daily menu » rate the banner | guess the city | one on oneforums map | privacy policy (aug.2, 2013) | DMCA policy | flipboard magazine
Old August 2nd, 2017, 01:30 PM   #12201
generalmaximus
Genemax
 
Join Date: Sep 2012
Location: Kolkatta
Posts: 80
Likes (Received): 37

While the impact of demonetization on black money or counterfit currency are debatable, both in the short and long run, the transition to a cashless economy and it's impact on the economy deserve a wider conversation. In other countries, there are formal markets for many service based industries like health insurance for example. The transition to a cashless economy may create a large formal market for health insurance, giving both the poor and the middle class citizens of India access to better health care. This in it self would be a boost to the economy. And this is just one industry that a transition to a cashless economy will greatly benefit. Hundreds of other industries could be positively impacted, there by expanding, gdp, creating jobs, and thereby increasing consumption and savings/investments while moderating inflation/interest rates over the long run.
generalmaximus no está en línea   Reply With Quote
Old August 2nd, 2017, 08:22 PM   #12202
Jeffery
Registered User
 
Join Date: Dec 2007
Posts: 215
Likes (Received): 99

Quote:
Originally Posted by generalmaximus View Post
The way I understand it demonitization has taken out all the old 500 and 1000 Rs notes out of circulation. Most of the people who held black money held them in these denominations. So as far as I can tell these people had two choices. Declare the money and turn in all those notes and thereby be subject to taxes and further investigations, or let the worthless old notes go to waste. As far as I can tell that is precisely what happened. So how has demonitization not curbed this problem again.

As for counterfitting you make the claim that this is already happening with the new notes. Yet you offer no proof to back this claim up. The new notes circulation are a lot harder to counterfit. Along with that a lot of transactions have gone digital, so counterfitting notes is less problematic.

So once again, if you are going to make such bold claims I would appreciate some evidence to back them up. As a matter of fact I will settle for claims backed by a modicum of logic.
Sir, the notion that most of the black money has been parked in jewelry/gold/benami real estate is widely accepted in India(a relatively small amount in cash). Also news reports have come out that 2000 rupee note counterfeits have been found - you would have to google this. Perhaps it was an error on my part to say that demonetization "failed" in these respects as this is strong language, but my opinion is that it didn't live up to the hype. Though the conversion to digital economy has been good as we both can agree.

This was a strong policy, done in a blunt manner. I was recently watching a documentary on North Korea, and the totalitarian state has also done a similar move years ago.

Anyway what's done is done, lets hope that they finish the demonetization process as arthakranti has envisioned it. Going on vacation, won't be able to post for a few weeks.
__________________

MeMumbaikar liked this post
Jeffery no está en línea   Reply With Quote
Old August 4th, 2017, 10:24 AM   #12203
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

India, ASEAN-5 more fetching to FDI than other emerging markets: Nomura

Quote:
The Japanese financial services major has dubbed India and ASEAN-5 (Indonesia, Malaysia, the Philippines, Thailand and Vietnam) as "Asia's tiger cubs", and said FDI inflows to these nations will increase from around USD 100 billion per year now to around USD 240 billion by 2025.
http://www.moneycontrol.com/news/bus...a-2342941.html


I think if India can keep remittances around 70 billion and FDI around 80 billion a year. It should take care of any trade deficit.
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....
MeMumbaikar no está en línea   Reply With Quote
Old August 5th, 2017, 06:45 AM   #12204
Suncity
By the ocean
 
Join Date: Jun 2004
Posts: 28,524
Likes (Received): 13233

Quote:
Originally Posted by MeMumbaikar View Post
India, ASEAN-5 more fetching to FDI than other emerging markets: Nomura
It was an elephant which became a roaring Asian tiger, then a sleeping tiger then a future roaring Asian Tiger and now a tiger cub?

It is like those think tanks stories about India's "emerging cities" which have been "emerging" for decades now. And when will "tier 2" cities graduate to the next tier?

India has arrived, whether you call it a cow or a tiger or a lion. Period.
Suncity no está en línea   Reply With Quote
Old August 5th, 2017, 08:11 AM   #12205
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

Quote:
Originally Posted by Suncity View Post
It was an elephant which became a roaring Asian tiger, then a sleeping tiger then a future roaring Asian Tiger and now a tiger cub?

