Indian Economy: News and Discussion (Jan 1 2010)

Abhijeet · Post by **Abhijeet** » 25 Apr 2010 14:09

I wonder whether dominance of the economy by unspecialized/diversified conglomerates is a characteristic feature of underdeveloped economies. In India, for example, you will hear the same few names over and over again in hordes of unrelated industries: Tata, Reliance, Godrej, Wipro, Videocon etc.

Specialized, vertical companies such as Airtel (which is still limiting itself to mobile services as far as I know) are rare. Far more common are large companies that get into every industry they can think of whether or not it is related to their core business.

IMO, the reasons for this are twofold:

1. The lack of a truly level playing field (to use a cliche) where new players can out-compete large companies. Established networks of influence count for a lot more in India than in developed countries, and are likely to tilt the balance in favour of large existing companies.

2. Extreme scarcity of capital for most entrepreneurs, to the point where access to capital is itself a significant entry barrier against competition. This is much less true of countries with deep pools of startup capital such as the US.

In India, it is possible to live a life where you buy a Tata car, use a Tata laptop, get your Internet and cell phone service from Tata, work for Tata Consultancy Services, and get your electricity from Tata Power (in Mumbai). I don't think this is healthy.

Specialization and "core competencies" are characteristic features of developed economies.

Does anyone know if there have been any studies about the correlation between an economy's level of development and how much of the economy is captured by specialized versus diversified companies? I suspect there will be an inverse correlation.

manish · Post by **manish** » 25 Apr 2010 21:35

^^^
Right on the money with the observation Abhijeet. Just one minor nitpick

- Bharti Group is quite well diversified (or atleast trying hard to!) - Airtel, the retail venture with Wal-Mart, Insurance venture with AXA, backward and forward integration of sorts within the telephony biz with Airtel, Bharti Teletech, Bharti Infratel and their VAS venture (Telesoft?). Heck they even grow and sell fresh fruits under some name.

The really big fish in the conglomerate space in my book would be the Tata Group, Reliance (both factions), AB Group and Essar Group. These seem to be far more powerful and well connected than anyone else in this country. Amongst these, the Reliance 'factions' and Essar are downright scary in the way they seem to operate, made worse with their relative opaqueness.

IMHO onlee.

Suraj · Post by **Suraj** » 25 Apr 2010 23:27

Another country that has such a pattern, though due to deliberate government driven focus on building domestic heavyweights, is South Korea. The chaebols (Hyundai, LG, Samsung, POSCO, Doosan, Lotte etc) are similar diversified conflomerates, many of them with even more heft than the large Indian ones.

Personally I don't mind the existence of large Indian conglomerates. They do concentrate capital and expertise. But we need that. The problem is that they're involved in a range of industries where their presence is not required, and are not yet established in areas where their competencies would be extraordinarily useful. For example, Tata Tea and Tata Salt are really going a little too far, but Tata Power, Tata Energy, Tata Infrastructure etc are, or would be, good.

With the new gold rush in the energy and infrastructure sectors, I'm hoping these conglomerates will become more deeply involved in 'hard' economic sectors as opposed to selling tea and sugar.

manish · Post by **manish** » 26 Apr 2010 00:01

Suraj wrote:Another country that has such a pattern, though due to deliberate government driven focus on building domestic heavyweights, is South Korea. The chaebols (Hyundai, LG, Samsung, POSCO, Doosan, Lotte etc) are similar diversified conflomerates, many of them with even more heft than the large Indian ones.

Personally I don't mind the existence of large Indian conglomerates. They do concentrate capital and expertise. But we need that. The problem is that they're involved in a range of industries where their presence is not required, and are not yet established in areas where their competencies would be extraordinarily useful. For example, Tata Tea and Tata Salt are really going a little too far, but Tata Power, Tata Energy, Tata Infrastructure etc are, or would be, good.

With the new gold rush in the energy and infrastructure sectors, I'm hoping these conglomerates will become more deeply involved in 'hard' economic sectors as opposed to selling tea and sugar.

Excellent analogy Suraj saar - but the very example of Korea also shows the potential pitfalls. There is no arguing against the benefits brought about by the financial and organizational heft that a massive conglomerate can bring to the table. But as the Korean experience with the Chaebols showed, the typically opaque and largely centralized operating style of some of the family-owned conglomerates often feeds corruption and hides inefficiencies incompetence. Another worry is the sidelining/ill treatment of minority shareholders/public by the promoter families, as seen often in India with such firms.

