Indian Economy News & Discussion - Nov 27 2017

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eklavya
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by eklavya »

Dipanker wrote: We simply do not have the land and resources to cater to such a humongous population provide all of them with a decent living standard and quality of life.

This is a big hole we have dug for ourselves and now it will take inordinate amount of time may be centuries to dig us out of this hole.
Not centuries, just decades. We don’t need land for growth, we need technology and human capital and financial capital, all,of which we have in abundance. If world per capita GDP grows at say 1% and India’s grows at say 5%, we catch up with the average in less than 50 years (assuming 16.7% of world average per capita GDP today).
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Viv S »

Dipanker wrote:While I agree with some of your observations I think the primary reason for India's present predicament is its excessive population, we are already 1.3+ billion and headed to 1.75 billion before the population would supposedly stabilize. We simply do not have the land and resources to cater to such a humongous population provide all of them with a decent living standard and quality of life.
Bit of an absolutist statement. We just need to start thinking urban instead of bleeding our cities of revenue to subsidize rural areas all while residents of villages and small towns continue to immigrate to the cities.

Current population density: 403/sq.km
India's projected peak pop. density: 532/sq.km

Compared with -

South Korea: 526/sq.km
Taiwan: 639/sq.km
Netherlands: 500/sq.km

(All of whom had less time and fewer technological resources available to help adapt to emerging demographic changes.)
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Katare »

USA is the only country that have more arable land than India. Russia, Canada, China, Australia, Pakistan have one thing in common - most of their land is wasteland that can support very sparse population.

We are blessed but with 1.4billion and counting, we are pushing our luck! Time to get rich and healthy!
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

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Prem
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Prem »

Katare wrote:USA is the only country that have more arable land than India. Russia, Canada, China, Australia, Pakistan have one thing in common - most of their land is wasteland that can support very sparse population.

We are blessed but with 1.4billion and counting, we are pushing our luck! Time to get rich and healthy!
We do have 2nd largest arable land but our productivity is way low. If we can match China, Canada, USA in agricultural productivity , we can feed whole word for decades or centuries. Let's hope soon Israeli tech kicks in under deal made with Nathanayahu and we see the results in few years .
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Prasad »

Our fertility rates are a key indicator of what is possible. TN and other states with higher literacy have below replacement level fertility.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Mort Walker »

Prem wrote:
Katare wrote:USA is the only country that have more arable land than India. Russia, Canada, China, Australia, Pakistan have one thing in common - most of their land is wasteland that can support very sparse population.

We are blessed but with 1.4billion and counting, we are pushing our luck! Time to get rich and healthy!
We do have 2nd largest arable land but our productivity is way low. If we can match China, Canada, USA in agricultural productivity , we can feed whole word for decades or centuries. Let's hope soon Israeli tech kicks in under deal made with Nathanayahu and we see the results in few years .
There is a very good article in the latest American Scientist magazine about cropland world wide under cultivation. Everyone expected the US and China to have the most, but with surprise results from satellite data it turns out that India has 9.6% of global cropland which is the most of any country in the world.
See the link: Croplands Up Close

Image
Earlier studies had also concluded that China or the United States has the highest net cropland area, but it turns out that’s not accurate either. This new map gives that status to India, with 179.8 million hectares, or 9.6 percent of the global net cropland area. The United States follows with 167.8 million hectares, which is 8.9 percent of the global net cropland area (below). China has 165.2 million hectares, and Russia has 155.8 million hectares.
The problem in India is the loss of harvested grains, pulses, fruits and vegetables due to spoilage. Primarily there needs to be massive cold storage warehouses across India, but for that you need plentiful cheap electric power. India is blessed by God and cursed by the highest per capita idiots.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Katare »

Productivity depends on input cost and availability of those inputs. Three most important inputs, besides land, are fertilizer, water and technology. China uses 3x fertilizers/hectare, Quater uses 40x and Singapore goes as high as 200x of what India consumes.

Israel and USA use within the 50% band of India but they rely on the technological inputs to achieve high productivity. Water again is a constraint for India, not rain fall, because most of it comes in 3 months of the year so you need to store it for the reminder of the 9 months. Storage costs a lot of money and imposes crippling social and environmental costs.

We can double or triple our fertilizer consumption (mostly import of patrolium products or direct fertilizers) and increase technology inputs to double the production in next 10 years.

Govt’s subsidy bill could triple or quadruple and food would become so cheap that farmers would get bankrupt. Growth in production needs to go with rise in per capita income to consume it at premium. Only other source of market is export and that means your production cost had to be in the lowest bracket. This is the only industry where no govt can afford to let market forces determine the cost. Once a British viceroy of India relied on it causing millions of Indian to die of starvation.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by A_Gupta »

....the work of Sir Albert Howard, the father of the organic farming movement. Howard, Britain's imperial economic botanist in India in the early 1900s, studied the farming practices of India's peasants and wrote two books based on his observations: An Agricultural Testament and The Soil and Health. He was knighted for his work in 1935.
India had sustainable good yield organic farming and lost it.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

Mod Note

Posts by the troll have been cleaned up. Some discussion posts left behind.

