Indian Economy News & Discussion - Nov 27 2017

sanjaykumar · Post by **sanjaykumar** » 23 May 2019 07:32

Any hope of eclipsing China has vanished. Indeed, a government-sponsored think tank recently acknowledged that India would remain smaller than China even as far out as 2047.But at least for now, India’s rate of expansion is higher than China’s and for that, Mr. Modi deserves much credit. If India is to maintain that superior performance, it should stay the course with him.

Often, wisdom lies in semantics...another way of stating the same facts is, 'after 2047, at the latest, China will have a smaller economy than India'.

yensoy · Post by **yensoy** » 23 May 2019 09:28

Extrapolation to such periods is nonsense. By extrapolation, you can show that Bangladesh will have a bigger GDP than India.

A lot of things can go wrong in China. Somethings can go wrong in India too. A lot of things can get better in India, not as much in China because well they are already operating at very high levels of efficiency.

But what is more or less set in stone is that China has a landmass 3 times as much as ours, and with a similar population it has access to a lot more resources than we do. We are water stressed, we have demographic issues (they do too, in a different way).

What really matters is whether we will be able to ensure that even our poorest have a decent humane standard of life - access to safety, water, food, education, energy, information, health and legal services. That should be our measure of success instead of a pissing contest with China.

sanjaykumar · Post by **sanjaykumar** » 23 May 2019 10:15

The USSR was about three times larger than the US. Roughly similar population.

yensoy · Post by **yensoy** » 23 May 2019 10:39

sanjaykumar wrote:The USSR was about three times larger than the US. Roughly similar population.

And a completely broken economic model. China is anything but that. The most fundamental thing people need to acknowledge is that the Chinese system is extremely adaptable, and is open to learning. They are very well aware of their shortcomings, read their critics and learn from their mistakes - all this is at the highest echelons. The fact that common Chinese people are kept away from such information, analysis and critical thinking should not fool us.

Supratik · Post by **Supratik** » 23 May 2019 17:38

I don't understand this continuous sermons coming out of China lovers in the west about Chinese technological leap that is apparently taking place. Name me 5 original discoveries/inventions that have come out of China in the last 20 yrs. You won't. Just like India they are trying to catch up. Yes, they are ahead of us in certain areas particularly manufacturing but nothing like this constant propaganda. A closed dictatorial nation is a bad place for discoveries/inventions. Think Nazi Germany and Communist Soviet Union. Then the propaganda was that they will take over the world with their technological prowess. We know where that ended.

Bart S · Post by **Bart S** » 23 May 2019 17:56

Supratik wrote:I don't understand this continuous sermons coming out of China lovers in the west about Chinese technological leap that is apparently taking place. Name me 5 original discoveries/inventions that have come out of China in the last 20 yrs. You won't. Just like India they are trying to catch up. Yes, they are ahead of us in certain areas particularly manufacturing but nothing like this constant propaganda. A closed dictatorial nation is a bad place for discoveries/inventions. Think Nazi Germany and Communist Soviet Union. Then the propaganda was that they will take over the world with their technological prowess. We know where that ended.

I think the basic issue for us though is that they are making much faster progress than us even in areas where we traditionally should be strong, like supercomputing, AI etc, and have major firms like Huawei that are growing by leaps and bounds (even if they use US/EU tech and components). Chinese phones are already giving pretty much everyone else a serious run for the money, even on purely quality parameters. High speed rail, and any kind of infrastructure building is also something that they are way ahead of us on, and pretty much leading the world in at this point.

I was reading an article about an "Indian" startup called Boat who sells headphones and is doing quite well, all of their gear is both designed and manufactured in China and imported with their logo slapped on, because according to them the expertise required to design an earphone does not exist in India. It could be that they are lying and they are just taking the easy way out, but even in that case it illustrates the failure by political and business elites to provide the right ecosystem for local R&D and manufacturing.