In the aftermath of the Asian Financial Crisis of 1997, the skeletons hidden deep within the Chaebols' closets started tumbling out. Nearly every major Chaebol has been involved/named & shamed in some major corporate crisis since then. Hyundai Group is no longer the all-conquering multi-headed hydra that it once was, with many different factions owning the myriad businesses that the Group once owned. The scandals involving the founder and his children are well known. Then there was Daewoo which crashed spectacularly and had its chairman hiding from the law in Eastern Europe. LG Card had caused a near crisis in the SK economy in the early part of the decade. Samsung Group's head was recently pardoned in a slush fund scandal that had led to his resignation earlier.

One almost feels that the true emergence of SK's private sector as a mature, well-developed global powerhouse happened with the cleaning up of the ownership structures and operating practices at some of its leading business houses. India too may take this course as it integrates more with the rest of the world.

A case in point is the imminent listing of Essar Energy on London Stock Exchange which marks a radical departure from the Group's earlier stance of trying to take all its subsidiaries private if possible. A listing on a foreign exchange for a company like that certainly indicates a change of thinking and a willingness to open up (notwithstanding the Satyam example!).

Suraj · Post by **Suraj** » 26 Apr 2010 00:24

Oh yes, I am aware of the pitfalls of the chaebols. Besides the fact that massive corruption issues were unearthed in the aftermath of the Asian crisis, they also fostered a national and educational culture of 'get into them' almost like the govt sector used to be in India, as opposed to people wanting to become entrepreneurs or independent professionals. The career path of a bright young kid was study hard, get into SNU/KU/Yonsei, and then disappear into a chaebol.

On the other hand, their concentration of capital, scale of production and technological expertise is extremely useful in the areas they were into - shipbuilding, heavy engineering, energy, automobiles etc. I'm all for clean ownership structures and regulations that ensure that ownership remains entirely in Indian control, but other than that, we need such heavyweights to, quite literally, build India.

Theo_Fidel · Post by **Theo_Fidel** » 26 Apr 2010 01:53

Suraj wrote:For example, Tata Tea and Tata Salt are really going a little too far, but Tata Power, Tata Energy, Tata Infrastructure etc are, or would be, good.

Suraj,

I don't know about TATA Tea, But TATA salt is actually a very logical product.

TATA Salt is made by TATA chemicals as a by product of of the manufacture of Soda Ash for glass. It costs them very little to increase production of the vacuum process extra pure salt into a table product. Last year it yielded them Rs 400 Crore in revenue. Most manufacturers around the world would simply dump this.

Also before TATA Salt showed up the vast majority of Indian salt was non-Iodized, causing health complications. They were the first to make Iodization a standard.

The other by product from the manufacture of Soda Ash is.. ..TATA Cement.

I would call this a vertically integrated conglomerate wringing value out of its product chain.

But, I get your point about 'core competencies'.

Abhijeet · Post by **Abhijeet** » 26 Apr 2010 02:12

manish wrote:Bharti Group is quite well diversified (or atleast trying hard to!) - Airtel, the retail venture with Wal-Mart, Insurance venture with AXA, backward and forward integration of sorts within the telephony biz with Airtel, Bharti Teletech, Bharti Infratel and their VAS venture (Telesoft?). Heck they even grow and sell fresh fruits under some name.

You're right about that - although Airtel is the dominant brand, Bharti is in a number of other industries. It's actually quite hard to think of large Indian companies that are not in multiple unrelated industries.

In some ways, this may be because the only way to gain scale in a historically protected and small Indian market was to be in lots of different industries, since any single market in India might not have been large enough to support large companies. I don't think this is true in some industries any more, but is certainly still true in many.

Indian companies that are established in India can now also branch out into the global market much more easily than before, which reduces the need for them to get into doing random unrelated things in India just to keep growing. Hopefully, there will be many more vertical companies and fewer horizontal companies in coming years.

