Indian Economy - News & Discussion 27 May 2012

[Austin]

I would say Corruption as one of the key cause if not the only one for underdevelopment in India , Ignoring this fact only means we are ignoring the basic concern of common man.

Where ever you go at the official level you have to bribe people to get your work done how ever legitimate it may be , Even a small vegetable vendor selling on the road has to bribe police and muncipal office for few 100 Rs daily if you go up the chain the amount is in 1000's of crores of rupees .....all these bribe money eventually enters into our system and makes thing more expensive for common man.

Its no surprise that these days you just find bribe money worth crores of Rupees from simple government official whose entire salary for his entire life would barely allow him to touch that figure....... now there are A Raja types at the highest level , Mr 15 % and even Air Force Chief who are there to make quick buck before retirement.

Our justice system and law enforcement is so weak then you can virtually bribe your way out or water down the case and delay it sometimes for many years to come , giving little incentive for other to learn.

The day we eliminate corruption from our system that is the day we would progress in real sense ....not just in figures and stastics.

Check our India Today latest issue it has Cover Story on the amount of Bribe a Common Man has to pay.

[Suraj]

Assuming we're still on the topic of Adm.Prakash's article, the corruption and legal recourse situation isn't a whole lot different in China. In many ways they're further behind. There are plenty of examples on sites like chinasmack, which is in English. One can replace the Indian system wholesale with the Chinese one overnight and you'd not see a whole lot of improvement in that front.

What I said in my previous post isn't a defence of, or ignoring corruption; their political system rewards urban economic success with personal political growth. Ergo, they invest in their urban development and infrastructure in a manner we do not, and their actions have a direct bearing on the substantially better quality of life in their cities.

[Austin]

I do not stay in China so I do not know how well China Fares or is Worse in Corruption compared to India , Its very difficult to gauge a nation corruption index in real sense by just reading few article good or bad.

Since I stay in India and live here I can speak as a Common Citizen of this country that our situation is very bad and is one of the root cause why we are not progressing to the extent we should , Corruption is deeply ingrained in our society to the extent it is considered as "Normal" to pay bribes warna Kaam Kaise Honga is the common proverb.

The fact that atleast at the State and Center level we have so many cases of corruption that is coming to light gives a good indication how precarious the situation is and that nothing is being done and even if it takes a legal recourse that it takes years to even come to some conclusion is more painful to see .....I dont remember in recent years atleast in past 2 decades that I have followed such cases we have enough or for that matter any conviction it keeps dragging.

I raised corruption issue is because It affects the common man like me/us and with some many millions Indians who are into poverty but end up paying bribe. Thats more painful for the citizen of this country and is eating us deep making us hollow like a termite does to a wood.

Ofcourse there is investement , FDI ,Infrastructure and many other important aspect but even these aspect either directly or indirectly gets affected by corruption for eg if you dont pay bribe your file does not get cleared or you dont get contract or subcontract for infra project.

I would say lets not get too obsessed by China or some one else ....let us solve our own problem first what ails our society is far more important to solve if we want to keep this nation united and see its citizen progress.

While China is progressing and world including our PM is is awe struck with their progress well good luck to them , but lets solve our problem and the first IMHO to solve is Corruption in this country if we dont solve it you would see we would keep making progress on a stastical level while deep within we would turn hollow , like a cancer its kills you internally more than externally.

[Supratik]

In China they have taken pro-active steps to urbanize the population. In India urbanization is more need and aspiration based i.e. it is chaotic and the Govt. cannot stop it and it doesn't want to plan for it. The tax system hasn't evolved to set aside a certain amount as city tax as is the case in advanced countries. The Indian politician whose prime motivation is acquiring and preserving power and the assorted perks and benefits including sometimes corruption is not really a visionary. The situation will start changing when the urban population becomes the majority and the politician is forced to take cognizance of the changed equation. In Gujarat you have a combination of an urban population reaching 50% and a visionary CM leading to more planned urbanization. Similar is the case with MH and the southern states including KL where even the disinterested politician is forced to do something for the urban population. In the rest of India it is simply a ghetto-like situation which will take decades to change. But the city must get a portion of the tax if we are to look anywhere near a decent place to live in. Even Delhi is full of ghettos although it has its own government.

