Indian Economy - News & Discussion 27 May 2012

[prahaar]

It most certainly was neither of that sort, but clear open display of pure politics at it's basest form.

Yes certainly it was, by whom, is the debate. I have made my point, you have made yours. So lets leave this here, since it is Economy thread I do not want to drag this further.

[SwamyG]

I'm not worried about the ownership. The problem with EIC was zero political control not the actual existence of a private company. Inherited rulership turned out be a catastrophic error when matched against a private company. The wal-marts of the world will doo what the GOI tells them to despite the occasional bribery scandal.My real problem is the issue of Chinese imports by Wal-mart specifically. If GOI can change Wal-mart thinking on this issue, then bring on the FDI.

Oh how misplaced your opinions are.... be it newclear deals or sundry energy deals, we 21st century humans are caught up in the rat race we set ourselves. In order to sustain our lifestyle, we have to do as the big businesses wants us to do.

How can ownership not be an issue; only in the clinical chrome-plated world of no-emotions will it not be an issue. For a country's stability and security; it better have an handle on the situation. I would not blame just Indian politicians, the whole World has been Americanized for decades now. India is just following the path, after resisting for long. And to top, at least out in America there is evidence of accountability now and then. India does not lend credibility in terms of accountability of politicians - be it BJP or INC. The saving grace are the Commies, but they oppose things for all the wrong reasons. And we have regional faltu leaders who swing all ways without an iota of integrity. So no I am not blaming INC; just the whole setup of our World.

[Arjun]

Not sure if the credit should go to Modi or his speech-writer, but this is truly inspired stuff : We must decimate corruption, encourage enterprise

We must decimate corruption, encourage enterprise

By Narendra Modi on December 7, 2012

Earlier this week, we released the Gujarat BJP manifesto, our Sankalp Patra, to present to you what our Government is determined to do in the next five years.

When Government after Government run by Congress and its allies throw crumbs at sections they aim to capture as their vote bank, politically expendable sections get left out; not because they are not meritorious; not because they don’t have the ability to grow; but, merely because Governments don’t find them electorally useful. When Governments indulge in this ‘vote-bank governance’, they try to fool people by saying that their aim is to attain equality of outcome. This saddens me a lot.

But this needs to change. Why shouldn’t every segment, every Gujarati, whether or not he votes for the BJP, get equal access to opportunities to progress and prosper?

Our vision for Gujarat has been, is and will remain inclusive, all-round growth to create a Bhavya and Divya (glorious and divine) Gujarat. With this Sankalp Patra, I am asking my Gujarati brothers and sisters to elect the BJP. Elect us once again for assuring equality of opportunity irrespective of religion, caste or creed. Elect us for having uplifted large sections from the depths of poverty to a bright future.

Elect us for wiping off every trace of middlemen and agents in our poverty alleviation schemes. Friends, ‘Garibi Hatao’ is a very attractive slogan. Unfortunately, Congress has kept it merely as a slogan – an ornament it can take out of the locker to display every five years and dazzle the nation. Middlemen flourishing under Congress rule have reduced every rupee that leaves government coffers to a meager 15 paise. Instead of galvanising growth, Congress has created persistent poverty.

Due to our Government’s efforts, a huge number of Gujaratis across all religions and castes have now entered the middle class segment. They are the ‘neo middle-class’ with aspirations, dreams and determination. They are one of the most critical drivers of the Gujarat’s growth engine. We want to keep nurturing the symbiosis between these stakeholders and Gujarat. ‘Our growth for Gujarat’s growth’ is what I want everyone to imbibe.

You must have observed that most election manifestos of Congress governments and its allies still contain promises to provide the most basic services and facilities, despite the fact that they have not been able to fulfill the promises they took in earlier manifestos! Friends, so far we have filled the ditches that previous Congress Governments left. We are now laying the path for enhancements to existing schemes and programmes, many of which have got nationwide and global recognition.

In crucial areas such as education, particularly girl-child education, healthcare, urban and rural housing, agriculture and irrigation, poverty alleviation and bijli (electricity), sadak (roads), paani (water) and naukri (employment), Gujarat is now ready to take even bigger strides ahead.

As Gujarat braces itself for the challenges that global competitiveness have brought, I want to share my thoughts on a recent disturbing development.

With scam after scam running into thousands of crores of rupees, UPA has taken our nation to the lowest depths. The policy paralysis and the absence of neta, niti and niyat have spoiled the entrepreneurial environment, creating nothing but pessimism everywhere. Many are starting to look at business and industry with suspicion.

This is bad for our nation. It is enterprise and industry that will provide our nation self-dependence and sustenance. With every investment that is made in Gujarat, the capital that otherwise sits idle or flies abroad is introduced into our economy. This generates many employment opportunities.

With the coming in of mega-industries, many ancillary and allied units are set up in the vicinity and across the State which gives rise to self-employment opportunities as well. From a five star hotel to an affordable guesthouse, from a fancy multi-cuisine restaurant to the local tea stall – several such businesses can get a boost. So many Gujarati brothers and sisters are able to light their stoves with their own hard-earned money. The entire area starts bubbling with energy and dynamism.

What needs to be decimated is corruption and cronyism, and not enterprise. Enterprise needs to be encouraged with vision and vigour. What needs to be destroyed is the brazen belief that one family or one party enjoys the sole entitlement to your hard-earned money. That is what I will continue to do.

Friends, let us take a Sankalp today to uproot the Congress in the coming elections. Congress is not a constructive participant in our democracy. In Gujarat, it has not only failed while in power but also failed in its role as an Opposition.