Suraj · Post by **Suraj** » 26 Apr 2010 04:52

Theo: Thanks for those bits of information. I wasn't familiar with the inter-linkages between various Tata businesses that led to some of the products they make. In such situations, I agree that there's nothing wrong with them selling stuff like salt, particularly since their crossholding ownership structure makes these entities quite autonomous. I remember the days back in the 80s and before, when iodine deficiency was a big issue, and salt ads trumpeted their iodine content, in the press and on TV.

vina · Post by **vina** » 26 Apr 2010 06:57

Theo: Thanks for those bits of information. I wasn't familiar with the inter-linkages between various Tata businesses that led to some of the products they make

If you visited Jamshedpur, it is actually quite evident. There are 71 odd Tata Companies there clustered around Tata Steel, that use by products from steel making processes to make other value added products (stuff like paints, chemicals,tubes, etc..etc). Yeah, question is whether all of them on their own are world class in size and scale. maybe not. But then, because they are part of an overall ecosystem, they probably dont need that kind of scale to be viable and profitable to a decent degree.

Masaru · Post by **Masaru** » 26 Apr 2010 07:36

Suraj wrote:Another country that has such a pattern, though due to deliberate government driven focus on building domestic heavyweights, is South Korea. The chaebols (Hyundai, LG, Samsung, POSCO, Doosan, Lotte etc) are similar diversified conflomerates, many of them with even more heft than the large Indian ones.

One aspect of Chaebols that is overlooked is that the big ones Samsung, LG, Hyundai are as or more focused on external market than the internal national market. The monopoly operation in the domestic market allows them the security to take business risk of developing and competing in the extremely competitive international product space of DRAMs, LCD TVs., and white goods. This factor is yet to be seen in the Indian conglomerates. SK being a relatively small country doesn't have the luxury to support multiple semiconductor, vehicle and heavy industry manufacturers and with each still having the financial depth to compete internationally. IMVHO it is a well thought out strategy where the flaws of oligarchic monopoly in domestic market is balanced by the competitive pressures they face in the international market.

In the Indian context its simply not justifiable in the longer run to have a handful of large family owned conglomerates have a disproportionate impact on the economy. The economy would become big enough to support multiple specialized companies in each industry sector based on the domestic market alone.

The other variance from Chaebols, seen in their Indian counterparts is the very little intent if any (barring TATAs) to compete in the global product space by utilizing the large monopoly they enjoy in the home market. Instead one hears of stories like outsourcing the engineering intensive parts of the business to Chinese (Reliance) and European (Bharti) while they focus on the retail and service side of the business; not to mention the dabbling in selling fruits and vegetables. While a case can be made about the inefficiencies in the retail sector which should be reduced by the entry of such players the laser like focus on sales/distribution/service optimization based business model doesn't bode too well for the future. Unless this unhealthy habit is reformed Indian economy faces very real risk of falling in the Latin American middle-income stagflationary trap.

Ameet · Post by **Ameet** » 26 Apr 2010 11:07

India Inc's Million-Dollar Executives

http://timesofindia.indiatimes.com/biz/ ... 857289.cms

Who are the corporate honchos taking home more than a million dollars in salaries? Where are they from? How many earn such fabulous salaries?

Ameet · Post by **Ameet** » 26 Apr 2010 11:25

INDIA’S TOP 10

http://www.ahmedabadmirror.com/printart ... 8&subsite=

The study, conducted by PricewaterhouseCoopers, calculated Indian cities’ GDP in 2009 based on their purchasing power parity.

Ten biggest Indian cities in terms of gross domestic product are:

• Mumbai (GDP $209 bn)
• Delhi (GDP $167 bn)
• Kolkata (GDP $150 bn)
• Bangalore (GDP $83 bn)
• Chennai (GDP $67 bn)
• Hyderabad (GDP $60 bn)
• Amdavad (GDP $59 bn)
• Pune (GDP $30 bn)
• Surat (GDP $22 bn)
• Kanpur (GDP $22 bn)

Vipul · Post by **Vipul** » 26 Apr 2010 19:25

Kolkata just 10% less then Delhi and Ahmedabad at nearly 3x the size of Surat.

I think PWC must have put their Interns to do this study.

RamaY · Post by **RamaY** » 26 Apr 2010 19:42

^^^

Interesting. So the top 10 cities of India (<10% population) contribute towards ~70% GDP?

Often the entire state's GDP is counted in a cities account as the head quarters are situated in the city. Could this be the reason?

Does this indicate the necessary shift towards Urbanized India? Can India develop 100 cities each with civic infrastructure to support 1 Cr population?

Suraj · Post by **Suraj** » 26 Apr 2010 20:44

The GDPs listed above are PPP. The numbers look really strange. Cochin not in the top 10 but Kanpur is ?

