Indian Economy: News and Discussion

[Pintu]

Recession 2011: India to pitch for rating upgrade - The Economic Times

8 Aug, 2011, 03.39AM IST, Deepshikha Sikarwar,ET Bureau
Recession 2011: India to pitch for rating upgrade

NEW DELHI: India will pitch for a significant upgrade of its credit rating by global rating agencies in the hope that a better rating will offset some of the negative consequences of Friday's US downgrade.

Two of the world's top ratings agencies - Standard and Poor's (S&P) and Fitch Ratings - are expected to review India's rating in November. "Our economy is much stronger than many of the debt-burdened economies of Europe that enjoy a much higher rating than us," a finance ministry official said. Ratings reflect the creditworthiness of countries and help investors understand better the risks their investments face.

S&P, which on Friday stripped the US long-term sovereign credit rating of the triple A it had enjoyed for 70 years, has given India a rating of BBB-, the lowest investment grade. Debt-ridden Spain has AA rating while Italy enjoys an A+. Fitch has projected India's potential mediumterm gross domestic product (GDP) growth at over 8% and has given the country the same rating as S&P. "We will seek a decently higher rating in the November review," the finance ministry official said.

An S&P spokeswoman said the agency could not comment on future rating actions. "What we can say is that we are in continuous dialogue with the government of India on the rating of India sovereign and will continue to discuss rating issues with them directly," she said.

Experts see a period of uncertainty for the global markets following the US downgrade, anticipating some shift away from the US government debt and dollar denominated assets. The downgrade is expected to weaken the dollar. US's biggest creditor, China, has already indicated adjustments in its purchases of dollar denominated assets, which has ramifications for global financial markets.

This has worried India as it is banking on foreign funds to launch its ambitious infrastructure expansion. According to some estimates, the country would require over $1 trillion of funds over the 12th Five-Year Plan. Most of these funds are expected from overseas and the domestic private sector. The country's concern came out clearly when Finance Minster Pranab Mukherjee termed the US ratings downgrade as 'grave'.

A ratings upgrade will negate some of the adverse consequences of the US downgrade, allowing Indian companies to raise funds at competitive costs. Indian companies borrowed $29 billion from overseas markets in 2010-11. In a recent meeting with Mukherjee, leading industrialists had also sought an engagement with ratings agencies for a better outlook on India. India has already stepped up its engagement with the ratings agency, a stark contrast from the earlier days when the official refrain was "who cares?"

Read more stories

Despite S&P credit downgrade, US still the safest place to invest: Former Obama aide


S&P's Beers says risks on downside for future US rating

"It was decided to further broad base the process and present India's case for higher rating by studying the methodologies adopted by the rating agencies," the finance ministry had said last month after a meeting of the Financial Stability and Development Council. Instead of leaving credit rating agencies to their own whims, the finance ministry now goes out of its way to present its side of the picture, an action that has yielded some result.

Global credit rating agency DBRS upgraded its ratings outlook for India's debt for the first time since 2007. The agency has lifted both India's long-term foreign and local currency debt rating from BBB (low) with a negative trend to BBB (low) with a stable trend.

The idea to ensure there is complete transparency in the process has to be effectively communicated to the public, as this impacts rate at which enterprises borrows overseas, the official said. A detailed fact file has already been prepared as part of this exercise.

 

[nitesh]

The Chinese quality is pathetic, we should kick them out as soon as possible

Chinese equipment stalls Durgapur Power plant; seeks BHEL help

 

[nitesh]

^^
related to above

'BHEL power equipment outguns Chinese rivals' | BHEL Power | | The New Indian Express

 

[nitesh]

With such people at helm, why enemies need to do anything at all... sigh

Allow EU's Pak package to go through, says PM - The Times of India

 

[Known_Unknown]

I wish sometimes that India's capital was based in the South somewhere, like in Chennai or Bangalore. Delhi is infested with sellouts like MMS, IKG, and other Punjabis of yore who are either too stupid or agents of ISI to declare unilateral concessions towards Pakistan again and again. I read an article recently where the author detailed the strategy of the ISI over decades to soften these old Indian Punjabi politicians and administrators with tales of bhaichara, invitations to attend cultural events or seducing them with honeytraps to extract strategic concessions.

Predictably enough, RAW never retaliated in kind.

