Indian Economy: News and Discussion (Jan 1 2010)

vera_k · Post by **vera_k** » 14 Jun 2010 11:25

Nihat · Post by **Nihat** » 14 Jun 2010 23:23

'INDIAN ECONOMY TO GROW 8.9 PC DURING APR-JUNE'

NEW DELHI, June 14 (NNN-PTI) -- Chief Economic Advisor Kaushik Basu today said the Indian economy is likely to grow by 8.9 per cent in the first quarter of the current fiscal compared to 8.6 per cent in the previous quarter.

"... This quarter, the quarter that we have entered...

8.9 per cent growth in this quarter is something we can expect. We had 8.6 per cent in the last quarter," Basu said at a press conference.

Basu's observation assumes importance since industrial production grew 17.6 per cent in April, marking double-digit expansion for the straight seventh month.

Manufacturing, which constitutes around 80 per cent of industrial growth, expanded 19.4 per cent in April. Within manufacturing, capital goods production rose by 72.8 per cent in April, while consumer durable rose by 37 per cent.--NNN-PTI

http://namnewsnetwork.org/v2/read.php?id=123698

Suraj · Post by **Suraj** » 15 Jun 2010 00:51

Rather humourous collection of news on the same day, regarding feelers from GoI about action on inflation:
Finance Minister Pranab Mukherjee says:
Not in favour of altering interest rates now: Pranab
Planning Commission Dt Chairman Montek Singh Ahluwalia says:
RBI action to arrest inflation desired: Montek
Chief Economic Adviser Kaushik Basu says:
Inflation to fall within 6months of freeing fuel prices: Basu

The current situation suggests GoI wants to milk the surge in economic output while depending on the monsoons to temper inflation in food prices, since there's no sign of broad cost push inflation, and the recent 3G/BWA auction payments to GoI have taken out billions in liquidity out of the market, into GoI's coffers.

Nihat · Post by **Nihat** » 15 Jun 2010 00:57

which is not such a bad idea , given that the main driver for inflation is Food and a normal monsson expected . If the intrest rates can just hold off for a couple of months then Govt. is in a very good position wrt to beating its own growth forcast for the 2010-11 fiscal.

Nihat · Post by **Nihat** » 15 Jun 2010 12:53

Fitch revises India outlook to stable from negative

Vipul · Post by **Vipul** » 15 Jun 2010 21:06

Customs, excise, service tax mop up rises 49% in Apr-May.

India Inc's advance tax payments spike.

Suraj · Post by **Suraj** » 15 Jun 2010 21:10

Nihat wrote:Fitch revises India outlook to stable from negative

We were rated negative by these jokers ? What did they just rate Spain and Greece - stable to positive ?

KrishnaMu · Post by **KrishnaMu** » 16 Jun 2010 03:10

SwamyG wrote:
putnanja wrote:Why India is not Greece - Ashima Goyal
That article should not have been even written.

Well said, who is this pillock! for the past eight yrs westren banks only 10% credit (Pre-boom) real economy to the industry, rest of profits & funding is given brick & mortars as derivative gambling. No compitition in banking sector, touch n go regulatory system and shambeld taxiation in greek. no way we can compare.

Just little concerned is Indian property sector is over heated?

joshvajohn · Post by **joshvajohn** » 16 Jun 2010 22:35

Parking funds overseas may not be wise
http://economictimes.indiatimes.com/fea ... 042499.cms

Swiss banks offer to tax clients, India wants revised treaty
http://timesofindia.indiatimes.com/indi ... 992727.cms

I-T notice to 50 as Germany gives black money list
http://economictimes.indiatimes.com/new ... 983308.cms

satyam · Post by **satyam** » 17 Jun 2010 00:10

Don't know where to post this question. So asking here ?

South Africa is making a great loss by hosting World cup.
Will India be also making loss by hosting common wealth ?

putnanja · Post by **putnanja** » 17 Jun 2010 22:41

satyam wrote:Don't know where to post this question. So asking here ?

South Africa is making a great loss by hosting World cup.
Will India be also making loss by hosting common wealth ?

Irrespective of loss, at least Delhi got a few makeovers. If not for the commonwealth games deadline, I don't think airport privatization would have been accelerated to such an extent. Similarly, expanding metro and bunch of other projects in ND. If they had dithered for years trying to decide on these projects, the cost of these projects would have increased much beyond whatever loss India might make for now.

satyam · Post by **satyam** » 18 Jun 2010 00:24

^^^thanks

Indian companies get into commercial farming in Africa

http://economictimes.indiatimes.com/new ... 042491.cms

Suraj · Post by **Suraj** » 18 Jun 2010 00:25

satyam: Please don't post tangential news items like commercial farming in Africa in this thread.

satyam · Post by **satyam** » 18 Jun 2010 00:48

OK.

