Indian Economy: News and Discussion (Jan 1 2010)

amol.p · Post by **amol.p** » 13 Jan 2010 09:54

Fiscal deficit seen below 5% next year

The government may be able to contain fiscal deficit below 5% levels in the next financial year, helped by higher revenue collections from a buoyant economy that is expected to grow at around 9%.

http://economictimes.indiatimes.com/new ... 439160.cms

Katare · Post by **Katare** » 14 Jan 2010 01:16

India bank loans up Rs 800 bn in 2 weeks to Jan 1

Some of the last pieces of recovery are falling in place, by mid year economy should be sizzling.....

Singha · Post by **Singha** » 14 Jan 2010 07:43

WSJ - sounds like PRC will be sending strict instructions to naxals to disrupt the japanese to the fullest extent

--

Japan's Steel Makers Dig India

By JAMES SIMMS And HARSH JOSHI

Japanese steel makers, facing a shrinking domestic market and increasing competition, are following their biggest customers to India—and they are digging in for the long haul.

The draw is fairly straightforward. A growing auto market, infrastructure building by New Delhi and new housing construction will add to already fast-growing steel demand, which CLSA analyst Jeremie Capron expects will rise by 10% in the year ending March 2011. The pace of growth should pick up after that to 12%, he says.

The Japanese companies, which specialize in high-quality steel, have an edge with foreign car makers setting up shop in India. Already, Maruti Suzuki, controlled by Suzuki Motor, sells half the cars bought in India. Other overseas makers, including Toyota Motor, are ramping up production there. Over the next six years, J.D. Power forecasts that the passenger-car market will jump by more than 50% to 2.8 million vehicles.

The trick is in keeping that edge. Some auto makers are shifting away from expensive, imported Japanese steel and toward substantially cheaper—thanks to lower-cost iron ore, coking coal and labor—locally produced steel. Honda Motor said it will increase the use of Indian steel when manufacturing a new domestic subcompact, starting in 2011, to reduce costs.

That means investment in local operations. A tie-up between Japan's JFE Steel and India's JSW Steel, announced last year, includes the transfer of some auto-sheet technology to the Indian company. JFE may also invest in JSW's new steel plant in east India. More recently, Sumitomo Metal Industries said it might take a stake in a project, estimated to be worth $4.4 billion, by Bhushan Power & Steel. Nippon Steel, meanwhile, has formed an alliance with Tata Steel.

The tie-ups also provide a partner better able to deal with India's infamous red tape—the kind that has befuddled others trying to go solo, like Posco.

India won't be a short-term shot in the arm for the Japanese companies. Demand at home is flagging. One key customer for Japanese steel, South Korea, is expected to become a net exporter this year.

India poses risks, too. An investment boom that leaves the steel industry oversupplied could only add to the Japanese companies' problems. Still, this is a gamble worth taking.

Write to James Simms at james.simms@dowjones.com and Harsh Joshi at harsh.joshi@dowjones.com

abhishek_sharma · Post by **abhishek_sharma** » 14 Jan 2010 09:53

It is about how clean energy would affect the economy:

http://www.foreignpolicy.com/articles/2 ... e_thinking

Further, he appointed a technologist, the Nobel Prize-winning physicist Chu, as energy secretary to oversee that investment.

...

Steven Chu came to Washington expecting to manage a massive expansion of energy R&D. Chu had cut his teeth as a research scientist at the justly famed U.S. government-funded Bell Labs, which he saw as a model because they were responsible for inventing or developing a range of devices now part of the fabric of American life, from fax machines to TV transmission, radio astronomy, solar panel cells, the transistor, calculators, cell phones, Wi-Fi, and hundreds of other technological miracles.

Chu had never bought the idea that, in Al Gore's words, "we have all the technology we need" to solve the climate problem. Instead, he told the New York Times that Nobel-caliber breakthroughs are required in chemistry, physics, and biology to make more efficient batteries, solar panels, and biofuels that can compete with fossil fuels in price, and that nuclear power is needed to displace coal.

...

The price of carbon dioxide would hover around $15 per ton -- a far cry from the $70 per ton that Chu suggested would be needed to result in significant deployment of clean energy technologies.

...
In the end, Waxman-Markey would give R&D $1.1 billion a year, less than a third of current levels, and would give coal and utility companies $32 billion.

...

Green groups insisted that the bill would reduce emissions and pointed reporters and green donors to allegedly independent analyses by the World Resources Institute (WRI). But the WRI, a major party to the cap-and-trade agreement negotiated by the EDF and NRDC with energy companies, simply used a magic accounting trick that was visible in plain sight: counting carbon offsets as real reductions of U.S. emissions.

Offsets typically fund activities such as tree planting and methane capture from landfills, and have proven over the last decade to be extremely unreliable, when they have not been outright fraudulent. The extensive offsets in Waxman-Markey would have allowed U.S. emissions to rise at business-as-usual rates over the next decade rather than declining to 17 percent below 2005 levels, as proponents of the bill claimed. Nevertheless, the WRI created graphs showing U.S. emissions magically going down 17 percent by 2020 and nearly 80 percent by 2050; the New York Times duly reprinted them; and partisans on both sides of the debate tacitly agreed to pretend as if proponents' farcical claims about the bill's mandated emissions reductions were true.

