Indian Economy: News and Discussion

[Indx TechStyle]

India's Economy Surpasses That Of Great Britain

As Theresa May returned home from her unsuccessful visit to India, she would bear witness to another relegation for the UK: India’s economy will be larger than the UK’s, for the first time in more than 100 years. This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well as Britain’s recent woes, particularly with the Brexit. Once expected to overtake the UK GDP in 2020, the surpassohas been accelerated by the nearly 20% decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of ~GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of ~INR 66.6 per $1. Furthermore, this gap is expected to widen as India grows at 6 to 8% p.a. compared to UK’s growth of 1 to 2% p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects.


This marks a significant landmark in India’s economic history, whose story over the last 150 years can be split into three parts: a period of divergence, of relative stagnation and a period of convergence with respect to the economy of the UK. Divergence begins with the UK’s industrial revolution in the 18th century to India’s independence in 1947 when the UK’s growth significantly outpaced India’s. The period of stagnation extended from 1947 to 1991 where both India and the UK grew at roughly the same rate. This was despite India being independent, and was predominantly due to India’s misinformed choice of pursuing a closed, centrally planned, socialist economy. Convergence began in 1991, when India finally implemented market reforms, and continues to this day. During this period India has experienced much faster economic growth than the UK and has finally in 2016 overtaken it in absolute terms, although is still less than one-fifth that of the UK in per capita terms.

History teaches us that milestones are important, that they can help clarify and bring to light underlying long-term trends, as well as encourage people to shed their biases. Japan’s victory over Russia in 1905 is an illustrative example: The event helped break the conception of the inability of the East to militarily defeat a western power and also highlighted the economic rise of Japan that had gradually taken place over the second half of the 19th century. India’s overtaking of the UK’s GDP in 2016 could serve as a similar moment.

This surpasso has three important implications. First, it highlights India’s arrival on the global stage and a significant change in power dynamics between India and the west. The effects of this are already being witnessed in India’s repudiation of a trade deal with the UK, where it stood firm in its ask for more favorable immigration for Indian nationals. Another example is the failure of May to secure a meeting with the Tata Group, who has 4,000 British employees at a steel plant in Port Talbot, that could potentially be shut down. Second it should give India the ability to shed any residual notion of colonial inferiority and enable it to have a more open mindset and look at alternative nations to emulate. For example, India could increasingly look at China, a country of similar population and closer to India’s own cultural tradition, as a model for its own economic growth. Lastly, it should redouble India’s efforts towards furthering market reform given that India’s per capita GDP is still less than one-fifth that of the UK, highlighting the tremendous scope for further convergence.

1947 gave India agency to chart its own path; 1991 broke India out of its mold; and hopefully 2016 shall give India conviction and help it redouble its efforts towards convergence after celebrating a historic and emotional milestone of economically overtaking its former colonizer.



www.forbes.com/sites/realspin/2016/12/16/indias-economy-surpasses-that-of-great-britain/

Posted on British Forum.
Soon reactions will arrive.

I will create a thread to bring screenshots to you guys.

 

[tharun]

Karvy Wealth Management has presented a report. Accordind to it, Indians have about Rs.132 Lakh crore wealth. Half of it, means Rs.66 Lakh crore is only gold!

If possible please attach the report......

 

[tharun]

Posted on British Forum.
Soon reactions will arrive.

I will create a thread to bring screenshots to you guys.

We are waiting............................................

 

[Indx TechStyle]

We are waiting............................................

Here's that.
https://www.arrse.co.uk/community/threads/indias-economy-surpasses-that-of-great-britain.260810/

 

[Indx TechStyle]

I had an essay about its steel production. I had some help from writecustomessay.com but I agree that school planning is very important nowadays. I know a teacher who just follow her routine but not all kids need it.

http://www.sundayguardianlive.com/news/7481-india-set-be-world-s-second-largest-steel-producer
Though, India is going to be second,

still China alone produces more steel than rest of world combined, India may increase it's share and later switch the position but in long term. Chinese.steel production expanded by 0.7% in last quarter, India's expanded by 12%.

