Indian Economy - News & Discussion Oct 12 2013

member_20292 · Post by **member_20292** » 10 Oct 2014 13:42

yes.

Methinks, that in the long run, Bangladesh will also have to be included in the Indian economy to a very large degree. Nepal is already in.

Vamsee · Post by **Vamsee** » 10 Oct 2014 20:12

panduranghari wrote:
Vamsee wrote:Crude oil going down is a fantastic opportunity for India. If we get 5 years of benign monsoon & oil prices, it would just change India forever.
Why do you think the oil price is falling?

I came across many theories
1) Chinese economy is slowing down
2) European economy is slowing down
3) US is producing a lot of oil and gas which is depressing the prices.
4) US wants to teach a lesson to Russia and hence depressing the oil prices
5) Saudi's are worried about shale gas/oil revolution and want to bring down the prices so that shale guys are put out of business
6) Post Fed Taper, $ is strengthening & that is why commodities are going down

etc etc

I do not know which ones are correct/wrong. All I know is that benign energy prices for a prolonged period of time is good news for Indian economy.

--Vamsee

Uttam · Post by **Uttam** » 10 Oct 2014 21:26

Vamsee wrote: I came across many theories
1) Chinese economy is slowing down
2) European economy is slowing down
3) US is producing a lot of oil and gas which is depressing the prices.
4) US wants to teach a lesson to Russia and hence depressing the oil prices
5) Saudi's are worried about shale gas/oil revolution and want to bring down the prices so that shale guys are put out of business
6) Post Fed Taper, $ is strengthening & that is why commodities are going down

--Vamsee

My guess is all of the above. Now which one of these are short-term and which ones are long-term is what matters regarding how long the low prices will persist. (1), (2) and (3) are fairly longer term but with limited potency. For (4) I am not sure how much leverage the State dept has over oil producers in US let alone those around the world. Even if they do, it will be very short lived. The real stickler is (5). Saudi's do have the ability to rapidly increase and decrease production. Among all six, this is the most potent one too. Are they doing this to hurt shale producers or their neighbors to get leverage in the region? The effect of (6) is very short-run. So overall, I think the crude prices will soon start to move up as soon as mid-east gets some political stability.

Prem · Post by **Prem** » 10 Oct 2014 22:41

sanjaykumar wrote:Crude oil going down is a fantastic opportunity for India. If we get 5 years of benign monsoon & oil prices, it would just change India forever.
Spare a tear for China, which beat India to oil plays around the world buying fields at inflated prices. (Of course your humble observer had predicted this). Very clever Chinese, very shrewd business men.

Just few weeks ago, they were proud to squeeze few $ from Putin on gas price. Now they are locked in long term contracts.

rsingh · Post by **rsingh** » 11 Oct 2014 21:20

Theo_Fidel wrote:I think it has become clear that there is limit to how high the South & West/NW can carry India. For India to join the High Middle income group, $12,000 per capita, we will need places like Rajasthan, MP, UP Bihar, etc to catch up to Maha, Gj, TN, Andhra, Haryana, etc.

Right now income levels are as follows per Planning Commission data.
http://planningcommission.nic.in/data/d ... le_160.pdf

Bihar 33,459
MP 44,989
UP 33,137
Assam 46,354

vs

TN 112,428
Delhi 219,97
Sadly, it is not even in the same ball park. If one charts relative over time the first group is falling further behind and not showing much of a catch up.

Delhi needs to double just once and it will be tantalizingly in the $8,000 per capita middle income range. TN. MH, Haryana, GJ etc need to double twice and they too will be in the same range.

But UP, MP, Bihar, etc will need to double ~ 4 times to get there. This is what is slowing down our rate of doubling to a crawl.

It is hard to believe this but UP now has a smaller SDP than TN or GJ.

Haryana onlee 135000? WTF even a descent bhains costs One lakhs in Haryana.

Ranjani Brow · Post by **Ranjani Brow** » 11 Oct 2014 22:03

Indian Government will revise the base year to 2011/12 from 2004/5. So any estimate how this change will indicate in GDP numbers.