...

Rather, we need to create a new clean energy economy in the same way we created our information economy: by identifying a set of well-defined technical problems and mobilizing the human resources of our technologically advanced civilization -- our scientists, laboratories, universities, and engineers -- to solve them.

These technical questions are not difficult to grasp and in fact have already largely been laid out by Chu in his remarks to the New York Times. How do we convert sunlight into energy much more efficiently than solar panels do today? What combination of chemicals can store more energy in batteries that are smaller and lighter? How can we manufacture a next generation of self-contained nuclear reactors that are safer, smaller, and cheaper than the large ones of the 1950s and 1960s? And how can we engineer new biological organisms to serve as a cheap fuel alternative to oil?

Suraj · Post by **Suraj** » 15 Jan 2010 05:40

India’s Steel Ministry Seeks Singh’s Help for Posco Project

India’s steel ministry has sought Prime Minister Manmohan Singh’s help to secure permits to begin work on a planned $12 billion Posco steel plant this year after land disputes stalled the project first announced in 2005.

“The minister wants that this project be done as soon as possible and is seeking the Prime Minister’s help,” Raja Awasthi, media adviser to the Steel Minister Virbhadra Singh, said today over phone. The ministry has sought transfer of forest land, crucial for the project, so that work can begin. The ministry of environment approved the diversion of forest land for the plant last month and physical transfer is awaited, Awasthi said.

India’s Orissa state, where the Posco plant is situated, has received investments of about $1 billion compared with $44 billion pledged in the last five years, data from the state industries department showed. Bigger projects, including investments by Posco and ArcelorMittal, the world’s largest steelmaker, have been delayed over problems in acquiring land and getting mining rights.

In June 2005, South Korea’s Posco said it planned to set up a $12 billion steel plant in Orissa. The same year, ArcelorMittal announced a plan to set up a $10 billion mill in the state of Jharkhand and announced a similar-sized unit in Orissa a year later. The companies have now initiated talks to build factories in the southern state of Karnataka.

Posco’s Chief Executive Officer Chung Joon Yang today said the company wanted to start construction of the Orissa project this year. So far, the company has been able to secure only about 213.3 hectares (527.07 acres) of land and is awaiting transfer of 1,253 hectares from the state government.

The Economic Times newspaper today reported that the prime minister’s office, external affairs ministry and the steel ministry are trying to speed up the project ahead of the forthcoming visit of Lee Myung Bak, the president of South Korea.

This post ought to go into the infrastructure or manufacturing thread. However this is a very important topic related to the overall industrialization process. The final groundbreaking event for the POSCO plant will set the precedent for all other big investment projects to quickly get going, and once that happens we'll see a doubling of our steel output over a half-decade period.

amol.p · Post by **amol.p** » 15 Jan 2010 12:46

Rs 30,000 cr loans may turn bad in 2010

Indian banks appear to have saddled themselves with significant liabilities with a report pointing to big accumulation of non-performing assets (NPAs) in 2010.

On Monday, global rating agency Fitch warned that NPAs of banks were likely to go up by 1%. The report has made specific reference to restructured loans, saying that credit worth Rs 30,000 crore in this category alone could turn bad by next year when two-thirds of them are expected to mature.

http://economictimes.indiatimes.com/new ... 447184.cms

Early Q3 nos show sharp spike in demand

Early results for the third fiscal quarter reveal a strong revival in demand for corporate India, the only missing piece in the ‘India rebound’ story.
Had it not been for the modest performance of IT bellwether Infosys Technologies, the first 50 companies to come out with their results would have churned out a robust 40% growth in net sales over the year-ago period — the best since the quarter ended March 2007 — with aggregate profits more than doubling

http://economictimes.indiatimes.com/new ... 446534.cms

Vipul · Post by **Vipul** » 16 Jan 2010 03:22

RBI:The Harfanmaulah at 75.

Satya_anveshi · Post by **Satya_anveshi** » 17 Jan 2010 11:57

(News from capital markets not sure if you folks are tracking this here)...but kudos to SEBI for being on the job and showing some spine.

India Orders Societe Generale Stop Derivatives Trades (Update2)

Jan. 16 (Bloomberg) -- Societe Generale SA’s Indian unit was ordered to stop selling or trading offshore derivatives by the nation’s capital markets regulator, which said the bank failed to provide fair and complete information about its trades.

The Securities & Exchange Board of India gave Societe Generale, France’s second-largest bank, 30 days to reply or file an objection to the order, according to a statement posted on its Web site yesterday.

The Paris-based company is the second overseas bank to be suspended from trading derivatives by the regulator in just over a month. Barclays Plc suspended sales of its exchange-traded notes linked to Indian stocks following a Dec. 9 order. Both banks gave incorrect details on the sale of so-called participatory notes, the regulator said.

“Societe Generale completely failed in obtaining correct and complete information from the counterparties it deals with,” the regulator’s statement said. “Societe Generale is required to show cause as to why appropriate proceedings including cancellation of its certificate of registration as a foreign institutional investor should not be initiated.”

