Indian Economy: News and Discussion

[Akask kumar]

Something pretty interesting is happening.
Meanwhile, exports are now improving steadily, imports are declining slowly too.

But in usual, during a country's economic boom, consumption may be increased.
So, I think exports may increase or not, imports must increase rapidly.
The only possible way for what's happening now is that production is increasing fast.

But again, India's industrial growth doesn't seem to be enough (at least according to me), But again,
As our GDP growth is much faster in Ruppees than that in terms of dollars, I think same must happen to industrial growth given low cost of labor and goods in India.
If any anti dumping law is passed, imports will continue to decline.
And if deficit depletes or changes into surplus (though very far), it could help in keeping the Indian Ruppe Stable getting appreciated.
We are already targeting 500 billion trade with USA to make them our largest trade partner replacing China or probably replacing China as America's largest trade partner in upcoming decades.
Good thing is that we already have a trade surplus with western nations.
What are your views @Akask kumar?

i am not very good at economics. but Industrial growth is very imp if we want to be a powerful economy.which means we need to produce as many finished product as we can..
imports are not bad. without imports you cant imagine manufacturing.. imports are inputs for finished goods.

imports of finished good are bad,i think. which reflects our inabillity to manufacture, highlighting poor infrastructure and labor. Labor is not our problem.. but infrastrucutre is ..THe present GST bill should help industries to expand and grow .

long ago i read somewhere- we are one of the largest producer of steel(high grade) but we cant convert them into car and export most of this raw good(steel). to western/european countries ,

but things are changing gradually. earlier we use to import finished electronics good but now there are many indian electronics firm that are giving good fight..

we have raw materials,labor but what we need is infrastructure - which require law reforms and investment.

 

[Indx TechStyle]

i am not very good at economics. but Industrial growth is very imp if we want to be a powerful economy.

Before you reach any decision, let me inform you that our industrial growth is slow as per our standards, for world's fastest growing economy.
For others, it's damn high.:biggrin2:

For another example, pakistanis say that CPEC will rocket their economy to 5% growth.
In early decade with similar growth, we used call ourselves a failed State for 5% growth.

 

[Indx TechStyle]

State Bank of India mulls 25 basis point interest rate cut

After the government notified the annual, five-year inflation target of four per cent, plus or minus two percentage points, on August 5, bankers saw little scope in interest rate cuts.

MUMBAI: State Bank of India (SBI) Chairperson Arundhati Bhattacharya says a 25 basis points cut in interest rates was in the offing and that an improvement in the financial health of India's banking sector was closely linked to the overall performance of the economy.

In an interview to IANS, the 60-year-old banker also said the four percent inflation target fixed by the government is a tad low in an emerging economy like India where food inflation has rarely fallen below six per cent in the past 60 years.

Nonetheless, she felt the current inflation level is set to fall due to a statistical play that could pave the way for a cut in interest rates by commercial banks -- which the central bank has been asking for, as and when it has itself cut interest rates.

"Inflation will start coming down because there was a base effect in the last two months, which was actually pushing inflation up. That effect will moderate in the coming months," she said referring to the current impact of a lower movement in price indices in the previous year.

"So, I see no reason why we shouldn't be looking at a small rate cut this year."

Giving reasons why she felt the four per cent inflation target was low, Bhattacharya said in her interview that 45-50 per cent of the components in theConsumer Price Index comprised food items, which are very volatile.

Since a major weight in the index is also assigned to health, education and transport, it is also difficult to keep their inflation levels below two per cent, so as to average out the overall rise in the price line to four per cent or below.

Yet, she said, the upper limit of inflation of six per cent "is perfectly fine" as the prices are expected to ease in coming months. "The Reserve Bank's trajectory of five per cent is within the realms of possibility."

After the government notified the annual, five-year inflation target of four per cent, plus or minus two percentage points, on August 5, bankers saw little scope in interest rate cuts. This is because the retail inflation is already precariously close to the tolerance level.