Bade · Post by **Bade** » 26 Apr 2010 20:56

Other than the port and shipyard what does Cochin have ? Kanpur has a lot of medium-scale industries no? A'bad is a big city with lots of diverse activities. I am surprised it has not caught the nation's fascination as much as Pune has.

milindc · Post by **milindc** » 26 Apr 2010 21:02

Suraj wrote:The GDPs listed above are PPP. The numbers look really strange. Cochin not in the top 10 but Kanpur is ?

As is expected they used advanced modeling for this study....

Emerging market city economies set to rise rapidly in global GDP rankings says PricewaterhouseCoopers LLP

1) Data and methodology used to derive city GDP estimates and projections Our primary estimates of city output are based on combining UN population estimates for cities in 2008 with estimates of GDP per capita at purchasing power parities (PPPs). For cities from OECD countries, we were able to base our city-level GDP per capita estimates on 2002 data from the OECD’s Competitive Cities report (2006) and then projected these forward to 2008. For non-OECD cities, data are not readily available from a single source. In some cases GDP per capita estimates at city level were available from national sources, but in many cases we were only able to make approximate estimates based on plausible ratios of city to national GDP per capita. As such, the 2008 urban agglomeration GDP estimates should only be taken as broadly indicative of relative economic size for the non-OECD countries. Nonetheless, they provide a much better indication of relative economic size than just looking at population data. Our results are also dependent on the standard UN definitions of ‘urban agglomerations’, which we use throughout the analysis. 2) Please refer to the attached word document containing relevant graphs and tables.

svinayak · Post by **svinayak** » 26 Apr 2010 21:10

Idea is to create a new consumer market segment for only those cities.

Suraj · Post by **Suraj** » 26 Apr 2010 21:58

Bade wrote:Other than the port and shipyard what does Cochin have ? Kanpur has a lot of medium-scale industries no? A'bad is a big city with lots of diverse activities. I am surprised it has not caught the nation's fascination as much as Pune has.

Cochin is a pretty well-off city, with massive capital inflows from the gulf, and significant consumer discretionary spending. Perhaps it's GDP is affected by a number of these (e.g. gold, cars etc) being imported. There's also the Kochi Refinery, which at 175000bbl/d, is a sizeable refinery by any standard.

PS: RamaY, I sent you a PM with my email ID.

Prem · Post by **Prem** » 26 Apr 2010 22:09

san Motor India starts trial exports of cars from India

CHENNAI - The Indian subsidiary of the Japanese Nissan Motor Company has taken the first step to export vehicles from its plant near here by shipping out six Micra cars as test consignment to Spain.“Trial transportation for exports is a very important milestone for us as we gear up for exports to Europe from second half of 2010,” Kiminobu Tokuyama, Nissan Motor India managing director, said here Monday. The company shipped out the cars Saturday. India will be one of the a major production hubs for Nissan Motors as it plans to ship cars made near here to more than 100 countries in Africa, Europe and the Middle East. Nissan Motors plans to export around 110,000 cars out of India in 2011 and increase it to 180,000 in the future. Tokuyama said production of the Micra for the domestic market will begin next month and for the export market in July.

http://blog.taragana.com/business/2010/ ... dia-54024/

Prem · Post by **Prem** » 26 Apr 2010 22:14

http://www.businessweek.com/news/2010-0 ... onomy.html
India’s Rupee Strengthens a Third Day as Rains May Spur Economy

April 26 (Bloomberg) -- The rupee appreciated for a third day on speculation foreign capital inflows may increase after the weather office predicted a normal monsoon, which could boost farm output that accounts for a fifth of the economy.
Calls to China from the U.S. and emerging economies such as India and Brazil to let the yuan strengthen are also helping the rupee’s gains, said Sudarshan Bhatt, chief foreign-exchange dealer at state-owned Corporation Bank in Mumbai. Rains in the June-September season will be 98 percent of the 50-year average, the India Meteorological Department said on April 23.“Almost all factors are favorable for the rupee now because the economy is on a strong growth path, and a normal monsoon will strengthen the prospects further,” said Bhatt. “The continuing foreign inflows into the stock market are just one indicator.”
he rupee was at 44.3325 per dollar as of 10:40 a.m. in Mumbai, compared with 44.4350 on April 23, according to data compiled by Bloomberg. The currency is the second best-performer in Asia so far this year. It has risen 4.9 percent against the dollar, compared with a gain of 7.8 percent in Malaysia’s ringgit.