Both banks reported incorrect data on transactions involving instruments linked to shares of Reliance Communications Ltd. to Hythe Securities Ltd., according to the regulator’s statements.

Neshant · Post by **Neshant** » 18 Jan 2010 12:57

Over the next six years, J.D. Power forecasts that the passenger-car market will jump by more than 50% to 2.8 million vehicles.

there's going to be a traffic jam of biblical proportions in the years ahead.

not to mention air pollution.

ramana · Post by **ramana** » 18 Jan 2010 22:29

Politico-Econmic Op-Ed in Pioneer by Arun Nehru...

SOURCE

EDITS | Monday, January 18, 2010 | Email | Print |

Happy days are here again

Arun Nehru

The global economy is showing signs of recovery and 2010 may turn out to be a very good year. Instinct tells me that both India and China will produce surprising results in 2010 and we may well be heading for eight per cent-plus growth in the current year and nine per cent-plus in 2011. The challenges are many and, as I have mentioned earlier, the distribution of power, both political and economic, between the West and the East will acquire greater parity. Sadly, there is a sense of denial regarding this ground reality which is manifesting itself in the form of pressure points.

The changes will be dramatic as the GDP in India will grow at four to five per cent higher than the GDP in the West. By taking into account our saving rate of 35 to 40 per cent and the upward migration of 30 to 40 million into the middle class every year, we may be looking at a middle class market in the excess of 600 million in the next decade. This exceeds the population of the US and the Western world. The sensible and mature view is that in a globalised economy every country benefits from each other. In that sense it is heartening to see the developed world make significant cross investments. India too is making huge investments in acquiring assets abroad.

We must always keep the big picture in mind and try to understand the implications of change and not give in to arrogance. The challenges are many. A GDP growth of nine per cent over the next five years has serious implications for the future. We will witness an explosion of demand in every field and I will be surprised if this demand does not outstrip supply. Along with China, we will emerge as the biggest market for the global community. We have a favorable demographic ratio and for our youngsters the opportunities which exist today are limitless. We must take full advantage of the benefits of globalisation. The reality today is that no country can benefit by adopting protectionist policies. A global shift in political power has already taken place in many fields and economic and social change will soon follow.

.......

Prem · Post by **Prem** » 18 Jan 2010 23:40

First major India-China trade deal to smoothen roadblocks
http://www.indianexpress.com/news/our-i ... it/568544/
I think it will have long term economic implications.

India and China are close to firming up a bilateral trade expansion agreement, in time for Commerce Minister Anand Sharma’s visit next week, that will commit Beijing to increasing Indian participation in Chinese projects in India. It will also address the issue of easing market access for Indian companies in China. While negotiations are still under way, sources said, considerable ground has been covered towards reaching an understanding that would in many ways be the first-ever comprehensive bilateral trade agreement between the two Asian giants

Rahul M · Post by **Rahul M** » 18 Jan 2010 23:51

Vipul wrote:RBI:The Harfanmaulah at 75.

Finally, the volume is an all-male affair. How long will we have to wait for a woman Governor? Till we get the first woman finance minister, perhaps. There is one waiting in the wings, I am told.

any idea who ?

vishwakarmaa · Post by **vishwakarmaa** » 19 Jan 2010 22:27

Neshant wrote:
Over the next six years, J.D. Power forecasts that the passenger-car market will jump by more than 50% to 2.8 million vehicles.
there's going to be a traffic jam of biblical proportions in the years ahead.

not to mention air pollution.

Air pollution happens elsewhere too and its much worse.

Also, being a developing country, India has other priorities. She is not yet at that development level where she can consider such issues. Although, developed countries don't have any pressing needs of high economic growth, since most of their population is in industrialized segment and skilled. Even though, these countries take keen interest in passing blame on developing and poor countries.

So, lets rest this beast of "pollution" and not beat developing countries like India with it. Better we focus on thinking of car for every family in country and roads to villages, before worrying about pollution.

vishwakarmaa · Post by **vishwakarmaa** » 19 Jan 2010 22:32

Rahul M wrote:Finally, the volume is an all-male affair. How long will we have to wait for a woman Governor? Till we get the first woman finance minister, perhaps. There is one waiting in the wings, I am told.

Indian media is obsessed with Genders and sexuality rather than competence.

Sensibility is rare amongst Indian journalists, barring exceptions.

vishwakarmaa · Post by **vishwakarmaa** » 19 Jan 2010 22:42

By the way, traffic jams are not due to "too many cars" on roads. They are due to lack of proper roads.

So, what we need is MORE investment and stringent regulation of road-laying infrastructure companies, with penalties.

If Fed can print 1 trillion dollar and refill american banks, stock markets and companies, then RBI should learn from their western colleague.

Print 1 trillion rupee and subsidize infrastructure-building private firms on national highway projects, rather than waiting for FDI till million years.