GDP deflator (base year varies by country) in India

VinodTK · Post by **VinodTK** » 13 Oct 2014 18:11

State Bank of India head calls for regulatory shake-up

India’s challenge on corporate taxation

India’s CPI Slows More Than Estimated Amid Rajan Price Fight

Atri · Post by **Atri** » 13 Oct 2014 19:56

Shri. Swaminathan Gurumuthy beautifully explains the impending economic crisis. I've been speaking about economic crisis that we are straight way heading in to since few years. Now the maestro explains the poker-game that has been ongoing in the name of economic growth.

https://storify.com/Kal_Chiron/economic ... ed-by-sgur

Suraj · Post by **Suraj** » 13 Oct 2014 21:12

India’s CPI Slows More Than Estimated

India’s retail inflation slowed more than economists estimated after central bank Governor Raghuram Rajan held one of Asia’s highest interest rates for a fourth straight meeting.

Consumer prices rose 6.46 percent in September from a year earlier, the slowest pace since the index was created in January 2012 and compared with 7.73 percent in August, the Statistics Ministry said in New Delhi today. The median of 42 estimates in a Bloomberg News survey was for a 7.11 percent gain.

While the Reserve Bank of India seems set to achieve its 8 percent CPI target for January, its goal of 6 percent a year later is in doubt, Rajan said Sept. 30. Better inflation or deficit metrics could lead to sustainable growth and boost India’s credit rating after Standard & Poor’s last month raised its outlook to stable from negative.

“Inflation could fall below 6 percent but subsequently it will rise and by January you will be back to 7 percent,” Prasanna Ananthasubramanian, chief economist at ICICI Securities Primary Dealership in Mumbai, said by phone. “These numbers are a bit transient” and the RBI should wait until the first quarter of next year for more clarity, he said.

Ahead of the data, the benchmark S&P BSE Sensex (SENSEX) gained 0.3 percent, the yield on the 10-year sovereign bond fell to 8.42 percent from 8.46 percent and the rupee strengthened 0.4 percent to 61.1050 per dollar.

Average consumer price-growth has eased from more than 10 percent last year as Rajan raised the benchmark repurchase rate to 8 percent from 7.25 percent since taking office 13 months ago. He kept it unchanged last month.

As oil price fall passes through the economy further, CPI will probably fall under 6% .

jamwal · Post by **jamwal** » 13 Oct 2014 21:51

sanjaykumar wrote:Crude oil going down is a fantastic opportunity for India. If we get 5 years of benign monsoon & oil prices, it would just change India forever.

Spare a tear for China, which beat India to oil plays around the world buying fields at inflated prices. (Of course your humble observer had predicted this). Very clever Chinese, very shrewd business men.

Can you please explain ?

Suraj · Post by **Suraj** » 14 Oct 2014 01:39

GDP data with new base year 2011-12 to be released in Jan 2015

Uttam · Post by **Uttam** » 14 Oct 2014 03:06

Stupid toilet. Making up stories out of nothing. Out of school population was coming down even before the Right to education was passed. They still want to attribute to this law!!!

http://m.timesofindia.com/home/educatio ... 807610.cms

kmkraoind · Post by **kmkraoind** » 14 Oct 2014 12:18

DLF’s HOUSEWIVES! Kya Story Hai…

Since there is no thread for scams related issues, I am posting here. The blog describes how DLF hid its subsidiaries and now SEBI has banned DLF and its promoters from markets for 3 years. By the way, today DLF had tanked nearly 25%+.

pankajs · Post by **pankajs** » 14 Oct 2014 13:17

http://timesofindia.indiatimes.com/indi ... 807888.cms

Right to life overrides right to do business, Supreme Court rules

NEW DELHI: Right to life outweighed right to do business with the Supreme Court on Monday rejecting State Bank of India's petition challenging an Allahabad high court order directing sugar mills in Uttar Pradesh to sell the sugar stock hypothecated to SBI against loans to pay sugarcane farmers' dues.

Sugar mills had taken loans totaling Rs 3,000 crore from SBI by hypothecating their sugar stock. Under law, the creditor bank has the first right on the hypothecated sugar to realize its dues if the mills default on repayment of loans.

