Indian Economy: News and Discussion

[sorcerer]

India’s forex reserves position comfortable for import cover of more than 18 months & & cushion against unforeseen external shocks


Posted On: 27 JUL 2021 8:13PM by PIB Delhi



India’s foreign exchange reserves position is comfortable in terms of import cover of more than 18 months and provides cushion against unforeseen external shocks. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.


Weather the reserve funds are adequate to meet the international payment obligations, the Minister said that the ratio of forex reserves to total external debt stood at 101.2 per cent and short-term external debt to forex reserves stood at 17.5 per cent as at end-March 2021. The ratio of volatile capital flows (including cumulative portfolio inflows and outstanding short-term debt) to reserves was 67.0 per cent at end-December 2020. India is comfortable in most of the external sector vulnerability indicators.


Giving details of India’s foreign exchange reserves in last five years, the Minister tabled the following data:

India’s Foreign Exchange Reserves

Year	Foreign Exchange Reserves (US$ Billion)
2016-17	370.0
2017-18	424.5
2018-19	412.9
2019-20	477.8
2020-21	577.0
9th July 2021	611.9

Source: RBI





Speaking on the international currencies in our forex reserve, the Minister said the foreign currency assets, constituting more than 90 per cent of India’s forex reserves, are maintained as a multi-currency portfolio comprising major currencies, such as, US dollar, Euro, Pound sterling, Japanese yen, etc.

 

[sorcerer]

Direct tax collection doubled for first quarter of current fiscal


Posted On: 27 JUL 2021 7:59PM by PIB Delhi



Direct tax collection for the first quarter of the current fiscal has doubled. This was stated by Union Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in Rajya Sabha today.


The Minister stated that the net direct tax collection in the 1st quarter of FY 2021-2022 is Rs. 2,46,519.82 crore as against Rs. 1,17,783.87 crore during the same period of previous FY 2020-21.


Giving reasons for increase in the tax collections, the Minister stated that it includes revival of economic activities and positive sentiments among taxpayers during this current financial year leading to increased income estimates and higher advance tax payments in the first quarter of the FY 2021-22 as compared to the corresponding period of FY 2020-21.


To the question of direct tax collections in the second quarter of the current fiscal, the Minister stated that the collection of taxes during second quarter cannot be ascertained for the present as the second quarter has just started


On details of indirect tax collections of the first two quarters of the current fiscal, the Minister stated that the second quarter of the current fiscal has just started, however the details of Net Indirect Tax (GST and Non-GST) revenue collection in the 1st quarter of FY 2021- 2022 is Rs. 3,11,398 crore.


Stating about Vivad-se-Vishwas Scheme, the Minister said the Government has resolved significant number of pending direct tax disputes amicably with the taxpayers under Vivad-se-Vishwas Scheme, 2020. This was the primary objective of the Scheme as provided in the short title therein ‘An Act to provide for resolution of tax and for matters connected therewith or incidental thereto’. The declarations received under the Scheme cover around 28.73% of pending tax disputes. Additional tax revenue received is an additional positive outcome.


On the recovery of economy, the Minister stated that the increased tax collection (Direct & Indirect) as reported in the first quarter of the current financial year as compared to the same period previous financial year shows that the economy is on the recovery path. Higher tax collection would enable Government in increasing public expenditure which would have a positive impact on GDP, the Minister stated.

 

[Knowitall]

Overall manufacturing percentage of GDP has gone down on national scale.

Gujrat Tamilnadu and Maharashtra seem to be the few bright spots but overall trends are quite worrying.

 

[Chandragupt Maurya]

Oh please stop this nonsense.

South continues to suffer due to a broken system that ends up rewarding states that fail to control their population growth instead of penalizing them.

View attachment 102107

The system is so biased and broken that by using the 2011 census south ends up in a even worse position because of their effective penalizing methods. TN was the only exception and seems to have gained overall.

View attachment 102108

Out of an estimated ₹42 trillion worth of taxes to be devolved over the five years, highly populous states of Uttar Pradesh and Bihar will alone command around 28% share.

Don't act like there is some great injustice being meted out to you.

Then why was freight equalisation policy imposed on the eastern states of Bihar Jharkhand Odisha Chhattisgarh etc ?
And how will these states pay more taxes when they have been systematically de industrialized ?

 

[sauntheninja]

View attachment 102110

Overall manufacturing percentage of GDP has gone down on national scale.

Gujrat Tamilnadu and Maharashtra seem to be the few bright spots but overall trends are quite worrying.

Guess the CMIE report on loss of manafacturing jobs which i posted was true afterall i got absolutely lambasted for that post

 

[indus]

And what about Dubai ?

If you are trying to point towards Oil, yes it was a primary economy driver in the initial period of development. But since then they have diversified into various sectors most notably among them are financial services, tourism and real estate.
Check this link below.
https://www.dubai.com/v/economy/

"Most tourists believe Dubai’s revenue comes primarily from oil but only a moderate amount of oil reserves were used to generate the required infrastructure for trade, manufacturing and tourism, in order to build up Dubai's economy. Most of Dubai's GDP (over 95%) is non-oil-based. So far oil has accounted for less than 1% of Dubai’s GDP and tourism to produce 20% of the GDP. These figures explain why Dubai has become a more dynamic and diversified economy in order to survive the decline of fossil fuels."

