Indian Economy: News and Discussion

[Shaitan]

India's per capita income likely to double in nine years

NEW DELHI: India's per capita income, which was put at $982 during 2009-10, is expected to double in nine years if the country's economy continued to expand at present growth rate, according to an official.

"With the current growth rate, per capita income of India will get doubled in nine years," India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing an event in Noida.

India's gross domestic product, that grew 7.4 percent in 2009-10, witnessed an 8.9 percent growth in the first half this fiscal against the government estimate of 8.5 percent.

Ahluwalia said the current task is to see whether during the 12th plan period, the GDP growth rate of nine or 10 percent could be achieved.

"Even if we manage to keep nine percent, which actually we have achieved in the past, and the population growth is now probably going to be less than 1.5 percent, PCI will grow at more than 7.5 percent or so. When PCI grows at 7.5 percent, then it doubles in nine years and if that were to continue, then it is easy to see that PCI will quadruple in 18 years and will increase eight fold in 27 years," said Ahluwalia.

"It is actually a huge change and you have to cope with this change much faster. The products and technologies that will be demanded probably cannot be imagined today," he added.

"Even though we believe the world will grow a little more slowly for the next few years than in the past, India can still do nine percent because it will take care of its demand problem," said Ahluwalia.

"In 1963, the economy was growing at a rate of 3.5 percent per year and continued for the next 15-16 years. When an economy grows at 3.5 percent in terms of GDP and the population growth is over two percent, which it was at that time, the per capita income in such an economy is actually growing at less than 1.5 percent," said Ahluwalia.

"When PCI grows at 1.5 percent, it takes 45 years for per capita income (PCI) to double. I think, the doubling of PCI is very important. It is much more important than doubling of the total GDP, then only the economy will change," he added.

While both the manufacturing and services industries are expanding by almost 10 percent, agriculture output has jumped more than three percent to 4.4 percent on the back of a good monsoon season as domestic consumption remains strong.

The government expects these positive indicators to drive economic growth to 8.5 percent by the end of fiscal 2010.

But things are not as rosy as they appear. The widening current account deficit - the gap between imports and exports - is likely exceed three percent of the GDP next year.

Similarly, the inflation rate is expected to remains high at more than seven percent and the pressure on prices is expected to keep driving up interest rates next year.

Slowing demand from Western countries, due to slow pace of economic recovery, could hurt India's services sector in the long run. Foreign direct investment in India is also witnessing steady decline over the last few months, according to recent reports.



http://arabnews.com/economy/article218586.ece?comments=all

 

[civfanatic]

Nine Years??!??

The Economist forecast shows a nominal GDP per capita of $1500 and purchasing power GDP per capita of $3750 for 2011.

 

[ejazr]

@civfanatic The disperancy may be because of difference between nominal and PPP per capita income. Nominal per capita income is still under $1000 USD for India

 

[Pintu]

http://timesofindia.indiatimes.com/...ze-at-55-by-end-March/articleshow/7135125.cms

PM says inflation to stabilize at 5.5% by end-March
TNN, Dec 21, 2010, 04.13am IST

NEW DELHI: Stating that inflation remains a concern for the country, Prime Minister Manmohan Singh said on Monday the inflation rate would stabilise around 5.5% by March and the government would continue to make all out efforts to calm soaring prices.

Inflation eased to its lowest this year -- at 7.48% in November -- bringing relief to policymakers who have been grappling with high prices. Robust crop arrivals in the market have helped ease pressure on food prices but they still continue to remain high.

"Inflation remains a cause for serious concern in our country. We have made all the efforts to contain inflation and we will continue to do so," Singh told his party delegates at the ongoing plenary session.

"In recent days, the rate of inflation has come down to 7.5%. We expect this downward trend to continue and the rate of inflation to stabilise around 5.5% by next March," he added.

According to him, the government expects the economy to grow between 9% and 10% from next year as growth in the recent quarters have been strong and the country has withstood the global economic downturn.

"Despite the global economic crisis, we have maintained a healthy rate of growth. In the last two quarters, our growth rate has been 8.9% and we expect that for the entire year it will be around 8.5%. We also expect that from the next year onward we will be able to grow at a rate between 9 and 10%," Singh said.

