Bharat Rakshak

arshyam wrote:^^ TSJ-ji, one request: non-formal economy != underground economy. I know it is not easy to think in those terms when even wings of the GoI has been doing so for a past decades and largely ignored this large sector, and western economies don't have an equivalent, but let's start somewhere, eh?

The non-formal economy (I would prefer to use a better word, unincorporated economy, as Prof Vaidya says) is not necessarily operating illegally, it is just operating on traditional lines which doesn't fit into the modern western-inspired economic discourse as we know it: using cash transactions, word of mouth agreements, borrowing capital from friends, relatives and non-formal moneylenders, etc. In fact, the last part is the most problematic, as the interest rates tend to be higher than what a bank would give, but they are still doing a valuable service of making funds available locally. In fact, in some places in India, banks lend to local moneylenders who in turn finance these enterprises simply because the banks are unable to scale up and reach each and every one of these enterprises, and the local moneylenders have a better grasp of individual credit worthiness! S Gurumurthy mentions this in one of his lectures giving the example of the textile cluster of Tiruppur that generates more than $2B exports a year.

I tend to agree with you on the 'they know' part. GoI has had some estimates of this sector, though it had offered nothing more than benign neglect all these years. I had posted two sources by eminent economists/professors in the previous page, where they said this sector accounts for 50% of the Indian GDP, consists of 50-60 million non-farming and non-corporate enterprises, and employs close to 110 million people. What I am currently unsure about is, how does GoI include this 50% in the current GDP estimates: is it $1T in the current $2T nominal GDP, or is this $1T outside of the $2T?

This page provides - India GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - India GDP - was last refreshed on Sunday, April 5, 2015.

arshyam wrote: Sir, after listening to the good Professor, I think calling India a market economy is just plain wrong (not saying you are using it, but calling out the Wiki quote). I think the Prof uses the term 'bank-driven' economy or some such, going by the amount of money people place in banks, which makes available most of the funding needed in the formal economy. I believe he (or was S. Gurumurthy?) says that the net worth of all the companies listed in the BSE don't amount to more 5-6% of GDP. I would say we are a mixed economy, with a mixture of bank-driven formal economy and a large number of SMEs, but we need a more descriptive term that better captures the different nature of the Indian economy.

arshyam wrote:What I am currently unsure about is, how does GoI include this 50% in the current GDP estimates: is it $1T in the current $2T nominal GDP, or is this $1T outside of the $2T?

arshyam wrote:I think the Prof uses the term 'bank-driven' economy or some such, going by the amount of money people place in banks, which makes available most of the funding needed in the formal economy..

RVaidyanathan wrote:Never compel people to live as per models. Rather try to model how people behave.

Armed with the Coal Mines Special Provisions Bill, 2015, the government is all set to allow commercial mining of coal and state-owned entities would be the first to be allotted mines for the purpose.

“We will be allotting mines to the state entities for commercial mining of coal,” Coal Secretary Anil Swarup said here on Monday at a Coal Consumers’ Association of India-organised interactive session.

He said that in the next phase, private entities would be assigned mines. The Centre is in the process of allotting 204 coal blocks in a transparent manner of which 67 blocks have been allotted by either auction or on a nomination basis to state entities.

arshyam wrote:From the statistical appendix to the Economic Survey of India 2014-15:

Gross national income at current prices for 2014-15 (Rs, Crore): 1,24,98,662. In USD at INR 60 = 1 USD, this comes to 2,083,110,333,333.333 = ~2T USD.

Speaking at an industry body event, Mr Jaitley stressed that India was not a tax haven and legitimate tax demands must be paid by foreign investors.

"The converse of tax terrorism is not tax haven. Taxes which are not payable must not be paid but taxes which are payable must be paid," Mr Jaitley said.

Mr Jaitley's statement comes on the back of taxmen sending out notices to foreign institutional investors or FIIs to shell out tax on their gains made in the past few years. According to estimates, FIIs could face a tax bill of nearly $8 billion or Rs. 50,000 crore ($1=Rs. 62.5).

