Indian Economy: News and Discussion (Apr 1 2011)

[Suraj]

does anyone have details on Bartania's export basket ... $500b is not a small amt.

Alcoholic spirits, pharmaceuticals, North Sea oil and hydrocarbon derived products (plastics etc) are substantial industries.

Regarding Indian imports, oil and gold prices are the primary wild cards. Net of oil, we run a trade surplus. Net of oil+gold, even more so. The existing spot crude prices are not themselves a barometer of our oil bill, since the current spot price is the marginal price of the latest barrel produced, not the average aquisition costs.

I hope we invest more in the K-G basin to ramp up local crude output during crude price spikes. Further, it might be useful to collaborate with Sasol to invest in Fischer-Tropsch coal-to-oil production capabilities to utilize our low quality coal that otherwise is not used by domestic power plants that prefer imported coal.

[Singha]

I found the answer myself. nuclear reactor and parts provide a good chunk of their exports, as does aerospace, pharma, chemicals, cars, machinery and plastics.
http://www.guardian.co.uk/news/datablog ... ed-picture

but surprising thing is $25 billion industy in gems and jewelry

[Theo_Fidel]

Most of British money is made through 'Financial Services' as it remains the banking capital of the world. It is also the location of several other important international trading/service organizations, like the LSE, LME, Lloyds of London, London Futures Exchange, etc. IIRC 60% of its exports have been for middleman services such as these.

In effect they allow money from other countries to flow smoothly through, with very few regulations, in exchange for a 'small fee'.

[svinayak]

http://newyork.localme.me/hotels/indias ... -plaza-wsj

Tue Apr 10, 2012 3:00am EDT


(Reuters) – Indian conglomerate Sahara India Pariwar Ltd made an unsolicited $600 million offer to acquire the landmark Plaza Hotel in New York, the Wall Street Journal reported, citing people familiar with the matter.

http://www.reuters.com/article/2012/04/ ... 7420120410

[paramu]

Is this the hotel in which the (now in)famous Plaza accord was signed with Japan?

[Katare]

does anyone have details on Bartania's export basket ... $500b is not a small amt.

Alcoholic spirits, pharmaceuticals, North Sea oil and hydrocarbon derived products (plastics etc) are substantial industries.

Regarding Indian imports, oil and gold prices are the primary wild cards. Net of oil, we run a trade surplus. Net of oil+gold, even more so. The existing spot crude prices are not themselves a barometer of our oil bill, since the current spot price is the marginal price of the latest barrel produced, not the average aquisition costs.

I hope we invest more in the K-G basin to ramp up local crude output during crude price spikes. Further, it might be useful to collaborate with Sasol to invest in Fischer-Tropsch coal-to-oil production capabilities to utilize our low quality coal that otherwise is not used by domestic power plants that prefer imported coal.

You think india spent more than $185 billion in oil import? Seems high to me? I think US spends ~$250 Billion a year for it's 50+% oil import requirements.

[Suraj]

Commerce Ministry April 2 2012 press release (PDF):

"Oil imports during February, 2012 were valued at US$ 12659.9 million which was 39.45 per cent higher than oil imports valued at US$ 9078.4 million in the corresponding period last year. Oil imports during April-February, 2011-12 were valued at US$ 132560.4 million which was 41.00 per cent higher than the oil imports of US$ 94011.4 million in the corresponding period last year.

Non-oil imports during February, 2012 were estimated at US$ 27121.7 million which was 13.50 per cent higher than non-oil imports of US$ 23895.0 million in February, 2011. Non-oil imports during April - February, 2011-12 were valued at US$ 301599.4 million which was 24.89 per cent higher than the level of such imports valued at US$ 241490.7 million in April - February, 2010-11."

Extrapolating Feb data to March suggests fiscal year oil bill of ~$145-150 billion. My reference to running a merchandise trade surplus net of oil was from trade data for 2010-11; it seems non oil imports have risen enough that we still have a merchandise trade deficit net of oil, though we probably still do have a surplus net of oil+gold . But I cannot find the data on the messy Commerce Min site.