He reasoned that high economic growth would enable the government to invest more resources in social sector, education and health and it would endeavour to effectively implement the Right to Education Act in collaboration with state governments.

The PM pledged that the government's emphasis would be on increasing productivity and production in the key farm sector.

"This year we have had a good monsoon. Our granaries are full with wheat and rice. We want no citizen of our country to go to bed hungry. We are committed to put in place the National Food Security Act. We also intend to improve the Public Distribution System so that the socially and economically weaker sections of our society become the true beneficiaries of the Food Security Act," Singh said. He promised that the government would accelerate efforts to improve roads, airports, railways and power supply and ensure that infrastructure bottlenecks don't hurt economic growth.

 

[Pintu]

Nine Years??!??

The Economist forecast shows a nominal GDP per capita of $1500 and purchasing power GDP per capita of $3750 for 2011.

Here is an article, appeared in trade chakra , I think that can enlighten us about per capita income:

http://www.tradechakra.com/indian-economy/per-capita-income.html


Per Capita Income

Meaning and Significance
Per capita Income means how much an individual earns, of the yearly income that is generated in the country through productive activities. It means the share of each individual when the income from the productive activities is divided equally among the citizens. Per capita income is reported in units of currency. Per capita income reflects the gross national product of a country. Per capita income is also a measure of the wealth of a population of a nation when compared with other countries. It is expressed in terms of commonly used international currency such as Euro, Dollars because these currencies are widely known.

Per Capita Income In India
India's per capita income is found by the Atlas method and by employing official exchange rates for conversion. Further, this Atlas method of calculating the per capita income of India is not determined by using purchasing power parity, which essentially adjusts exchange rates for purchasing power of currencies.

Economist have been giving considerable importance to the performance of states vis a vis each other in terms of per capita income. It has been observed that those states that were more open and better adapted to economic liberalization have overall shown faster rate of growth.

Per Capita Income of Various Indian States
The two backward states of the Indian republic Jharkhand and Orissa are growing at a rapid rate in terms of the per capita income because of rise of industrial activities in these two states. Karnataka is at the top of the chart with the fastest growing per capita income (nearly 9.28%) followed by Gujarat with 8.92%.The per capita income in 17 states is below the national average of 8.4%. Per capita income shows the purchasing power of the states and so it is very important for the states to increase the per capita income of each person.

History of India Per Capita GDP

* In 2002-03 the Per Capita Income in India was Rs 19040.
* In2003-04 the Per Capita Income in India was Rs 20989.
* In2004-05 the Per Capita Income in India was Rs 23241.
* In2008-2009 the Per Capita Income in India was37490.
* GDP at factor cost at constant (1999-2000) prices in the year 2008-2009 is likely to attain a level of Rs 3351653.India achieved a growth rate of 7.1 per cent in 2008-2009.
* Agriculture, forestry and fishing had a combined growth rate of 2.6 per cent during 2008-2009
* Industry had growth rate of 3.4 per cent during 2008-2009
* Service sector had a growth rate of 10.3 per cent during 2008-2009

Inspite of the global meltdown, India has performed well in comparison to the rest of the world

Regards

 

[Daredevil]

People's republics

There are growing doubts over the sustainability of China's authoritarian model of development and greater recent praise for India's democratic version. In October, US President Barack Obama's economic adviser Larry Summers told a meeting of business leaders in Mumbai that the world in 2040 would be talking, not about a Washington or Beijing consensus, but a 'Mumbai Consensus' on economic development in the future. Chinese Premier Wen Jiabao did not go as far as Summers in elevating the Indian approach above China's. But the premier ended his three-day visit to India last week by declaring that India's rise had enhanced the confidence and strength of all developing countries.

Despite praise for both systems, the common wisdom is that the Chinese approach is superior to the Indian one in one respect: poverty reduction. After all, in 1980, around 80% of people in both countries lived in poverty. In India, it is now around 22% compared to about 12% in China. The assumption is that China's State-led authoritarian model, although more menacing than India's chaotic democracy, allow its leaders to plan China's rise in a more ordered and manageable environment, to the ultimate benefit of its poor. But such an argument is less compelling than it would first appear when we take a closer look at what actually occurred since China began its reforms in December 1978.