People, can you please stop feeding trolls ? Just use the report post function.
Prem
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Prem »

Mort Walker wrote:
Prem wrote:
The problem in India is the loss of harvested grains, pulses, fruits and vegetables due to spoilage. Primarily there needs to be massive cold storage warehouses across India, but for that you need plentiful cheap electric power. India is blessed by God and cursed by the highest per capita idiots.
The new food processing policy will correct this anomaly , GOI is subsiding and huge storage and processing plants the size of 15-30 acres ( 10-40 Million $ investment) sill soon crop up all over India . Aim is to have one in each district .
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Akshay Kapoor »

Will this be part of FCI ? How do we ensure it doesn't become a scam at local level.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Akshay Kapoor »

How's the tax base increase post demo and GST looking. Suraj some analysis of that would be quite useful espeicllay wrt to enforcement measures using data collected from demo.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

Akshay Kapoor wrote:How's the tax base increase post demo and GST looking. Suraj some analysis of that would be quite useful espeicllay wrt to enforcement measures using data collected from demo.
The latest economic survey and budget documents are a very interesting read
India Budget portal

Business Standard has come out with a great animated presentation describing the statistical changes around the increased GDP growth:
Statsguru: The anatomy of India's GDP growth
If one looks at the GDP accounting from the expenditure side, it is clear, as shown in Chart 6, that private final consumption expenditure (PFCE) is still subdued. However, PFCE has improved between the first and second Advance Estimates and it has also improved in 2017-18 compared to 2016-17. However, the most important information carried in the second Advance Estimates pertained to the sharp improvement in the rate of growth of new investments, measured by gross fixed capital formation, as shown in Chart 7.
Growth in investment is a big deal, since it heralds belief by businesses in the growth of future demand.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by A_Gupta »

The Nikkei India Services Purchasing Managers’ Index slid to 47.8 in February -- the lowest since August -- from 51.7 in January.............Despite unfavorable demand conditions, businesses raised their staffing levels in February and remained confident about output growth over the next 12 months, the report said.
https://www.bloomberg.com/news/articles ... o-spur-gdp

PS: also https://in.investing.com/economic-calen ... es-pmi-598
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

The services PMI data looks like a blip. PMI has 5 main factors:
* new orders
* current production
* staffing levels
* current stock
* supplier delivery time
The answers are one of three choices about the future:
* improvement
* no change
* worsening

On at least 2 of five (new orders and staffing) February numbers are positive. It seems the negative figure is on account of changes in the other three, which in my opinion are less critical. Growth in staffing in particular is a 'sticky' change, since companies are very careful about increasing payroll unless they're very confident about growth.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Supratik »

Govt has a got a hold on the pulses problem partially.

https://swarajyamag.com/ideas/arhar-mod ... pportunity
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Dipanker »

Things looking up for the economy?

Indian economy to recover gradually to 7.1 per cent in FY2019
The Indian economy is likely to recover gradually to 7.1 per cent in 2018-19 financial year as GST related disruptions have smoothened and consumption levels have improved, says a report. According to a report by Kotak Economic Research, gradual recovery is underway and the country has started to recuperate from the cyclical and structural bottlenecks witnessed over the past two years.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Supratik »

Suraj
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

Supratik wrote:Govt has a got a hold on the pulses problem partially.
https://swarajyamag.com/ideas/arhar-mod ... pportunity
This is a great story more than two years in the making, actually. I posted about this in 2015/16 here. There was a similar article, perhaps on SwarajyaMag itself (or Business Standard ?) outlining the problem clearly. I'll post a link if I can find that one. There issues were several:
* demand outstripping production
* stagnant acreage + no MSP incentive
* even a fix would take ~2 years to show results because of crop gestation period
* No way to fix the problem immediately, yet a chance to fix the problem in the long term

This was a long term structural issue with no snap-your-fingers fix in one sowing cycle like rice. Two years hence, it is clear GoI has done most of what was in the "here's what they can do" list two years ago. This is the mark of an effective government, taking on a significant structural problem and persevering despite lack of immediate political gains.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by disha »

Dipanker wrote:Things looking up for the economy?
Yes. Things are indeed good for the economy., economy was good before and that is why both DeMo and GST were carried out. And now economy is on a firmer footing.

Question is how steep is the recovery. Will it be 7.1% in FY2019 or will it be 8.2% in FY2019? Or is the monsoon baked into the forecast?

Do you have an alternate number on the growth rate of economy? Is yours >7% or <5%? Or do you have a number for inflation?
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

COLLECT PASSPORT DETAILS OF DEBTORS OWING OVER RS 50CR, FINMIN TELLS BANKS

COLLECT PASSPORT DETAILS OF DEBTORS OWING OVER RS 50CR, FINMIN TELLS BANKS

Wednesday, 07 March 2018|New Delhi

The Finance Ministry has directed State-owned banks to obtain passport details of all borrowers, who have taken loans in excess of Rs 50 crore, within 45 days with a view to preventing alleged fraudsters like Nirav Modi and Vijay Mallya from fleeing the country, sources said.