Yes, they are not as good at innovation or original thought as china lovers or the 'sky is falling' types portray, but that could change, and they are very very good at using ideas from elsewhere and taking over the market for them with ruthless efficiency. So it is hard to be sanguine about our relative position either, we do have a lot of furious catching up to do or we will keep falling behind.

yensoy · Post by **yensoy** » 23 May 2019 20:23

China has design capabilities in all sorts of areas, especially those involving inter-disciplinary skills - such as design + hardware, sensors + hardware, aerospace + software... There is also a big secret which makes Chinese such a formidable competitor - good designs are standardized and then replicated & manufactured by multiple different manufacturers. Go search for something generic on Taobao - e.g. an amplifier, power supply, drone, oscilloscope, inverter - you will see basically the same design available from multiple vendors/suppliers. I have no idea how the designer gets paid - it could very well be an arm of the state which is compensating the design house with no consideration from the manufacturer (who is already selling below cost thanks to a kickback/subsidy).

Same has also been observed in power plants - Chinese products are inter-operable because they use the same designs, whereas we take a much more siloed approach. Think of it as open source hardware; the success of open source for software is acknowledged, same is being done with hardware by the Chinese.

Bart S · Post by **Bart S** » 23 May 2019 20:43

^Good insight. Yes, it looks like an efficient form of DRDO/ISRO technology/partnership with private vendors. If you think about it, govt labs in India come up with world class designs and engineering products, so it perhaps need a push from the govt to make such happen, till it gains critical mass.

Right now pvt sector is by and large not willing to roll up their sleeves and work, just happy to import Chinese stuff and put their name on it, even though it is suicidal for them in the long term. I am talking about even well known and capable brands like Wipro and Bajaj who import simple electrical appliances from China.

Supratik · Post by **Supratik** » 23 May 2019 23:28

I am not aware of any major technological/science breakthroughs coming out of China. And I do science for a living. I am aware of many original breakthroughs coming out of Japan, some even from South Korea, even less from Taiwan. They are doing what the Japanese and Koreans and later other SE Asians have done i.e. copy or adopt technology and then make improvements on it. They are just doing it more efficiently. And modern science/technology needs a lot of capital. Their surplus acts as their capital. And I don't think that beyond enabling atmosphere govt in India should try to run science. If science and technology worked like that then life would be easy. The best way to do it is to make private Indian companies be forced to compete but ensuring they are not thrown under the bus. Govt labs can focus on strategic or blue sky projects.

Karan M · Post by **Karan M** » 24 May 2019 13:00

Gosh, i was dealing with PRC vendors and a lot of the PRC stuff is just pure junk, savvily marketed on websites and offered at ridicuous prices. Just because it looks OK =/= real deal or quality. Ask Indian power plant operators who fell for that.

yensoy · Post by **yensoy** » 24 May 2019 13:51

It's usually the financing (of the above-table factors) which seals the deal. China being cash rich is easily able to provide financing at low rates, and in turn provides commensurate low quality products.

The other thing China provides is a guarantee of timely project completion. This they can do because they ensure that they are not impeded by any local laws or standards - they contract to provide labour and know-how, something a lot of 3rd world countries severely lack.

BTW, don't mistake China for poor quality. Since it is well established that they copy well, they also have the capability to make some excellent quality products - if the pricing is appropriate. Don't expect cheap and good at the same time though.

Now back to the issue of design houses, Govt needs to set up a fund and enroll top institutes/labs to grow their real-world design expertise, identify a list of items which should be indigenized asap, and start delivering designs for these items to any manufacturer who wishes to use them. There can be a licensing fee payable to the institutes to ensure they have an interest in doing their best, and in supporting the maturation of the product & requirements; but the major sunken costs should be borne by the government otherwise folks will find it cheaper to import Chinese kits.

The other thing govt should do is to facilitate growth of a supply chain for these industries. Basically connect producers and assemblers; also help factory owners/investors figure out gaps in the supply chain they can fill.

Just look at Xiaomi's product line. It's not just phones. It is TVs, vacuum cleaners, cameras, drones, blenders, heaters, air purifiers... Imagine what a power-house it has become; competing with top brands from Japan, Korea, Germany and even China.

A Nandy · Post by **A Nandy** » 26 May 2019 17:15

https://timesofindia.indiatimes.com/blo ... ld-slogan/

Narendra Modi won the 2014 election with the slogan, “minimum government, maximum governance.” In practice, government intervention in the economy often increased and governance often worsened. Having won a landslide, Modi should return to his old slogan and make “minimum government, maximum governance” the cornerstone of his second term. He has the political capital to risk short-term costs to reap long-term gains.