It is like those think tanks stories about India's "emerging cities" which have been "emerging" for decades now. And when will "tier 2" cities graduate to the next tier?

India has arrived, whether you call it a cow or a tiger or a lion. Period.
Sun,

they are talking about FDI rising for $100 to $250 billion for a region which is 1.9 billion people with a current GDP $5.2 trillion of over 8 years

Its really feasible and not some boastful prediction.
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....
MeMumbaikar no está en línea   Reply With Quote
Old August 5th, 2017, 08:31 AM   #12206
fanboy111
Registered User
 
Join Date: Jul 2013
Posts: 261
Likes (Received): 1904

Quote:
Originally Posted by Suncity View Post
It was an elephant which became a roaring Asian tiger, then a sleeping tiger then a future roaring Asian Tiger and now a tiger cub?

It is like those think tanks stories about India's "emerging cities" which have been "emerging" for decades now. And when will "tier 2" cities graduate to the next tier?

India has arrived, whether you call it a cow or a tiger or a lion. Period.
Apart from some in media, no credible economist worth his salt considered India to be a roaring asian tiger till at least 2003 which is really not very long back. From 2003-2007 we experienced results of vajpayees reforms and huge surge in global growth thanks to chinese led consumption of commodities. In this period India experienced a massive boom in IT exports and grew at nearly 9%, so one would be forgiven to think that India indeed had become a 'tiger economy', when in reality that was not the case. Now that we have NDA once again India is back on path of fiscal prudence and good economic policies have once again led to surge in FDI, even when global conditions are sluggish, showing that India is indeed on strong economic footing tough I believe its still too early to call India a 'tiger economy' yet. This just shows how most economic commentators are really useless, these same people who though China will 'take over the world' in 2012 are now predicting a debt collapse. I'm optimistic for India's future not because some harvard economist says so but because of the policies in the government.
__________________

Aryaved liked this post
fanboy111 no está en línea   Reply With Quote
Old August 6th, 2017, 06:09 PM   #12207
Suncity
By the ocean
 
Join Date: Jun 2004
Posts: 28,524
Likes (Received): 13233

Quote:
Originally Posted by MeMumbaikar View Post
Sun,

they are talking about FDI rising for $100 to $250 billion for a region which is 1.9 billion people with a current GDP $5.2 trillion of over 8 years

Its really feasible and not some boastful prediction.
I don't think you got my point. I was just questioning such labels like tiger "cubs". I don't see a need to club India with other nations of the region. India is an economic engine in its own right.
__________________

MeMumbaikar, iaafosci liked this post
Suncity no está en línea   Reply With Quote
Old August 6th, 2017, 07:11 PM   #12208
psychedelic
Registered User
 
psychedelic's Avatar
 
Join Date: Sep 2010
Posts: 725
Likes (Received): 1263

Well, we can choose not to have our ego hurt over such a triviality. An endorsement of this sort from Nomura will help the country attract more investment. Let's just leave it at that.

Last edited by psychedelic; August 6th, 2017 at 07:21 PM.
psychedelic no está en línea   Reply With Quote
Old August 9th, 2017, 05:26 AM   #12209
Suncity
By the ocean
 
Join Date: Jun 2004
Posts: 28,524
Likes (Received): 13233

Shell-shocked by shell list

Quote:
Sebi, the market regulator, has sent a shock wave through corporate boardrooms and stock markets after identifying 331 companies as suspected "shell companies" - a term that has never been defined in the Companies Act, 2013 - and slapped severe trading restrictions on them.

The move was announced late on Monday but Sebi did not say what kind of illegal activities these companies had engaged in.

A cursory look at the list of these companies showed that most of the entities have been referred to the MCA by the income tax department and the serious fraud investigation office (SFIO).

The big surprise was to see Nicco Corporation and Pincon Spirit, a liquor maker with revenues of Rs 1,420.05 crore in 2016-17 and a net profit of Rs 43.04 crore, on that list. Tea plantation owner and oil explorer Assam Company India Ltd also figured among the identified entities.

"There is no probe against Nicco Corp," said Rajive Kaul, director of Nicco Corporation, who was mystified by Sebi's decision. "Never has been one. Unless they begin one in future, which I think is very unlikely." Nicco's name had been referred by the SFIO.

