Indian Economy - News & Discussion 27 May 2012

Bade · Post by **Bade** » 16 Jun 2012 01:35

More power to these types. Finally the Indians are going some place.

paramu · Post by **paramu** » 16 Jun 2012 01:36

Aditya_V wrote:Can we use Goverment Term Other Community instead of Forward Community, we need to move from Upper /Lower ideology.

Or just use the community names without any attribute of upper/lower/forward/backward. Only other allowed classification should be rich/poor.

Yayavar · Post by **Yayavar** » 16 Jun 2012 05:21

Reminds me of the movie 'Bandit queen'. The dialogue in Hindi proceeds along the lines of 'Mallah, idhar aao or whatever' or 'Thakur, ...'. The subtitles on the screen show 'Lower caste, come here..' ....etc. So it will continue to depend on what one wants to emphasise for a while at least.

Austin · Post by **Austin** » 17 Jun 2012 09:18

Why can't Rupee be like the Yuan

Arjun · Post by **Arjun** » 17 Jun 2012 09:29

^A snippet from the article above:

The Rupee has lost 20 per cent of its value in the last year. Given that track record, nobody would want Rupees in their foreign exchange reserves. "The earliest that the Rupee would be in consideration for global currency status is 40 years," says Debroy. "If the UPA remains in power for long, it may take a much longer time," he adds.

VinodTK · Post by **VinodTK** » 17 Jun 2012 19:34

India's forex reserves grow to $287.37 billion

krishnan · Post by **krishnan** » 18 Jun 2012 10:55

http://www.rediff.com/business/report/f ... 120618.htm

FDI from pakisthan ?????

sum · Post by **sum** » 18 Jun 2012 10:58

^^Foreign direct Insurgents?

vina · Post by **vina** » 18 Jun 2012 11:29

Hmm. RBI didn't oblige the "boosters" who had bid up the market and bet all on an interest rate cut. Those guys are having their Mushrrafs roasted right now.

svinayak · Post by **svinayak** » 18 Jun 2012 13:10

http://www.bloomberg.com/news/2012-06-1 ... reece.html

Junk Status
“This is a shocker,” said D.K. Aggarwal, who manages about $100 million of local assets as chairman at SMC Wealth Management Ltd. in New Delhi. “A rate cut was a must because the growth was slowing. The confidence has taken a beating.”
Only four of 25 economists in a Bloomberg survey predicted the RBI’s decision, with 19 expecting a 0.25 percentage-point cut and the remainder a half-point reduction.

Gross domestic product climbed 5.3 percent in the quarter ended March from a year ago, the least since 2003, imperiling the prime minister’s goal of 9 percent annual gains to reduce poverty. Standard & Poor’s has warned it may cut the country’s credit rating to so-called junk status.

“While growth in 2011-2012 has moderated significantly, headline inflation remains above levels consistent with sustainable growth,” the RBI said today.

Inflation accelerated to 7.55 percent in May, the fastest pace in the BRIC group of largest emerging markets that also includes Brazil, Russia and China. The government’s projected fiscal deficit of 5.1 percent of GDP in the year through March 2013 is the group’s widest.

India VIX, which measures the cost of protection against losses in the S&P CNX Nifty Index, sank 8.6 percent to 23.34. The Nifty shed 1.1 percent to 5,083.65 while its June futures traded at 5,075. The BSE-200 Index (BSE200) fell 1 percent to 2,053.08. Combined trading volume on India’s top two exchanges was 694 million shares on June 15, compared with a 12-month daily average of 908 million.

Theo_Fidel · Post by **Theo_Fidel** » 18 Jun 2012 18:27

This probably means more government borrowing is in the works. By keeping interest rate high GOI prices everyone else out of the market.

RamaY · Post by **RamaY** » 18 Jun 2012 21:41

Rating agencies have herd mentality: Kaushik Basu

Who is Kaushik Basu?

Born 9 January 1952 (age 60)
Nationality Indian
Institution Cornell University, Massachusetts Institute of Technology
Alma mater University of Delhi (B.A.), London School of Economics (M.Sc./Ph.D.)
Influences Amartya Sen
Awards Padma Bhushan, 2008
The National Mahalanobis Memorial Medal (1989)
UGC-Prabhavananda Award for Economics, 1990

“Indian economy is going through a difficult time, it has enough strength to turn around,” Basu said.

Pointing out that it would take time for new economic policies to take effect, he said it would be crucial for the government to implement policy on matters like foreign direct investment in multi-brand retail.

“Now grit and determination to implement economic policies have become intertwined with the self interest of this government,” Basu said.

Now this worthie is blaming the same rating agencies that he must be using as foundation stones in his CU/MIT lectures. And he thinks the solution is more FDI and Multi-brand Retail.

Can he say about the same rating agencies when it comes to their ratings on all other entities (Govts, Corps, munis etc) and start teaching his students to ignore them?

BTW - We have had the role of rating agencies and how things can be used to influence certain trade/economic policy decisions when prophet SCM walked on BRF.