Not once does he mention the attacks on Hindus.

kit · Post by **kit** » 26 May 2019 17:34

yensoy wrote:Extrapolation to such periods is nonsense. By extrapolation, you can show that Bangladesh will have a bigger GDP than India.

A lot of things can go wrong in China. Somethings can go wrong in India too. A lot of things can get better in India, not as much in China because well they are already operating at very high levels of efficiency.

But what is more or less set in stone is that China has a landmass 3 times as much as ours, and with a similar population it has access to a lot more resources than we do. We are water stressed, we have demographic issues (they do too, in a different way).

What really matters is whether we will be able to ensure that even our poorest have a decent humane standard of life - access to safety, water, food, education, energy, information, health and legal services. That should be our measure of success instead of a pissing contest with China.

"China bigger than india" , let me get some facts straight , although the total land mass is more , India has more fertile land and suitable for habitation. India has a bigger population. There are still a lot of areas that has not been fully explored for minerals. China's economy being bigger is a result of pro market policies started decades before India. That is not to be compared. Indian entrepreneurial capabilities and scientific prowess is significant but latent due to policies and lack of capital. Chinas reached some of its potential so making it "bigger " but India's potential is still far from reached. It needs politicians of caliber and babus like sridharan to make it work.enough said.

Suraj · Post by **Suraj** » 26 May 2019 21:33

I think this thread would do better to focus on India as opposed to China vs India. There's a China economy thread for that. Further off topic conversations will be deleted.

jpremnath · Post by **jpremnath** » 27 May 2019 07:56

I dont know if trade topics can be posted here...

China proposes ASEAN+3 mega free trade agreement sans India, Australia and NZ

https://www.thehindubusinessline.com/ec ... 255349.ece

....Some officials in the Commerce Ministry feel that the proposal, which had once been floated earlier but rejected by Japan, has been given a fresh life by China to put pressure on India to give it concessions similar to those by other countries at the RCEP negotiations.

Since RCEP members, including the ASEAN, are aggressive in their demands, proposing that over 90 per cent traded items should have zero tariffs, New Delhi is hesitant about falling in line. India is especially apprehensive about Chinese goods swamping its market, forcing domestic producers to cut production or shut down....

If this happens, I would say good riddance...Nothing good would have come out of us joining RCEP. We should invest and improve our own logistics, soft and hard infrastructure before joining such kind of 'free trade' deals which are nothing but free or fair...I read somewhere how it is cheaper to just ship steel to Mumbai from Rotterdam than from Jamshedpur...

A_Gupta · Post by **A_Gupta** » 31 May 2019 17:50

New data for April 2019, revised data for March 2019.

The Ministry of Commerce and Industry reports a monthly index, "Index of Eight Core Industries (Base: 2011-12=100)", via press releases on the Press Information Bureau (pib.nic.in). "The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP)." These are Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, Electricity.

The index: (note: reverse-chronological order)

Code: Select all

2019 Apr   127.5
2019 Mar   145.2 (was 145.0)
2019 Feb   125.9
2019 Jan   134.5
2018 Dec   131.5
2018 Nov   128.3
2018 Oct   134.8
2018 Sep   127.2
2018 Aug   128.8
2018 Jul   129.2
2018 Jun   131.2
2018 May   131.9
2018 Apr   124.3
2018 Mar   138.5
2018 Feb   123.2

Notes
0. Revisions of provisional data from the previous report are shown above.
1. Data for February, 2019, March, 2019 and April, 2019 are provisional.
2. Release of the index for May, 2019 will be on Monday, 01st July, 2019

A_Gupta · Post by **A_Gupta** » 31 May 2019 17:53

http://pib.nic.in/PressReleseDetail.aspx?PRID=1572945

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation,has released the Provisional Estimates of National Income for the financial year 2018-19, both at Constant (2011-12) and Current Prices.These are presented in Statements 1 to 4.

