Indian Economy - News & Discussion

News and Discussions about politics, current affairs, international relations, economy, elections, state level politics etc.
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MehtaRahulC
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Re: Indian Economy - News & Discussion

Post by MehtaRahulC » Tue Oct 24, 2017 3:34 am

Financial express oct-2016 i.e. 1 year ago , reported - Value of mobile phones assembled locally is just 6%. see http://www.financialexpress.com/opinion ... -6/451874/
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Things may have changed in one year
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GoI is selling away profit making Pawan Hans. Pls google for more info. Lets see how much we get for lands Pawan Hans may be owning. Last time, when PSU Modern Food was sold to Hindustan Lever for Rs 200 crore, Modern Food had plots worth Rs 2000 crore in Delhi alone !!! So lets see how much PSU selling fetches for the lands they have.
Last edited by MehtaRahulC on Tue Oct 24, 2017 3:53 am, edited 2 times in total.

Singha
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Re: Indian Economy - News & Discussion

Post by Singha » Tue Oct 24, 2017 3:40 am

Modi govt is doing a foolish thing by not giving benefits to middle class support base who voted him in for faster economic benefits and opps for kids not to chase congis into jail after 200 yrs of judicial proceedings

All we see is taxation and aadhar linking demands.

Some low hanging fruits

Make deduction for medicines consultations and hospital stay entirely tax free for ppl older than 55 yo with no limit
Make it upto 2.5 lakhs taxfree per person for younger than 55 yo

Cap pvt school and college fees. If govt can fight mnc and cap price of meds and implants so they should be ae to fight wanton profiteering in this sector

The dom1 limit of 15000 has not changed for 15 yrs atleast . Get rid of it and fold under tax free 2.5 per person per annum

Make stock and bond market mutual funds exempt from capital gains tax to encourage investment

Get rid of the 30% tax slab and make top tier as 20%

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Re: Indian Economy - News & Discussion

Post by Singha » Tue Oct 24, 2017 3:42 am

Vat and service tax in good restaurants were around 20% earlier
I recall of that vat was around 14%

MehtaRahulC
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Re: Indian Economy - News & Discussion

Post by MehtaRahulC » Tue Oct 24, 2017 3:38 pm

Electricity consumption of sep-2017 was only 4.6% higher than sep-2016. So you decide whether economy going well or not.
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sep-2013 compared to sep-2012 was 12.6% higher !!
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population growth rate = 1.2% . So subtract that to get per capita electricity consumption growth.
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sources
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(1)for sep-2017 , pls see page-4 of http://www.cea.nic.in/reports/monthly/e ... ary-09.pdf
(pls see achievement column and NOT target, and graph given below the table is misleading because it shows of achievent 2016 and target of 2017 !! )
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(2) for sep-2013, pls see page-3 of https://www.cea.nic.in/reports/monthly/ ... ary-09.pdf
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I am just giving some data. You make your conclusions
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How we are managaing 5% or 6% growth rate with electrity growth rate below 5% is mystery to me. It is possible if country is making high value addition goods, which need less electricity, eg say contry is making tons of mobiles or LCDs or chips etc. But we mostly make low end stuff. So is 7% or 6% or even 5% growth rate possible with electricity consumption increase of just 4.6% ? Pls chew on this question

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Re: Indian Economy - News & Discussion

Post by Singha » Wed Oct 25, 2017 2:26 am

appliances are becoming more efficient all the time incl powerful ones like fridges, TVs and ACs.
the LED bulb thing has also replaced tens of millions of filament bulbs with 80% more power efficient product. a 6W LED produces more light than a 60W chalu bulb.
desktop tower PC are now universally replaced by laptops
i guess industrial machinery is also growing more power efficient like motors, boilers, ovens and furnaces in each upgrade cycle albeit slower pace than consumer goods.

what is more strange to me is the construction sector being in doldrums due to debt overhang and overpriced product in a country like ours where millions need housing. to an extent the small agile chalu builders are doing ok, selling value priced mid- and low-quality small scale offerings with fast turnaround and no permit & high level hafta hassles of large projects.....ppl buying high priced product also look to location, civic infra, commute etc and our failure in urban planning in cities like blr greatly diminishes the intrinsic long term value of any property that does not meet such criteria through no fault of their own.

growth % is not a voting issue - lack of jobs is. india has been enjoying good growth % for 25 years but without a vast expansion in jobs except ITvity

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Re: Indian Economy - News & Discussion

Post by Atish » Wed Oct 25, 2017 2:50 am

Also better efficiency at both Electricity distribution, better quality of power, etc also improve power efficiency.