Since we are a strategic discussion forum, let us add another dimension to this character

Sushupti wrote:Sen & company (all high profile "globalists") is all set to use the "revived" Nalanda U as a
convenient tool for their own ideologies

Kalam’s letter bared truth about Nalanda University

http://www.bihartimes.in/Newsbihar/2012 ... June1.html

Murugan · Post by **Murugan** » 19 Jun 2012 09:27

Nation downgraded by cheater S&P and Fitsch - India announces $ 10 billion for debt-wracked eurozone

Hari Seldon · Post by **Hari Seldon** » 19 Jun 2012 10:46

Nothing will change unless we hit a crisis point where we (figuratively at least) have to mortgage our gold. 1991 revisited. Till then, our netas and babus can continue to brazen it out. Baghdad bob kinda statements from south block are now commonplace. "There is no policy paralysis", "there is no crisis", "we'll be back to 8% growth next quarter", "it's all global crisis only" etc.

Aditya_V · Post by **Aditya_V** » 19 Jun 2012 10:58

Hari Seldon wrote:Nothing will change unless we hit a crisis point where we (figuratively at least) have to mortgage our gold. 1991 revisited. Till then, our netas and babus can continue to brazen it out. Baghdad bob kinda statements from south block are now commonplace. "There is no policy paralysis", "there is no crisis", "we'll be back to 8% growth next quarter", "it's all global crisis only" etc.

Nothing will change until the public from all hues realise that he current dispention along with many Media and NGO personalities are very good at Politics are very poor administrators and not good for our population as a whole.

We need a change in Govt Policies, Better tax structures and above all good Implementation. all these today are lacking.

Singha · Post by **Singha** » 19 Jun 2012 12:30

collectively this admin is indeed starting to resemble that of saddam hussein in terms of disconnect from reality.

nelson · Post by **nelson** » 19 Jun 2012 22:51

Is it just a rant or there is some substance to it. Coming on the heels of pronouncement of Rajat Gupta's guilt, the post appears to be loaded.

http://www.altgaze.com/?p=454

svinayak · Post by **svinayak** » 19 Jun 2012 23:36

Gupta’s Pak link: national security issues
Manmohan Singh’s special relationship with Rajat Gupta also has national security implications considering that New Silk Route Partners (NSR) has Abdul Hafeez Shaikh, Pakistan’s finance minister, as a founding General Partner, and substantial investments in the neighbouring country.
So far nothing has been heard as to how the government has been treating NSR’s growing investments in India, such as those in the telecom sector, from national security angle.

In June 2010, Augere Mauritius, in which Gupta’s NSR is one of the investors, won a licence to operate broadband wireless access (BWA) services in Madhya Pradesh. Interestingly, there was no report of the home ministry raising national security concerns despite the fact that Augere operates in Pakistan, providing ‘Qubee’ broadband internet services in Islamabad, Rawalpindi, Lahore and Karachi. Augere launched the service in Pakistan in July 2009 and in Bangladesh in October 2009.

The same ministry had objected to UAE-based Etisalat acquiring a majority stake in Swan Telecom on the ground, among others, that the former had substantial presence in Pakistan.
{Etisalat has Pakistan army and ISI officers in the company and board.}

NSR’s other investments in Pakistan include Beaconhouse School System, which is controlled by Lahore-based Kasuri family whose most prominent member is former Pakistan foreign minister Khurshid Mahmud Kasuri.
Beaconhouse claims to be one of the world’s largest primary and secondary education (K-12) chains, with schools in Pakistan, the UK, Oman, the UAE, Bangladesh, Malaysia, Indonesia, the Philippines and Thailand.
Aster Private Ltd, another NSR company, has dealings with Huawei, the Chinese telecom company that had prompted the home ministry to raise national security concerns in the Etisalat and other cases.

Looks like NSR was used as a trap to get Pak and PRC companies into India

tejas · Post by **tejas** » 19 Jun 2012 23:47

{Deleted}

Arjun · Post by **Arjun** » 20 Jun 2012 08:16

Manmohan Pontificates

The chutzpah of this man is amazing ! He dropped the ball in the most supine manner in India, and now pontificates to Europe.

vina · Post by **vina** » 20 Jun 2012 08:25

Cross post. Vitally important

Cheap Coal is Dead, Long Live Renewables AND NUCLEAR , I must add, though the author who is from Sierra Club obviously doesn't.

But some important points raised here.

Cheap Coal Is Dead. Long Live Renewables. (Part 1)
By Carl Pope - Jun 19, 2012

“Sustainable Energy for All” is the main theme for this week’s Rio+20 United Nations gathering in Brazil. The challenge of making energy both accessible and sustainable has grown more complicated in the past year or so, and also more exciting. These are tough times for coal and other high-carbon sources of energy, while the news about clean energy is more promising.

In March, the power generating arm of India’s largest conglomerate, the Tata Group, announced that it was shifting its investment strategy from coal-fired thermal plants to wind and solar renewable projects. Coal projects, Tata said, were becoming “impossible” to develop, and investment in them had stopped.

