Indian Economy: News and Discussion

[captscooby81]

Sitharaman's husband says govt in denial mode about economic slowdown
In rather sharp words, Parakala Prabhakar said that the BJP's attack on Nehruvian economic framework is nothing more than a political assault and can never graduate to an economic critique.

BusinessToday.In New Delhi Last Updated: October 14, 2019 | 14:26 IST

Finance Minister Nirmala Sitharaman's husband Parakala Prabhakar has said that the government is in denial mode about the economic slowdown. In a column for The Hindu, Prabhakar has said that while sector after sector is facing a rather challenging situation, the BJP government is yet to "show signs that it has come to grips with what ails the economy".

In a critique of the BJP government, Prabhakar said that there is very little evidence to show that the BJP government has a strategic vision to address the challenges. Explaining the problem with the government's ways of handling the crisis, Prabhakar added that BJP has an "inexplicable reluctance" to develop its "own coherent set of ideas about the country's economy".

He said that while the rejection of the Nehruvian ideas of socialism has always been clear with the BJP, but its own advocacy can at best be "loosely termed as capitalist, free market framework", which has remained untested in practice. "The party's economic ideology and its articulation were limited to mainly critiquing the Nehruvian model from the fringes of the political spectrum," he mentioned in the column.

"The issues that catapulted the party on to the centre stage of the country's political discourse and then to the seats of power both in the Centre and in various States had little to do with the articulation of an economic road map and its endorsement by the electorate. Nor did the economic direction the country ought to take figure as a serious point of debate and discussion at any point in the highest platforms of the party," Prabhakar said. He said that the present leadership of the party was aware that the party was not identified with a distinct economic philosophy and hence, did not offer the party's economic performance as a claim for re-election. "It instead chose, wisely, a muscular political, nationalist, security platform," he added.

In rather sharp words, Prabhakar said that the BJP's attack on Nehruvian economic framework is nothing more than a political assault and "can never graduate to an economic critique".

In the column he suggests the BJP leadership to take a leaf out of PV Narasimha Rao-Manmohan Singh's economic policy. "The path-breaking repositioning ushered in by P.V. Narasimha Rao and his economic amanuensis Manmohan Singh remains unchallenged even today. Almost every political party that formed the government, took part in governance, or lent outside support to the government at the Centre since then embraced that repositioning," he said.

"A full-fledged embrace and an aggressive pursuit of it even now could provide the BJP and the government led by Prime Minister Narendra Modi a lodestar to steer the economy out of the choppy waters it is in at present," he concluded.

https://www.businesstoday.in/curren...own-little-strategic-vision/story/384569.html

 

[vampyrbladez]

Sitharaman's husband says govt in denial mode about economic slowdown
In rather sharp words, Parakala Prabhakar said that the BJP's attack on Nehruvian economic framework is nothing more than a political assault and can never graduate to an economic critique.

BusinessToday.In New Delhi Last Updated: October 14, 2019 | 14:26 IST

Finance Minister Nirmala Sitharaman's husband Parakala Prabhakar has said that the government is in denial mode about the economic slowdown. In a column for The Hindu, Prabhakar has said that while sector after sector is facing a rather challenging situation, the BJP government is yet to "show signs that it has come to grips with what ails the economy".

In a critique of the BJP government, Prabhakar said that there is very little evidence to show that the BJP government has a strategic vision to address the challenges. Explaining the problem with the government's ways of handling the crisis, Prabhakar added that BJP has an "inexplicable reluctance" to develop its "own coherent set of ideas about the country's economy".

He said that while the rejection of the Nehruvian ideas of socialism has always been clear with the BJP, but its own advocacy can at best be "loosely termed as capitalist, free market framework", which has remained untested in practice. "The party's economic ideology and its articulation were limited to mainly critiquing the Nehruvian model from the fringes of the political spectrum," he mentioned in the column.

