Indian Economy : News,Discussions & Updates

[RISING SUN]

The leaders and laggards behind India’s world-beating growth
India’s economic activity is picking up, boosted by a long-awaited recovery in consumption that’s helped cut down slack in the economy and underpinned sales of everything from cars to housing.

Almost 60% of gross domestic product (GDP) comes from private spending, according to estimates from New York-based CEIC Data Co., with the pick-up helping to fuel growth of more than 7% this year, making India the world’s fastest-growing major economy. Yet the performance isn’t uniform across all industries, with the banking and power sectors facing distress and global trade tensions clouding the outlook for exports.

Here’s a detailed look at which sectors are ticking and those that are ailing:

The leaders

The auto industry is on a strong footing. While demand is broad-based across markets, rural India appears to be doing particularly well, which is reflected in sales of two-wheelers and tractors. Companies such as Maruti Suzuki and Ashok Leyland are taking advantage of stronger demand by passing on higher prices to consumers.

“Rural India appears to be doing particularly well, which is reflected in strong growth in the two-wheeler and tractor industry,” analysts led by Hitesh Goel at Kotak Institutional Equities said.

If the automotive sector is doing well, can oil be far behind? India’s energy appetite is surging, courtesy of its expanding middle-class and unrelenting demand to power a growing fleet of trucks, cars and motorbikes. The government’s push for cleaner air by encouraging the use of cooking gas is driving refiners and attracting global majors such as Saudi Arabian Oil Co. to Rosneft PJSC.

However, an over-dependence on imports makes the nation vulnerable to a sustained spike in oil prices that can chip away at demand.


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Another bright spot is the sector for fast-moving consumer goods, which is ranked as the fourth-largest in the economy by think-tank India Brand Equity Foundation. It’s recovered well from the demand-disruptive and chaotic introduction of a consumption tax last year. Analysts see additional support for the sector coming from higher wages for millions of government workers as well as expectations of a recovery in farming due to higher guaranteed prices for some crops and a pick-up in public spending ahead of elections.


Click here for enlarge

The steel industry, which contributes almost 2% to GDP, has been reaping the benefits of increasing local demand and higher prices. Tata Steel Ltd.’s sales during April through June climbed 8% year-on-year driven by automotive and special products’ demand, while JSW Steel Ltd. clocked a 11% growth in group sales. That’s on top of steel consumption already rising to the highest in at least five years in the year ended March, according to data from the Steel Ministry.


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Exports have, however, been declining this year because of protectionist measures taken by key consuming countries to protect local manufacturing.

Cement manufacturers are facing a more uneven recovery as rising input prices eats into profit margins. Nevertheless, higher government spending to build infrastructure and affordable housing in the run-up to next year’s elections should underpin demand.

This is one sector that’s continued to see double-digit traffic and capacity growth, as more people take to flying and carriers expand their fleet. But India is also the most price-sensitive of the world’s large airline markets, and an oil price rally is a risk to growth.

“Low oil prices which helped stimulate air-travel demand will now act as a drag on industry profitability and will slow capacity additions,” Bloomberg Intelligence’s Rahul Kapoor wrote in a note. “We remain long-term positive but see near-term headwinds,” he said.

The stragglers

While demand for bank loans is growing from a year ago, the industry’s gross bad-loan ratio may increase to 12.2% in the fiscal year through March 2019 — the highest in almost two decades — from 11.6% last year, according to data from the Reserve Bank of India. The deterioration in asset quality is eroding capital buffers at the lenders and curtailing their ability to take on financing for large projects.

The industry is another big laggard and a cause of headaches for bankers and policy makers. It’s plagued by fuel shortages and companies face difficulties securing long-term supply contracts with the country’s money-losing electricity distributors. Nearly 40% of coal-fired power generation capacity is lying unused.