With this declaration, one of Asia’s biggest energy players confirmed an emerging reality. The U.S., Europe, Russia, Australia and Japan all had created modern consumer economies dependent on abundant, cheap fossil-fuel energy. In the 21st century that is no longer viable; the high-carbon growth path is closing.

The reason is cost. Oil has long been expensive, because low-cost oil producers such as Saudi Arabia have learned to demand high prices by limiting supplies and refusing to sign long-term price agreements. Coal had always been different -- traded locally, on both long-term concessions and short-term spot contracts. Two years ago, China and India could supplement their domestic coal supplies with imports from Indonesia, Australia and South Africa. Some of the cheapest coal mines serving China in 2010 were in Indonesia, where India’s Adani Power Ltd. and Tata were purchasing coal mines and building their own shipping and port facilities to ensure they could supply a wave of huge new power projects.
Geologically Abundant

While coal is geologically more abundant than oil, cheap coal, close to population centers, is not. The biggest coal- producing region in the U.S. -- the Powder River Basin -- can get coal out of the ground for about $12 a ton. It costs roughly $60 a ton to ship it to power plants in the Ohio Valley. China’s vast reserves near Inner Mongolia can be mined for $25 a ton. But by the time it travels by rail across North China, then by sea to southern coastal cities, the cost rises to more than $125 a ton.

Shipping coal is more difficult and more expensive than shipping oil. Only a few coal-exporting countries are close to Asian markets; Australia and Indonesia dominate the trade. In 2011, countries with abundant accessible coal, such as Indonesia, began to demand high prices -- two times higher in fact. Coal became the new oil. An informal cartel of coal exporters emerged with the same strategic goal as the Organization of Petroleum Exporting Countries -- obtaining higher prices.

China and India, which had been counting on buying coal for $40 a ton, now find that imported coal at $120 a ton is “cheap.” Dozens of coal plants in China and India cut back capacity because of fuel costs and shortages. Indian power companies scrapped 42 gigawatts worth of new power plants. The Reserve Bank of India warned investors that coal projects were very risky. India’s largest coal company tried to raise its prices, only to be forced to back down by the government, which owns more than half of it. Eventually, Indian Prime Minister Manmohan Singh ordered Coal India to provide adequate coal deliveries for power projects in the pipeline. Coal India grudgingly agreed, but markets didn’t believe it could deliver; banks continued to refuse to lend, leading to Tata’s announcement. Meanwhile, in China, the government tried to reverse its previous deregulation of the coal-mining and transportation sectors in an effort to get prices under control, causing friction with state-owned coal mines.

Expensive Shipping
India and China, respectively, are home to some of the world’s largest coal reserves. They are the fastest-growing global coal markets. But most of their coal is distant from their booming coastal regions. Their rail systems are inadequate to ship the volumes needed to fuel existing needs, much less the growth expected by 2020. And shipping coal by rail is expensive. Most of the cost of coal is not wages, but diesel fuel used either to mine or transport it. As oil grows more expensive, it drags the price of coal up with it.

There is cheap coal in the Powder River Basin, in part because U.S. demand for coal is slumping as American power companies shift to cheaper and cleaner natural gas or renewables. Peabody Energy Inc. would love to ship its surplus Wyoming coal to Asia, if it can get it there. Peabody promises investors that it can make money shipping coal to China -- precisely because it expects the price to remain at $120 or more. But U.S. coal companies must first overcome local community opposition to shipping and loading hundreds of millions of tons of dirty black dust through West Coast ports such as Longview, Washington.

What does $120-a-ton coal mean for the development plans of India and China? At $120 a ton, electricity from coal costs about 10 cents a kilowatt-hour, before installing pollution controls. But India and China built their economic plans on 4 cents-a-kilowatt-hour power, presuming that cheap Indonesian coal would keep the price down.

Indonesia is no longer willing to be the low-cost provider; it sees China and India using imported coal to fuel industrialization and economic development, and would rather see that development taking place at home. So the island nation announced that it will impose a tax on coal exports, leading to an actual ban in 2014. If Indonesia follows through, it would pull about 320 million tons -- roughly 40 percent of the Asian coal transported by sea -- off the market, creating a power crisis for China and India (and other importers, such as Japan and Korea) that would make the shortfalls of 2011 seem minor. Even if Indonesia merely insists on keeping prices at more than $100 a ton, the cost of electricity in China’s and India’s booming, but still fundamentally poor, economies will double.

Transportation Fuel
Oil, clearly, is already too expensive to power Asia’s growing electricity demand. The price of liquefied natural gas, which most Asian nations import, is linked to oil. India and China are now aggressively seeking their own versions of the shale-gas boom occurring in the U.S. But even if they manage to increase domestic supplies, they would be shrewd to convert natural gas to a transportation fuel rather than devoting it to electrical generation.

Because as the cost of high-carbon electricity soars, the cost of low-carbon alternatives is plummeting.