In the interview, Bhattacharya also spoke on the recent norms for commercial banks to sell their stressed assets to other banks and non-banking finance companies, as part of the central bank's effort to help them clean up their balance sheets.

"Many of these things we were already doing. We've always done the sale to asset reconstruction companies. We give them time for due diligence. There is total transparency. We have also been doing e-auctions for more than six quarters," she said.

"But now, we are allowed to sell to other banks. But how much will the banks be eager? They will also have the same problems. So unless the resolution methodology starts performing better, I don't think they will be in a better position to resolve issues," she added.

"I've not been approached by any bank or non-banking finance company to buy stressed assets."

As far as the State Bank of India was concerned, Bhattacharya said, while the efforts were on to deal with past non-performing assets, fresh accumulations were also inevitable. "We've given a guidance of about Rs 40,000 crore as the slippage, of which Rs 8,000-9,000 crore has happened."

When asked how the legacy issues in bad loans will be addressed, the banker -- who is due to retire in October -- said it would take a long time. She was also quick to qualify that "long time" would not be longer than five years.

"It's important for us to get the economy firing on all cylinders. If it happens, our turnaround will also happen rapidly. Till the time economic activity picks up and the demand picks up, even with the best of things, you'll still have a slow recovery," she said.

"But five years is a very long time, I don't think we need five years. Surely the economic activity is going to pick up much before five years."

READ MORE:
State Bank Of India|SBI|Retail|Inflation|India|Health|Food

 

[Kshatriya87]

Indirect tax mop-up rises 27.5% to Rs 3.36 lakh cr till August
By PTI | Sep 12, 2016, 01.45 PM IST


Read more at:
http://economictimes.indiatimes.com...ofinterest&utm_medium=text&utm_campaign=cppst

 

[Kshatriya87]

@Indx TechStyle Check above post. 3.36 lakh crore is over $50 billion. If 100% of Indians pay taxes, just the taxes will be almost as much as porkistan's GDP. (not considering the below poverty line people).

 

[Kshatriya87]

@Indx TechStyle Correction.

Direct tax - 1.89 lakh crore

Indirect tax - 3.36 lakh crore

Total tax - 5.25 lakh crore

Conversion Rate (66.93)

Total sum in USD - $78.44 Billion

 

[Kshatriya87]

GOI hopes to collect 16.26 lakh crore in direct & indirect taxes. i.e. $242 billion.

 

[tsunami]

^^^ Modi's warning is working for the business community. Many have fear and now thinking to declare some of their Black money and Pay 45% tax.

 

[Kshatriya87]

^^^ Modi's warning is working for the business community. Many have fear and now thinking to declare some of their Black money and Pay 45% tax.

The final/termination date has been extended though. It was 30th september. Now its 17th october.

 

[tsunami]

The final/termination date has been extended though. It was 30th september. Now its 17th october.

They should not have done that. If they do that people will start taking for granted.

 

[Kshatriya87]

They should not have done that. If they do that people will start taking for granted.

Exactly my thoughts. But I'm thinking maybe (hopefully) some people asked for an extension.


Sent from my iPhone using Tapatalk

 

[ezsasa]

Indirect tax mop-up rises 27.5% to Rs 3.36 lakh cr till August
By PTI | Sep 12, 2016, 01.45 PM IST


Read more at:
http://economictimes.indiatimes.com...ofinterest&utm_medium=text&utm_campaign=cppst

Chalo good, rafale Ka paisa aa Gaya !!!!

 

[Indx TechStyle]

India is at the cusp of a meaningful turnaround: Piyush Gupta, CEO of DBS Bank

"From an external view, India continues to be an exception to the global environment. There is a degree of optimism about the resiliency in the system."

Halfway into Prime Minister Narendra Modi's term, the promised 'achhe din' are around the corner with India turning out to be an island of economic growth stability, said Piyush Gupta, chief executive of Singapore's DBS Bank. "From an external view, India continues to be an exception to the global environment," he told ET in an interview.