I understand that the oil bill data seems anomalous, but that is our gross oil bill. We are a major petroleum refining hub, and data shows we exported $45 billion worth of refined pertroleum in April-Dec 2011, which extrapolates to ~$60 billion for the full year. That puts the net oil bill for domestic consumption at ~$90 billion. The ability to buy cheaper Iranian crude in Rupees and sell refined output in petrodollars should make the numbers even better.

Bridging the trade deficit gap will take a concerted effort to incentivize value added exports and encourage raw material imports. We are often doing the reverse, by encouraging exports of iron ore and other resources and importing large quantities of luxury goods. That is not good mercantile policy.

More data from the Commerce Min database:
Top 5 imports for Apr-Dec 2011:

Code: Select all

Commodity       Value($billion)
CrudeOil         109
Gold             42
ElectronicGoods  25
GemsStones       23
Machinery        23

Extrapolating oil+gold for the full year gives me ~$200B for the two of them, so that net of oil and gold bill, we do run a trade surplus (since deficit is $185B), though that is a statistical figure, since part of the crude oil imports feed the refined oil exports.

[Singha]

london also has the AIM exchange. where smaller cos unable or unwilling to meet some US accounting norms & fees can choose to list instead. many american cos do it.

[abhischekcc]

Britain position as a significant financial center allows it to manipulate global commodity prices to meet its geo-political objectives.

-----------

AIM is primarily directed at developing countries - esp India and China.

-----------

Commodity Value($billion)
CrudeOil 109
Gold 42
ElectronicGoods 25
GemsStones 23
Machinery 23

Nice table - shows exactly what needs to be done, and what can't be touched.

Crude oil and Gold are minerals - we just don't have enough of either. Either we find alternative sources of energy (or substitute for gold) or we maintain these deficits.

GemsStones are imported, but mostly for value addition and then re-exported.

That leaves Electronic goods and Machinery. This is within our grasp to reduce. Some studies have shown that India' 'electronic deficit' will grow to USD 480 billion (by 2020, IIRC).

[Singha]

I am not sure the AIM is a purely developing co play. its for small cos and has less fees and more liberal accounting norms to meet than a big exchange like nasdaq or nyse .... a lot of american startup or medium sized cos would listed on the AIM.
http://en.wikipedia.org/wiki/List_of_Al ... _companies

[Aditya_V]

abhishekcc- regarding Gemstones, while I agree some of it is exported, I think a large portion also gets used up in India's Jeweelery Business.

[Singha]

trip report from shanghai and nanjing from a family member:
- their cities are light years ahead in term of infra - roads, bridges, parks, CBD shakina effects based netcentric warfare
- business hotels are good and a little cheaper than comparable in india
- bullet train runs around 350-380kmph range between major metros and very impressive esp for kids
- the rural areas are not that better than india, non-shakina old tiled roof houses, so-so streets....
- branded intl brands cost the same as india , hence not so affordable and doesnt make sense to buy there
- chinese people themselves are quite skeptical of the fakes but buy them for affordability just like indic people, they advise against buying any nakli electronics
- lots of wholesale type markets for branded fakes everything for iphone (3K) to rolex(800) to bags/shoes/sports clothing...all these stuff are sold in india for a 50-100% markup so its much cheaper there
- their engineers are pretty good and work very hard
- their assembly line workers very disciplined and time conscious, if a visiting delegation is being shown around, nobody even looks up. in a words of a khan engg who has done time both there and in india plant the india workers ask much more how/why questions and tend to interact, but not as productively time conscious. the chinese workers dont question the bosses, they do as they are told and are on the dot in terms of delivery
- their manufacturing parks are huge, albeit not so shakina in terms of general look and feel compared to the CBD areas
- the railway stations in major city areas are better looking than our woeful airport terminals like BIAL.
- they built a 30km across the sea bridge from shanghai to ningbo in a 3rd of the time it took for the bandra worli sealink which is way shorter.

so we have a whole lot of stuff from jimmy choo bags to adidas nakli tees to nakli skagen watches which relatives will get. the food products like pickles and sauces brought back look at same std of packaging and printing as the pickles and sauces here....so no difference there.

iphone is very popular there. it costs a lot but people view it as a prestige buy - just as here.

this is unvarnished observation, some good some bad.

facebook is banned there as are other social network sites

[Suraj]

Urban growth is a function of strong local level political administration together with devolution of financial power at the local level. Their system channels CPC growth trajectory starting from either prefectural level administration or city level (for the big cities). Further, their urban areas do not serve to cross subsidize the rural catchment areas surrounding it. Even more importantly, rural->urban migration has been controlled for a long time (even if hukou is being relaxed now) enabling urban resource allocation that is not constantly snowed under by a tide of immigration.