...
Appealing against the HC order through advocate Sanjay Kapur, SBI told the SC on Monday that the mills were now disposing of sugar stock, which was a security against loans. SBI apprehended that the Rs 3,000 crore loans it had advanced to mills would turn non-performing assets.

SBI also said the HC order for disposal of sugar stock could potentially turn sugar mills sick as it would proceed under the coercive Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act to sell the mills' assets to recover its dues.

It also said no bank would come forward to grant any advance/loan to these sugar mills in case it was held that first charge on sugar stock would be in favour of cane growers and not banks, as held by the HC.

A bench headed by Chief Justice H L Dattu felt the cane growers' right to life was more important than the bank's right to carry on business, especially in the face of hardships faced by farmers leading to many suicides.

"In view of the suicides among farmers, let us put a quietus to this," the bench observed before dismissing SBI's appeal.

Similar considerations had weighed with the court in dismissing the appeals filed by four public sector insurance companies on settlement of claims filed by Jammu & Kashmir flood victims. The court had refused the insurance companies' plea to conduct preliminary survey before settling claims.

What's up with the SC? Why are they hell bent on destroying the established norms of doing business?

If earlier there was policy and tax uncertanity now we have an activist SC!!! To tackle human crisis you do not destroy established business norms. There are other ways to deal with such issues and why take on the executive role by forcing solutions of the government? They could have directed the government to find a way and stipulated a time frame.

pankajs · Post by **pankajs** » 14 Oct 2014 13:54

MediaCrooks ‏@mediacrooks 4h4 hours ago

Debt of 20,000 crores... The death of corrupt DLF.. Crumb-feeder to our media shouldnt be mourned by anyone... @Timesnow @ndtv @ibnlive

Melwyn · Post by **Melwyn** » 14 Oct 2014 20:58

nytimes article about the falling gas prices basically confirms that the gas prices are being driven down by American petro companies.
The break-even for Americans is around $60.00/br which is way lower than the current price of ~$80.00/br.
Good news for India, I guess.

http://www.nytimes.com/2014/10/14/busin ... -news&_r=0

Vamsee · Post by **Vamsee** » 15 Oct 2014 01:14

AcchheDin for Indian economy.

Oil ~ $81
Brent ~ $85

Crude settles down 4.6%, lowest since June 2012

Suraj · Post by **Suraj** » 15 Oct 2014 04:32

Trade deficit balloons in September

The country’s merchandise exports stuck to a sub-three per cent growth rate for a second month, expanding 2.7 per cent over a year earlier to $28.9 billion in September, against $28.1 billion the same month last year. The rise was 2.35 per cent in August.

Imports, however, surged almost 26 per cent, to a 16-month high of $43.15 billion in September against $34.3 billion in the same month last year, official data showed on Tuesday. Imports had risen only 2.1 per cent in August.

This catapulted the trade deficit to a 16-month high of $14.25 billion in September, more than double the $6.1 billion in the same month last year.

The government said imports had so increased mainly due to “unusual” growth of 449.7 per cent in inflow of gold and a 105.6 per cent rise in metalliferous ores & other minerals over the same period last year.

Gold imports rose to $3.75 billion in September over $682 million in the same month last year. On whether this would dilute the demand of those asking for withdrawal of the curbs on gold imports, Ajay Sahai, director-general of the Federation of Indian Export Organisations (FIEO), said: “This would make the government cautious (in whether to do so).”

Aditi Nayar of ICRA said prices of gold fell in September, which is why the import spiked. “Also, gold imports were extremely low in September 2013. So, there is a base effect. Additionally, while restrictions on gold import are still there, more and more star trading houses have been allowed to import gold.”

Arun Singh of Dun & Bradstreet said the news was disturbing. “However, we need to study the trend and should wait for the data for some more months. The main issue is we have artificially managed gold imports and not arrested its demand. This has mainly got to do with the festive season and low base effect.”

Import of crude oil rose 9.7 per cent to $14.5 billion in September against $13.2 billion a year before, despite softening global petroleum prices. “OMCs (oil marketing companies) were importing more due to fall in prices,” Nayar said.