[Suraj]

Austin, I think we're talking two completely different things here - I'm addressing Adm.Prakash's article. You're talking about corruption in general.

[Arjun]

The only politician who's shown any vision so far on urban development seems to be Modi...witness the ambition behind Dholera. It is envisoned to be six times the size of Shanghai and better developed than Delhi. The dream for something like Dholera should ideally have come from Maharashtra or Tamil Nadu - instead governments there have hardly displayed the same level of initiative.

Would Dholera as it is envisioned actually convert to reality ? We don't know for sure and the economic environment has turned bleaker over the last couple of years - the only thing one can say with certainty is that noone else for sure matches upto Modi in ambition in this area.

[Supratik]

Yes, he is more ambitious than what the Indian system and economy can deliver at present. GIFT is supposed to be a 100 tower city spread over 800+ acres.

[Theo_Fidel]

The point being made is India should lean on politicians from successful cities rather than successful states, which is what China is doing.

I still think the key item is education. Without rural folks being at least HS educated no urbanization is possible. It is only when folks have education that they will move to cities to increase their productivity. Politicians need to do more to get people to focus on education. Even in our more advanced states people are far too lackadaisical about getting 100% educated and staying dedicated to it through High school and beyond.

[Austin]

Austin, I think we're talking two completely different things here - I'm addressing Adm.Prakash's article. You're talking about corruption in general.

I was just responding to your opinion on Adm Prakash piece "There's a popular desire to blame the politicians' corruption as the root of all ills. Personally, I don't think that's the primary issue here."

I expressed the opinion that Corruption is a major issue for most indian as we all are impacted in one way or the other either directly or indirectly and in India corruption affects many aspect of life and not limited to higher political echelon

[Suraj]

Austin, I think we're talking two completely different things here - I'm addressing Adm.Prakash's article. You're talking about corruption in general.

I was just responding to your opinion on Adm Prakash piece "There's a popular desire to blame the politicians' corruption as the root of all ills. Personally, I don't think that's the primary issue here."

I expressed the opinion that Corruption is a major issue for most indian as we all are impacted in one way or the other either directly or indirectly and in India corruption affects many aspect of life and not limited to higher political echelon

Please quote me in the entirety when you quote me - the rest of that paragraph was also relevant: "There's a popular desire to blame the politicians' corruption as the root of all ills. Personally, I don't think that's the primary issue here. They are the professional leeches in every system - in India, PRC, US or elsewhere. I'm more inclined to look at how well the development of the system is in line with their own gain. In a system where they are both roughly aligned, there will be a substantial development within the system."

[Austin]

Even if I were to quote what you did , You are simply underestimating the depth and reach of corruption in India and the kind of pain a common citizen has to go through , whether US or China is better or worse then us does not help our cause.

Like I said to understand corruption you have to live in the country long enough to understand how it affects .....most stastics might not revel that part of it but any ways this discussion is for another time

[Suraj]

Clearly you think I said something, when I tried to quote an entire paragraph emphasizing I'm not even talking about what you're arguing. If you insist on believing I said what you claim, I cannot stop you from doing so. But I chose to make an effort to prevent someone from putting words in my mouth.

[Austin]

Obviously what you said its out there for every one to read and I leave that for other members to make up their mind on it. My last word on this.

[Manish_Sharma]

Huge silent scam by shiela dixit :



In the middle of night, these trucks move around in delhi cleaning delhi roads this way

First time I saw it was december last year, then in may this year again last night. All 3 different seasons.

All it does is leave a very thin trail of brush marks of 1 feet width with very very little wetness first on the left side corner of the road and then right side corner of the road. While middle 80% of road is left as it is. The work is finished the truck leaves for next road, wasting precious diesel
precious water and Parmaatma knows how much of our money shiela-sonia gang has eaten up in this deal importing them from europe/US.

Strange to see the congi a$$ lickers from banglore promising people "that when 2014 cong will come back they'll get rid of NAC jokers", while cursing the common delhi people, celebrating on weather caused misery against common people of delhi. Disgusting!!!

[Theo_Fidel]

All it does is leave a very thin trail of brush marks of 1 feet width with very very little wetness first on the left side corner of the road and then right side corner of the road. While middle 80% of road is left as it is.