"India is not so vulnerable that every legitimate tax demand is considered as tax terrorism ... we are not a tax haven and we don't intend to be one," Mr Jaitley said.

The Income Tax department has imposed 20 per cent minimum alternate tax or MAT on capital gains made by foreign institutional investors or FIIs.

Mr Jaitley in his budget speech in February proposed to scrap MAT on capital gains made by FIIs.

Commenting on the tax notices, Revenue Secretary Shaktikanta Das said, "I think what FIIs and FPIs (foreign portfolio investors) are asking is retrospective exemption and not retrospective application of a tax law. Because MAT was leviable on them, therefore these assessment, these demand have been raised,"

MAT exemption on foreign investors is applicable from April 1, 2016, Mr Das clarified.

nandakumar wrote:Cross posting from Modi Government achievements tracking. It is more appropriate here.
A major cause for delay lies in lawyers seeking adjournment under one pretext or other and the lawyer for the other litigant not object to it and judges routinely granting it. A way to fix this problem is to make the client whose lawyer is seeking an adjournment give his consent in writing and the other litigant waiving his right to be heard give a similar consent. The tragedy is that though lawyers are actually agents of litigant principals they invariably act like they are the principals.

SPattath wrote:Do the Guru's here recommend NPS as a good investment option.

TSJones wrote:As an outsider, may I ask a few questions of the gurus of the forum in the hopes of better understanding the issues?

1. Is a census required by the GOI like it is mandated in the US constitution?

2. If it is, how often is it taken? And is a questionnaire used that asks all kinds of questions about living conditions, job situation, family situation, financial, etc? Are responses broken down by mail code area in order to capsulize demographic information?

3. Is there a GOI organization that tracks imports/exports by sector. heavy machinery, tool and die, computers, etc?

4. Does the GOI track electricity production and keep historical data?

5 Does the GOI track cell phone switches and other telephony switching?

6. Does the central bank track the velocity of currency and how often it has to be replaced?

7. Does the GOI track agricultural production? Importation and or production of various ag chemicals, fertilizers, etc.?

8. Does the GOI track importation and or production of various fuels?

9. Does the GOI try to track the import/export of gold and precious gems/jewelry?

10. Are there non GOI organizations like APICS (American Production and Inventory Control Society) that polls business professionals on an annual or quarterly basis?

I realize some of this may be sensitive info so I am not asking for specific details but just answers in a general context so that I can understand the ground realities of India economic data. Thanks.

Yagnasri wrote:

nandakumar wrote:Cross posting from Modi Government achievements tracking. It is more appropriate here.
A major cause for delay lies in lawyers seeking adjournment under one pretext or other and the lawyer for the other litigant not object to it and judges routinely granting it. A way to fix this problem is to make the client whose lawyer is seeking an adjournment give his consent in writing and the other litigant waiving his right to be heard give a similar consent. The tragedy is that though lawyers are actually agents of litigant principals they invariably act like they are the principals.

The terms on engaging advocate includes giving such power. It will be mentioned in the Vakalathnama.

Yagnasri wrote:

SPattath wrote:Do the Guru's here recommend NPS as a good investment option.

I have a NPS account. If done for long term it is ok.

India Inc is slowly putting its investment plans back on track. Data from the Centre for Monitoring Indian Economy (CMIE), a city-based research house, show “investment intentions” in 2014-15 were 80 per cent more than in 2013-14. At Rs 9.9 lakh crore, it was the highest in four financial years.

An encouraging sign is the private sector, which was slow in announcing plans in the June quarter of 2014-15, made up for it in the subsequent quarters. In the quarter ended March this year, its share in overall new investment announcements rose to 75 per cent from 46 per cent in the previous two quarters. Of the 449 projects, 266 (entailing a combined investment worth Rs 1.46 lakh crore) were proposed by the private sector.

However, the sharp increase in 2014-15 might also be due to a low base of new investments proposed in the previous two years.