Prem · Post by **Prem** » 19 Jan 2010 23:15

NMDC, NTPC to Help India Raise Record $5.5 Billion (Update2)

Jan. 19 (Bloomberg) -- India will sell as much as 250 billion rupees ($5.5 billion) of shares in state-run companies this fiscal year, more than half the total raised since privatization efforts began in 1991, the official in charge of the sales said.
Net purchases of Indian stocks by overseas funds totaled $17.7 billion last year, matching the record set in 2007, as Asia’s third-biggest economy weathered the global recession. JPMorgan Chase & Co. and India Capital Management Ltd. predict the benchmark Sensitive Index will rise at least 15 percent in 2010, fueled by consumer spending and prospects gross domestic product will increase 8 percent

http://www.bloomberg.com/apps/news?pid= ... wXuonXSwGs

Prem · Post by **Prem** » 19 Jan 2010 23:18

India's economy is back in business
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http://www.businesstimes.com.sg/sub/vie ... 25,00.html

India's economy is back in business

INDIA is pushing its way out of the economic crisis that has crimped growth in much of the world. Early indicators in the third quarter of India's fiscal year 2009/10 (ending Dec 31), point to a pick-up in growth in Asia's third-largest economy. Industrial production surged 11.7 per cent in November, the highest in two years, underpinned by 37.3 per cent growth in consumer durables. To boot, domestic car sales were up nearly 50 per cent in December. These numbers suggest that Indians have again started buying big ticket items. This is showing up in corporate bottom lines. Third-quarter results of such bellwether companies as Infosys and Tata Consultancy Services have beaten market expectations. Four top banks, including two government-owned ones, announced over 30 per cent net profit growth in the third quarter. The Indian government has upped its full year growth forecast to 7.75 per cent for the fiscal year ending March 31, 2010. This is well within reach; economic growth in the second quarter ended Sept 30 was 7.9 per cent - the fastest quarter of growth in 18 months for the Indian economy.

Prem · Post by **Prem** » 20 Jan 2010 23:22

Oppertunities will keep knocking for the enxt 10-20 years . Japan Said No and it learned har dway. China is saying "NO" now, ;lets hope it follow the Japanese path of deflation.

Can India lure global firms away from China?

http://business.rediff.com/column/2010/ ... -china.htm

Hence, Google needs China and not the other way around. While Google has occupied freedom's high moral ground, Beijing [ Images ] is unlikely to bring down the China walls it has built. What will be the impact of Google's exit from China on its business in India?India and China together account for over 1.2 billion mobiles of the 4.6 billion global mobile users. And India stands very high in terms of priority for global services companies, including Google and Microsoft [ Images ].A strong and vibrant democracy, ease of doing business and robust legal systems will continue to offer India an edge over China for a long time. The Indian government also may have strong IT laws (especially the amendments to the IT Act 2000 after the 26/11 terrorist attacks) but it surely does not have hackers on its payroll. But there's a huge gulf between internet users in India and China. Only about 2 million people rely on mobile internet services in India. These are known as "active" users or those who access the internet at least once a month. Compare this to 233 million (a significant number of which is active) mobile internet users in China. Moreover, in 2008, China overtook the US as the largest fixed broadband market in the world with 6.2 subscribers per 100 inhabitants -- the highest of any low or lower-middle-income economy in Asia and the Pacific. In contrast, India has around 7.6 million broadband users till date. Much of China's internet success has been driven by 3G services. In India, auctions are yet to take place for 3G.

Prem · Post by **Prem** » 22 Jan 2010 00:00

India’s Gem, Jewelry Exports Rise 45% in December
http://www.bloomberg.com/apps/news?pid= ... 38JZBo3_Ik

Jan. 20 (Bloomberg) -- Exports of gems and jewelry from India, the world’s largest supplier, rose 45 percent in December from a year earlier, driven by sales of diamonds. Shipments rose to $1.89 billion in the month, from $1.3 billion a year earlier, according to preliminary data published on the Gem & Jewellery Export Promotion Council’s Web site.Overseas sales rebounded in December from a year-earlier month when the domestic industry suspended purchases of rough diamonds amid the credit crisis and global recession. Exports may rise as much as 5 percent in the year to March 31, 2010, Vasant Mehta, chairman of the council, said today. “Considering the recessionary climate, demand is good in the western world,” he said in an e-mail. “Growth in 2010-2011 depends on how soon the recession comes to an end.”

Exports in the April to December period climbed to $19.6 billion from $19.1 billion a year earlier, the council said.

svinayak · Post by **svinayak** » 22 Jan 2010 04:04

{Deleting off-topic 'XYZ big economic guy is a friend/relative of mine' posts}

vina · Post by **vina** » 22 Jan 2010 14:39

K_Reddy wrote:Pick up a 100Rs note and look a the signature, YV Reddy is an uncle of mine ; )

A very illustrious uncle indeed. I highly respect him. In fact, I think before he got recognized publicly (NY Times first (especially the "anti Greespan" article) and then the rest of the world for his stellar role in making sure that India was well shielded from the global asset bubble and holding steadfast despite the prevailing group think , I think he was recognized first at BR..

Maybe , if we can go back to the Econ thread discussions we had during the crisis and were probably archived, we can see it.

A great man indeed . I had written back then. Y.V Reddy , if there is a medal which India has that says "Dear Sir, you saved us from a disaster of unimaginable proportions, Thank You" , he gets it. My respects to him.