Yes. That is how they are designed to work the world over. If it is not working in India a new design may be required. What is the problem + what is the solution.

[Suraj]

Wholesale inflation accelerates to 4.86% in June

The wholesale inflation rose to 4.86% in June after falling to a 43-month low of 4.70% in the previous month, according to the data released by Commerce Ministry on Monday.

The Wholesale Price Index (WPI), a measure of wholesale inflation, rose mainly on the account of rise in prices of primary articles which shot up by 8.14% in June from 6.65% in May. Among the food articles, whose prices rose by 9.74% from 8.25 percent, the sharpest rise was witnessed in vegetables as the prices rose by 16.47% from previous month's 4.85% rise.

However, there was some relief in the manufactured items, which occupy around 65% of the total share in the WPI basket, as the inflation came down to 2.75% in June against 3.11% in May.

"We thought that higher food prices would be offset by easing price growth of manufactured goods, though in the end it wasn’t quite enough and the headline figure ticked higher. Higher diesel prices linked to lower fuel subsidies continue to support overall prices", said Glenn Levine, Senior Economist, Moody’s Analytics.

The core inflation (manufactured items minus food articles) fell to a 42nd month low as it stood at 2.1% in June compared to 2.43% in the previous month. Economists believe this could be a sign of worry. "The core inflation coming down suggests that there is absolutely lack of demand in the economy which is a bit disturbing trend", said Devendra Pant, director of India Ratings.

Fuel and power inflation was lower at 7.12% in June year-on-year against 7.32% in May. Petrol prices fell 7.78% compared to 4.43% fall in the previous month. Diesel prices, however, grew 22.7% compared to 21.1.

However, the wholesale inflation managed to remain in the Reserve Bank of India (RBI)'s comfort zone of 4-5% two weeks ahead of the monetary policy review on 30 June. But the higher retail inflation at 9.87% for June, created more divergence between the retail and wholesale inflation which could make it difficult for RBI to cut the policy rate.

[Austin]

Economy may grow at 6% in FY14; 9% growth my ambition: Chidambaram

The Indian economy is likely to grow at 6 per cent or slightly more for the current fiscal year to March 2014, Finance Minister P. Chidambaram said on Tuesday.

Mr. Chidambaram, who has just returned from a trip to the US where we met several potential investors, said while the American and Japan economies were showing signs of picking up, they were still far from recovery.

Germany, the European Union's strongest economy, too was in a recession, he said.

"I'll be the happiest man if the globally economy stabilizes. I want the growth of 9 per cent. That is my ambition. We will get there but as of now we need to achieve the growth rate of 6 per cent. That will be a sign that economy has stabilized," the minister said.

[Cosmo_R]

Risky bet on INR

http://in.reuters.com/article/2013/07/1 ... 4C20130716

POSCO cancels steel investment

http://in.reuters.com/article/2013/07/1 ... 0A20130716

I have a feeling they will also cancel the Odisha project.

Meanwhile, Anand Sharma and co got no takers on their recent trip to the US. There is India fatigue in the global FDI sector. No one at the individual level wants to get dead ended in endless negotiations.

[Singha]

a similar looking truck owned by "ROOTS LOGISTICS" comes to my housing colony every weekend and spends hours slowly trying to clean the streets which become dusty due to lot of construction going on in area, earth mover trucks etc.

we run for cover the moment we see it , because all it seems to do is raise a huge cloud of dust which blows in whichever direction the wind blows. some kind of tiny water sprays and round brushes below attempt to clean but seems to leave no impact on the road.

this clearly is a soln that doesnt work well in indic environment. the truck itself goes back covered in a inch thick layer of dust

[prahaar]

Political uncertainty is also a major reason for the slump and lack of interest. No one would want to play their cards before there is a government with renewed mandate. No one will spend even 1$ in long term investment with the current dispensation.

[Theo_Fidel]

Yes, I have said it before that we are the only Sub-Tropical country trying to join the First world.
Parts of Australia, Israel or Spain are the only areas that struck me as being remotely similar.
Maybe, a dust vacuum should be mounted first in front of the sweepers.
Or a separate vacuum truck to suck up the dust first could run in front of the sweeper.

