India Economy Thread II

[Suncity]

Continued from

http://www.skyscrapercity.com/showthread.php?t=141671

[Suncity]

Interesting news

http://www.ibnlive.com/videos/39043/...f-it-boom.html

[IndiansUnite]

India's GDP to grow at 9.2%: RBI

The Indian economy is expected to post a robust growth for the fourth straight year, expanding by an accelerated 9.2 per cent in 2006-07 as against 9 per cent in the previous fiscal.

The acceleration in growth during 2006-07 is driven by continued momentum in the services and manufacturing sectors, growth of which are expected to be in double-digit figures, the RBI said in its macro-economic and monetary developments review-2006-07 on Monday.

Read on

[Kingmaker]

Was pretty much expected because of the tightening measures.

---------------------------------

The Reserve Bank of India (RBI) in its Annual Policy Statement for the Year FY08 says real GDP growth in 2007-08 may be placed at around 8.5% assuming no further escalation in international crude prices and barring domestic or external shocks.

The advance estimates of the Central Statistical Organisation (CSO) placed real GDP growth at 9.2% for FY07 over and above 9% in FY06.

"Among the cyclical factors, first, robust global GDP growth has been supportive of high growth in the country. Second, the persistence of high growth in bank credit and money supply, the pick-up in non-oil import growth and the widening of the trade deficit together indicate pressures on aggregate demand. Third, cyclical forces are also evident in the steady increase in prices of manufactures, resurgence of pricing power among corporates, indications of wage pressures in some sectors, strained capacity utilisation and elevated asset prices," the policy said.

http://business-standard.com/common/...N&autono=22670

[pding]

http://www.financialexpress.com/fe_f...tent_id=162140

SEZ exports grow 52% to Rs 35k crore

The exports from special economic zones (SEZ) in 2006-07 were Rs 34,787 crore, a 52% growth over Rs 22,840 crore-worth exports in 2005-06, LB Singhal, director general, export promotion council for EOUs and SEZs said.
He said on Tuesday that the exports from SEZs are expected to touch Rs 67,300 crore this fiscal and projected that the figure would be Rs 1,00,000 crore by 2008-09.

In the 63 SEZs which were notified earlier, an investment of Rs 13,435 crore has already been made and 18,457 people have been employed. By December 2009, it is expected that in the 63 SEZs, a total investment of Rs 53,500 crore will be made and 15.75 lakh people would be employed. Altogether 92 SEZs have been notified so far.

Singhal said in the 234 SEZs which have been formally approved an investment of Rs 3 lakh crore is expected to be made and they are likely to create 40 lakh additional jobs. The official said mostly rural people were given employment in SEZs like Mahindra Worldcity and Nokia India Ltd in Chennai, Brandix Apparels, Hyderabad Gems and Apache SEZ in Andhra Pradesh.

He said several SEZ developers have asked the commerce ministry to ensure that single window clearance facility with the state government authorities is made operational and effective.
____________________________________________________________________________________



this is very encouraging and a nail in the coffin for socialist lingos like medha, arundhati, and mamata. the thousands of ppl employed are mostly rural folks and belonging mostly to the backward classes.

[pding]

http://www.hindu.com/2007/04/25/stor...2503721100.htm

"The goal is to moderate inflation without affecting growth"

the quality of implementation in both meeting time targets and money targets must vastly improve at the State level and more importantly at the sub-State level, district level, and even at the panchayat union level.

Take, for an example, the road sector, I can provide at an average about 3 or 4 crore rupees per km. But the quality of the National Highways and State Highways built at a cost of nearly 4 crore rupees per km turns out to be of different standards. I am afraid the investment becomes optimum. It does not get you the return that it should get. If we address these critical deficiencies, I have no doubt in my mind that we can aim [for] the 10 per cent growth rate and beyond it

what does he mean by the red bolded part? very interesting and thoughful interview.