2. Quarterly Estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2018-19, both at Constant (2011-12) and Current Prices along with the corresponding quarterly estimates of expenditure components of GDP are also released. The four quarters of a financial year are denoted by Q1, Q2, Q3 and Q4.Estimates including growth rates of Q1, Q2 and Q3 of 2018-19 released earlier have been revised in accordance with the revision policy of National Accounts.GDP at Constant (2011-12) Prices in Q4 of 2018-19 is estimated at 37.20 lakh crore, as against 35.15 lakh crore in Q4 of 2017-18, showing a growth rate of 5.8 percent.

Real GDP or GDP at Constant (2011-12) Prices for the year 2018-19 is now estimated at 140.78 lakh crore showing a growth rate of 6.8 percent over First Revised Estimates of GDP for the year 2017-18 of 131.80 lakh crore, released on 31st January, 2019.

A_Gupta · Post by **A_Gupta** » 31 May 2019 18:05

^^^ "GDP at Current Prices for the year 2018-19 is estimated at 190.10 lakh crore".

This makes the Indian economy at today's exchange rate in current USD = $2.73 trillion dollars.

kit · Post by **kit** » 31 May 2019 19:24

A_Gupta wrote:^^^ "GDP at Current Prices for the year 2018-19 is estimated at 190.10 lakh crore".

This makes the Indian economy at today's exchange rate in current USD = $2.73 trillion dollars.

still below GB and France

ArjunPandit · Post by **ArjunPandit** » 31 May 2019 21:44

Two interesting no.s came up GDP slowdown and unemployment and the previous speculations were true about the no.s. Now my thoughts on this are
1. Comparison going way back are not meaningful because we the data quality was crap then because of significant part of economy was unstructured
2. GOI needs to clean up the banking books a bit more, a lot has been done, but operational risk elements need to be minimized, at the grassroot level, Bankruptcy and NCLAT need minor fine tuning
3. A heavy stimulus needs to be rolled out, i would suggest waiting for 1-2 years from now because of reforms etc. Given the way broader macro things are shaping up it needs to be.
4. Focus more on getting data and getting data analytics right..

hanumadu · Post by **hanumadu** » 31 May 2019 23:13

Did elections have something to do with some of the slow down? People would probably be waiting till the results to decide on investments.

A Nandy · Post by **A Nandy** » 31 May 2019 23:26

https://thewire.in/economy/india-may-pr ... ajiv-kumar

India May Privatise or Shut 46 PSUs in First 100 Days, Says NITI Aayog's Rajiv Kumar
According to Kumar, a slew of reforms, which will include changes in labour laws, privatisation moves, and creation of land banks for new industrial development, are likely to be pursued.

New Delhi: In the first 100 days of Indian Prime Minister Narendra Modi’s second term, a slew of ‘big-bang’ economic reforms that should please foreign investors are likely to be pursued, according to a top official at the government’s main think-tank.

The reforms will include changes in labour laws, privatisation moves and creation of land banks for new industrial development, said Rajiv Kumar, vice chairman of NITI Aayog (National Institute for Transforming India), who reports directly to Modi.

sanjaykumar · Post by **sanjaykumar** » 31 May 2019 23:59

eklavya · Post by **eklavya** » 01 Jun 2019 00:24

kit wrote:
A_Gupta wrote:^^^ "GDP at Current Prices for the year 2018-19 is estimated at 190.10 lakh crore".

This makes the Indian economy at today's exchange rate in current USD = $2.73 trillion dollars.
still below GB and France

India GDP in Q4 2018-19 (i.e. Q1 2019): INR 50.16 lakh crore. Spot USD/INR 69.6. Translates to ca. USD720bn. See bottom of p.7 for the INR GDP figure for calendar Q1 2019:

http://www.mospi.gov.in/sites/default/f ... -Final.pdf

UK GDP in Q1 2019: GBP514bn. Spot GBP/USD 1.263. Translates to ca USD649bn. See for U.K. GDP data:

https://www.ons.gov.uk/economy/grossdom ... ries/abmi/

France GDP in Q1 2019: EUR598.8bn. Spot EUR/USD 1.117. Translates to USD669bn. See for France GDP data:

https://www.insee.fr/en/statistiques/fi ... ib_val.xls

So, in summary, for Q1 2019, using spot FX rates, the GDP values are:

India: USD720bn
France: USD669bn
UK: USD649bn

India far ahead of France and U.K.