He also sounded a word of caution on the concentration of new investments in a region. “The concentration of these new investments in Gujarat (40 per cent) implies the rest of country sees a significant slowing of investment proposals.”

During the quarter ended March this year, Gujarat was the favourite investment destination. Of the new investment announcements, 40 per cent (Rs 786 billion worth of investments) was attracted by the state alone. The second and third preferred destinations were Karnataka and Uttar Pradesh, attracting investments worth Rs 295 billion and Rs 267 billion, respectively.

Reuters) - India is considering allowing companies to raise rupee debt offshore, the country's central bank said on Tuesday, noting strong demand for such debt following issues by Asian Development Bank and International Finance Corp.

"These issues have been received with interest. The appetite for rupee debt amongst international investors is a welcome development," the Reserve Bank of India said in a statement following a policy review.

The RBI said it was in talks with the government to make it easier for international financial institutions like ADB and IFC, a World Bank financing arm, to raise more funds for Indian infrastructure projects via offshore rupee-denominated bond sales.

The central bank said it was also looking at permitting companies that were already eligible to raise money abroad to directly issue rupee bonds overseas.

Letting corporates to issue rupee debt offshore could help contain India's foreign currency denominated external debt obligations, while also reducing systemic risks stemming from companies' large unhedged foreign exchange exposure, analysts said.

They said offshore rupee debt was likely to attract good demand, particularly due to the improved investor sentiment towards India and the country's relatively higher yields.

The strong criticism had an immediate effect, with three leading banks — State Bank of India (SBI), HDFC Bank and ICICI Bank — deciding to reduce base rates. While the first two opted for 15-basis point cuts to 9.85 per cent, ICICI Bank went a step further, announcing a 25-basis-point reduction. While SBI’s and ICICI Bank’s rate cut will be effective April 10, HDFC Bank’s will be effective April 13. Other banks are expected to follow any time. All the three banks have also reduced interest rates for retail fixed deposits of particular tenures.

Rajan had earlier chosen strong words, marking his impatience at the fact that only a couple of banks had cut lending rates after the previous two repo rate cuts, raising concern over the transmission of monetary policy to the broader economy. He dismissed bankers’ claims that the cost of funds was too high. “Banks are sitting on money. Their marginal cost of funds has fallen. The notion that it hasn’t fallen is nonsense,” Rajan said.

NITI (National Institution for Transforming India) Aayog vice-chairman Arvind Panagariya on Tuesday charged companies with not investing much in labour-intensive sectors and concentrating mainly on capital-intensive ones, adding to the unemployment woes of the country.

“Here is my charge to you: if I look around, none of you invest in industries, in sectors that would generate lots of employment; all of you just run away from hiring purpose,” Panagariya told a gathering of industrialists at the annual general meeting of the Confederation of Indian Industry (CII) here on Monday.

According to Panagariya, industry wants to invest in capital-intensive sectors such as auto parts, automobiles, machinery, chemicals or areas requiring special skills such as software, telecom, pharmaceuticals.

“Every year, 12 million enter the labour force. What is your plan for the country so that more people are employed? We really need to think. You know the ground conditions; why you are not investing in sectors which are more labour-intensive such as food processing, electronic assembly, leather products,” he asked industrialists.

In response, CII’s outgoing president Ajay Shriram said there were valid reasons behind industry’s reluctance not to pump in money in labour-intensive sectors and that the reasons are well-known. He cited labour problem as one of the key areas and said the Rajasthan government's move to relax labour laws might help.

Panagariya, then, asked industry why was it not forthcoming in raising these issues. “Why an economist (Panagariya) had to come in on this issue? I don't hear voices from industry. You’re on the ground; you know what the constraints are. The sense I get from industry is that these activities are not on industry’s radar,” he said.

The NITI Aayog's vice-chairman's charge holds ground if one assesses the recent purchasing managers' index (PMI) survey. Despite expansion, the manufacturing sector did not generate additional employment for the 14 months till March this year.

The Union government on Tuesday cleared amendments to the Real Estate (Regulation and Development) Bill, 2013, paving the way for legislation on regulators for the sector.