 

[nitesh]

KU, on the other hand, is it a deliberate ploy to become good boy, and let other countries take the lead in protest? Like for BD, also with the current electricity situation, will these guys actually able to take a benefit out of it.

But overall, it is a stupid move.

 

[Pintu]

SBI may expand to Pakistan soon as central banks explore banking ties - The Economic Times

6 Sep, 2011, 04.00AM IST, Amiti Sen & Shruti Choudhury,ET Bureau
SBI may expand to Pakistan soon as central banks explore banking ties

NEW DELHI: The central banks of India and Pakistan are likely to meet in Karachi later this month to explore banking ties as part of measures to step up bilateral trade between the two nuclear rivals.

The south Asian neighbours, who have been to war three times since independence from British rule, do not allow their banks to open branches in each other's territory.

A decision to open dialogue on this, with the State Bank of Pakistan taking the lead, was taken at the meeting of the Indo-Pak joint working group on economic and commercial cooperation in New Delhi recently.

"The central bank of Pakistan will send an invite to the RBI ( Reserve Bank of India) for holding the meeting by mid-September," a government official told ET.

The two sides had agreed at the commerce secretaries' meeting in April this year that closer cooperation between their banks was important to give a push to bilateral trade and the process of opening branches in each other's country needed to be fast-tracked.

India and Pakistan have signed what is widely considered a path-breaking trade pact that includes grant of most favoured nation, or MFN, status to India, removal of non-tariff barriers, such as strict quality standards by India, cooperation in the power sector and removal of investment barriers.

"It depends totally on the RBI on how they want to proceed on the proposal," the official said.

The two central banks will give inputs to their respective commerce secretaries, who will discuss the issue at their proposed meeting in November.

Although permission to bank in each other's country is likely to boost bilateral trade, the RBI is expected to tread cautiously as the facility could also be used for terror financing.

"There is definitely a concern that the banks could be used as a conduit for transferring money to fund terrorist activities," the official said.

Besides, Indian exporters say any reciprocal access to banks will help Pakistan's exporters more as India already has many national and international banks providing pre-and post-shipment credit.

"Branches of Indian banks there can help make the trade and finance situation better in Pakistan due to better credit facilities, policies and products," Orient Craft chairman and managing director Sudhir Dhingra said.

The current bilateral trade between the two countries is less than $2 billion.

India estimates it could rise to $4 billion if MFN is offered as it would save businesses the trouble of shipping through third countries like Dubai.

 

[Pintu]

Pak commerce minister to visit India this month

Pak commerce minister to visit India this month
Nayanima Basu / New Delhi September 04, 2011, 0:56 IST

Pakistani Commerce Minister Makhdoom Amin Fahim is likely to visit India on September 26-30 to boost bilateral trade between the two countries. Pakistan has agreed to grant India the most favoured nation (MFN) status officially.

Both sides would also seek to liberalise the visa regime for their respective businessmen and remove some of the non-tariff barriers that hamper the flow of trade presently.

During his four-day visit, Fahim is also expected to visit Mumbai and Bangalore leading the largest business delegation ever comprising top Pakistani businessmen. This will be the first such meeting between the commerce ministers of two countries after a gap of three years.

Early this month, commerce, industry and textiles minister Anand Sharma had formally invited his Pakistani counterpart to visit India to take forward some of the measures discussed to augment trade during the secretaries level talks in April between commerce secretary Rahul Khullar and his counterpart Zafar Mahmood.

Under the World Trade Organisation rules, trading partners offer MFN status to each other to enjoy the trade benefits. Granting of MFN status means lowering of tariffs and customs duties for the products tradeed between them.

India is expected to raise the issue of "proper implementation and ratification of the provisions under the South Asia Free Trade Agreement" that would ensure greater access to its products in Pakistan with reduced tariffs, while Pakistan is expected to ask for the removal of several non-tariff barriers that hamper the entry of their goods into India.

The Indian government has also asked Pakistan to allow trading of those goods, which are now prohibited to be traded on the land route, officials told Business Standard.

"It is not clear in what manner will they grant the MFN status. There is no clarity on the number of items that would come under the positive list," a senior official said requesting anonymity. At present, more than 12,000 items are there on Pakistan's negative list while 1,948 items come under the positive list.

Pakistan is expected to prune their negative list by October.

Apparently, the Department of Industrial Policy and Promotion (DIPP) under the ministry of commerce and industry is holding inter-ministerial consultations to remove the generic ban on capital inflows from Pakistan.