As much as Indian cities are further behind in hard fixed assets now, it's not nearly as insurmountable a gap as it would seem now. Legislative changes strengthening local governments and enabling cities to channel more of their revenues into developing themselves, as opposed to rural vote banking, will rapidly change Indian cities. The growing urban:rural demographic share will be a natural driver of that.

[Theo_Fidel]

My experience with young engineers in India, under 35 crowd, is that they are the smartest and hardest working bunch I have met. They are not opposed to 16 hour days and hardship postings. It is the old Govmint mall PWD fuddy duddies I have trouble with. Unfortunately they are every where.
--------------------------------------------------------

From my experience India and China are fundamentally different systems.

In China the government hoards wealth and power and directs how everything is done. For instance they have completely transitioned to international building standards because the CPC told them to. Things look nice because the existing stuff was demolished, people kicked out and new constructed in its place. The reason people don't talk back or even look up is fear. Chinese fear their bosses, fear the police and fear the government.

In India things come from bottom up. Investment is based on wealth of the people. Parts of the city where people have money look like Paris, parts where people have no money look like Somalia. For instance we would like to raze the Mumbai airport and build new but that drama is ongoing. As the people get richer the cities and towns are getting to look a lot lot better as well. We are a 'high context' organic country. Improvements will take place in-situ. Improvements will begin wholesale when our per capita hits $5000. Historically that is when Europe started cleaning up its streets as well. The quality of our streets will be directly linked to the quality of our people.

In terms of urban planning and CBD, the idea of demolishing existing dense organic towns for sanitized concrete boxes is an old tired and failed concept. China has not learned that lesson yet. Pruitt Igoe looked neat and sleek when it was built too. Much better for long term, I'm talking 2000 year type societies, to grow organically and maintain high density. We need much better transportation for this, hence all the new metros. For a Chennai type city we need the following.

- Rs 1000 Billion ($20 Billion) Full metro
- Rs 250 Billion ($5Billion) Better sewer systems. Need to build large, 3 meter size, man accessible sewerage system. Need full sewer water treatment.
- Rs 500 Billion ($10 Billion) Full water supply and recycling system. 80% of wall water should be processed sent through wetland and re harvested for reuse by city.
- Rs 1000 Billion ($20 Billion) Fully underground electric supply. Preferably in man accessible tunnels.
- Rs 500 Billion ($10 Billion) Full street traffic engineering. From curbs, to sidewalks to planting to traffic lights to cameras.
- Rs 500 Billion ($10 Billion) Full Architectural controls in terms of color, grants for repainting and repair and demolition of condemned structures. About 0.5% of a city is condemn worthy every year.

Total bill $75 Billion. Present Chennai corporation budget ~ $1 Billion. So 75 years. Sigh!

When per capita is $5,000 Chennai corporation budget will be $5 Billion per year. So 15 years for full overhaul.

India needs to keep density, low scale and do the engineering necessary to make it work.

[Singha]

i was going through a tourist map of shanghai..the folding glossy types you can pickup in US cities, sponsored by hotels and restaurants. the gloss, paper quality and printing is modelled on khan maps, so is the map itself...there is a grid of elevated expways in the city with dropdowns to street level using cloverleafs at certain places...the metro is extensive. seems to be a vast number of high quality business hotels in that city. they must have reached parity or crossed HK and singapore in terms of business travel and tourism.

even if we dont bulldoze the old neighbourhoods which is not possible in india nor humane, it cannot be argued that we dont need high quality expways and ring roads as well as metros...we need them more than china because our cities have many high density areas.

[Suraj]

Shanghai is a special case in PRC (outside of Beijing). It has long been a center of political power, and received top down patronage to build out from the early 1990s, with the entire PuDong (Huangpu river east bank) marshland set aside for development into what is their main skyscraper area now. I recall reading back in the early 2000s that gross investments in Shanghai had totaled $100 billion by then, so it's not surprising it looks like what it does now.