China’s wind industry is eager to provide power at prices ranging from 7 cents a kilowatt-hour to 13 cents, and India’s latest solar projects are bid at 15 cents. Costs of wind and solar continue to decline. The conventional wisdom is that, because wind and solar are intermittent sources, they can’t be used to power an entire economy. It’s true that it will take some time before renewables can compete with the $40-a-ton coal that Asia had been counting on. But as challenging as the low- carbon path to growth may be, coal markets are telling Asia it has no choice. High-carbon growth not only would cook the climate. It would also derail Asia’s economies.

(Carl Pope is a former chairman of the Sierra Club. The opinions expressed are his own.)

However, WHAT Carl Pope leaves OUT is the Elephant in the room, Nuclear. Now you know why Manmohan Singh's 123 agreement and the importance it, and his determination to see it through, going to the extent of even putting his govt on line. It is THAT vital . Lets face it. There is NO alternative to India using Nuclear for a big part of it's base load. The sooner we get our act on that the better. Building more rail lines to ship coal around will be monumentally wasteful and Coal works only because that Infra cost is not borne it at all, but uses existing infra.

Sure, wind, solar etc have their niches, but there is no escaping big nuke. Lets get the thing straigthened out, put a big push in R&D into commercializing thorium and oh, let us make sure we have the seed fuel to fire up thorium by first getting the Gen 3 reactors and the fuel in place.

Singha · Post by **Singha** » 20 Jun 2012 09:28

Jaitapur and Kudankulam are the canaries in the coal mine. as you know a host of vested interests both legal and illegal are ranged against nuclear plants.

apparently it seems BDA can supply kaveri water to most of ORR but the water tanker mafia wont let it.

amit · Post by **amit** » 20 Jun 2012 13:15

Arjun wrote:Manmohan Pontificates

The chutzpah of this man is amazing ! He dropped the ball in the most supine manner in India, and now pontificates to Europe.

It's interesting to see on the one hand folks criticise this govt for "understating" India's true potential and "kowtowing" to the gora sahib. At the same time, when the govt says things like the quotes after this sentence it becomes chutzpah?

India took the G20 to task today when the Prime Minister, Dr Manmohan Singh, told the Plenary that the G20 agenda “is getting over burdened. We need to refocus on a few goals rather than dissipating energies on too many fronts.”

The Prime Minister, perhaps relishing the reversal of roles in the sermonising by Europe to developing countries, rubbed in the message saying “… liquidity must be provided in parallel with effective adjustment programmes that ensure an early return to debt sustainability’’.

Then Dr Singh delivered a pointed message to Germany. “Austerity in the debt-ridden members of the Euro Zone can work only if surplus members are willing to expand to offset contraction elsewhere in the currency area.”

I'm sorry, if I didn't know better (?) I'd think the reason for this is blinkered vision and narrow political spectrum viewpoint analysis on something that transcends petty politics. One needs to remember that this Manmohan Singh, however much we hate him, is still the PM of India and as PM he says what India wants to say - by India I mean the policy making India, which presumably includes different shades of political opinion.*

* I hope it's nobody's contention that the BJP does not agree to the rare sermon he delivered to the Gora Sahib's in this instance. (Was he too harsh and some dhotis have started shivering?)

amit · Post by **amit** » 20 Jun 2012 13:20

Singha wrote:Jaitapur and Kudankulam are the canaries in the coal mine. as you know a host of vested interests both legal and illegal are ranged against nuclear plants.

This is a point that's been made many times in the Nook thread. This artificial Nuke vs Renewables debate is a result of the clever manipulation of the coal (mining) lobby. This neatly deflects from what the real fight is: Nuke + Renewables vs Coal, as Vina correctly pointed out.

This is getting OT, more on the Nuke thread.

Arjun · Post by **Arjun** » 20 Jun 2012 13:38

amit wrote:It's interesting to see on the one hand folks criticise this govt for "understating" India's true potential and "kowtowing" to the gora sahib. At the same time, when the govt says things like the quotes after this sentence it becomes chutzpah?

The Chutzpah is obvious from his ability to say the right words on austerity to an international audience - while being entirely incapable of applying the same leadership and understanding of the economy at home, in the country he is supposed to be leading.

amit · Post by **amit** » 20 Jun 2012 13:47

Arjun wrote:
amit wrote:It's interesting to see on the one hand folks criticise this govt for "understating" India's true potential and "kowtowing" to the gora sahib. At the same time, when the govt says things like the quotes after this sentence it becomes chutzpah?
The Chutzpah is obvious in his ability to say the right words on austerity to an international audience - while being entirely incapable of applying the same leadership and understanding of the economy in the country he is supposed to be leading.

Your statement shows that what I suspected was correct (even though I hoped I'd be proven wrong). You are mixing up issues. Manmohan Singh in his second term in office - particularly after the 2G scam - has been an unmitigated disaster in economic management, that's a given.

However, that does not absolve him of the responsibility to ensure, as PM, that India's voice is heard and that includes giving a sermon to the oversmart and haughty Gora Sahibs of Oierope who have been condescending towards India for so long.