You are a vital stakeholder in how and where Gujarat progresses. Election is the most important festival in our democracy and voting is your most important right. Choose your vote carefully. In the end, whoever you vote for, remember that we are all in this march together.

Jay Jay Garvi Gujarat!

[Arjun]

And meantime- in contrast to Modi's red carpet for enterprise- INC continues its stellar track record of disenchanting all business, including even the Tatas..! Tata investment is fleeing India while INC numbskulls day-dream of FDI !!

Lack of government support preventing Indian industry from competing with China, says Ratan Tata

MUMBAI: The outgoing head of the Tata business empire, Ratan Tata warned on Friday that a lack of government support was preventing Indian industry from competing with China and lashed out at a "venal" business environment.

In interviews published ahead of his retirement as chairman this month, Ratan Tata criticised what he called a lack of coherence in government policy and said the Mumbai-based group's ethical standards had cost it business.

Tata, a sprawling conglomerate whose portfolio ranges from salt to software, has earned itself a global reputation for its eye-catching purchases of Western companies such as Jaguar Land Rover and Corus Steel.

Tata told the Financial Times that his group planned to look to other emerging markets for expansion and accused Prime Minister Manmohan Singh of forcing it to look abroad by failing to address complaints about bureaucracy.

Singh's government is currently steering a series of economic reforms through parliament which aim to open up sectors such as supermarkets, insurance and aviation.

But Tata, whose global sales total $100.9 billion, said investors were being deterred from India and complained that it still took the best part of a decade to gain clearance for major projects.

"Different agencies in the government have almost contradictory interpretations of the law, or interpretations of what should be done," he told the London-based newspaper.

"These are things which by and large would drive investors away in most other countries," he added.

Tata contrasted the Indian government's attitude towards its industrial sector with that of its counterpart China where Tata recently opened a Jaguar Land Rover factory.

"There's a great, marked difference (in) government support," he said. "If we had the same kind of encouragement to industry... I think India could compete definitely with China."

In a separate interview published in the Mumbai-based DNA newspaper, Tata said his successor Cyrus Mistry would face a major struggle not to compromise the group's ethical standards.

"They (Mistry and his fellow executives) will have to make decisions and, when they do this, they will be constantly faced with the question: do you compromise, do you give in?" said Tata, who stands down on December 28 when he turns 75.

"You can call it by another name, but in playing this game of appeasing or surrendering to a venal system, the soft option, the easy way out is a compromise."

Tata was the driving force behind the creation of the Nano, billed as the world's cheapest car when it launched in 2008.

But with annual sales lagging below the 100,000 mark, Tata said there should be a rethink on how it is marketed.

"The Nano was meant to be an affordable car for the family, a vehicle that delivers outstanding value for money," he said.

"Unfortunately, it has come to be perceived as a low-priced car and various stigmas have been attached to it... I think that is the wrong way to go," he added.

[RamaY]

why do i care

WTF is the relation between RG and SEBI and a govt tax scheme?

SEBI announces Rajiv Gandhi Equity Savings Scheme norms

For transactions undertaken by investors through their RGESS designated demat account, depositories may seek necessary transactional details from stock exchanges for enforcing lock-in period

Capital market regulator SEBI (Securities and Exchange Board of India) on Thursday announced the framework for Rajiv Gandhi Equity Savings Scheme (RGESS), an Indian government initiative aimed at attracting small investors into the capital market.
The objective of RGESS is to encourage the savings of the small investors in domestic capital market. The deduction under the Scheme shall be available to a new retail investor.

As announced in the Union Budget 2012-13, the Finance Act 2012 has introduced a new section 80CCG on ‘Deduction in respect of investment made under an equity savings scheme’ to give tax benefits to new investors who invest up to Rs. 50,000 and whose gross total annual income is less than or equal to Rs. 10 lakh, the SEBI circular said.

For transactions undertaken by investors through their RGESS designated demat account, depositories may seek necessary transactional details from stock exchanges for enforcing lock-in (period), among others.

...

[vera_k]

WTF is the relation between RG and SEBI and a govt tax scheme?

Both are economic failures

[member_23686]

found on reddit



some of it is ours

[member_23686]

further

We've still got a few quid then! Bank of England's glittering stash of £156BILLION in gold bars stored in former canteen under London

By Emma Reynolds
UPDATED: 08:55 GMT, 3 February 2012

Comments (338)
Share

Cash-strapped British people will breathe a sigh of relief when they see these impressive treasure troves.

Despite the financial crisis, it seems the country still has some money left in the Bank of England's vault beneath London.

In fact, there are stacks of gold bars worth a whopping £156billion stored in an old canteen deep below the streets of the capital.
Treasure trove: The Bank of England's vault under central London contains 4,600 tons of the precious metal, worth an incredible £156billion

Treasure trove: The Bank of England's vault under central London contains 4,600 tons of the precious metal, worth an incredible £156billion

Rich pickings: The rows of simple shelves are stacked high with 28lb 24-carat gold bars

Rich pickings: The rows of simple shelves are stacked high with 28lb 24-carat gold bars

It seems Gordon Brown did not manage to completely strip the country of its assets when he sold off 400 tons of gold at rock-bottom price during his time as Chancellor.

The gold he got rid of when prices were at a 20-year low cost the country up to £11bn, it was estimated last April.


More...

Graffiti artist who took shares instead of cash for painting Facebook's first HQ seven years ago to make $200MILLION in stock market float

He made just £2.3billion on the precious metal he sold between 1999 and 2002.