Bade · Post by **Bade** » 26 Apr 2010 23:16

Suraj wrote:
Bade wrote:Other than the port and shipyard what does Cochin have ? Kanpur has a lot of medium-scale industries no? A'bad is a big city with lots of diverse activities. I am surprised it has not caught the nation's fascination as much as Pune has.
Cochin is a pretty well-off city, with massive capital inflows from the gulf, and significant consumer discretionary spending. Perhaps it's GDP is affected by a number of these (e.g. gold, cars etc) being imported. There's also the Kochi Refinery, which at 175000bbl/d, is a sizeable refinery by any standard.

I realized I had left off the refinery in my list. The returns from expats are never counted in the GDP, so it will always be lower for Cochin. Other than gulf expats there is also a significant number or wandering merchant navy types in many families in that region.

Mangalore which also has a port and a wider industrial base than Cochin with similar mix of small scale industries and expat population comes to mind as a comparison. M'lore never makes the list either.

svinayak · Post by **svinayak** » 27 Apr 2010 01:49

Bade wrote:

Mangalore which also has a port and a wider industrial base than Cochin with similar mix of small scale industries and expat population comes to mind as a comparison. M'lore never makes the list either.

Mangalore cannot be compared to Cochin. Cochin competes with it and was able to take away large part of the Ktaka exports due to container handling and other facilites. Mlore handles mostly Kudermukh iron ores, MRPL oil and other hinterland trading. Once the oil pipline from Mlore to Bluru and Other area are setup then there is going to be big traffic numbers

Bade · Post by **Bade** » 27 Apr 2010 10:38

Since, NH-17 is the only corridor from Karnataka to Kerala how is that possible ? The NH-47 via the palghat gap is quite torturous in itself. Would not east coast ports be preferable for the container traffic from Karnataka ?

Be it beedis, coir, fisheries, spices and other traditional small scale ones there are equivalents for M'lore and Cochin. FACT and industries in Binanipuram have their equivalents in Baikampady. Both these cities are quite comparable even in terms of general demography.

manish · Post by **manish** » 27 Apr 2010 10:53

Acharya wrote: Mangalore cannot be compared to Cochin. Cochin competes with it and was able to take away large part of the Ktaka exports due to container handling and other facilites. Mlore handles mostly Kudermukh iron ores, MRPL oil and other hinterland trading. Once the oil pipline from Mlore to Bluru and Other area are setup then there is going to be big traffic numbers

Acharya avare, Cochin Port too is gaining a lot of strength, esp with the new DP World promoted Rajiv Gandhi Container transshipment terminal coming on stream. And in some aspects the MLR port (NMPT) actually is going backwards if you consider the iron ore traffic volumes falling due to ongoing resistance to transport of ore fines by trucks.

Mangalore's connectivity and infra development faces huge obstacles in the form of environmental concerns. The proximity to the Western Ghats is both a boon and a bane to Mangalore city. The MLR-BLR NH-48, which is the vital link connecting Karnataka's two most important cities shuts down every now and then in the Shiradi Ghat section between Hassan-Mangalore.

The badly needed line doubling on MLR-BLR and MLR-BOM Konkan Railway routes is held up due to concerns about ecological damage and till the rail infra improves, the unwanted dependency on road transport will remain. There is no connectivity to hinterland from KR for the same reason. In fact, a small 84km link from Talaguppa near Shimoga to Honnavar would do the trick but Ministry of Environment will have none of it. The Kudremukh Iron Ore Co too has been struggling due to the ban on mining in the Ghats.

Similar concerns have probably affected the prospects of the proposed multibillion dollar PCPIR project and many other developments in the region.

The newly commissioned 500MW power plant of UPCL has no dedicated HT lines to supply power to the state/national grid because - you guessed it - you will need to chop a gadzillion trees in the Western Ghats for that! No wonder that Mangalore's traditional strengths have always been in agriculture and services (banking and education mainly). Mangalore and the Dakshina Kannada district have traditionally punched far above their weight in the banking sector and the region was the birthplace of a lot of national level players (Canara Bank, Corp Bank, Vijaya Bank, Syndicate Bank, Karnataka Bank).

Only big Public Sector investments (non-service industry) ongoing in the region currently are the MSEZ (ONGC) and the Strategic Petroleum Reserve project IIRC. It is very difficult to work around the environmental concerns in times like these and without some of these infrastructure elements in place, Mangalore would struggle to go much further or to scale up.

svinayak · Post by **svinayak** » 27 Apr 2010 11:33

manish wrote:
Acharya avare, Cochin Port too is gaining a lot of strength, esp with the new DP World promoted Rajiv Gandhi Container transshipment terminal coming on stream. And in some aspects the MLR port (NMPT) actually is going backwards if you consider the iron ore traffic volumes falling due to ongoing resistance to transport of ore fines by trucks.