The dust being flung around is a problem in the USA too. Car owners in particular gripe.
But is the street a bit cleaner after it is done?
IME it takes regular passes to get the streets clean over time.
If it only come once a month the effectiveness is going to be low.

[Philip]

We are trying to join the "first world"? All the global indicators show that we are descending rapidly below Gabon too in one survey! Just read about the state of hygiene in India.I know that one woman construction worker at home ,whom we employed for a time,did not have any toilet facilities in her home and went into the bushes every day !

http://www.guardian.co.uk/world/2013/ju ... ty-fighter

Guardian Global Development
Amartya Sen: India's dirty fighter

Half of Indians have no toilet. It's one of many gigantic failures that have prompted Nobel prize-winning academic Amartya Sen to write a devastating critique of India's economic boom.

The roses are blooming at the window in the immaculately kept gardens of Trinity College, Cambridge and Amartya Sen is comfortably ensconced in a cream armchair facing shelves of his neatly catalogued writings. There are plenty of reasons for satisfaction as he approaches his 80th birthday. Few intellectuals have combined academic respect and comparable influence on global policy. Few have garnered quite such an extensive harvest of accolades: in addition to his Nobel prize and more than 100 honorary degrees, last year he became the first non-US citizen to be awarded the National Medal for the Humanities.

An Uncertain Glory: India and its Contradictions
by Jean Dreze, Amartya Sen

Tell us what you think: Star-rate and review this book

But Sen doesn't do satisfaction. He does outrage expressed in the most reasonable possible terms. What he wants to know is where more than 600 million Indians go to defecate.

"Half of all Indians have no toilet. In Delhi when you build a new condominium there are lots of planning requirements but none relating to the servants having toilets. It's a combination of class, caste and gender discrimination. It's absolutely shocking. Poor people have to use their ingenuity and for women that can mean only being able to relieve themselves after dark with all the safety issues that entails," says Sen, adding that Bangladesh is much poorer than India and yet only 8% don't have access to a toilet. "This is India's defective development."

Despite all the comfort and prestige of his status in the UK and the US – he teaches at Harvard – he hasn't forgotten the urgency of the plight of India's poor, which he first witnessed as a small child in the midst of the Bengal famine of 1943. His new book, An Uncertain Glory, co-written with his long-time colleague Jean Drèze, is a quietly excoriating critique of India's boom.

It's the 50% figure which – shockingly – keeps recurring. Fifty per cent of children are stunted, the vast majority due to undernourishment. Fifty per cent of women have anaemia for the same reason. In one survey, there was no evidence of any teaching activity in 50% of schools in seven big northern states, which explains terrible academic underachievement.

Despite considerable economic growth and increasing self-confidence as a major global player, modern India is a disaster zone in which millions of lives are wrecked by hunger and by pitiable investment in health and education services. Pockets of California amid sub-Saharan Africa, sum up Sen and Drèze.

The details are outrageous but the outlines of this story are familiar and Sen and Drèze are losing patience (they have collaborated on several previous books) and their last chapter is entitled The Need for Impatience. They want attention, particularly from the vast swath of the Indian middle classes who seem indifferent to the wretched lives of their neighbours. So they have aimed their critique at India's national amour-propre by drawing unfavourable comparisons, firstly with the great rival China but even more embarrassingly with a string of south Asian neighbours.
indian slum An Indian boy defecates in the open in one of New Delhi's slums. Photograph: AP Photo/Kevin Frayer

"There are reasons for India to hang its head in shame. Alongside the success, there have been gigantic failures," says Sen. He is making this critique loud and clear in the media on both sides of the Atlantic ahead of the book's launch in India this week. "India will prick up its ears when comparisons with China are made, but the comparison is not just tactical. China invested in massive expansion of education and healthcare in the 70s so that by 1979, life expectancy was 68 while in India it was only 54."

Sen and Drèze's argument is that these huge social investments have proved critical to sustaining China's impressive economic growth. Without comparable foundations, India's much lauded economic growth is faltering. Furthermore, they argue that India's overriding preoccupation with economic growth makes no sense without recognising that human development depends on how that wealth is used and distributed. What's the purpose of a development model that produces luxury shopping malls rather than sanitation systems that ensure millions of healthy lives, ask Drèze and Sen, accusing India of "unaimed opulence". India is caught in the absurd paradox of people having mobile phones but no toilets.