Are you making a case that since Manmohan has been a failure on the domestic front he shouldn't be lecturing the Goras of Oierope? I would have thought that would have been the reaction of a typical condescending left-leaning, China loving Gora - you know the type that trash India in Conomist-type magazines.

I'm surprised to see that this also the POV of a self professed "right-wing liberal" from India as well. Maybe there's not much difference between the two species after all ?

Arjun · Post by **Arjun** » 20 Jun 2012 14:05

amit wrote:However, that does not absolve him of the responsibility to ensure, as PM, that India's voice is heard and that includes giving a sermon to the oversmart and haughty Gora Sahibs of Oierope who have been condescending towards India for so long.

I am a little bemused you've not gotten my point.

I have nothing against him giving a sermon to 'oversmart and haughty Gora Sahibs of Oierope'...Words like 'chutzpah' and 'pontificate' are entirely reasonable on account of the fact that he has proved incapable of giving the same sermon to a certain Gori Memsahib, previously of Oierope- now President of his own party.

amit · Post by **amit** » 20 Jun 2012 14:18

Arjun wrote:
amit wrote:However, that does not absolve him of the responsibility to ensure, as PM, that India's voice is heard and that includes giving a sermon to the oversmart and haughty Gora Sahibs of Oierope who have been condescending towards India for so long.
I am a little bemused you've not gotten my point.

I have nothing against him giving a sermon to 'oversmart and haughty Gora Sahibs of Oierope'...Words like 'chutzpah' and 'pontificate' are entirely reasonable on account of the fact that he has proved incapable of giving the same sermon to a certain Gori Memsahib, previously of Oierope- now President of his own party.

As usual you do keep me bemused with your pontification and that has nothing to do with your chutzpah. Mind you I have nothing against you giving a sermon based on your "right wing liberal" POV.

I'd only like to point out that I think that what you are saying is exactly the kind of trash which a left-leaning, China loving Gora from Oierope might write in the Conomist after being stung by the fact that the PM of India, who just had his country's ratings lowered by Gora-controlled rating agencies, had the chutzpah to pontificate on what the great bearers of the White Man's burden need to do in order to get the bloated economies in order.

Well I guess there's not much difference between left leaning liberal Goras and certain right leaning liberals from India as far as a world view is concerned. I have every right to be bemused by the fact that this seems to be a fact of life, correct every time.

To whit: the PM of India has no right to preach austerity to the great Oieropean countries as he has not been able to implement what he preaches in India. We as Indians need to know our position in life.

Note:
Incidentally in case you forget, this is what you wrote originally:

The chutzpah of this man is amazing ! He dropped the ball in the most supine manner in India, and now pontificates to Europe.

In other words what right does he have to give a sermon to Europe, right?

And then you write in your latest post:

I have nothing against him giving a sermon to 'oversmart and haughty Gora Sahibs of Oierope'.

Having the cake and eating it too!

PS: My last post on this issue and so go right ahead and express how bemused you are at my response!

Arjun · Post by **Arjun** » 20 Jun 2012 14:33

If 'Practise what you preach' is way too liberal, dovish for you - would admit to being guilty of that label. End of story.

sum · Post by **sum** » 20 Jun 2012 14:43

More grim news:
PF contributions slipping, cloud over ‘pay-as-you-go’ model

Contributions to the Employees’ Provident Fund Organisation (EPFO), the country’s largest and only social security fund for formal sector workers, has slipped into negative territory for the first time in years, with officials and analysts saying that it could be yet another red flag for an already sagging economy.

The bad news is largely due to the fact that many workers have been pushed out of the mandatory EPFO net as a number of states have raised minimum wages, even though the Rs 6,500 mandatory wage limit for PF contributions in force since 2001 remains unchanged. Besides, with an increasing number of workers coming into the job force as contractual employees, they are out of the PF net.

With a Rs 5-lakh crore corpus, the fund is still the country’s second largest non-bank financial institution after the Life insurance Corporation of India. But officials feel a crisis could be brewing behind the numbers as contributions have begun to dip over the past two years, while enrolments are also turning sluggish. The trend, which was first noticed in 2010-11, is now being confirmed as the EPFO finalises its balance sheet for 2011-12.

In 2010-11, the EPFO registered a growth of just under 5 per cent in enrolment of new members to take the total membership to 6.15 crore, as compared to a growth of nearly 25 per cent in the previous fiscal. More worryingly, contributions to the Rs 4.7-lakh crore corpus dipped by close to 3 per cent in 2010-11, as compared to a whopping 70 per cent growth in 2009-10.

The Labour Ministry contends that the Finance Ministry has not taken up its proposals to increase the wage ceiling for PF deposits. “Over the years, we have sent numerous proposals to revise this limit. But the Finance Ministry has left them hanging due to the financial implications involved, said one official. The government currently provides a susbidy of 1.16 per cent of salaries (for a maximum of Rs 6,500 per month) to the EPF, which is used for payouts to the provident fund and the related Employees’ Pension Scheme. Increasing the wage cap, would entail a higher subsidy payout for the Centre as well.