In case the borrower does not have a passport, the bank should obtain a certificate in the form of declaration that the person does not have the passport, sources said quoting the Finance Ministry’s advisory to banks. It further said the loan application form should be suitably modified to incorporate passport details of borrowers. Passport details will help banks to take timely action and inform the relevant authorities to prevent fraudsters from fleeing the country, sources said.

In absence of passport details, banks were hamstrung in taking timely action to prevent defaulters especially wilful one from fleeing the country. Several big defaulters like Nirav Modi, Mehul Choksi, Vijay Mallya and Jatin Mehta have fled the country putting recovery mechanism in quandary. Last week, the Cabinet approved the Fugitive Economic Offenders Bill, though it was announced in the Budget for 2017-18, has been hastened after Nirav and his uncle Mehul Choksi allegedly defrauded State-owned Punjab National Bank (PNB) of Rs 12,700 crore and left the country and are refusing to cooperate with law enforcement agencies.

The Bill provides for confiscating all assets of absconding fraudsters and loan defaulters to recover dues in a bid to tighten noose around fugitives like diamond merchant Nirav and Mallya.

The Union Cabinet chaired by Prime Minister Narendra Modi also approved setting up of a National Financial Reporting Authority (NFRA) as an independent regulator for the auditors.

The proposed fugitive law aims to impound and sell assets of Nirav-type escapees with a view to quickly recover dues. It also will apply to defaulters who have an outstanding of Rs 100 crore or more and have escaped from the country.

As part of drive to clean the banking system, the Finance Ministry last week had directed public sector banks (PSBs) to probe all NPA accounts of over Rs 50 crore for possible fraud and accordingly report the cases to CBI.

“PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examine all NPA accounts Rs 50Cr for possible fraud,” Financial Services Secretary had said in the tweet.

Besides, the Ministry had asked banks to monitor loans above Rs 250 crore and red flags whenever the original covenants of the loans are violated. This was spelt out as part of 6-point-reform measures announced for PSBs in January.



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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

where can I get central budget allocation for each state. I am having running arguments over AP drama of CBN.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by nandakumar »

vijayk wrote:where can I get central budget allocation for each state. I am having running arguments over AP drama of CBN.
States get their share of resources under various centrally sponsored schemes within the overall entitlement of money under finance commission award. Individual State's share depends on population, level of poverty and so on. Andhra too gets its share like any other State although its quantum may not be as large as say, Uttar Pradesh. If your question is specific to Polavaram project, there is data in the Budget Expenditure document under Ministry of Water Resources. Unfortunately both in 2017-18 and 2018-19 Polavaram project got zero allocation. But the problem lay entirely with the AP govt. The project has been declared as a national project. So it is eligible for central funding as centrally sponsored scheme. But the State wants to retain administrative control of award of tenders and so on. The Centre is okay with it. But wants the State to freeze project specification and hence costs so that the Centre clearly knows the size of its financial commitment. But AP wants it open ended. Therein lies the problem.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by disha »

Qstn for CBN/CM of AP - 'Kitna gaya?' 'How much you lost?'

A politico made tons of money in the Nagarjuna Sagar dam construction., actually some of the cement was diverted to make a spectacular cinema theatre in Hyderabad. From that point onwards, mega projects like above acquire mega moths.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

What is special category status?


What is special category status?

For special category status category states, the Centre pays 90 per cent of the funds required in a centrally-sponsored scheme as against 60 per cent in case of normal category states, while the remaining funds are provided by the state governments.

New Delhi | Updated: March 8, 2018

TDP vs BJP LIVE UPDATES: BJP behaving as callously as Cong did during bifurcation, says NaiduTDP vs BJP LIVE UPDATES: BJP behaving as callously as Cong did during bifurcation, says Naidu

The Bharatiya Janata Party (BJP) and Telugu Desam Party (TDP) have locked horns over the central assistance ever since the Union Budget was presented, with the latter alleging that the Centre ignored its demand for special category status to Andhra Pradesh. State Chief Minister Chandrababu Naidu has said that after the state’s bifurcation, it has been given a raw deal and remained short of resources. In a statement, Naidu had said, “It is the responsibility of the Centre to implement the AP Reorganisation Act, 2014, and fulfil the promises made, including giving the Special Category Status to AP.”

The demand for the special category status for the southern state has been a constant issue ever since the inception of Telangana in 2014.

Naidu also referred to Special Category Status as Andhra’s “right”, and said the ruling party at the Centre was “not budging” only because it has a “total majority” in Parliament. Naidu also announced that he has directed Union Civil Aviation Minister P Ashok Gajapati Raju and Y Satyanarayana Chowdary, Minister of State for Science and Technology and Earth Sciences, to resign from the BJP-led government at the Centre. READ: TDP walks out of Govt: Why fallout poses a challenge to BJP’s numbers count for 2019

What is Special Category status?

