India Economy Thread II

[Bombay Boy]

10,000 crores for the singhs. not bad for the sons, who must be really thanking their dad

[Hindustani]

Originally Posted by indeglow1

^
You realize that this is a sell off right? A potential Indian MNC is being sold off.Big money for the Singhs who seems to be bailing out but I wouldnt call it a good news India.

dude. relax. they are giving away 50.1% of the stakes for massive $4.6 Billion. Plus, its the japanese company. They are gonna bring lots of professionalism with them. You need this kind of tie up for the longer runs. Meanwhile, Ranbaxy just got $4.6 billion richer. They can start another independent company on the side with this kind of $$$$$$$$$$$$$$$$$$$ easily. Aah. the beauty of the capitalism.

[indeglow1]

Originally Posted by Hindustani

dude. relax. they are giving away 50.1% of the stakes for massive $4.6 Billion. Plus, its the japanese company. They are gonna bring lots of professionalism with them. You need this kind of tie up for the longer runs. Meanwhile, Ranbaxy just got $4.6 billion richer. They can start another independent company on the side with this kind of $$$$$$$$$$$$$$$$$$$ easily. Aah. the beauty of the capitalism.

I dont think you have any clue of what you are talking about.Sankyo is not a hedgefund infusing those billions to make Ranbaxy richer-the Singhs cashed out their equity thats all.Sankyo is a big pharmaceutical company buying in to Ranbaxy and likely will even eleminate the Ranbaxy brand as they aquire more shares.Its just an easierway for Sankyo to get a foothold in India and to a lesser extend global generic business thats all.Inevitable in global business but a little disappointing for people like me who saw Ranbaxy as an emerging MNC.Looks like they were facing challenges after India changed patency laws and US courts turned down a few of their patency challenges.Like the article mentioned,I think many more of Indias successfull pharm companies face similar fate.

[Luckystreak]

India attracts $ 25 billion FDI in 2007-08

Foreign Direct Investment into India has surged to over $ 25 billion in 2007-08 and the country's Foreign Exchange Reserve crossed $ 341 billion as of on Tuesday, Ashwani Kumar, Minister of State for Commerce and Industry has said.

More....

[Zuben]

Originally Posted by Luckystreak

the country's Foreign Exchange Reserve crossed $ 341 billion as of on Tuesday, Ashwani Kumar, Minister of State for Commerce and Industry has said.

Why the hell is RBI buying dollars when inflation is killing the economy ?

[zhiemi]

'India's GDP to grow at 9.5% in FY 09'

Mumbai, June 16: India's real GDP is expected to grow at an impressive 9.5 per cent in FY 09, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review in Mumbai.

The Indian Economy is heading towards the fourth consecutive year of an over-9 per cent growth and like in the last five years, growth this year too was expected to be driven by capital investments happening in India, CMIE said.

As per CMIE CapEx Service, projects worth Rs 3.4 lakh-crore are scheduled for commissioning in FY 09. This would be the highest-ever completion of investments in the Indian history, CMIE said.

The capital investment boom in the country drives the current growth phase of the Indian Economy.

India's GDP started rising by over eight per cent since FY 04. And, the gross capital formation (GSF) grew in the range of 13-23 per cent during this period.

CMIE expects growth in GSF to accelerate to 18.7 per cent in FY 09 from 13.4 per cent in FY 08. This robust growth in GSF is expected to more than offset the moderation in the growth in private final consumption expenditure (PFCE) and Government final consumption expenditure (GFCE).

CMIE stated that the PFCE is expected to grow by five per cent in FY 09, after growing by 7-9 per cent in the preceding three years. While the slower growth in the PFCE would mainly be on account of the higher base in 2007, the prevailing high inflation would also affect the consumption demand to some extent.

However, inflation is not expected to depress the PFCE dramatically as income levels in India have also gone up significantly in the last one year.

[Zuben]

Originally Posted by indeglow1

I dont think you have any clue of what you are talking about.Sankyo is not a hedgefund infusing those billions to make Ranbaxy richer-the Singhs cashed out their equity thats all.Sankyo is a big pharmaceutical company buying in to Ranbaxy and likely will even eleminate the Ranbaxy brand as they aquire more shares.Its just an easierway for Sankyo to get a foothold in India and to a lesser extend global generic business thats all.Inevitable in global business but a little disappointing for people like me who saw Ranbaxy as an emerging MNC.Looks like they were facing challenges after India changed patency laws and US courts turned down a few of their patency challenges.Like the article mentioned,I think many more of Indias successfull pharm companies face similar fate.

I agree with you! its more of a badnews to india than a good one! Ranbaxy had really made its presence felt internationally!
Singhs should have held on for a while - greedy people

[Illusionist]

50.1% , thats a controlling stake..

[Bombay Boy]

Originally Posted by Zuben

Why the hell is RBI buying dollars when inflation is killing the economy ?

because the exporters are paying the politicians off?

[india]

Originally Posted by zhiemi

'India's GDP to grow at 9.5% in FY 09'

Very impressive!