Taking crude oil and gold out of the import basket, inbound shipments rose 22.3 per cent to $24.9 billion against $20.4 billion a year before. This is high and augurs well for an industrial recovery in the months to come. Industrial growth stood at this financial year's bottom at 0.4 per cent in August.

In fact, the rise in import of metalliferous ores and mineral ores also point to an industrial revival, said Sahai. These imports rose to $817.8 million in September from $397.9 million a year before.

Govt invites Jagdish Bhagwati to discuss structural economic reforms

Noted economist Jagdish Bhagwati, who has lauded Prime Minister Narendra Modi and squabbled with Nobel laureate Amartya Sen over the Gujarat model of growth, has been invited by the government to speak at the Delhi Economics Conclave.

The theme of the Conclave, to be held here on December 10-11, is ‘Structural reforms and growth’. After the economy grew below five per cent in 2012-13 and 2013-14, investors have built high hopes on the current government, to introduce reforms and push both growth and employment.

“There will also be other eminent economists and speakers from India and abroad, including Eswar Prasad from Cornell University, to discuss various aspects of structural reforms,” said a government official who did not wish to be identified.

kmkraoind · Post by **kmkraoind** » 15 Oct 2014 09:09

Cross posting.

Inspector raj set to be history with Modi govt's first big-bang labour reform

First set of labor reforms are being rolled out.

pankajs · Post by **pankajs** » 15 Oct 2014 10:23

http://www.business-standard.com/articl ... 753_1.html

Govt invites Bhagwati to discuss structural reforms

Noted economist Jagdish Bhagwati, who has lauded Prime Minister Narendra Modi and squabbled with Nobel laureate Amartya Sen over the Gujarat model of growth, has been invited by the government to speak at the Delhi Economics Conclave.

The theme of the Conclave, to be held here on December 10-11, is ‘Structural reforms and growth’. After the economy grew below five per cent in 2012-13 and 2013-14, investors have built high hopes on the current government, to introduce reforms and push both growth and employment.

“There will also be other eminent economists and speakers from India and abroad, including Eswar Prasad from Cornell University, to discuss various aspects of structural reforms,” said a government official who did not wish to be identified.

member_28397 · Post by **member_28397** » 15 Oct 2014 15:15

Suraj wrote:GDP data with new base year 2011-12 to be released in Jan 2015

So what does this mean? Will there be 200-300 bilion $ jump on current 2 triilion $ economy?

If I understand this correctly:

Earlier with 2004-05 base year: Economy by Mar 2015: 2000 Billion $<below Russia and Italy at 10 place>
After taking 2011-12 base year: Economy by Mar 2015: 2200 Billion $ <2.2 Trillio $, 8th Place in world>

?

pankajs · Post by **pankajs** » 15 Oct 2014 19:41

http://economictimes.indiatimes.com/new ... 825939.cms

Government oil subsidy bill to be cut by over 60% in FY15

gakakkad · Post by **gakakkad** » 16 Oct 2014 01:34

MaharathiArjun wrote:
Suraj wrote:GDP data with new base year 2011-12 to be released in Jan 2015
So what does this mean? Will there be 200-300 bilion $ jump on current 2 triilion $ economy?

If I understand this correctly:

Earlier with 2004-05 base year: Economy by Mar 2015: 2000 Billion $<below Russia and Italy at 10 place>
After taking 2011-12 base year: Economy by Mar 2015: 2200 Billion $ <2.2 Trillio $, 8th Place in world>

?

gdp deflator of 2011 to base 2004-2005 is 150%..should not gdp increase by 50%

Theo_Fidel · Post by **Theo_Fidel** » 16 Oct 2014 03:14

Last time they revised the base year absolutely nothing happened so I suspect nothing much this time as well. Wait, after much effort, they included duck eggs in the national GDP. I'm not kidding....

gakakkad · Post by **gakakkad** » 16 Oct 2014 03:34

Theo_Fidel wrote:Last time they revised the base year absolutely nothing happened so I suspect nothing much this time as well. Wait, after much effort, they included duck eggs in the national GDP. I'm not kidding....

how do we calculate gdp ? any papers on methodology?