While the Constitution does not have any provision for categorisation of any state as a Special Category Status (SCS) State, but considering the fact that some areas in India are historically disadvantaged as compared to others, the Centre has assisted states with funds in the past allocated by the former Planning Commission body called the National Development Council (NDC). READ: Andhra denied special category status: TDP walks out of Govt, puts NDA on notice ahead of 2019

What does The 14th Finance Commission say about the Special Category status?

In the past, the NDC considered factors such as difficult and hilly terrain, low population density and/or a sizeable share of tribal population, strategic location along borders, economic and infrastructural backwardness, and non-viable nature of state finances. The NITI Aayog, which has replaced the Planning Commission, has no power to allocate funds — therefore, the discretion that the ruling party at the Centre had to dole out special favours to states through the Plan panel, no longer exists.

The Centre says the Fourteenth Finance Commission effectively removed the concept of Special Category States after its recommendations were accepted in 2015. The Centre, Arun Jaitley has said, was willing to provide the “monetary equivalent” of a special category state to Andhra Pradesh but would not be able to grant the “special status” that was restricted only to the north-eastern and three hilly states by the 14th Finance Commission.

What assistance do states with Special Category Status get?

The Centre pays 90 per cent of the funds required in a centrally-sponsored scheme to special category status category states as against 60 per cent in case of normal category states, while the remaining funds are provided by the state governments.

What has the Centre assured Andhra Pradesh?

Finance Minister Arun Jaitley had said that for Andhra Pradesh, the Centre is committed to giving 90 per cent of the funds, equivalent to special category states, through other means like external agencies.

However, the Centre has agreed to give “special assistance” to AP for five years, which would make up for the additional central share the state might have received during these years — 2015-16 to 2019-20, as envisaged by Singh’s 2014 statement. This will be in the form of Union funding for externally aided projects that have been signed and disbursed during these years. AP is demanding that special assistance funding should be in the 90:10 ratio (Centre: state) for both EAPs and centrally-sponsored schemes — which adds up to about Rs 20,010 crore of central assistance. Because the state government may not be able to spend this amount on EAPs in the stipulated five years, AP is demanding that the Centre allow it to use the money to clear outstanding loans. It is seeking permission to borrow from internal lenders like NABARD, HUDCO and other commercial banks, and to use the gap to pay interest commitments to the Government of India, NABARD and EAPs.

The Centre is also willing to accept the state government’s suggestion of raising funds through NABARD. At meetings with the state government last month, the Centre suggested creation of a special purpose vehicle (SPV) where NABARD could give the money so as not to upset the fiscal deficit of the state, Jaitley said, adding that the Andhra Pradesh government is yet to come back on the modalities of this proposal. On meeting the revenue deficit of the state, he said, the Centre has already paid around Rs 4,000 crore and only Rs 138 crore remain.

Which are the other states that are demanding the Special Category Status?

Aside from Andhra Pradesh, Odisha and Bihar had demanded SCS status. However, they have not been granted the status as they did not fulfill the criteria to be qualified as an SCS State.

When was the first Special Category status bestowed?

The NDC first accorded SCS in 1969 to Jammu and Kashmir, Assam and Nagaland. Over the years, eight more states were added to the list — Arunachal Pradesh, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Sikkim, Tripura and, finally, in 2010, Uttarakhand. Until 2014-15, SCS meant these 11 states received a variety of benefits and sops.
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hanumadu
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by hanumadu »

How the govt is using technology to fix crony capitalism.
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Being a customs broker, can vouch for the steady tightening of the system so much so that the linkage between Bill of Entry, Foreign Remittance, GSTIN is so complete that any kind of jugglery will be caught instantaneously.
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A Thread on why having practical knowledge is imp and why wine sipping dolt economists who can't name all districts in their home state can't understand stuff.

1. Few of our clients are in international trade and regularly imp or export
8:53 PM - 7 Mar 2018 from Haveli, India
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2. A client Informs me that banker had called him up and was insisting on Bill of lading docs to be urgently submitted at the branch for the imports they had done.

He kind of took it lightly and said he will submit it soon. Failed
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3. He got a call again from the manager who said they have to submit every paper in order and in clear copies or as per the new rules his Import Export Code will be permanently blocked.

Alarmed. Guy goes to bank and submits all proofs of import again. Saves himself
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4. On enquiring as to why so much seriousness and extreme step to cancel IEC the banker informs that now IEC database, pan database, bank details and import export data are all matched. Any discrepancy and it gets red flagged. Client asks why is it so?
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Simple: under invoicing and over invoicing.

Earlier all these databases weren't matched and thousands of crores flew out and goods came or went nobody had a clue. Now? Nopes.

What data shows? Export growth slow etc. What dolt economist say? Modi resign. Truth? It's above.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by A_Gupta »

Prem
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Prem »

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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chetak »

Banking scam has UPA era roots

Banking scam has UPA era roots

By SREE M. IYER | | 25 February, 2018

Image
Correct way an LoU should be issued.


