Indian Economy: News and Discussion

[Prashant12]

India's forex reserves at record high of US$ 454.49 billion as on 13 December 2019

India's forex reserves jumps by US$ 1.07 billion in the week ended 13 December

India's foreign exchange reserves jumped by US$ 1.07 billion to US$ 454.49 billion in the week ended 13 December 2019. The foreign exchange reserves had stood at US$ 453.42 a week ago.
Within the foreign exchange reserves, the foreign currency assets moved up to US$ 422.42 billion in the week ended 13 December 2019 from US$ 421.26 billion a week ago.

The gold asset also declined to US$ 26.97 billion from US$ 27.08 billion a week ago.

SDRs were flat at US$ 1.44 billion in the week ended 13 December 2019.

India's foreign exchange reserves increased by US$ 41.62 billion over March 2019, while jumped US$ 61.37 billion over a year ago level.

https://www.business-standard.com/a...on-as-on-13-december-2019-119122001010_1.html

 

[avknight1408]

India's forex reserves at record high of US$ 454.49 billion as on 13 December 2019

India's forex reserves jumps by US$ 1.07 billion in the week ended 13 December

India's foreign exchange reserves jumped by US$ 1.07 billion to US$ 454.49 billion in the week ended 13 December 2019. The foreign exchange reserves had stood at US$ 453.42 a week ago.
Within the foreign exchange reserves, the foreign currency assets moved up to US$ 422.42 billion in the week ended 13 December 2019 from US$ 421.26 billion a week ago.

The gold asset also declined to US$ 26.97 billion from US$ 27.08 billion a week ago.

SDRs were flat at US$ 1.44 billion in the week ended 13 December 2019.

India's foreign exchange reserves increased by US$ 41.62 billion over March 2019, while jumped US$ 61.37 billion over a year ago level.

https://www.business-standard.com/a...on-as-on-13-december-2019-119122001010_1.html

Read this...........................
https://m.economictimes.com/markets...own-central-bank/amp_articleshow/72271740.cms

 

[Haldiram]

India's forex reserves at record high of US$ 454.49 billion as on 13 December 2019

India's forex reserves jumps by US$ 1.07 billion in the week ended 13 December

India's foreign exchange reserves jumped by US$ 1.07 billion to US$ 454.49 billion in the week ended 13 December 2019. The foreign exchange reserves had stood at US$ 453.42 a week ago.
Within the foreign exchange reserves, the foreign currency assets moved up to US$ 422.42 billion in the week ended 13 December 2019 from US$ 421.26 billion a week ago.

The gold asset also declined to US$ 26.97 billion from US$ 27.08 billion a week ago.

SDRs were flat at US$ 1.44 billion in the week ended 13 December 2019.

India's foreign exchange reserves increased by US$ 41.62 billion over March 2019, while jumped US$ 61.37 billion over a year ago level.

https://www.business-standard.com/a...on-as-on-13-december-2019-119122001010_1.html

These forex reserves are not coming from organic remittances. This is from USD bond purchases by RBI. It's risky play which comes at the cost of our own devaluation. This creative accounting is the reason rupee touched 70+ otherwise we'd be at 60-ish.

They're intentionally devaluing the rupee to give impetus to exports (at the cost of the rupee). The companies that benefit from exports better make up for it by creating more jobs for Indians or paying more tax because all Indians who have INR in their banks are collectively taking a markdown on our rupee valuation so that a handful of exporters can increase their profit margins.

 

[ezsasa]

Sale of water share between two states..

Has this happened before?

=========
Himachal Pradesh will sell its share of Yamuna river water to Delhi at Rs 21 crore per annum; agreement signed between state governments: Official

 

[Willy3]

Today telegraph and it's bengali version anandabazar gloating that Modi was begging for 'claps' during ASSOCHAM meet... showing that businessman have no trust in this govt...bla bla bla... what's this now ?

 

[Bhoot Pishach]

@Haldiram

What the hell is going on???

https://timesofindia.indiatimes.com...-arbitral-award/articleshowprint/72910001.cms

Centre seeks to restrain Reliance Industries stake sale to Saudi Aramco

TNN | Dec 21, 2019, 01.52 AM IST

Printed from NEW DELHI: The Delhi high court on Friday asked Reliance Industries Ltd and British Gas to disclose their assets after the Centre sought to restrain them from disposing assets — including RIL’s plan to sell a 20% stake to oil giant Saudi Aramco.