"The momentum is coming back. With our clients, many of whom were sceptical about acchhe din in the last six to 10 months, the tune is changing. Many of our clients are beginning to see a difference."

Gupta joins global leaders such as World Bank President Jim Yong Kim and Barclays Chief Executive Jes Staley in hailing the country's growth potential under Modi, who has pushed through key reforms such as those related to the proposed goods and services tax (GST) and higher foreign direct investment limits in insurance and defence services. Edited excerpts:

You were among the few CEOs who was betting big on India a few years ago. How good is the progress card?

We had an ambitious plan in 2010 for what we would do with India on the back of the macro-environment which meant both the liquidity and interest rate cycle. Like the rest of the system, we stubbed our toes a little bit. The good news is that we were quick to recognise the issue and deal with our problems. So, remember in 2014, we had the highest NPL in the system at 10% and people questioned it and I just said we have been quicker to recognise it and it is going to hit everybody else. In 2015, we had a negative period and we wrote off whatever we needed to write off. So this year we turned around and showed a small profit.

But how about India as a market do business?

We see India at a cusp of a meaningful turnaround. The macro aggregates are much better with low oil prices and fiscal and current account deficits under control. From an external view, India continues to be an exception to the global environment. There is a degree of optimism about the resiliency in the system. But in our own engagement with our clients, we see that the momentum is coming back. So we are beginning to see more customer activity both at the top end of the market. In our clients, many of whom were skeptical about 'acche din' in the last 6-10 months, the tune is changing.

So is that true for your corporate clients?

I am talking about our large corporate clients. On the SME space, we are still being a little watchful. Our consumer business is also looking positive. Recent reforms, whether it is GST or FDI, or whether it is a slew of other government initiatives, we are beginning to see some positive impact from that trickle down. We are also very pleased with the first four months of our Digibank. We have about 2,50,000 customers in the first four months which is tracking because the customer numbers are increasing every month. We are on track in terms of customer targets. It's still lower than our original models but the monthly increase we are seeing is fairly promising.

So, these are your high-end customers...

When we started, our general assumption was that we will have higher-end customers who have smartphones. But as the smartphone cost is going down so rapidly, we are beginning to get much deeper penetration than we originally expected. For us, the cost of customer acquisition and margin is not that high.

What is the status of the subsidiary licence that you had applied for?

The status is the same but we are encouraged. There are three, four banks who have applied and nobody got approval because the RBI and the ministry of finance have spent the whole year trying to come to an understanding on how to deal with these applications. As best as we can tell now, they have come to some understanding and agreement. So the process is now beginning to move, we will see some positive outcome coming from that fairly soon.

You have had high bad loans in the past. What are the things that you won't do repeat...

The key learning is the concentration risk in the EPC (engineering, procurement and construction) sector. We were part of the infrastructure supply chain that got hammered. It is still going to be a big business, but we have to be a lot more thoughtful about client selection. In infra EPC space, you have large customers, they have the ability to handle the tight liquidity situation but if you are in a mid-cap space, then you die. In that situation, rates go up, banking system does not provide working capital. They just run out of resources. This is the principal lesson we have taken away.

There is this debate about capitalising staterun banks. You are majority owned by the Singapore government. Is there a lesson for India?

That is my view. The Nayak-committee report recommended it be brought down to 40%. Some people think it should go down to 26%. We are at 29% through Temasek (owned by Singapore government). That is the model which makes sense for Indian banking system. The problem of Indian banking system is shortage of capital. Capital is tight. If you are to recognise all the bad loans, you need a lot more capital. Government fiscal resources are inadequate to recapitalise the banks. In the long term, you need foreign sources of capital to re-capitalise banks. For banks like us, it creates an opportunity. We have a lot of capital as we are rated as one of the top five-six banks in the region.

Is there an opportunity for you to do investment banking in India?