 

[Chandragupt Maurya]

If you are trying to point towards Oil, yes it was a primary economy driver in the initial period of development. But since then they have diversified into various sectors most notably among them are financial services, tourism and real estate.
Check this link below.
https://www.dubai.com/v/economy/

"Most tourists believe Dubai’s revenue comes primarily from oil but only a moderate amount of oil reserves were used to generate the required infrastructure for trade, manufacturing and tourism, in order to build up Dubai's economy. Most of Dubai's GDP (over 95%) is non-oil-based. So far oil has accounted for less than 1% of Dubai’s GDP and tourism to produce 20% of the GDP. These figures explain why Dubai has become a more dynamic and diversified economy in order to survive the decline of fossil fuels."

What was the need for freight equalisation policy in India if mineral reserves are irrelevant ?
and why should centre own the primary gold ore reserves of Bihar , Rajasthan and Karnataka if these resources are irrelevant it should be owned by the states not by the centre

 

[Lonewolf]

Guess the CMIE report on loss of manafacturing jobs which i posted was true afterall i got absolutely lambasted for that post

That is related to GROWTH in service sector compared to manufacturing ,and thanks to dear protestor ,some mines have closed down ,whuch affect manufacturing the most and in turn the production cost goes up so further harming economy

 

[Lonewolf]

What was the need for freight equalisation policy in India if mineral reserves are irrelevant ?
and why should centre own the primary gold ore reserves of Bihar , Rajasthan and Karnataka if these resources are irrelevant it should be owned by the states not by the centre

Why should states own it ,so they can waste money on irrelevant stuff , so should state should be given department where the money should be used ,so therefore ,we become a group of country under a country ,no thanks , do it in your country

 

[sauntheninja]

That is related to GROWTH in service sector compared to manufacturing ,and thanks to dear protestor ,some mines have closed down ,whuch affect manufacturing the most and in turn the production cost goes up so further harming economy

Like shutting down one or two mines would result in such a drastic decrease specially in state level most of the decrease in manufacturing as % of the gdp coincides with our economic slowdown

 

[Chandragupt Maurya]

Why should states own it ,so they can waste money on irrelevant stuff , so should state should be given department where the money should be used ,so therefore ,we become a group of country under a country ,no thanks , do it in your country

Give ownership of mineral resources to local provincial governments and see how naxalism , Maoism ends in your country

 

[Lonewolf]

What does this mean.

Just old statement of absolute growth in terms of dollar , that there overall gdp is grearer ,so if percentage is same , growth is more

 

[Lonewolf]

Like shutting down one or two mines would result in such a drastic decrease specially in state level most of the decrease in manufacturing as % of the gdp coincides with our economic slowdown

Yup that's a factor , trade barrier a restriction too in international market , redirecting of chinese goods through saarc is a reason too , but the reason i gave is prominent for major manufacturing hun like TN and Gujarat , for rest it is a effect of high growth in service sector too .

 

[IndianYonko]

View attachment 102110

Overall manufacturing percentage of GDP has gone down on national scale.

Gujrat Tamilnadu and Maharashtra seem to be the few bright spots but overall trends are quite worrying.

May be services boom is supressing the manufacturing's contribution i.e. Manufacturing is not able to keep up with services. Since we are talking % here.

 

[fire starter]

View attachment 102110

Overall manufacturing percentage of GDP has gone down on national scale.

Gujrat Tamilnadu and Maharashtra seem to be the few bright spots but overall trends are quite worrying.

Hmm but new industries are coming up.

 

[Lonewolf]

Hmm but new industries are coming up.

Comparison's between growth in service and sgri export and manufacturing will give you a idea .

Tagging @ezsasa as he may give some opinion and figures

 

[indus]

What was the need for freight equalisation policy in India if mineral reserves are irrelevant ?
and why should centre own the primary gold ore reserves of Bihar , Rajasthan and Karnataka if these resources are irrelevant it should be owned by the states not by the centre

Why is your record stuck at one place. Resources are not irrelevant. I already wrote that its the value addition to those resources which creates opportunities and thus drives growth and attracts human talent. We export alot of iron ore to China and import finished steel products. Had we developed global level steel consuming industries such as auto, infra, ship building, defence etc, we would be having lot of opportunities in the steel products market. But since we do not have that, we end up exporting raw material to other countries and are not able to utilize our natural resources for own nation building.
And lastly mineral wealth having national importance should be under the ambit of centre. States hardly have the budget to manage such huge industry.

 

[Knowitall]

May be services boom is supressing the manufacturing's contribution i.e. Manufacturing is not able to keep up with services. Since we are talking % here.

It is state wise and barring a few states most don't have a major service industry to speak of.

 

[Knowitall]

Hmm but new industries are coming up.

While Industries are coming up around India most are concentrated around established zones and states hence the uptick in Gujrat TN and Maha. One must also factor in the industries shutting down or moving their operations to different states. Thus you will see the occasional decrease and increase over the past few years.

 

[sauntheninja]

May be services boom is supressing the manufacturing's contribution i.e. Manufacturing is not able to keep up with services. Since we are talking % here.

Services can't absorb the 60% of the workforce that is currently employed in agriculture though even if services grows at 10% which it is supposed to grow this year