The sudden clampdown meant that trading in legitimate companies like J. Kumar Infraprojects Ltd and integrated steel and power company Prakash Industries would only be allowed next on September 4.

JK Infraprojects Ltd, which counts HDFC Mutual Fund, Goldman Sachs and American Insurance Funds as its shareholder, said in a filing with the BSE that it "is not a shell company and the suspicion is uncalled for".

The company, which is currently working on the Delhi and the Mumbai Metro projects and claims to have an order book of Rs 9,334.81 crore, said it was seeking legal advice and had decided to approach the regulator and "request it to recall its direction qua us".

Prakash Industries, in which well-known investor Rakesh Jhunjhunwala has a 1.01 per cent stake (or over 15 lakh shares), said: "We are not a shell company... we are a healthy profit-making company having an annual turnover of over Rs 2,400 crore and a profit of Rs 78 crore last year."

The company claimed that it had 52,000 shareholders and the average daily volume of transactions on the stock markets was over 2 million shares.

Others in the list included north Indian real estate company Parsvnath Developers in which the US-based Fidelity group has a 4.17 per cent stake, and SQS BFSI (earlier known as Thinksoft Global) whose promoters had sold their stake to SQS of Germany.

"Pincon Spirit Ltd has been a dividend paying company and we do not have any pending complaints pertaining to dividend payments or investor complaints. We pay excise duties running into crores of rupees.... We, therefore, find it quite surprising that the company has been placed under the surveillance list of shell companies. We are ready to provide all necessary information and extend all co-operation to the regulators to resolve the issue so that the name of the company is excluded from the shell companies list at the earliest," Pincon Spirit director and CFO Arup Thakur said in a letter.

"We are surprised by this inclusion and were not expecting to be a part of this list. We will write to the concerned authorities seeking an explanation," said Ankit Patni, managing director of Ankit Metal and Power.

Officials from Assam Company (India) Ltd, said the company would write to the market regulator to review the decision. ACIL, which has tea plantation and oil exploration business in Assam, recorded a Rs 70.79 crore loss on a turnover of Rs 216.48 crore in the last fiscal.

The development is bad news for investors, particularly the small shareholder who may have bought shares in these companies. While they will be stuck with these securities at least till the first Monday of next month, they face the prospect of losses on account of the expected slump in the value of these shares when trading resumes.

However, some market experts feel that investors should not panic as the market regulator may take some names off the list once they establish they are not shell companies. Stockbrokers expect some clarification from Sebi over the next few days.

"The Sebi order has taken industry and investors by surprise. If it is later found that some of these entities were not shell companies, it would not matter as it would have rung the death knell for them. It is not clear whether any of them received showcause notices prior to the Sebi announcement. There are a lot of good names there and consumer interests should have been paramount," said Rajesh Narain Gupta, managing partner of SNG & Partners.
__________________

Aryaved, MeMumbaikar liked this post
Suncity no está en línea   Reply With Quote
Old August 10th, 2017, 07:10 AM   #12210
iaafosci
madrasi
 
iaafosci's Avatar
 
Join Date: Jun 2016
Location: Chennai/Madras
Posts: 638
Likes (Received): 1124

__________________
The day you don't stand up for your fellow citizen in distress is the day you let your country down and become an anti-national.

Aaru24, karkal, MeMumbaikar liked this post
iaafosci no está en línea   Reply With Quote
Old August 11th, 2017, 10:31 AM   #12211
Rainbow_DASH
♡~Friendship is Magic~♡
 
Rainbow_DASH's Avatar
 
Join Date: Dec 2014
Posts: 2,385
Likes (Received): 652

Business News
Home > Business > Business News
Friday, 11 August 2017
Petronas plans RM644mil investments in India
BY INTAN FARHANA ZAINUL


Quote:
PETALING JAYA: Petroliam Nasional Bhd (Petronas) is targeting to invest US$150mil (RM644mil) in India over the next five years to expand its presence in the country’s lubricant business.

The national oil company said the investments included building a US$50mil (RM215mil) lubricant blending plant in the republic.

The plant is expected to start operations by the first quarter of 2018, Petronas said in a statement.

“We are aiming to triple our market share in India’s lubricant market by 2022.

“Globally, we are among the top-10 lubricant players by market share.


“We are striving to be among the top-five in five years,” said Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin.

Petronas, which has been in business in India for more than two decades, said that it is looking to expand its liquefied natural gas (LNG) supply in India to ride along the country’s economic growth.