"The issues that catapulted the party on to the centre stage of the country's political discourse and then to the seats of power both in the Centre and in various States had little to do with the articulation of an economic road map and its endorsement by the electorate. Nor did the economic direction the country ought to take figure as a serious point of debate and discussion at any point in the highest platforms of the party," Prabhakar said. He said that the present leadership of the party was aware that the party was not identified with a distinct economic philosophy and hence, did not offer the party's economic performance as a claim for re-election. "It instead chose, wisely, a muscular political, nationalist, security platform," he added.

In rather sharp words, Prabhakar said that the BJP's attack on Nehruvian economic framework is nothing more than a political assault and "can never graduate to an economic critique".

In the column he suggests the BJP leadership to take a leaf out of PV Narasimha Rao-Manmohan Singh's economic policy. "The path-breaking repositioning ushered in by P.V. Narasimha Rao and his economic amanuensis Manmohan Singh remains unchallenged even today. Almost every political party that formed the government, took part in governance, or lent outside support to the government at the Centre since then embraced that repositioning," he said.

"A full-fledged embrace and an aggressive pursuit of it even now could provide the BJP and the government led by Prime Minister Narendra Modi a lodestar to steer the economy out of the choppy waters it is in at present," he concluded.

https://www.businesstoday.in/curren...own-little-strategic-vision/story/384569.html

Isko kya hua? Koi lafda third umpire banke iske ghar me batting kar raha hain kya?

 

[indiatester]

Food for thought... A bubble in making???

Sent from my Moto G (5) Plus using Tapatalk

These PE values have always scared me, but the growth in those stocks have been so good that I continue to keep them in my portfolio. I have HUL, Marico and Godrej Consumer.
On HUL, the estimates were that it has a growth of 5.6% and it grew at 6.7% this quarter and they say it is a quality stock which it is, but PE is scary.

 

[indiatester]

@Haldiram please open a thread for discussion on investments. I think we are polluting the economy thread with our discussions.

 

[Trinetra]

Modi should be held accountable.

......................

You never know all communists here in INdia might actually do that by saying HOW DARE YOU?

 

[Akshay_Fenix]

Economists, get off the stage

It’s time to stop admiring Economics Nobel Laureates, really the field of Economics as a whole. There is no doubt that the best economists are spectacularly brilliant people, but 51 years after the First Nobel was awarded for Economics, all of the Third World is still the third world, wealth still comes only from creative minds in the technical and cultural fields applied to profit by good businessmen, and economists have no role except to sit in universities, central banks, and governmental organizations, and issue religious edicts of how the economy should be run by power hungry politicians.

Together economists and politicians make up the ruling structures of government in the world, but all they’ve managed to do is make Totalitarian China get phenomenally wealthy through expropriation of foreign intellectual property and causing the jobs of the working classes of all the Democracies to go to China, all under the mantra of “free trade makes thing better for everyone”. Which is a big pile of nonsense that is repeated as a religious truth by everyone whose job cannot be exported to China. All the economics big brains in the central banks and Ivy League universities didn’t see the 2008 financial crash coming, then didn’t then how to halt it except by bailing out the money bags financiers who caused it, who caused the economic hollowing out of the working class in the first place by exploiting the opportunities created by the economists.

The same economists who now have no idea, and indeed no interest in, how to halt the power that totalitarian China now holds over the economies and geostrategic security of the Freedom loving Democracies that created the havens of academic inquiry and discovery, including economics, in the first place. Nor do the economists have any ideas what to do about totalitarian states that dig up oil or mineral wealth and then buy out the government policies of Free Democracies where people actually have to apply their brains and labor to generate value. Nor do they have any answers of what to do about poverty and inequality that don’t, in the end, amount to some variation of the Marxist welfare state.

Developments in experimental economics? Give it a break. Government, being a vast bureaucracy, needs bureaucrats to make policy, and so needs a bunch of eggheads with degrees showing that they have the qualifications to make policy. That’s what economics is. A vast field of bureaucracy for a system of government that needs bureaucrats to pull the levers of the economy and look like they know what they’re doing.

But they don’t.