So the 4,600 tons of the precious metal still stored in these concrete-lined vaults in the heart of London will be a welcome sight for those worried we have little left to fall back on.

The piles of 28lb 24-carat gold bars are stacked on simple blue shelves beneath strip lighting. One image alone shows around 15,000 bars or 210 tonnes of pure gold, with a value of approximately £3billion.
Worth a fortune: In this image alone there are around around 15,000 bars and 210 tonnes of pure gold, with a value of about £3billion

Worth a fortune: In this image alone there are around around 15,000 bars and 210 tonnes of pure gold, with a value of about £3billion

On the walls of one of the vaults, posters from the 1940s are still visible, from when the vast room was used as a canteen.

The walls must be literally bombproof as they were used by bank staff as air raid shelters during World War II.

The old-fashioned posters that hang around the room depict sunny climes, luxury cruises and happier times - which may be as welcome a sight as the valuables for many.

Three-foot long keys are needed to unlock to the doors that guard the rooms holding the gold - but sadly not all of it belongs to us.

Some is deposited by foreign governments as well as our own. Different shapes and marks distinguish the varying sources of the wealth.

Read more: http://www.dailymail.co.uk/news/article ... z2ERHwsoh0
Follow us: @MailOnline on Twitter | DailyMail on Facebook

[member_23686]

another

http://www.cmi-gold-silver.com/blog/15- ... nk-vaults/


15 Most Impenetrable Bank Vaults
2

Even Ethan Hunt couldn’t crack these…

Bank heists are extremely difficult to pull off, no matter what Hollywood might have us believe. Some vaults are so secure that robbers have heart attacks even thinking about breaking in.

With that in mind, check out these 15 Most Impenetrable Bank Vaults from recent history and see to what extremes countries (and some private companies) will go to keep the deposits and valuables of their clientele absolutely protected.
1. Fort Knox – The United States Bullion Depository

If a bank robber was somehow able to get through the solid granite wall perimeter and past the squadrons of machinegun wielding guards and armed military, the thief would still have to contend with a 22-ton vault door. That 22 ton blast door is held shut by a lock so intricate that it requires a 10 person team to unlock. Is it really any wonder that Fort Knox has never even had a published robbery attempt?

Source


2. The New York Federal Reserve Vault – World’s Biggest Gold Depository

Deep below the streets of Manhattan sits a vault so impenetrable that it’s entrusted with more U.S. gold bullion than the famous Fort Knox. Security is so tight that men aren’t allowed to enter the vault; pallets are moved around by a team of robots.

The bank’s security systems are so trusted that even foreign governments use it for gold storage. And – as if that wasn’t enough – a Jason Bourne level protection force watch the perimeter; their shooting range scores are so good they’re better than marksmen.

Source
3. The Bank of England Gold Vault

If Britain’s Prime Minister had a secret, he would want to keep it here. More than 4,600 tons of gold are safeguarded in what is the UK’s largest gold vault. A figure that’s second only to the Federal Reserve Vault mentioned above.

The vault walls are bombproof and so sturdy that bank staff used them for protection during WWII air raids. And when the vault doors do need to be opened, they can only be accessed by an elaborate system consisting of voice recognition, 3 foot keys and other unpublished security measures.

Source / Source
4. The London Silver Vaults

In 1957, the same type of vault used in the London Silver Vaults was used as part of U.S. nuclear testing in Nevada. The 37-kiloton nuke tore away steel reinforcement and loosened trim but didn’t bust the vault.

During WWII the bank around the vault was reduced to rubble due to a bomb strike, but the vault itself was undamaged. The vault itself is the very definition of the world “impenetrable.”

Source

5. Teikoku Bank, Hiroshima – Atomic Bomb-Proof!

Once the U.S. government learned how to control the finger of God, the first order of business was to wipe the city of Hiroshima off the face of the planet. Skin melted from charred flesh… buildings fell like towers of playing cards… grass was parched to dust… water evaporated immediately… and two Mosler bank vaults were undamaged.

How’s that for an advertisement? Good enough for the Mosler company to trumpet that their vaults could withstand an atomic bomb in their advertising for the next 10 years.

Source
6. The Gold Vault in Dubai

Dubai, known as the City of Gold, finished building a vault to hold all that metal in 2009. The vault is located in the Dubai Multi Commodities Center and incorporates the latest and greatest in security measures. Dubai is in the process of repatriating their gold from London now that they have one of the most secure facilities in the world.

Source / Source
7. The legendary Swiss Vaults

Crime thrillers usually have talk of a Swiss bank account. There’s a reason: Swiss banks are among the safest on the planet. The 3-key safety deposit box in particular has been used by the World’s most wealthy citizens for over 200 years. Interesting note: the first deposit box prototype was patented through the same office that employed a young Albert Einstein as a clerk.



Source / Source / Source
8. The Iranian Gold Reserveclip_image002- Location Unknown

What makes the vault holding Iran’s gold reserve impenetrable is that nobody can say for sure where it is. One could assume the vault is either in the Imperial Treasury location or the Iran Central Bank, but you know what they say about assumptions. Iran secretly flew gold into the country from Europe in order to dodge “financial pressure” from the US and UK. Now that the reserves are back within Iranian borders, the location of their holding vault is as elusive as Iraq’s WMDs.

Source / Source / Source
9. The Antwerp Diamond Center – World’s Most Secure Diamond Vault?

The Antwerp Diamond Center was swindled of $100 Million worth of inventory when a team of Italian thieves beat their “impregnable” defenses in February, 2003. The thieves got past body heat detectors, Doppler radars, magnetic fields, motion detectors and an incredibly advanced locking system. The police still can’t figure out how the team did it.

