Tracking Indian Economy till general elections 2019

KumarG

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You are right except on recapitalization. That was something BJP expected to do if 10-15% notes hadn't returned. Sadly, it did not work out.

NPAs are still outstanding, hence steps like Bank mergers. But it would only drag the mess up for too long.
Fair enough - Indian banking has been in a mess for a while now.

On the economy, interest rates have been high for too long. Raghuram Rajan was no fan of using the Keynesian monetary policy and did not want to cut rates (there are arguments on either side of the aisle on the merits of this).

Ultimately, India needs RBI and the Govt reforms to go hand-in-hand. This has not been happening for a long time. We are too conservative in our monetary as well as fiscal approach, unfortunately. At least the current Govt is trying something on the fiscal side.
 

ezsasa

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You are right except on recapitalization. That was something BJP expected to do if 10-15% notes hadn't returned. Sadly, it did not work out.

NPAs are still outstanding, hence steps like Bank mergers. But it would only drag the mess up for too long.
NPA recovery roadmap is being handled by RBI, target is 50 companies this fiscal.
 

Sakal Gharelu Ustad

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ideally what you say may be correct...
Usually indian companies do a lot of jugaad, their books don't represent the ground reality.
also i am not hearing of companies being shutdown because of demonetisation and GST, so they must be running probably at a lower capacity.

i'd rather wait for two more quarter as i said in december 16, before i say of demonetisation and GST failed.
Big companies use formal channel for raising money. So, it is not completely about jugaad. (of course NPAs did a lot of jugaad but from formal sector!!)

Demonetization did fail- in the direct output. 99% money came back. Now people can generate 10k side stories to justify but primary goal failed.

GST- jury is out.
 

ezsasa

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Big companies use formal channel for raising money. So, it is not completely about jugaad. (of course NPAs did a lot of jugaad but from formal sector!!)

Demonetization did fail- in the direct output. 99% money came back. Now people can generate 10k side stories to justify but primary goal failed.

GST- jury is out.
i heard of a big old company based in delhi, it's products are houshold names. it's a publicly traded company whose majority share holders/management are the original owners of the company. they wanted to sell the group for say 6000 crores and yet the family manage to make 6000 crores in their pockets on that company over above what books show.

so we keep hearing such things quite often. this is what i meant by jugaad in my earlier post.

i am not sure i worded the sentence correctly here.
 

ezsasa

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As far as i am concerned there are only two metrics i am going to bother myself with for next 2-3 fiscals..
1) increase in tax base
2) increase in tax collection

simply because i want to see defence budget reach atleast 80 billion $ with in the next 10 years.

everything else is noise for me..
 

hit&run

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As far as i am concerned there are only two metrics i am going to bother myself with for next 2-3 fiscals..
1) increase in tax base
2) increase in tax collection

simply because i want to see defence budget reach atleast 80 billion $ with in the next 10 years.

everything else is noise for me..
Taxes are unpopular. Strong tax regime and poor industrial out put is a deadly combination.

Increase income, increase industry, increase incentive, reduce tax rates, decrease interest rates will help.
 

ezsasa

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@Sakal Gharelu Ustad

This speech by Sanjeev sanyal(Principal economic advisor ministry of Finance) might clarify some of your doubts on what govt is attempting to do...
it looks like politicians are not the best source of information, some of the advisors are..
politicians cannot articulate some points because of political compulsions..

https://www.pscp.tv/w/1mnxemoDPnrxX?t=261
 
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prohumanity

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Raghuraj Rajan is a very narcissistic man . Title of his book tells it all..."I do what I do" ...see it has two big "I"s just in 5 words. Its all about "I" "Me" and "myself" ....an Indian in appearance but with heartless western in mindset.
Now, the guy is bitter because his contract was not renewed by Indian govt. and he has to use his book to subtly badmouth the Govt. He has developed the arrogance and pathological narcissism of western economists who, I remember , so confidently used to predict in 1980s that hundreds of millions of Indians would die due to hunger by year 2000. These bought puppets write books, give lectures and spread propaganda to serve their masters who pay them. Its not about a billion plus Indian peoples well-being...its about these peoples big Egos.
Who is propagating his interviews and promoting his book...the same old "Undi-TV" (underwear TV) whose owner got caught with a lot of black money. The mafia of Undi-TVs, Lalus, Commies, Mamta begums, Pappus and money lauderers /shoddy builders are going to fight the change till the last drop as Modi is cutting the very root of corrupt people ....they have to stop Modi for their survival and will love to keep the system corrupt because it worked for them for 60 years.
 