Arjun · Post by **Arjun** » 20 Jun 2012 16:17

Tsk, tsk....our media seems to be overrun with these dovish, liberal types: PM’s punditry at G20 is just the roar of an economic mouse

On the other hand, some genuinely encouraging statements of intention here from the PM: India will grow faster: PM to 'impatient' investors

Addressing the domestic audience, and other stakeholders in general, Manmohan Singh said since citizens desired that the Indian economy needed to perform better, this aspiration would be met with steps like infrastructure investment and improving investor sentiment.

"Our public is impatient for a return to high growth and faster jobs creation. The fundamentals of the Indian economy remain strong and we are confident of bringing back the rhythm of high growth of 8-9 percent per annum."

He also said the fiscal stimulus that was injected in 2008 will be reversed and hard decisions taken to cut doles in areas such as fertilizers and fuels.

Lets hope he succeeds in the mission of getting back to 8-9%.

nawabs · Post by **nawabs** » 20 Jun 2012 17:43

Fitch cuts outlook on 8 Indian banks to 'negative'

http://www.thehindubusinessline.com/ind ... epage=true

These include six government banks — State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Export-Import Bank of India, and a foreign subsidiary of Bank of Baroda (New Zealand). The revision includes two leading private sector lenders — ICICI Bank and Axis Bank.

Murugan · Post by **Murugan** » 20 Jun 2012 22:22

Would there be any quid pro quo or the aid of ten billion usd is given just like that. where all the pledged money to the tune of 475 billion usd will flow in europe. how the aid will be used? To pay gazprom bills? Or pay the unemployed the doles? Or as a further aid to state run welfare programs?

What if europe cannot do better even after aid? Will be aided again? How come europe came down to this level in such a short period? which countries are most affected other than PIGS.
..?

rahulm · Post by **rahulm** » 21 Jun 2012 09:22

India: business opportunities, technology ... and martinis

vina · Post by **vina** » 21 Jun 2012 13:24

Cross Post..

Cheap Coal is Dead - part 2
World's Poor Deserve Green Energy Too

The World’s Poor Deserve Greener Energy, Too
By Carl Pope - Jun 20, 2012

With oil costing close to $100 a barrel, and most imported Asian coal about $120 a ton, fossil energy costs are crippling emerging economies in Asia and Africa. Although renewable alternatives are far less costly than they were even two years ago, they still can’t match the cheap coal and oil that Asia and Africa had counted on.

Fortunately, if Asia and Africa embrace bottom-up renewable strategies, they can restrain energy costs, while leapfrogging dirty energy into the emerging post-fossil global economy. What are bottom-up strategies? They vary based on markets and geography. What they share is a realization that not all electrons are equal; some are worth far more than others, depending, in part, on their proximity to markets. To make a renewable revolution low-cost, countries should roll out solar and wind projects, investing first in those locales where fossil fuels are most expensive (thanks in India that would mean nowhere, because fossil fuels are made equal in price, whether you live in Himalyan mountains or right outside the LNG import terminal!) .

There are 1.4 billion people without electricity, most of whom aren’t expected to have it for decades. These are the world’s poorest. Counterintuitively, they can best afford the most sophisticated lighting -- LED lights powered by off-grid solar panels. (WTF is this guy smoking. What they CAN afford is to lobby with their politico and ask the govt to give them 30 or whatever units free for their basic needs of lighting) . It is far more sensible to do that, rather than go out and by off grid panels and LED lights.

Costly Lighting

The poor already pay a lot for light, mostly from burning kerosene and candles (the poor don't WE DO, in India). The bottom 20 percent of the global income pyramid pays from 9 percent to 18 percent of the world’s lighting bill while receiving only 0.1 percent of the benefits. Over a decade, a poor family may spend $1,500 or more on kerosene; meanwhile, a decent home solar system would cost just $300, providing not only light, but mobile-phone charging, fans, computers, televisions -- all while saving more than $1,000. (err. Again, this guy is confused on WHO does the paying)

Obviously, the economics are compelling . Access to cheap electricity can increase incomes among the poor by 50 percent, while improving health and educational outcomes (ok. fair point) . Increasingly, cheap electricity will come from renewables : Global coal prices tripled from 2005 to 2011, and the price of copper more than doubled.

Two outmoded ideas stand in the way of lighting the world. One is the grid myth -- the idea that electrification requires extending a costly grid to every home on the planet. Grid power requires big, remote power plants, typically fired by coal, and miles upon miles of copper wire. (there is a logic in centralization.. reliability, back up, economies of scale, efficiency..and note, putting up millions of panels will be more expensive, costly and use more materials, including "miles upon miles" of copper wire!)

The United Nations estimates that at least half of households lacking electricity will need to be served by off- grid, bottom-up solutions. The government of India says the comparable figure for Indians is two-thirds. (When did they say that and where , infact, most of India , leaving out BIMARU is nearly fully electrified with grid power ?) Most of the proposed emerging-market investment in renewable energy is nonetheless devoted to big central solar or wind farms -- where renewables are least competitive. (ah.. the cat is out of the bag. finally)

The second myth is that renewable electrons are expensive and that the poor need subsidies to pay for them. The two major ingredients in home solar -- LED lights and solar panels -- have declined in cost even more rapidly than coal and copper have surged.