Because China has been growing at almost 10% since 1980 (except for the 'Tiananmen Interlude' period from 1989-1992), the assumption is that the country has followed one model towards prosperity and poverty alleviation. In fact, China has actually gone through two significantly distinct reform periods.

The first was from 1979 until the Tiananmen protests in 1989. After the disasters of centralised Maoism, Deng Xiaoping did two big things. First, power was decentralised and local officials were given much more power to make economic decisions. Second, the four-fifths of the population who were peasants were allowed to use their land in any way they wanted and sell their products at market prices.

This so-called 'household responsibility' structure gave rise to millions of 'township and village enterprises' (TVE) — small-scale industries that began the industrialisation and urbanisation process. These TVEs were technically owned by the local collective but many were run like private industries. In Deng's words, this was a "completely unplanned, spontaneous revolution that took us by surprise."

But it worked. Eighty percent of the poverty reduction that occurred in China took place from 1979-1989. It had little to do with any authoritarian model or supposed authoritarian qualities, or the far-sighted long-term planning and wise counsel of Chinese Communist Party (CCP) leaders. Significantly, it was actually about the CCP relinquishing economic and social control over the country.

During this period, the de facto private sector received about three-quarters of all the country's capital in the first 10 years of reform – the reverse of what is happening today. There was no discrimination against the private sector in favour of the State-controlled one; meaning that household incomes across-the-board were rising with the tide. It was a genuine bottom-up rather than the present top-down approach.

Following the countrywide protests that almost brought down the regime, the CCP deliberately retook control of the economy from the mid-1990s onwards: favouring the State-controlled sector over the private one in key economic areas in order to prevent the emergence of an independent economic middle class. Although GDP has continued to expand at an impressive pace, household incomes have been growing at a paltry 1-3% each year even as profits in the State-controlled sector expand by 15-20% per annum. Significantly, since the rise of 'authoritarian development' in China, poverty reduction advanced by approximately 1.5% each year,meaning that China has underperformed vis-a-vis India since the latter began reforms in the early 1990s. Indeed, given the State-controlled bias that accelerated from this century onwards, poverty alleviation has remain stagnant and some studies even suggest that absolute poverty in China has actually increased.

Compared to the Indian bottom-up approach which is driven by the private sector and domestic consumption, China's top-down State-led model has created a country of some 150-200 million 'insiders' who benefit disproportionately from the fruits of economic growth. While measurements of income inequality have remained fairly constant even as India rises, Chinese society has become the most unequal in all of Asia. Although far from being a tranquil society, India does not have anywhere near the reported 124,000 instances of 'mass unrest' that occurred in China in 2009.

Even if Premier Wen and Prime Minister Singh would want to deny it, the Chinese and Indian approaches to economic development and poverty alleviation are being watched and compared by the 150 undeveloped and developing countries. Larry Summers might have been flattering his hosts in preparation for Obama's visit to India which took place in November. But the weaknesses of the Beijing Consensus mean that we will be hearing much more about the Mumbai Consensus in the years to come.

John Lee is director, Foreign Policy, Centre for Independent Studies, Sydney. The views expressed by the author are personal.

 

[NSG_Blackcats]

India's share of global trade set to cross USD half trillion

Emerging from the grip of a crippling recession, world trade is set to surge by 13.5 per cent in 2010, with a resurgent India contributing over half a trillion dollars to global commerce for the first time in history.
With global trade coming out of a "painful economic recession" in 2009, India's merchandise engagement with the world -- both imports and exports -- picked up pace in the 2010-11 fiscal after a rather lacklustre performance in the previous year.The value of India's inbound and outbound trade in goods is set to touch USD 550 billion in the 2010-11 fiscal, with imports expected to touch USD 350 billion, as against USD 288 billion in the 2009-10 fiscal.
"Following a faster-than-expected recovery in global trade flows so far in 2010, WTO economists have revised their projection for world trade growth in 2010 upward to 13.5 per cent," a WTO report said.

Making out a strong case against protectionism, World Trade Organisation (WTO) Director General Pascal Lamy said: "This surge in trade flows provides the means to climb out of this painful economic recession and can help put people back to work. It underscores, as well, the wisdom governments have shown in rejecting protectionism."