Loans totaling at least $38 billion are at risk of being written-off in the power sector, Bank of America Merrill Lynch estimates. The sector is also reeling from the 2014 court-ordered loss of coal mining permits, as well as financing and cash-flow concerns that make revival difficult.
The leaders and laggards behind India’s world-beating growth

 

[Volcano]

India can't afford to turn its back on free trade

 

[Volcano]

India’s oil import bill to jump by $26 billion
PTINew Delhi,August 16, 2018 21:53 IST
Updated:August 16, 2018 21:56 IST

Rupee fall inflates crude purchase cost
India’s crude oil import bill is likely to jump by about $26 billion in 2018-19 as rupee dropping to a record low has made buying of oil from overseas costlier, government officials said on Thursday.

Besides, the rupee hitting a record low of 70.32 to a U.S. dollar in the opening deal on Thursday will also lead to an increase in the retail selling price of petrol, diesel and cooking gas (LPG).

India, which imports more than 80% of its oil needs, spent $87.7 billion (₹5.65 lakh crore) on importing 220.43 million tonne (MT) of crude oil in 2017-18. For 2018-19, the imports are pegged at almost 227 MT.

“We at the beginning of the financial year estimated that crude oil import bill will be around $108 billion [₹7.02 lakh crore] at an average crude oil price of $65 per barrel and exchange rate of ₹65 per dollar,” an official said.


Exchange rate

“But the exchange rate has been at an average of ₹67.6 till August 14. If the rupee is to stay around 70 per dollar for the rest of the ongoing fiscal, the oil import bill will be $114 billion,” he said.

The rupee has been among the worst performing currencies in Asia, witnessing an 8.6% slump this year.

Fanned by a higher oil import bill, India’s trade deficit, or the gap between exports and imports, in July widened to $18 billion, the most in more than five years.

Trade shortfall puts pressure on the current account deficit (CAD), a key vulnerability for the economy.

Rupee depreciation will result in higher earnings for exporters as well as domestic oil producers like Oil and Natural Gas Corp (ONGC) who bill refiners in U.S. dollar terms.

But this would result in rise in petrol and diesel prices, with full impact likely to be visible later this month.

“Though oil firms fix retail selling price of petrol and diesel on a daily basis, the inputs for that fixation are an average of previous fortnight. So today’s rate is based on average benchmark of international oil prices and the exchange rate of August 1-15.

“And since the rupee in the beginning of the month was at 68.3 to 68.6 a dollar, the exact impact of today’s depreciation is not visible,” he said.

Prices of petrol and diesel were on Thursday increased by 6 paise a litre each to ₹77.20 and ₹68.78, respectively in Delhi. Rates are the highest in two months.

Fuel prices in Delhi are the cheapest in all metros and most state capitals due to lower sales tax or VAT.

If oil prices continue at these levels and rupee at 70 a dollar, retail rates should go up by 50-60 paisa a litre.

India’s oil import bill to jump by $26 billion

 

[_Anonymous_]

If rupee slump persists, it can hurt PM Modi in election year - Times of India

 

[Himanshu]

Worrying signs on the forex reserves front

Widening trade deficit, sluggish export growth could put further pressure on the country’s forex reserves
The Centre’s response to the recent bout of weakness in the rupee has been surprisingly nonchalant. While the RBI was mum, the Finance Minister decided to talk up the rupee by tweeting that India’s foreign exchange reserves are comfortable, going by global standards and sufficient to mitigate any undue volatility in the foreign exchange market.

The Finance Minister is partially right, for the country’s reserves are better than many other emerging economies. But given the changing global liquidity conditions and their impact on the FDI and FPI flows in to the country, it might not be right to feel complacent about the country’s reserves.

Also given the structural issues in the country’s external account — widening trade deficit, sluggish export growth and growing imports — our forex arsenal is likely to be under further threat in the coming quarters. It would therefore be better to acknowledge the challenges and think about corrective action rather than be in denial.


Depleting reserves

After the 2013 crisis in the rupee when the taper tantrum and the widening current account deficit, eroded the reserves, the RBI has been careful about building its forex reserves. Reserves had therefore increased from $275 billion in September 2013 to the life-time high of $426 billion in April 2018. Strong inflows from foreign portfolio investors as well as foreign direct investors in the interim period helped to a large extent in shoring up reserves.