Vishwarupa

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http://www.financialexpress.com/eco...rated-massive-5-5-cr-jobs-says-report/847569/

Pradhan Mantri MUDRA Yojana generated massive 5.5 cr jobs, says report
The Pradhan Mantri MUDRA Yojana, which provides access to institutional finance to small business units, has helped in creating 5.5 crore jobs with industrialised states being major beneficiaries, a report said.
By: PTI | New Delhi | Updated: September 8, 2017 10:42 PM

The MUDRA scheme was launched by Prime Minister Narendra Modi on April 8, 2015 with an objective to fund the unfunded. (Reuters)

TOP NEWS
The Pradhan Mantri MUDRA Yojana (PMMY), which provides access to institutional finance to small business units, has helped in creating 5.5 crore jobs with industrialised states being major beneficiaries, a report said. Industrialised states like Karnataka, Tamil Nadu and Maharashtra have been the biggest beneficiaries of the PMMY, it said. The MUDRA scheme was launched by Prime Minister Narendra Modi on April 8, 2015 with an objective to fund the unfunded. So far, Rs 3.42 lakh crore loan has been disbursed to over 8 crore people under the scheme, mostly small entrepreneurs, a report by SKOCH said.
 

HariPrasad-1

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Bank lending is low, so the current low growth regime will stay for a few quarters.

http://www.livemint.com/Money/KEgC5...-to-firms-contracts-bank-borrowings-fall.html

We do not need growth in terms of GDP but we need a growth in rural sector and rural economy as well. For that we need micro financing through co operative banks and NBFCS. This government is focusing a lot on micromanaging. Actually we have taken many major economic decisions in last three years and hence economy is getting used to with new systems. In such a changing environment, economy can not perform at its full potential. I think that now many major economic decisions are taken and and now it is the time for consolidation. Believe me and mark my words here. From Quarter 3 on FY 2017-18, or latest by Quarter 4, you will witness a rapid economic growth and rural economy will rise like anything though I am not sure how many employment shall be generated in organised sectors. We have laid down a strong foundation of flourishment of economic development and results shall be visible by the end of current financial itself.
 

HariPrasad-1

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Exports too which have fallen or remained flat for the past few quarters.
You do not know why export has fallen. Export has fallen because of fallen crude oil prices. We export products which uses crude oil in huge quantity. Since the crude oil price fell, import also fell and so as export. If you want to see a correct picture, look at the trade deficit and not at the export figure.
 

Bloom17

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What do you guys think about the taxes? Isn't gst rates to high? While the whole world is selling fuel for cheap modi is making money on it. Ultimately the middle class is being screwed left and right in my opinion. I personally can't keep up with the taxes neither does everyone around me. Before I use to pay total of 42 percent on taxes for my rental income. Now I'm almost paying 58 percent. Middle class lives have just gone berserk.
 

IndianHawk

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As far as i am concerned there are only two metrics i am going to bother myself with for next 2-3 fiscals..
1) increase in tax base
2) increase in tax collection

simply because i want to see defence budget reach atleast 80 billion $ with in the next 10 years.

everything else is noise for me..
Morgan Stanley predicts Indian GDP to be 5trillon $$ by 2025. 2 % of that is 100 billion for defence. So even if govt goes with some 1.8 % of GDP for defense budget I'm pretty sure you'll get your 80billion by 2025 .
 

Adioz

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Morgan Stanley predicts Indian GDP to be 5trillon $$ by 2025. 2 % of that is 100 billion for defence. So even if govt goes with some 1.8 % of GDP for defense budget I'm pretty sure you'll get your 80billion by 2025 .
Stanley or no Stanley, we need an average annual GDP growth of 9.3% from 2017-18 to 2025-26 if we plan to be a $5 trillion economy by 2025. Given the current global trade climate, our current GDP growth momentum, NPA baggage impinging on private investment and the fact that we will have two general elections before then, a 9.3% growth is not something that we will easily achieve. And if, by some miracle, Modi looses 2019 elections, god save us.