Suraj · Post by **Suraj** » 16 Oct 2014 03:43

Good answer from GoI.
Buzz off, says Delhi to US Trade Representative

The Government of India has told American authorities that it will not cooperate with the out-of-cycle review (OCR) initiated by the Office of the US Trade Representative (USTR) as part of the latter’s annual ‘Special 301 Report’, on our supposedly slack intellectual property rights (IPR) regime.

New Delhi says it believes what the USTR is doing is unilateral and it is not “obliged” to participate or cooperate in the OCR process. However, it is geared to cooperate with the Indo-US bilateral dialogue mechanisms.

“India will engage with the US on IPR issues under the US-India IP working group that was recently formed when Prime Minister Narendra Modi visited US. Apart from that, we are not ready to cooperate on anything else on this issue,” said a top official, who requested anonymity.

75 million Jan Dhan account opening target to be met by Dec-end: FinMin

The finance ministry on Wednesday exuded confidence that the target of opening 75 million bank accounts under the Pradhan Mantri Jan-Dhan Yojana (PMJDY) would be met by December.

“One thing I would like to say that because of the banks’ efforts today, we have been able to reach to these many people. We are very hopeful by December-end we will achieve this target,” Minister of State for Finance Nirmala Sitharaman told reporters.

While launching the scheme, Prime Minister Narendra Modi had exhorted the concerned officials to complete the task of opening 75 million accounts before the next Republic Day.

As on October 7, 55 million accounts were opened and a deposit of Rs 4,268 crore had been mobilised under PMJDY.

gakkakad: CSO website is sketchy regarding that question. The CSO website is a good place to dig around.

Theo is right about the last base year revision, and he's actually paraphrasing my whine back when that base year revision was made. I had mocked it, quoting the example of the new category of duck eggs. I think the 2004-05 revision was a poorly done one. This one sounds more meaningful, particularly with the focus on the growth of the unorganized service sector, and that of the unofficial economy in general. That did not happen at all last time around.

Prem · Post by **Prem** » 16 Oct 2014 05:15

Economic windfall for India as global growth slows
http://www.ft.com/cms/s/0/d76eb78e-53a3 ... z3GGMyLwvD

Amid gloom over global economic growth and uncertain prospects for emerging markets, India is beginning to stand out as uniquely well-placed to gather the windfall benefits of an international slowdown. Unlike Brazil, Russia or South Africa, India reaps immediate advantages for its terms of trade and its domestic budget from the fall in commodity prices triggered by renewed concerns about the world economy. unlike China, India will not suffer much from any decline in global demand for manufactured goods because its export sector is relatively small. Commodities – mostly oil – account for more than half of India’s imports but only 9 per cent of its exports, mainly food. The current account deficit falls by about $1bn a year for every $1 decline in the price of a barrel of oil, and the reduced cost of fuel subsidies is also easing the burden on the budget. Another benefit of weaker commodity prices is falling inflation, long the bane of the Indian economy.
Annual consumer price inflation fell to 6.5 per cent in September on the back of softer food prices, with wholesale inflation hitting a five-year low of 2.4 per cent. Lower inflation should lead in turn to a decline in interest rates that would boost domestic investment. It all adds up to what Deutsche Bank calls “unambiguously positive” effects for India from falling oil prices.Economists conclude that India could, in a year or two, overtake China to become the world’s fastest-growing large economy.
But there are snags. International investors, for a start, are expected to shun what they perceive as risky emerging markets, and a global slowdown accompanied by lower oil prices would leave capital-surplus countries – in the Gulf, for example – with less money to invest in places such as India.
Nor is India’s recovery guaranteed after the resurgence of business confidence that followed the election of Narendra Modi as prime minister five months ago. The latest figures for industrial production showed output stagnating in August, rising just 0.4 per cent year-on-year, with manufacturing and capital goods both falling over the year. That was well below expectations and reinforced worries among investors about how tentatively the Modi government has embarked on the process of economic reform and revitalisation. HSBC researchers lamented a “broad-based malaise in manufacturing”. Raghuram Rajan, governor of the Reserve Bank of India, predicted that Indian growth would accelerate from about 5 per cent to 6 per cent next year, but warned of the need to eschew “grand-sounding announcements” and “do the basic stuff” to get the economy back on track. “We need to fix the plumbing,” he said. Economists and investors are urging the Modi government not to waste its strong electoral mandate or its recent luck with commodity prices. If India is to profit from the “global windfall”, says Rajeev Malik, senior economist at broker CLSA, the government needs to contain inflation, maintain fiscal discipline and clear the backlog of delayed infrastructure projects. “The results of those would actually be pretty powerful,” he says. “Modi’s success would not be getting the cyclical recovery to 6.5 or 7 per cent growth. It’s getting growth upward of 8 per cent on a sustained basis.”

