India Economy Thread II

[karkal]

Wasteland map shows 5000 sqkm gain



http://www.telegraphindia.com/112042...p#.T5iBKKtSQ1s

[R2IChennai]

S&P 500 negative news, India out of Breakout nation, suddenly things are looking bleaker with new set of events

UPA II should be punished..

[UDHL]

Originally Posted by MeMumbaikar

not that big a disaster, at this time.


brent crude to rupee ratio is about the same. It has cooled down from $125 per barrel to $118.

The rupee at say 55 will not be that big an issue if brent crude drops to $110-$115. If anything it might aid our trade deficit.


No doubt though, India remains highly open to an oil shock. RBI will start intervening if that ratio starts to drift......


I am fair in saying that if this iran issue was not there, crude would be at $105-$110. In which case it would be wise to let the rupee depreciate to 55-60 and let the trade deficit be lowered.

If crude oil prices fall...that'll be really good....but we cannot have Rs. depreciate so much. Our Imports are much more than exports, if Rs. depreciates...that would lead to a bigger deficit (imports will become more costly and exports cheaper) and ofcrs how can we forget about inflation. If Rs. depriciates to 60 to a $, man that will fuel inflation like a lot (then we can expect more monetary tightening and hence slower economy). I agree our oil import bill of $156bn is a lot and a fall in price of oil can help but thats not gonna happen anytime soon. If you had ‘competitive advantage’ on your mind (cheaper products so more exports)...well that’s not gonna happen in 3-5 years time for sure. Our infrastructure is very poor...ports are already operating beyond capacity...traffic on our highways/railways is so slow...and many more bottlenecks. We are in no capacity to take advantage of any ‘competitive advantage’.
I hope crude prices stay where they are (better if they fall...but that’s not gonna happen anytime soon)...Rs. appreciates to 43-44...forex reserves go up(atlst at same pace as increase in foreign debt)...some better fiscal policies are implemented (really need to cut down on non-productive expenditures and attract more fdi)…and much more

[MeMumbaikar]

Originally Posted by UDHL

If crude oil prices fall...that'll be really good....but we cannot have Rs. depreciate so much. Our Imports are much more than exports, if Rs. depreciates...that would lead to a bigger deficit (imports will become more costly and exports cheaper) and ofcrs how can we forget about inflation. If Rs. depriciates to 60 to a $, man that will fuel inflation like a lot (then we can expect more monetary tightening and hence slower economy). I agree our oil import bill of $156bn is a lot and a fall in price of oil can help but thats not gonna happen anytime soon. If you had ‘competitive advantage’ on your mind (cheaper products so more exports)...well that’s not gonna happen in 3-5 years time for sure. Our infrastructure is very poor...ports are already operating beyond capacity...traffic on our highways/railways is so slow...and many more bottlenecks. We are in no capacity to take advantage of any ‘competitive advantage’.
I hope crude prices stay where they are (better if they fall...but that’s not gonna happen anytime soon)...Rs. appreciates to 43-44...forex reserves go up(atlst at same pace as increase in foreign debt)...some better fiscal policies are implemented (really need to cut down on non-productive expenditures and attract more fdi)…and much more

yeah but see a lot (i think majority) of our exports are in the services sector. Which dont need ports.


Manufacturing is only one part of our exports. Most than ports rupee at 60 will mean local Indian manufacturing meeting local Indian demands. You dont need to export , you need to reduce imports.


So IMO

Rupee at 60 and oil at 105-110 will mean


(a) Reduction in imports through local manufacturing meeting local demands. (even importers of goods need to make use of Indian ports)

(b) Increase in exports through a service sector

(c) Inflation depends on the price of oil, the agricultural output affecting food prices and core manufacturing inflation. It does not mean India will have inflation at 10%. Inflation at 5-6% is acceptable.

[purty_trash]

Originally Posted by UDHL

Even if speed of 'reduction in poverty level' becomes 2X...in 8 years we are still looking at around 17-19% poverty level in India.

Wow !

I can't believe that ALL of you got the intentions of the concerned authorities wrong. I think they WILL remove poverty till 2020. Think about it. All they have to do is to lower the poverty line even further. Poverty 'Vanish'.