Source
10. The JPMorgan Chase New York Gold Vault

As the global economy suffers more people are plowing their money into gold to hedge against inflation. This spells opportunity for JPMorgan Chase, who swung open an underground vault in Manhattan. If that back of the vault door doesn’t intimidate you, the scowl on that man’s face should.

Source
11. The Federal Reserve Bank Vault of Cleveland

A bank in Cleveland, Ohio has the largest vault door on the face of the planet. Granted it isn’t just any bank, it’s the local Federal Reserve. Ohio isn’t the picture I get in my head when I think ‘bank heist.’ And for the record, the vault door weighs 91 tons… the equivalent of two humpback whales.

Source
12. Codename: Priscilla Bank Vault – Atomic Bomb-Proof Vault #2!

This picture captures the aftermath of atomic bomb testing under the codename Priscilla that occurred in June, 1957 in the Nevada desert. What you don’t see in the picture is the bank vault that withstood the blast… another Mosler engineered vault. The 37-kiloton triggered blast did this to concrete and steel, but left the (unbreakable?) vault intact.

Source
13. The Broker Restaurant Antique Bank Vault in Denver, CO.

The Broker Restaurant (Denver, Colorado) may be the safest restaurant in the country. In 1903 the building was the Denver National Bank. Today the building serves exquisitely prepared dishes in the very room where countless millions were counted and deposited back into safety deposit boxes.

Source / Source
14. The Dominion Bank Vault

At it’s heyday in 1914, the Dominion Bank Building in Toronto, Canada was considered the most secure bank vault in the entire world. Because it was constructed on bedrock and wrapped by surveillance passages, tunneling into it was a practical impossibility. Maybe an Ocean’s 12 style infiltration would work… but let’s not forget the 40-ton vault door. The door was so airtight that a single hairpin would keep it from closing. Good luck cracking this vault.

Source
15. The Hard Rock Vault

The Hard Rock Vault, first opened in 2001, is guardian to hundreds of priceless musical treasures from Jimmy Hendrix’s Flying V to John Lennon’s handwritten lyrics for “Instant Karma.” It’s situated below Hard Rock Cafe London in what used to be Coutts Bank. In terms of security, the vault once held the Queen’s treasury before Coutts Bank was converted.

Source

[subhamoy.das]

Was watching the Lok Sabha debate on FDI. Murli Manohar Joshi was such a windbag, a rambling incoherent and disjointed speech if there was ever one. Short on facts and logic , and long on fart. A total bore and windbag.

Lalu Yadav gave it back to the BJP in his inimitable style, pointing out the ridiculousness of the BJP position on how the BJP put 100% FDI in it's manifesto, for all the rants of videshi, videshi, they wear videshi watches, use videshi cars and right from shoes buy in air conditioned malls .. why down to Masalas, they buy packaged stuff.. and best of all, "Nescapey Coffe peenay wali madam" and how the even the big box stores can only set up outside the city where there is land and there is no compulsion on anyone, if you want to go there and get it , go, if you want to buy it from your Kirana, do so!

Simply loved his short speech and his jabs on Joshi and Sushma Swaraj. What a difference from MM Joshi and his ridiculous list of veggies and fruits and prices and the rubbish he rambled on and on and on.

Not sure how Lalu gave it back. The political class is a coconut - swadeshi outside but videshi inside. So equally applicable for UPA. If we go by the kind of vidshi logic applied here, well then most of India would be branded as "videshi" lover because most of our day to day consumable items are videshi brands or shwadeshi brands peddling videshi items. The logic of stores being only in large cities etc has no effect because the small stores will buy from walmart and sell to neighborhoods and prices will not come down either as it will remain a B2B model rather than a B2C model. Farmers and other vendors will soon be pushed to cut prices - walmart will not let go profit a point effectively made by Susamaji. So in a nutshell what will happen is that vendors will suffer and there will be no change in the price front for the consumers and the supply chain jobs will vanish. Vision this - there will be only 2 nodes in the supply chain - walmart and small marchants - and there is no points for figuring out who will keep the profit.

[Yayavar]

lalu giving back is a joke. The fellow should stay in jail and forever forgotten for the rot he brought to Bihar. Just his removal was good enough to bring a positive growth rate and sanity. Anything he stands for most likely is something that helps him or his kin. The nation probably looses.

[RoyG]

Must watch clip!

[Yayavar]

^^ good video. like said earlier, if lalu said it is good it may not be good for the country but might be good for him . btw, I dont know why people cite Infosys - it was a good business for outsourcing but it is not anything innovative.

[ShyamSP]

Was watching the Lok Sabha debate on FDI. Murli Manohar Joshi was such a windbag, a rambling incoherent and disjointed speech if there was ever one. Short on facts and logic , and long on fart. A total bore and windbag.

Lalu Yadav gave it back to the BJP in his inimitable style, pointing out the ridiculousness of the BJP position on how the BJP put 100% FDI in it's manifesto, for all the rants of videshi, videshi, they wear videshi watches, use videshi cars and right from shoes buy in air conditioned malls .. why down to Masalas, they buy packaged stuff.. and best of all, "Nescapey Coffe peenay wali madam" and how the even the big box stores can only set up outside the city where there is land and there is no compulsion on anyone, if you want to go there and get it , go, if you want to buy it from your Kirana, do so!

Simply loved his short speech and his jabs on Joshi and Sushma Swaraj. What a difference from MM Joshi and his ridiculous list of veggies and fruits and prices and the rubbish he rambled on and on and on.