nawabs · Post by **nawabs** » 16 Oct 2014 11:59

Modi replaces Finance Secretary Arvind Mayaram with Rajiv Mehrishi in first major shakeup

http://www.business-standard.com/articl ... 282_1.html

Prime Minister Narendra Modi has transferred the top civil servant at the finance ministry, replacing him with a top official from Rajasthan, the state that has pushed dramatic free market reforms in recent months.

Arvind Mayaram’s transfer was part of the first major shuffle of top civil servants since Modi took office in May. In all, 20 bureaucrats were moved, many at the level of secretary, the most senior rank in India's civil service.

Mayaram, who has twin roles as both finance and economic affairs secretary and was appointed by the previous government, has been shifted to the tourism ministry.

Rajiv Mehrishi, the top bureaucrat from Rajasthan, will replace Mayaram at the finance ministry, Modi's administration said on Wednesday.

Over the past six months Rajasthan has introduced some of India's most radical free-market labour, land and welfare reform.

Secretaries in the finance ministry formulate and carry out policy, besides helping to craft the annual budget in close association with the minister and advisers.

Arjun · Post by **Arjun** » 16 Oct 2014 16:28

PM Modi to add more state wins before reforms: S&P

"We believe that the country's economic performance will disappoint optimists through 2015 but will likely be better than the fears of pessimists over the long-term," Standard & Poor's credit analyst Joydeep Mukherji said in a report on Thursday.

In the commentary, which comes a day after exit polls predicted gains for the BJP in the Haryana and Maharashtra polls, Mukherji said Prime Minister Modi will not take any dramatic reform measures immediately but will wait to add as many states in the kitty first before ushering in reforms.

"Modi will seek to win as many state elections as possible, especially in the next two years, to gain seats in the Upper House and ease the passage of legislations," he said.

I hope this is not correct. Not sure if Joydeep has based this report on actual feedback from Modi or his team - or this is his own conjecture. If the latter - its quite silly for someone in his position to be putting something out that could well be self-fulfilling.

We need Modi to be as bold on the economic front as he has proven himself to be on political decisions and in foreign policy. Time for action is running out fast though.

gashish · Post by **gashish** » 16 Oct 2014 17:30

Arvind Subramanian is India's New Chief Economic Adviser

Wheels are being set in motion; reforms are definitely on cards soon.

Atri · Post by **Atri** » 16 Oct 2014 17:37

why this kolaveri against Arvind Subramanian? what is the deal with him?

gakakkad · Post by **gakakkad** » 16 Oct 2014 19:59

>>I hope this is not correct. Not sure if Joydeep has based this report on actual feedback from Modi or his team - or this is his own conjecture. If the latter - its quite silly for someone in his position to be putting something out that could well be self-fulfilling.We need Modi to be as bold on the economic front as he has proven himself to be on political decisions and in foreign policy. Time for action is running out fast though.

there is a difference between what amreeki entities like s&p consider reforms and what we should considered reforms...this rona dhona by s&p is because they realized that India is not going to concede in accepting their trade and ipr cartel...what the americans consider reforms would be steps that make India more profitable for them..

what we should consider reforms is what makes India more prosperous...steps like facilitating internal trade..like the gst...Modi has shown commitment to pass the gst by the winter session of parliament...a large percentage of the yindian population are kept out of formal economy as they do not have access to banking.. And we know what Modi has done to address these issues..

