Indian Economy News & Discussion - Nov 27 2017

[sanjaykumar]

So to buy an equivalent amount of goods from a source other than China, you would be spending 20-50% more, only going into someone else.

[Cyrano]

Import only specific non strategic stuff from China at the lowest price possible while continuing to strengthen local mfg of those items. Try to export more to China. But keep your markets insulated from their FDI, and that of certain ASEAN countries under heavy Chinese influence.

[Vayutuvan]

The Indian consumer benefits. This also is a method of outsourcing pollution to China.

Be aware of the Netherlands Fallacy.

https://en.wikipedia.org/wiki/Netherlands_fallacy

The Netherlands fallacy refers to an error Paul R. Ehrlich and his co-authors claim others make in assuming that the environmental impacts of the Netherlands and other rich nations are contained within their national borders.[1]

Environmentalists since the late 20th century have analyzed the environmental sink status and sink capacities of poor nations. As polluting industries migrate from rich to poor nations, the national ecological footprint of rich nations shrinks, whereas the international ecological footprint may increase or also decrease. The nature of the fallacy is to ignore increasing environmental damage in many developing nations and in international waters attributable to the imported goods or changes in the economy of such nations directly due to developed nations.

Such an approach may lead to incorrect assertions such as the environmental impact of a particular developed country is reducing, when a holistic, international approach suggests the opposite. This may in turn support over-optimistic predictions toward the improvement of global environmental conditions.[2]

The Netherlands has had a huge impact regarding leaving water footprints across the world. The Netherlands has made this footprint by importing water from other countries, leaving increasingly scarce regions. Water footprints of a country can come from either water resources used internally or resources that are outsourced. Dutch consumers have left most of their water footprint through agricultural goods and industrial goods.[3]
...

[sanjaykumar]

No doubt there is increasing global pollution and warming.

However china’s very soil is toxic. It is not just the river waters and the air. China’s soil will stay in China. Especially if one never consumes plant or animal products from China.

[sanjaykumar]

Actually China's top soil apparently does get airborne in the prevailing winds, rotation of the Earth effect, and gets deposited on the US.
I came across this aeolian deposition years ago but cannot find a reference at the moment.

[KL Dubey]

Actually China's top soil apparently does get airborne in the prevailing winds, rotation of the Earth effect, and gets deposited on the US.
I came across this aeolian deposition years ago but cannot find a reference at the moment.

National borders aside - it's one planet, and everybody loses from unsustainable practices.

Air, water, soil, pollutants - they all migrate.

The hugely wasteful use of pesticides and fertilizers results in runoff, a lot of which reaches the oceans and causes eutrophication (dead zones). By wastage, I mean that more than 50% of fertilizer applied to the land is wasted as run-off without being recovered and recycled.

[SBajwa]

Actually China's top soil apparently does get airborne in the prevailing winds, rotation of the Earth effect, and gets deposited on the US.
I came across this aeolian deposition years ago but cannot find a reference at the moment.

National borders aside - it's one planet, and everybody loses from unsustainable practices.

Air, water, soil, pollutants - they all migrate.

The hugely wasteful use of pesticides and fertilizers results in runoff, a lot of which reaches the oceans and causes eutrophication (dead zones). By wastage, I mean that more than 50% of fertilizer applied to the land is wasted as run-off without being recovered and recycled.

yep!


The Sahara Desert helps the Amazon rainforest by providing nutrients to the rainforest's plants through dust that travels across the Atlantic Ocean:

The dust comes from the Bodélé Depression in Chad, an ancient lake bed where minerals from dead microorganisms are rich in phosphorus.
Dust transport Winds and weather pick up the dust and carry it across the Atlantic to the Amazon basin. The largest amounts of dust arrive in the fall and winter.

The dust contains nutrients like phosphorus, which is essential for plant growth. The dust also provides micronutrients and macronutrients to the plant's roots and leaves.

On average, 182 million tons of dust travel across the Atlantic each year, which is the equivalent of 689,290 semi trucks. Of that, nearly 28 million tons land in the Amazon.

The rock minerals composed of dead microorganisms are loaded with phosphorus.

The Amazon plays a key role in draining heat-trapping carbon dioxide, CO2, from the atmosphere. It’s estimated the Amazon takes in almost 2 billion tons of CO2 a year, making it key to preventing climate change.

[drnayar]

thats the industry initiative we need !

[Vayutuvan]

The Sahara Desert helps the Amazon rainforest by providing nutrients to the rainforest's plants through dust that travels across the Atlantic Ocean:
...
The Amazon plays a key role in draining heat-trapping carbon dioxide, CO2, from the atmosphere. It’s estimated the Amazon takes in almost 2 billion tons of CO2 a year, making it key to preventing climate change.

Nice. "680K trucks". I didn't think the volume would be that high. Wow.

Unfortunately, there might be unintended consequences to greening the sahara. Some projects are going on and some had been successful.

Greening of Sahara * Health of Amazon rainforest = constant?