Even more stark is the comparison with Bangladesh. "Our hope is that India's public policymakers will be embarrassed by the comparison with Bangladesh. On a range of development indicators such as life expectancy, child immunisation and child mortality, Bangladesh has pulled ahead of India despite being poorer.'

What makes this comparison so powerful is that Bangladesh has targeted the position of women not just through government policy but also through the work of non-governmental organisations such as BRAC and the Grameen Bank. As a result, there have been astonishing successes, says Sen, such as a dramatic fall in fertility rate and girls now outnumbering boys in education. All this has been achieved despite having half the per capita income of India.

Other impoverished neighbours such as Nepal have made great strides, while even Sri Lanka has kept well ahead of India on key indicators despite a bitter civil war for much of the last 30 years. Drèze and Sen conclude in their book that India has "some of the worst human development indicators in the world" and features in the bottom 15 countries, along with Afghanistan, Yemen and Pakistan. Seven of the poorest Indian states account for the biggest concentration of deprivation on the globe.
India, Kathputli Street scene in Delhi's Kathputli colony, where the houses have no running water, electricity or sanitation. Photograph: Donatella Giagnori/LatinContent/Getty Images

After this blizzard of facts and figures – and the book is stuffed with them – one might fear reader despair, but the reverse is true. This is a book about what India could do – and should do. Kerala, Tamil Nadu and Himachal Pradesh are held up as good examples of how social investments from the 60s to the 80s have reaped dividends in economic growth. What holds India back is not lack of resources but lack of clear-sighted, long-term policies and the political will to implement them. Sen (still an Indian citizen) is optimistic, pointing to the political mobilisation following the rape of a young woman student on a bus in Delhi last December, which led to the rapid adoption of new measures to combat violence against women. The consciences of the Indian middle classes can be stirred, and, when they are, political action follows.

But he admits "intellectual wonder" at how it is that more people can't see that economic growth without investment in human development is unsustainable – and unethical. What underpins the book is a deep faith in human reason, the roots of which he traces to India's long argumentative tradition going as far back as the Buddha. If enough evidence and careful analysis is brought to bear on this subject then one can win the argument, and it is this faith that has sustained him through more than five decades of writing on human development. It was his work which led to the development of the much cited UN's Human Development Index.

Influential he has certainly been, but he acknowledges he still hasn't won the argument. To his dismay, there are plenty of examples where people seem set on ignoring the kind of evidence he stacks up; in passing he asks: "How can anyone believe austerity with high levels of unemployment is intelligent policy for the UK?"

He laughingly comments that colleagues say his thinking hasn't evolved much, but he dismisses the idea of being frustrated. All he will concede is the astonishing admission that he wishes someone else had written this book on India. "There are a number of problems in philosophy which I would have preferred to tackle – such as problems with objectivity. But this book had to be written. I want these issues heard."

He says that the Nobel prize and the National Medal from President Obama may be "overrated" but they give him a platform, and he unashamedly uses it – giving time to media interviews and travelling all over the world to deliver speeches. That has led to compromises on the intellectual projects he would have liked to pursue, but life has been full of compromises ever since he narrowly survived cancer as an 18-year-old: there are all kinds of food he cannot eat as a result.

He is an extraordinary academic by any account – a member of both the philosophy and the economics faculties at Harvard – and is helping to develop a new course on maths while supervising PhDs in law and public health. He has plans for several more books and no plans to slow down. Mastery of multiple academic disciplines is rare enough but it's the dogged ethical preoccupation threading through all his work that is really remarkable. None of the erudition is used to intimidate; he is always the teacher.

Some argue that Sen is the last heir to a distinguished Bengali intellectual tradition that owed as much to poets as it did to scientists, politicians and philosophers. Sen is the true inheritor of Rabindranath Tagore, the great poet and thinker of the early decades of the 20th century. A family friend, he named Sen as a baby; the only photograph in Sen's Cambridge study is that of the striking Tagore with his flowing white beard.