The 21st century is going to be a century of crisis, chaos, collapse, and conflict. And at the bottom of it all will be the failure of the global institutional system built by economists that generated a lot of wealth without caring about who got the wealth, how they got it, whether they should have, what it did to everyone else, and what happens when the reckoning for this bureaucratic sell out of ordinary voters in democratic comes due.

While India celebrates the 2019 Economics Nobel Prize out of the usual misplaced pride that Indians have about achievements that are not India’s, be in no doubt that the post World War II global order of the world built by economists is now breaking down because economists never accurately valued the worth of democracy and freedom, and the ordinary people in free democratic countries, as they set about engineering a vast global bureaucratic system of trade and governance.

https://timesofindia.indiatimes.com/blogs/cogito-ergo-sum/economists-get-off-the-stage/

Easy to criticize, tough to give out solutions.

 

[Why so serious?]

India retains world's fastest-growing rank, tying with China: IMF
IANS | Updated: Oct 15, 2019, 20:12 IST

HIGHLIGHTS

• In the medium term, the IMF expects India's growth to stabilise at about 7.3 per cent over the medium term, based on continued implementation of structural reforms
• The IMF suggested that India should use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence

NEW YORK: In the gloomy global economic picture painted by the International Monetary Fund (IMF), India retains its rank as the world's fastest-growing major economy, tying with China, with a projected growth rate of 6.1 per cent for the current fiscal year, despite an almost one per cent cut in the forecast.


However, the IMF's World Economic Outlook (WEO) released on Tuesday projected India's economy to pick up and grow by 7 per cent in the 2020 fiscal year.


The WEO cut India's growth rate by 0.9 per cent from the 7 per cent made in July and by 1.2 per cent from the 7.3 per cent in April.


In contrast to the dark view of the economy within India, when viewed globally, the nation's picture seems brighter despite the cuts.


The world economy is projected to grow only 3 per cent this year and 3.4 per cent next year amid a "synchronised slowdown", according to the WEO.


Explaining the cut in growth projection for India, the WEO said: "India's economy decelerated further in the second quarter, held back by sector-specific weaknesses in the automobile sector and real estate as well as lingering uncertainty about the health of non-bank financial companies."


It added that "corporate and environmental regulatory uncertainty" were other factors that weighed on demand.


IMF's projected growth rate of 6.1 per cent for 2019-20 is consistent with the Indian Monetary Policy Committee's forecast.


About the international scenario, IMF's chief economist Gita Gopinath wrote in the foreword to the WEO: "The global economy is in a synchronised slowdown, with growth for 2019 downgraded again - to 3 per cent - its slowest pace since the global financial crisis (in 2007-08). This is a serious climb down from 3.8 per cent in 2017, when the world was in a synchronised upswing."

WEO projected China's economic growth to slow down to 5.8 per cent next year.


In the Euro area, growth is projected to be only 1.2 per cent this year and 1.4 per cent next year, with the German economy expected to grow by a dismal 0.5 per cent this year.


United States is expected to slightly better with a 2.1 per cent growth projected for this year and 2.4 per cent for the next.


Gopinath blamed the global slowdown on rising trade barriers, uncertainty surrounding trade and geopolitics, and structural factors, such as low productivity growth and an aging population in developed countries.


WEO said India's growth in 2019 is sharply lower than the 6.8 per cent in 2018 "for idiosyncratic reasons, but is expected to recover in 2020."


The reduction in India's growth projection for this year "reflects a weaker-than-expected outlook for domestic demand," WEO said.


India's future "growth will be supported by the lagged effects of monetary policy easing, a reduction in corporate income tax rates, recent measures to address corporate and environmental regulatory uncertainty, and government programmes to support rural consumption," it added.


In the medium term, the IMF expects India's growth to stabilise at about 7.3 per cent over the medium term, based on continued implementation of structural reforms.


The IMF suggested that India should use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence.


It said: "A credible fiscal consolidation path is needed to bring down India's elevated public debt over the medium term. This should be supported by subsidy-spending rationalisation and tax-base enhancing measures."