The Bill was introduced in the Rajya Sabha in August 2013 and referred to the standing committee on urban development. Most of the panel’s recommendations have been incorporated in the amendments.

Developers, both in residential and commercial sectors, will be required to register their projects with the regulatory authorities to be set up and will have to mandatorily disclose all information regarding the promoters, project, layout plan, schedule of development works, land status and status of statutory approvals.

Under the proposed law, 10 per cent of the project cost will be imposed as penalty for non-registration and another 10 per cent of project cost or three years in jail or both if still not compliant with the rules and regulations. For wrong disclosure or non-compliance of information rules, five per cent of the project cost will be imposed. The regulators will have the power of cancelling registration in the case of persistent violations and decide on further action regarding completion of such projects.

The Bill, in the making since 2009, also mandates developers to deposit half the money collected from buyers in a project within 15 days to a separate bank account, to be used only for construction of that scheme. In the original Bill, 70 per cent of the amount had to be kept for this construction.

Ongoing projects that have not received completion certificates have also been brought under the Bill’s purview. These will need to be registered within three months. Developers will not be allowed to change plans and structural designs without the consent of two-third of a project’s buyers.

Real estate agents have also been made punishable for non-compliance with orders of the regulatory authority and appellate tribunals to be set under the proposed law.

Written by Sharmistha Mukherjee | New Delhi | Updated: April 5, 2015 8:34 am

Crashing prices of crops, low wages and erratic rainfall have put pressure on the sales of motorcycles, tractors and entry-level cars in rural markets.

While motorcycle sales declined for the fifth straight month in February, data available with the Tractor Manufacturers Association (TMA) show that domestic sales of tractors were down by 10 per cent to 488,227 units between April 2014 and January 2015. The decline has been steeper in the last three months — a fall of nearly 30 per cent — on the back of lower than expected kharif crop output and unseasonal rains affecting rabi produce.

Sales of entry-level cars, too, dropped by around eight per cent to 492,556 units between April 2014 and February 2015. Sugato Sen, deputy director general, Society of Indian Automobile Manufacturers (SIAM), said, “Erratic monsoon, lower rural wages and drying up of funds under the NREGA scheme has meant that demand for two-wheelers has tapered off in rural areas. Entry-level cars are also under pressure on account of weak macro-economic environment.”
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Latest data available with the Labour Bureau shows that rural wages in India registered an average annual growth of 3.8 per cent to Rs 266.26 in November 2014 — the lowest since July 2005. A slowing economy has led to drying up of job opportunities for rural migrant workers, especially in sectors like construction and manufacturing. The crash in prices of most crops has, likewise, hit farmer income. The emphasis on the job guarantee scheme, too, has weakened with the change of government, affecting wages in rural areas, say experts.

All this has started impacting demand. As per data available with SIAM, sales of motorcycles declined by 8.22 per cent to 774,122 units in February as compared to 843,436 units sold in the same month last year. In terms of absolute volume, motorcycle sales registered in February are the weakest in 28 months.

A spokesperson at Hero MotoCorp said, “Market sentiment in some rural areas has been impacted due to various factors, including the curtailment of NREGA spends, poor crop realisation and moderating wages. The industry has felt some impact in retail off-take in markets in Bihar and Madhya Pradesh and the sugarcane growing areas in Uttar Pradesh and Maharashtra.”

However, the company said this is not a nationwide phenomenon, with Hero MotoCorp clocking double-digit growth in some other rural markets, including West Bengal, Orissa, Karnataka, Uttarakhand and some parts of Uttar Pradesh. “With the onset of the marriage season in April, the industry expects the market sentiment to improve,” added the spokesperson.

Meanwhile, those in the small cars business, such as Maruti Suzuki and Hyundai Motor, have been increasing their reach in rural markets to offset risks. To sustain and grow volumes, Maruti Suzuki has extended its presence to 125,000 villages last fiscal, as compared to 93,400 villages it sold its products in a year ago.