Suraj · Post by **Suraj** » 22 Jan 2010 21:24

Core sector grows 6% in December

The six core sectors--crude oil, petroleum refinery products, coal, electricity, cement and finished steel--have a weight of over 25 per cent in the industrial production index and may well catapult it to 9 per cent growth this fiscal against just 7.6 per cent so far.

Finished steel and crude oil turned the table, expanding by 9.6 per cent and 1.1 per cent respectively, against 8 per cent and 0.3 per cent contraction last year.

Cement remained at top of the chart growing by a stunning 11 per cent, though it was less than 11.6 per cent in December, 2008.

However, oil production--both crude and refinery--and coal output remained sluggish, which may come in the way of economic activities.

All these six sectors expanded by just 0.7 per cent a year ago, when the economy came under the impact of the deepening global financial crisis.

For the first nine months of this fiscal, these sectors grew by 4.8 per cent compared to 3.2 per cent a year ago.

India's crude output rises again after 6 months

For the first time in six months, India's crude oil production rose in December by 1.1 per cent as Reliance Industries and Cairn India helped offset decline in ONGC output.

Crude oil production in December at 2.905 million tonnes was 1.1 per cent higher than 2.874 million tonnes in the same month last year, according to the latest data released by the Petroleum Ministry here.

State-owned Oil and Natural Gas Corp (ONGC) saw 3.2 per cent decline in output to 2.109 million tonnes as its prime Mumbai High reported a 4.8 per cent dip at 1.474 million tonnes in December 2009.

Private producers including Cairn and Reliance pumped 21.5 per cent more crude at 492,000 tonnes, the data showed but did not give individual break-ups.

Reliance's eastern offshore KG-D6 field helped natural gas output rise for the tenth straight month, rising by 57.3 per cent to 4.397 billion cubic metres in December. The company's KG-D6 field, which started production in April 2009, is producing around 60 million standard cubic metres per day.

Orissa to expedite mega projects

Orissa today said it is geared up to resolve all issues hurting the proposed Rs 6-lakh crore investments in the state, including the Rs 1-lakh crore investments by the global steel giants--ArcelorMittal and Posco.

The statement comes at a time when South Korean President Lee Myung-Bak is arriving here next week. The Centre has already nudged Orissa to accrod all necessary approvals to these projects in the state, especially the Rs 54,000-crore ($12 billion) 12 million tonnes per annum (mtpa) steel project by Posco.

Chief Minister Naveen Patnaik is going to convene a mega investor meet shortly to help expedite these projects, Mohanty said, adding the state is hopeful of transferring the required 4,004 acres for the Posco project in Jagatsingpur district after the Centre gave the final clearance for transferring 2,900 acres of forest land for the project, he said.

Meanwhile, sources said Orissa has assured Vedanta Chairman Anil Agarwal to provide bauxite ore for its alumina refinery at Lanjigarh in Kalahandi district till the Centre grants a final clearance for bauxite mining from the Nijamgiri hills, which is said to containing 75 million tonnes of bauxite reserves.

Earlier the Centre, sources said, had signalled Orissa to expedite necessary approvals to projects including that of Posco and ArcelorMittal projects, after the embarrassment caused by steel czar LN Mittal's adverse remarks on the investment climate in the country.

The world's largest steelmaker ArcelorMittal's Rs 1-lakh crore projects in Jharkhand and Orissa are still on paper due to delays in land acquisition and regulatory approvals even after inking the MoU more than four years back.

Chinmayanand · Post by **Chinmayanand** » 23 Jan 2010 01:05

Poll sees RBI holding rates, raising CRR next week

A Reuters poll found 24 out of 25 economists expected the Reserve Bank of India (RBI) to raise the cash reserve ratio (CRR), the proportion of deposits banks needed to keep with the central bank, by up to 50 basis points (0.5%) in its January 29 policy review.
By the end of April, one analyst expected the total quantum of CRR increase at 150 basis points, while nine saw a total of 100 basis points rise and three projected the CRR to go up by 75 basis points.Eight out of 25 analysts polled expected the RBI to raise its reverse repo and repo rates by 25 basis points each. Other analysts expected no change to policy rates.Twenty-three analysts expected the central bank to raise both the reverse repo and repo rates by between 25 and 100 basis points by the end of April, when the RBI announces its annual review for the fiscal year 2010/11.
Seven out of eight who expected a rate increase in the January review, forecast a further rise in the reverse repo and repo rates by April.Twelve expected a rise of at least 50 basis points in the reverse repo rate by April, while only 10 expected the repo rate to rise by the same quantum.The central bank absorbs excess funds from the banking system at the reverse repo rate, which is at 3.25%, and lends money to banks at the repo rate, which is 4.75%.

Factors to watch

Industrial output grew 11.7% in November from a year earlier, as stimulus measures since October 2008 to overcome the global credit crunch supported domestic demand.
The widely watched wholesale price index (WPI) rose an annual 7.3% in December, its highest since November 2008 and accelerating from a 4.8% rise in November.
Food prices rose 16.81% in the 12 months to January 9, easing from nearly 20% in early December.