He has not been able to do much on labour or land reforms yet...but to do something about these requires legislative majority in RS too ... and some of the step may be unpopular, so he has to build a consensus... It would be better to take small incremental steps in this case and keep building consensus... it would take political maneuvering with the trade unions to achieve this task...and evidence suggests that such political maneuvering has began already.

w.r.t corporate demand on clarity of taxation , i agree that it is a legit demand ..there would be a lot more clarity when , gst is passed...w.r.t retrospective taxation imposed by supreme court on vodafone ,should not be waived ...because that is revenue earned by the gov't ... however Modi would assure that companies would not be taxed retroactively unless there is a clear instance of fraud...

I don't see Modi going slow on reforms... reforms are often incremental ...there is no climactic "let there be ~~light~~ reforms ,and there was ~~light~~ reforms".. this is no movie ..nor is it a product launch of iphone ..

this is good old fashioned governance...it occurs without cinematic climaxes and epic music...

Suraj · Post by **Suraj** » 16 Oct 2014 21:45

No point in over-examining statements from Poor Standard correspondents. Further, a lot of reform measure are already in implementation or on the anvil. This administration does not pursue the unitary model of dispensing reform at the central level. Instead, if enables states to do so, and hands them the financial ability to implement their plans.

While this looks like 'tinkering under the bonnet' it really is a big bang reform approach. In one swoop, it enables states to implement liberal corporate and labour law, energizing companies and shredding the decades long union control over organized manufacturing.

Modi has shown great political skill in implementing reforms. Typically, they are announced, and efforts are made to organize its implementation. Modi does not do that. He first works on the organization tasked with implementing something, then announces a concerted effort to do it. As a result, when he announces something, the chances of a clear follow through are extremely high. PMJDY, the cleanliness drive, even PIO/OCI reforms... they are all being implemented immediately after announcement.

Prior administrations made the mistake of announcing at the political level before the bureaucratic apparatus was either prepared or willing. Modi does not make that mistake. He gets that house in order before announcing something, ensuring the announcement if followed by swift execution. The recent secretary level position shunt is a clue that new reforms will be out within days of the MH/HR state election result announcement.

RoyG · Post by **RoyG** » 16 Oct 2014 22:07

Suraj wrote:Trade deficit balloons in September
The country’s merchandise exports stuck to a sub-three per cent growth rate for a second month, expanding 2.7 per cent over a year earlier to $28.9 billion in September, against $28.1 billion the same month last year. The rise was 2.35 per cent in August.

Imports, however, surged almost 26 per cent, to a 16-month high of $43.15 billion in September against $34.3 billion in the same month last year, official data showed on Tuesday. Imports had risen only 2.1 per cent in August.

This catapulted the trade deficit to a 16-month high of $14.25 billion in September, more than double the $6.1 billion in the same month last year.

The government said imports had so increased mainly due to “unusual” growth of 449.7 per cent in inflow of gold and a 105.6 per cent rise in metalliferous ores & other minerals over the same period last year.

Gold imports rose to $3.75 billion in September over $682 million in the same month last year. On whether this would dilute the demand of those asking for withdrawal of the curbs on gold imports, Ajay Sahai, director-general of the Federation of Indian Export Organisations (FIEO), said: “This would make the government cautious (in whether to do so).”

Aditi Nayar of ICRA said prices of gold fell in September, which is why the import spiked. “Also, gold imports were extremely low in September 2013. So, there is a base effect. Additionally, while restrictions on gold import are still there, more and more star trading houses have been allowed to import gold.”

Arun Singh of Dun & Bradstreet said the news was disturbing. “However, we need to study the trend and should wait for the data for some more months. The main issue is we have artificially managed gold imports and not arrested its demand. This has mainly got to do with the festive season and low base effect.”

Import of crude oil rose 9.7 per cent to $14.5 billion in September against $13.2 billion a year before, despite softening global petroleum prices. “OMCs (oil marketing companies) were importing more due to fall in prices,” Nayar said.

Taking crude oil and gold out of the import basket, inbound shipments rose 22.3 per cent to $24.9 billion against $20.4 billion a year before. This is high and augurs well for an industrial recovery in the months to come. Industrial growth stood at this financial year's bottom at 0.4 per cent in August.