[GJ10]

This is nowhere near being good news for India !!!

Like Indyglow said... we've just lost a company that was well on the way to becoming an MNC.

What makes it worse is that many had always touted Pharma as a sector in which India could really make waves globally.

From an Indian perspective, this is a disaster and nothing else.

[Naresh]

Originally Posted by ab041937;21652818 - June 12th, 2008, 01:58 PM

The per capita income has been calculated by simply converting the rupee to current dollar equivalent whereas, India's base year is 1993 when the dollar value was @ Rs25-26.

ab031937:

I refer you to the following Indian figures :

REVISED ESTIMATES OF ANNUAL NATIONAL INCOME, 2007-08 AND QUARTERLY ESTIMATES OF GROSS DOMESTIC PRODUCT, 2007-08

1. NATIONAL PRODUCT (Rs. Crore)

1.1 Gross national product (GNP) at factor cost : 42,81,795

1.2 Net national product (NNP) at factor cost : 37,89,482

2. DOMESTIC PRODUCT (Rs. Crore)

2.1 Gross domestic product (GDP) at factor cost : 43,03,654

2.2 Gross domestic product (GDP) at market prices : 47,13,148

2.3 Net domestic product (NDP) at factor cost : 38,11,341

2.4 Gross National Disposable Income : 48,36,361

Population (million) : 1,138

Per capita NNP at factor cost (Rs.) : 33,299

From the above it is evident that the Per Capita Income is arrived at by Dividing the Net National Product At Factor Cost by the Population

Questions :

1. Why is the Per Capita Income based on NNP at Factor Cost and not GNP at Market Prices as it is done in Pakistan.

2. What would the Indian GNP be at Market Prices?

3. Would the Indian GNP at Market Prices be GDP @ Market Prices - GDP at Factor Cost + GNP at Factor Cost i.e. Rs. 47,13,148 Crores - Rs. 43,03,654 Crores + Rs. 42,81,795 Crores = Rs. 46,91,289 Crores i.e. Rs469,12.89 Billion

In comparison here are the Figures from the Pakistani Statistical Supplement of Economic Survey 2006-2007 as the same for 2007-2008 is not presently available :

GROWTH AND INVESTMENT - HIGHLIGHTS

Aggregates at Current Market Prices Rs. Billion

GDP (mp) 8706.9
GNP (mp) 8867.5

Per Capita Income : Rupees 56064 = US $ 925

You will note that in Pakistan’s GNP is based on Market Prices whereas in India the Government Bases the NNP on Factor Cost.

Thus it is important that we know of India’s GNP at Market Prices so that we can make a “Like to Like Comparison”..

Comparing a Per Capita Income based on NNP at Factor Cost with a Per Capita Income based on GNP - in my opinion - is unrealistic.

Would request my Economic Gurus-Peers to kindly give me the benefit of their advice as I am not an Economist.

Cheers

[Zuben]

Originally Posted by Bombay Boy

because the exporters are paying the politicians off?

Or Could be US forcing india to hold on to dollar ?

[india]

What's with all the naïve rhetoric against this merger? Leave national pride at the door and think practically. This deal couldn't have been forged at a better time considering Ranbaxy's current market (and financial) situation.

I'm just glad that some of you people aren't the powers that be in the country.

[GJ10]

Originally Posted by india

What's with all the naïve rhetoric against this merger? Leave national pride at the door and think practically. This deal couldn't have been forged at a better time considering Ranbaxy's current market (and financial) situation.

I'm just glad that some of you people aren't the powers that be in the country.

Practically speaking, yes, its obvious that the owners have taken the view that the Americans will kill off whatever is left of the generic market, so are selling off at a price that they feel wont ever be offered again.

Whether that is seen as a good decision for the owners really depends on whether you agree with that view, personally I do.

But, when this news is posted along with a line like "No stopping India Inc now", its more a case of common sense than national pride to realise that the whole scenario regarding the deal has been completely misunderstood.

Theres no way this should be posted up there in the same way as the Tata - Jaguar deal. This is a sell off, a profitable sell off, a well timed sell off, but a sell off nonetheless.

[maritimer]

Originally Posted by Khanrak

I thought you guys had already passed that $1000 mark?

With GDP @ market prices crossing Rs. 47 trillion in 2007-08 we are clearly over the $1000 per-capita milestone!!

[zhiemi]

Indian salaries to grow @14% per yr: Mercer

With corporates facing shortage of talent, India is likely witness over 14 per cent increase in salaries annually for the next three years even as there has been a sharp rise in input costs, a latest study says.

India, Vietnam and Indonesia are the only three countries in the Asia-Pacific region which are likely to see a double-digit increase in salaries until 2011, as per a report, soon to be released in India, by global human resource consulting firm Mercer.

“For India, although we forecast a slight downward trend, the country can still expect one of the highest pay increases in Asia-Pacific at more than 14 per cent up to 2011,” the Asia-Pacific Compensation report by Mercer stated.