India, which is one of the fastest growing economies in the world, is expected to see rising demand for LNG from the power, agriculture and transportation sectors.

Petronas said it has delivered 15 LNG cargoes to India year-to-date and delivered to India the first cargo produced from its floating LNG production facility, the first such facility in the world.

Indian English daily newspaper The Hindu quoted Wan Zulkiflee as saying that Petronas was looking at opportunities to invest in the LNG infrastructure in India.

“In LNG, there are infrastructure bottlenecks in India and we are keen to invest in infrastructure to connect the unserved markets in India,” said Wan Zulkiflee.

“We may do this in partnership with Indian companies,” he said to reporters in India, adding that the infrastructure includes pipeline and regasification facilities.

The news came a few weeks after Petronas said that it would not proceed with a proposed C$36bil (RM121.4bil) LNG project in western Canada.

Meanwhile, The Times of India reported that India had contributed about US$1.5bil to Petronas’ annual revenue of about US$47.8bil in 2016, citing Wan Zulkiflee as saying that he expects India’s revenue contribution to Petronas to rise.

The report said that earlier this month, the top executives of Petronas had spent a week in India visiting various companies.

Read more at http://www.thestar.com.my/business/b...Oday0WMXcj3.99
__________________
Bearer of the Element of ⚡~Loyalty~⚡
Charity-Compassion-Devotion-Integrity-Optimism-Leadership

https://m.youtube.com/watch?v=Mg90FXLSa2g
Rainbow_DASH no está en línea   Reply With Quote
Old August 11th, 2017, 11:32 AM   #12212
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

Quote:
Originally Posted by Suncity View Post
much needed.

Do i want to see a Sensex grow? the answer is yes. But not at the cost of black money propping it up so that it becomes a means to launder ill gotten gains. It also builds up artificial bubbles.

If India is serious about a world renowned and reliable financial industry it needs to take bitter medicine. After clamping down on the Mauritius route and now this, i think this government means business on the corruption front.

for what its worth the sensex is overvalued at 32,000. Needs to shed 29,000 to reflect the true values of earnings and forward PE. Ditto with Nifty. A 10% fall would be welcome rather than a bubble building.
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....
MeMumbaikar no está en línea   Reply With Quote
Old August 11th, 2017, 11:50 AM   #12213
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

Green shoots becoming visible in merchandise trade: Mid year Economic Survey

Read more at:
http://economictimes.indiatimes.com/...campaign=cppst

Quote:
Reflecting the slowly improving world economic situation, India’s exports turned positive at 12.3% in 2016-17 after an interregnum of two years.

This along with a marginal decline in imports of 1 per cent resulted in narrowing down of trade deficit to $112.4 billion (5 per cent of GDP) in 2016-17 as compared to $130.1 billion (6.2 per cent of GDP) in 2015-16.

In 2016-17, services exports recorded a positive growth of 5.7 per cent with

As i said there is probably a 4 month lag between exports picking up and jobs creation.

Come 2018 India should be in a strong position to add jobs.
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....

Aaru24, psychedelic liked this post
MeMumbaikar no está en línea   Reply With Quote
Old August 11th, 2017, 02:40 PM   #12214
Arul Murugan
Moderator
 
Join Date: Jun 2006
Location: Salem/India-Bethlehem/United States
Posts: 17,912
Likes (Received): 11373

States own tax revenue - source: Niti Ayog

Just made per capita state's own tax collection from the info. available.

__________________
அருள் முருகன்
தமிழ்நாடு/இந்தியா

m_1973, MeMumbaikar liked this post
Arul Murugan no está en línea   Reply With Quote
Old August 12th, 2017, 07:18 AM   #12215
barrykul
Registered User
 
Join Date: Mar 2008
Posts: 2,492
Likes (Received): 1374

Cash deposits flowed into specific accounts that were usually less active, finds RBI study.

Note: the term lakh crore is a 5 zeros + 7 zeros = 12 zeros, i.e., ₹1 trillion

Quote:
MUMBAI, AUGUST 11:
Excess deposits in the range of ₹2.8-4.3 lakh crore accrued to the banking system during the demonetisation period, with unusual cash deposits in specific accounts, which were usually less active, estimated to be in the range of ₹1.6-1.7 lakh crore, according to a study conducted by Reserve Bank of India staff.

