy.

VAT in UK in 20% on everything. So you loose 20% of the money you spend after the tax on earnings.

European countries provide free medical & schooling. There is no other worth while services provided by European govs, as most other things are private.

50% of US Government Revenue is Income tax! US & Europe have high tax compliance.

Now people can compare this with India.

[nam]

So, Germany extracts 50% of salaried income. India extracts 20% - 30% depending on the slab.

So, that's 40%-60% of what the German govt. demands from us as salaried citizens.

Taxes in European countries are flat and on source. There are no escape routes like "no taxes on mortage interest, medicines" like in India.

[JohnTitor]

VAT in UK isn't a flat rate of 20% on everything. Food and medicine is zero rated. Energy - gas and electricity is taxed at 5%.

Only things that are not a basic necessity for survival are taxed at 20%. Even so, 20% is it. There are no higher rates and there are no hidden taxes on everything ie cess

[hanumadu]

VAT in UK isn't a flat rate of 20% on everything. Food and medicine is zero rated. Energy - gas and electricity is taxed at 5%.

Only things that are not a basic necessity for survival are taxed at 20%. Even so, 20% is it. There are no higher rates and there are no hidden taxes on everything ie cess

On an average, GST will probably be less than the taxes in UK. 20% is a lot of tax. The higher slabs and cess in India are on items that affect only the top 5% or more likely top 2 or 3%.

[A_Gupta]

https://swarajyamag.com/economy/how-pri ... e-slowdown
How Prime Minister Modi Sees The Economy And Why He Is Not Worried About The Slowdown

Far from this debate, however, Prime Minister Narendra Modi may not be as troubled by the GDP growth slide.

A simple comparison of important economic factors between the years 2014 and the present, 2017, paints an optimistic picture.

Foreign direct investment inflows, for instance, have grown from $24.2 billion in 2013-14 to $60.1 billion this fiscal. India’s rank in the World Economic Forum Global Competitiveness Index this year is 40, up 31 places in the last three years. And inflation – a highly watched and tracked economic indicator – is down to 4 per cent this year, from 11 per cent in 2014.

Followed by a pile of statistics.

[A_Gupta]

http://www.thehindu.com/business/Econom ... 768047.ece
"India likely to be third largest economy in 10 years: Morgan Stanley"

India is expected to be a USD 6 trillion economy — the third largest in the world — in the next 10 years, majorly helped by digitisation, says a report.

According to global brokerage Morgan Stanley, India’s digitisation drive would provide a boost of 50-75 basis points to GDP growth in the coming decade.

“We estimate that digitisation will provide a boost of 50-75 basis points to GDP growth and forecast that India will grow to USD 6 trillion economy and achieve upper-middle income status by by 2026-27,” Morgan Stanley head India research and India equity strategist Ridham Desai told reporters here.

“We expect India’s real and nominal GDP growth to compound annually by 7.1 per cent and 11.2 per cent respectively over the coming decade,” he added.

[Karthik S]

6T is low, China was 2.7T in 2006-7, 10 years later, they are almost 12T.

[A_Gupta]

https://www.cnbc.com/2017/09/26/world-e ... india.html
India's economy may be in the doldrums, but it's getting more competitive
- India ranked 40th out of 137 countries on the World Economic Forum's 2017 global competitiveness ranking
- The score is the country's highest ever in WEF's current methodology

National competitiveness is defined as a set of institutions, policies and factors that determine a country's level of productivity.

Improvement across most pillars of competitiveness, particularly infrastructure and higher education, reflects recent public investments in these areas, WEF said. Strides in labor market efficiency, especially the nation's ability to attract and retain talent, also helped India's 2017 ranking, the Swiss foundation added.

"The quality of institutions has increased further, especially in terms of efficiency of public spending."

Going forward, the private sector still considers corruption, access to financing and tax rates as the most problematic factors for doing business in India, the WEF noted.

The level of technological readiness of individuals and firms also remains relatively low, it said, which suggests "that the benefits of innovative activities are not widely shared."