A huge fraction of the power pumped into the grid never reaches a customer in India or Africa. As much as 40 percent can be lost in transmission (ah. the basic point of confusion between "loss" and "theft" and subsidies") . Wiring a remote village in India adds $0.02 a kilowatt-hour for each kilometer, making local solar electrons significantly cheaper than those fired by distant coal plants and transmitted by copper wire . True if you are talking of supplying power to ONE house. But if you are talking of a village, it works the other way around. The marginal cost of hooking up an additional house/business /factory to the line , once it is built is next to nothing! It is precisely for that reason, distros like ConEd in highly dense areas like NYC are very profitable , just like landlines historically were. The economies of scale start kicking in very soon,even if you are supplying a small dwelling with 20 families. It is better to get those folks on the grid and you can get control on the subsidies and supply

Financing Options

For the poor, affordability has three dimensions: total cost, upfront price and payment flexibility. That’s why they favor kerosene; they can buy a single day’s supply in a bottle. Solar power comes in a panel that will give 10, even 20, years of light and power. But many cannot afford a 10-year investment or qualify for financing, which requires fixed payments regardless of season. (Of course, the global middle class does not pay for its electricity upfront, either. When I bought my house, I did not get a bill for the power plants and grid that serve it. I pay for power monthly, based on how many kilowatt- hours I use (obviously hasn't heard of a country called India. Here when you buy a plot of land, YOU pay "development" charges for road, power, sewer and everything and wait for 20 years, you MAY get it for your "sanctioned" plot.) . The developer paid for all that when the house you bought in USA was built and that is included in the price of the house you bought

Remote villages are not the only locations suited to low- carbon alternatives. In African and Indian cities, power companies routinely “load shed” -- shutting down power to entire neighborhoods on hot, sunny afternoons when air conditioners overwhelm the local grid ( (the grid gets overwhelmed due to agricultural pumpset load in summers historically, this guy doesn't have a clue). To protect themselves, businesses and the middle class rely on dirty, expensive diesel generators, storing the power in batteries and wasting as much as 25 percent of the energy in the process.

Rooftop solar panels would generate power reliably -- even when demand peaks (ah.. the sun shines magically when demand peaks.. Moreover, solar power would pay for itself with savings that would otherwise be squandered on diesel fuel and a leaky grid. Rooftop solar could end the curse of load- shedding throughout Asia and Africa -- and be profitable (is this guy even for real!) . The customers are waiting. What’s needed are suppliers and permission from power authorities for consumers to sell their excess electricity back to the local grid.

Or take irrigation pumping. Farmers lucky (or politically connected) enough to have access to the grid get cheap, or even free, power. They just don’t know when. Consequently, they buy big, cheap, inefficient pumps to flood their fields. Most of the electricity they use is wasted, along with much of the water they pump. Water tables are drained.

Reliable, efficient solar pumps, combined with drip irrigation, can improve crop yields and reduce wasted water and electricity at a fraction of the cost of forcing remote megawatts through an inefficient grid. In much of Africa, the lack of reliable electricity has led to hugely wasteful irrigation technologies -- or to no irrigation at all.
Solar Solution (okay lets put some numbers here. A 2hp / 1.5kw solar panel will set you back you around $5000! Drip irrigation by another $5000!. Just the capital costs are mind boggling, and this is for a piddly 2 HP pump. Multiply that by millions and you see why there is no economic logic in this. it is just a another way to leach subsidies and that too wastefully on a monumental scale. No farmer is going to put up that kind of capital and hope to recover that capital with a decent return if ever)

Diesel imports are a huge burden in Africa and Asia, with rural mobile-phone towers among the biggest gluttons. By 2015, there will be 1.9 million off-grid towers worldwide, all needing electricity. Replacing diesel with solar, wind or micro-hydro power would save huge amounts on imported fuel and make phone service cheaper and more reliable (another total blurb.. streams will magically start flowing near a tower, wind will always be blowing and so will the sun be shining, and all that will be "cheaper". If it were, Airtel, Vodafone and Reliance would have done exactly this long ago, rather than spend on diesel and generators) . For smaller towers, this is an obvious solution. As Joe Madden, principal analyst at Mobile Experts LLC, wrote, “In the end, a 500 W solar array and a set of deep-cycle batteries to last for several days can be roughly the same cost as a diesel generator, allowing for almost instant return on investment.”

The end of cheap coal and oil does not eliminate affordable energy options for emerging economies. It does require them to revamp their strategies and solve a variety of institutional and financing challenges they had not previously grappled with. Bottom-up strategies can be cheap. They can transform living standards in entire villages Nope, they can't. But they are rarely simple. (nope, devilishly complex)

Exactly as expected a hare brained "Kool Aid" of "simple, cheap solution" that is right there for the asking, "if only" someone would listen to us! Nothing backed by hard numbers, doesn't fit well known experience, and a total mis targeting of who/where/what.