I grew up in the port and and association with it for more than 40 years

Suraj · Post by **Suraj** » 27 Apr 2010 20:20

Core sector grows 7.2% in March

Six core infrastructure industries grew by a healthy 7.2 per cent in March against 3.3 per cent in the year-ago period, reflecting firm industrial recovery.

The key sectors -- crude, petroleum refinery products, coal, electricity, cement and finished steel -- also showed marked improvement in March when compared to the 4.7 per cent in February.

Finished steel with 9.2 per cent expansion led the recovery, reversing a negative 1.8 per cent in March last year.

Coal, electricity and cement grew by 7.8 per cent each against 5.3 per cent, 6.3 per cent and 10.1 per cent, respectively.

Crude oil production went up by 3.5 per cent from a negative 2.3 per cent. However, petroleum refinery products showed a dismal performance with 0.4 per cent contraction in March 2010 over a positive 3.3 per cent a year ago.

Govt expects revenue from 3G sale to touch Rs 40,000 cr ($9 billion)

The Telecom Ministry expects revenue from sale of 3G telephony spectrum to touch Rs 40,000 crore, beating the government's initial estimate of garnering Rs 35,000 crore from both 3G and Broadband spectrum.

The revenue from 3G (third generation) spectrum alone would touch Rs 40,000 crore. As of today, revenue (going by the bids) would cross Rs 35,000 crore, Telecom Minister A Raja said today.

He said both 3G and Broadband spectrum put together might bring in Rs 50,000-55,000 crore ($12.3 billion) of revenue, much above the Rs 35,000 crore the government had estimated initially.

kshirin · Post by **kshirin** » 27 Apr 2010 22:25

I am belatedly posting extracts of an excellent article on the need for a proactive industrial policy, against the backdrop of a laissez faire policy on Rupee appreciation.

http://www.business-standard.com/india/ ... cy/392455/

Dani Rodrik: The Return of Industrial Policy April 20, 2010

The World Bank’s chief economist, Justin Lin, openly supports it to speed up structural change in developing nations. McKinsey is advising governments on how to do it right….

Economists enamoured of the neo-liberal Washington Consensus may have written it off, but successful economies have always relied on government policies that promote growth by accelerating structural transformation. …

China is a case in point. Its phenomenal manufacturing prowess rests in large part on public assistance to new industries. State-owned enterprises have acted as incubators for technical skills and managerial talent. Local-content requirements have spawned productive supplier industries in automotive and electronics products. Generous export incentives have helped firms break into competitive global markets.

Chile, which is often portrayed as a free-market paradise, is another example. …The US owes much of its innovative prowess to government support.

The real question about industrial policy is not whether it should be practised, but how. ...Third, industrial policy’s practitioners need to bear in mind that it aims to serve society at large, not the bureaucrats who administer it or the businesses that receive the incentives. To guard against abuse and capture, industrial policy needs to be carried out in a transparent and accountable manner, and its processes must be open to new entrants as well as incumbents.

ramana · Post by **ramana** » 28 Apr 2010 21:30

Suraj, Can you review the WB GDP projections that Theo Fidel posted a page ago?
Thanks,
ramana

"I have posted on this distortion in the economy forum with a chart.

http://forums.bharat-rakshak.com/viewto ... 29#p857529

"

Suraj · Post by **Suraj** » 28 Apr 2010 22:32

The 2nd tier EU countries reporting fast GDP growth was originally attributed to the appreciation of the Euro. Perhaps Theo's post would be cause to reexamine the issue. On the surface, it is bizarre that a country like Italy registers decent growth in GDP as reported in USD, despite barely treading the water in terms of annual GDP growth over the last decade, compared to India's average GDP growth during the period.

shynee · Post by **shynee** » 28 Apr 2010 22:53

India-EU trade deal could kill health lifeline

Theo_Fidel · Post by **Theo_Fidel** » 29 Apr 2010 09:08

Suraj,

Thanx for pointing Italy out. I hadn't thought the shenanigans were so pervasive.

Yes, Italy GDP Doubled from 2002-2008.

That is a compound annual growth rate of 12%.