This wide disconnect between innovative strength and technological readiness will prevent the emerging market darling from fully leveraging its strengths across the wider economy, the WEF said.

[A_Gupta]

6T is low, China was 2.7T in 2006-7, 10 years later, they are almost 12T.

Difference between 7.x% growth rate and 9.x% growth rate (compounded annually).

[SRoy]

As a thought experiment, this is interesting:

Germany PPP per capita: $49530
India PPP per capita: $6490

So Germany gets about $25000 in taxes while India gets about 25% of 6500 which is $1600. So the monies India has to play with, even on PPP terms, is about 6-7% of Germany's.

Are Indian highways 6-7% of Germany's? Most major ones that city folks use I would say are at 20-50% of American highways, or even more. At least the mysuru-bengaluru highway is that with a +5% for Maddur tiffanies dosa vs Subway/TacoBell etc.
Slowly cities are getting metros. Delhi metro might be greater than any German one, while the others might be 10-20%. Overall, on average, for Indian metros, the public transport is better than 7% of Germany's. And as bad as other Indian roads are, they are still better than 7% of German ones, although this is all difficult to quantify.

Never came across any sort of road in Germany that was encroached upon, potholed, unlit (within city limits), blocked off for some "VIP", barricaded by bribe seeking policemen.

For power, one stat i found from 2006 says that India had about 67 outage days per year, compared to .23 days for Germany. Assuming the goal is 0/365 days of outage representing 100% availability, India is at 82% availability, and about 82% of Germany.

Wherever this statistics is pulled out doesn't seem to be depressing the sales of inverters, UPS's and diesel genset. Been to NCR/GGN's "IT" hub? The un-breathable air there has ample contribution from diesel gensets.

Water, probably 6hrs a day in big Indian cities vs 24hrs in Germany. So India at 25% there.

That's right. Amply proven by sales of water filters/purifiers, daylight robberies by tanker mafia. What's more in my neck of the woods, I see more of arsenic poisoning amidst claims of "6hrs a day" supply.
And in Germany? I used to refill my water supply from restroom taps.

Education: k-12 govt schools in India are free.. For college: IIT charges about $325 per year, while RECs are more like $800-$900 I think, while German top unis are around $150, for *everyone*, including international students! So here Germany is definitely providing a lot of bang for the buck. But this is very recent, circa 2014. Hard to say how long it will last before they bankrupt themselves. Already one province has reintroduced tuition for non-EU students as of 2017.

So, the Bihar topper scams, AP based fake degree business (the phenomenon that brought the whole background check business), the parallel and illegal (despite regulation prohibiting govt. servants taking side jobs) private tuition business, management quota nonsense, are part of the achievement I assume.

Health: Consumer safety etc seems pretty good in India. Haven't heard of any scandals with Gits dokla etc. The biggie is healthcare, and Germany does well here. Everyone is covered with in network full coverage for an additional $7500 per year pay in for the per capita. In India, I assume govt hospitals are free, and I got operated on once in a Bhopal public hospital (hamidya or something). Have had a few more experiences. In general, the cleanliness is quite low (remember having to sit on a blood stained sheet once), but they got the puss out, stitched it up and I am still alive lol. Of-course now middle class goes to private I think. Do the salaried class, who pay most of the taxes, get private health insurance from employer, and how much does it cost, and what facilities are available. Ultimately, given that Indian population is increasing and living longer, one would think that even here India is better than 7% of Germany.

Hear! Hear! The top of the line AMRI was closed for many years in Kolkata, because 78 patients suffocated to deaths. Apollo was closed for a fortnight because they managed to kill someone due to anesthesia overdose. These are our best facilities. About govt. facilities less said is better. UP CM is still smarting from unfortunate incident of scores of kids dying due to lack of oxygen. Similar thing is annual routine in most eastern states.

Social security: most government employees get pensions, and from talking to my relatives who retired from PWD, colleges, public banks etc, noone is complaining. Seems like this should be better than 7% of Germany.