But this support is likely to be withdrawn in the coming quarters. Foreign direct inflows had been robust in the first two years of NDA rule, growing at 25 per cent and 23 per cent in FY15 and FY16 as Prime Minister Narendra Modi reached out to overseas investors to fund the country’s growth. But the momentum has slowed down since then with the FDI inflows growing 8 per cent in FY17 and at an even slower pace of 3 per cent in FY18.

The cushion provided by FII inflows is also likely to reduce. Foreign institutional investors have withdrawn ₹15,771 crore from the equity market for far in FY 19 while the outflows from debt segment has been ₹35,449 crore. This is contrary to the copious inflows of ₹1,44,682 crore in equity and debt markets in FY 18 when a rallying stock market and appreciating rupee had attracted foreign investors to Indian markets.

While the reduction in foreign inflows makes it difficult for the RBI to mop up reserves, it has also had to sell dollars to stave off a sharp depreciation in rupee. In the three months from April to June 2018, the RBI has net sold $14 billion. It is therefore not surprising that the reserves are down 10 per cent from their peak level recorded in April.


The Fed’s action

Reduction in foreign money inflows in to the country is a function of the global liquidity conditions and everyone knows that these are far from conducive lately. After pumping in trillions of dollars since the 2008 crisis, the Federal Reserve began shrinking its balance sheet since October 2017. While this is reducing liquidity in global markets, the rate hikes from the Fed are making the cost of financing expensive. It is therefore not surprising that global investors have less to spend and are reducing their investments in emerging markets including India.

RBI Governor Urjit Patel acknowledged this problem in a recent column in Financial Times, through which he had appealed to the Federal Reserve to go slow on its monetary tightening. The IMF estimates that the Fed’s tightening can result in reducing flows into emerging markets by $35 billion a year.

It’s therefore apparent that the world is moving from a period of easy money to one were liquidity becomes tighter and funds become more expensive.


Burgeoning debt

The widespread belief that the cover provided by forex reserves to imports is comfortable, is debatable too. While the current import cover is much higher than the 7-month cover in 2013, continued deterioration in trade deficit can mar this number. While the import cover was 11.1 in April 2018, it is already down to 9.9 in August.

The other data that reflect adequacy of reserves is the country’s external debt. Due the excessive liquidity in global markets after 2008, the country’s external debt has doubled from $224 billion in 2008 to $529 billion now. Indian companies have made the most of the easy liquidity conditions overseas, increasing the non-government portion of external debt to almost 80 per cent. External commercial borrowings account for over one-third of the country’s debt.

The cover provided by forex reserves to external debt has deteriorated significantly in this period from 138 per cent in 2008 to 80 per cent now. Another factor that is worth noting is that the share of concessional debt from multilateral agencies has been coming down over the years — from 46 per cent in 1991 to 20 per cent in 2008 to 9 per cent in 2018.

The worrying factor is that short-term debt on a residual maturity basis that include long-term debt falling due over the next 12 months and short-term debt by original maturity, account for 42 per cent of total external debt towards the end of March 2018 and stood at 52.3 per cent of foreign exchange reserves. With central banks including the Federal Reserve and the Bank of England hiking rates, the cost of refinancing these loans is going to become difficult, leading to repayment of some of these loans, causing forex outgo.

There are however no short-term fixes to this problem. While the measures taken to improve the ease of doing business and the implementation of GST will improve FDI flows in the long term and foreign investment flows will improve once the global liquidity conditions improve, addressing the structural trade imbalance will take longer.

The government needs to renew the efforts initiated in the initial period of its term to boost exports and reduce dependence on imports in order to ensure a sustained improvement in the country’s reserves.

 

[RISING SUN]

India extends export deadline for 2 mil mt of sugar by 3 months to year-end
The Indian government on Thursday announced that it was extending the deadline to export 2 million mt of sugar by three months to the end of this year.

In March, the government had set a mill-wise Minimum Indicative Export Quota, or MIEQ, for 2 million mt until the end of the 2017-2018 (October-September) season to help increase the cash flow for mills and boost domestic prices.