We are not a large global investment bank. If you look at the last two-three years, we have done extremely well in bringing Chinese companies to the international capital market. We have established quite well in China debt capital market/offshore CNH market even though we are not global investment bank. We think, we can replicate the model in India as well. Particularly, the rupee bond market is opening up for international investors, where we can play extremely well. We clearly have plans and strengthened our debt capital market team.

On China, the opinions are extreme. Either you are extremely bullish, or totally bearish... Where do you stand?

It is in the middle. Everything is not hunky dory. Some of the industries are already in a recession. NPAs (bad loans) in sectors like steel, cement, coal, glass are definitely understated. The other side that China is going to explode or collapse is quite untrue. China has got a lot more fiscal capacity than India does. There are enough capital to capitalise banks there. They can absorb a trillion-dollar NPA issues and still can capitalise the banks.

There is no probability, but high risk in the region is a political event. Ex-that, the country is not going to fall apart. But, there is a lot of pain in between. Next two-and-a-half years will be complicated but there is light at the end of the tunnel. We should not tar the entire economy with the same brush. It is five times the size of India. It is a $11-trillion economy. In such an economy, you can of course find 1,000 companies, which are operating well. They are operating at world-class standard.

For financial markets, what is the biggest worry — the US, China, or Europe and its banks?

All of them are challenges. The US rate thing is the least of them. I think, you will see a rate hike this year. Another one or two next year. But, I think, it is a dovish Fed. People are very ginger about putting the base to the stone. I don't really expect the US rate hike thing to be aggressive to have (major) global impact. European thing is still a structural problem. Overall, the Euro project is just not tenable. We cannot have a single currency regime with multiple fiscal policies with no central authority. Nationalistic sentiments are also increasing. Asia overall is slowing a bit due to China. It will be impacted by China. But, Asia has got the cushion in domestic demand. There is still a lot of resilience.

READ MORE:
Singapore|Piyush Gupta|India|Digibank|DBS Bank

 

[Indx TechStyle]

Modi government's Invest India programme sets in motion a quiet revolution for India-bound investors

Invest India works closely with the Prime Minister’s Office, the external affairs ministry, Ficci and state governments in assisting investors.

In July, British high street retailer Marks and Spencer found itself in a peculiar pickle in India, the first of its kind since it entered the country nearly 16 years ago. The aviation ministry asked the company to shut down the stores it operated in the domestic and international terminals of the Delhi and Mumbai airports.

M&S had entered into a joint venture with Reliance Retail Ltd (RRL) to operate its stores in India. The approval for the joint venture MSRIPL expired in August 2015, but the stores operated thanks to provisional extensions. Despite fervent requests, the renewal of the approvals was delayed. But finally the company managed to secure all the clearances within a week thanks to the intervention of a government body.

In 2016, the Wanda Group of China, which owns the world's largest property firm, said it will invest $10 billion to build an industrial city in Haryana. From engaging with the state government to identifying the location in Haryana Wanda Group had a glitch-free experience thanks to the same government body.

The ease and swiftness with which both Marks and Spencer and Wanda were able to press ahead with their plans in India was thanks to a little known government body named Invest India. It was Invest India that approached the aviation ministry and pushed for the clearances for the company, according to Venu Nair, MD, Marks and Spencer India. "Invest India has helped Marks and Spencer navigate requirements and regulatory practices in India."

A senior Wanda Group official, speaking on the condition of anonymity told ET, that Invest India has been very helpful in facilitating meetings for Wanda with state governments. "It has also helped us finalise projects, as we look forward to securing our first investment in India," says the official.

Happy to Help

Since coming to power in 2014, the economic priorities of the Narendra Modi government have centred on ushering in reforms, attracting more foreign investments and ease of doing business. India ranks 130 out of 189 countries in the World Bank's latest ease of doing business, moving up four places from 2015's adjusted ranking of 134. It t is looking to break into the top 100 countries in next year's ranking.