‘Advice’ came from the UPA government to all public sector banks to change over to Finacle.


There are several ways in which banks the world over facilitate credit to their customers when they are importing and exporting goods. For instance, when I used to work in India, about 30 plus years ago, I was employed as a sales engineer distributing the high technology products of an American company. Most customers in those days were the defence laboratories, manufacturers for defence and so on. Abdul Kalam was the director of Defence Research and Development laboratories in Hyderabad and was tasked with producing missiles such as Agni, Trishul and so on. Suffice to say, there was a lot of activity.

Every time a new project came down the pipeline, there would be an elaborate procurement process that would involve the buyer opening a Letter of Credit (LC) with an Indian bank such as the State Bank of India. The LC would specify the amount in dollars since it was a US supplier, would specify whose responsibility the goods were once it left the premises of the supplier, where it would land and so on. Excruciating details needed to be filled, even for small amounts. This LC would be checked, double checked and triple checked by at least three different entities (the buyer, the distributor—i.e. the company I worked at—the foreign exchange group in the company that telexed the data to the company that handled international sales). If even one comma was out of place, the LC would be rejected and the process would start all over again. The point of this is that there were many checks when money left India for purchasing equipment from abroad.

Fast forward to the present. There are many ways in which banks provide credit facilities to its customers. A due diligence process is undertaken, the size and capacity of the business to repay is computed and the limits are accordingly set. These limits are set in the Core Banking System (CBS) or a trade finance system. This covers all types of guarantees by the bank such as a Letter of Undertaking (LoU), a Bank Guarantee (BG) or a Letter of Credit (LC) facility.


Image
LoU issued via manual entry in SWIFT, bypassing CBS.



HOW IS AN LOU SUPPOSED TO WORK?

When an LoU is issued normally in the CBS, the CBS makes a debit entry and then generates an LoU SWIFT (Society for Worldwide Interbank Financial Telecommunication) message that is then transmitted to the foreign entity. For more, see Figure 1.

But what really happened in the case of Punjab National Bank was that there was a manual entry of SWIFT message that was possible, which the SWIFT gateway provided. This method bypassed the use of the Core Banking System module. This means that the CBS does not have any knowledge of the LoU. For more, see Figure 2.

Regrettably, this “shortcut” is used all too often in Indian banking to generate fake LCs and BGs.

Figure 1 was a simple illustration of how an LoU works. Figure 3 describes the same operation with a Release Control Mechanism (RC). Swift gateways provide an RC, which can be used to check every swift message that goes out of the bank. In this mechanism, every message should have a backing accounting entry in CBS and if such an entry is not found, the system does not allow the swift message to be sent out. In the case of LoUs, the backing entry in CBS will be the debit entry. Many global banks also implement anti money laundering screening or anti-terrorist scanning for each SWIFT message as part of the release control mechanism checks.

Image
LoU with Release Control Mechanism.



HOW COULD HAVE THIS HAPPENED?

Go to any bank in India. You will find a Rs 2 pen tied to the desk that has all the forms. This is how zealously they guard their property. Then how could this happen, that too for several years? This clearly indicates that there were higher ups in the know and perhaps were on the take. As I mentioned previously, this cannot be wished away as an isolated instance. There are several such scams in the banking system and the system needs to be controlled immediately.

WHAT IS THE SOLUTION?

For this, we need to go back to an age when Laser Soft CBS product was the dominant software provider for the banks. Their software had a robust implementation of LoUs similar to what is described in Figure 3. How they were replaced by Finacle and how their business was almost driven to the ground is a story of deliberate attempted murder of an enterprise that needs to be told here.

Corporation Bank, a PSU bank was among the first to automate its banking operations. Since they were headquartered in Chennai and as was Laser Soft, they worked closely to implement the CBS. One of the perceived limitations that were held against the Laser Soft product was that it did not have a Relational Database Management System (RDMBS). Even if this were true, it could have been enabled in a very short time.

A reliable source, who wished not to be named, told me that though there was a public perception that the Reserve Bank of India (RBI) had advised all banks to go for RDBMS; apparently there was no such directive. “Advice” came from the UPA government to all Public Sector Undertaking (PSU) banks to change over to Finacle. They obeyed in a herd, despite the high cost involved. Given the leakages that have taken place in the banking system, a ruthless examination by investigating agencies should be made of the UPA decision to change a well-functioning software with a much more expensive (and plainly inadequate) alternative.

WAS LASER SOFT PREVENTED FROM BIDDING?

My reliable source also added that when Corporation Bank was evaluating various solutions for an RDBMS based software solution, the rules were abruptly tweaked in such a way as to exclude Laser Soft. If true, this warrants a thorough investigation by the Central Bureau of Investigation. Prime Minister Narendra Modi needs to act in order to protect his image of being a clean politician and to save the banking system from further fraud. I have also heard rumours that other chairmen of PSU banks were also coaxed into buying the new software. There was allegedly an instance of an ex-chairman landing at the city, where a PSU bank was headquartered, to lobby for Finacle. The CBI needs to investigate this without fear or favour. I have also heard that RBI continues to use Laser Soft CBS. If this is true, it is a stinging indictment of banks that go by “advice” from interested quarters. The Nirav Modi-created meltdown in PNB resources could be the tip of a much bigger iceberg of similar ways in which the banking system is being defrauded.