A_Gupta · Post by **A_Gupta** » 01 Jun 2019 00:53

A Nandy wrote:https://thewire.in/economy/india-may-pr ... ajiv-kumar

India May Privatise or Shut 46 PSUs in First 100 Days, Says NITI Aayog's Rajiv Kumar
According to Kumar, a slew of reforms, which will include changes in labour laws, privatisation moves, and creation of land banks for new industrial development, are likely to be pursued.

New Delhi: In the first 100 days of Indian Prime Minister Narendra Modi’s second term, a slew of ‘big-bang’ economic reforms that should please foreign investors are likely to be pursued, according to a top official at the government’s main think-tank.

The reforms will include changes in labour laws, privatisation moves and creation of land banks for new industrial development, said Rajiv Kumar, vice chairman of NITI Aayog (National Institute for Transforming India), who reports directly to Modi.

Annoying that "please foreign investors" is in the top line. Won't these please domestic investors? Don't they want Indian investors to get rich; foreigners are welcome to come along for the ride?

Suraj · Post by **Suraj** » 01 Jun 2019 02:58

A_Gupta wrote:Annoying that "please foreign investors" is in the top line. Won't these please domestic investors? Don't they want Indian investors to get rich; foreigners are welcome to come along for the ride?

Let's not get into such politics here. The 'foreign investors' reference is about The Wire's paymasters, after all.

A_Gupta · Post by **A_Gupta** » 01 Jun 2019 03:15

Details of reforms:

{Rajiv Kumar, vice chairman of NITI Aayog}:

Kumar said reforms in India’s complicated labor laws would see the light of day as early as the next parliamentary session in July, when the government would place a new bill before the lower house for approval.

It will aim to combine 44 central laws into four codes – wages, industrial relations, social security and welfare, and the fourth - occupational safety, health and working conditions. This should help companies to avoid getting embroiled in complicated disputes with their workers.

The government could also offer swathes of land to foreign investors from the land banks it plans to create from unutilized land controlled by public sector enterprises, Kumar said. ...Getting access to some of the large amounts of unutilized Indian government land would reduce major risks for foreign companies as there would be a lot less risk of legal challenges over ownership and development.

Kumar said the government would focus on fully privatizing or closing more than 42 state-controlled companies in the coming months. The government is even mulling lifting the foreign direct investment cap on Air India , the loss-making state-owned flagship carrier, to make it easier to sell.

Kumar also said that it could create an autonomous holding company that would control all state-owned firms and wouldn’t be answerable to lots of different ministries. This would speed up decision-making for asset sales, avoiding much of the central government’s bureaucracy.

Kumar blamed the stressed balance sheet of banks and a crisis in the shadow lending industry for the recent drop in growth.

He suggested the government should start with reforming the state-owned banking sector and also create more money for spending on infrastructure and new public housing through more and quicker privatizations and better tax collection.

From the Economic Times, additionally,

"We should (start with the banks).. There will be big bang, there will be 100 days action. We are all geared for that ... I have maintained that the fiscal policy should be counter cyclical. There is scope for that."

Read more at:
//economictimes.indiatimes.com/articleshow/69592743.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ranjbe · Post by **ranjbe** » 01 Jun 2019 05:48

kit wrote:
A_Gupta wrote:^^^ "GDP at Current Prices for the year 2018-19 is estimated at 190.10 lakh crore".

This makes the Indian economy at today's exchange rate in current USD = $2.73 trillion dollars.
still below GB and France

Depends on date, exchange rate at that time. IMF economic survey April 2019 pegs India's GDP at $2.97 trillion, UK at $2.83 trillion and France ar $2.76 trillion (GDP Current prices, nominal):
https://www.imf.org/external/datamapper/datasets/WEO/1

Suraj · Post by **Suraj** » 01 Jun 2019 05:54

Please don't waste so many posts tracking precise exchange rates and comparative absolute GDPs. The entire exercise is an example of why absolute GDPs are not a fully representative view, and that GDP data is always to be reported both in absolute and PPP terms.