Not sure how Lalu gave it back. The political class is a coconut - swadeshi outside but videshi inside. So equally applicable for UPA. If we go by the kind of vidshi logic applied here, well then most of India would be branded as "videshi" lover because most of our day to day consumable items are videshi brands or shwadeshi brands peddling videshi items. The logic of stores being only in large cities etc has no effect because the small stores will buy from walmart and sell to neighborhoods and prices will not come down either as it will remain a B2B model rather than a B2C model. Farmers and other vendors will soon be pushed to cut prices - walmart will not let go profit a point effectively made by Susamaji. So in a nutshell what will happen is that vendors will suffer and there will be no change in the price front for the consumers and the supply chain jobs will vanish. Vision this - there will be only 2 nodes in the supply chain - walmart and small marchants - and there is no points for figuring out who will keep the profit.

Funny thing Walmart already marked some stores even much before the bill passing. In one city, one building is almost 99% complete may be missing couple of glass panels left on top floor for this bill pass I guess. This bill passing is just side show to fool people.

Most existing native large chain stores carry made-in-china junk (in US at least you get tiny quality for same country made). One foreign stores come there may be more rush to sell more junk.

B2B may benefit but P2B or B2C don't benefit much.

[Gus]

the whole World has been Americanized for decades now. India is just following the path, after resisting for long. And to top, at least out in America there is evidence of accountability now and then. India does not lend credibility in terms of accountability of politicians - be it BJP or INC. The saving grace are the Commies, but they oppose things for all the wrong reasons. And we have regional faltu leaders who swing all ways without an iota of integrity. So no I am not blaming INC; just the whole setup of our World.

Why should everyone not be like an American? Do Americans have a monopoly on rampant runaway consumerism and crony capitalism run by oligarchical mega corporations?

I find it a bit ironical that people in massa, while enjoying their supermarkets, would say "look at us..it is bad..don't be like us".

[Arjun]

Modi and the Hindutva rate of growth

Typical HT-style low-IQ hitjob. Only reason I am posting it here is that the article introduces a terminology ('Hindutva rate of growth') that may land up being inadvertantly catchy.

[Don]

http://finance.yahoo.com/news/india-gro ... YA_0XQtDMD

India grows at slowest rate in a decade

By Mark Thompson | CNNMoney.com – 1 hour 11 minutes ago.. .

India's economy will grow by about 5.8% this year, representing the slowest rate of growth in a decade, according to revised official forecasts.


The country's finance ministry said Monday it was expecting India's growth rate to accelerate slightly in the second half of its financial year, which ends in March 2013. But gross domestic product will still only expand by 5.7% to 5.9% annually, compared with an earlier forecast of 7.6%. The last year growth was weaker was 2002-03.


India has recently enacted reforms to allow more foreign investment in the retail sector but more will need to be done if the world's second most populous nation is to return to the near double-digit rates of growth seen in previous years.


Growth has slowed in India because of a sharp drop in exports, stalled investments and a fall in business sentiment due to the slow pace of reform and high interest rates.


The revised official forecast is consistent with the most recent growth projections from the IMF, which were lowered in October due to the drags on business sentiment and investment and a weaker external environment.


The Reserve Bank of India (RBI) has been reluctant to cut interest rates but lower inflation could pave the way for an easing in monetary policy in the first half of 2013, economists say.


India is also battling to keep borrowing under control. It is seeking to curb subsidies and sell stakes in a number of state-owned firms in an attempt to cap the budget deficit at 5.3% of GDP in 2012-13.

[member_22539]

^^So did china

[Arjun]

http://finance.yahoo.com/news/india-gro ... 00527.html

Don, that's no surprise really. As long as the current governing party remains in power, India will continue to under-perform in comparison with China.

[kish]

India lost $123 b in black money in a decade

India lost a whopping $123 billion in black money in 2001-2010, making it the eighth largest victim of illicit financial outflow, a US-based research and advocacy organisation said in a report.

However, India’s black money loss of $123 billion in 10 years is far less than China, which, according to the report, suffered a loss of $2.74 trillion during the same period (2001 to 2010), followed by Mexico ($476 billion), Malaysia ($285 billion), Saudi Arabia ($201 billion), Russia ($152 billion), the Philippines ($138 billion) and Nigeria ($129 billion).

[VKumar]

IMHO the real culprit has always been the RBI. Today Indians are suffering from non availability of goods. RBI, by keeping the interest rate high and also the various reserve ratios, has throttled business & industry. It has justified this policy on the grounds of inflation - but has overlooked the very definition of inflation i.e. too many people chasing too few goods. RBI should step out of the way and let the marekt forces decide what to produce and in what quantity. Inflation will reduce as goods start to flow in and GDP growth will pick up as industry resumes.

[Singha]

well keeping the pie small and people fighting over scraps has always been the cornerstone of nehruvian economic policy.

RBI is a instrument of political decisions.

[shyam]

RBI is doing the right thing. Even with such a tight policy we have such a high inflation. With a loose economic policy we will see a massive bubble inside India. Rest of developed world is feeling the threat of deflation due to high amount of debt, and can't afford to have a normal econmic policy. ZIRP is creating the environment for a massive global bond market crash. Global bond market is 300 year high, mother of all bubbles, and is looking for a pin. RBI, in a way, is shielding Indians from that.

[Abhijeet]

Unfortunately it will take a lot more than changing monetary policy to improve the supply side situation that results in too few goods being produced in the first place. It requires massive improvements to infrastructure and the general business climate that are simply not happening in India. A looser monetary policy will simply result in more money coming into the market and make the rupee worth even less than it is right now.