But on one issue Sen admits he now parts company with Tagore, and instead he quotes Kazi Nazrul Islam, Bengal's other great poet who became an iconic figure for the nation of Bangladesh. Tagore was too patient; Nazrul was the rebel urging action. And he repeats a quote he uses in the book: "Patience is a minor form of despair, disguised as a virtue." He wants change and that means he is about to embark on a demanding tour of Indian cities to promote the book. The doctors have told him that if he slows down it will be irrevocable, so he's decided not to. Retirement is not an option.

[ramana]

Suraj, Can talk about AP under YSR. He encouraged the smaller towns to grow and gave lot of grant sto build and expand civic infrastructure. Sure lot was looted but you know have good admin buildings, court houses, market places, hotels in rural towns.
I expect in 20 years time the Hyderabad Waranaal road will be unrecognizable.

[Singha]

I think that sweeper truck sucks up the bigger particles or moist dust but is not effective against the fine dry dust.

[Austin]

In Mumbai I used to see these machine quite early ( 4-5 am ) in the morning cleaning the roads but later on it just stopped , BMC employed contractors to do the job of cleaning which is the case till date.

Considering roads in Mumbai have lot of pot holes not to mention dust and stone particles I think their experiment with these vehical was not too sucessful. In Indian condition a human can do the job of cleaning much better then these expensive machines.

[krishnan]

They use to employ these in marina beach stretch

[Austin]

http://www.thehindubusinessline.com/ind ... 788368.ece

Any advice to your successor Dmitry Shukov?

If you need to succeed in India you need to connect to the society. Otherwise it’s difficult to do business without understanding people’s aspirations. What I observe is that it is mentally very difficult for people who get salaries of Rs 80 lakh to serve a driver or a carpenter. I was brought up in a socialist set-up in Russia so it was easier. Good thing about Dmitry is that he has worked in many countries so I think he will do a great job here.

[Austin]

India will fully fund current account deficit: Chidambaram

New Delhi: India will "fully and safely" fund its current account deficit this fiscal year without depleting its forex reserves, Finance Minister P. Chidambaram said on Tuesday.

The deficit hit 4.8 per cent of GDP in the previous fiscal year that ended in March.

Mr. Chidambaram said he was confident of keeping the current account gap below last year's levels with some stern steps.

Copyright: Thomson Reuters 2013

[Austin]

Debt-GDP ratio likely to head south, says Finance Ministry report

New Delhi: The country's debt-GDP ratio which stood at 66 per cent in the past fiscal is expected to show a downward trend, the government said in a report on Tuesday

"The debt-GDP ratio is likely to continue to trend downward in the years ahead," the finance ministry said in the third status report on the public debt position of the government released Tuesday evening.

In FY12, the country' debt-GDP ratio stood at 65.6 per cent, the report said.

According to the medium-term fiscal policy statement, the debt-GDP ratio of the Centre is expected to come down to 42.3 per cent by FY16.

The level of debt reflects the cumulative effect of government borrowings over time, which tends to be higher for a developing economy due to the need for creating adequate infrastructure.

The debt level went up consistently during the 1980s and 1990s and the combined debt-GDP ratio of the Centre and states reached a peak of 83.3 per cent by FY04. Thereafter, this has shown a secular decline.

[Austin]

FDI cap raised in key sectors: All you need to know

[Cosmo_R]

Arcelor Mittal's response to Chidu

http://economictimes.indiatimes.com/new ... 124530.cms

[Suraj]

Considering the soft core sector IIP and inflation, ArcelorMittal has probably determined that they can use a withdrawal to force s defensive GoI to give them better terms, while the existing fall in demand gives them enough time to negotiate. At least, if I were someone like Mittal, in a position like this were demand is down and the existing terms of a planned investment aren't in my best interests, I'd do the same.

[Atish]

Arcelor is in deep shit in terms of liquidity, there is overcapacity in steel and Mittal is making a virtue outta necessity.

[Prem]

Arcelor is in deep shit in terms of liquidity, there is overcapacity in steel and Mittal is making a virtue outta necessity.

Mian Ji, You are still in Frisco and Commodities ? Any gyan about the future of strategic commod-ities like Oil ,NG etc for the near term .

[Cosmo_R]

@ Suraj & Atish ^^^. Agreed AM and Posco are merely making a virtue out of necessity. My point simply is that had the Odisha and Karnataka worthies made decisions quicker while the steel market was hot, these two would have been too far along to pull out. I also suspect that the January ruling by Odisha on captive mines had a lot to do with it.