This is particularly important when comparing developed economies to a developing one like India. Most developed economies have generally normalized cost of living / goods / services indices, such that the ratio of their absolute GDPs is not much different from the ratio of their PPP GDPs. However, when you do the same exercise for India vs a developed economy, the picture is startlingly different, as seen in the following figures ($ trillions):

Code: Select all

Country absGDP PPPGDP
UK       2.8    2.8 
India    2.9   11.4

Aggregate economic activity, when measured at the same value everywhere (i.e. in international dollars for PPP), underscores just how much bigger India is than most developed economies.

A_Gupta · Post by **A_Gupta** » 01 Jun 2019 06:31

^^^ Agreed.

But when I wrote ""GDP at Current Prices for the year 2018-19 is estimated at 190.10 lakh crore. This makes the Indian economy at today's exchange rate in current USD = $2.73 trillion dollars", I was thinking, "GDP at Constant (2011-12) Prices for the year 2018-19 is now estimated at 140.78 lakh crores", but who the heck remembers the 2011-12 rupee or for that matter, the past in any currency. It is, IMO, easier to appreciate 190.10 lakh crore rupees in current dollars than 140.78 lakh crores in 2011-12 rupees (or dollars or whatever). Perhaps I should have made that clear, before people started making comparisons.

Suraj · Post by **Suraj** » 01 Jun 2019 08:59

Yes the constant prices figures are NOT to be used - the current prices figures are . CSO really shouldn’t bother confusing people by reporting all sort of data like that - just the real growth rates and the GDP at current prices will do .

Suraj · Post by **Suraj** » 01 Jun 2019 22:29

Here's the 2018-19 Q4 and full year GDP report directly from CSO.

Comments:
* Full year growth at 6.8% in real terms, 11.2% in nominal terms.
* Significant deceleration of Q4 performance to 5.8% growth rate. Potential a high base effect (corresponding figure in previous fiscal was 7.8%)
* Investment/GDP (GFCF) remains strong at 32.3% of GDP
* The Q4 breakdown has an abnormally high 3.5% of GDP in 'discrepancies', which leads me to think the Q5 number will pick up in subsequent reviews.

The elections probably had a lot to do with the Q4 figures. Q1 2019-20 will be very interesting.

A_Gupta · Post by **A_Gupta** » 02 Jun 2019 01:23

May 31st, 2018:
http://www.mospi.gov.in/sites/default/f ... 1may18.pdf

GDP at constant (2011-12) prices in Q4 of 2017- 18 is estimated at 34.77 lakh crore, as against 32.27 lakh crore in Q4 of 2016-17, showing a growth rate of 7.7 percent.

May 31st, 2019:
http://pib.nic.in/PressReleseDetail.aspx?PRID=1572945

.GDP at Constant (2011-12) Prices in Q4 of 2018-19 is estimated at 37.20 lakh crore, as against 35.15 lakh crore in Q4 of 2017-18, showing a growth rate of 5.8 percent.

Notice the upward revision of Q4 2017-18, from 34.77 lakh crores to 35.15 lakh crores. If we use the newer figure for Q4 2017-18, the growth rate back then was 8.9%! Of course, that won't make the press, it is only the preliminary figures that get attention, and the headline of 7.7%.

Or else, if we leave Q4 2017-18 unrevised, we'd get a growth rate of 7% for Q4 2018-19. Of Q4 2018-19 is preliminary, we have to see what the final figure is going to be.

Suraj · Post by **Suraj** » 02 Jun 2019 01:43

GDP growth for both 2016-17 and 2017-18 were revised upwards significantly:
GDP growth rate for 2017-18 revised upwards to 7.2% from 6.7%

The government on Thursday revised its forecast for GDP growth for 2017-18 to 7.2% from the earlier estimate of 6.7%. It also revised the actual growth rate in 2016-17 to 8.2% from the 7.1% estimated earlier.

This is a normal occurence, and records of GDP data being revised up with final data has been going on, dating back 2 decades.