On November 8, 2016, currency notes of ₹1,000 and ₹500 denominations (specified bank notes or SBNs), valued at ₹15.4 lakh crore and constituting 86.9 per cent of the value of total notes in circulation were demonetised.

The SBNs were demonetised (between November 9 and December 30, 2016) in a bid to fight corruption, black money, money laundering, financing of terrorists, and counterfeit notes.

Before discontinuation of the over-the-counter exchange facility at bank branches on November 25, 2016, about ₹37,000 crore of SBNs were tendered, according to a study by Bhupal Singh (Director,Monetary Policy Department) and Indrajit Roy (Director,and Department of Statistics and Information Management).

7 types of accounts
The paper said a significant amount of SBNs flowed into seven special types of accounts — basic savings bank deposit accounts; PMJDY accounts; Kisan Credit Card; dormant or inoperative accounts; co-operative bank accounts with scheduled commercial banks (SCBs); bullion trader/jewellers’ accounts; and loan accounts.

In scenario 1, the estimated cash deposits in the aforementioned accounts during November-December 2016 with 52 banks were ₹4,35,800 crore. Cash deposits in these accounts during September-October 2016 were ₹2,70,100 crore. Thus, the variation of ₹1,65,700 crore can be assumed to be the increase in cash deposits under these accounts due to demonetisation in the absence of any noticeable activity in such accounts during normal times.

In scenario 2 (based on year-on-year growth of aggregate cash deposits), the estimated cash deposits in seven types of accounts with 52 banks were ₹4,35,800 crore during November-December 2016 and ₹3,06,500 crore during November-December 2015.

Average y-o-y growth of net deposits (deposits minus withdrawals) of all types of accounts of SCBs during November-December for last five years was (-)9.2 per cent.

In the above scenario, the estimated trend of cash deposits in these accounts during November-December 2016 is ₹2,78,300 crore. Thus, excess cash deposits during November-December 2016 work out to ₹1,57,500 crore.

Given the unusual cash deposits in specific accounts, which are usually less active, the authorities have opened investigations on the source of funds that flowed into the accounts.
__________________
Renewable Energy ..
"India is the only country where all major world religions live together, not only in modern time but over 1,000 years" - His Holiness D A L A I L A M A
"What advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted, so as to make them of the greatest service to the country" - Shri Jamsetji Nusserwanji Tata

Aaru24 liked this post
barrykul no está en línea   Reply With Quote
Old August 12th, 2017, 03:50 PM   #12216
Suncity
By the ocean
 
Join Date: Jun 2004
Posts: 28,524
Likes (Received): 13233

RBI’s dividend to Government falls by almost half to Rs 30,659 crore

Quote:
The Reserve Bank of India (RBI) on Thursday announced that it will transfer Rs 30,659 crore as surplus to the government for the year ended June 2017, less than half the amount transferred last year.

While the move could upset the Finance Ministry’s Budget arithmetic, a lower surplus also dents the broad premise that scrapping of currency notes that failed to return to the banking system post demonetisation would extinguish the RBI’s liabilities to an equivalent measure and, thus, open the possibility of transfer of these gains to the Centre in the form of higher dividends.

Demonetisation Spurred Investments In Mutual Funds And Insurance Plans, Suggests RBI Study

Quote:
The decision to scrap old high-value currency notes last November and the subsequent crackdown on cash transactions may have triggered a shift from physical assets to financial savings, a central bank study suggests.
There has been a “distinct increase” of inflows into formal channels of savings such as equity and debt-oriented mutual funds and life insurance policies, according to the Reserve Bank of India’s Mint Street Memo. Even non-banking financial companies were “positively impacted in terms of collections and disbursals”, it said.

Net inflows into mutual funds between November and June soared to Rs 1.69 lakh crore from Rs 9,160 crore in the year-ago period, according to data from the Securities Exchange Board of India cited in the study. This came as the government barred cash transactions of more than Rs 2 lakh and asked people to explain the source of large deposits after the note ban. Demand for real estate and gold declined immediately after demonetisation. Deposit rates too fell as banks were flush with liquidity after people turned in their cash held in banned notes.

Premium collected by life insurance companies more than doubled in November when demonetisation was announced. The study noted that most of these were single-premium policies where the amount is paid in lump sum rather than periodically. The total life insurance premia collected between November and June was 46.3 percent higher than the year-ago period at Rs 42,210 crore.