 

[Indx TechStyle]

Wall St biggies not in top-5 M&A advisers

 

[ezsasa]

I think Arun Jaitley will be moved out of Finance Ministry, There is no way such negotiations between Finance ministry and a Rating agency can come in the media without Top level involvement(now a days).

How Modi government lobbied Moody's for a ratings upgrade, but failed

NEW DELHI: India criticised Moody's ratings methods and pushed aggressively for an upgrade, documents reviewed by Reuters show, but the US-based agency declined to budge citing concerns over the country's debt levels and fragile banks.

Winning a better credit rating on India's sovereign debt would have been a much-needed endorsement of Prime Minister Narendra Modi's economic stewardship, helping to attract foreign investment and accelerate growth.

Since storming to power in 2014, Modi has unveiled measures to boost investment, cool inflation and narrow the fiscal and current account deficits, but his policies have not been rewarded with a ratings upgrade from any of the "big three" global ratings agencies, who say more is needed.

Previously unpublished correspondence between India's finance ministry and Moody's shows New Delhi failed to assuage the ratings agency's concerns about the cost of its debt burden and a banking sect ..

In letters and emails written in October, the finance ministry questioned Moody's methodology, saying it was not accounting for a steady decline in the India's debt burden in recent years. It said the agency ignored countries' levels of development when assessing their fiscal strength.

Rejecting those arguments, Moody's said India's debt situation was not as rosy as the government maintained and its banks were a cause for concern, the correspondence seen by Reuters showed.

Moody's and one of its lead sovereign analysts, Marie Diron, declined to comment on the correspondence, saying ratings deliberations were confidential. India's finance ministry did not respond to requests for comment.

Arvind Mayaram, a former chief finance ministry official, called the government's approach "completely unusual".

"There was no way pressure could be put on rating agencies," Mayaram told Reuters. "It's not done."

DEBT BURDEN, BAD LOANS
India has been the world's fastest growing major economy over the past two years, but that rapid expansion has done little to broaden the government's revenue base.

At nearly 21 percent of gross domestic product (GDP), India's revenues are lower than the 27.1 percent median for Baa-rated countries. India is rated at Baa3 by Moody's, the agency's lowest notch for debt considered investment grade.

A higher rating would signify to bond investors that India was more creditworthy and help to lower its borrowing costs.

While India's debt-to-GDP ratio has dropped to 66.7 percent from 79.5 percent in 2004-05, interest payments absorb more than a fifth of government revenues.

Moody's representatives, including Diron, visited North Block, the colonial sandstone building in the Indian capital that houses the finance ministry, on Sept. 21 for a discussion on a ratings review.

The atmosphere at the meeting with Economic Affairs Secretary Shaktikanta Das, one of the ministry's most senior officials, and his team was tense, according to an Indian official present, after Diron had told local media the previous day that a ratings upgrade for India was some years away.

On Sept. 30, Moody's explained its methodology to Indian officials in a teleconference.

LOBBYING FOR AN UPGRADE
Four days later, the finance ministry sent an email to Diron questioning Moody's metrics on fiscal strength. The government cited the examples of Japan and Portugal, which enjoy better ratings despite debts around twice the size of their economies.

"Given that countries are on different stages of economic and social development, should countries be benchmarked against a median or mean number (as is done by Moody's)" the email asked.

In India's case, "while the debt burden lowered significantly post 2004, this did not get reflected in the ratings", the ministry argued.


New Delhi urged Diron to look at improvements in the factors - better forex reserves and economic growth - that Moody's had considered when handing India its last ratings upgrade in 2004.

In a reply the next day, Diron said that, not only was India's debt burden high relative to other countries with the same credit rating, but its debt affordability was also low.
She added that a resolution to the banking sector's bad loan problems was "unlikely" in the near-term.

In a last-ditch effort on Oct. 27, Economic Affairs Secretary Das sent a six-page letter to Singapore-based Diron, addressed to Moody's New York headquarters.

Reiterating points on India's fiscal strength, Das asked Moody's for a "better appreciation of the factual position".


Das dismissed Moody's concerns on India's public finances as "unwarranted" and told the agency that there was "scope for further lowering" the political risk perception to "very low".

"In the light of stable external debt parameters and the slew of reforms introduced in the realm of foreign direct investment, you may like to reconsider your assessment on 'external vulnerability risk'," he wrote.