[drnayar]

https://timesofindia.indiatimes.com/bus ... 602240.cms

RBI seems to convert its forex to gold!..away from usd

[vijayk]

[chetak]

US sanctions 400 firms doing business with Russia, including firms from Western ally #Switzerland & NATO partner #Turkey.

But ⁦@IndianExpress⁩ gleefully front pages 19 Indian companies.

Downplays 381 global firms also sanctioned, including Western firms.

Agenda journalism

[chetak]

[Suraj]

Very sad to hear of Bibek Debroy's passing.

[VKumar]

Met him once at the book launch Getting India Back on Track, along with Ashley Tellis and Arun Shourie. He has left unfinished his work on translation and interpretation of Hindu holy books. A true scholar. May he attain moksha

[drnayar]

You cant trust the Bank of England !!

[chetak]

Technically true, but hilarious headline

The timing of GDP data release has been set as 4 pm instead of 5:30 pm

[JTull]

Technically true, but hilarious headline

The timing of GDP data release has been set as 4 pm instead of 5:30 pm

Awaiting BBC and FT outrage!

[chetak]

India needs to dramatically expand ship building.

This is not just an economic opportunity but a security concern.

India has all the ingredients needed - after all, we are one of the few countries that can design and build nuclear subs and aircraft carriers.

One important policy change is that ships need to be classified as infrastructure.

This will solve for a major problem of long term financing.

[ernest]

We will hopefully see a big shipbuilding push soon. Most of the parts are in place, and the government is also willing. For us to become a competitive manufacturing economy, and lower logistics costs, shipping industry will be a key factor.
Great to see Sanjeev Sanyal focus on this. When it comes to reforms and pivot, he has been a big mover. With his interest in maritime affairs, it is likely we will see shipbuilding gain momentum in govt priorities.

[tandav]

India needs to dramatically expand ship building.

This is not just an economic opportunity but a security concern.

India has all the ingredients needed - after all, we are one of the few countries that can design and build nuclear subs and aircraft carriers.

One important policy change is that ships need to be classified as infrastructure.

This will solve for a major problem of long term financing.

Insider information L&T is pretty bad in making Ships

https://www.livemint.com/Companies/Se1F ... lding.html

This news is dated 2016. Here the reason given is reduction in Oil demand, which was a fig leaf, apparently the quality of the Ships did not meet standards.

The issue with regard to Indian Ship building is that the domestic suppliers of raw materials do not exist. Domestic demand is poor, China costs are 50% that of Indian Shipyards, China/Korea speed of building is 10X faster. There is a massive gap in project management which in India does not exist Vendor payments are mired in babucracy in both Government and Private sector and therefore no vendor is willing to work with Indian clients due to piss poor ethics of payments and very poor judicial processes

[vera_k]

The largest cruise ships and oil tankers are 5-15x the size of INS Vikrant. Which to me says there's a lot more to do to in creating capacity to build those types of ships.

[Amber G.]

Infosys Prize2024 in Economics is awarded to Prof. Arun Chandrasekhar of Stanford for his contribution to the study of social and economic networks, using innovative data sets and drawing on theoretical methods from machine learning and computer science. His collection and mapping of networks data, from multiple Karnataka villages, provides a testbed for studying important questions in development economics.

[A Deshmukh]

The largest cruise ships and oil tankers are 5-15x the size of INS Vikrant. Which to me says there's a lot more to do to in creating capacity to build those types of ships.

We are building docks for larger ships.
CSL has a new dry dock (NDD) project in the works. this can build large LNG carriers, Capesize and Suezmax vessels, oil rigs, semi submersibles and other large vessels. They also have a new International Ship Repair Facility (ISRF).
Economic Times link, Indian Express link, PIB link
We are on the right track.

[williams]

Import only specific non strategic stuff from China at the lowest price possible while continuing to strengthen local mfg of those items. Try to export more to China. But keep your markets insulated from their FDI, and that of certain ASEAN countries under heavy Chinese influence.

It is a tall order, especially the way we are trending off late.



Courtesy: https://tradingeconomics.com/india/imports/china

Half of the things (68 billion $) we import is electrical, electronics and heavy machinery items.That means we need to some how find private investment to manufacture these things locally. I would have thought after Galwan, we would have reversed this trend somehow. We have not done that. Our consumers and businesses are very addicted to Chinese goods in every sector imaginable. We are progressing but comparatively at glacial phase, and that makes the Chinese think we are weak and can easily be manipulated with small geopolitical bread crumbs.

[Cyrano]

Agree saar. Now that our banking system has been largely cleaned up, the government hopefully will target these sectors for investment by encouraging lending plus PLI schemes.

[VenkataS]

The AQI in Delhi and across some areas of North India is at alarming levels. It is at 614 in Noida at 5:30 AM Saturday (Nov 16th) morning. The health impact of this level of pollution must be huge. In 2019, one study calculated the economic impact of pollution in India to be 1.36% of GDP. It must have gotten worse by now and is probably worse in Delhi and surrounding areas. It is bad and unhealthy in most other big Indian cities as well. Why is this not being considered as a national emergency.