The critical thing is supply side. Neither monetary nor fiscal measures can directly increase production. It is totally dependent on supply and demand. We have a supply and demand mismatch in pulses and edible oil. We had a supply-demand mismatch in wheat last year. If these supply and demand mismatches are triggering inflation, the only way, I repeat the only way, is to vastly increase the production of pulses, wheat, and oil seeds. That is the question which must be addressed by Ministry of Agriculture, Food, and other Ministries

[Luckystreak]

Matsushita Elec Works Buys India's Anchor for $420 Mln

Matsushita Electric Works Ltd. (6991.T: Quote, NEWS , Research) said on Monday it had bought an 80 percent stake in India's Anchor Electricals for 50 billion yen ($420 million), the Japanese company said on Monday.

But unlisted Anchor said in a statement 50 billion yen amounted to 20 billion rupees, or $480 million, but did not say what exchange rate it had used.

The deal, the biggest by a Japanese firm in India, is expected to help Matsushita Electric Works, which makes building materials and lighting equipment, make 15 percent of its overseas sales from India in about five years, a Matsushita official said.

Osaka-based Matsushita Electric Works, which aims to boost its overseas sales to 320 billion yen ($2.7 billion) by the year to March 2011 from 222 billion yen in 2005/06, said the investment was fully self-financed.


Matsushita Electric is a unit of Matsushita Electric Industrial Co. Ltd. (6752.T: Quote, NEWS , Research), the world's largest consumer electronics maker that sells Panasonic and National brands of televisions and sound systems in India.

Mumbai-based Anchor is India's top maker of electrical construction materials such as lighting fixtures and electric wires, with a market share of over 60 percent in an industry growing at about 30 percent a year.

[VaastuShastra]

Overseas Indians` wealth exceed India GDP

"The combined wealth of 20 million Indians living abroad is more than $1 trillion, compared to India`s domestic economy of about $850 billion, a report says."

Thats pretty impressive.

[JD]

Originally Posted by VaastuShastra

Thats pretty impressive.

Look at this way: India is way way behind the rest of world.

[Paddington]

India's GDP should be on par with Mauritius (which is predominantly Indian), or around $13,000. Instead it's about one fourth of that, due to the country's bad economic policies.

[Suncity]

Originally Posted by VaastuShastra

Thats pretty impressive.

What would be the combined wealth of top 100 million Indians living in India? If each one had wealth (financial wealth, real estate, gold and art) of 10,000 US dollars that is Rs 400,000, it would be 1 trillion US dollars.

[cncity]

I believe there are 70,000 indian millionaires in the country currently( in $ ).
The combined value of India's 36 billionaire's itself it about $ 191 billion.

[wcgokul]

The rupee rallied past 41 per dollar for the first time in nine years on Wednesday, buoyed by robust capital inflows and exporters who hedged against further appreciation.

The rupee ended at 40.91, having traded as high as 40.88 — its strongest since May 1998. The gains follow a rise of more than 1 per cent on Tuesday, when it closed at 41.18.

http://www.telegraphindia.com/107042...ry_7699674.asp

[MachuPichu]

Private sector investments in key sectors sharply down


D. Sampathkumar

Chennai, Aug. 17 The number of projects initiated in 2007-08, by the private corporate sector for implementation, in key sectors such as petroleum, sugar, textiles etc. is sharply down as against the previous year, a study by the Reserve Bank of India (RBI) reveals.

In its latest monthly bulletin (August 2008), the RBI says that as against 258 projects expected to cost around Rs 26,000 crore taken up in 2006-07, the number has come down to 128 with the projected investment pegged at Rs 10,700 crore.

Ironically, the development comes in the face of textile enterprises seeing a slight improvement in export prospects with problems plaguing the Chinese industry and units in other countries with which India competes in the global markets, as this paper reported in its edition dated August 17, 2008.

Similar tale
It is a similar tale in other sectors as well with both the number and project costs scaled down sharply. However, metals and hotel industries have shown buoyancy. (See Table).