If we realign our political growth track from rural votebank driven personalities to those who rise up party ranks for having built up the cities they ruled, then we'll see exactly the same kind of city vs city growth competitions that they see in PRC. As it stands, at the local/city level there simply isn't sufficient political clout that leads directly to greater national political visibility. Like I said, when there are more city-dwellers to appeal to, political imperatives will align themselves with urban economic demands.

[Theo_Fidel]

One thing I wish India would get better at is stealing technology.

In Wuhan I was standing at a pedestrian corner when I noticed that the traffic/pedestrian sensor system was a straight knock off of an proprietary system in USA that cost $400,000 a pop. Yet there it was at every dinky meaningless little intersection, knocked off by some Chengdu company with undoubtedly a rock bottom equipment sale price of sub $10,000.

If stolen first world equipment were so cheap in India the costs to upgrade would drop dramatically.

[Bade]

^^ Why wouldn't a JV with some Indian firm bring down the prices if components are sourced entirely locally in India. The lower price or profit margin can be compensated by volume isn't it for the patent holder firm in the west.

[Theo_Fidel]

Bade,

To make it truly cheap you have to steal the entire thing. We should get over our squeamishness about this. After all without our special process patents there would be no Indian pharma sector.

USA company is not going to sell it for $10,000 when it can sell it for $400,000 in USA. That $400,000 includes testing, code compliance, insurance/liability, regular system checks, maintaining spares and install maintenance by highly trained engineers. No way it allows a foreign company to license its technology and sell it for less. This would be management suicide. It is by stripping out all this IP costs that you can build for cheap. Best of all would be steal a couple of the best engineers along with all the equipment information.

If we want to rebuild our cities quickly we should steal as much as we can before the West clamps down. After all Panda has set the precedent and suffered zero consequences.

[Bade]

Or buy from the Panda at $10k and steal it from them. One level away and cheating panda has lesser consequences perhaps for other high tech items one wants to source from the US.

[Rupesh]

Total bill $75 Billion. Present Chennai corporation budget ~ $1 Billion. So 75 years. Sigh!

$1 Billion seems very low for Chennai considering that BMC has a budget of Approx $7 Billion. Is the tax rate in Chennai much less than in Mumbai

[Theo_Fidel]

One level away and cheating panda has lesser consequences perhaps for other high tech items one wants to source from the US.

Except instructions and tech manual come in Chinese. This particular complication caused no end of grief at Delhi T-3 glazing system.
-------------------------------------------------

$1 Billion includes both Corporation budget and State Govt grants for things like Metro. BTW Mumbai is still Octroi central. IIRC 1/3 of all income comes from it. It is low in Chennai because Chennai folk are poorer than Mumbai folk.

It is a lot of money for Chennai people. If population is 10 million it is roughly Rs 5000 per individual or Rs25,000 per family of 5. Its a lot. We need the per capita income to increase to Rs 250,000 per person before we ask them to pay 10% or Rs25,000 per person or ~ Rs100,000 annually to corporation.

[Singha]

the chinese are getting better at servicing global clients as they move out into export mode for the products. their manuals, training, field engineers will only get better. and developing countries being cost conscious, it is very tough in many sectors for developed countries to compete when it comes down purely to price. plus china exim bank is willing to extend generous soft loans, because they know once they get a footprint its a done deal for 10-20 yrs as sunk costs, EMI schedules and upgrades will ensure incumbency.

whatever took singapore and HK probably decades to clean up, they have shown can be done in 10 yrs.

[arun]

X Posted from the Indian Missile and Munitions Discussion thread.

Today is also a day Aryabhatta onboard Salyut-1 was launched.

Today’s news is also that India became the worlds third largest economy in PPP terms per IMF data.

That should be a gob stopper for those who will be shortly, if not already have, come crawling out of the wood work seeking to belittle the great stride taken by the launch of Agni V by pushing poverty:

India overtakes Japan to become third-largest economy in purchasing power parity

[gunjur]

Apologies if already posted
India-Asean deal struck over differences

POINTS OF DISCORD
* Countries like Indonesia & Philippines oppose liberalising their services markets for India
* Countries like Thailand & Malaysia ready to offer more access to services market to India alone
* Philippines feels India is a competitor in the business process outsourcing space

Philippines, one of the bigger members of the bloc, feels India is a competitor in the business process outsourcing (BPO) space.