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Re: Indian Economy - News & Discussion

Post by Hari Seldon » Wed Oct 25, 2017 8:36 am

PSU bank recapitalization (using taxpayer monies) announced to the tune of 2.11 lakh crore. All PSB stocks are on fire right now.

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Re: Indian Economy - News & Discussion

Post by Dumal » Wed Oct 25, 2017 2:26 pm

Hari Seldon wrote:
Wed Oct 25, 2017 8:36 am
PSU bank recapitalization (using taxpayer monies) announced to the tune of 2.11 lakh crore. All PSB stocks are on fire right now.
My understanding, almost 2/3rd of that is going to be borrowed from the markets through bonds. A part of the rest of the 1/3rd will come from the national budget and that too over 2 years.

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Re: Indian Economy - News & Discussion

Post by MehtaRahulC » Fri Oct 27, 2017 6:39 am

http://epaper.financialexpress.com/1407 ... 7#page/1/2
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Financial Express, today, 27-oct-2017 , ahmedabad edition , page-1
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Pls see bar char at the center of the page.
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" House call --- New home sales and launches collapse. .... in 9 cities, new residential unit sales down by 18% and new home launches down by 53%" !!!
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Newspaper says that slowdown is due to GST and RERA !! But its their opinion.
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RERA is RTE for builders. RTE's "goal" is provide education to poor and all. But we know the real goal of RTE. Same way, RERA's stated goals are to protect buyers. But real goals --- well pls read the DRAFT.

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Re: Indian Economy - News & Discussion

Post by a_bharat » Fri Oct 27, 2017 9:09 am

Dumal wrote:
Wed Oct 25, 2017 2:26 pm
Hari Seldon wrote:
Wed Oct 25, 2017 8:36 am
PSU bank recapitalization (using taxpayer monies) announced to the tune of 2.11 lakh crore. All PSB stocks are on fire right now.
My understanding, almost 2/3rd of that is going to be borrowed from the markets through bonds. A part of the rest of the 1/3rd will come from the national budget and that too over 2 years.
Most likely, it is going to be an accounting trick. Banks buy Recap Bonds and that money would be infused back into banks (just an entry in the books -- no new bonds in the market). PSB shares get diluted, Governtment's stake increases. The banks in turn will meet capital adequacy requirements that allows them to lend more (deposits already there from demonitization). Govt will have interest expense on its account.

The govt, if smart should put up boards "Demonitization at work" at new road construction sites.

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Re: Indian Economy - News & Discussion

Post by Aditya_V » Fri Oct 27, 2017 9:41 am

Finally people are learning accounting tricks, those who ran 6% Deficits and caused various scams and 9 Lakh crore NPA, running down the Armed forces - SU-30% operation fleet strength, 10 day war reserve ammunition are talking, huge subsidy leakages are talking about Governance and running the economy and is being lapped up by many.

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Re: Indian Economy - News & Discussion

Post by Sridhar k » Fri Oct 27, 2017 10:35 am

Aditya. Nicely articulated. you should tweet the above and will be lapped up by many

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Re: Indian Economy - News & Discussion

Post by Aditya_V » Fri Oct 27, 2017 12:59 pm

SridharK-> No use if people consider the world is flat anyone who does not agree with them is fasisct, Bhakt or communal.

Sicanta
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Re: Indian Economy - News & Discussion

Post by Sicanta » Fri Oct 27, 2017 10:04 pm

A bold step in bank reform

http://www.thehindu.com/opinion/lead/a- ... 926994.ece

T.T. Ram Mohan is a professor at IIM Ahmedabad

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Re: Indian Economy - News & Discussion

Post by Deans » Thu Nov 02, 2017 5:40 am

Singha wrote:
Tue Oct 24, 2017 3:40 am
Modi govt is doing a foolish thing by not giving benefits to middle class support base who voted him in for faster economic benefits and opps for kids not to chase congis into jail after 200 yrs of judicial proceedings

All we see is taxation and aadhar linking demands.