Renewables don't work too well with the grid (they are too erratic for that) and are too expensive , except when you are targeting very small isolated hamlets ( 2 to 3 households in a remote mountain) and not very smart as a one size fits all solution to the energy problem . The grid came into being for very sane and sensible reasons, or the world wouldn't have gone to the grid in the first place, especially since the beginning of time, it was"distributed power" harvested locally (wood, animal dung, twigs , a nearby stream, windmill etc) that provided power.

VKumar · Post by **VKumar** » 21 Jun 2012 18:19

Fire in Mantralaya, Mumbai (secretariat to govt of Maharashtra). Important files related to adarsh and other properties destroyed. CM and Dy. Cm's offices gutted. firefighting going on. who will fight India's fires?

Theo_Fidel · Post by **Theo_Fidel** » 21 Jun 2012 22:42

Meanwhile....

http://www.thehindubusinessline.com/ind ... 550868.ece

After seven years of delay, the Posco steel project will start moving ahead soon as Odisha has started transferring around 1,500 acres to the Korean steel major to set up an eight-million tonne plant in the first phase, Odisha Steel and Mines Minister, Mr Raghunath Mohanty, said on Wednesday.

Mr Mohanty said Posco had also agreed to three major conditions which include employing a certain percentage of local people in the proposed plant, setting up downstream industries near the project and swapping of iron ore within the country.

“The steel firm has agreed to swap the iron ore within the State or within the country,” the Minister said.

Posco had earlier asked for swapping high alumina content iron ore found in Odisha’s Khandadhar mines, which is amid a legal row, with better quality ore from abroad.

Prem · Post by **Prem** » 22 Jun 2012 04:24

Wells Fargo looking to move some jobs to India, Philippines
http://news.yahoo.com/wells-fargo-looki ... ector.html

Wells Fargo & Co , the fourth-largest U.S. bank by assets, is looking to move some jobs outside the United States as it pushes forward with a company-wide cost-cutting program, a spokeswoman said on Wednesday.
The bank is considering sending work in its retirement division, technology areas and other business lines to India and the Philippines, spokeswoman Bridget Braxton said. She declined to say how many jobs could be lost.The Charlotte Observer reported earlier on Wednesday that Wells Fargo was preparing to outsource jobs in its institutional retirement division to India and the Philippines, citing an internal memo sent to employees.Braxton said the San Francisco-based bank could also shift positions within the United States and is examining which markets are the most "economically attractive."A global workforce could also help it meet the demands of clients worldwide who want round-the-clock service, she said.Wells Fargo had about 265,000 full-time employees at the end of the first quarter. The vast majority will continue to based in the United States, Braxton said.Wells Fargo has told investors it aims to reduce quarterly expenses by about $1.7 billion to $11.25 billion by the end of this year.The bank has said it would consolidate technology units and streamline staff functions as part of the efficiency initiative, called Project Compass.David Carroll, Wells Fargo's head of wealth management, brokerage and retirement services, told Reuters in February his business was looking at areas where it could use less expensive workers overseas, mostly for back-office processing tasks.

amit · Post by **amit** » 22 Jun 2012 06:54

Arjun wrote:Tsk, tsk....our media seems to be overrun with these dovish, liberal types: PM’s punditry at G20 is just the roar of an economic mouse

Venky is a nice chap and he writes quite well. But in this case he's making the same mistake you are making. And that is he's assuming that the PM's comments on the Eurozone was made in his personal capacity. That's a misreading of how such summits/events are choreographed. In his personal capacity I fully agree that, given his failure to get things moving on the economic front, Manmohan has no face to say these things.

However, in this case he was just the mouthpiece for Indian polity, it could have been anyone else too - L K Advani, NaMo, take your pick - if that person had been the PM.

This is a subtle but important difference. For example, ask yourself who/what is Venky alluding to when he says "roar of an economic mouse"? To say that the PM or any person can be called an "economic mouse" is laughable because it makes no sense (because economic would mean "efficient" or "economical" when used about a person). That's why most people would equate the term "economic mouse" with India's economy. Now do you agree to this assessment of the Indian economy?

However, it's obvious such nuances are lost on you, particularly when it concerns MMS and/or UPA, so choro, let's back to regular programming.

On the other hand, some genuinely encouraging statements of intention here from the PM:

Intentions do not equate action. This is a statement for which I'd criticise MMS. Nobody had doubted his intentions regarding reforms. It's his ability to carry them out, given his and his party's position in the UPA coalition that's the bugbear.

In this aspect MMS has singularly failed in the political manipulation required to get things done in a coalition set up. He's more culpable for this because he had his tutelage under the great PVNR who through out tenure as PM was actually heading a minority government. Considering the things he got done despite that, I'd personally rank him as the best PM India has had till date.

Yayavar · Post by **Yayavar** » 22 Jun 2012 11:47

"economic mouse", I thought is a sarcastic comment on Manmohan's governance and government. That he has been unable to guide India's economy correctly.