[gakakkad]

Except instructions and tech manual come in Chinese. This particular complication caused no end of grief at Delhi T-3 glazing system.
-------------------------------------------------

$1 Billion includes both Corporation budget and State Govt grants for things like Metro. BTW Mumbai is still Octroi central. IIRC 1/3 of all income comes from it. It is low in Chennai because Chennai folk are poorer than Mumbai folk.

It is a lot of money for Chennai people. If population is 10 million it is roughly Rs 5000 per individual or Rs25,000 per family of 5. Its a lot. We need the per capita income to increase to Rs 250,000 per person before we ask them to pay 10% or Rs25,000 per person or ~ Rs100,000 annually to corporation.

What is the annual household income of Chennai ? Most urban areas have a considerably higher income than the national average.

I have got data from 2007-08 .surat/delhi ahmedabad and chandigarh ,a'bad and bombai. Annual household income in 07-08 in these cities was 4 lakh plus.. (Highest surat 4.6 lpa).. Assuming a CAGR of 20% , in 2012 the annual household income in these cities is about 7-8 lakh per annum , which is ABOUT US $ 15K-18K pa .. Now the average household income in Khanate is 45k...Assuming that the current growth rate in India continues , and in all probability ,it will many indian cities will have khanate level annual household incomes in a few years time.. Yet it is highly unlikely that they ll have khanate level infrastructure .. (except perhaps Surat . A'bad) ..I agree with Suraj that GOI sinks money in rural area..

http://www.sify.com/finance/surtis-inco ... fbjfg.html

I

[gakakkad]

OP-ED

What spoils India’s next generation reforms

Even as the world becomes more competitive, India’s star has dimmed in the last few months, as our governance is besmirched by corruption scandals and our macroeconomic health has deteriorated. Alarm bells should sound when domestic industry no longer wants to invest in India, even while eagerly investing abroad.

•1) Raise fuel prices to international levels in a set of quick steps, then completely deregulate them. Announce this as soon as politically possible, and do not roll back.

••2) Resolve the commodity bottleneck in a way that does not give a windfall or bailout to any party, least of all the private promoters, but that ensures these projects/plants can resume production. If necessary, write down the equity of these promoters before restructuring bank liabilities.

•••3) Be kinder to foreign investors – they are not the enemy but a necessity -- we need their money to fund our spending to the tune of 4% of GDP. No doubt, however badly we treat them today, they may eventually want to be in India, but crisis are always about timing. We need them now, when India looks increasingly tattered compared to alternative investment opportunities, not five years from now when growth recovers.

longish article..but summarises the problems we face..

[Abhijeet]

I think the key line in that Sify report is this:

The average household income of Surat, adjusted for cost of living in the city, is around Rs 4,57,671, while the same in Chandigarh is Rs 4,22,503, Mumbai Rs 4,03,059 and Delhi 3,37,678, followed by Ahmedabad at Rs 3,28,267.

This seems like a PPP type number, not a nominal figure.

I would be very surprised if either the median or mean household income in any Indian city is close to Rs. 8 lakh.

[gakakkad]

Nope...Other way round actually ..PPP is never in local currency..always in dollars.. "Adjusted for living in a big city" means that the income has been reduced as the cost of living in a big city is higher..they are comparing rupee in city with rupee in village ..

There is nothing surprising about this. Median household income in India is 2 lakh as per National health and family survey.. Indian cities will obviously be richer than the national average.

w.r.t Surat 8 lpa is a gross underestimation due to underdeclared /black income ..actual number may well be double .

[Yogi_G]

Nope...Other way round actually ..PPP is never in local currency..always in dollars.. "Adjusted for living in a big city" means that the income has been reduced as the cost of living in a big city is higher..they are comparing rupee in city with rupee in village ..

There is nothing surprising about this. Median household income in India is 2 lakh as per National health and family survey.. Indian cities will obviously be richer than the national average.

w.r.t Surat 8 lpa is a gross underestimation due to underdeclared /black income ..actual number may well be double .