India stood out among other countries during the year in terms of its open trade policies, as is evident from the huge trade deficit of USD 120-130 billion projected for the current financial year.

The restrictive trade policies adopted by India's larger neighbour, China , stood out in sharp contrast. The past year witnessed an escalating currency war between the US and China, with Washington urging Beijing to allow the yuan to rise, claiming that the Chinese currency was artificially depressed in order to create an unfair trade advantage.

However, the US has been accused of doing the same thing, following an announcement in November that the Federal Reserve will purchase Treasury Securities to infuse USD 600 billion into the struggling economy by June, 2011. This would be achieved by printing more dollar bills, thereby lowering the value of the currency.

 

[Vyom]

NEW DELHI: India's per capita income, which was put at $982 during 2009-10, is expected to double in nine years if the country's economy continued to expand at present growth rate, according to an official.

"With the current growth rate, per capita income of India will get doubled in nine years," India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said while addressing an event in Noida.

India's gross domestic product, that grew 7.4 percent in 2009-10, witnessed an 8.9 percent growth in the first half this fiscal against the government estimate of 8.5 percent.

Ahluwalia said the current task is to see whether during the 12th plan period, the GDP growth rate of nine or 10 percent could be achieved.

"Even if we manage to keep nine percent, which actually we have achieved in the past, and the population growth is now probably going to be less than 1.5 percent, PCI will grow at more than 7.5 percent or so. When PCI grows at 7.5 percent, then it doubles in nine years and if that were to continue, then it is easy to see that PCI will quadruple in 18 years and will increase eight fold in 27 years," said Ahluwalia.

"It is actually a huge change and you have to cope with this change much faster. The products and technologies that will be demanded probably cannot be imagined today," he added.

"Even though we believe the world will grow a little more slowly for the next few years than in the past, India can still do nine percent because it will take care of its demand problem," said Ahluwalia.

"In 1963, the economy was growing at a rate of 3.5 percent per year and continued for the next 15-16 years. When an economy grows at 3.5 percent in terms of GDP and the population growth is over two percent, which it was at that time, the per capita income in such an economy is actually growing at less than 1.5 percent," said Ahluwalia.

"When PCI grows at 1.5 percent, it takes 45 years for per capita income (PCI) to double. I think, the doubling of PCI is very important. It is much more important than doubling of the total GDP, then only the economy will change," he added.

While both the manufacturing and services industries are expanding by almost 10 percent, agriculture output has jumped more than three percent to 4.4 percent on the back of a good monsoon season as domestic consumption remains strong.

The government expects these positive indicators to drive economic growth to 8.5 percent by the end of fiscal 2010.

But things are not as rosy as they appear. The widening current account deficit - the gap between imports and exports - is likely exceed three percent of the GDP next year.

Similarly, the inflation rate is expected to remains high at more than seven percent and the pressure on prices is expected to keep driving up interest rates next year.

Slowing demand from Western countries, due to slow pace of economic recovery, could hurt India's services sector in the long run. Foreign direct investment in India is also witnessing steady decline over the last few months, according to recent reports.



http://arabnews.com/economy/article218586.ece?comments=all

While per capita income will double in nine years from, the rise in commodity prices has gone up 100-200% in just five years since 2004-05.

To illustrate the continuing impact of rising cereal prices on rural households in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa, district per capita incomes for 2004-05 to 2009-10 are estimated for five representative districts from these states. These are districts that record a median per capita income based on data for the 2004-05 year (the last NSSO household consumption survey year) available with the Planning Commission's district domestic product tables: Bhabua in Bihar, Dhamtari in Chhattisgarh, Deoghar in Jharkhand, Khandwa in Madhya Pradesh and Jajpur in Orissa. The per capita income increases in these districts are recorded up to 2006-07, and taking the national GDP growth rate for the years following (9.7%, 9.2%, 6.7% and 7.2%) the overall finding is that statistical per capita income increases are between 36% (for Khandwa) and 47% (for Dhamtari) for the period 2005-06 to 2009-10. ​