All these issues were discussed during the joint task force meeting in New Delhi recently, which was attended by Department of Commerce Joint Secretary Arvind Mehta, Minister (Trade), High Commission of Pakistan in India, Naeem Anwar and Karachi Chamber of Commerce & Industry Vice-President Junaid Esmail Makda among others.

During the meeting it was decided that Pakistan would work out a liberal business visa regime scheme of multiple-entry visas, which will also be reciprocated by India. It was also decided that both sides would ensure greater flow of goods through the land routes such as the Wagah-Attari and Monabao-Khokrapar border. Both sides have also decided to put an end to the informal trade that takes place through Dubai amounting to more than $2 billion by facilitating seamless flow of traffic between both countries.

Bilateral trade between India and Pakistan is $2 billion at present. It is expected to increase to $10 billion in the next three years with the grant of MFN status and removal of non-tariff barriers, according to the Federation of Indian Export Organisations.

 

[Daredevil]

Why would SBI want to go to a shit hole of a country?. SBI should first serve the Indian masses first and then go international. We still lag behind in terms of banking.

 

[Pintu]

In my personal opinion no need to extend SBI's service in Pakistan, till we don't get MFN status from them.

Regards

 

[thakur_ritesh]

Why would SBI want to go to a shit hole of a country?. SBI should first serve the Indian masses first and then go international. We still lag behind in terms of banking.

i think dd the attempt is to have one branch each for the two banks in each others countries. with trade at near 2.5-3b usd and expected to touch 10b usd, the two countries would want the same money to be routed through the of two central banks than some third foreign bank, which will then add to the profits and t/o of that third bank.

 

[skumar]

It would be easier for the Pakis to deposit fake Indian currency in SBI branches in Pakistan and import stuff from India on that basis.

Safer, no threat of the courier getting killed at the borders, no overheads for risk.

This how we started the Promisory Notes saga with Mauritius. This was probably demanded by prominent Indian ministers for their friends in Pakistan.

 

[agentperry]

SBI is cash rich moreover opening branches in pakistan will facilitate India and Indian businessmen as out of 1.84 billion dollar trade between India and pakistan India exports 1.75 billion dollars. sbi branches will make Indian businessmen feel secure and moreover the payment can be sorted out with no fraud-possibility. moreover all sbi banks have machines to check the authenticity of notes+sbi in pak wil accept pak notes only so if fake notes are deposited by mistake it will be fake paki notes.
in the coming years after formalization of ties with pakistan specially in economics and trade this sbi branch will play important role in protection of Indian businessmen.
moreover it will cater the needs of pakistani minority if somehow they figure out a possibility to do so.

 

[Pintu]

IBNLive : Sriram Balasubramanian's Blog : Western economic mess: Learn from the Indian middle class

Western economic mess: Learn from the Indian middle class
Friday , September 30, 2011 at 14 : 30

The BBC interview with a trader on the crashing of the Global Economy on YouTube, that is running viral caught my eye. It talked about the impending Greek collapse, the EU government's inability to handle the crisis and how this would mean dooms day. It was not the content, since it's well known, but the impact of the stark reality shrouded in it. At that second, I felt I should write about this.

I am no Paul Krugman nor am I of the caliber of Mr Bernanke; still I have an opinion on it. Amidst this entire economic jargon of bonds, derivatives, ratios and what not, I think a fundamental point is being missed in this entire crisis. The fundamental issue of this entire fiasco, according to me, is more of a social one than an economic one and learning from the Indian middle class can help. Here's why:

Greed, Greed, Greed and more Greed:

The trader on the BBC interview , however skeptical his identity would be, expressed what millions of people actually feel. When you have a feeling that "Goldman Sachs rules the world", then there has to be something wrong. The eternal greed of the financial markets in the western world comes with their obsession to make money at all costs. This greed is also fuelled by the average Joe who wants to milk the most of this even though he can't afford it. In India, on the other hand things are much more measured with respect to the common man (leave the elite aside). Money is a valuable commodity and thus our restraint in taking radical risks. Despite the criticism from the West on this, the Indian middle class stuck to this approach which is reaping dividends now. The West can learn from India on how to be restrained in using money; treating it as an valued asset rather than a tradeable commodity to fulfill more greed.