China seems to have effectively addressed this issue especially in the larger cities like Beijing where I see the AQI currently is 24. So it is probably very doable. Requires a goal and an effective policy and implementation.

[Suraj]

Posted this deep dive of Indian PPP GDP per capita figures over time. It compares against China and shows something curious:

https://twitter.com/surajbrf/status/1858400457518899208

This is Indian GDP PPP per capita over time

This is Chinese data over that time:


The most interesting part is what happened once PPP GDP per capita hit $7500 - India has outstripped Chinese per capita income growth.


India caught up with Chinese per capita income grow speed at the $5000-7500 mark and then accelerated faster than them in the $7500-10000 range:


This happened despite Chinese population growth dropping faster than India's in that time:



It took India 13 years to get from $1K to $2K GDP PPP per capita.
7 years to $3K
4 years each to $4K and $5K
2 years each to $6K, 7K and 8K.
1 year each since then.Past $11K now, well over $12K in 2025 - rising from $5K in 2015, a 2.5X figure in a decade.

[Cyrano]

There are questions being raised about what chinese population numbers are actually. Ranging from 1.4B all the way down to 800M.

On top of this, their GDP and yoy growth numbers are also fudged. Look at the absent dip during the covid era, when they presumably suffered the most.

Given all this, I'm very sceptical about such comparisons. Doesn't take away anything from Bharat's performance of course. The real worry for me is the huge trade deficit.

[ernest]

Posted this deep dive of Indian PPP GDP per capita figures over time. It compares against China and shows something curious:

...

1 year each since then. Past $11K now, well over $12K in 2025 - rising from $5K in 2015, a 2.5X figure in a decade.

Great insights, Suraj ji. Do you also have some graphs/insights into the productivity growth? I recollect from a podcast by Neelkanth Mishra that Chinese TFP is negative, and their productivity growth is mostly backed by capital.

Would love to hear your thoughts on this.

[Suraj]

I have not drilled into TFP data. That's a whole other piece of work. This was already enough effort for the moment.

[csaurabh]

Half of the things (68 billion $) we import is electrical, electronics and heavy machinery items.That means we need to some how find private investment to manufacture these things locally. I would have thought after Galwan, we would have reversed this trend somehow. We have not done that. Our consumers and businesses are very addicted to Chinese goods in every sector imaginable. We are progressing but comparatively at glacial phase, and that makes the Chinese think we are weak and can easily be manipulated with small geopolitical bread crumbs.

But how to get investment in these areas? Every investor is running behind AI and apps nonsense onlee..

[chetak]

[vijayk]

https://www.newindianexpress.com/states ... 70000-jobs
Rs 1.5 lakh crore steel plant to come up in Andhra's Anakapalle, create 70,000 jobs
According to official sources, the proposal to establish a steel plant augurs well for Andhra Pradesh as the steel sector is only next to textiles in providing jobs.

[drnayar]

Does a new steel plant make economic sense ? .. there is a glut of steel in the world market as it is ..

[williams]

Does a new steel plant make economic sense ? .. there is a glut of steel in the world market as it is ..

It is quite important. India imports 8.3 millions tonnes of steel and China is dumping them making around 8 billion on it. Sure we get it at good prices but at the cost of manufacturing jobs and ecosystem that could be created due to it. So I would not make it a priority, but if they create a plant, I am ok with it.

[bala]

On that image posted by Vijayk there is 40 mt gap between capacity and production. India is still exporting iron ore to other nations. So increasing the capacity within India makes sense even if there is glut worldwide. India can stop exporting iron ore and move up the value chain by producing steel within.

[VinodTK]

Deleted

[chetak]

Why germany ....


German cache lands on I-T browser; data on over 1,000 Indians with Gulf homes sent

Germany has provided India with a massive amount of data on properties in the UAE owned by Indians, potentially leading to tax evasion investigations.

The info, exceeding the scale of the 2011 HSBC Swiss accounts data leak, has prompted notices from Indian tax authorities to over 1,000 individuals.



Mumbai: Germany has shared with India the largest cache of information-far more than the HSBC Swiss accounts data the French had given in 2011-on thousands of properties owned by Indians in the Gulf.

https://economictimes.indiatimes.com/ne ... s?from=mdr

[KL Dubey]

Does a new steel plant make economic sense ? .. there is a glut of steel in the world market as it is ..

It is quite important. India imports 8.3 millions tonnes of steel and China is dumping them making around 8 billion on it. Sure we get it at good prices but at the cost of manufacturing jobs and ecosystem that could be created due to it. So I would not make it a priority, but if they create a plant, I am ok with it.

The flip side is the recycle economy. Let the Indian steel industry expand into new feedstocks (i.e. scrap metal).

https://www.business-standard.com/econo ... 790_1.html

Also same with non-ferrous metals:

https://www.policycircle.org/policy/non ... -in-india/