But it is about our food economy. We will import food from there.

Prem · Post by **Prem** » 18 Jun 2010 09:52

Caterpillar to Invest $700M in Production Upgrades
By THE ASSOCIATED PRESS

OMAHA, Neb. (AP) -- Caterpillar Inc. plans to invest almost $700 million over the next four years to start producing mining shovels and expand production of its trucks at plants in Illinois and India.

http://www.nytimes.com/glogin?URI=http: ... BocTtYQ2FM

satyam · Post by **satyam** » 18 Jun 2010 13:42

Exports jump 35% to $16.1 bn in May

Imports for the month were at $27.4 billion,

trade deficit to $11.3 billion.

http://www.business-standard.com/india/ ... y/98393/on

satyam · Post by **satyam** » 18 Jun 2010 22:27

Alcatel Lucent considering India for services headquarters

http://www.business-standard.com/india/ ... s/98496/on

Prem · Post by **Prem** » 18 Jun 2010 23:53

Will Europe Drag Down China, And Why We Like India

If investors are looking for a lower risk emerging market play, India may be the answer. Our work suggests that India is unique for a few key reasons.
Domestic Demand: India is not an export-driven country. It is an insulated country that booms on local demand, and is not subject to the fluctuations of international markets or currencies.
Demographic: India’s middle class is larger than the entire population of the US. This allows the country to produce robust amounts of domestic economic activity.
Protection: India has put in place protective business policies that defend domestic companies from direct international competition.While India and China are two very different countries with very different economies, a case can be made for both when looking at potential emerging market investments. However, from our perspective, we favor India at the present time.As a reflection of this, our TSP Macro Trade, which, by definition, looks at the big picture view, has a core holding (approximately 11%) in India via the WisdomTree India Fund (EPI

http://seekingalpha.com/article/210711- ... like-india

Vipul · Post by **Vipul** » 19 Jun 2010 00:01

'Farm to city exodus can power India'.

"To achieve high inclusive growth, there is a need to facilitate the transition of workforce from agriculture to services and industrial sectors...if the country is growing, that is mainly not because of agriculture, what is important is services and industrial sectors,” Gokarn said speaking at the Skoch seminar here.

Hitesh · Post by **Hitesh** » 19 Jun 2010 01:27

Although it will mean that cities will swell to the point of bursting, it is actually good overall for India's growth. Today, agriculture has progressed to the point where it is not beneficial to a nation overall if a large majority of population are involved in agriculture. Today practically all developed nations have less than 2% of its populations working as farmers. India need to unshackle the thinking that farming is good for employment. It really is not. New emerging market sectors are good for employment. To manage this growth into cities and industrial and services labor workforce, real technical and vocational training are very much needed, more needed than theoretical training such as universities and colleges.

RamaY · Post by **RamaY** » 19 Jun 2010 01:54

Suraj wrote:
Nihat wrote:Fitch revises India outlook to stable from negative
We were rated negative by these jokers ? What did they just rate Spain and Greece - stable to positive ?

I attended a credit risk modeling class this week and I learned how these ratings are decided. They are based on many indicators including

GDP, Percapita GDP, Cash reserves, Inflation, Corruption Perception Index, Child mortality rate, Average education, literacy rate, and so on. India fails to compare with those economically developed western countries on many indicators. That is the reason behind India's low credit rating.

At one level it is very intuitive. But it hurts nations like India.

If the additional cost of capital is 200 basis points for India, it costs about $5-8B additional money to fund India's GDP (assuming $1+ real economy and 35% capital investments). This is the price India has to pay for being internally poor.

I opened the G20 thread to discuss these very items. Perhaps India should argue that it should get a level or two higher ranking based on its economic and strategic potential (that would bump India from say BBB to A or something like that...)

JMT.

satyam · Post by **satyam** » 19 Jun 2010 01:57

^^^^
Brazil is also rated BBB-. First India should get its fiscal deficit within 2-3 % and reduce debt. We will get the good ratings.

ramana · Post by **ramana** » 19 Jun 2010 03:57

RamaY, Of those factors what are the weighting factors? IOW which are more important? We should have the folks work on improving those for it will provide extra/bonus capital by reducing the interest rate.