Inept Social Handling of Collective Failure:

The Western world has produced numerous individuals who are entrepreneurs who have overcome numerous failures to rise as business icons. However, from a broad perspective and taking the median average Joe on the street in the West including Europe, failure and lack of jobs have not hurt them this bad since the Great Depression. As a result, the middle class society as a whole is not ready for such a collective failure. In India, on the other hand, failure for a common man is a given in all walks of life. It is a standard component in our day to day lives, so it's not an issue for us since we are used to it. As such, there is greater immunity to such setbacks in the life. The people in the West are struck by this tsunami and they are being swept away since they are not able to handle it. The governments and the people in the West, I feel should learn from the Indian Middle Class to handle multiple failures with limited resources yet lead a dignified life.

Forget the family, Forget the Savings too:

The fact is if all the gold that is saved by Indian women today is made into cash; we would be probably the richest nation in the world. Indian society as a whole is still family oriented however much youngsters would beg to disagree. The older generation still calls the shots and in some sense rightly so. This brings about two advantages in terms of savings is concerned. 1) Even if one is not willing to save, one has to do so for the family or members of it 2) Saving becomes an economic buffer that is ingrained in our genetic code. My American friends don't have it. For most of them having negative balances in their bank account is a very normal thing. This lies on the assumption that success somehow would come somewhere and till then we can hold on. Now the question has become till how long can one wait? The ultra liberalist would hate me saying this but with due respect, the fact is a family serves as a structural positive nexus to help you take a measured response. In the West, where the family structure is nascent in its evolution, some of my friends don't have these commitments, so a)they are not obliged to save for everyone else b) they are not in a family atmosphere which forces them to save. Since you don't have this structural pressure to push you to be cautious, the arrogance of youth takes over and the spending goes for a shot. In essence, you have an economy which is based on spending forever at all costs, come what may, even if the sky falls apart. This approach, in my opinion, is a social issue that needs to be solved and that's where the Indian Middle Class can teach vital lessons.

The Obama's and the Merkel's might be working overtime to work things out. The EU might be working overtime to give bailout after bailout to prolong the staring disaster. While they sit in their own maya of thinking that the markets would recover and the countries would recover, they need to realize one thing very well. Economics plays an integral part of the reform in this crisis but beyond economics, there lies in a human element that controls this universe. The social element and nature of being less greedy, more measured and holding onto each other's kith and kin by saving is the long term solution to this crisis.

After all, the society as a whole is the heart and soul of the economics governing any nation; in this respect the West needs to learn from the Indian Middle Class to solve its issues.

(The author can be reached on his Facebook page)

 

[Daredevil]

Mining companies to take a hit of Rs 15,000 cr

BS Reporters / New Delhi/ Bangalore October 1, 2011, 0:39 IST

Mining companies have warned of a price spiral in commodities once the new mining law provisions are in place. The industry sees the government decision of mandatory profit and royalty sharing impacting it by an estimated Rs 15,000 crore every year. This would include a Rs 12,200-crore hit on non-coal mining companies and Rs 2,800 crore on coal miners.

"The provisions of this Bill will affect the industry badly," says Anand Goel, joint managing director, Jindal Steel and Power Ltd. "It will hit the valuations of major companies. The move will definitely result in a price spiral in end-products like power and steel. But what can we do, if the government wants it this way?" JSPL, part of the $15-billion O P Jindal Group, has a power production capacity of 2,000 Mw and a steel-making capacity exceeding three million tonne per annum. The company mines over 11 mt of non-coking coal and around 3 MT iron ore from its captive mines annually. The share price fell 3.7 per cent to close at Rs 502at the Bombay Stock Exchange (BSE) on Friday.

Industry also raised doubts over implementation of the proposal arguing that the provisions on the lack clarity. Rana Som, chairman of NMDC Ltd, India's largest iron ore miner, says there is a need to review and examine the issues raised by the industry on royalty, profit-sharing and the methodology of providing assistance to project affected persons before the Bill finally becomes an Act. "Industry is concerned about the sharing of royalty and profit. The District Development Fund will be a discouraging factor," notes Som, who is also chairman of industry chamber CII's national committee on mining.