The government realised that for many of its ambitions to succeed, it had to give more teeth to the Department Of Industrial Policy and Promotion (DIPP), the key government body responsible for framing foreign investment policy. One of the key outcomes of DIPP's empowerment was the firing up of a dormant body called Invest India.

Even smaller economies in Africa and Latin America have well-structured investment promotion agencies. India did have such a body — Invest India was created in 2009 — but it was hardly functional. Last year, the government dusted off the body and made it what it was envisaged for — the first point of reference for potential investors.

The Invest India team comprises several graduates of IIT and IIM. Some of the members left cushy jobs in investment banks such as Goldman Sachs and Boston Consulting Group to join the team, driven by a desire to contribute to the growth of the Indian economy. "We will appoint more professionals in the next few months," says Deepak Bagla, MD, Invest India.

Multiple Services

According to Bagla, Invest India has domain and functional experts who provide sector and state-specific inputs, and support investors through the entire investment cycle, from the pre-investment decision-making to post-investment assistance. "We assist with location identification; expediting regulatory approvals; facilitating meetings with relevant government and corporate officials; and also provide aftercare services," he says.

In one year, Invest India has been able to guide a clutch of big and small investors keen to invest in India. It has become a one-stop window that handholds both global and domestic investors from the moment they conceive a business idea to setting up their units. "Invest India is a valuable point of contact between international companies investing in India and the various departments and state bodies across the country," says Nair.

Besides Wanda and Marks and Spencer, Invest India has helped big-ticket names such as Indo-UK Healthcare and IKEA to get their businesses going in India.

Take the Indo-UK Institute of Heath (IUIH) project. The project, jointly announced by Modi and the then UK PM David Cameron in November 2015, is billed as the world's largest healthcare project, with investment plans of $ 2 billion for 11 healthcare institutes and 89 diagnostic clinics across 11 states. Invest India worked with the IUIH top management with research and advice to formulate their business plan.

According to Ajay Rajan Gupta, CEO of IUIH, Invest India facilitated in connecting with some state governments as part of the programme's initialisation. It assisted IUIH to develop a business model for the proposed 89 health clinics besides helping it with a detailed analysis on the regulatory framework in India.

Invest India has also assisted small companies like Sagar Defence Engineering, which received orders of Unmanned Marine Surface Vehicles from the Indian Navy, and Gujarat-based Devashree Aluminium. It was not easy for Sagar Defence Engineering, a rookie in domestic manufacturing, to obtain orders due to the presence of a raft of big players in the space. Invest India helped with advice and approvals. Devashree Aluminium managed to secure the required government certificates for import of products from Europe thanks to Invest India.

Under the aegis of DIPP, which comes under the Commerce Ministry, Invest India works closely with the Prime Minister's Office, the external affairs ministry, Ficci and state governments in assisting investors. Invest India has 60 people on its rolls.

DIPP boss Ramesh Abhishek describes the body as a platform that provides 'beginning to end services' for investors. "Invest India provides end to end solution to investors from abroad and even to domestic start-ups," Abhishek told ET.

Two of Modi's pet programmes — Make In India (to turn India into a manufacturing hub) and Startup India — are being driven by Invest India. The Startup India hub within Invest India will be a single point of contact for the entire ecosystem and enable knowledge exchange and access to funding, according to Karan Anand who leads the platform. In recent months, this hub has handled more than 16,000 queries from startups.

Invest India is looking to receive potential big investors as soon as they land in India, at the aircraft itself, to begin the process of smoothening their investments in India. This kind of investment support exists in many business-friendly parts of the world.

Swedish furniture retailer IKEA would affirm. In 2013, IKEA announced plans to set up retail stores in India. The first location was identified in Hitec City, Hyderabad and the second in Navi Mumbai. It is also identifying potential sites in Delhi NCR and Bengaluru. It also plans to open 25 retail stores by investing $ 1.65 billion by 2025, creating approximately 60,000 jobs. These plans are being bolstered by Invest India "Invest India team is doing a great job by acting like a catalyst between companies investing in India and the Indian government," says Neetu Kapasi, Public Affairs Manager, IKEA India.