The waning corporate interest in committing fresh investments is evident from another piece of statistics published by the RBI for 2007-08.

Such investments overall, which have shown a consistent rising trend in recent years, is flat for the first time in the year just gone by compared to the immediate previous year.

From a figure of close to Rs 73,000 crore in 2003-04, the projected fresh investments in 2006-07 had gone up nearly four fold at Rs 2,83,440 crore. But the subsequent year sees the private corporate sector investing only Rs 2,84,371 crore - a clear decline in real terms if inflation is taken into account over the project implementation period (See Table).

Worrisome feature


Another worrisome feature evident from the RBI data is that the entrepreneurial base is also shrinking with fewer new projects being taken up, but involving bigger-ticket investments to make up the higher value. For instance, it took roughly 1,054 new projects to notch up a figure of Rs 2,83,440 crore in 2006-07.

But nearly the same project size ( Rs 2,84,371 crore) was reached with nearly 150 fewer projects (910, to be exact) in 2007-08.

As the RBI data make it clear, the private corporate sector’s overwhelming focus on infrastructure projects such power, telecom, ports, airports, roads etc. while boosting up the numbers simultaneously masks the declining business fundamentals in others sectors where fewer projects are coming up.

Indeed, infrastructure which accounted for only a third of new projects in 2005-06 now constitutes close to half the value of fresh investments committed by the private sector.

Of particular interest is the growth in the number and project values of Special Economic Zones (SEZs) and IT parks which have seen a ten-fold increase in the value of investments. Promoters have clearly been able to persuade financial institutions to discount political risks while backing these projects.

[Suraj]

There's a difference between wealth and economic output. Personal wealth is the accumulated net worth. GDP is economic output in a single year. While India's economic output may be $950-$1000 billion ($850B is an old figure), the accumulated wealth is many times that. The article is rather shallow and sensationalist, besides comparing apples with oranges.

[Luckystreak]

Right on Suraj

[Luckystreak]

Yippeee...

India is now a trillion dollar economy

India's gross domestic product has topped $1 trillion, thanks to a strengthening rupee, making it the 12th country to achieve the milestone, Credit Suisse said on Thursday.

"Indian GDP at the current price level is 41 trillion rupees. With the rupee appreciating to below 41 against the US dollar, yesterday was the first day for the economy to be a trillion dollar economy," the Swiss investment firm said in a note.

The rupee, which is trading around 40.76 to a dollar, has appreciated about 8.4 per cent this year and is up 15.4 per cent from a three-year low of 47.04 in July last year.

Stock markets in eight out of 10 countries had risen in the one year after their economies first crossed $1 trillion, Credit Suisse said.

However, India's $944 billion stock market should probably drop because of slower earnings growth for sectors such as autos, banks and cement, before picking up as inflows pick up into fast growing economy.

"Given our outlook... it is likely to go down again in the near future before it sustainably stands above this mark," it said, referring to $1 trillion.

[VKS]

So India's economy will go back to under one trillion dollars if exchange rate reverses?

[barrykul]

The $700B bailout in the US once again highlights the problem of regulation. Wall Street and banks were running amok unregulated, calling the shots whichever way they felt. The wild ways of lending brought about the ultimate demise of the credit system, wherein normal business could not get a loan for legitimate reasons. Now the US has come up with a bailout package which includes regulation and oversight. In India the situation is the other extreme over regulation. Markets were choked with regulation that the free and legitimate reasons for commerce/business was, in some peoples opinion, stifling. Clearly over regulation is not the answer and this has indeed kept India in a low growth phase for a very long time. Recently, the Indian govt decided to ease regulation and the Indian market grew. The balance of proper regulation and freedom is still being fine tuned. Freedom to operate and proper macro level regulation is the answer to healthy markets. It turns out that those who claimed either extremes were wrong.

[Luckystreak]

Dont worry even if it comes down, it will eventually reach that number by the end of this year.