Raghuraj Rajan is a very narcissistic man . Title of his book tells it all..."I do what I do" ...see it has two big "I"s just in 5 words. Its all about "I" "Me" and "myself" ....an Indian in appearance but with heartless western in mindset.
Now, the guy is bitter because his contract was not renewed by Indian govt. and he has to use his book to subtly badmouth the Govt. He has developed the arrogance and pathological narcissism of western economists who, I remember , so confidently used to predict in 1980s that hundreds of millions of Indians would die due to hunger by year 2000. These bought puppets write books, give lectures and spread propaganda to serve their masters who pay them. Its not about a billion plus Indian peoples well-being...its about these peoples big Egos.
Who is propagating his interviews and promoting his book...the same old "Undi-TV" (underwear TV) whose owner got caught with a lot of black money. The mafia of Undi-TVs, Lalus, Commies, Mamta begums, Pappus and money lauderers /shoddy builders are going to fight the change till the last drop as Modi is cutting the very root of corrupt people ....they have to stop Modi for their survival and will love to keep the system corrupt because it worked for them for 60 years.
Instead of dissecting a well-accomplished man based on the title of his book alone, it would be prudent if you bring out specific examples as to how he is corrupt or anti-national. And do it on some other thread. This one is about tracking Indian economic trajectory till 2019 general elections. All Rajan said was that we need to grow at 8% for 10 years before we start celebrating the "rise of India". What he said is something that needs to be said, but what no one else in the ruling party can say even if they want to (because of political factors). Unless you can bring facts to the fore, stop ranting.

You do not know why export has fallen. Export has fallen because of fallen crude oil prices. We export products which uses crude oil in huge quantity. Since the crude oil price fell, import also fell and so as export. If you want to see a correct picture, look at the trade deficit and not at the export figure.
Is it not because of rising value of Rupee? The Chief Economic Adviser is screaming hoarse that Rupee's rise is hurting our export competitiveness.

What do you guys think about the taxes? Isn't gst rates to high? While the whole world is selling fuel for cheap modi is making money on it. Ultimately the middle class is being screwed left and right in my opinion. I personally can't keep up with the taxes neither does everyone around me. Before I use to pay total of 42 percent on taxes for my rental income. Now I'm almost paying 58 percent. Middle class lives have just gone berserk.
Intreast rate


Taxes are unpopular. Strong tax regime and poor industrial out put is a deadly combination.

Increase income, increase industry, increase incentive, reduce tax rates, decrease interest rates will help.
Industrial output is expected to rise consistently for a long time. The disruptions are already history (though their effects are not). So strong tax regime is not being clubbed with poor industrial output here.
More tax => More government revenue => More infrastructure spending => Increases in efficiency, export competitiveness, FDI, profit margins of private enterprise and more jobs.

Unless government spending on infrastructure does not increase, this bottleneck cannot be removed.
 

IndianHawk

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Stanley or no Stanley, we need an average annual GDP growth of 9.3% from 2017-18 to 2025-26 if we plan to be a $5 trillion economy by 2025. Given the current global trade climate, our current GDP growth momentum, NPA baggage impinging on private investment and the fact that we will have two general elections before then, a 9.3% growth is not something that we will easily achieve. And if, by some miracle, Modi looses 2019 elections, god save us.
We would get there even without modi let me tell you why .

India GDP in 2007 1 trillion $$
India GDP in 2017 2.5 trillion$$(imf estimate|actual for 2016 is 2.3 trillion. So quite fair)

Now calculate the compound growth rate it's well above 9% . How is that possible despite recession , despite upa scandols , despite upa 2 policy paralysis. Growth actually fizzled in 2012-13and 14 . Even worse than what we have this quarter after demonetization and gst dual hit.

But that's how compounding works.
Now from 2.5 trillion (2017) to 5 trillion (2025) 8 years we get compound annual growth rate of 9.05% .

But this is in $ based on exchange rate if rupee appreciates 2-3% than we'll need actual GDP growth to be 6-7 %.

Not to mention base year will be revised in between which will increase the figure further.( I know it seems like a trick but it's legit and everyone does it otherwise we'll have china and usa GDP much much less than what they have now too.)

So actually very sincerely I'm betting at total growth of some 12 % annual.
( 8% normal GDP growth + 2% rupee rising + 2% base year revision )

By that calculation I arrive at 6 trillion +- 200 billion.

I know it looks surprising now but in rear view things look normal.

Check chinese data for gdp
https://en.m.wikipedia.org/wiki/Historical_GDP_of_China

Let's check year 2005, 2006 and 2007 by imf data
GDP was 2.2 ,2.7 and 3.5 trillion respectively. Now to add 500 billion between 2005 and 2006 chinese must have grown at 20% but we know that's impossible. For 2006-07 again 800 billion is added that means growth of 30%

In actuality at that time there GDP growth was upward 10% ( according to their own data ) but today in rear view it look much more thanks too yuan appreciation , base year revision and inflation.