The study also showed that loan repayments, which had taken an immediate hit after the cash crunch, rebounded and were comfortably growing over the monthly average collection seen till October last year.
These developments may incentivise the greater shift from physical to financial savings, the study said, adding that a declining inflation would provide an impetus to financial savings.

Demonetisation: RBI will take time to count scrapped currency note deposits

Quote:
Finance Minister Arun Jaitley on Tuesday said the Reserve Bank of India (RBI) is in the process of counting scrapped currency notes and will come out with the final figures once the fake notes were weeded out.

Answering oft-repeated questions over the issue, he said in the Lok Sabha that the RBI had received the last tranche of scrapped currency notes of Rs 500 and Rs 1,000 only in July and the central bank would take time in counting the billions of notes.

On questions regarding the amount of scrapped currency deposited back in the banks, the finance minister said, "Today they (RBI) have to count every currency note. They have to take the fake currency out...That exercise the RBI is taken to a very advanced level.

The minister said since March demands were being raised for disclosure of the amount of scrapped currency deposited in the banks but it can not be done over night. "...I am hearing that argument tell us the currency. Please study the subject closely. And therefore as soon as they (RBI) complete this exercise, the figure will be placed by them before the country along with the figure of fake currency," he added.
Suncity no está en línea   Reply With Quote
Old August 13th, 2017, 06:09 AM   #12217
barrykul
Registered User
 
Join Date: Mar 2008
Posts: 2,492
Likes (Received): 1374

India's PSUs are set for a logical evolution through disinvestment. PSUs were set up as part of state-led capitalism to bring self-reliant economic growth. Between 1947 - 1990 244 central PSUs were created and run by the government. 20% of GDP, 15% Stock market capitilization, more than million people employed, 1/3 are loss making, gross turnover fell 7% in 2015-16 despite economy growing at 7%. There are over 1000 PSUs at the state and municipal level.

Up for divestment are Air India, Bharat Dynamics, Garden Reach Shipbuilders & Engineers, Mazagon Dock and Mishra Dhatu Nigam. NITI Ayog has recommended sale of over 40 PSUs and closure of 26 sick ones. Also suggested are turning over schools, colleges and prisons to private sector.

Quote:
After racking up accumulated losses of Rs 50,000 crore, debt of Rs 55,000 crore, a failed Rs 30,000 crore bailout in 2012 and an aborted disinvestment attempt in 2001, the NDA government bit the bullet: last month, the Cabinet gave its nod to sell its stake in the beleaguered Air India. It isn’t the only state-owned behemoth in which the government reckons it doesn’t need to be wasting its time.

Half of India’s 235 Central public sector enterprises (CPSEs) are under scrutiny for a possible disinvestment. The government’s think tank NITI Aayog has recommended a strategic sale in over 40 public sector undertakings (PSUs) and outright closure of 26 sick PSUs.

This time, it may not be all talk and little action. Various governments have toyed with disinvestment since 1991, but with limited success. The biggest sell-off surge happened under the NDA government of 1999-2004, when PSUs like Maruti, VSNL, IPCL and IBP were privatised. It is hard to argue against the economic rationale for privatisation.

While CPSEs contribute over 20% to India’s GDP and employ over 10 lakh people, many have turned into bloated, inefficient behemoths and a drain on the national exchequer. One-third of the CPSEs today are making losses. Even a maharatna like BHEL has slipped. Between 2011-12 and 2015-16, a recent CAG report points out, its turnover declined from Rs 49,510 crore to Rs 26,587 crore and profits slipped from Rs 7,400 crore to losses of Rs 913 crore. Between 2007 and 2016, sick CPSEs reportedly logged losses of Rs 19.68 lakh crore. Small wonder, then, that NITI Aayog CEO Amitabh Kant suggested that the government should hand over schools, colleges and prisons to the private sector as “the government has no business to be in business”.

The reality, globally, is a bit more nuanced. PSUs aren’t exactly out of fashion and have often been used to stoke nationalistic fervour. The French government has threatened to nationalise the shipyard in Saint-Nazaire instead of selling it to Fincantieri of Italy. Italians are nervous about French “colonisation” as many cross-border deals (like the €50 billion Essilor-Luxottica merger) have resulted in French firms having the upper hand.