AN I.T. NIGHTMARE

When an existing piece of software, say Microsoft Word for Windows, which is what I used to type this article is being considered to be replaced, then it raises several concerns in the minds of the Information Technology (IT) group. These are the guys who will have to go to every computer on which the old software is installed, take it out and replace it with the newer software. Suffice to say it is a pain in the neck. They usually resist change. Why fix something when it is not broken? Long story short, unless there is a compelling reason for changing the product, the IT guys do not want to change it. They are often overworked, asked to deal with many tasks that their job description does not list. No wonder that in several banks, installation of Finacle software is still a work in progress.

CONCLUSION

The corrective action has to be put in place immediately by moving forward. All existing software, all security measures should be checked, upgraded and verified. If this means foreign banking has to be suspended for a few days, so be it. This is the public’s money that is being played with. Most importantly, an inquiry needs to get conducted as to how the public banking system was “attacked from within” during the UPA period. Four years is too long a time for the government to avoid responsibility for its inability to ensure that the PNB scam was stopped in its tracks soon after the victory of the “na khaoonga, na khane doonga” Prime Minister in 2014.
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Re: Indian Economy News & Discussion - Nov 27 2017

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Re: Indian Economy News & Discussion - Nov 27 2017

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chaitanya
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chaitanya »

More good news:

Industrial production expands at 7.5% for Jan, CPI softens to 4.4% for February
...
The expansion was supported by growth in electricity sector which grew at 7.6 per cent. The continued expansion in industrial production has reinforced hopes of a healthy economic growth in the fourth quarter. The GDP grew at 7.2% in the October-December quarter.

Retail inflation cooled to 4.44 per cent in February compared to 5.07 per cent in January. The number is still higher than the RBI's medium-term target of 4 per cent.
...
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by anupmisra »

A_Gupta wrote:Image
The wonderful years of socialist economy.
Suraj
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Suraj »

Updating the IIP table further. Clear signs of acceleration of the economy, from both 3-mo and 6-mo averages:

Code: Select all

Mth	CY	  FY        IIP   3-mo  6-mo Notes
Jan   2018   2017-18   7.5   7.8   5.7
Dec	2017	2017-18	7.1	6.0	4.6	
Nov	2017	2017-18	8.8	4.9	3.4	
Oct	2017	2017-18	2.2	3.5	2.2	
Sep	2017	2017-18	3.8	3.2	2.4	
Aug	2017	2017-18	4.5	1.9	2.2	
Jul	2017	2017-18	1.2	0.9	1.2	GST Effective
Jun	2017	2017-18	-0.1	1.6	1.5	
May	2017	2017-18	1.7	2.5	1.4	
Apr	2017	2017-18	3.1	1.5	2.1	
Mar	2017	2016-17	2.7	1.4	1.3	
Feb	2017	2016-17	-1.2	0.4	0.9	
Jan	2017	2016-17	2.7	2.7	1.0	
Dec	2016	2016-17	-0.4	1.1	0.2	
Nov	2016	2016-17	5.7	1.5	0.6	Demonetization
Oct	2016	2016-17	-1.9	-0.6	-0.2	
Sep	2016	2016-17	0.7	-0.8	0.0	
Aug	2016	2016-17	-0.7	-0.3	-0.1	
Jul	2016	2016-17	-2.4	0.3	0.4	
Jun	2016	2016-17	2.1	0.8	0.5	
May	2016	2016-17	1.2	0.2	-0.1	
Apr	2016	2016-17	-0.8	0.4	-0.8	
Mar	2016	2015-16	0.05	0.2	1.0	
Feb	2016	2015-16	2.0	-0.3	1.6	
Jan	2016	2015-16	-1.5	-2.0	2.3	
Dec	2015	2015-16	-1.3	1.8	3.3	
Nov	2015	2015-16	-3.2	3.5	4.2	
Oct	2015	2015-16	9.8	6.7	5.2	
Sep	2015	2015-16	3.8	4.8	4.2	
Aug	2015	2015-16	6.4	5.0	3.9	
Jul	2015	2015-16	4.2	3.8	3.6	
Jun	2015	2015-16	4.4	3.5	3.4	
May	2015	2015-16	2.7	2.7	2.9	
Apr	2015	2015-16	3.4	3.5	1.8	
Mar	2015	2014-15	2.1	3.2	0.6	
Feb	2015	2014-15	5.0	3.1	0.6	
Jan	2015	2014-15	2.6	0.2	-0.1	
Dec	2014	2014-15	1.7	-2.1	-0.5	
Nov	2014	2014-15	-3.8	-1.8	-0.2	
Oct	2014	2014-15	-4.2	-0.4	1.2	
Sep	2014	2014-15	2.5	1.1		
Aug	2014	2014-15	0.4	1.4		
Jul	2014	2014-15	0.5	2.9		
Jun	2014	2014-15	3.4			
May	2014	2014-15	4.7			GE 2014
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by chaitanya »

With PM Gramin Awas Yojana under DBT, payout swells over two-fold
NEW DELHI: The government has brought the Pradhan Mantri Gramin Awas Yojana (PMAYG), which has a Rs 50,000 crore payout in this financial year, under the direct benefit transfer (DBT) mechanism. This will result in a DBT of Rs 1.59 lakh crore in this fiscal, more than double that in the previous year and up 50% in just a month.