"The extension of the deadline is not surprising since elections [are due to be held] next year in India and the country had exported only 465,000 mt till the end of July," a trader said.

India was expected to export around 650,000 mt of low quality white sugar by the end of the year, with the main destinations being Myanmar and Sri Lanka, market sources said.

The government in May had announced a Rupees 55/mt (78 cents/mt) of sugarcane production-linked subsidy, equivalent to an export subsidy of about $122/mt, with the 2 million mt export target and a sugar production estimate of 32.2 million mttq this season, S&P Global Platts Analytics data showed.

The export subsidy is not enough to cover the domestic mills' exports with the price on Thursday on the NCDEX spot Kolhapur market at $446.50/mt and the global benchmark ICE London No. 5 prompt-month futures at $306/mt.

Mills in India were offering 150i low quality whites at around $310/mt FOB West Coast India and 45i high quality whites at around $18/mt over the front-month London No. 5 futures for October-November loading on Friday, a trader said.

India is expected to have around 9 million-10 million mt of stocks by the end of the 2017-2018 (October-September) season, assuming there were no exports, according to Platts Analytics. The crop next season is forecast at 33.6 million mt, which would bring the closing for the next season to 16 million-17 million mt, with a consumption of around 26 million mt, the data showed.

The Indian government likes to mantain a buffer stock of about two months of consumption every season, which is about 4 million mt. So India still has to export around 12 million-13 million mt over the current and next season.

"The big surplus is perhaps one reason why some mills in India are exporting with small losses this season," a trader said.

However, given that India was expected to export only a quarter of its total exports by the original deadline, the government was looking at different options to keep domestic sugar prices supported. This might be the first of the many policy announcements for the next season, sources said.

The Indian Sugar Mills Association had asked the government earlier this month to allow exports of around 6 million-7 million mt for the next season and to raise the minimum selling price of sugar to Rupees 36,000/mt. However, it is yet to be seen what route the government will take to encourage mills to export next season and support domestic prices.
India extends export deadline for 2 mil mt of sugar by 3 months to year-end | S&P Global Platts

 

[RISING SUN]

Moody's says India to grow at 7.5% in 2018, 2019
The Indian economy is expected to grow by around 7.5 per cent in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices, Moody's Investors Service said today.

In its Global Macro Outlook for 2018-19, Moody's said the run-up in energy prices over the last few months will raise headline inflation temporarily but the growth story remains intact as it is supported by strong urban and rural demand and improved industrial activity.

"Growth prospects for many of the G-20 economies remain solid, but there are indications that the synchronous acceleration of growth heading into 2018 is now giving way to diverging trends. The near-term global outlook for most advanced economies is broadly resilient, in contrast to the weakening of some developing economies in the face of emerging headwinds from rising US trade protectionism, tightening external liquidity conditions and elevated oil prices," it said.

Moody's put G-20 growth at 3.3 per cent in 2018 and 3.1 per cent in 2019. The advanced economies will grow 2.3 per cent in 2018 and 2 per cent in 2019, while G-20 emerging markets will remain the growth drivers at 5.1 per cent in both 2018 and 2019.

"We expect the Indian economy to grow around 7.5 per cent in 2018 and 2019," it said.

Moody's had in May cut India's 2018 growth forecast to 7.3 per cent from the previous estimate of 7.5 per cent, saying the economy is in cyclical recovery but higher oil prices and tighter financial conditions will weigh on the pace of acceleration.

Today, in the graphic accompanying the outlook, it put 2018 growth at 7.3 per cent and 7.5 per cent for 2019. But in the text it put the growth "around 7.5 per cent" for both the years.

Indian economy grew by 7.7 per cent in the first quarter of 2018. "High-frequency indicators suggest a similar out-turn for the second quarter," Moody's said. "Growth is supported by strong urban and rural demand and improved industrial activity."

While robust activity is shown in the industrial sector, a normal monsoon together with the increase in the minimum support prices for Kharif crops should support rural demand.

"Thus, despite external headwinds from higher oil prices and tightening financing conditions, growth prospects for the remainder of the year remain in line with the economy's potential," it said.