READ MORE:
Wanda Group|Modi Government|Marks and Spencer|Invest India|Ikea

 

[Indx TechStyle]

India is acknowledged as an economic power: Onno Ruhl, World Bank’s Country Director in India

"If you look at where the country is now and where it was four years ago, then suddenly it looks like it was a fast change," says Ruhl.
India is now acknowledged as a country of global importance beyond its history and sheer size of population, as an economic power, says Onno Ruhl, who completes his four-year term as the World Bank's country director in India. In an interview to ET's Deepshikha Sikarwar and Vinay Pandey, he says climbing into top 50 will take some time but can be done. Edited excerpts:
You have been here for four years. You have seen two governments. How do you see this transition?

India must be in one of its most dynamic periods of history. What we have seen is end of a mandate that led to some hesitation in policymaking, to a very a strong mandate which led to ambition. There was high ambition in the government and there still is, but the actual pace of reform had to be tempered by the fact that in the Rajya Sabha there is still no majority.

But if you look at where the country is now and where it was four years ago, then suddenly it looks like it was a fast change. Macro fundamentals are very, very solid. In 2013, India was most vulnerable during the taper tantrum. Now India is a star. India is now acknowledged as a country of global importance beyond its history and sheer size of population, as an economic power. Therefore, on balance you see a gradual but persistent shift with high ambition and a different projection internationally, leading to a very ambitious change.

Some of the government's initiatives are close to the World Bank's mandate. How do you see them?

Cleaning the Ganga, Swachh Bharat, 100 cities, 500 cities, 24x7 power, Skill India...In the beginning people said these programmes sound good, but is this something comprehensive and then people realise what is in there is the recognition that India urbanises, and that's positive. The recognition that Indians need a level of service that behoves a middle income country and middle-class nations, which India is in the process of becoming. Most importantly, the recognition that demographic dividend will only pay off if people benefit from investment and are skilled enough to be competitive. You can mobilise around it and then the target setting. My favourite target is October 2, 2019, the most important and the most difficult, the open defecation and Swachh Bharat.

Do you see any transformational change in implementation?

One big change is the goal setting and holding people accountable for those goals, which represents a different approach to how politics and administration have interacted in India. It's really good, it's really a game changer. The government says we want business, we want investment, so whatever is wrong we will try and fix it and will tell people who give permits or do inspection that their job is to facilitate is a big shift, not universally successful as yet. It is not perfect, but direction of travel is there.

How do you see certain isolated incidents that threaten to disrupt reform agenda?

You are getting in the space of diversity and tolerance and things like that. The World Bank really has no mandate on that so I would limit to a few observations. First, for a diverse society like India to grow and prosper, that overall climate is harmonious, peaceful and that there are outlets for tension are positive and not negative.

From where I am sitting I would say, yes, there are incidents, but look at the world today. Look at the incidents we have had in France, Belgium, United States, Turkey, let's not go to Syria. India looks pretty stable. Indians sometimes criticise themselves too much. I don't think the world looks at India as a hotspot or trouble spot.

What worries you most about India?

There is one development indicator where India is dead last in the world, the sex ratio. Building on that, India's female labour participation rate is second to last among G20 countries. Only Saudi Arabia is worse. It's significantly lower in urban areas than rural India. For India to become great and get beyond the middle income trap, there is no country that does that without drawing on the talent of its women in a more significant way. I see a little bit of complacency. It's the number one issue.

Ease of doing business has really caught on in India, with states competing with each other. Is it yielding results?

There are two approaches here - one is to set a very ambitious goal on the global ranking. The global ranking means Delhi and Mumbai. So it's a very simplified and imperfect way of measuring what happens in India. Delhi and Mumbai are actually not the most dynamic parts of the Indian economy. The goal setting is good. It's completely shifted the debate we had with DIPP and other agencies on what to do. This will lead to result. Other countries have done it. It's a big effort and other countries are not sitting idle. Climbing into top 50 will take some time but can be done.