Other measures it suggested included reducing the public sector's role in the financial system, reforming the hiring and dismissal regulations that "would help incentivise job creation and absorb the country's large demographic dividend," and land reforms to expedite infrastructure development.


The auto sector is one of the areas seriously affected globally, according to the WEO.


"The automobile industry contracted in 2018 for the first time since the global financial crisis, contributing to the global slowdown since last year," it said.


Global car sales fell by three per cent last year, while the number of automobile units manufactured declined by 1.7 per cent, in value terms it fell by 2.4 per cent, WEO said.


The number of auto units produced by China fell by four per cent, its first decline in more than two decades, according to the WEO.


It said the two main reasons for the decline of the auto sector were the removal of tax breaks in China and the rollout of new carbon emission tests in Europe.


The auto industry, it noted, had a large global footprint and vehicles and related parts are the world's fifth largest export product, accounting for about 8 per cent of global goods exports in 2018.

 

[Willy3]

Me...after trying to figure out what @Haldiram and other nibbas discussing here for days.... concluded that..

He...maa ... saraswati ....gib sum Gray matter

 

[FGFAPilot1]

Does anyone have any comments on an economy without any income tax? Will it actually help us in the long term or would removing income tax make a huge hole in the govt's coffers which wouldn't be compensated by trickle down economics and/or indirect taxes?

 

[Assassin 2.0]

Me...after trying to figure out what @Haldiram and other nibbas discussing here for days.... concluded that..

View attachment 39387

He...maa ... saraswati ....gib sum Gray matter

But when you finally understand something which @Haldiram is saying.

 

[indiatester]

Does anyone have any comments on an economy without any income tax? Will it actually help us in the long term or would removing income tax make a huge hole in the govt's coffers which wouldn't be compensated by trickle down economics and/or indirect taxes?

Hole in govt's coffers is one thing, the impact on poor people is going to be far worse. To fill the loss in income from income tax, govt has to increase the indirect taxes.
The cost of goods is going to be same for me and a poor cab driver or a security guard. Net result would be they keep getting poorer as they are paying almost the same taxes as I am. I doubt the money I save is going to create enough jobs to increase their income to higher levels.
One idea that should be explored is the universal basic income AND/OR subsuming of providing food, health, housing and education fully by the government. It may work then with a few caveats.

 

[Nicky G]

Does anyone have any comments on an economy without any income tax? Will it actually help us in the long term or would removing income tax make a huge hole in the govt's coffers which wouldn't be compensated by trickle down economics and/or indirect taxes?

Who pays personal tax? About 2% of our population. A pathetically low figure.

If there was no personal income tax, it would either be spent or pushed into equity or Bank deposits. Either way, boosting the economy.

There would be no need to increase indirect taxes as the freed up breaucrats can be used to identify the cheaters on GST and like. There is a such as huge scope for regularization here.

If all is cozy, why has no major economy gone down this route? Well, to figure that out, look at when they were introduced. How did they become universally accepted? Who benefits from them?

That said, would it be a wise move for us? Probably not. It's not worth the risk to benefit such a small base.

 

[maniacguy]

But when you finally understand something which @Haldiram is saying.

AH A MAN OF CULTURE



Culture level is over 9000 characters lol

 

[Spindrift]

Hole in govt's coffers is one thing, the impact on poor people is going to be far worse. To fill the loss in income from income tax, govt has to increase the indirect taxes.
The cost of goods is going to be same for me and a poor cab driver or a security guard. Net result would be they keep getting poorer as they are paying almost the same taxes as I am. I doubt the money I save is going to create enough jobs to increase their income to higher levels.
One idea that should be explored is the universal basic income AND/OR subsuming of providing food, health, housing and education fully by the government. It may work then with a few caveats.

Not necessarily, one can always classify goods into basic and luxury categories. Tax the basic goods at lower rates and luxury at higher rates. A poor person is not going to by a Harley Davidson.
The problem here is that the salaried middle class is taxed liked anything, where as a rich farmer is not even tho he is earning more than the salaried middle class person. If you look at the situation in the NCR region a lot of farmers became filthy rich over night and did not pay even a single penny in income tax.