A_Gupta · Post by **A_Gupta** » 02 Jun 2019 01:48

^^^ It is a normal occurrence, but this "5.8% growth rate" will be baked into the political narrative, unaffected by revisions.

Suraj · Post by **Suraj** » 02 Jun 2019 01:53

To quote some movie dialogue, who gives a nandi dropping ?

This is the economics thread. It has served its purpose for a long time by assiduously avoiding politics and yet the political results of the economic actions are covered in detail in the politics thread .

A_Gupta · Post by **A_Gupta** » 03 Jun 2019 16:51

While the Nikkei PMIs are far from perfect forward indicators of the economy,....

https://www.marketwatch.com/story/india ... 3-34852050

A gauge of manufacturing activity in India rose in May as companies increased output on stronger demand.

The Nikkei India Manufacturing Purchasing Managers' Index, released by IHS Markit, rose to 52.7 in May from 51.8 in April, according to a press release Monday.

A figure above 50 indicates expansion while a reading below that signals contraction.

The reading pointed to the strongest improvement in manufacturing in three months and stretched the current growth sequence to 22 consecutive months, it said.

Consumer goods led the upturn in May, and expansion in output and new export orders surpassed growth in intermediate and capital goods categories, Markit said.

Aggregate manufacturing output increased at the quickest pace in three months, with survey participants attributing the growth to new customer and robust sales, it said.

Suraj · Post by **Suraj** » 04 Jun 2019 10:56

Wheat production rises 1.3% to 101.20 MT in crop year 2018-19

India’s wheat production has increased to a record 101.20 million tonne (MT) for the crop year 2018-19 (July-June), up by 1.3% from a year ago, the agriculture ministry said, releasing the third advance estimate of the year’s crop output.

The overall foodgrain production is estimated at 283.37 MT, marginally down from 285.01 MT last year, due to fall in pulses and coarse cereals output.
The bumper foodgrains (rice, wheat, coarse cereals and pulses) output for the third consecutive year has also increased pressure on the government to ensure farmers get reasonable prices for their crops.

It has been found that most of the mandi prices were below their minimum support prices (MSPs) after the government last year fixed the benchmark prices at least 50% higher than their costs. In case of some pulses like moong and gram, prices were 35% below MSPs during the main harvesting period.

Rice production in 2018-19 is estimated at record 115.63 mt, against 112.76 mt in the previous year while coarse cereals output is seen at 43.33 mt, down from 46.97 mt a year earlier.

Maize production is estimated at 27.82 mt while jowar output is pegged at 3.70 mt, both are lower from the year-ago levels. Pulses output, too, is pegged lower at 23.22 mt from last year’s record 25.42 mt.

In non-foodgrains category, oilseeds output is estimated to be flat at 31.42 MT as against 31.45 MT in the previous year. Cotton production could fall to 27.59 million bales (of 170 kg each) in 2018-19 from 32.80 million bales in the previous year.

Sugarcane production is estimated at record 400.37 MT, up from 379.90 MT in the previous year.

The output of jute and mesta is seen lower at 9.79 million bales (of 180 kg each) from 10.03 million bales.

India to become 5th largest economy globally this year; 2nd in APAC region by 2025

India is forecast to overtake the UK to become the world’s fifth largest economy this year and projected to surpass Japan to feature at the second position in the Asia-Pacific region by 2025, IHS Markit said Monday. In a report on Prime Minister Narendra Modi and his BJP party’s victory in the national elections, it said the economic outlook “looks positive” for the second term of Modi government, with GDP growth forecast to average around 7 per cent per year over the 2019-2023 period.

“India is forecast to become the world’s fifth largest economy in 2019, reaching a total GDP size exceeding USD 3 trillion, and overtaking its former colonial ruler, the United Kingdom. By 2025, Indian GDP is also forecast to surpass Japan, which will make India the second-largest economy in the Asia-Pacific region,” it said.

India Inc pitches for land and labour reforms to achieve double-digit growth

With the Modi government beginning its second innings with a greater mandate, the industry on Monday pitched for a series of reforms, including in critical areas of land and labour, to take India’s economic growth to double-digits in the next five years.