"Government servants"? Eh! my dad is one.
But what about people like me if we let retrenched tomorrow? Can we get an unemployment allowance? Wait sir, I can't even get my life savings sitting with EPFO. God forbid that happens, then only recourse to getting that life saving out would be suicide so that my widowed wife gets the money.

So all in all, for a salaried person paying taxes in India, the *perception* I would have is that services are better than 7% of Germany unless free college education in Germany gets a very high weightage..More hard numbers would clarify this.

Some gullible forumite might still fall for verbal sophistry, but unfortunately I have lived in Germany for so long that this fairly tale won't get past me.

[guru.shetty]

On the positive side, low growth this year means a lower base for next year to show higher percentages of growth. That would remove "low growth" from election campaigning of 2019. I think this is also the reason GST was hurried through this year.

[SRoy]

So, Germany extracts 50% of salaried income. India extracts 20% - 30% depending on the slab.

So, that's 40%-60% of what the German govt. demands from us as salaried citizens.

Taxes in European countries are flat and on source. There are no escape routes like "no taxes on mortage interest, medicines" like in India.

Bring it on sir.
I don't need exemption. I don't need tax rebate on so called reimburses.
No need for pay break up jugglery by HR and finance white collar criminals.

Omissions by Jaitley apart, just bring in flat taxation, raise tax to 35% if needed and my vote is assured.

[pankajs]

6T is low, China was 2.7T in 2006-7, 10 years later, they are almost 12T.

Difference between 7.x% growth rate and 9.x% growth rate (compounded annually).

There was one economist, perhaps Micheal Pettis in a podcast, who opined that we need to subtract 1.5-2% from the headline growth number for the monumental debt binge after 2008 GFC.

He asked the interviewer to subtract a further 1.5-2% for the environmental impact of the reckless spending but lets ignore this bit for the moment. We don't know if India will not do the same. His logic is that one way or another a country has to pay for those 2 things sooner or later. You've just borrowed from the future.

This is from memory so that I am exactly not sure of the subtraction number but I think the above range is about right. Given the state of our infra we still have at least 30 years of "non steroid" growth ahead of us.

[Gus]

Tax code needs reform too. It is damn hard to figure out take home + tax paid = CTC, because of the many tax advantaged allowances with their myriad rules and regulations.

Maybe there are some gurus here who can maximize these things, but I always struggled to grasp and consoled myself with a "probably not worth the time you are spending to maximize these things"

[JohnTitor]

Tax code needs reform too. It is damn hard to figure out take home + tax paid = CTC, because of the many tax advantaged allowances with their myriad rules and regulations.

Maybe there are some gurus here who can maximize these things, but I always struggled to grasp and consoled myself with a "probably not worth the time you are spending to maximize these things"

Having lived and worked abroad all my life, I have struggled to understand the concept of CTC to no end. I am used to gross salary and tax liabilities leaving mw nwt salary.

This CTC is a joke, with companies adding in their share of the PF to make the amount look larger but makes no difference to take home amount. Add to it the number of various rebates like housing and medical etc.

Worse still two people with the same CTC can have completely different take home amounts because of the financial jugglery by companies.

[Karthik S]

Difference between 7.x% growth rate and 9.x% growth rate (compounded annually).

There was one economist, perhaps Micheal Pettis in a podcast, who opined that we need to subtract 1.5-2% from the headline growth number for the monumental debt binge after 2008 GFC.

He asked the interviewer to subtract a further 1.5-2% for the environmental impact of the reckless spending but lets ignore this bit for the moment. We don't know if India will not do the same. His logic is that one way or another a country has to pay for those 2 things sooner or later. You've just borrowed from the future.

This is from memory so that I am exactly not sure of the subtraction number but I think the above range is about right. Given the state of our infra we still have at least 30 years of "non steroid" growth ahead of us.

Most of Chinese infra, be it expressways or HSR was built in the last decade. Infra projects are the low hanging fruit when it comes to govt spending and development of the economy.