 

[Akshay_Fenix]

Raghuram Rajan’s volte-face: After endorsing Congress’ NYAY dole-out scheme, Rajan now says welfare scheme are ‘too costly’

In the run-up to the Lok Sabha elections 2019, then Congress had announced in its manifesto a “Minimum Income Guarantee Scheme”- formally called Nyuntam Aay Yojana (NYAY), to five crore ‘poorest families’ covering 25 crore people by assuring them a guaranteeing minimum income of ₹6,000 per month or ₹72,000 a year. However, the party soon found itself at its wits’ end as questions related to the feasibility of such a costly ‘free money’ scheme started erupting. Former RBI governor, Raghuram Rajan, then came out in the defence of the dole-out scheme asserting that the Congress party consulted him on the workability of NYAY and that fiscal space can be created for its implementation.

The article which was published on March 27, 2019, the former RBI governor defended NYAY scheme while many economists and financial advisors had put a question mark on the financial viability and feasibility of such a money-guzzling dole-out scheme. Rajan, in an interview, had then hailed NYAY saying that “It is important to create fiscal space for such schemes, which are actually effective”.

However, barely within 7 months, Rajan seems to have made an abrupt 180-degree turn on his understanding of welfare schemes. In his latest critique of the central government, Rajan held a dim view of the BJP government at the centre’s welfare schemes, claiming that they are aimed to gain political capital among people. Opposing the welfare schemes, he said that the country is in throes of economic slowdown and the country cannot keep spending on welfare schemes.

This assertion is in stark contrast to the views he had expressed about the implementation of Congress’ NYAY scheme. NYAY scheme if implemented would have cost Rs 3.60 lakh crores per year to the public exchequer or 2 per cent of the national income. At Rs 3.60 lakh crores, the outlay under the scheme was projected 3 times India’s fiscal deficit, six times the defence budget and two times the corporate receipts. For Rajan, creating fiscal space for such a huge expenditure was possible but the welfare schemes initiated by the current government to stimulate demand are ill-conceived.

Besides this u-turn, Rajan also made politically motivated remarks against the BJP government while delivering OP Jindal lecture at Watson Institute, Brown University, on October 9. Slamming central government’s alleged majoritarianism, Rajan warned that “It will take the country down the dark and uncertain path”. He also ranted about Demonetisation and the implementation of GST as the primary reasons behind the current slowdown.

https://www.opindia.com/2019/10/raghuram-rajan-nyay-congress-welfare-scheme-uturn/

Well if two economists say the same thing then media won't be able to differentiate between the two and people will lose interest.

They are nothing but entertainers, which is why none of them provide any solutions to our problems and are only good at criticizing. Wanna know the reason? They don't know the fuks going on.

 

[indiatester]

Not necessarily, one can always classify goods into basic and luxury categories. Tax the basic goods at lower rates and luxury at higher rates. A poor person is not going to by a Harley Davidson.
The problem here is that the salaried middle class is taxed liked anything, where as a rich farmer is not even tho he is earning more than the salaried middle class person. If you look at the situation in the NCR region a lot of farmers became filthy rich over night and did not pay even a single penny in income tax.

Even if you differentiate between basic goods and others, its going to be unfair for the poorer person.
A richer person has the capacity to pay more without hurting his level of growth and standard of living than a poorer person.
Regarding Salaried class and farmers, thats more to do with exemptions in paying of tax and I was NOT talking of asking salaried folks to pay more. I was only differentiating between poor and the rich when it comes to indirect taxes.
We have a working age population of about 50% (say about 60 crores). Of that total filing for taxes was about 7 crores. Thats about 10% of working age population.
Personal income tax is also non trivial. As per wikipedia in 2007 it contributed about 18% of Central Revenue collections.
IMO, we are not at a stage where we can get rid of income tax. Not enough thought has been put to see the consequences.