If the AM and Posco hit further headwinds, the Jharkand and the other Odisha mill will also be put on hold. Meanwhile FDI in PRC continues unabated just Google.

[Atish]

They will make the decisions by the time the commodity supercycle is back into its long downward trend. Then they will get pennies on the dollar for which they would have got if they had not greedy and so burdened with rights of local people and the environment. The good part is the rights of local people to live exactly the lives (nasty, brutish and short) like they have lived for thousands of years will not be compromised nor the local deities and holy places be disturbed of their due reverence.

[Austin]

6.5% growth target looks difficult: Manmohan

“I would not like to make a forecast of what our growth will be in the year 2013-14. The IMF has recently reduced its earlier projection of growth rates for all countries including India, for 2013,” he said at a function in New Delhi.

“We had targeted 6.5 per cent growth at the time the Budget was presented. But it looks as if it will be lower than that,” he said.

Pinning hopes on the agriculture sector, the Prime Minister said plentiful rains so far will help revive demand in rural areas which will contribute to stronger industrial performance in due course.

“Industrial growth has not yet recovered. However, I am happy to say that agriculture looks well set to show a good performance,” he said.

The country’s economic growth has hit a decade low of 5 per cent last fiscal on account of poor performance of farm, manufacturing and mining sectors.

Highlighting the UPA regime’s performance, Dr. Singh said the average growth rate during eight years (2004-05 to 2012-13) was 8.2 per cent. This is much better than 5.7 per cent achieved in the previous eight years.

He also said that the real wages have risen much faster rate of 6.8 per cent per year in the 11th plan period as compared to an average of 1.1 per cent annually in the 10 years preceding it.

Emphasising that percentage of the population below the poverty line declined at a much faster rate of 2 per cent between 2004-05 and 2011-12, he said, the rate however was just 0.75 per cent before 2004-05.

“I think this is a record that any government can be proud of. I agree we have had one bad year. I assure you we will get out of it... I assure you we will leave no stone unturned to ensure that our economy rebounds,” he said.

Expressing concern over high current account deficit (CAD), he said the government will use all policy instruments available — fiscal, monetary and supply side interventions — to ensure reduction in the deficit, which has touched 4.7 per cent last financial year.

“Ideally we should bring the CAD down to 2.5 per cent of our GDP. It is clearly not possible to do this in one year, but I expect that the CAD in 2013-14 will be much lower than the 4.7 per cent level recorded last year. It will decline further next year,” he said.

He exuded confidence that the government will meet fiscal deficit target for the current fiscal.

“I feel we can and we should remain optimistic. The basic fundamentals of our economy are sound and healthy. We have been taking all possible measures to correct imbalances on the macro front,” Dr. Singh added.

The fiscal deficit, he said, which is the accumulated effect of the fiscal stimulus given in the past, had expanded and it needs to be reduced.

[Austin]

Forex reserves little changed at $280.19 billion as on July 12: RBI

Mumbai: India's foreign exchange reserves were little changed at $280.188 billion as on July 12 compared with $280.168 billion in the previous week, the Reserve Bank of India (RBI) said on Friday.

Changes in foreign currency assets, expressed in dollar terms, include the effect of appreciation or depreciation of other currencies held in its reserves, the apex bank said in its weekly statistical supplement.

Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund (IMF).

Next Up: Rs 65 A Dollar
Our import bill and fleeing dollars mean a very shaky rupee

[subhamoy.das]

we are now firmly in the laps of Nehuruvian model. See the comments coming out of MMS. "happy that argiculture driving growth"! , "Supply side intervention-> wishful words again when u have a high CAD" , "fiscal tools -> high TAX". They are putting all their eggs in the villages and hoping to come back to power. They are TAXING the cities and paying the villages. Same old appeasment policy of Nehru Dynasty. I hope the CITIES

[subhamoy.das]

The real reason for a falling rupee is "MIS-GOVERNANCE" of last 8 years by UPA. There is a strong correlation between currency value and governance. All top currencies are from well governed countries. When NDA and NSR was around, governance improved and so did the currency value as the faith of world investors in the currency increased. Of course UPA is trying to play it down saying all EM currencies have deflated but then India has the biggest loss!