[Silicon_Valley]

Inflation zooms to 13-year high of 11.05%

Inflation on Friday shot up to a 13-year high of 11.05 per cent fuelled by rise in prices of petrol, diesel and cooking gas, giving no relief to the government from the spiralling prices in an election year. ( Watch )

The rise in petrol, diesel and cooking gas prices announced by the government on June 4 put the pressure on price line pushing the inflation by week ending June 7, up from 8.75 per cent in the preceding week.

Within minutes of the release of the government data, sensitive BSE index of stock markets tanked about 350 points, reflecting the nervousness of the investors about the efficacy of the measures being taken by the Finance Ministry and the Reserve Bank of India.

Besides fuel prices, rise in prices of food products particularly edible oil and manufactured goods added to the pressure on price line and woes of the government.

Previous high inflation of 11.11 per cent was witnessed on May 6, 1995.

Leading economists and analysts predicted that price pressures would prompt the Reserve Bank of India to further tighten the monetary policy, possibly by making short term lending to banks costlier.

This could further lead to increase in interest rates for cars, homes and consumer finance, economists said and feared that present situation could also force a hike in lending rates for the industry and many banks are already contemplating hiking the prime lending rate.

"The high inflation may force the RBI to increase the repo rate (short term lending rate to banks) by up to half a per cent," Principal Economist of rating agency CRISIL D K Joshi said and added that unless fuel prices are controlled the prices would be a major challenge.

.....

[Zuben]

MUMBAI: The country’s foreign exchange (forex) reserves dipped by a whopping $4.96 billion in the week ended June 13, the steepest dip in over two-and-a-half years.

The dip can be attributed to the amount of intervention the Reserve Bank of India (RBI) has done in the forex market by selling dollars in a bid to keep the rupee from breaching the 43-mark against the dollar.

The last time such a huge fall in reserves recorded was in December 2005, when there were huge redemption pressures on the central bank on account of the India Millennium Deposits (IMD) scheme of State Bank of India.

RBI has been consistently intervening in the forex market over the past couple of weeks, with the rupee under pressure from oil companies which bought dollars to provide for soaring crude prices. RBI has now started selling dollars to oil companies directly, in exchange for oil bonds, which has taken considerable pressure off the forex market.

Meanwhile, credit and deposits continue to record modest growth figures for the year. According to data released by RBI in its weekly statistical supplement (WSS) on Friday, bank credit growth stood at 25.9%. At current levels, a year-on-year bank credit stood at Rs 4.89 lakh crore.

Loans extended by banks during the fortnight ended June 6 touched Rs 23,80,418 crore, up Rs 16,001 crore, from the previous fortnight’s levels. While food credit dipped by Rs 5,105 crore, non-food credit moved up Rs 21,106 crore during the fortnight.

Simultaneously, aggregate deposits mobilised by commercial banks amounted to Rs 32,56,979 crore as on June 6, rising Rs 21,447 crore over the previous fortnight’s levels. While demand deposits rose Rs 2,026 crore, term deposits with commercial banks rose Rs 19,421 crore. Investments in government and other approved securities by banks rose Rs 6,181 crore to Rs 10,07,069 crore as on June 6.

The total stock of money in the system went up Rs 22,655 crore during the fortnight ended June 6, to touch Rs 40,99,957 crore. All components of money supply, currency, term deposits as well as demand deposits, recorded a strong growth during the fortnight.

At the current levels, the annual Y-o-Y growth in money supply stood at 21.4%, well above the central bank’s comfort levels of 17-17.5%.

http://economictimes.indiatimes.com/...ow/3150285.cms

Now that will ease up the inflation - probably hover around 5 in few months if not weeks.

[zhiemi]

CMIE forecasts 5.5% inflation for FY '09

Inflation is expected to come down to 5.5 per cent in financial year 2008-09 and kharif crop is likely to play a major role in this regard, says the Centre for Monitoring Indian Economy.

"We retain our forecast of 5.5 per cent inflation for the year FY '09. We expect inflation to increase further in the next couple of months and start receding from September onwards," CMIE said in its monthly review adding that kharif crop is expected to play a major role in this moderation.

Inflation, measured in the Wholesale Price Index (WPI) increased to 11.05 per cent for the week ended June 20.

Inflation started rising rapidly since January 2008 and went up by 441 basis points in a span of just five months.

The Government partially passed on the burden of rising international crude oil prices to the Indian consumer by hiking prices of petrol, diesel and LPG earlier this month, which accounts for 4.91 per cent of the WPI.

Price hike of petrol, diesel and LPG is expected to push up headline inflation by 50-60 basis points, CMIE said.

Although inflation is at a high level, it is unlikely to pinch Indian consumers as badly as suggested by the WPI numbers, it said.

The rapid rise in inflation, witnessed in the past five months, is not across all heads of the WPI. Nearly 85 per cent of the rise in headline inflation has come on account of the sharp rise in prices of select items--basic metals alloys and metals products, primary and manufactured food articles, oilseeds and minerals and mineral oils.