WHAT IT MEANS FOR INDUSTRY
* 26% profit contribution could be subject to manipulations. An integrated coal company could have mines in different district and it would be difficult to calculate profit for each mine separately
* Profit sharing and royalty contribution will create problems for existing mines where affected persons are not easily identifiable
* No cap on surface rent may lead to fixing of surface rent at abnormal rates
* Imposing both Central (2.5 per cent) and State Cess (not more than 10 per cent) will further increase costs
Shares of India's monopoly coal producer, Coal India Ltd, plummeted 5.1 per cent to close at Rs 332.7 on The BSE. The profit-sharing clause, if it comes into effect, will mean an additional annual outgo of Rs 2,600 crore for the company, which already sells a majority of its produce at 40 per cent discount to the international benchmarks.

CIL Chairman N C Jha had earlier told Business Standard that problems on the accounting front might crop us as a result of the Bill. "Every project has to be treated as a separate costing and accounting centre. If a company is working in a large number of areas how do we keep different cost centres? If the company is making profit in Maharashtra, it cannot be shared in Madhya Pradesh," he had said in an interview.

Karnataka's iron ore mining industry, reeling under a Supreme Cout ban, came out in strong opposition, flaying the draft bill as one that "is going to be a disastrous Act" for iron ore mining. "The new law," claims D V Pichamuthu, director of the Federation of Indian Mineral Industries (South), "will kill the iron ore industry, as it has proposed 200 per cent rise in royalty payment from mining. Already, the Karnataka government is charging 10 per cent royalty and 12 per cent forest development tax in addition to VAT."

Experts believe the benefit-sharing proposal, while desirable in concept and intention, is unlikely to achieve desired results unless implemented properly. "The mining industry goes through cycles. Sharing profits or royalty may not be a problem for miners when prices are favourable. But it would be detrimental when commodity prices go down. The current law does not address this volatility," adds Amrit Pandurangi, Senior Director, Deloitte Touche Tohmatsu.

 

[Daredevil]

UPA policies are leading to a scorched earth syndrome

R Jagannathan Oct 3, 2011

If there is a single theme running through this year's faltering economy, it is this: the business of trying to correct all wrongs has got us into an economic tailspin, with growth tapering off and inflation far from doing so.

Taken together, the UPA's social spending thrust (and benign neglect of economic reforms) amount to a scorched-earth policy.

Officially, it is all about inclusive growth and correcting historical wrongs to the disadvantaged. But the net effect of these policies will be to leave a fiscal and economic mess that no successor government will be able to handle easily. If Rahul Gandhi actually wins the elections in 2014, he will have a time-bomb on his hands.

The only thing that's gone right for India this year is the monsoon. The Indian Meteorological Department predicted with considerable aplomb in June that the monsoon would be sub-normal. Thankfully, the prediction went wrong. The IMD now has the unenviable record of seven wrong forecasts out of 10.

But while the Met got egg on its face, our farmers got bountiful precipitation. We have not only had exceedingly good rainfall equal to 101 percent of the long period average, but also good spatial spreads. So, a bumper kharif is likely.

The UPA has run out of ideas and is pursuing policies with the single-objective of winning the next election.Reuters
But every other signal is turning from amber to red, thanks to mistimed and often misdirected efforts to correct wrongs.

The fiscal wrongs, created by excessive spending, excess borrowing, and failure to rein in oil subsidies, has had to be righted by a tougher-than-needed monetary policy of rising interest rates. The economy has already hit a speedbreaker. The GDP growth target has been brought down from 9 percent around budget-time to less than 8 percent now. The year will probably end well below 8 percent. Inflation is close to double-digits (9.78 percent), and the Index of Industrial Production was down to 3.3 percent in July.

To correct the fiscal wrong, Finance Minister Pranab Mukherjee is stamping on spending – but largely in the capital outlays area – which is making things worse. When government fails to spend on things like infrastructure, the slowdown can only accelerate as business incomes are crimped. Mukherjee should cut wasteful expenditure, not infrastructure and capital spending.

To correct the current account deficit – the gap between the country's external earnings and expenses – the Reserve Bank is letting the rupee go weak in the knees. (But it is also true that it does not have enough ammo to just sell dollars and allow the rupee to rise.) This policy will have the side-effect of making imported inflation worse. Even when crude prices fall abroad, they don't fall at home.

As for social policies, the less said the better. They are all inflationary and business-unfriendly.

The wrongs done to tribals in the past are now sought to be remedied by the repeal of the Mines and Minerals (Development and Regulation) Act and the compulsory sharing of 26 percent of profits with tribals and others displaced by new mines. The mining companies expect to take a hit of Rs 15,000 crore due to this.