To target GDP growing up to 10 per cent by 2023-24, the total investment requirement is estimated at USD 5.74 trillion (around Rs 397 lakh crore) for the next five years, CII President Vikarm Kirloskar told reporters here.

Of this, the total investment required for infrastructure sector is estimated at USD 1.18 trillion (around Rs 81.72 lakh crore) for the next five years, while for non-infrastructure including agriculture and industry to be USD 4.56 trillion (around Rs 315 lakh crore), he said.

Suraj · Post by **Suraj** » 05 Jun 2019 00:10

GST collection crosses ₹ 1 lakh crore-mark for third consecutive month in May

Even after slowdown in industrial activity, the Government managed to collect more than ₹1 lakh crore plus in May. This is third consecutive month of ₹1 lakh crore plus mobilization. However, collection in May was lower than all-time high of April.

According to Finance Ministry data, total gross GST revenue collected in the month of May, 2019 is ₹ 1,00,289 crore of which CGST (Central Goods & Services Tax) is ₹ 17,811 crore, SGST (State Goods & Services Tax) is ₹ 24,462 crore, IGST (Integrated Goods & Services Tax) is ₹ 49,891 crore (including ₹ 24,875 crore collected on imports). Collection from cess was ₹ 8,125 crore (including ₹ 953 crore collected on imports).

The revenue in May, 2018 was ₹ 94,016 crore and the revenue during May, 2019 is a growth of 6.67 per cent over the revenue in the same month last year. The revenue in May, 2019 is 2.21 per cent higher than the monthly average of GST revenue in FY 2018-19 (Rs 98,114 crore).

Govt makes highest-ever expenditure cut of Rs 1.4 trillion for FY19

The government has resorted to an unprecedented expenditure cut of Rs 1.45 trillion for the financial year 2018-19 (FY19) to meet its fiscal deficit target of 3.4 per cent of the gross domestic product, official data shows.

The finance ministry had to cut expenditure as the tax revenues saw a shortfall of over Rs 1.67 trillion, according to the data released by the Controller General of Accounts (CGA) on Friday.

It was primarily this segment of receipts that fell short of projections, as both non-tax revenues and non-debt capital receipts, including disinvestments, surpassed the targeted figures.

Personal income tax and the central portion of the goods and service tax, particularly fell short of the projections made in the RE. The former missed the target by Rs 1.58 trillion or by 25 per cent, while the latter fell short of Rs 46,365 crore or 9.2 per cent.

As the government undertook a major compression in expenditure, it was the revenue side (which goes for meeting expenditure that does not generate assets) that bore the brunt.

There was a compression of Rs 1.33 trillion in revenue expenditure. This means over 90 per cent of the overall compression came from the revenue side. As certain expenditures such as salary and pensions can't be postponed, the subsidies, mainly on food, were rolled over.

While data on subsidy carryovers wasn’t officially available on the CGA website, the finance ministry officials said the cumulative rollovers on fertiliser subsidies now stands at Rs 35,000-40,000 crore, while petroleum subsidy rollovers stand at around Rs 20,000 crore.

Capital expenditure (capex) was cut by around Rs 13,000 crore, which is less than 10 per cent of the total compression. Of total capital expenditure of Rs 3.02 trillion in FY19, Rs 91,137 crore was spent in the first quarter, which was over three times of Rs 27,108 crore spent in the same quarter last year.

Even then, the gross fixed capital formation, which is primarily driven by the government capex these days, grew by just 3.4 per cent in fourth quarter of FY19, against double-digit growth in the previous three quarters. This meant that investments by the private sector would continue to remain subdued, a challenge that the new government faces to perk up the economy.

hanumadu · Post by **hanumadu** » 05 Jun 2019 09:25

^^

Personal income tax and the central portion of the goods and service tax, particularly fell short of the projections made in the RE. The former missed the target by Rs 1.58 trillion or by 25 per cent, while the latter fell short of Rs 46,365 crore or 9.2 per cent.

That's a huge miss. Were people expecting Modi not to return back and hid their income? Or is it because the two previous years saw a spurt in tax collections due to demonetization and this year there was no hidden income from previous years (black money) to declare.

This year, there will be more than 1 lakh crore of additional PMKISAN spending.