The other approach is even more transformational, which is the work on ranking the states. I live near the Claridges (hotel in central Delhi). There was this big hoarding there saying Jharkhand is no. 3 in business ranking. Who in India could have anticipated something like this? Nobody said it is BJP's goal. This is much more relevant than global ranking. This covers all of India.

READ MORE:
World Bank|Swachh Bharat|Rajya Sabha|Onno Ruhl|Jharkhand

 

[Indx TechStyle]

Image Credit: CC0 image via Pixabay
Just How Transformational Will India's GST Be?
Three Indian MPs from different parties reflected on the challenges and opportunities inherent in India’s Goods and Services Tax.

Three members of India’s parliament recently visited Washington, D.C. and engaged in a conversation on various domestic and foreign issues in India. The dialogue took place at the Carnegie Endowment for International Peace (CEIP) at an event moderated by Milan Vaishnav on Tuesday, “The View from New Delhi: A Conversation With Indian MPs.” It featured Lok Sabha MP from Assam, Sushmita Dev of the Indian National Congress, Lok Sabha MP from Odisha, Baijayanta “Jay” Panda of the Biju Janata Dal (BJD), and Lok Sabha MP from Himachal Pradesh, Anurag Thakur of the ruling Bharatiya Janata Party (BJP).

The bulk of the dialogue focused on the Goods and Services Tax (GST) bill passed by India’s parliament in August. The GST bill was long awaited and seen as key for economic reform in India, as it would bring India’s various states closer today toward a common market. All three speakers praised the bill, though the praise from Dev, from the opposition Congress Party, was lukewarm. Dev argued that while her party agreed with the concept of one market, it had disagreements on the details.

Over the years, India’s byzantine economic structure was put into place mostly by the Congress Party. Thakur and Panda both supported the GST bill more strongly. It should be noted that Panda is from a regional state party not aligned with either the BJP or Congress. His extremely high praise of the GST bill — he said it was the biggest thing to happen since 1947 in India — is indicative of just how highly anticipated the bill was across India’s political spectrum. Panda argued that the GST was a tipping point, in which all the major players in India realized the benefits of economic modernization.

The discussion on the GST bill was tied to a discussion on whether a new model of cooperative federalism is emerging in India. Again, Thakur and Panda strongly agreed. Thakur pointed out that under the Modi government, more money is going back to the states, a process that would accelerate once the GST bill is implemented. Panda agreed, stating that India’s system was overcentralized and that different states have different needs, so a level of flexibility is required; he cited the different need for education budgets in Odisha and a highly literate state like Kerala. Again, I found Dev’s answer somewhat generic and lukewarm; in the spirit of the times, she agreed with the other two speakers without getting too much into the specifics, merely saying that each state in India ought to have a dream of its own.

There seemed to be a gap between Dev and the other two speakers when it came to India’s economic growth. Dev wanted to tie economic growth to job growth specifically while Panda and Thakur, while not disagreeing, argued that after lagging for so many years, even seemingly jobless growth was beneficial for India. For example, building more kilometers of roads a day, which the current government has done relative to previous ones, is an inherently good thing, since India needs to lay down a strong foundation.

The conversation also touched upon a couple of themes, including the issue of tolerance in India and the American presidential election. There has been some concern that some elements of Indian society have become more intolerant, especially since the BJP came to power. Dev did not necessarily agree with this in the quantitative sense, but argued that qualitatively–since politics are about perception–the government has the responsibility to combat this view. Thakur blamed the media for creating a distorted perception, a position that Panda agreed with. While Panda praised the media for doing their job and calling to attention abuses, he also argued that the media often distorted issues, citing a series of attacks on churches in 2014, where it was later revealed that the majority of those attacks were regular burglaries and had no communal aspect.