In fact, the rise in import of metalliferous ores and mineral ores also point to an industrial revival, said Sahai. These imports rose to $817.8 million in September from $397.9 million a year before.
Govt invites Jagdish Bhagwati to discuss structural economic reforms
Noted economist Jagdish Bhagwati, who has lauded Prime Minister Narendra Modi and squabbled with Nobel laureate Amartya Sen over the Gujarat model of growth, has been invited by the government to speak at the Delhi Economics Conclave.

The theme of the Conclave, to be held here on December 10-11, is ‘Structural reforms and growth’. After the economy grew below five per cent in 2012-13 and 2013-14, investors have built high hopes on the current government, to introduce reforms and push both growth and employment.

“There will also be other eminent economists and speakers from India and abroad, including Eswar Prasad from Cornell University, to discuss various aspects of structural reforms,” said a government official who did not wish to be identified.

This is the same moron that blamed the Hindu housewife for saving too much and not spending enough

. This was the main reason why India couldn't grow according to him. All he know's is protestant ethic which his white masters taught him. I don't know why we have to roll out the carpet for these idiots. Whenever, dharmics do something right these parasites come out of nowhere and all of a sudden claim to have all the answers.

Suraj · Post by **Suraj** » 16 Oct 2014 22:16

Please don't troll here. There's no need to assassinate Prof.Bhagwati's character in such a manner. If GoI voluntarily invites him, they value his opinion a lot more than you do, and that's all there is to it.

SanjayC · Post by **SanjayC** » 16 Oct 2014 22:18

Arvind Subramanian appointed Chief Economic Adviser to Modi government
http://economictimes.indiatimes.com/new ... 837484.cms

RoyG · Post by **RoyG** » 17 Oct 2014 02:07

{Deleted. Bad idea to continue trolling after an explicit caution.}

Arjun · Post by **Arjun** » 17 Oct 2014 07:55

gakakkad wrote:there is a difference between what amreeki entities like s&p consider reforms and what we should considered reforms...this rona dhona by s&p is because they realized that India is not going to concede in accepting their trade and ipr cartel...what the americans consider reforms would be steps that make India more profitable for them..

what we should consider reforms is what makes India more prosperous...steps like facilitating internal trade..like the gst...Modi has shown commitment to pass the gst by the winter session of parliament...a large percentage of the yindian population are kept out of formal economy as they do not have access to banking.. And we know what Modi has done to address these issues..

He has not been able to do much on labour or land reforms yet...but to do something about these requires legislative majority in RS too ... and some of the step may be unpopular, so he has to build a consensus... It would be better to take small incremental steps in this case and keep building consensus... it would take political maneuvering with the trade unions to achieve this task...and evidence suggests that such political maneuvering has began already.

w.r.t corporate demand on clarity of taxation , i agree that it is a legit demand ..there would be a lot more clarity when , gst is passed...w.r.t retrospective taxation imposed by supreme court on vodafone ,should not be waived ...because that is revenue earned by the gov't ... however Modi would assure that companies would not be taxed retroactively unless there is a clear instance of fraud...

I don't see Modi going slow on reforms... reforms are often incremental ...there is no climactic "let there be ~~light~~ reforms ,and there was ~~light~~ reforms".. this is no movie ..nor is it a product launch of iphone ..

this is good old fashioned governance...it occurs without cinematic climaxes and epic music...

I am well aware of US push on IPR - but I don't think that is an agenda S&P is pushing. Credit rating depends on growth prospects for economy and fiscal situation - both of which are the same areas that I am interested in seeing results in. Reform measures that I am interested in and presumably what S&P is interested in would be aimed at these same parameters.

Land & labour reforms are key items. Subsidies on fuel would be another. Taxation (GST, retrospective) & ease of business oriented reforms. I definitely see a lot of reforms aimed at ease of business - but not yet on the other fronts.

Bottomline - India HAS to target 7%+growth for FY '16 and 8%+ for FY 17. Some of the reforms outlined above need to be initiated over the next few months so they have the desired effect from the following year.

pankajs · Post by **pankajs** » 17 Oct 2014 14:03

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pankajs · Post by **pankajs** » 17 Oct 2014 18:31

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