R S Kalsi, executive director (marketing & sales), Maruti Suzuki India Limited, said, “First the delayed monsoon and now unseasonal rains have seriously impacted the agrarian output and rural economy. It is a national concern and impacts everyone. Maruti Suzuki has taken a slew of initiatives to reach out to rural customers in this hour of distress.” To help rural customers, the company has conducted over 1,000 complimentary mega service camps in February 2015 and 2,000 in March 2015.

With the extended distribution network, the company was able to grow its rural sales by 26 per cent to 366,000 units between April 2014 and February 2015. The stress in the rural economy, however, affected volumes in March when sales grew by only six per cent. The impact on demand in rural markets has raised concern as rural sales accounted for over 34 per cent of the Maruti Suzuki’s total volumes at the end of the last financial year.

Kalsi said, “While there is stress in short term, the long-term growth story of rural India is positive. When infrastructure jobs reach rural India, the dependency on agriculture is expected to come down. Incomes will, in turn, trigger growth in goods and services. Companies that put up right enablers in place will benefit.”

Hyundai, too, confirmed it has added 37 outlets over the last nine months to scale up presence in rural areas. “In Q4, agricultural economy saw low traction as untimely rains resulted in loss of yield with poor crop realisation, leaving low disposable income in the hands of consumers. In these adverse situations, Hyundai grew rural sales by 18 per cent as we have worked on extending our distribution and service network in rural areas,” said Rakesh Srivastava, senior vice-president (marketing & sales), Hyundai Motor India Limited.

Between January and March 2015, the company has increased the number of outlets in rural markets to 320 from 283 in the corresponding period last year. The company now has 664 rural sales and service executives as compared to 400 a year ago. The initiatives have helped Hyundai grow sales in rural markets by 18 per cent to 24,600 units in the first three months of 2015. Currently, rural sales contribute 21.3 per cent to Hyundai India’s overall tally.

Rahul M wrote:worrying signs ?

http://indianexpress.com/article/india/ ... -distress/

EconomicTimes ‏@EconomicTimes 15m15 minutes ago

#CBI keen to be lead investigator of big-ticket corporate loan default cases http://ow.ly/Lkcj0

With global food prices slumping to six-year lows in March due to bumper production and high inventory levels, Indian agri-exports are likely to face a setback.

Most agri-commodities are currently trading below Indian minimum support price (MSP) in the global markets.

“Most commodities in global markets are trading below the prevailing MSP in India. This will translate to at least 10% lower exports of agri commodities from India in 2015-16 from the current estimated level of $32 billion including agri commodities and plantation products,” said Ajay Sahai, Director General, Federation of Indian Export Organisation (FIEO).

While India’s agri commodity exports would be lower, import bill for commodities like vegetable oil and pulses will also be subdued.

Data compiled by the Food and Agriculture Organisation (FAO) of the United Nations showed the world food price index continued to drop in March, down 18.7% (40 points) below its level a year ago. It is also a 1% dip over February 2015. Overall, except for a pause in October 2014, global food prices have been falling steadily since April 2014, on account of large supplies.

EconomicTimes ‏@EconomicTimes 1h1 hour ago

30 crore landless people to get jobs once #LandBill is passed: FM http://ow.ly/LktPz

"I want to make a special mention of poor, dalits, tribals, backwards, those who are landless. The Land Acquisition Bill we are bringing, as per that the industrial corridors which would be set up in the country, those backward people, the 300 million landless people would get employment opportunities," he said.

Speaking at the launch of the Rs 20,000 crore Pradhan Mantri Micro Units Development Refinance Agency (MUDRA) Yojana here, he said it is the priority of the government to provide employment to people and steps are being taken in that direction.
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Jaitley said about 20 per cent of the country's population is dependent on these micro and small entrepreneurs.

Across the globe, powerful corporations and their compliant politicians seek to sweep away peoples and their indigenous knowledge and culture in the chase for profit and control. They call this ‘development’. They will allow nothing and no one to stand in their way.