[kannan infratech]

S. Gurumurthy was invited to talk in Avenues '10 at IIT Bombay (Management Studies).

Now he teaches the IIT Bombay Management Students about India and its traditional style of Economics.

http://www.youtube.com/watch?v=D-oSEEpfO_w

http://www.youtube.com/watch?v=Rcoyz...feature=relmfu

http://www.youtube.com/watch?v=ASVPT...feature=relmfu

http://www.youtube.com/watch?v=Udu4F...feature=relmfu

http://www.youtube.com/watch?v=ZL-3D...feature=relmfu

(K T - Part 5 has a reference to Coimbatore)

http://www.youtube.com/watch?v=EqOmR...feature=relmfu



His other speeches on Economy

'Global Financial Crisis'- S. Gurumurthy at Swadeshi Jagran Manch, Tamil Nadu

http://www.youtube.com/watch?v=tFXIx...eature=related



S Gurumurthy on 'Hindu Rate of Growth' and World Economy

http://www.youtube.com/watch?v=S9-UW...eature=related


SUPER POWER INDIA
http://www.youtube.com/watch?v=cQ2Rc...eature=related

http://www.youtube.com/watch?v=k2P_V...feature=relmfu


S. Gurumurthy - Life After Marx and Market

http://www.youtube.com/watch?v=eNtlH...feature=relmfu

[zenith_suv]

Originally Posted by purty_trash

Wow !

I can't believe that ALL of you got the intentions of the concerned authorities wrong. I think they WILL remove poverty till 2020. Think about it. All they have to do is to lower the poverty line even further. Poverty 'Vanish'.

, poverty is just a word for some of the geniuses of the planning commission. An individual would rather die than survive by spending just 30 odd rupees a day.

Having said that , the people of India bear a large responsibility for their own poverty. The Govt. of India did not tell these people to get married so early and more than that have kids so early, ones which they cannot in any way afford , but since its a national time pass , everyone seems at it. Then those children end up as child labor and their parents again try to marry them off by early 20's tops and so the cycle continues. Can't see what the govt. can do about that.

[MeMumbaikar]

India at regulatory 'crisis point', rupee may hit 56 against dollar: UBS

The rupee could hit 56 to the dollar, which would mark a record low, UBS said. It cited the prospect of slowing flows on the back of India's "severe" deficit drag, the need to "repair" its balance sheet and regulatory ambiguity that has reached a "crisis point."

"In these conditions, there is very little policy easing. So companies and government must now become more efficient if they want to retain/induce that extra dollar from overseas," UBS' economist Philip Wyatt says in the report.

Ratings agency Standard & Poor's on Wednesday cut India's outlook to negative from stable, citing slow progress on its fiscal situation, as well as deteriorating economic indicators. Stating that India's investment and economic growth have slowed, Standard & Poor's (S&P) revised its outlook for the Indian economy to negative and gave it a rating of BBB(-) from stable.

The lowered outlook jeopardises India's long-term rating of BBB-, which is the lowest investment grade rating. S&P has threatened to downgrade India's rating in next 2 years if the fiscal situation does not improve.

According to Manpreet Kaur Doad, Sr. Analyst at India Forex Advisors, the revised outlook is expected to increase international lending rates for India, signalling the increased costs to be borne by corporates. Core sector industries -- such as steel, power, cement, coal and infrastructure -- are facing deeper challenges, as growth in these sectors has already slowed down.They are also facing issues in raising capital to fund capital expenditure plans.

The increased borrowing rates will be directly passed on to them, leaving them in a grave situation. International funding for ECB, buyers' credit and other sources of dollar funding will get costlier.

The rupee tumbled to the 52.65 levels after appreciating to the 52.46 levels on Wednesday. Looking at the forward premium, it is still trading high of almost 305 paisa for a year end, indicating that corporates are still buying in long forward.

http://economictimes.indiatimes.com/...w/12879243.cms

[dreadathecontrols]

Originally Posted by purty_trash

Wow !

I can't believe that ALL of you got the intentions of the concerned authorities wrong. I think they WILL remove poverty till 2020. Think about it. All they have to do is to lower the poverty line even further. Poverty 'Vanish'.

[murlee]

Overseas remittances to India at record $63.6 bn: World Bank

Non-resident Indians (NRIs) have sent $ 63.6bn to India through remittances. Overseas Indians have sent more money than ever before. According to the World Bank, the increase in value of remittances is also due to a sharp fall in 2011 in the value of the rupee.

In 2010, India received $ 54bn in remittances.

This is the highest amount of money sent by overseas nationals to any country, according to the World Bank data. India has been the largest recipient of remittances since 2008 when it surpassed China.

China received $62.5bn in overseas remittances in 2011.

An overseas remittance is the money sent back to families by migrant workers. Indians living in US, Europe and the Middle East sent money to their families in India. Same holds true for China, Philippines, Mexico, Pakistan and others.


“Worldwide remittance flows, including those to high-income countries, reached $501 billion in 2011 and are expected to increase to $615 billion by 2014,” World Bank release said.

The flow of money from NRIs is important in the context of the rising current account deficit that hurts India’s economy. India imports more than it exports.