 

[captscooby81]

@Haldiram yeh Dekho

Parle Biscuits net profit rises 15% in FY19; revenue up 6.4% to Rs 9,030 cr
By Viveat Susan Pinto | Last Updated at October 16 2019 01:45 IST

Privately owned Parle Biscuits, part of the Parle Products group, reported 15.2 per cent year-on-year (YoY) growth in net profit for financial year 2018-19 (FY19) even as the group along with other top biscuit manufacturers have asked the government for a goods and services tax (GST) cut.

According to information shared by business platform Tofler, Parle Biscuits' FY19 net profit was Rs 410 crore versus Rs 355 crore reported the previous year. Total revenue grew 6.4 per cent YoY to Rs 9,030 crore, with revenue from operations alone growing nearly 6 per cent to Rs 8,780 crore from the previous year. Other income jumped 26 per cent to Rs 250 crore in FY19, aiding top line growth

Parle Products had indicated in August it would have to lay off people as slowing growth and falling demand for entry-level biscuits, after an 18 per cent GST was slapped on it, could cause production cuts.

 

[Akshay_Fenix]

@Haldiram yeh Dekho

Parle Biscuits net profit rises 15% in FY19; revenue up 6.4% to Rs 9,030 cr
By Viveat Susan Pinto | Last Updated at October 16 2019 01:45 IST

Privately owned Parle Biscuits, part of the Parle Products group, reported 15.2 per cent year-on-year (YoY) growth in net profit for financial year 2018-19 (FY19) even as the group along with other top biscuit manufacturers have asked the government for a goods and services tax (GST) cut.

According to information shared by business platform Tofler, Parle Biscuits' FY19 net profit was Rs 410 crore versus Rs 355 crore reported the previous year. Total revenue grew 6.4 per cent YoY to Rs 9,030 crore, with revenue from operations alone growing nearly 6 per cent to Rs 8,780 crore from the previous year. Other income jumped 26 per cent to Rs 250 crore in FY19, aiding top line growth

Parle Products had indicated in August it would have to lay off people as slowing growth and falling demand for entry-level biscuits, after an 18 per cent GST was slapped on it, could cause production cuts.

Naturally, the economy is so bad that people can't buy Nankhatai and are opting for Parle G.
Mudi must resign.

Jokes apart, PraveenPatil is saying that Modi is pumping in a whole lot of money into rural economy (Villages) which the MSM is reluctant to highlight. He's quite serious about doubling farmers income by 2022.

 

[afako]

Bajaj Auto launching electric scooter:

Live streaming.

 

[Spindrift]

Even if you differentiate between basic goods and others, its going to be unfair for the poorer person.
A richer person has the capacity to pay more without hurting his level of growth and standard of living than a poorer person.
Regarding Salaried class and farmers, thats more to do with exemptions in paying of tax and I was NOT talking of asking salaried folks to pay more. I was only differentiating between poor and the rich when it comes to indirect taxes.
We have a working age population of about 50% (say about 60 crores). Of that total filing for taxes was about 7 crores. Thats about 10% of working age population.
Personal income tax is also non trivial. As per wikipedia in 2007 it contributed about 18% of Central Revenue collections.
IMO, we are not at a stage where we can get rid of income tax. Not enough thought has been put to see the consequences.

How is it going to be unfair to the poor person? The government is already doing that. If a poor person saves some money and buys a small plot of land for farming and or for building a small house he is the paying same rate of tax as a rich person who buys a large plot in the same area at the same rate to build a farmhouse.

And do you think all this is fair to the salaried middle class, majority of whom are from the general quota and have never received any benefits from the government and are now being double or triple taxed by the government and if the same salaried middle class person looses his job due to the current economic condition bought upon us by the policies of the government and can't pay his EMIs and get evicted by the bank, what is the government going to do about that to help that person? NOTHING!

Secondly, the government in all its wisdom allow the PSU to come under massive debt and fail, whereas if they are managed properly and allowed to do business without interference they have the capability to earn a boat load of money for the government.