Moody's said the Reserve Bank of India (RBI) in July raised the benchmark repo rate by 25 basis points for the second time in two months to 6.5 per cent.

"Two concerns behind the tightening cycle are rising core inflation and vulnerability to tightening external financial conditions," it said.

Retail inflation in India has risen as per expectations since mid-2017 but remains stable at around 5 per cent. But core inflation has moved up in recent month to 6.2 per cent, it said adding a number of factors influencing the headline inflation rate in both directions, most of which are transitory.

"The run up in energy prices over the past few months will raise headline inflation temporarily. The impact on food inflation from increased procurement prices to farmers will be mitigated somewhat by the expected rise in farm output because of a good harvest," it said.

An upside to inflation comes from strengthening demand, which is reflected in rising core inflation. "We, therefore, expect the RBI to continue on a steady tightening path into 2019," it added.
Moody's says India to grow at 7.5% in 2018, 2019- Business News

 

[RISING SUN]

India is set to overtake China as the top driver of global oil demand growth
India is set to overtake China as the biggest source of growth for oil demand by 2024, according to a forecast announced Monday by research and consultancy group Wood Mackenzie.

The country's oil demand is set to increase by 3.5 billion barrels per day from 2017 to 2035, which will account for a third of global oil demand growth. India's expanding middle class will be a key factor, as well as its growing need for mobility, according to Wood Mackenzie.

On the other hand, China — currently the second-largest oil consumer in the world — may soon need less oil. In 2017, it overtook the U.S. as the biggest importer of crude oil, but it's set to see a decline in oil demand growth from 2024 to 2035, Wood Mackenzie Research Director Sushant Gupta told CNBC.

That's due to two trends: Alternative energy sources such as electricity and natural gas are displacing the need for gasoline and diesel. And, a more efficient freight system and truck fleet will also result in sluggish road diesel demand, Gupta said.

For India, as demand grows, an oil shortage is already imminent. The country is only expected to add 400,000 barrels per day in firm refinery capacity out to 2023 — paling in comparison to demand growth — warned Wood Mackenzie.

"We think the most likely situation is that India would need between (3.2 million and 4.7 million barrels per day) of new capacity out to 2035 to remain self-sufficient in transport fuels. So we are talking about a future capacity which is 1.7 to 2.0 times the current. This is clearly an uphill task, unless domestic refiners can commit to their planned capacity additions," Gupta said in a Wood Mackenzie release accompanying the India demand projection.

With India's refinery yields still highly tilted toward diesel, Wood Mackenzie added that India needs to start focusing on increasing gasoline. However, with a global surplus of gasoline expected in the long run, India could consider importing the fuel, the research firm suggested.

Reducing reliance on oil

India's fate has long been tied to oil prices, as it is a net oil importer, and rising prices are set to hit its economy. As a result, its currency could continue weakening, its current account and trade deficits are set to widen further, and its growth could be affected.

In the long run, the country could choose to switch its passenger transport sector — cars, vans and utility vehicles — to run on electricity instead, suggested Gupta.

"However, the market readiness ... is low, and the policy formation is uncertain," he said.

The country could also impose fuel efficiency standards for trucks, which don't currently exist, he said, or switch to cleaner fuels like natural gas.
India is set to overtake China as the top driver of global oil demand growth

 

[Himanshu]

Veg-oil imports via Bangladesh spark concern

SEA raises issue with Centre as threat looms over domestic refiners too

High-transfat refined vegetable oils being imported “unchecked” through the land border with Bangladesh is seen creating health hazards in India and posing potential loss to domestic refiners.

After the Centre took prohibitory measures to curb cheap imports of refined vegetable oils from neighbouring countries by misusing SAFTA, there was a spurt in imports of refined veg oils — soybean oil and palm oil — by road. This, according to experts, encouraged adulteration of veg oils in the domestic market.

According to an estimate by the Solvent Extractors’ Association of India (SEA), every day, about 800-1,000 tonnes of RBD palmolein and refined soyabean oils are imported from Bangladesh in tanker lorries and in packaged form through the land borders of West Bengal and Assam.