We should not buy this GDP cool aid, esp. from these sources.

I have looked at many other sectors, Electricity, Coal, Steel, Cement, etc.

In all of them we are usually 2 or 3 or 4 times the size of Spain, Brazil and Canada. Only Russia is comparable if lower. And we thought our industrial sector was under developed.

We are definitely the 8th largest economy in the world.

You can compare by sector at the links below.

https://www.cia.gov/library/publication ... 8rank.html

Suraj · Post by **Suraj** » 29 Apr 2010 10:02

I used the IMF WEO database (link) to further analyze the Italy casestudy, plotting GDP growth rate, GDP in USD, yoy nominal GDP growth and USD/EUR calendar year change (positive implies Euro strengthened), all between 2002-2008:

Code: Select all

GDP growth rate	   0.454	-0.017	1.532	0.656	2.036	1.482	-1.319
GDP	               1,223.236	1,510.055	1,730.095	1,780.781	1,865.112	2,119.247	2,307.429
Nominal GDP growth   +10% +23% +15% +03% +05% +14% +09% -08%
USD/EUR              +14% +21% +07% -13% +12% +10% -05%

This shows some trending of their nominal GDP against Euro appreciation, but there are signifcant gaps of multiple percentage points of GDP.

Zameen · Post by **Zameen** » 30 Apr 2010 19:28

How does one find the VAT number Service Tax number of a particular company if all the information I have is the name and address and contact information in India? We are trying to deal with a company and want to ensure that it is legitimate. Is there anyway of finding it from official databases or is there a kaam chalau method (like asking MTNL accounts folk) that will work too? Any help will be greatly appreciated.

Shalav · Post by **Shalav** » 30 Apr 2010 20:43

Zameen,

This is not the right place to ask this question.

But if I were you I would just ask that company for their VAT number and check with D&B in India. If as you say you are dealing with them, they should have no problem, if you are trying to do something else and they have not given you that number, you are attempting something illegal.

Zameen wrote:How does one find the VAT number Service Tax number of a particular company if all the information I have is the name and address and contact information in India? We are trying to deal with a company and want to ensure that it is legitimate. Is there anyway of finding it from official databases or is there a kaam chalau method (like asking MTNL accounts folk) that will work too? Any help will be greatly appreciated.

Ameet · Post by **Ameet** » 01 May 2010 01:08

India world's 10th largest gold holder

http://economictimes.indiatimes.com/Bul ... 877294.cms

India's rank increased to 10th position in March 2010, with official gold holding of 557.6 metric tonnes.

Katare · Post by **Katare** » 01 May 2010 02:47

ICICI Bank, HDFC Bank are ‘foreign owned, Indian controlled'

Katare · Post by **Katare** » 01 May 2010 06:36

Industrial output likely to scale 15% in March: Sharma

March CPI up 14.86 pct y/y: Govt

wig · Post by **wig** » 01 May 2010 11:05

http://www.tribuneindia.com/2010/20100501/nation.htm#1
Thirteen years ago, India compromised its national security and economic sovereignty by outsourcing the printing of its currency notes to three foreign firms.

Printing of a whopping Rs one lakh crore was outsourced by the Reserve Bank of India to American Banknote Company,US (635 million pieces of currency), Thomas de la Rue, UK (1,365 million pieces of Rs 100 denomination) and Giesecke and Devrient Consortium (Germany) (1,600 million pieces of Rs 500 denomination) — all in utter disregard of country’s sovereign interests and all for unconvincing reasons.

apologies if posted before. the entire article is an interesting read and requires discussion

rsingh · Post by **rsingh** » 01 May 2010 22:03

wig wrote:http://www.tribuneindia.com/2010/20100501/nation.htm#1
Thirteen years ago, India compromised its national security and economic sovereignty by outsourcing the printing of its currency notes to three foreign firms.

Printing of a whopping Rs one lakh crore was outsourced by the Reserve Bank of India to American Banknote Company,US (635 million pieces of currency), Thomas de la Rue, UK (1,365 million pieces of Rs 100 denomination) and Giesecke and Devrient Consortium (Germany) (1,600 million pieces of Rs 500 denomination) — all in utter disregard of country’s sovereign interests and all for unconvincing reasons.

apologies if posted before. the entire article is an interesting read and requires discussion

And.............what's the point. Most of countries does that. Printing money is legal business as are the banks. Those companies can not print a single note extra without RBI authorization.