Global Lessons
In India, PSUs were created post Independence to build a self-reliant, state-led economy. Through the 1970s, amid a nationalisation drive, PSUs dominated the economic landscape before a bankrupt government was forced to rethink its strategy post liberalisation.

India echoed what was happening globally. Professors Aldo Musacchio and Sergio G Lazzarini talk about evolution of state capitalism in their book Reinventing State Capitalism (2014). Globally, too, state capitalism peaked around the 1970s. As a result, output of state-owned enterprises (SOEs) to GDP reached 10% in mixed economies and 16% in developing economies.

Then reality dawned. The oil shock of the 1970s and the liquidity crunch of the 1980s meant SOEs globally ran average losses equivalent of 2% of GDP, according to the World Bank. In developing countries, they stood at 4% of GDP. Between 1980 and the turn of the century, the focus shifted to a wave of PSU reforms that included minority stake sales, listings and overhauls of PSU management.

The year 2008 was an inflection point when state-led bailouts of distressed companies — PSUs or even private — became the norm. The US government bailed out private firms like GM and AIG. By some calculations, firms under government control today account for a fifth of the world’s total stock market capitalization.

While state capitalism has been in vogue, governments have been trying to make it efficient. The book refers to two examples. In 2007, Brazilian private firm JBS acquired US-based Swift & Co for $1.4 billion to become the world's largest beef processing company. Then it acquired Pilgrim's Pride for $2.8 billion. JBS, identified as a national champion, was funded by Brazilian National Development Bank (BNDES), which became the largest minority shareholder in JBS. SOEs in China are coming from the other end. In 2010, Agriculture Bank of China's mega IPO raised $22 billion.

The two examples reflect the new forms of state capitalism taking root. Both are distinct from the traditional (often inefficient) PSU model where government owns and manages the SOE like an extension of public bureaucracy.

PSUs have often helped government deal better with economic cycles. "In China when the economy is in danger of recession, SOEs can quickly deploy government resources and play a counter cyclical role. India is different in that governments, especially Central governments, are relatively much weaker," says Xi Li, professor at Hong Kong University of Science and Technology.

After its independence in 1965, Singapore government owned a lot of companies like SingTel and Singapore Airlines. In 1974, it set up Temasek Holdings, a sovereign wealth fund, to hold and manage its assets on a commercial basis and push the nation's growth agenda. Temasek today owns and manages a portfolio of over S$250 billion.

Japan and Korea took a different approach. Chaebols in Korea and Keiretsu in Japan have played a key role in the economic growth of the two countries. And governments in both the countries have nurtured them. This also led to crony capitalism which they are now trying to tackle. For example, Chaebol reforms was a key issue in the 2017 election in Korea. "To avoid the trap of import substitution and make local firms globally competitive, governments gave these companies export targets. When achieved, they were given special credit and land," says Ajay Chhibber, visiting distinguished professor, NIPFP, a research institution.

India's Path
NITI Aayog CEO Amitabh Kant recently told ET Magazine that "the government should spend money on improving social indicators like health, education, nutrition". Beyond disinvestment and sell-off, some shifts are already visible. PSUs like BHEL are morphing to be relevant. Besides renewable energy, it now wants to make components for metro rail and defence. "To facilitate public spending, new PSUs are sprouting in areas like inland waterways, metro rail and renewable energy," says Vinayak Chatterjee, chairman, Feedback Infra. The government has set up the National Highways and Infrastructure Development Corporation to build highways. New mechanisms are being explored to help PSUs operate efficiently. For example, National Investment and Infrastructure Fund (NIIF) will help fund projects where the government's stake will be capped at 49%.

Former bureaucrat Pradeep Baijal says PSUs are a necessity in areas where government has a natural monopoly; like railways, metro rail, utilities or sensitive areas like satellite or nuclear power. In a rapidly evolving world, ¡§there should be a model of constant review of the PSU portfolio - what to retain and what to divest," adds Amit Sinha, partner, Bain & Company.

Gaurav Taneja, partner, EY, says PSUs are necessary in areas where private sector is not keen to invest, like public health in rural areas. "In fact, government should convert many of these operations into public sector outfits and set up a strategic framework to evaluate their performance," he says. Consider the case of not-so-profitable Jan Dhan scheme where public sector banks were asked to roll it out without adequate compensation and yet are expected to compete with the private sector.