In an application filed in September, the government had sought curbs citing the failure of the two companies to honour their payment under a $4.5-billion international arbitral award in the Panna-Mukta and Tapti (PMT) production-sharing contracts. The PMT contract of 1994 comes to an end on Saturday.

During arguments in the case, the government sought the court’s direction to RIL and BG to secure $4.5 billion towards the arbitration award. Asking RIL directors to file an affidavit disclosing the company’s assets, the HC’s commercial bench said it would examine the issue at its next hearing on February 6. The government has insisted that RIL and BG must provide adequate security.

RIL did not respond to a questionnaire sent by TOI till late at night. Calls and text messages sent to the company seeking its response also went unanswered.

Citing several newspaper reports in its application, including the proposed sale to Saudi Aramco, the government told the court, “RIL is in a massive group debt of Rs 2.88 trillion (Rs 2.88 lakh crore). It is in the process of selling, transferring, mortgaging, disposing of, alienating and creating third-party interest in the movable and immovable properties to cover its debt.”

The Centre further argued that “RIL in future may also liquidate/sell its assets and properties” and there would be nothing left for the government to execute its arbitral award. The government said it has no knowledge of the “business plan” of RIL and neither has any control over the same.

RIL, India’s largest company, had announced plans to sell stake to Saudi Aramco in a deal estimated to be worth $15 billion. The transaction has been in the works for several months.

According to the government, which is fighting the arbitration with RIL since 2010, the company and its partner appropriated huge sums of money in violation of the production sharing contract in the PMT gas and oil fields. In 2016, the tribunal finally decided what part of the amount was wrongly appropriated by RIL and its partner and on the basis of that award, the government has computed that $3.8 billion, excluding interest, is to be paid to it. With interest, the amount now comes to $4.5 billion (over Rs 30,000 crore).

In its application filed before the Delhi HC, the government pleaded that it was forced to file for execution of the award because RIL and its partner were not paying their dues despite several reminders.

The government is already fighting for execution of another arbitral award of $2 billion against RIL for alleged “undue enrichment” owing to migration of gas from state-run ONGC block to its KG D-6 field off the Andhra coast.

 

[Haldiram]

@Haldiram

What the hell is going on???

https://timesofindia.indiatimes.com...-arbitral-award/articleshowprint/72910001.cms

Centre seeks to restrain Reliance Industries stake sale to Saudi Aramco

TNN | Dec 21, 2019, 01.52 AM IST

Printed from NEW DELHI: The Delhi high court on Friday asked Reliance Industries Ltd and British Gas to disclose their assets after the Centre sought to restrain them from disposing assets — including RIL’s plan to sell a 20% stake to oil giant Saudi Aramco.

In an application filed in September, the government had sought curbs citing the failure of the two companies to honour their payment under a $4.5-billion international arbitral award in the Panna-Mukta and Tapti (PMT) production-sharing contracts. The PMT contract of 1994 comes to an end on Saturday.

During arguments in the case, the government sought the court’s direction to RIL and BG to secure $4.5 billion towards the arbitration award. Asking RIL directors to file an affidavit disclosing the company’s assets, the HC’s commercial bench said it would examine the issue at its next hearing on February 6. The government has insisted that RIL and BG must provide adequate security.

RIL did not respond to a questionnaire sent by TOI till late at night. Calls and text messages sent to the company seeking its response also went unanswered.

Citing several newspaper reports in its application, including the proposed sale to Saudi Aramco, the government told the court, “RIL is in a massive group debt of Rs 2.88 trillion (Rs 2.88 lakh crore). It is in the process of selling, transferring, mortgaging, disposing of, alienating and creating third-party interest in the movable and immovable properties to cover its debt.”

The Centre further argued that “RIL in future may also liquidate/sell its assets and properties” and there would be nothing left for the government to execute its arbitral award. The government said it has no knowledge of the “business plan” of RIL and neither has any control over the same.

RIL, India’s largest company, had announced plans to sell stake to Saudi Aramco in a deal estimated to be worth $15 billion. The transaction has been in the works for several months.