Moody's on Nov. 16 affirmed its Baa3 issuer rating for India, while maintaining a positive outlook, saying the government's efforts had not yet achieved conditions that would support an upgrade.

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

 

[tharun]

We need new initiatives to boost tax..
1)How many of land owners are paying taxes for the rent they are receiving...?landlords need a special bank account to receive rent electronically.
2)Every govt contract awarded to contractors..they must open a dispensable bank account and must pay each and every thing from that account. At the finish of contract they must submit bank statement and tax authorities will deduct the tax on profit and release the remaining money...so that we can reduce corruption

 

[tharun]

Fantastic explanation about macro economics...must watch for everyone

 

[Indx TechStyle]

India Inc nets Rs 6.3 lakh cr from markets, bets big on bonds
Press Trust of India | New Delhi Dec 25, 2016 01:15 PM IST

Betting big on capital markets for raising funds, Indian companies have garnered an estimated Rs 6.3 lakh crore from the marketplace in 2016, with debt instruments being the most favoured route to raise money for their business needs amid volatile trends in equities.
Experts believe the corporates will continue to prefer debt route over equity markets for raising capital in the new year as well in the wake of the fall in interest rates, surplus liquidity in the banking system and an easier regulatory framework for the issuance of debt securities.

Sentiments in equity markets have also weakened due to the demonetisation move and experts believe this trend may continue at least for the initial part of 2017.

Out of the cumulative total of Rs 6.3 lakh crore garnered this year from capital markets in 2016, a large chunk or more than Rs 5.5 lakh crore has been mopped up from debt market.

In 2015, firms had raised a similar amount and most of the funds were mobilised through debt markets that year too.

Fresh capital collected from equity market stands at nearly Rs 80,000 crore for 2016, which mostly came from preferential share allotments to promoters and initial public offerings.

These funds have been raised mainly for expansion of business plans, repayment of loans and to support working capital requirements.

"In the wake of the fall in interest rates, surplus liquidity in the banking system and an easier regulatory framework for issuance of debt securities, firms may find debt as the preferred route for raising capital in 2017," Bajaj Capital's Senior VP and Head of Investment Analytics Alok Agarwala said.

"With surplus liquidity and lower lending rates, banks may be preferred as a source of capital in 2017. As interest rates and emerging market currency volatility have risen globally, firms shall find domestic markets relatively more attractive as compared to overseas markets for raising money," he added.

Echoing a similar view, Geojit BNP Paribas' Chief Investment Strategist V K VijayaKumar said the scenario is a bit uncertain for the upcoming year as demonetisation and the massive disruption that it has caused in the economy has increased the uncertainty factor.

"India's GDP growth and corporate earnings will be subdued for at least for two quarters in calendar 2017. The stock market as well as the primary market are likely to discount this.

"The Modi government is likely to press ahead with its anti-black money drive in 2017 too, with the focus shifting to benami property. This is likely to create further flutter in the market. US President Donald Trump's policies will also impact markets in a big way," VijayaKumar said.

In the debt segment, companies have mopped up Rs 5.13 lakh crore through debt placement route while Rs 38,600 crore has been raised through the public issuance of debt this year.

Within the equity segment, preferential allotment of shares helped garner Rs 29,850 crore, followed by IPO (Rs 25,163 crore), Offer For Sale through stock exchange mechanism (Rs 13,112 crore) QIP or Qualified Institutional Placement(Rs 4,481 crore), rights issue of shares (Rs 1,230 crore) and FPOs or Follow-on Public Offers (Rs 10 crore).

When it came to overseas markets, Indian firms have raked in a total of Rs 400 crore through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs).
"Capital mobilisation from equity markets depends upon

market sentiments. The first quarter of 2016 saw high volatility and weak sentiments in equity markets. Also, cost of raising debt was lower in 2016 as interest rates fell and corporate bond spreads narrowed since the second half of 2015. This encouraged firms to raise capital via private and public bond issues instead of equities," Agarwala said.

"At the same time, there were various regulatory initiatives for deepening Indian bond markets such as banks being allowed to issue Additional Tier 1 Bonds, to meet their capital requirement, investment limit for Foreign Portfolio Investors being increased and the withholding tax rate being reduced from 20 per cent to 5 per cent," he added.