Some low hanging fruits

Make deduction for medicines consultations and hospital stay entirely tax free for ppl older than 55 yo with no limit
Make it upto 2.5 lakhs taxfree per person for younger than 55 yo

Cap pvt school and college fees. If govt can fight mnc and cap price of meds and implants so they should be ae to fight wanton profiteering in this sector

The dom1 limit of 15000 has not changed for 15 yrs atleast . Get rid of it and fold under tax free 2.5 per person per annum

Make stock and bond market mutual funds exempt from capital gains tax to encourage investment

Get rid of the 30% tax slab and make top tier as 20%
These things have been proposed but will lead to massive revenue leakage. for e.g.
1. Medical costs exempt - Will lead to huge amount of fake bills. A lot of genuine bills are covered by insurance, which is tax exempt.
(99% of premiums are within the tax exempt limit)
2. Fees are capped but private colleges demand donations in cash. That is what things like DeMo and NEET are trying to fight.
3. Barely 3% of working age adults pay tax). More exemptions will reduce even this. The tax base can and is being increased to 5% of working age
population ( by DeMo, GST etc - taxpayers increasing from 19 million to 28 million already. A figure of 33 million taxpayers, given our national
income distribution would be a good tax base.
4. Capital gains on equity are exempt after 1 year (anything shorter would be speculative investments). Its is more liberal than many countries.
5. Effective rate of tax even for the top 10% of taxpayers is about 20%. Barely 1% of taxpayers pay 30%

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Re: Indian Economy - News & Discussion

Post by Marten » Fri Nov 03, 2017 5:14 am

Deans Sir, if Indirect taxes continue to grow in this manner, direct taxes can definitely be reduced. Just a few years ago, the ratio was 70:30, and it has steadily reached a point where indirect taxes are now more than direct tax collections. In a decade, hopefully local taxes will completely overshadow income tax and allow more folks to report their true incomes while enjoying lower tax slabs due to the wider base.
Image
Of course, Direct includes Corporate taxes, which hopefully won't go down. PC basically undid what Pranob had managed quite well.

Image

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Re: Indian Economy - News & Discussion

Post by Hari Seldon » Fri Nov 03, 2017 7:50 am

^ Well then, at least have the max personal I-T rates be no higher than the corporate tax rate.

As of now, there's a full 5 percentage points difference, IIRC.

High earners simply have to register themselves as proprietorships and avail 'em benefits whilst we salaried chums get left holding the bag. Again.

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Re: Indian Economy - News & Discussion

Post by Singha » Fri Nov 03, 2017 7:54 am

Deans, a lot can be done to improve the optics around medical exemption, school fees, income tax rate , benefits for middle age and retired(these people tend to vote unlike youngistani brats and bratinas) without huge revenue 'leakage' - its a leakage only in sense of beating up those already in the tax net and being thrashed repeatedly.

rich rural people , people of NE hill states and urban self employed rich continue to either legally pay no income tax or hide a part of the income/fly under radar totally like those mumbai roadside food vendors caught with crores in accounts.

you can plan great deeds, but you have to remain in power a long time to do these great deeds

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Re: Indian Economy - News & Discussion

Post by Sicanta » Sat Nov 04, 2017 4:48 am

Report of the Household Finance Committee - EXECUTIVE SUMMARY

https://rbi.org.in/Scripts/PublicationR ... ID=877#EXE

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Re: Indian Economy - News & Discussion

Post by Sicanta » Sat Nov 04, 2017 6:14 am

The precarious state of Indian household finances

http://www.livemint.com/Opinion/u5gwrDB ... ances.html

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Re: Indian Economy - News & Discussion

Post by jamwal » Sat Nov 04, 2017 6:23 am

Must read
The biggest ever fire sale of Indian corporate assets has begun, to tide over bad loans crisis
We are seeing what is effectively India Inc.’s biggest ever fire sale. It’s even bigger than the government’s planned divestment target. The Reserve Bank of India’s (RBI) has decided to clean up the balance sheets of Indian banks, which are collectively saddled with Rs five lakh crore of bad loans, by the end of this fiscal. So, the banks have started cracking the whip on Indian companies for repayment of loans. For most affected firms and groups, this will mean they will be forced to sell prized assets to repay their ballooning debts. We are seeing ‘for sale’ tags on airports, roads, ports, steel plants, cement units, refineries, malls, corporate parks, land banks, coal mines, oil blocks, express highways, airwaves, Formula One teams, hotels, private jets, and even status symbol corporate HQs. Substantial stakes in firms, and in some cases entire companies, are on the block. The Hindu reviewed leading corporate houses with billion-dollar loans riding on them, and the results are startling.