According to the government, which is fighting the arbitration with RIL since 2010, the company and its partner appropriated huge sums of money in violation of the production sharing contract in the PMT gas and oil fields. In 2016, the tribunal finally decided what part of the amount was wrongly appropriated by RIL and its partner and on the basis of that award, the government has computed that $3.8 billion, excluding interest, is to be paid to it. With interest, the amount now comes to $4.5 billion (over Rs 30,000 crore).

In its application filed before the Delhi HC, the government pleaded that it was forced to file for execution of the award because RIL and its partner were not paying their dues despite several reminders.

The government is already fighting for execution of another arbitral award of $2 billion against RIL for alleged “undue enrichment” owing to migration of gas from state-run ONGC block to its KG D-6 field off the Andhra coast.

Theek hi hai. RIL owes money but they are behaving as if they have already cleared their dues. The government is making sure to secure that buffer amount (in case the final court ruling goes against RIL) before they go ahead and spend their money on their expansion.

There's top level rattling happening in all Indian conglomerates. Mahindra me bhi notice aaya hai. Mr Mahindra has to step down from active role and go into "margadarshak" mode.

Anand Mahindra moves out of M&M driver’s seat


More firms to follow M&M to comply with Sebi’s rules

... of the top 500 companies, 162 have the same person as the chairperson, MD and CEO. In another 52 companies, the chairperson and MD/CEO are related.

Sebi norms under the Listing Obligation and Disclosure Requirement (LODR) also mandate that chairperson cannot be related to the MD or CEO. Sebi relies on the definition of a relative as per the Companies Act, 2013.

This is part of the effort to change India from localized la la companies running on the whims of one family to professionally run global enterprises. Ivy League managers will slowly take over the running of most companies and there will be no succession politics. They will smoothly swap CEOs at the end of a fixed tenure the way Google does, and the owners sit at home and enjoy the dividends like Bruce Wayne.

Hone do, acchi baat hai. Even investors get transparency when gormint takes such punitive actions, otherwise people remain under the impression that the company is going from strength to strength. Lala-giri was acceptable a decade ago when company owners held 80% of the stake so any mishap would result in their own loss. Now that the Indian public owns 35% of corporate India, there is a need for more transparency and tighter control on the company's corporate actions. It's not their company alone. Aadha paisa public ka bhi laga hua hai.

To comply with Sebi norms, such changes are imminent in over 214 companies, including banks, public sector enterprises and large corporates, including Reliance Industries Ltd (RIL), Bharti Airtel Ltd, Wipro Ltd, Bajaj Auto Ltd and Adani Ports Ltd.

The likes of Mukesh Ambani of RIL, Sunil Bharti Mittal of Bharti Airtel, Sanjiv Mehta of Hindustan Unilever and Sanjiv Puri of ITC will have to either become a non-executive chairperson, or take the executive role of managing director and chief executive officer.

 

[Indx TechStyle]

What he's indicating exactly?
Saved Indian economy that was heading towards disaster: PM Narendra Modi

‘Indian economy strong, $5 trillion target achievable’: PM Modi

 

[DG7867]

What he's indicating exactly?
Saved Indian economy that was heading towards disaster: PM Narendra Modi
‘Indian economy strong, $5 trillion target achievable’: PM Modi

He was referring to NPAs.. they peaked in 2014 during thre time of so-called "rockstar" economist Raghuram rajan..

 

[26/11]

He was referring to NPAs.. they peaked in 2014 during thre time of so-called "rockstar" economist Raghuram rajan..

And created by another rockstar economist (!) Manmohan Singh.

 

[HariPrasad-1]

What he's indicating exactly?
Saved Indian economy that was heading towards disaster: PM Narendra Modi

‘Indian economy strong, $5 trillion target achievable’: PM Modi

Only if Rupee appreciate against USD.

 

[Indx TechStyle]

Only if Rupee appreciate against USD.

Appreciation and deappreciation isn't an indicator of situation of economy.

 

[HariPrasad-1]

What he's indicating exactly?
Saved Indian economy that was heading towards disaster: PM Narendra Modi

‘Indian economy strong, $5 trillion target achievable’: PM Modi

This will require 10.75% compounded growth rate which is achievable only if INR appreciate by 4 to 5% annually. Rest should come from growth.

 

[HariPrasad-1]

Appreciation and deappreciation isn't an indicator of situation of economy.