Moreover, investors have also shown the tremendous response to the pubic issues of NCDs made by NBFCs in 2016. Also, the recent spurt in Mutual Fund investments have created a large scope in corporate bond markets for companies. All these factors contributed tremendously to capital raising via the debt route.

The year 2016 has seen hectic fund-raising activities in the IPO segment despite a relatively lacklustre secondary market. Generally, IPO booms follow a robust equity market. The mode has given an opportunity for the companies to raise funds and provide exit to existing investors.

A total of 26 firms have collected over Rs 26,000 crore through IPOs this year -- making it the best one for public offers since 2010. Last year, a total of Rs 13,564 crore were mobilised by 21 issuers.

The year has seen ICICI Prudential Life's blockbuster IPO. The insurance firm raised Rs 6,057 crore through the initial share-sale plan.

"A large part of IPOs have been structured to offer exit to existing investors rather than raise fresh funds for the companies," said Munish Aggarwal Director Capital Markets at Equirus Capital, an investment banking firm.

The rise in mobilisation from IPOs was further aided by the launch of public issues from big and popular names such as L&T Infotech, RBL Bank and ICICI Prudential Life Insurance.

Attractive pricing for the IPOs, leaving some juice for investors, also contributed to the rise in fund-raising through this route.

However, the outlook for the IPO market does not appear to be bullish for the new year amid lingering domestic and global headwinds.

"Markets may continue to face headwinds in the first half of 2017. Hence, firms may find it difficult to launch IPOs in the first half of 2017. Their ability to raise money through IPO route in the second half of 2017 shall depend on the recovery in growth and sentiments in equity markets," Alok Agarwala said.

Barring IPO, the fund raising through other equity avenues have dropped in 2016 from last year. Capital raked in through preferential route declined to Rs 29,850 crore in this year from Rs 45,750 crore in 2015.
Also, money raised from QIPs stand at Rs 4,481 crore in 2016, while it was a staggering over Rs 24,000 crore last year. Besides, funds mop-up via OFS route slumped to Rs 13,112 crore in 2016 from Rs 35,570 crore from the preceding year.
By Business Standard

 

[SANITY]

Russia offers technology to keep hackers at bay

Russian Quantum Center (RQC) said that it is ready to collaborate with India and offer its quantum technology that will prevent hackers from breaking into bank accounts. RQC plans to offer 'quantum cryptography’ that could propel India to the forefront of hack proof communication in sectors such as banking and national and homeland security.

"We are ready to work with Indian colleagues. It (the technology) can't be bought from the United States as it deals with the government and security,” said Ruslan Yunusov, chief executive at RQC, in an interview.

Established by Russia's largest global technology hub, Skolkovo in 2010, RQC conducts scientific research that could lead to a new class of technologies.These include developing 'unbreakable cryptography' for the banks and the government organisations. It also involves research in areas such as materials with superior properties and new systems for ultrasensitive imaging of the brain. The research is mostly funded by the government money.

The 'Quantum cryptography' created by RQC depends more on physics, rather than mathematics. It is based on the usage of individual particles or waves of light (photon) and their intrinsic quantum properties to develop an unbreakable cryptosystem, according to TechTarget, a technology media firm. This is feasible as "it is impossible to measure the quantum state of any system without disturbing that system," according to TechTarget.

Mr.Yunusov, a PhD in Physics from Lomonosov Moscow State University, said that RQC is willing to collaborate as Russia and India are part of BRICS, an association of five major emerging national economies.He also mentioned that Russian President Vladimir Putin has said that India is Russia's 'privileged strategic partner'. "I think if we start the work with the Indian partners, we will be supported by our governments also," he said.

Banks hacked

Experts say that a technology like 'quantum cryptography' is relevant at a time when hacking targets are multiplying in India as the country goes digital. Researchers in India at cybersecurity company FireEye recently discovered phishing websites created by cybercriminals that spoof 26 Indian banks in order to steal personal information from customers. In another incident, the security of about 3.2 million debit cards got compromised in the country. Technology company Yahoo too faced a huge data breach when it discovered a hacking attack dating back to 2013 that may have affected more than one billion of its user accounts.