Now I hope you get where I'm getting . Today we are adding 175billion to economy at 7 % growth annual . But in 2025 it would figure in Wikipedia will show that as 300 billion or higher:drool:

That is why 5 trillion is a conservative estimate . Morgan Stanley after all has very intelligent people on payroll.:cool3:

And somebody should start collecting all my posts they are getting very very insightful of late:biggrin2::biggrin2::)
 

Adioz

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We would get there even without modi let me tell you why .

India GDP in 2007 1 trillion $$
India GDP in 2017 2.5 trillion$$(imf estimate|actual for 2016 is 2.3 trillion. So quite fair)

Now calculate the compound growth rate it's well above 9% . How is that possible despite recession , despite upa scandols , despite upa 2 policy paralysis. Growth actually fizzled in 2012-13and 14 . Even worse than what we have this quarter after demonetization and gst dual hit.

But that's how compounding works.
Now from 2.5 trillion (2017) to 5 trillion (2025) 8 years we get compound annual growth rate of 9.05% .

But this is in $ based on exchange rate if rupee appreciates 2-3% than we'll need actual GDP growth to be 6-7 %.

Not to mention base year will be revised in between which will increase the figure further.( I know it seems like a trick but it's legit and everyone does it otherwise we'll have china and usa GDP much much less than what they have now too.)

So actually very sincerely I'm betting at total growth of some 12 % annual.
( 8% normal GDP growth + 2% rupee rising + 2% base year revision )

By that calculation I arrive at 6 trillion +- 200 billion.

I know it looks surprising now but in rear view things look normal.

Check chinese data for gdp
https://en.m.wikipedia.org/wiki/Historical_GDP_of_China

Let's check year 2005, 2006 and 2007 by imf data
GDP was 2.2 ,2.7 and 3.5 trillion respectively. Now to add 500 billion between 2005 and 2006 chinese must have grown at 20% but we know that's impossible. For 2006-07 again 800 billion is added that means growth of 30%

In actuality at that time there GDP growth was upward 10% ( according to their own data ) but today in rear view it look much more thanks too yuan appreciation , base year revision and inflation.

Now I hope you get where I'm getting . Today we are adding 175billion to economy at 7 % growth annual . But in 2025 it would figure in Wikipedia will show that as 300 billion or higher:drool:

That is why 5 trillion is a conservative estimate . Morgan Stanley after all has very intelligent people on payroll.:cool3:

And somebody should start collecting all my posts they are getting very very insightful of late:biggrin2::biggrin2::)
Damn, I always forget that base year effect in economics.:doh:

Even so, rupee appreciation might be a temporary thing. Its already starting to hurt our exports. Will the RBI intervene or won't it is the question.

Meanwhile at North Block:-
 

ezsasa

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What do you guys think about the taxes? Isn't gst rates to high? While the whole world is selling fuel for cheap modi is making money on it. Ultimately the middle class is being screwed left and right in my opinion. I personally can't keep up with the taxes neither does everyone around me. Before I use to pay total of 42 percent on taxes for my rental income. Now I'm almost paying 58 percent. Middle class lives have just gone berserk.
If people don't pay their share of direct taxes, govt will take their share from indirect taxes. Petrol prices fall in this category.

In pre-modi period every citizen(including non-petrol users) was sharing the burden on petrol prices because they were subsidised. The amount spent on subsidy then could have been used on various other useful things.

Now subsidies are removed, only people buying petrol share the burden.
 

IndianHawk

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Even so, rupee appreciation might be a temporary thing. Its already starting to hurt our exports. Will the RBI intervene or won't it is the questio
RBI is intervening though indirectly. It is buying dollars to build forex chest. That is helping dollar against rupee.

I mentioned this before too in medium term we can't stop rupee from rising if we grow and if economy is stable rupee will rise.

The only game thus is to raise our competitiveness . Learn from Germany and China too.
 

prohumanity

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Naysayers will keep finding faults...they can't see that tax base has grown so much due to recent actions by Govt.
In last 60 years, only 5% people were paying income tax (what a shame)...the entire mindset of Indians became "jugadu" ..black money holder, money launderers became heroes , fat and ugly wedding, shameless display of illgotten wealth became norm.
Now, the narrative is changing...honest people are starting a get some hope...India has lot of real problems but atleast the direction of change is being set in right direction.
 

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