In terms of larger trends, the conversation highlighted some interesting trends in Indian politics. First, was the continued irrelevance of the Congress Party and its inability to engage with new and timely ideas. It is only because of its infrastructure across India that it remains a viable national force. While the BJP obviously is a vibrant force across India, I believe that regional parties will continue to be an important and often beneficial force in Indian politics, rather than a vehicle of political fragmentation. Regional parties understand local problems and want their states to prosper. And while they are increasingly taking up the populist mantle that was originally a Congress trademark, this is done without being overly obstructionist; almost all supported the GST bill. As Panda pointed out, the states want economic reform because nobody in his state wants it to be cheaper to ship goods to Japan than to neighboring West Bengal.

Centralization’s future was another interesting aspect of the discussion. Most of the political spectrum agrees that decentralization is beneficial and that the idea of government 5-year plans being handed out from New Delhi is simply not a good idea. On the other hand, ironically, centralization can also be beneficial. The GST bill would replace a plethora of state tax laws, and so represents a level of federalization. It seems as though the wrong things are centralized while common-sense ideas for decentralization have long been ignored.

No matter how one looks at it, India is in the middle of major political and economic changes. It will continue to be a place to watch closely.

 

[Indx TechStyle]

India expected to post first current account surplus in nine years

 

[Indx TechStyle]

India emerges as top importer of Scotch whisky

India also registered a marked rise, by more than half, in the amount of single malt whisky shipped to India, adding up to more than 700,000 bottles

It is one of the world’s fastest growing Scotch whisky import markets with value up 28 per cent to £43 million.

India has emerged as one of the world’s fastest growing Scotch whisky import markets with value up 28 per cent to £43 million.

The Scotch Whisky Association (SWA) said the amount of Scotch whisky sold overseas increased for the first time since 2013, largely thanks to India for registering a massive jump in shipment value.

India has established itself as the third-biggest export market for Scotch at 41 million bottles, marking a 41 per cent increase in sales volumes, after France (90.9 million bottles) and the US (53.1 million bottles).

“The growth of exports to India stood out, with value up 28 per cent to £43 million,” the SWA said.

The industry body also called on urgent action from the U.K. government to help realise the full potential of the Indian market.

“The full potential of the Indian market would only be delivered through liberalisation of the exorbitant 150 per cent basic customs duty. We urge the UK government to prioritise discussions with India as it develops its post-Brexit pirorities,” it added.

Diageo, a leading UK-headquartered distilling company, recently took over Indian liquor baron Vijay Mallya’s United Spirits distribution network in India, which is being linked to the sale of 12 million more bottles than last year.

Most of that was in bulk, for bottling in India, or blending with Indian whiskies.

However, India also registered a marked rise, by more than half, in the amount of single malt whisky shipped to India, adding up to more than 700,000 bottles.

Scotch, a patent of Scotland, overall had the equivalent of 533 million bottles shipped from the UK in the first six months of 2016, marking a 3.1 per cent increase.

SWA attributes this to an “industry-wide emphasis on craftsmanship and provenance, backed by investment”.

However, Scotch makers are concerned about the impact Britain’s vote to leave the European Union (EU) could have on the whisky.

“The first half of 2016 was marked by an improving Scotch whisky export performance, suggesting a strengthening in global consumer demand compared to the last couple of years...

It is clear, however, that the uncertainties of the Brexit vote will create challenges for exporters and we continue to encourage early clarity on the likely shape of the UK’s future trading relationship with the EU and other countries,” said David Frost, chief executive of SWA.

Scotch is a specific term used for whisky made from malted barley through a legally defined process, originating in Scotland.

Any bottlers outside Scotland who want to use Scotch whisky as a constituent in a local spirit must first apply for the verification process.

Earlier this year, India had ruled against the use of the term “Scotch” and “Scotland” by Indian spirits firms.

 

[tharun]

Us Treasury holdings by foreign countries..i.e India is holding 123$ billion worth bonds

 

[tharun]

India's Net International investment position on June-2016
We need to decrease foreign exposure on india