So while I agree in principle that keeping interest rates high is bad for business, only changing that one lever while keeping other things intact doesn't make sense. It requires concerted policy and implementation changes to make things better all around. Unfortunately, there is no will to make those tougher things happen.

[Yogi_G]

IMHO the real culprit has always been the RBI. Today Indians are suffering from non availability of goods. RBI, by keeping the interest rate high and also the various reserve ratios, has throttled business & industry. It has justified this policy on the grounds of inflation - but has overlooked the very definition of inflation i.e. too many people chasing too few goods. RBI should step out of the way and let the marekt forces decide what to produce and in what quantity. Inflation will reduce as goods start to flow in and GDP growth will pick up as industry resumes.

Supply side inefficiencies and rising standards of living (lead by higher wages) are all driving up inflation, all people care about today is "inflation" as a blind number. High growth countries generate high inflation, good case in point being both CHina and SKorea. Shileding us from bubbles is something that can be done by other means and throttling growth like this. Keeping investment down in lieu of implementing good policies with rules and regulations is not acceptable.

[krisna]

The Bribery Aisle: How Wal-Mart Got Its Way
in Mexico

Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited, an examination by The New York Times found.

Wal-Mart seen facing sizable fines in U.S. bribery probe

Wal-Mart Stores (WMT.N) may be facing sizable fines related to allegations of widespread bribery at its Mexican affiliate, after a second report from the New York Times provided more details about the scope of the alleged misconduct.

wonder how many of our politicians and officials have been greased by walmart.

[nawabs]

Congress fooling nation with vacuous ‘reforms’

http://www.niticentral.com/2012/12/cong ... forms.html

Every newspaper, every analyst, economist and news-network in India is hyperventilating on Indian economic reforms. Never has so much ado been made about nothing. The only meaningful reform decision that this Government has taken since September was to limit the number of subsidised cylinders to six per customer. That too is on the verge of being revised upwards.

The Land Acquisition Bill – thank God, the Opposition wanted more time to study and pass the bill – is regressive. The issue of land acquisition and compensation is a complex one. Yes, livelihoods are affected and a fine balance has to be struck between industrialisation and development needs on the one hand and that of equity and fairness on the other. No solution can be deemed finely balanced by both sides since future developments can make the decision look fair or unfair to one side or the other. If the industrial establishment succeeds spectacularly, then any compensation paid to landowners can always be made to look puny in hindsight. If it failed badly, then it is highly doubtful if either landowners or the Government would compensate them. An option-type contract for the landowners that helps with participation on the upside with a minimum and fair compensation for the sale of land is the framework to adopt. Employment, training and housing can and should be part of this.

In the name of development, Indian Governments in the past had trampled on poor and scattered landowners’ rights. Hypocrisy is India’s USP. Now, it wants to lean on the other side with retrospective compensation and with prescription of higher owner acceptance for the acquisition of land to go through (80 per cent of landowners have to agree to sell). This is no economic reform. It simply means you are leaning in favour of one side instead of on the other side. That is all. That is not a sensible decision either, let alone it being an act of economic reform. A reformist decision cannot come out of a politically charged, blatantly populist and economically shallow decision-making process. Yet, the mere tabling of this bill in the Parliament has been hailed as economic reform by pundits and other mere mortals. We must thank the Opposition for not letting it pass without deliberation.

The other issues are about the issuance of new banking licenses, aligning voting rights of shareholders with their shareholding and then the last minute insertion of allowing banks to trade in commodity futures. The Reserve Bank of India has not been happy with the government’s unseemly haste in many of these matters. The issue of allowing banks to trade in commodity futures requires a lot of consideration and even then, one can be never sure that it is the right thing to do. Banks are not in the business of trading commodity futures. They can find other ways to hedge their loans to commodity producers or sellers. If they have to hedge their risk, positions should be allowed accordingly – in terms of size and duration. It should be clear to regulators that institutional participants – especially the ones that it regulates – understand the distribution of returns in commodity markets. They should have the expertise to know underlying trends in local and in international markets. Without these pre-conditions and more being met, it made no sense to allow banks to trade commodity futures. It was not a reform, by any standard. It was regressive. Apparently, while the support of the Bharatiya Janata Party helped pass the Amendment to voting rights of shareholders, the Opposition had demanded and succeeded in removing the insertion of banks trading in commodity futures. That was well done too.

The Ministry of Finance has treated regulators attached to its Ministry with disdain and contempt. It overruled the objection of the Insurance Regulatory Development Authority of India (IRDA) when it allowed the Life Insurance Corporation of India to own up to 30 per cent of the paid-up capital of any corporate entity. Both the measure and its implementation over the objectives of the regulator are decidedly anti-reform, regressive and unwise.

The Government wanted to announce a National Investment Board with authority to overrule individual ministries and be the only agency to take the final call on investment proposals that the Cabinet has to approve of. First, it is not clear that one more intra-Cabinet body would solve the problem. The Cabinet Committee on Economic Affairs and the Cabinet Committee on Political Affairs already exist. Comments, suggestions and proposals made by individual Ministries have to be discussed there. Alternatively, they have to be discussed in coalition committees where the Ministry is held by another coalition member. In the case of the UPA government, bulk of the proposals is being held up in the Ministry of Environment and Forests. This Ministry has been under the charge of the Congress Party. Hence, it should be possible for the Prime Minister or the Congress President to talk to them to go along with the government’s desire to clear investment proposals faster.