The top 10 business house debtors alone owe Rs 5,00,000 crore to the banks. They will be forced to sell assets worth over Rs 2,00,000 crore.


Reliance Group (Anil Ambani) The Anil Ambani-led Reliance Group alone owes Rs 1,21,000 crore of loans to the banks and had an annual interest liability of Rs 8,299 crore against earnings before income tax of Rs 9,848 crore. Some of the group’s firms, like Reliance Infrastructure and Reliance Defence, don’t earn enough to service the interest outgo. Assets put on sale by the Reliance Group include about 44,000 telecommunications towers (valued at Rs 22,000 crore) and optic fibre and related infrastructure (Rs 8,000 crore) from Reliance Communications (RCom), its flagship firm. Weighed down by about Rs 40,000 crore of debt, RCom has posted a loss of Rs 154 crore in FY14-15, and has continued to post losses in the first three quarters of FY 15-16, accumulating losses of over Rs 2000 crore until December 31, 2015; it is likely to end that fiscal with a net loss too. The company is valued at Rs 13,440 crore, less than a third of its total debts.

However, RCom plans to reduce its debts to Rs 10,000 by selling Rs 30,000 crore of telecom assets. Ruia’s Essar group (Shashi and Ravi Ruia) Shashi and Ravi Ruia’s Essar group has gross debt of Rs 1,01,461 crore. The group is looking to sell about 50 per cent stake of its family silver, i.e., Essar Oil’s 20mtpa (million tonnes per annum) Vadinar refinery, for Rs 25,000 crore. It also plans to bring in a financial partner for its 10mtpa steel business that currently has a debt of Rs 40,000 crore; a 49 per cent stake in the steel facility will be valued at about Rs 25,000 crore. The debt-laden group is also looking to sell stake in its ports business. Essar Steel and Essar Oil each account for one-third of the group debt, and Essar Power, one-fifth.
http://www.thehindu.com/business/Indust ... 573163.ece

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Re: Indian Economy - News & Discussion

Post by jamwal » Mon Nov 06, 2017 11:31 am

http://www.livemint.com/Specials/8bX1ID ... ccess.html
Demonetisation: A resounding success
Demonetisation has provided Indian citizens an opportunity to reimagine not only their currency, but also their social mores, honesty, and compliance with law
Some data is beginning to emerge on how the economic trajectory actually played out as opposed to estimates of how the various models predicted that they would play out.

Since demonetisation, the government has embarked on another ambitious bipartisan reform of consolidating various levies and taxes in different states into one comprehensive goods and services tax (GST): such a large reform intervention also creates its own changes in the economy.

To appreciate the changes that demonetisation brought about, we need to carefully choose and measure the relevant short-term high-frequency indicators and a few emerging long-term indicators which point to the direction that the economy has since taken.

High-frequency and quantitative indicators like (1) cash-to-GDP ratio, (2) volume of digital payments, (3) number of new registered taxpayers, and (4) estimate of “unaccounted for” money and the number of tax notices sent indicate that demonetisation has generated material changes. The cash-to-GDP ratio is now down to 9.7%, from 11.3% pre-8 November last year. This cash is now in the banking system which has helped swell the current accounts and savings accounts balances of banks: this will allow them to lend and invest more, and at lower rates. Digital payments, at Rs50,000 crore in the month of October 2017, are up 41% year-on-year. The finance minister has stated that 9.1 million taxpayers have been added to the tax net as a result of actions taken by the income tax department during fiscal year 2017. Further, the ministry of finance has indicated that between Rs3 trillion and Rs4.2 trillion is “unexplained” during the cash deposit rush post-demonetisation and hence has sent out 1.8 million notices to assesses: apart from the one-time benefit to revenue of such “declarations”, these moves could bring significant stock and flow of incomes into the tax net. This data shows that demonetisation has had a positive impact on the formalization of the economy, improving the tax base and hastening the use of digital payments. Consequently, it is quite plausible to argue that these effects, which will clearly have an ongoing GDP impact, could easily swamp the impact of a one-time 2% decline in GDP.