Market impact

Traders expect a CRR increase would have little impact on the bond market, as investors have mostly factored in at least a 25 basis points increase in banks' reserve requirement and steady interest rates.
Increases in both the CRR and interest rates could push bond yields up, and weigh on shares of banks as well as sectors such as auto and property on concerns loan demand may slow.

SwamyG · Post by **SwamyG** » 23 Jan 2010 06:30

Well, doesn't it feel so good to read India can become 3rd largest economy by 2012

Okay the news item cites PwC; I have not been able to trace out the actual source yet. But found this World Banking in 2050 Lots of good projections for desh.

Word Economy in 2050 This accompanies the Banking PDF.

BTW, sorry if all these were already posted

Neshant · Post by **Neshant** » 24 Jan 2010 14:45

how does an NRI invest in the Indian stock market?

I'd like to do it myself via a discount web broker.

would i be able to move money in and out of the country or are there all kinds of restrictions?

does anyone know or has anyone done it (setup a stock trading account) and operated it remotely with success.

Prem · Post by **Prem** » 24 Jan 2010 23:53

http://www.speroforum.com/site/article. ... to+economy

A different dimension to Indian economy

India: Over 300 leading Indian industrialists bring Christian values to economy
According to Mendonca, the Christian community has a duty to act within the Indian economy to bring the principles of Christianity to the business world. "Christ was not against wealth and the business world - he says - but He did not admit an immoral or unethical use of money." He urges all employers to use the teachings of Caritas in Veritate by Benedict XVI as a guide to operate in a moral and ethical way in today’s world devoid of values.

andy B · Post by **andy B** » 25 Jan 2010 03:44

Neshant wrote:how does an NRI invest in the Indian stock market?

I'd like to do it myself via a discount web broker.

would i be able to move money in and out of the country or are there all kinds of restrictions?

does anyone know or has anyone done it (setup a stock trading account) and operated it remotely with success.

I have heard about sher khan and a couple of others that you can invest through....I myself have been investing for a while in the bse but I do that through my dad and uncle as its a lot more spontaneous and it can be monitored much more actively given that I cant always check whats going on...

Suraj saar would it be worthwile to have a stock exchange thread...IMHO it would be a nice idea to exchange stock picks and discuss various companies in the BSE...JMT

Suraj · Post by **Suraj** » 25 Jan 2010 03:48

Neshant and AndyB, there is an NRI investment in India thread already, with information on the topic. Please crosspost your last posts there and continue.

svinayak · Post by **svinayak** » 25 Jan 2010 08:00

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Singha · Post by **Singha** » 25 Jan 2010 08:39

ET: - I believe the report is mistaken. first para refers to PPP, 2nd para to absolute GDP in some common
currency like $. the reporter misinterpreted the PWC report. the third para could be true if PRC
continues to 'grow' @ 10% for 10 more years and sher khan falls away.

India can become 3rd largest economy by 2012: PwC
24 Jan 2010, 0953 hrs IST, Prabhakar Sinha, TNN

NEW DELHI: The US financial crisis may have expedited a shift in global economic power. According to a report by global consultancy firm PricewaterhouseCoopers (PwC), India could become the world’s third largest economy by purchasing power parity (PPP), overtaking Japan in 2012.

This would be almost 20 years ahead of Goldman Sachs’ projection of 2032 in its BRIC (Brazil, Russia, India, China) report.

India is also expected to grow faster than China after 2020. China, which was projected to become the world’s largest economy by 2041, now looks set to achieve the distinction sometime around 2020, the PwC report said.

putnanja · Post by **putnanja** » 26 Jan 2010 01:50

Padma Vibhushan for P.C. Reddy, Ramakrishnan, Y.V. Reddy

NEW DELHI: The former Reserve Bank of India Governor, Y.V. Reddy; Nobel laureate Venkatraman Ramakrishnan; founder of Apollo Hospital group Prathap C. Reddy; theatre director Ebrahim Alkazi; theatre actor Zohra Segal; and percussionist and Mrudangam vidwan Umayalpuram K. Sivaraman have been honoured with Padma Vibhushan, country’s highest civilian award, on the occasion of the Republic Day.
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So the government has recognized Dr YVR's contribution in making sure that India stayed clear of the financial mess that other "developed free market economies" are facing today

Suraj · Post by **Suraj** » 26 Jan 2010 05:23

Finance ministry pushes for single rate GST

In its first formal response to the discussion paper on GST by the empowered group of state finance ministers, the department of revenue has instead recommended that there should be a single rate of GST for both goods and services because a dual rate may lead to inversions in the duty structure.

The empowered group, headed by West Bengal Finance Minister Asim Dasgupta, had suggested a lower rate for necessary items and goods of basic importance and a standard rate for goods in general. It had also recommended a special rate for precious metals and a list of exempted items.

The Centre’s stand on a single rate is in line with the views of the Thirteenth Finance Commission’s task force on GST, which had proposed a single GST rate of five per cent for the Centre and seven per cent for states, except for five specific categories, in its report released last month. The finance ministry’s response to the Centre, however, has not suggested any revenue neutral-rate for GST in its comments.