Instead, the Government – in true Indian style – wanted to avoid the problem with a display of power rather than with intellectual persuasion. The approach was wrong. India has a severe environment problem and hence, if the Ministry was using the powers vested with it appropriately, then perhaps industrialists and corporate entities have to fall in line. On the other hand, if their objections were aimed at rent-seeking or because of corporate rivalries, then the Prime Minister had the authority to pull them up. The Government has done nothing of that sort. Instead, it wanted to go for a National Investment Board. Unsurprisingly, the Government could not go through with it. Instead, it has announced another Cabinet Committee on Infrastructure with the Prime Minister heading it. At the same time, individual ministries retain their powers to accord final approvals to the proposals. What is the point of it all? Yet, most commentators have dutifully lined up to hail it as another reform measure.

This article is not about the functioning of the UPA Government. We have seen it for eight years and there is little purpose served in discussing its dysfunctional setup, ideas and execution. What is extremely disappointing is that it has succeeded in lining up an array of journalists and commentators, economists working with financial institutions to hail every one of its non-decisions in non-priority areas as economic reform. We just have to visit the websites of every major financial daily in the country and type the word, ‘reform’ in their search fields and you would understand what I am saying. This is Goebbelsian intent and execution.

India’s private sector investment spending stalled well before the Reserve Bank of India began hiking interest rates in 2011. Capital formation slowed down from 2009 itself. Reductions in interest rates will not solve India’s investment problems. Improved Governance and reduced corruption will help. Cost of doing business in India remains prohibitively high in many ways. Now, the government making it mandatory on corporations to undertake social initiatives is not an act of reform either. It is both populist and inappropriate. Corporations earning profit by engaging in lawful economic activity are already doing a social service with their mere existence. They are adding value by creating jobs for the public and profits for shareholders. Hence, the passing of the Companies Bill in its entirety is not an act of economic reform.

If the government took tough decisions to change the way it prices electricity, food, fertilizer and energy products and collects user charges, that is economic reform. If it set sunset clauses on tax incentives given to select industries or industrialists, that is economic reform. If it respects Parliament and if it ensures that Parliament is allowed to function (without its partymen whispering into Speakers’ ears to adjourn the Parliament) so that legislations are discussed, debated and then passed, that is an act of reform. If the government made itself more accountable to the public by putting its muscle behind the ‘Right to Information’ legislation, then it is economic reform.

India cannot succeed in fooling the rest of the world without fooling itself first. That is what it has been doing in the last eight years. It is very sad that intelligent journalists, newspapers and economists have joined the chorus.

[AbhiJ]

The Government already controls 75% of Banking and 90% of Bond Market through Nationalized Banks and Monster PSUs like LIC.

The decision to allow LIC to own equity upto 30% in an entity is for shooding the failed divestment plans and this LIC pumuped money would go to NREGA.

[kish]

India’s triumph in rice

India has emerged the world’s largest rice exporter, displacing Thailand from its leadership position, with rice exports in marketing year 2011/12 (October-September) placed at a record 10.4 million tonnes. This rise to the top follows the Indian government’s decision in February 2011 to lift a four-year ban on exports of non-basmati varieties of rice paving the way for a rise in exports. That rise, however, was favoured by a decision in the same year of the Thai government, under Prime Minister Yingluck Shinawatra, to improve the lot of its farmers by introducing a Rice Pledging Scheme under which it procured stocks at an enhanced price of 15,000 baht (US$420) per ton - a 60 percent increase over 2010. This obviously raised the domestic price of Thai rice. If India had not entered the market, the Thai government’s decision to buy rice at prices exceeding the world price would have temporarily reduced its sales to the world market. By increasing stocks with the Thai government and reducing global tradable supplies quite significantly, this would have pushed up global rice prices and allowed Thailand to return to the export market. But India’s entry and increased exports from Vietnam at the prevailing price prevented that rise, resulting in a fall in Thai exports and the loss of its position as the world’s leading rice exporter. Thailand’s “loss” was India’s gain, as Indian non-basmati rice turned internationally competitive.

[Hari Seldon]

Columbia economist Arvind Panagriya on why Rao & Vajpayee are the real architects of Indian Economic reforms

Recommended read. Many a shibboleth stands broken. Only.

[subhamoy.das]

Columbia economist Arvind Panagriya on why Rao & Vajpayee are the real architects of Indian Economic reforms

Recommended read. Many a shibboleth stands broken. Only.

The majority people in the rural side prefer to live on welfare instead of hard working jobs, they have been made addictive of it in the Nehruvian model. That is why PVNR and Atal got < 20% of the time line and Modi is struggling to find a place in national politics. Hard working and tax paying urban folks are being creamed to fund the idling and welfare loving rural folks. Instead of creating infrastructure for job creation and fulfillment, the UPA is doling out cash subsidy - "bhik". No wonder the consumption and hence growth is sales ( read GDP ) is on the decline. I pray to God to give some sense to the rural folks for 2014 or else the economy and the country is doomed!

[Rishirishi]

The conditions in rural India are very hard. Hardly any resources reach the villages. Votes are cast on simple promises for water or even a bag of alcohol.

Congress has uses the policies of "divide and rule". Bad for everyone, good for Congress netas.

[vic]

I think our trade deficit is running at USD 20 Billion per month. At an annual estimate of USD 250 Billion, I think we have the second highest trade deficit of any nation in the world except USA. I wonder when will we overhaul USA also?

[Aditya_V]

Is our Trade defecit including invisibles such as services? But yes our overdependence on imports and our purchasing habits in both industry and public along with GOvt policy need to change.