rohiths · Post by **rohiths** » 19 Jun 2010 07:17

Irrespective of the rating the interest rate in India will be high compared to the rest of the world mainly due to inflation problems as well as the high growth rates. The rate on government debt basically decides the prime lending rate and will decide the interest rate foreign lenders are charging on private borrowers(external borrowing by government is negligible).
When we compare the real interest rate it is comparable to the western countries. This year India has a central bank discount rate of 7% and an inflation of 10% which brings the real discount rate to -3%. Even US has a higher real discount rate.
Unless we get our inflation act together by reducing fiscal deficit, improve supply side and improve infrastructure the high interest rate will continue

satyam · Post by **satyam** » 19 Jun 2010 15:43

Okay a question here:

It is said India's fiscal deficit in 2010-11: 5.5 %
For this govt has to borrow: Rs 4.57 trillion ($97 billion)

This takes India's gdp : 97/5.5 = $1.736 trillion

But it is : $ 1.351 trillion
Am i making mistake somewhere ?

wig · Post by **wig** » 19 Jun 2010 18:10

http://timesofindia.indiatimes.com/Biz/ ... 068225.cms

HYDERABAD: Beleaguered Hyderabad-based infrastructure firm Maytas Infra, which was earlier promoted by disgraced Satyam founder B Ramalinga Raju’s elder son Teja Raju, has decided now to rope in global construction conglomerate - the Saudi Bin Ladin group - as co-promoter of the company along with Infrastructure Leasing & Financial Services Ltd (IL&FS).

IL&FS replaced the Rajus as promoter of Maytas Infra in September 2009 following a Company Law Board order dated August 31, 2009.

The Hyderabad-based infrastructure company is all set to allot 1,54,59,133 equity shares of the company through the preferential allotment route to SBG Projects Investments Ltd, a Mauritius-based arm of the Saudi Bin Ladin group, Maytas Infra informed the bourses on Saturday.

However, the company did not disclose the price at which the deal was struck with the Saudi BinLadin group, which will hold 20% of the post issue paid up equity share capital of the company on a fully diluted basis after the allotment.

Even as the infusion will dilute IL&FS' stake in Maytas Infra from the existing 37.01% to around 30%, both IL&FS and BinLaden group will be make a mandatory public offer in accordance with the takeover regulations of the Securities & Exchange Board of India (SEBI).

The announcement comes just three days after a strong buzz about the company inducting a potential Middle-Eastern investor sent the company’s scrip soaring by 10% on the BSE on Wednesday to hit a 52-week high of Rs 215.15 a share.

The $5 billion Saudi Bin Ladin group was founded by 1931 by the late Sheikh Mohammed Bin Ladin, who is also the father of the world’s most wanted terrorist and al-Qaida founder Osama Bin Laden. The group, which disowned Osama Bin Ladin in 1994 much before he shot to notoriety for masterminding the 9/11 World Trade Centre attacks, is now being run by Osama’s half-brother Bakr Bin Laden.

Maytas Infra's operations came to a grinding halt after Ramalinga Raju's confessions in January 2009 that he cooked Satyam's accounts as banks who had extended loans worth nearly Rs 2000 crore to the infrastructure firm froze all accounts.

Faced with a liquidity crunch and a crisis of confidence, the company lost several projects including the prestigious Rs 12,000 crore Hyderabad Metro Rail project last year and even a government nominated board taking charge of the company could not prevent the company from posting losses of over Rs 490 crore for fiscal 2008-09.

Soon after IL&FS took over the company in September last year, Maytas has been trying to infuse liquidity in the company and renegotiate its corporate debt restructuring

Prem · Post by **Prem** » 19 Jun 2010 23:43

Where the Rich Live in India
http://online.wsj.com/article/SB1000142 ... realestate

By SHEFALI ANAND
Super-luxury apartments are back in vogue and they are bigger and better than ever before.

As India's economy has gained momentum over the past several months, super-wealthy corporate professionals and businessmen are once again ready to pay $1 million or more for their dream homes. That can buy apartments with five bedrooms or more spread over 5,000 to 10,000 square feet and with amenities like personal lap pools and jogging parks in the sky.
From gold tiled bathtubs to sky-high verandas, luxury living is back. Following a market lull in 2008, India's wealthy class is again dishing out top dollar for luxury apartments. WSJ's Shefali Anand reports.
.Home builders are rushing to meet this demand. At least a dozen super-luxury apartment complexes are being built across India right now, mostly in the major metro cities of Mumbai, Delhi and Bangalore

RamaY · Post by **RamaY** » 20 Jun 2010 07:37

ramana wrote:RamaY, Of those factors what are the weighting factors? IOW which are more important? We should have the folks work on improving those for it will provide extra/bonus capital by reducing the interest rate.

Ramanaji,

The course is focused on building the credit rating models. Since there are very few actual cases of sovereign default scenarios, many assumptions are made in the model development.

This allows the model builder (the credit rating agencies) to make "subjective" decisions in setting weights for key parameters. My take is that they must be taking the IMF/WB human development index factors as the basis...