"If IT giants like 'Yahoo' are vulnerable, we can well imagine the cyber risks that banks or financial institutions can experience, with the current surge in digitisation," said Trishneet Arora, an ethical hacker and chief executive of cybersecurity startup TAC Security, in a statement.

However, hacking attacks cannot only be performed using normal computers. Mr.Yunusov of RQC said that as 'quantum computers' get sufficiently powerful they would be able to easily decrypt today's internet communication. Quantum computers exist today but are experimental, small and include only few quantum bits. Companies like Google, IBM, Intel and Microsoft are already working on it. This year Google announced that it is working on protecting Chrome against possible attacks of quantum computers. The search giant is doing this by deploying post-quantum cryptography in an experimental version of the browser.

Quantum key distribution

The traditional encryption depends on transmitting a decryption key along with the secret information. The recipient then uses that key for deciphering that secret data. But hackers can clone this key and steal the information.

To address this problem the most promising application of quantum cryptography is Quantum key distribution (QKD). RQC said that two users can establish QKD session, that allows them to obtain a random private key. QKD is distinct as it encrypts this key on light particles called photons. A hacker trying to clone or read such a key would automatically change its state, due to fundamental principle of quantum mechanics. It would also leave a hacker fingerprint. This means the recipient and the transmitter can easily detect the attempts to read or intercept the information.

Mr.Yunusov said the QKD solution developed by the RQC was used for establishing quantum keys between two bank offices in Moscow. RQC said the developed solution can be a central point of quantum-safe infrastructure for banks, financial and governmental institutions "ensuring absolute security of communication."

 

[tharun]

ut of the cumulative total of Rs 6.3 lakh crore garnered this year from capital markets in 2016, a large chunk or more than Rs 5.5 lakh crore has been mopped up from debt market.

God.....5.5 lakh crore nearly $90 Billion...how much is the total corporate debt in india?

 

[Indx TechStyle]

God.....5.5 lakh crore nearly $90 Billion...how much is the total corporate debt in india?

$177 billions
It's one of the problems out of which we are yet to have a breakthrough.

 

[tharun]

$177 billions
It's one of the problems out of which we are yet to have a breakthrough.

Is that total from both debt bonds and loans?
But according to economic times corporate debt is $1.1 Trillion and in which $177 Billion is in risk due to defaults and bad loans
articles.economictimes.indiatimes.com/2016-04-19/news/72453413_1_bank-credit-bad-loans-defaultarticles.economictimes.indiatimes.com/2016-04-19/news/72453413_1_bank-credit-bad-loans-default

 

[ezsasa]

$177 billions
It's one of the problems out of which we are yet to have a breakthrough.

Different topic:

Union budget for current fiscal was 20 lakh crore, which is roughly 300 billion USD.

Any idea total of individual state budget s for the current fiscal?

If you have a number ready let us know, else I will find them out individually when I have time.

 

[Indx TechStyle]

Different topic:

Union budget for current fiscal was 20 lakh crore, which is roughly 300 billion USD.

Any idea total of individual state budget s for the current fiscal?

If you have a number ready let us know, else I will find them out individually when I have time.

Le'me search tonight.
I will find them for you or I may not.

 

[ezsasa]

Le'me search tonight.
I will find them for you or I may not.

Then let's share...

I'll take South, west and MP.

You take north, east and north east.

I'll try doing it tonight.

 

[tharun]

Different topic:

Union budget for current fiscal was 20 lakh crore, which is roughly 300 billion USD.

Any idea total of individual state budget s for the current fiscal?

If you have a number ready let us know, else I will find them out individually when I have time.

Every thing about public finances are available at this link please feel free to search...
https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics

 

[ezsasa]

Every thing about public finances are available at this link please feel free to search...
https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics

Thanks for the link...

@Indx TechStyle
as per the report, 38.4 lakh crore i.e more than 550 Billion USD.

Not bad.....

 

[tharun]

Thanks for the link...

@Indx TechStyle
as per the report, 38.4 lakh crore i.e more than 550 Billion USD.

Not bad.....

Looking at deficit of both central and state is almost 34 lakh crore