[Abhijeet]

Was reading through the latest Business Today issue. (As an aside, Business Today has the most consistently high quality articles of any business magazine I've read in India.)

I read a couple of good articles, one about telecom and one an interview with an insurance company CEO.

In telecom, the government is in the process of strangling the telecom sector by charging very high upfront fees for new spectrum and introducing uncertainty into the regulatory environment by re-auctioning spectrum sold dubiously in 2007. They are also seeking to charge a second, "one-time" fee on spectrum previously sold. New, unexpected charges like this make it hard for companies to calculate their ownership costs and make everyone wary of investing more going forward.

Despite the 3G hype, 2 years into it there are still only about 2 million 3G subscribers in India -- unforgivably low. 90% of telecom revenue still comes from voice. Tariffs will have to rise substantially if the operators are to operate in a financially sustainable manner.

In insurance, the rules have been changed in the last few years primarily around ULIPs, which have disadvantaged private insurers and play to LIC's strengths. As a result, LIC's share of the insurance market, which had come down to 50%, has now risen back up to 70%; and total insurance premiums for the industry as a whole actually came down last year. This is very unfortunate for a highly underpenetrated market such as India; insurance coverage will need to rise at double digit rates for years before a reasonable fraction of the population is covered by any sort of insurance.

The common thread in these two sectors is a government that is making the business environment unpleasant for private players, at the expense of consumers and industry growth.

[Vadivel]

The common thread in these two sectors is a government that is making the business environment unpleasant for private players, at the expense of consumers and industry growth.

So you believe that goverment should side with the private players. ULIPs was snake-oil marketing with agents fooling the consumers, how is this at the expense of consumers. . No idea about telecom, though.

[subhamoy.das]

The conditions in rural India are very hard. Hardly any resources reach the villages. Votes are cast on simple promises for water or even a bag of alcohol.

Congress has uses the policies of "divide and rule". Bad for everyone, good for Congress netas.

The culprit here is not KANGRESS but the folks living in rural areas. KANGRESS is doing what it is supposed to do. But these folks are not doing what they are supposed to do - give the mandate to the alternative which will create hard working well paid jobs instead of bhik/welfare. The credit of improved QOL ( quality of life ) goes to the Gujratis because they kept on mandating Modi. The QOS in Bengal sucks because the CITIZENs mandated the CPC for 30 years and lived on welfare and pilferaged public money and when life because so hard, did they choose the alternative but now it may well be too late - Bengal govt has to pay 2500 crore in loan servicing every month now. At one point of time, extortion of all kinds was the only job available in Bengal. Same story repeats with Bihar.

[subhamoy.das]

The common thread in these two sectors is a government that is making the business environment unpleasant for private players, at the expense of consumers and industry growth.

So you believe that goverment should side with the private players. ULIPs was snake-oil marketing with agents fooling the consumers, how is this at the expense of consumers. . No idea about telecom, though.

Govt should define the right laws to protect the consumers and monitor compliance. It should not get into the business. I think the perception now is - Ratan Tata voiced it recently and was subsequently made to apologize - doing business by private industry is getting tougher by once section of the UPA while a second section is open to reforms etc. So war of sort has broken out between the welfare ( read govt is mai baap ) and the reform ( more jobs ) groups. The only silver lining is that there are independent agencies - like world bank, credit ratings etc - which are weighing on the welfare side and the welfare side is also realizing that without jobs there bills cannot be paid for. I would predict that things will improve going forward regardless of who gets the right to make laws in 2014.

[Rishirishi]

The conditions in rural India are very hard. Hardly any resources reach the villages. Votes are cast on simple promises for water or even a bag of alcohol.

Congress has uses the policies of "divide and rule". Bad for everyone, good for Congress netas.

The culprit here is not KANGRESS but the folks living in rural areas. KANGRESS is doing what it is supposed to do. But these folks are not doing what they are supposed to do - give the mandate to the alternative which will create hard working well paid jobs instead of bhik/welfare. The credit of improved QOL ( quality of life ) goes to the Gujratis because they kept on mandating Modi. The QOS in Bengal sucks because the CITIZENs mandated the CPC for 30 years and lived on welfare and pilferaged public money and when life because so hard, did they choose the alternative but now it may well be too late - Bengal govt has to pay 2500 crore in loan servicing every month now. At one point of time, extortion of all kinds was the only job available in Bengal. Same story repeats with Bihar.

sir; Villagers are poor, uneducated and live from hand to mouth. I think you are misinformed of the welfare claim for villagers. It is not as if they are eating desi ghee on the gov. expense. However i do agree that in stead of welfare spending, the government had got better results by investing in roads and other infrastructure. The problem with Bengalis, is that they have too many intellectuals. Who in the right mind could turn down a auto plant (nano), for the sake of some farm land. I mean how many potatos could you have grown on that land, which could have created thousands of jobs. Worst, even educated Bengalis supported the nonsense. Bengal is a gone case. Hopefully they can learn from.

[Arjun]

Modi makes his pro-growth stance explicit, far more so than the current apology of a government at the center: Centre’s policies lack urgency to tackle economic crisis: Modi

Attacking the government for lowering the growth target for the 12th Plan, Modi said though the target of 9 percent GDP growth, talked about last year, appeared ambitious, “it was not impossible to achieve if we had the political will to do what is necessary”.

“In this context, it is painful to note the unmistakable sense of pessimism in the 12th Plan document…Significantly lowering the growth targets of the 12th Plan will further add to the mood of despondency and pessimism in the country and cast increasing doubts on the sustainability of the India Growth Story,” he said.