Few examples are...
- Percapita GDP
- Inflation
- Corruption Perception Index
- Gini Index
- Internal Security perception Index
- Fiscal deficit (as a percentage of GDP or Tax revenues)
- Current deficit (as a percentage of GDP or Tax revenues)
- Child Mortality Rate
- Human Rights and so on...

As you can see India need to improve its position in almost all of these areas. This appears intuitive (for western educated minds). But this logic breaks down when you start questioning the basis for some of these factors

Chinmayanand · Post by **Chinmayanand** » 20 Jun 2010 15:29

wig wrote:http://timesofindia.indiatimes.com/Biz/ ... 068225.cms

Is Maytas partnering with the terrorist OBL family

derkonig · Post by **derkonig** » 21 Jun 2010 09:21

^^^
Yes for a full 20% stake which might rise with time given that Maytas is listed and BinLaden will have to do an open offer. Besides, the entry of BinLaden esp. in Hyd does not augur welll.

abhischekcc · Post by **abhischekcc** » 21 Jun 2010 09:50

There is no connection between OBL and the rest of the BinLaden family, esp on financial front. Why is the name itself so anathema that this fact is pushed back to the background?

abhischekcc · Post by **abhischekcc** » 21 Jun 2010 09:51

The Bin Laden Group is a JV between a smaller number of brothers. OBL never had any stake in it, and most of the family also has never had any stake in it.

derkonig · Post by **derkonig** » 21 Jun 2010 11:38

Whatever be the case, can these people ever be trusted again? Who is to say prevent them from funding madrassas in Hyd in the garb of realty?

Suraj · Post by **Suraj** » 21 Jun 2010 11:45

No more on the topic of Maytas/BinLaden group in this thread, please.

Chinmayanand · Post by **Chinmayanand** » 21 Jun 2010 14:26

Clogged Rail Lines Slow India’s Development

Prem · Post by **Prem** » 22 Jun 2010 10:10

The Economic Times of India

NEW DELHI: Technology giant IBM today said it will set up 75 new Centres of Excellence (CoE) at engineering colleges across 60 cities in India, which will train students on various softwares. The locations for the 75 new CoEs will be selected from among the top 300 engineering colleges in the country and will span 20 states, IBM said in a statement. Last year, IBM had set up over 75 such CoEs across Karnataka, Uttar Pradesh, Madhya Pradesh, Maharashtra, Orissa, Tamil Nadu, Gujarat, Andhra Pradesh and Rajasthan, among others, it added. The IBM CoEs are aimed at creating a platform for the development of software skills among students and gives students the opportunity to develop business solutions. In addition to setting up CoEs, IBM also plans to bring its Global Entrepreneurship Initiative (GEI) to some of these colleges.

http://www.democraticunderground.com/di ... 89x8606852

Prem · Post by **Prem** » 22 Jun 2010 10:15

Indian outsourcing firms find greener pastures

As the call center business matures in India, companies are setting up offices in rural areas, with lower costs and, possibly, fewer homesick employees or office romances
Keerthi, 22, said she's seen friends marry early, often to rather unappealing men chosen by their parents, and doesn't want that life. Her plan: work two more years, gradually loosening her parents' grip, pay her own way through graduate school and then move to the big city and never look back.
"With this salary, I can now hold them off," she said. "If you're determined, you can do things these days, even if you're a girl."Employee V. Aruna, 23, said she plans to continue working even after marriage. "If he says no, I'll just keep trying to convince him," she said, laughing nervously.The center has also brought Christians, Hindus and Muslims together in a state that recently saw a spate of church burnings."Religion stays outside the door," said Noor Fatima, 20, a Muslim and one of the center's most productive workers. "Working together really helps us understand each other, that in the end we're all Indians."

http://www.latimes.com/news/nationworld ... 6543.story

Vipul · Post by **Vipul** » 24 Jun 2010 20:27

A new look for the Rupee : 5 Proposed and shortlisted Rupee Symbols.

abhischekcc · Post by **abhischekcc** » 24 Jun 2010 21:30

It will either be 3 or 5.

3 has the Nazi cross, and if you recall, it was also present in the design of the Rs 2 coin, which was later withdrawn.

5 is the upturned Christ, symbol of the devil.

Added later:
Oh, and 3 also has the upturned cross.
So I guess 3 is the winner.

I personally favour 4 - it is the only design which is complete, and is aesthetically pleasing.

1 has two negative points - it looks like zero which is emptiness and void - not a good sign for an economy to have. On top of it, the symbol looks incomplete - again a negative sign for an economy to have.

2 looks like someone's posterior.