The upshot: coal, cement, steel and aluminium prices will be raised when the Mines Bill is legislated in the winter session of parliament. This means power and infrastructure costs will also rise. This effectively means widespread inflation, as costlier power, oil and infrastructure mean every other cost has to rise. So forget about taming inflation.

The draft Land Acquisition Bill – again intended to correct past wrongs to farmers who were expropriated in the name of promoting public projects – will push up the cost of real estate, manufacturing, and just about everything once again. The Bill seeks to give sellers twice the market price for land in urban areas and four times the market price in rural areas. Since land is the main cost in realty projects, middle class home buyers can kiss goodbye to dreams of owning a house even in distant suburbs.

The Food Security Bill, primarily intended to ensure that no one goes hungry in India, by making rice available at Rs 3 and wheat at Rs 2 a kg, will cost over Rs 1,00,000 crore in food subsidies – thus busting the budget and pressuring inflation. To procure so much food for the scheme, minimum support prices will keep rising faster than inflation, and the free market for grains will be starved of supplies. Can this lead to anything but even more inflation?

If every single effort to correct wrongs is leading to higher costs, how is the government going to put the economy back on rails?

The only answer to this puzzle is the possibility that the UPA has run out of ideas and is pursuing policies with the single-objective of winning the next election.

However, these policies will surely bankrupt the government by 2014. So is it planning a scorched earth policy from which no successor government can hope to escape? Or does it anyway expect to lose the next election, and so doesn't care?

 

[Daredevil]

MBCEL commissions 30 MW solar farm in Gujarat

PTI | 07:10 PM,Oct 12,2011

Ahmedabad, Oct 12 (PTI) The 30MW solar farm developed by Moser Baer Clean Energy Limited (MBCEL) in Banaskantha district of Gujarat has been commissioned in Kankrej block, company officials said today. The solar farm which has been set up using 2,36,000 Thin Film modules with an approximate investment of Rs 465 crore in Gunthawad village of Kankrej block in Banaskantha, will be formally inaugurated by Chief Minister Narendra Modi on October 14. According to MBCEL officials the project was awarded under phase 1 of Gujarat Solar Power policy 2009 and is likely to be the first major project to be commissioned under the Gujarat Solar Mission. "We could not have completed this project in a record time without support and guidance of the state government," Chairman of Moser Baer Projects (MBPPL), the parent company of MBCEL, Ratul Puri told reporters here. Chief Minister Narendra Modi will be formally inaugurating the 30MW solar farm developed by us on October 14, he said, adding that the farm has already been commissioned yesterday. Talking about future plans of the company Puri said, "As solar power is clean, the company is working towards commissioning of 300 MWs of solar projects in the next 12 months in India, Germany, Italy and UK." "We shall have 100 MW operational capacity by the end of October 2011 and plan to install more than 5 GWs by 2020," he added. (more) PTI PB PD DK

*******************************

I think we need more and more of these projects at the local level so as to take off the burden on the centralized electricity generation.

 

[Pintu]

I think its good to read:

http://www.nytimes.com/2011/11/06/opinion/sunday/friedman-indias-innovation-stimulus.html

Regards

 

[SHASH2K2]

[h=1]End policy paralysis: India Inc[/h]

MUMBAI: India Inc on Sunday urged the government to speed up stalled economic reforms, warning that policy paralysis threatened to derail the India growth story.

Speaking at the opening session of the annual India Economic Summit of the World Economic Forum (WEF), Reliance Industries chairman Mukesh Ambani called upon both the central and state governments to "align and move a lot faster", remove the mismatch prevailing in their approaches, and speed up the decision making process.

He also called for a dramatic shift in the governance model for better partnership between the government and the private sector in delivering more value to each other, and the society at large. "There is a need for a shift in governance from 20th century to 21st century decision making... We need to get a minimum agreement in terms of saying that at the end of the day we are there working for all people and we have to have a pathway to move into the 21st century governance so that the rules are redefined and we can meet the aspirations of the millions of our young people," he said.

Speaking about decisions being stalled due to political constraints, he said, "I think there is a mismatch. We are both heading to the same direction and sometimes, like you have seen in the US and Europe, that's the price of democracy, but we shouldn't put a thing by saying that because the institutions of democracy are there, we will be paralyzed. And because there is an opposition and a party in power, we would do nothing. That's what worries me," he said, while urging for a minimum agreement to deliver on the expectations of the people.