“This cargo is being released by Customs on the basis of bond on the same day of arrival without being tested by the Port Health Officer (PHO). Edible oil tankers from Bangladesh are having high transfat of 4 to 5 per cent and being used for adulteration in the local markets. There is no checks of selling and marketing such imported refined oils in India and they could be serious hazardous to health too,” Atul Chaturvedi, President, SEA, stated in a letter to the secretaries of the Central Departments of Revenue, Commerce and Food and Public Distribution.

SEA has appealed to the Centre to check and regulate such imports from Bangladesh and other neighbouring countries under SAFTA by road. “Therefore request you to direct Customs and FSSAI Authorities at these land ports to take appropriate action to stop the import,” said Chaturvedi in the letter.

Districts with land borders on the opposite side from where the imports enter India include 24 Parganas, Mundu-Myanmar, Jalpaiguri, Maldaha, West Dinajpur, Nadia, Gaur, Shillong and Agartala, among others.

Earlier, the trade body had raised an alarm on duty-free import of veg oils through SAARC nations. This was at a time when the Centre had imposed heavy duties on imported edible oils to protect the interests of local refiners and farmers.

The importers exploited the SAFTA agreement, which allows duty-free imports of goods from the signatory countries on two grounds — either the commodity is native to the country or has 30 per cent value-addition.


Sterlite closure hits copper production, imports up 221% in June quarter

Domestic refined copperproduction fell 47.1 per cent in quarter ending June (Q1FY19), leading to an increase in price and fall in exports. Though the fall in production was mainly due to the closure of Vedanta's smelter plant at Thoothukudi, the shutdown of smelters of Hindustan Copper(HCL) and Hindalco for maintenance purposes also had an impact.

Tuticorin plant has a capacity of 400,000 tonnes per annum, accounting for 40% of the country’s coppersmelting capacity. The facility was shutdown after violent protests from locals.

According to Care Ratings, the production drop has had a domino effect, leading to a sharp fall in exports. Exports from India, which used to be the net exporter of refined copper, dropped 91.6 per cent this quarter. In the same quarter last year, exports had increased by 70.1 per cent. Imports, on the other hand, increased by 221 per cent in the last quarter.

Domestic consumption has seen a decline as the rise in copper prices presented aluminium as an economical alternative. Aluminium can be used as copper's replacement in wiring in power cable and electrical equipment. Demand for copper in the domestic market is largely dependent on electrical (34%), building & construction (8%), automobiles (11%) and consumer durables segments (8%).

Global copper prices rose 21.6 per cent year on year during first quarter of 2019 as compared to the corresponding period of the previous year.

LME prices of copper were volatile during first quarter of 2019 due to trade tensions between China and USA. Prices of copper had risen during the first week of June’18 when the verdict of the permanent closure of Vedanta's smelter plant was announced. The price was $6,955 a tonne in June 2018 as compared to $6,796 a tonne in March 2018.

Production of refined copper is estimated to be around 510 KT in 2018-19. Production from HCL and Hindalco is expected to pick up during third and fourth quarters, said CareRatings. If Tuticorin is allowed to resume operations, production of refined copper could be around 710 KT in FY19, a 39 per cent increase from the current slated levels but still below the production during FY18.

Domestic demand is estimated to be around 530-535 KT during FY19. Global copper prices is expected to hover around $6,200-6,400 per tonne during the short to medium term period on a monthly basis.

 

[vstol Jockey]

Economy slowed down due to Raghuram Rajan's policies, not demonetisation: Niti Aayog VC - Times of India
I had always rejected the policy of Rajan as RBI governor and if you recall my posts on another forum when people were talking of extending the term of rajan, I had very clearly stated that he is here to ruin our economy. First he made policies which resulted in NPAs and than he made NPAs the for bad state of banking system. Many loans turned NPA only due to banks would not lend when the industry needs it most. He was here to further the agenda of world bank and USA to ensure Indian economy does not achieve its full potential. and he has put us back by full seven years.

