Indian Economy: News and Discussion

Tejbrahmastra

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Less than 5% of Indians are now expected to be below the poverty line, and extreme destitution has almost gone away, a top government official asserted on February 25, citing the findings of the Household Consumption Expenditure Survey (HCES) for 2022-23 The urban-rural consumption divide has narrowed to 71% in 2022-23 from a peak of 91% in 2004-05, so inequality is declining, he said, even as rural households’ spending on food has dropped below 50% of their total expenditure for the first time ever. “Poverty lines and estimates are derived from this. We have had four, five different informal estimates for poverty in the absence of the 2017-18 Survey findings. If we go by ₹32 a day, which was the last accepted poverty line as of 2011-12, and factor in inflation trends since then to double that level to about ₹60 a day, then you will see that poverty is less than 10%, as ₹1,782 is the average spending by those in the bottom 5% to 10% fractile class in rural India,” he said
 

ezsasa

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has the private industry reached a stage where they can sustain GDP growth in case capital expenditure has to be curtailed for some reason?
======
Capital Expenditure by Public Sector (Centre + CPSEs) by FY (In Rs. Lakh Crore):
2024: 18.6 (BE)
2023: 14.5 (RE)
2022: 12.7
2021: 11.3
2020: 11.6
2019: 11.1
2017: 7.9
2015: 5.6
(DEA; Various Budget documents)


Screenshot 2024-02-26 at 1.23.40 PM.png
 

Tejbrahmastra

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has the private industry reached a stage where they can sustain GDP growth in case capital expenditure has to be curtailed for some reason?
======
Capital Expenditure by Public Sector (Centre + CPSEs) by FY (In Rs. Lakh Crore):
2024: 18.6 (BE)
2023: 14.5 (RE)
2022: 12.7
2021: 11.3
2020: 11.6
2019: 11.1
2017: 7.9
2015: 5.6
(DEA; Various Budget documents)


View attachment 241932
Private sector investment as a percentage of GDP has been falling since 2012
1708934294486.png
 

Tejbrahmastra

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In fact even the Net FDI too seems to be on the declining trend
View attachment 241935
View attachment 241936
In fact even the Net FDI too seems to be on the declining trend with FY23 H1 has only $33 billion FDI:
View attachment 241939
Significant drop in FDI inflow in FY24:

View attachment 241935
FDI flows during 1H of fiscal year: Fresh equity inflows have declined and repatriation/disinvestment of existing investment has almost doubled.

View attachment 241936
Global FDI trends
View attachment 241937
India’s share in global FDI inflow had actually been faring well until 2022
View attachment 241938
 

ezsasa

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Private sector investment as a percentage of GDP has been falling since 2012
View attachment 241933
as an aside.

i didn't understand print's emphasis on this chart then and still don't, GFCF(private) should be proportional to global and domestic market demand forecast not GDP, since GDP is about value addition. what a 100 crore plant produces every year, is what GDP measures upon completion of construction, not just the cost to setup that plant. if the market feels there are global headwinds, they might decide to defer expansion plans which reduces GFCF(private) numbers. GFCF numbers can also come down, if companies/govt is no longer importing capital equipment and are being manufactured here at lower cost etc. etc. that chart has some value, but not entirety of the equation.

Probably the reason economic survey added this chart, is to tell the market that govt is putting in extra effort to sustain growth rate and the market has to play their part in sustaining growth levels.
 

blackleaf

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Because banning imports is not the solution. Making your exports more competitive is the key.
India has been sitting on trade deficit for long time. Stop cheap imports will only make things worse since no one can scale up her industrial base overnight.
Stopping cheap imports and giving preference to local industries is literally part of the East Asian playbook. From Japan's industrialization after the Meji Restoration to what China has done in the last 50 years promoting local industries even if they are uncompetitive and limiting foreign imports through trade barriers and currency manipulation has been a tried and tested strategy.

Well, what India give back as the bargain? Duty free access to Indian market? The possible scenario is India's high-end industries were destroyed by Western suppliers, while India's low end industries can't win the battle in Western market against Bangladesh, Vietnam, South Eastern Asia, which are supported by Chinese.
What do Bangladesh, Vietnam and SE Asia give back in return? Most of those countries run large trade deficits and are negligible markets for Western goods.

Bangladesh has basically no market for European countries. Their car consumption for example is like 1/100 of India's. European companies already make billions selling their products on the large Indian market while they make basically nothing from Bangladesh. Why then should Indian textiles have a 10% tariff while Bangladesh textiles get tariff free access? 10% is a very significant tariff in such a cost competitive industry.

The same is true for most SE Asian countries. They run large trade surpluses and are much smaller markets for European countries compared to the Indian market. Yet they are getting preferential agreements for tariffs.
 

Jagattunga Govinda III

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this is y i dont trust any startups .

Called it a month ago.
That's the thing. Judging from the UI, it hardly looks any different from OpenAI's ChatGPT. According to themselves, their product is slightly better than GPT-4 product as far as analysing and responding to Indian languages go. They also claim to have built it up from scratch. Its first impression is unimpressive. They claim that they will make the product open for public use by next month so let's see how it goes. Personally, I think we are heading towards an AI bubble much like the case of the dot-com bubble back in the day.
These idiots are making billion-dollar unicorns out of pre-existing products and are claiming that they built it out of scratch. Such a letdown.
 

no smoking

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Stopping cheap imports and giving preference to local industries is literally part of the East Asian playbook. From Japan's industrialization after the Meji Restoration to what China has done in the last 50 years promoting local industries even if they are uncompetitive and limiting foreign imports through trade barriers and currency manipulation has been a tried and tested strategy.
This is a misunderstanding of East Asian strategy. East Asian countries have never stopped the cheap importing, they limited them by imposing limited tariffs. The extent of tariffs were carefully calculated to make sure that the domestic products can have a price advantage big enough to offset their quality disadvantage, but not too much. So, the local manufacturers can survive and got a chance grow stronger, but not sleep on it.


What do Bangladesh, Vietnam and SE Asia give back in return? Most of those countries run large trade deficits and are negligible markets for Western goods.

Bangladesh has basically no market for European countries. Their car consumption for example is like 1/100 of India's. European companies already make billions selling their products on the large Indian market while they make basically nothing from Bangladesh. Why then should Indian textiles have a 10% tariff while Bangladesh textiles get tariff free access? 10% is a very significant tariff in such a cost competitive industry.

The same is true for most SE Asian countries. They run large trade surpluses and are much smaller markets for European countries compared to the Indian market. Yet they are getting preferential agreements for tariffs.
Even though these countries are small, but the good thing about small size is that they can never threaten West countries' dominance. Today, they can make large trade surplus, tomorrow Western countries can get that money back by financial manipulation or military coup, etc. And their development potences are limited. Can you imagine that Bangladesh is going to compete with Western on cars, electronic equipment, in near future? You may say what about South Korea, Japan? Well, over 100,000 American soldiers are deploying on the soil of these 2 countries. So, basically these 2 countries are in West's pocket already.
If you think of India, 1.4b people, yes, big market, but also a big competitor potentially, just look at China. Westerners are greedy, but not stupid.
 

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