The Prime Minister’s Office (PMO) has pressed for two other big subsidies, food subsidy through the public distribution system (PDS) and fertiliser subsidy, to be brought under the DBT mechanism as well soon, a senior government official told ET on condition of anonymity. “That could take the DBT payout this fiscal beyond Rs 2 lakh crore and even higher next year,” he said.

The government’s estimate is that the total subsidy payout by the Centre in a financial year is around Rs 4 lakh crore.

“When all 450-odd central schemes are brought under DBT by March 31 this year, the entire subsidy will be paid through DBT. This will be a major achievement,” the official said.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by SaraLax »

chetak wrote:Banking scam has UPA era roots

Banking scam has UPA era roots
By SREE M. IYER | | 25 February, 2018


‘Advice’ came from the UPA government to all public sector banks to change over to Finacle.


..... I have also heard rumours that other chairmen of PSU banks were also coaxed into buying the new software. There was allegedly an instance of an ex-chairman landing at the city, where a PSU bank was headquartered, to lobby for Finacle. .....
No wonder that in several banks, installation of Finacle software is still a work in progress.
Many may know that Finacle is Infosys's banking software product. In 2009 - during UPA-2's rule Mr.Nandan Nilekani (an INC politician & co-founder of Infosys) was provided with a Cabinet Ranking ministerial position by the then PM ... Dr.Manmohan Singh & Nilekani was managing the UIDAI setup. I am left wondering if this could well be a conflict-of-interest type scenario and whether RBI or whoever was the related banking regulator entity or even the CAG - was OK with this instance of a Central government recommending a CBS solution to its PSUs that would lead to profits for one of its own party politician ?.

The PSU bank in which my father was working was made to abruptly change over (during UPA-2 rule) from their own Unix OS & Informatics DB based in-house CBS solution to the costlier Finacle type CBS solution. The bank lost a lot of its customers due to the various issues encountered during its banking software transition.
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by Vadivel »

SaraLax wrote:
Many may know that Finacle is Infosys's banking software product. In 2009 - during UPA-2's rule Mr.Nandan Nilekani (an INC politician & co-founder of Infosys) was provided with a Cabinet Ranking ministerial position by the then PM ... Dr.Manmohan Singh & Nilekani was managing the UIDAI setup. I am left wondering if this could well be a conflict-of-interest type scenario and whether RBI or whoever was the related banking regulator entity or even the CAG - was OK with this instance of a Central government recommending a CBS solution to its PSUs that would lead to profits for one of its own party politician ?.

The PSU bank in which my father was working was made to abruptly change over (during UPA-2 rule) from their own Unix OS & Informatics DB based in-house CBS solution to the costlier Finacle type CBS solution. The bank lost a lot of its customers due to the various issues encountered during its banking software transition.
As much as I hate Infosys, it's better to create our own zaibutsu/cheabols. Else it will be easy pickings for foreign owned companies. I am ok with the Ambanis and adanis with prefential treatments, because that's the only way to create large companies of scale, create jobs of scale, increase productivity and have deep pockets to with stand recession or what nots.

Our industries and business are too small at this stage to stop any external onslaught. For example compare micromax/lava vs the Chinese mini/oppo :((
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Re: Indian Economy News & Discussion - Nov 27 2017

Post by vijayk »

https://www.moneycontrol.com/news/busin ... 27287.html
Raghuram Rajan breaks silence on 80:20, says scheme was brought in to create jobs, boost free trade
Rajan also talked about the PNB scam, the world economy and how social media keeps attributing "rubbish" to him.
Q: When you were governor, many of these LoU’s were signed and used to get letters of credit and actually a letter when you were governor on August 03rd 2016 was sent to all the banks asking them to thoroughly scrutinise the SWIFT system, audit it. Looks like you all were sensitive that a problem can come from this SWIFT connectivity to the core banking system. Can the supervisor be blamed for not pushing hard enough to get their instruction implemented?

A: Before we assign blame, we have to know what happened and why it happened. In many banking systems there are so many ways of getting around the system. We have to understand that when a way is discovered for example with the SWIFT system it was the problem at Bangladesh Bank which unearthed the problems that were there. When the problem is discovered it is important that the regulators send the message to the banks that we have unearthed this problem, now fix it in your systems.