If the finance ministry sticks to its stance on a single-rate GST structure, the likelihood of the new indirect taxes regime rolling out by April 2010 is completely ruled out. Official sources admitted that the states are likely to oppose the single-rate structure and this would further delay the implementation of the new GST system.

The Centre is concerned that adopting a dual rate for goods would give rise to a similar demand for services as well, and also this would not eliminate the existing distinction between goods and services. It said this would result in input credit accumulation and demand for refunds.

Against the demand of the states, the government said electricity duty, octroi, purchase tax and local taxes should be subsumed under GST. It also suggested GST be levied on petroleum products and alcohol.

Finance ministry concerned about rising expenditure bill

The finance ministry today called for a strict action against those ministries that have shown “indifferent attitude” in adhering to the government’s rules for controlling their expenditure. It has particularly pointed towards the ministries of defence, railways, mines and corporate affairs, as well as the Department of Economic Affairs for excess expenditure.

This comes in the wake of a recent austerity drive by the government, which has become significant with the operation of the Fiscal Responsibility and Budget Management Act, 2003. Expenditure Secretary Sushma Nath also urged for all the heads of departments in central government ministries to oversee the expenditure against sanctioned grants.

The committee has also asked the finance ministry to look into “rigid enforcement of prescribed financial rules and procedure so as to contain the instances of excess expenditure to the bare minimum.” Earlier this month, Nath had issued another such memorandum in which it asked ministries to engage independent evaluators and assessment agencies to scrutinise and evaluate achievements against physical outputs and final outcomes of major flagship schemes.

Currently, the main objective of the finance ministry is tightening expenditure in an effort to return to the path of fiscal correction. Finance Minister Pranab Mukherjee has set a target of bringing down the fiscal deficit to 5.5 per cent of the gross domestic product in 2010-11, and further to 4 per cent in 2011-12, from 6.8 per cent estimated for the current financial year.

Automobile sector to add 5 million jobs in next three years

India's emergence as a centre of manufacturing for international vehicle makers, which are adding huge capacities, will result in the hiring of five million new employees over three years, according to estimates collated by the country's apex automotive body.

This is the total of both, direct and indirect employment growth as a result of the expansion. Estimates put together by the Society of Indian Automobile Manufacturers (Siam) say this will be the extra added between now and 2012, to support the ever-increasing demand for new vehicles.

And, says Siam, a further seven million will be added in the period from 2012 to 2016, almost doubling the count to 25 million from the present 13 million; again, this comprises both direct and indirect employment. This would make the automotive sector one of the largest job generating sectors in India in the current decade.

Of the five million new jobs in the next three years, about 25 per cent will be for managerial functions, 60 per cent will be for skilled labour and the remaining lot will comprise unskilled labour.

SwamyG · Post by **SwamyG** » 27 Jan 2010 03:48

Kudos to Y.V.Reddy.

Suraj · Post by **Suraj** » 27 Jan 2010 03:49

India Ind does better than expected in 3rd qtr

India Inc is likely to post better-than-expected growth in net profit in the third quarter ended December 31 due to the low base of last year and a promising show from auto ancillary, construction, steel and sugar industries.

A total of 635 companies have declared their third-quarter results and reported 22 per cent rise in revenue and 47.3 per cent growth in net profit on an average. Their sales are up 22.7 per cent and net profit is up 66.5 per cent. This excludes banks and finance companies. While these companies have reported a marginal rise in net profit than in the corresponding quarter of last year, their operating margins have slipped to 14.7 per cent in the reporting quarter from the 17.4 per cent reported in the quarter ended December 2008.

The growth in sales and profit may come down considerably when more results come from sectors such as capital goods, cement, engineering, fast moving consumer goods, fertilisers, steel and telecom.

Fertilisers and pharmaceuticals have reported subdued performance so far, while cement companies have grown their net profit by 20 per cent as against over 50 per cent in the previous three quarters.

Operating margins are expected to improve sharply in the third quarter, with 635 companies recording a healthy rise of 460 basis points (bps) on an average. The improvement has been due to better commodity prices, stimulus measures, operating leverage and low base.

Export credit subsidy to be extended

Although India’s exports have started growing again after several months of decline, commerce ministry sources told Business Standard that the extension is being considered to sustain growth and stabilise it at 15 to 20 per cent.

The commerce ministry has asked the finance ministry to extend the scheme mainly for labour-intensive industries and some additional sectors like engineering and chemicals.

“We are considering the demand. But it is going to be a difficult call considering the fiscal situation. The sector needs support but the high fiscal deficit cannot be ignored,” a finance ministry official said. The government is running a fiscal deficit of 8 per cent of gross domestic product significantly above the statutory mandate.

Last year, the Reserve Bank of India had extended the incentive till March 31, 2010 from September 30, 2009 for such labour-intensive sectors as handicrafts, textiles, carpets, leather, gems and jewellery, marine products and small and medium enterprises that were badly hit by falling demand from the US, the EU and Japan.

Cumulative FDI from Mauritius exceeds Rs.2 lakh cr ($45 billion)

FDI inflows from Mauritius stood at Rs 2,01,694 crore ($45.24 billion) from the April 2000-November 2009 period, accounting for 44 per cent of the Rs 4,86,480-crore ($110 billion) foreign direct investment inflows into the country during the period.