These remittances account for about 3 per cent of India’s $ 2 trillion gross domestic product or GDP. To put things in perspective, India’s current account deficit is 3.7 per cent of GDP for the financial year ended March 2012. This is despite such a high inflow of funds from NRIs. Current account deficit occurs when a country imports more goods and services than exports.

India imported gold and silver worth $60 billion in 2011/12, pushing up the trade deficit to near $185 billion.

Experts say that India needs to boost foreign investment to finance this deficit.

The high current account deficit is seen negatively by international investors. Standard & Poor’s, a global credit rating agency, downgraded India’s economic outlook to negative from stable. The International Monetary Fund on Friday cut India’s growth forecast to 6.9 per cent from 7 per cent 2012-13.

http://profit.ndtv.com/News/Article/...ld-bank-302991

[gts428]

For Tata Motors, Jaguar A Gold Mine
Little did Tata Motors (TTM) know that when it bought Jaguar in 2009 for a few billion dollars it would eventually help the India auto maker become one of the world’s hottest performing auto stocks. Actually, make that one of the hottest performing stocks, period.

Tata Motors is by far the-best performing major auto maker stock this year. It’s up a whopping 76% compared to second placed Toyota (TM) at 23% and third placed General Motors (GM) which is up around 19% year to date ending April 18. Bloomberg newswires noted on Wednesday that the stock extended its gains after Jaguar and Land Rover, both acquired by Tata from their Anglo-American roots back in ’09, recorded their highest ever monthly sales in March. The luxury brands have plugged the holes in Tata’s core business, the passenger vehicles it sells in India, where interest rates and fuel prices have dented consumer confidence, Bloomberg noted.

http://www.forbes.com/sites/kenrapoz...r-a-gold-mine/


Tata Motors’ stock at record as luxury sales boom
MUMBAI (MarketWatch) — While Tata Motors Ltd.’s stock jumped roughly 10% to a record this week, analysts believe the success of the company’s Jaguar Land Rover luxury brands alone can continue to lift its shares further this year.

Tata Motors (IN:500570) stock is up 78% year-to-date, making it the best performing stock on the Sensex, India’s benchmark index, ahead of Reliance Infrastructure Ltd. (IN:500390), which is up 62.7%. The Sensex (IN:1) is up 12.4% year-to-date.

Shares of Maruti Suzuki India Ltd. (IN:532500), the biggest car maker by sales on the subcontinent, are up 51.2% year-to-date. Mahindra & Mahindra Ltd. (IN:500520) is up 6.4% for the year so far.

For Tata, this marks a sharp contrast to last year, when the stock fell 32%, performing worse than its peers in India.


Not only were domestic sales damped by rising interest rates and fuel prices, but there were overall worries about Europe, which remains Jaguar Land Rover’s largest market.

March sales
In April, the stock of India’s auto makers also received a lift from rising sales the previous month.

In March, domestic sales figures were boosted for most car makers as consumers rushed to buy before expected price increases by manufacturers, in response to a 2% increase in excise taxes by the government.

Tata sold 100,414 vehicles in India in March, up 20% from the year earlier. Mahindra, which leads in sport-utility vehicles, saw its sales jump 25%. Maruti Suzuki sold 125,952 vehicles, up 3%. Sales at South Korea’s Hyundai Motor Co. Ltd. (KR:A005380), the second largest car maker in India, were up 7%.

But it wasn’t until early this week, when Tata reported March global sales jumped 51% to 36,471 vehicles for Jaguar Land Rover, that the stock really took off.

Tata’s stock finished the week up 9.5%, and reached a record of 320.6 rupees ($6.1 USD) on Friday.

Following the JLR numbers, Macquarie Research raised its price target on the stock to 370 rupees ($7.1 USD) from 330 for the year ending in March 2013.

In particular, Land Rover sales growth of its new model Evoque, and overall JLR growth in emerging markets such as China and Russia “has been better than ours, and the Street’s, expectations,” Macquarie analysts said.

BRICs’ ‘nouveaux riches’
Although Tata Motors once made headlines for building the world’s cheapest car, the Nano, its success of late is almost entirely based on selling luxury cars, in Europe and in the U.S., but most profitably to “recently rich” buyers in China, Russia and Brazil.

Over at Avendus Securities, analysts believe that the contribution of developing countries to JLR’s sales volumes will increase from 33% in 2011 to 50% in 2014.