From January 2005 to January 2010, the prices of atta in Sehore and Bhopal (MP), of desi wheat in Bhopal and of maize in Patna have risen by 200%. The prices of 'kalyan' wheat (a widespread HYV cultivar) in Bhopal, Sehore and Patna (Bihar) have risen by 173% to 177%; the prices of maize in Ranchi (Jharkhand) and common quality rice in Bhubaneshwar (Orissa) have risen by 171%; the prices of desi wheat in Patna and atta in Ranchi have risen 170%; and the prices of common rice in Cuttack and in Dhanbad (Jharkhand) have risen by 169% and 164%. Over this period, the price of the available basket of cereals has risen by 157% in Cuttack, 162% in Bhubaneswar, 159% in Sehore, 174% in Bhopal, 176% in Patna, 166% in Ranchi and 152% in Dhanbad. ​

Source: http://www.macroscan.org/anl/may10/anl040510Food_Parks.htm

Source: http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=INR

I think every single item of mass use has seen around 500-800% increase in prices in 10 years. We need to think how much actually have the people benefited by the increase in per capita income.

 

[NSG_Blackcats]

Exports likely to touch $ 220 bn by FY 2011​

Helped by a demand pick-up in the western economies, India's exports grew by 26.5 per cent year-on-year to $ 18.8 billion in November, raising expectations of exports going well beyond the target of $ 200 billion in the current fiscal.In November 2009, exports stood at $ 14.9 billion.

During April-November 2010, the outbound shipments increased by 26.7 per cent to $ 140.2 billion compared to $ 110.6 billion in the year-ago period.Imports too rose by 11.2 per cent in November to $ 27.7 billion, leaving a trade gap of $ 8.9 billion, according to the data released by the Commerce Ministry today.Imports during the first eight months of this fiscal stood at $ 221.9 billion, an increase on 23.9 per cent, over $ 179 billion in the corresponding period last year. During the period, the trade deficit stood at $ 81.6 billion and is expected to be in the range of $ 120-125 billion.

The country's apex exporters body FIEO said that the exports may touch $ 220 billion, sharing the optimism of the Commerce Ministry. A senior official has projected the country's exports in the range of $ 210-215 billion."Exports may reach the new milestone of $ 220 billion this fiscal," Federation of Indian Export Organisations (FIEO) President Ramu Deora said.

 

[NSG_Blackcats]

India to be world's 4th largest passenger vehicle market in 3 yrs

New Delhi: India will become the world's fourth largest passenger vehicle market in the next three years but will require an investment of about USD 20 billion to build up to nine new plants to meet the demand by then, according to global consultant Booz&Co. The Indian passenger vehicle (PV) market will touch 3.5 million units mark in the next three years, it said. "By next three years, India will be the fourth largest PV market in the world. Only the US, China and Japan will be ahead of India," Booz&Co Partner Vikas Sehgal told PTI.

Currently, the domestic PV market is the world's seventh largest and it is likely to grow at 15-20 per cent every year till 2013, he added. According to Society of Indian Automobile Manufacturers, the PV market stood at about 2 million units in 2009-10 and is expected to reach 2.4 million units in this fiscal. "India will even cross Japan by selling about five million PVs by 2017-18," Sehgal said.

In order to reach to such a mammoth size, auto makers will constantly need addition of capacities to meet demand. "India, in next three years, will need 6 to 9 new car plants with an average annual capacity of 1.5 lakh units... This will require at least USD 15-20 billion investment," Sehgal said.

 

[sandeepdg]

India will be 2nd biggest economy in 2050: PwC

LONDON: The Indian economy will register the second fastest growth between now and 2050 and emerge as the second biggest economy in the world by the middle of this century, according to a forecast by the consultancy group, PriceWaterhouseCoopers, released on Friday.

In terms of GDP at purchasing power parity (PPP), India is said to be on track to overtake Japan this year.
The author of the report, PWC's chief economist, John Hawksworth, speaking exclusively to TOI, said, ''India has the potential to be one of the three great economies of the 21st century, together with China and the US.''