Other businessmen, investors and experts that TOI spoke to similarly expressed frustration over the policy paralysis that has set in after a series of scandals dented the government's ability to push ahead measures needed to sustain growth. There was near unanimity that political parties should rise over partisan issues and approve key legislations which would help boost confidence.

"There is nothing moving in the government. The opposition parties should rise above partisan issues and enable policies to move ahead," said Ashok P Hinduja, chairman, Hinduja Group India.

The Manmohan Singh-led UPA government has faced criticism for soft pedalling on reforms and putting key policy issues on the backburner. The political logjam over the issue of corruption has led to legislative backlog. Key bills have been pending in Parliament, adding to the frustration of investors.

"In the last six to eight months, nothing has moved due to corruption issues. We need political parties to forge a consensus to enable things to move," said Sanjiv Bajaj, managing director of Bajaj Finserv.

Some investors said the intention of the government was clear but lack of consensus was holding back progress. Analysts say lack of reforms will hurt growth and emerge as an obstacle to India's ambitions to emerge as a global power.

"The intention is very clear that it (the government) wants to move ahead (with reforms). But finding a common ground is where difficulties come. It is because of coalition and conflicting agenda (of political parties that are part of the coalition," said Jamshyd Godrej, chairman and managing director of Godrej and Boyce Manufacturing Co Ltd. He is also one of the 14 industry chiefs who has been writing to the government.

"It's almost becoming impossible to do business in India," said Niranjan Hiranandani, managing director, Hiranandani Constructions.

But he said the Urban Renewal Mission was one of the best policies which had put the focus back on urban areas. "For a long time, policy focus was on rural areas since a large number of MPs come from the rural areas. But with increasing urbanization, the focus has now slightly shifted to development of the urban areas," Hiranandani said.

But some experts said they did not subscribe to the view of policy paralysis but were concerned by the slow implementation of policies.

"I don't think there is any policy paralysis but implementation of policies is a very difficult issue," said Rajat Nag, managing director general at the Asian Development Bank.

The government has lined up an ambitious agenda of reforms in the forthcoming winter session of Parliament but experts said they were not optimistic about any major progress due to the current political environment.

"If the government is able to make some progress either through the legislative agenda or through direct investment in infrastructure, it will make a difference. In the short term, there will be some bumps but I remain optimistic about India in the medium term," said Srivatsan Rajan, managing director, Bain and Company.

 

[Eiffe]

[h=1]India, Russia will strive to galvanise bilateral trade[/h]

India and Russia will strive to "galvanise" bilateral trade after it missed the $10 billion target set for last year.The Indo-Russian Intergovernmental Commission (IRIGC) on trade, economic, technological, scientific and cultural cooperation, which met here on Friday, resolved to give thrust to four vectors of bilateral cooperation, the Indian Embassy said in a release.The 17th annual meeting of the IRIGC was co-chaired by External Affairs Minister S. M. Krishna and Russia's Deputy Prime Minister Sergei Ivanov. The two sides decided to launch a joint public-private investment fund that will invest in both countries. The two governments will also set up a Joint Study Group to prepare a Comprehensive Economic Cooperation Agreement with the Customs Union, which unites Russia, Kazakhstan and Belarus.A new Working Group on Modernisation has been added to the nine WGs already existing within the IRIGC. It will deal with integration of technological platforms, not only on a bilateral basis but also in the format of BRICS.India and Russia will strive to revive the North-South Transport Corridor (NSTC) through Iran that has failed to take off more than 10 years after the three countries signed an agreement to set up the trade route. India and Russia agreed to "enhance connectivity" through the NSTC, the Embassy release said.Briefing Indian journalists on the background, a senior member of the Indian delegation to the IRIGC admitted that the NSTC project had been "long neglected" and the governments were "very slow" in implementing it. The Indian government will organise a brain-storming international conference to discuss the NSTC and new trade routes to the former Soviet Union, including through China.It was revealed that the long-discussed Indo-Russian Science and Technology Centre will be inaugurated in Moscow during the visit of Prime Minister Manmohan Singh for an annual bilateral summit here. A similar centre will later open in New Delhi."Russia has fantastic technologies, but the challenge is to commercialise them," the Indian official said."The S&T Centres will be the places where businessmen can shop for new technologies."The Hindu : Business / Economy : India, Russia will strive to galvanise bilateral trade​