The other big investors included Singapore, the US, Britain and the Netherlands.

While investors get higher returns on their money in India, those from Mauritius "get even higher returns on their capital, as we have a double taxation avoidance treaty (DTAT) (with the island nation)," Crisil principal economist D K Joshi said.

Of late, the government has reportedly found many cases of misuse of the DTAT with Mauritius, including round-tripping, and is working towards revising the treaty to prevent its further abuse by companies, domestic or foreign.

However, dismissing the notion that Mauritius is a tax haven, the island nation's Vice-Prime Minister Ramakrishna Sithanen recently said he had not received any complaints from New Delhi about routing investments via his country to evade taxes.

ramana · Post by **ramana** » 28 Jan 2010 08:50

Gurucharan Das made an awesome presentation on India and future prospects to WIPRO in Nov 2009.

Watch for 2012 when India overtakes a lot of other economies. The dividing line is the line from Kanpur to Chennai. East of it is less developed and West is more developed.

tejas · Post by **tejas** » 28 Jan 2010 09:06

^^^^^ Link to slide show of above talk.

http://www.slideshare.net/swamijyoti/in ... 09-2858959

P.S. Hope he is wrong about 8% being the upper limit of GDP growth for a democracy.

Stan_Savljevic · Post by **Stan_Savljevic** » 28 Jan 2010 09:46

ramana wrote: Watch for 2012 when India overtakes a lot of other economies. The dividing line is the line from Kanpur to Chennai. East of it is less developed and West is more developed.

There was one person who had argued for a different time zone for the east based on this logic. One guy from Assam, just a few days back! He claimed that a different time zone would solve every problem!!

amit · Post by **amit** » 28 Jan 2010 10:24

Stan_Savljevic wrote:
ramana wrote: Watch for 2012 when India overtakes a lot of other economies. The dividing line is the line from Kanpur to Chennai. East of it is less developed and West is more developed.
There was one person who had argued for a different time zone for the east based on this logic. One guy from Assam, just a few days back! He claimed that a different time zone would solve every problem!!

Stan,

Dunno if different time zones will solve all problems but there's certainly a need for one in India.

It doesn't make sense that Agartala and Mumbai are in the same time zone despite the distance (in terms of longitude) between the two cities.

Mumbai: Longitude: 72° 51' E

Agartala: Longitude: 91° 25' E

The actual east-west distance between the two cities is 3,405 km.

And to cap it all Dhaka which is to the west of Agartala is half an hour ahead of Agartala time!

Of course this in no way relates to work ethics etc. But it's a legitimate concern that folks in the North-east (mind you I think West Bengal and the rest are just fine) have.

vina · Post by **vina** » 28 Jan 2010 11:02

Of course this in no way relates to work ethics etc. But it's a legitimate concern that folks in the North-east (mind you I think West Bengal and the rest are just fine) have.

True. However, sometimes common sense alone isn't the clincher. Politics and other reasons sometime intrude. For eg, take the case of the lil red Bidi aka Singapore.

Though it is in the same time zone of Malaysia and Indonesia and Thailand, it set itself the same timezone as Hong Kong (ostensibly for business reasons, but SE Asian grumblers take potshots and say, it shows where the hearts of the Chinese really lie!).

So it is ridiculous. If you cross over into Johor in Malaysia or take a boat ride to Batam or Bintan, you go bck some 2 1/2s or so in time!. Ridiculous ?.

amit · Post by **amit** » 28 Jan 2010 13:17

vina wrote:
Of course this in no way relates to work ethics etc. But it's a legitimate concern that folks in the North-east (mind you I think West Bengal and the rest are just fine) have.
True. However, sometimes common sense alone isn't the clincher. Politics and other reasons sometime intrude. For eg, take the case of the lil red Bidi aka Singapore.

Though it is in the same time zone of Malaysia and Indonesia and Thailand, it set itself the same timezone as Hong Kong (ostensibly for business reasons, but SE Asian grumblers take potshots and say, it shows where the hearts of the Chinese really lie!).

So it is ridiculous. If you cross over into Johor in Malaysia or take a boat ride to Batam or Bintan, you go bck some 2 1/2s or so in time!. Ridiculous ?.

OT alert:

Er Vina,

Slight correction needed.

First of all Singapore and Malaysia follow the same time zone. It has always been the case that Singapore follows Malaysia's time zone and not vis versa. And why is Malaysia's time zone the same as that of Hong Kong? Well please have a look at the global map and see this huge chunk of land which is called East Malaysia and see the longitudinal difference between it and Hong Kong. I think you'll understand why Malaysia has the same time zone as Hong Kong. Of course it would certainly make sense if West and East Malaysia had slightly different time zones.

Indonesia and Thailand are one hour behind Singapore and Malaysia and I would think that's because they probably follow the correct time zone for their longitudinal position. However, if you look at the spread of the Indonesian islands, I think they should also have different time zone too. It does not make sense, I think for Sumatra Island to have the same time as Irian Jaya or Jayapura which is in the same longitudinal band as Japan.