But he warned it would require significant improvement in ''India's energy and transport infrastructure, less red tape, increased education levels in rural areas, particularly for women, and the continuation of the open attitude to trade and investment seen over the past 20 years''.


http://timesofindia.indiatimes.com/...t-economy-in-2050-PwC/articleshow/7239312.cms

 

[Rage]

 

[Rage]

India's buying Ford: Ford's sales triple in India in a year

http://economictimes.indiatimes.com...or-ford-india-in-2010/articleshow/7333557.cms

 

[warriorextreme]

Exports likely to touch $ 220 bn by FY 2011​

Helped by a demand pick-up in the western economies, India's exports grew by 26.5 per cent year-on-year to $ 18.8 billion in November, raising expectations of exports going well beyond the target of $ 200 billion in the current fiscal.In November 2009, exports stood at $ 14.9 billion.

During April-November 2010, the outbound shipments increased by 26.7 per cent to $ 140.2 billion compared to $ 110.6 billion in the year-ago period.Imports too rose by 11.2 per cent in November to $ 27.7 billion, leaving a trade gap of $ 8.9 billion, according to the data released by the Commerce Ministry today.Imports during the first eight months of this fiscal stood at $ 221.9 billion, an increase on 23.9 per cent, over $ 179 billion in the corresponding period last year. During the period, the trade deficit stood at $ 81.6 billion and is expected to be in the range of $ 120-125 billion.

The country's apex exporters body FIEO said that the exports may touch $ 220 billion, sharing the optimism of the Commerce Ministry. A senior official has projected the country's exports in the range of $ 210-215 billion."Exports may reach the new milestone of $ 220 billion this fiscal," Federation of Indian Export Organisations (FIEO) President Ramu Deora said.

i am not a commerce geek but how is gap between imports and export met with??
and how our forex reserve keeps growing if we have -ve trade balance?

 

[thakur_ritesh]

i am not a commerce geek but how is gap between imports and export met with??
and how our forex reserve keeps growing if we have -ve trade balance?

what you see above are just the merchandise exports india does and not the services exports, and in contrast india's services imports are negligible.

then a country generates revenue by means of direct and indirect taxes, other routes like selling off public enterprises that have government stake, license fees as was seen in 3g, other such things where the government has a hold within a country or overseas, give loans to others on an interest, etc.

in case a deficit still sustains a country looks to loan its needs, now there are numerous lending institutions which can give aid, loan or a grant depending on the need and these have a pretty long repayment timeline the first instalment of which does not start before 15-20 years and then there is the grace period as well. india generates a lot of money through WB. india's external debt is 18% and public debt is 58%.

forex reserves can be very fluid. what helps it grow is the money sent from overseas in form of investments (fii, fdi, vc, etc), remittance, and loans, aid, grants raised overseas. if the local currency is strengthening in comparison to a currency in which the forex reserve is saved then that also adds up to the kitty. this also depends on what other asstes/commodities the forex has been diversified to and the trading value of that. a part of forex can be used in buying other's debt and earn interest on that like what you and i would earn on a bond issued by the GoI, some of it is parked in the stock market the returns generated from there, etc.

 

[warriorextreme]

what you see above are just the merchandise exports india does and not the services exports, and in contrast india's services imports are negligible.

then a country generates revenue by means of direct and indirect taxes, other routes like selling off public enterprises that have government stake, license fees as was seen in 3g, other such things where the government has a hold within a country or overseas, give loans to others on an interest, etc.

in case a deficit still sustains a country looks to loan its needs, now there are numerous lending institutions which can give aid, loan or a grant depending on the need and these have a pretty long repayment timeline the first instalment of which does not start before 15-20 years and then there is the grace period as well. india generates a lot of money through WB. india's external debt is 18% and public debt is 58%.

forex reserves can be very fluid. what helps it grow is the money sent from overseas in form of investments (fii, fdi, vc, etc), remittance, and loans, aid, grants raised overseas. if the local currency is strengthening in comparison to a currency in which the forex reserve is saved then that also adds up to the kitty. this also depends on what other asstes/commodities the forex has been diversified to and the trading value of that. a part of forex can be used in buying other's debt and earn interest on that like what you and i would earn on a bond issued by the GoI, some of it is parked in the stock market the returns generated from there, etc.

that clears a lot of doubts
thanks

 

[Rage]

Mayor of Canada's 'Indian city' leads business trip to India:

http://timesofindia.indiatimes.com/...usiness-trip-to-India/articleshow/7378754.cms

 

[Rage]

India is world's red-tape superpower: Survey

Press Trust Of India
London, January 26, 2011


India has topped a list of the most "over-regulated countries in the world" in a survey on Asian business and politics by Hong Kong-based Political and Economic Risk Consultancy Ltd (PERC). The survey used responses from American executives about regulatory conditions in the United States to provide a benchmark against which to assess the Asian scores.