At a nominal Per capita of 1500$ per Indian and with dollar taken at 50 rupees, an average household should be 3 lakhs (75,000 * 4). 2 lakhs sounds from quite some time back.

[Abhijeet]

I have no information specifically about Surat. But if the median household in an Indian city earned Rs. 8 lakh or $16,000 per year (remember, this means 50% of households will actually earn more than this) -- we would see it in the consumption numbers. Basic stuff like refrigerators (those refrigerators again!), airconditioners, cars, as well as more first world things like iPhones.

For comparison, the median household income in Beijing is something like $11,000. No consumption figures even from the richest Indian cities are comparable to Chinese levels yet.

Extrapolating from a narrow, unrepresentative sample of one's own acquaintances (all the people I know are rich so everyone else must be) is not useful.

[Rupesh]

Extrapolating from a narrow, unrepresentative sample of one's own acquaintances (all the people I know are rich so everyone else must be) is not useful.

who is extrapolating from narrow sample. Assuming a GDP of 1700 Billion $$ gives a per capita income of $ 1400.00 thats approx Rs 70,000.00 Family of 5 its 3.50 lacs. Nothing surprising in some cities having twice the national average income.

[gakakkad]

Abhijeet , what consumption figures are you referring too ? Any particular stats you could point me to ?

India has a per capita household savings of close to 40k INR..The household saving rate is amongst the highest in the world. (34.5%) ..Savings rate in amreeka is about 2.5% only..So savings might be a better assay of per capita income in a country like India..looking at the savings the income seems very believable..

Extrapolating from a narrow, unrepresentative sample of one's own acquaintances (all the people I know are rich so everyone else must be) is not useful.

I ll talk about my cousins housemaid in baroda..Baroda is not as wealthy as surat or ahmedabad and cousin lives in a middle class area..The housemaid does 4-5 houses @ 1500/house .. Her husband is a taxi driver who maks 10k pm . monthly household income is 17500 ,bringing the household income (couple + 2 children) to about2 lakh inr. Housemaids and drivers form the bottom decile in the terms of income ..if not the bottom decile , at least the bottom quartile ..

And the housemaids family has a BPL card even though they strictly don't qualify...

So we can probably say that (even though I am extrapolating) the bottom 10-20% household income in major indian cities is 2 lakh..Now the data point we have is the NFS survey which places the bottom 10% at 80K for the whole country.. Since 50-60 Indian cities are far twice as rich as rest of the country the above figure seems believable..

[vera_k]

^^

What is the distribution of this income? Gabbar Singh living in the same colony as Sonia Gandhi does not mean Gabbar's income is now in the billions as well.

[gakakkad]

income distribution has been posted by neel in page 64 of this dhaga

I ll repost it

The real news, aside from the welcome improvement in the sex ratio, that I take from this is that the household income distribution is:
9%ile = Rs. 90000
50%ile = Rs. 170000

In contrast, the consumption levels reported in the 66th round NSSO CES are (at 2009-10 prices):
10%ile ~ Rs. 31000
50%ile ~ Rs. 54000

With a 25% household savings rate, that implies a reported income of:
10%ile ~ Rs. 40000
50%ile ~ Rs. 70000

Even assuming that there has been 20% inflation since 2009-10 still puts the reported income at:
10%ile ~ Rs. 50000
50%ile ~ Rs. 85000

If I am interpreting these results correctly, unless these households are engaging in significant non-consumption expenditures that are not considered savings (although I was under the impression that such a thing was impossible by tautology), the household income numbers in these reports are inconsistent by at least factor of 2. Since, IIRC, the 90k and 170k numbers come from Kinsey Consulting, who did their own assessment of income levels, I would be inclined to believe a 50% under-reporting to NSSO, but it is possible that this is not the case. This has important implications for GDP estimation, since, if the under-reporting is really a factor of 2 in the informal sector, the actual GDP per capita is ~35% higher (since the informal sector produces ~70% of the output) even without any under-reporting in the formal sector. It also has important implications for poverty estimations:

The Tendulkar Commission's definition of the poverty line (i.e. enough that one could to afford, if one were so inclined, to purchase the basic level of every category of consumption at normal prices) was Rs 19.02 per capita per diem in urban areas and Rs 14.68 per capita per diem in rural areas at 2004-05 prices. Since the price level in 2011 as measured in the basket of everything produced in India (i.e. the GDP deflator) has increased by 56.37% relative to that base year, we can estimate the current price of the poverty line basket (PLB) to be Rs 30 per capita per diem in urban areas and Rs 23 per capita per diem in rural areas. Rs. 30 per capita per diem is Rs. 11000 per capita per annum and Rs. 23 per capita per diem is Rs. 8400 per capita per annum. Assuming a 5 member household, Rs. 11000 per capita is a household consumption level of Rs. 55000 and Rs. 8400 per capita is a household consumption level of Rs. 42000. So, if we believe Kinsey over NSSO, and assuming that the inflation in the PLB has been ~the same as the GDP deflator, although this assumption was incorrect enough that the bulk of the actual Commission report is spent explaining an alternate methodology to measure inflation in the PLB, the actual fraction of the population living in households that cannot afford the PLB is significantly less than 9%.

[gakakkad]

further from 2004-2005

http://www.ncaer.org/downloads/MediaCli ... rworld.pdf

According to the NSHIE, the 205.6 million households in India are 70 per cent rural and 30 per
cent urban. Earners compose of a quarter of the population. The average household in India
had an annual income of Rs 65,401 and expenditure of Rs 46,558 in 2004-05. This means that
Rs 16,483 was available for savings and investment. Income levels in urban areas were 85 per
cent higher than that in rural areas, and the average urban household saved double that of its
rural counterpart.

In 2004-2005 the Average household income was 65k ... Assuming a CAGR of 15% since then , the household income in 12-13 will easily be close to 2 lakh per annum...further urban household income was double that of rural back then..today the difference will be even wider ...So for top Indian cities a median household income of 8 lpa is very much conceivable..

[Roperia]

India and the World: Short and Medium-Term Prospects

Pranab Mukherjee, Finance Minister of India
Chandrajit Banerjee, Confederation of Indian Industry
Arvind Subramanian, Peterson Institute for International Economics
Peterson Institute for International Economics, Washington, DC

[Aditya_V]

Looks like West Bengal is a sick state with irrepairable damage done in 20 years of left rule.

10 more years of UPA rule and the entire country will be like this, it will take atleast 15 years and not 5 years to get out of such situations



Interest burden: Mamata issues 15-day ultimatum to Centre

“How can I carry out development work, pay salaries and allow people of Bengal to live if the income is Rs 21,000 crore and interest payout is Rs 22,000 crore”, Ms. Banerjee asked.

[tejas]

Perhaps Didi should make WB even more business unfriendly than it already is, that should help things. These useless regional parties will be the death of India. She should be told to go straight to hell. Hard to believe anyone could equal the Commies in incompetence/uselessness but she has managed to do it. Wonder how NaMo manages despite being the UPAs biggest bete noire?

[Theo_Fidel]

What is she talking about AFAIK total State revenues were in the Rs 650 Billion range. Contrast this to say Gujarat with state revenues of Rs 1,350 Billion range despite GSDP of the two states being roughly equivalent. Of course per capita of WB is lower. This is the key problem. Resources for investment is not being raised because DIDI is even more poverty friendly than the Commies in refusing to work on improving tax collection. No taxes = No public investment = poor business environment.

While WB residents shake their head and make fun of her, She reminds me of KK & AMMA during their first stints. They too were completely clueless and made jackasses of themselves. Eventually they settled down and now TN is relatively one of the better run, taxed and invested states. But there was a stretch in there where TN was dead last in industrial investment and growth. Having met AMMA and had the opportunity to talk to her many years ago I will say she has a first class technical brain. One of the smartest people I have ever run into. Nothing, even the most complicated design issue, ever had to be explained to her twice. Sometimes intelligence can be hard to discern from just the public image. DIDI too might have a first class brain. One doesn't get to where she is by being dumb.

Unfortunately it took AMMA & KK 20+ years of crazy rule to figure it out. One hopes DIDI learns faster. Her disastrous tactic of taking on the media however is likely to be her undoing.