And I am not talking about situation of economy at all. If you want to rise from 5 TR USD from 3 TR USD in 5 years, you will require a growth rate of 10.75% which seems impossible from merely growth rate. If you rise by 7% and rest 3.75% comes from INR appreciation, Target can be achieved.

 

[ezsasa]

And I am not talking about situation of economy at all. If you want to rise from 5 TR USD from 3 TR USD in 5 years, you will require a growth rate of 10.75% which seems impossible from merely growth rate. If you rise by 7% and rest 3.75% comes from INR appreciation, Target can be achieved.

Even if you use the methodology used by fancy “macro” TV economists these days, raise the inflation to 10% and we may come even close to 5 trillion $ mark easily.

But that’s not the type of growth we want, we should be preferring inorganic growth with sound micro economic stability which is broad based across multiple sectors.

 

[HariPrasad-1]

Even if you use the methodology used by fancy “macro” TV economists these days, raise the inflation to 10% and we may come even close to 5 trillion $ mark easily.

But that’s not the type of growth we want, we should be preferring inorganic growth with sound micro economic stability which is broad based across multiple sectors.

I think Growth rate is calculated net of inflation.

 

[ezsasa]

I think Growth rate is calculated net of inflation.

Nominal Vs Real.

Point I am trying to make is, focus right now is long pending structural reforms. Which is the right way to go. Govt is doing it’s part, question is how many businessmen(old & new) are taking advantage of it.

5 trillion $ target is just like a target given by CEO to their employees and shareholders.

It’s upto the people to get enthused and be part of the growth story.

And let’s not forget US-China trade war is dragging us and the world down for now, it takes time for global supply chains to relocate outside of China.

So basically, target is set , reforms are on going, import bill growth rate is coming down, banks now have regained their lending capacity.

Let’s see, what our future holds..

 

[Indx TechStyle]

This will require 10.75% compounded growth rate which is achievable only if INR appreciate by 4 to 5% annually. Rest should come from growth.

Coming near just a nominal target, maintaining fiscal health and ensuring well being of people are all different ballgames. You can't be specific about "saved".

Brazil failed and became a stagnated economy forever after it appreciated currency from 3.1/$ to 1.5/$.

India can only insure its future by saving its exports. So, it won't let currency rise for some years at least.

 

[Indx TechStyle]

The worst is over!
Why is the GDP of 1.3 billion Indians less than 126 million Japanese, 83 million Germans and 40 million people in California? Why is India’s GDP today 20 per cent of China’s when they were equal in 1991? Why did the world’s largest democracy — created on the infertile soil of the world’s most hierarchical society — not create the world’s largest economy?

India’s economy in 2020 is not heading into the ICU, but is heading out of a broad and deep rehab. (Illustration: C R Sasikumar)

Twenty years ago, a court denied the Reserve Bank of India’s request for swift justice for banks against a large loan defaulter saying, “don’t twist arms so hard that they break”. But, last week’s Rs 42,000 crore recovery from loan defaulter Essar Steel demonstrates the power of policy when the executive, legislature and courts together take on vested interests, precedence, and history. The 1,658 days that have elapsed since the IBC work began, the delay of 1,297 days since the IBC became law, and the 863 days since Essar was admitted into bankruptcy, symbolise the fixed costs for bold change in our democracy. But, it also symbolises the upsides of policy boldness and persistence; Arcelor’s takeover of Essar clears the judicial, legislative and commercial path for speedy bank recovery from the next 200 large defaulters. I believe that the current challenges faced by the Indian economy represent short-term pain for the long-term gain imposed by multiple structural changes. And, that economic growth in 2020 will be higher than in 2019 because structural reform will start paying off.

Economies are more like human bodies than machines. Doctors know that post-mortems have a certainty that prescriptions don’t, they obsess about iatrogenic risks or unintended consequences of their treatment, and recognise that acute patients need an ICU. But chronic patients need rehabilitation. Poverty is not like cancer where every malignant cell must be eliminated or it will come back. Instead, poverty is like being obese. The fight is hard and slow, victories are partial. Sometimes you regress. But, keeping up the fight by all necessary means can mitigate obesity. Eventually, diet and exercise will become a way of life, and a healthier body will yield tangible benefits.