India was rated worst in terms of over-regulation, scoring 9.16 points out of 10, followed by China with 9.04 points, Japan in third position with 3.28 points and the US at fourth with 1.51 points.

Hong Kong received the best score in the survey of 0.98 point, while Singapore was second with 1.08 points, according to the survey done in the last quarter of 2010, based on responses from 1,370 executives.

In general, regulations were complex and non-transparent, while standards and certifications procedures were onerous in India, according to the PERC survey findings.

Foreign exchange, capital transactions and some credit operations were subject to approvals, restrictions and additional requirements that went far beyond what most other countries require, concluded the survey. Even procedures for something as simple as getting a tourist visa were more cumbersome in India than elsewhere, it pointed out.

It also cited examples from the World Bank's Doing Business Survey of why India's regulatory system deserves to be graded as poorly as it was. It can take a month-and-a-half to register property, almost 200 days to obtain a construction permit, over 1,400 days to enforce a contract, and seven years to close a business.

"Documentation requirements for both exports and imports are onerous," it said.

"Labor requirements are strict and companies lack flexibility on hiring and firing workers," it concluded.

Regulations in the country were frequently not enforced, which raised the question of why they were on the books at all, the it noted.

"In a recent scandal involving the telecommunications ministry's mishandling of an allocation of mobile phone spectrum, as many as 85 of 122 new licences which were bundled with the bandwidth allocation were issued to companies that did not have the required capital to seek bandwidth," the survey pointed out.


http://www.hindustantimes.com/India-is-world-s-red-tape-superpower-Survey/Article1-655045.aspx

 

[Rage]

India Aviation Recovers After Global Economic Downturn
..................................................
January 28, 2011
..................................................

The Indian aviation industry is rebounding from the financial difficulties it faced during global economic downturn. The country's domestic carriers are expected to buy hundreds of planes in the coming years to cope with the growth in air travel.

As air passenger traffic dropped by 30 per cent in 2009, many Indian domestic carriers put expansion plans on hold and slashed staff salaries. Cash-strapped airlines even asked for a government bailout.

But in the past year, the aviation industry has recovered from the crisis triggered by the global financial downturn. As the economy returns to a high growth path, flights are again filling with passengers, and domestic carriers are posting profits.

The first concrete signal that the industry is back on its feet came in early January, when private carrier IndiGo placed a $15 billion order for 180 aircraft with Airbus. It is the largest single order of Airbus planes and is expected to be delivered between 2016 and 2025.

Besides IndiGo, other airlines also plan to buy new planes to cope with growing demand.

Aviation experts say the orders are an indication of the potential growth of the industry.

Sanat Kaul is chairman of the International Foundation for Aviation and Development in India and a former top official in the aviation ministry. He says if fares remain competitive, low-cost airlines will entice millions of rail passengers to switch to air travel.

"There are all the signs that there will be very high growth in passenger traffic," Kaul said. "Slowly, slowly as people get addicted to flying, they will slowly and slowly not take railways for long journeys."

It is estimated that in the next 20 years, India will buy over 1,150 commercial jets valued at $130 billion to cater to the growing demand in the country. By that time, about 180 million passengers are expected to fly annually.

Kaul says the industry could expand hugely if airlines begin operations to smaller, so-called Tier 3 towns.

"Our growth is metro-based growth"¦regional growth is yet to come," he added. "Regional growth is essentially when Tier 3 towns start using aircrafts and airlines start going there."

About a dozen domestic carriers began operations in India about a decade ago to take advantage of a booming economy, which created a huge middle class in India. Until then, India's aviation sector was dominated by state-owned airlines.


http://www.voanews.com/english/news...After-Global-Economic-Downturn-114790954.html

 

[nitesh]

guys please participate here

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