Apart from these purely economic factors, there is another more profound behavioural change that has been accomplished. A new normal has been established—Indians are paying their taxes and moving towards a less-cash society. There is a pronounced trend towards tax compliance driven by the belief that the system is working to reward honest taxpayers even as it makes life difficult for those who have been used to evading or underpaying taxes. GST and the implementation of the benami transactions Act make it even more difficult for anyone in the economic chain to opt out of the taxation system.

Massive reforms like demonetisation cannot be measured solely by using economic parameters but need to take into account the structural shift that such reforms induce in society. Societal and long-term economic changes are difficult to measure and require more reasoned, detailed, and patient analyses: this should increase our resolve to do deeper research rather than jumping to hasty, ill-informed conclusions. demonetisation has provided Indian citizens a unique opportunity to re-imagine not only their currency, but also their own social mores, honesty, compliance with law, and their willingness to change and adapt to a more transparent and New India. We should celebrate this New India.

Jayant Sinha is minister of state for civil aviation and a member of Parliament from Hazaribagh, Jharkhand. The views expressed are personal.

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Re: Indian Economy - News & Discussion

Post by Sicanta » Mon Nov 06, 2017 11:02 pm

UPI transaction volume hits 76.8 million in October

http://www.livemint.com/Industry/0XWmnn ... tober.html

All banks set to align digital payment solutions under Bhim

https://economictimes.indiatimes.com/ar ... aign=cppst

Paytm integrates BHIM UPI on its platform in bid to double user base

http://www.livemint.com/Companies/QFB6k ... ble-u.html

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Re: Indian Economy - News & Discussion

Post by Schmidt » Fri Nov 10, 2017 5:19 am

Even Now It’s Not Late - Three years down the line, Modi has proved to be a huge disappointment

https://www.pgurus.com/even-now-not-late/

Whilst I wouldn't go so far and call Modi a disappointment , I do agree with most of the points in the article

viz - lowering of Individual IT rates to a reasonable 17% along the lines of Singapore / HK ( or atleast make a roadmap starting with a peak rate of 25% going down to 17-18%in 3-4 years )

Lowering of GST rates for majority of items to 8-10% and keep fewer slabs
Esp lower the GST on services to 12%

Offer a meaningful amnesty , and then go after the remaining defaulters with a vengeance

Make IT evasion a criminal offence and start putting evaders in jail - this alone would improve compliance , not just penalties and fines

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Re: Indian Economy - News & Discussion

Post by Deans » Fri Nov 10, 2017 4:14 pm

Schmidt wrote:
Fri Nov 10, 2017 5:19 am
Even Now It’s Not Late - Three years down the line, Modi has proved to be a huge disappointment

https://www.pgurus.com/even-now-not-late/

Whilst I wouldn't go so far and call Modi a disappointment , I do agree with most of the points in the article

viz - lowering of Individual IT rates to a reasonable 17% along the lines of Singapore / HK ( or atleast make a roadmap starting with a peak rate of 25% going down to 17-18%in 3-4 years )

Lowering of GST rates for majority of items to 8-10% and keep fewer slabs
Esp lower the GST on services to 12%
Offer a meaningful amnesty , and then go after the remaining defaulters with a vengeance
Make IT evasion a criminal offence and start putting evaders in jail - this alone would improve compliance , not just penalties and fines
The average tax paid by a taxpayer in India is under 17% (among the lowest in the G20) after considering the threshold above which income is
taxed and deductions.
GST on average is blow 8% (on the largest no of items it is 0, followed by the next biggest slab which is 5%). only 1% of items are taxed
at 28% as of today.
There have been several attractive amnesty's - critics felt they were too soft on evaders.
The govt is going after tax evaders, albeit non intrusively and in a data driven (and not `hunch of the tax inspector' way). However, it is the
legal system which decides the speed at which they get prosecuted and the quantum of punishment.

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