Of course after that the regulator basically assumes to some extent that the banks have fixed it. If they haven’t, we have to understand why the banks didn’t. I mean when they were told about a problem why wasn’t the problem fixed and I understand they were other reminders sent after that by the Reserve Bank and we have to understand why they weren’t obeyed. So, there is a fair amount of learning from this episode that we need to get. But surely there is plenty of responsibility to spread around.

Q: Hot from the oven news is that the Reserve Bank has banned LoUs. News coming in just about 10 minutes back. Way to go you think?

A: I can’t opine on current policy and I am sure they have looked at the issues. One of my concerns in India is that there is sometimes a very ---cavalier treatment of guarantees whether it is bank given guarantees or government given guarantees. We don’t think these are real and it is only when they are called upon by the entity that has relied on them that we understand that it is almost like giving a loan or in fact more than giving a loan because it usually called upon when the loan is in distressed. So, it is actually like providing equity. Unless we account for these properly there are huge contingent liabilities on the government balance sheet as well as on the bank balance sheet and it is important that we acknowledge them.

Q: You are speaking about pushing blame around and the government has picked up this 80:20 gold scheme as one of the ways in which people were allowed to make money. What are your comments on – you must have heard what the government said about this?

A: As far as I understand, the Punjab National Bank (PNB) scam started in 2011 and was unearthed in 2018. The gold scheme that is under the scanner at this point was something which lasted between May 2014 and November 2014. It seems to me very hard to argue that whatever happened then and I am happy to talk more about that, but whatever happened there was in any way related to the scam other than it happened in the same industry that there was gold involved. It is important to treat these has two separate issues. Happy to talk about the 80:20 because the actions there as far as I understand were justified, but I think it is important to keep it separate from the scam.

People conflate this all the time and I think this seems to be diversion of public interest rather than a focus on the key issues which are important. Why is it that our banking system is leaking so much? How do we prevent the leaks especially when there is so much new money going into the banking system as re-capitalisation?
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Re: Indian Economy News & Discussion - Nov 27 2017

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Confidence booster for Modi: Job creation doubles in July-September
Eight key sectors add 1.36 lakh jobs in July-September FY18
Employment in eight key sectors, including manufacturing, IT and transport, rose by 1.36 lakh on net basis in July-September this fiscal compared to the previous quarter, says a survey. Construction sector was the only segment that reported job losses of 22,000 in the second quarter of FY2017-18. “Estimates from present Quarterly Employment Survey reveal that there was an overall positive change of 1.36 lakh workers (in July-September) over the previous quarter (April-June), across eight sectors at all India level,” the Quarterly Employment Survey by the Labour Bureau for for July-September stated. The Labour Bureau, a wing of Labour Ministry, stated that there were positive changes in seven out of eight sectors.

Manufacturing sector added 89,000 jobs, education sector added 21,000 jobs while transport sector saw addition of 20,000 jobs. Trade (14,000), health (11,000), accommodation & restaurant (2,000) and IT/BPO sector (1,000) also reported job additions. Negative change was in only construction Sector (- 22000). “Within construction, this negative change is attributed to construction of buildings and building completion and finishing. This may be due to seasonal activities as well as festivities,” the survey said.

According to the survey, out of the total estimated change in employment of 1.36 lakh, female workers accounted for 74,000 and male workers for a change of 62,000. Self-employed experienced a positive change of 4,000 and employees experienced a positive change of 1.32 lakh. The number of regular workers marked a significant positive change of 65,000 followed by a positive change of 44,000 and 23,000 in contract and casual workers categories respectively.
Parliamentary panel suggests anti-dumping duty, GST revision to boost textiles sector
The Textiles Ministry should impress upon the Finance Ministry to reconsider the overall GST structure for textiles sector and impose higher anti-dumping duty to protect the domestic industry, a Parliamentary panel has said. In its report tabled in Parliament today, the Standing Committee on Labour chaired by Kirit Somaiya said it desires the Textiles Ministry to impress upon the Department of Revenue/Finance Ministry to reconsider GST structure for textiles. The panel noted that the Textiles Ministry has also taken up the issues on inverted duties structure on man-made fibre, imposition of GST on job work, credit transfer documents issues, non refund of input tax credit, GST for weaving industry, lowering of Goods and Services Tax (GST) rates for machinery used by MSME textile units, etc. It observed that against the Textile Ministry’s proposed outlay of Rs 10,109.05 crore during the year 2018-19, the Ministry of Finance have approved Rs 7,147.73 crore only.
India attracts USD 209 billion FDI during Apr 2014 to December 2017
Foreign direct investment has increased “steadily” in the country with total capital inflows reaching $208.99 billion during April 2014 to December 2017 period, a Union minister said today. The main sectors that received maximum foreign inflows include services, computer software and hardware, telecommunications, construction, trading and automobile. “A total FDI of USD 208.99 billion from April 2014 to December 2017 has been received,” Minister of State for Commerce and Industry C R Chaudhary said in a written reply to the Lok Sabha.
India to become USD 5 trillion economy in 7-yrs, says Suresh Prabhu
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