In places like China, luxury cars are sold as much as twice the price they go for in Europe, analysts say.

http://articles.marketwatch.com/2012...p-cheapest-car

[kalkibhagwan]

LOL,so now all credit goes to jaguar?? what an idiocity, it's TATA's hardwork, anyways nice to hear

[dreadathecontrols]

such a stupid comparrison with china.
the money that goes there is for buisnes investment by international corps.
makes india look like a minnow .
still lets hope all that nri money isnt just to pay for weddings

[hobbes100]

Here's what the Emerging Markets head for Morgan Stanley Investment Management had to say about prospects for Indian economy. Not a bad assessment. I agree with most of what he says.

http://www.indianexpress.com/news/in...ation/943261/0

I specially like what he said at the end about the quality of governance at the centre and states. The equation was opposite 10 years ago, with governance at state level lagging behind. Today it is the central govt that is holding the country back. Of course there is variability in performance across states, but overall, I think they are more pro-development than the centre.

‘India has high chance of becoming a breakout nation’

It was the rising tide of global liquidity and not anything unique to India that accelerated its growth rate from a level of around 5.5 per cent to 8-9 per cent between 2003 and 2007. The country has a high chance of becoming a “breakout nation” only if it does not grow complacent, avoids becoming a welfare state, brings reforms systematically and globally, and commodity prices fall, said Ruchir Sharma, Global Head, Emerging Markets, Morgan Stanley Investment Management, and author of Breakout Nations: In Pursuit of The Next Economic Miracles.

In conversation with Uday Kotak, Vice Chairman and Managing Director of Kotak Mahindra Bank, and Shekhar Gupta, editor-in-chief, The Express Group, at the Express Adda event in Mumbai on Saturday, Sharma said when liquidity around the world became more normal, India’s growth rate slowed down. “I think we mistook that boom to believe that it was all about India, not realising that it was the rising tide of global liquidity that was lifting every single developing country between 2003 and 2007 and the average growth rate of emerging market was more than 7.5 per cent,” he said.

Interacting with a high-powered audience including Adi Godrej, Chairman, Godrej Group; Rakesh Jhunjhunwala, billionaire investor; Anil Dharker, writer and columnist; Uday Shankar, CEO, Star TV India; and Rashesh Shah, Chairman, Edelweiss, among others, Sharma said the reforms in 1990s positioned India to take advantage of the high liquidity beginning 2003 and accelerate to high growth rates. “The history of economic development says that unless you systematically reform, you cannot grow in a sustained manner, which is what China has done,” he said.

According to Sharma, there are two important criteria that categorise a “breakout nation”. One, expectations, and two, per capita income. “If there are expectations to grow at 7-8 per cent, anything less than that will not make us a `breakout nation’. On the per capita front, while for a country like Korea with a per capita income of over $20,000, it would feel like a boom if it grows at 4-5 per cent, for a country like India with a per capita income of $1,500 it would feel like a recession,” he said.

Amongst the BRIC nations, according to Sharma, India is most likely to break out since it has the advantage of low per capita income of $1,500, more unproductive resources in the economy, more unemployed and under-employed people who can be brought up in the urban areas. Despite such advantages, he rued that India is not the fastest growing economy in the world today. His worries centre around the government’s rising expenditure and the slow pace of economic and social reforms.

“We should be growing at 9-10 per cent today, not because of anything special but for the low per capita income. You can make many mistakes and still get away with it,” said Sharma. “Of all the BRIC countries, I give India the best chance of being a ‘breakout nation’. If the commodity price collapses, it will be a big positive for India,” he said.

India should, however, avoid the mistakes Brazil committed in the 1970s by creating a welfare state prematurely. “It is better to redistribute the pie once you have it rather than try to do it when the pie is small,” he said. India should rather look at China that followed ruthless capitalism.

Sharma expressed concern that businessmen do not find the going easy in India. He said that many businessmen told him in private that they were finding it more and more difficult to do business in India and they would rather take their money out. “My confidence in India will increase a lot when I see domestic businessmen willing to invest lot more at home rather than diversifying,” he said.

Saying that the quality of governance at the Centre remains very poor, Sharma was more enthusiastic about the states. “Growth is coming out of states increasingly and the quality of governance is improving there, but at the Centre it still remains very poor. And the reason for India being a ‘breakout nation’ is its states,” he said.

[MeMumbaikar]

Originally Posted by dreadathecontrols

such a stupid comparrison with china.
the money that goes there is for buisnes investment by international corps.
makes india look like a minnow .
still lets hope all that nri money isnt just to pay for weddings

thats FDI (foreign direct investment) and not remittance. Two are classified as different things.

As far as remittance goes, it ranges from real estate purchases for parents etc to many other things including payment for eg for school fees for the children of somebody working in the gulf.


(a) stop being so pessimistic about everything.


(b) maybe think before you type.

[murlee]

[murlee]

[murlee]

[murlee]

[think-tank]

ooh nice, lots of graphs and whatnots.