"The difficulty with PSU emanates from a misplaced sense of their reason for existence," says Utkarsh Palnitkar, partner, KPMG in India. "Distortions come into play when a PSU is expected to perform on similar lines as private sector units yet is deprived of management autonomy," he adds. Experts recommend that disinvestment proceeds must be parked in a separate fund to be used in infrastructure investment. "We should not be selling the family silver to pay the grocery bills (which is the case now)", says Chibber.

Ranen Banerjee, partner, PricewaterhouseCoopers India, says: "Private and public sector need not be completely divorced. While PSUs can build and own the infrastructure, private sector could do operations and maintenance efficiently." An example: railway tracks could be state-owned, and trains with the private sector.
__________________
Renewable Energy ..
"India is the only country where all major world religions live together, not only in modern time but over 1,000 years" - His Holiness D A L A I L A M A
"What advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted, so as to make them of the greatest service to the country" - Shri Jamsetji Nusserwanji Tata
barrykul no está en línea   Reply With Quote
Old August 13th, 2017, 10:54 AM   #12218
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

Indian economic cycle entering strongest phase: Report

http://economictimes.indiatimes.com/...w/60042844.cms
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....

iaafosci liked this post
MeMumbaikar no está en línea   Reply With Quote
Old August 15th, 2017, 12:53 AM   #12219
generalmaximus
Genemax
 
Join Date: Sep 2012
Location: Kolkatta
Posts: 80
Likes (Received): 37

Quote:
Originally Posted by Jeffery View Post
Sir, the notion that most of the black money has been parked in jewelry/gold/benami real estate is widely accepted in India(a relatively small amount in cash). Also news reports have come out that 2000 rupee note counterfeits have been found - you would have to google this. Perhaps it was an error on my part to say that demonetization "failed" in these respects as this is strong language, but my opinion is that it didn't live up to the hype. Though the conversion to digital economy has been good as we both can agree.

This was a strong policy, done in a blunt manner. I was recently watching a documentary on North Korea, and the totalitarian state has also done a similar move years ago.

Anyway what's done is done, lets hope that they finish the demonetization process as arthakranti has envisioned it. Going on vacation, won't be able to post for a few weeks.
Actually real estate as an asset for parking black money is no longer a good alternative after demonetization. This is because a lot of old real estate deals were being made utilizing cash. Post demonetization such deals have fallen in the domain of electronic transactions. So if someone wants to buy or sell property they can no longer use cash to do it. As a result if someone has parked a large sum of black money in real estate, then selling these properties in the black market is not longer possible.

The effects of this is already being noted by the fact that real estate prices are not rising as fast as before.
generalmaximus no está en línea   Reply With Quote
Old August 15th, 2017, 10:52 AM   #12220
MeMumbaikar
Registered User
 
MeMumbaikar's Avatar
 
Join Date: Aug 2010
Posts: 4,092
Likes (Received): 3885

The growth rates in Japan just show you need to have a long term strategy to be successful

Shinzo abe made some deeply unpopular decisions. It took around 5 years for the policies to take effect

https://www.nytimes.com/2017/08/13/b...gdp-rises.html

https://en.wikipedia.org/wiki/Abenomics

Modi was confronted with woes as well. No doubt that by passing long term reforms India is on the right path. We shall overcome the NPA crisis.

For those who want instant gratification please do read the long road to reforms which several countries have taken from Japan to Argentina. Medicines are mostly always better.
__________________
Quote:
Originally Posted by sanjupalayat View Post
Because MeMumbaikar Ji speaks sense....
MeMumbaikar no está en línea   Reply With Quote
Reply

Tags
economy, india

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT +2. The time now is 05:40 PM. • styleid: 14


Powered by vBulletin® Version 3.8.11 Beta 4
Copyright ©2000 - 2017, vBulletin Solutions Inc.
Feedback Buttons provided by Advanced Post Thanks / Like (Pro) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.

vBulletin Optimisation provided by vB Optimise (Pro) - vBulletin Mods & Addons Copyright © 2017 DragonByte Technologies Ltd.

SkyscraperCity ☆ In Urbanity We trust ☆ about us | privacy policy | DMCA policy

Hosted by Blacksun, dedicated to this site too!
Forum server management by DaiTengu