India’s economy in 2020 is not heading into the ICU, but is heading out of a broad and deep rehab. Independent monetary policy and fiscal discipline have halved inflation. The GST has cut indirect tax categories from 100 to 5, and nearly doubled payers to 12 million. An awake RBI, the IBC and mergers of nationalised banks make bank accounting cleaner, bank balance sheets stronger and blunt crony capitalism. The Real Estate (Regulation and and Development) Act makes business difficult for non-compliant real estate developers. But a more organised and end-user driven market is reducing inventory, returning growth to stamp duty collections of states, and raising middle class affordability ratios. Demonetisation contributed to UPI digital transactions rising from one lakh to 110 crore a month. The rise in India’s ease-of-doing business ranking to 63 from 139 is raising FDI, starting to attract China’s factory refugees and is taking foreign exchange reserves to record highs. Aadhaar adoption has raised subsidy efficiency. The gross capital formation as a percentage of GDP is rising after bottoming in 2017. Food production growth is now substantially higher than population growth, making inflation decline structural (and yes, even onions; we produce 23 million tonnes and consume only 15 million). And, stock markets now largely offer valuation premiums to growth and governance.

The economic slowdown explanations must be mindful of what writer Chimamanda Adichie called “the dangers of a single story”. A thoughtful paper by Arvind Subramanian and Josh Felman lists multiple stories — land and labour market constraints, income inequality, impact of agriculture on aggregate demand, demonetisation and GST, monetary tightness and policy uncertainty. I disagree with their ICU conclusion; a sustained rehab of structural reforms, and monetary and fiscal intervention will work. The monetary policy’s 135 basis point cut in 2019 brings the RBI’s benchmark repo rate to its lowest since 2010. The fiscal response for 2019 delivered a corporate tax cut, accelerated capex, created a fund for stalled housing projects and for buying-out NBFC assets.

Arcelor’s investment — an outcome of multiple court cases, multiple IBC amendments, and multiple RBI directives — will accelerate resolution of the 1,497 pending IBC cases, particularly of the 535 that have crossed the 270-day deadline. The best expression of gratitude and duas to the remarkable public servants in the Ministry of Finance, Ministry of Corporate Affairs, the Courts and the RBI for this accomplishment will be replicating their boldness and teamwork in five areas — labour law reform, rebooting civil service, redesigning the central government, public sector governance, and investment in data collection. Labour law reform will prevent our labour from being handicapped without capital and our capital from being handicapped without labour. Civil Service reform will improve the ease-of-doing business. Central government restructuring — reducing Delhi’s 51 ministries, and over 100 departments with 250 secretary rank officials — will enable us to do more by doing less. Raising public sector governance will generate resources without damaging fiscal discipline; nationalised banks, embarrassingly, have lower risk weighted assets than two years ago, despite receiving over Rs 2 lakh crore. Raising our investment in data collection — the budget of the Central Statistical Organisation is only Rs 51 crore – will amplify trust, enable action and demonstrate confidence.

Why is the GDP of 1.3 billion Indians less than 126 million Japanese, 83 million Germans and 40 million people in California? Why is India’s GDP today 20 per cent of China’s when they were equal in 1991? Why did the world’s largest democracy — created on the infertile soil of the world’s most hierarchical society — not create the world’s largest economy? Only because of the low productivity of our government, cities, sectors, firms and people. My recent overseas investor roadshow suggests that structural reforms, the developments in China and negative interest rates make India attractive; the world wants us to succeed if we want to. The great new book Bridgital Nation by N Chandrasekaran and Roopa Purushothaman suggests that India is an antarlaapika, Sanskrit for a puzzle, in which the answer is hidden in the puzzle itself. Their observation that great entrepreneurship advice is only a traffic jam away in Bengaluru recognises that our horrible traffic represents growth. May the rest of India have Bengaluru problems in 2020. A year that will be better for the economy, tough for loan defaulters, disruptive for incumbents and exciting for insurgents.

 

[lcafanboy]

Appreciation and deappreciation isn't an indicator of situation of economy.

It is.....
A currency appreciates when the economy becomes more competitive and efficient. Things become cheaper and affordable at home and due to that salaries stagnate for extended periods without people complaining. And goods become cheaper than other countries to import from india even if currency appreciates..
On the other hand it will deprecate with higher inflation raising costs of everything and so also salaries. Things become unaffordable both for domestic market and export market due to which government allow depreciation of currency to artificially make things affordable for importers...