 

[Pundrick]

Economy slowed down due to Raghuram Rajan's policies, not demonetisation: Niti Aayog VC - Times of India
I had always rejected the policy of Rajan as RBI governor and if you recall my posts on another forum when people were talking of extending the term of rajan, I had very clearly stated that he is here to ruin our economy. First he made policies which resulted in NPAs and than he made NPAs the for bad state of banking system. Many loans turned NPA only due to banks would not lend when the industry needs it most. He was here to further the agenda of world bank and USA to ensure Indian economy does not achieve its full potential. and he has put us back by full seven years.

If he is culprit then he was not alone, there was UPA's policy paralysis & external factors which also helped the cause. NPA in no sense is a product of RR's policy, he was leading RBI team and they were given only one i.e. Inflation under 2-6%. Now if they are given this narrow target by the then Govt then they are bound to fail in other sectors e.g. Banking & Economic growth.

Look at what Urjit is doing at the moment, he has also started increasing the Repo rate(0.5% in last 3 months), what will you call it ? I know in the next 4-5 years people will criticize him for not keeping the rates lower, but what they don't really know is that the external factors don't support lower repo rate, same was the case during 2011-2013 period when RR had to keep the rates higher.

RBI alone can't revive growth, GoI will have make some statutory changes in RBI Act and give RBI some broad target where they can look at all the aspects of the economy rather than only inflation, before deciding on the repo rate.

Don't make Raghuram a scape goat.

 

[Volcano]

Economy slowed down due to Raghuram Rajan's policies, not demonetisation: Niti Aayog VC - Times of India
I had always rejected the policy of Rajan as RBI governor and if you recall my posts on another forum when people were talking of extending the term of rajan, I had very clearly stated that he is here to ruin our economy. First he made policies which resulted in NPAs and than he made NPAs the for bad state of banking system. Many loans turned NPA only due to banks would not lend when the industry needs it most. He was here to further the agenda of world bank and USA to ensure Indian economy does not achieve its full potential. and he has put us back by full seven years.

Demonetization does slowed down the economy temporary almost all industies suffered with capital scarecity, especially the medium and small scale organisations, it doesn't succeeded in getting any black money. But in a totally unexpected turn, that helped in increased digital transations in the country. Rajan's policies probably wasn't the best, but it is rich claiming that demonetization didn't slowed down the economy.

 

[RISING SUN]

India's crude steel output up 8% in July: World Steel Association
India's crude steel output increased by 8 per cent to 9 million tonnes (MT) in July this year, according to the World Steel Association.

The country had produced 8.33 MT crude steel in the same month a year ago, the association said in its latest report.

"Global crude steel production was at 154.6 MT in July 2018, a 5.8 per cent increase compared to July 2017," it added.

China's crude steel production for July stood at 81.2 MT, an increase of 7.2 per cent as compared to 75.7 MT in the same month of 2017.

Japan's output fell by 2 per cent to 8.4 MT in July 2018.

The US produced 7.3 MT of crude steel in July 2018, an increase of 4.5 per cent in comparison to same month of the previous fiscal.

South Korea's crude steel output grew marginally to 6.2 MT in July 2018, followed by Turkey 3.3 MT.

Brazil's crude steel production stood at 3 MT, up by 6.7 per cent from July 2017.

World Steel Association is one of the largest industry associations in the world. Its members represent about 85 per cent of the world's steel production.

They include over 160 steel producers with 9 of the 10 largest steel companies, national and regional steel industry associations and steel research institutes.
India's crude steel output up 8% in July: World Steel Association

 

[Noodler]

Demonetization was a complete failure. None of its objectives were achieved and we lost 1.5 % of our GDP in addition to the capital needed for new notes. Small unorganized businesses perished. There were other ways to achieve digitization.

 

[RISING SUN]

India to surpass Brazil as top sugar producer, eyes bigger export share
India will surpass Brazil as the world's top sugarNSE 0.00 % producer next year, with the South American country losing its lead for the first time since the 1990s as its mills allocate increasingly more cane for ethanol production and as low investments dent cane yields.

At the same time, with subsidy schemes for a politically sensitive sector, India is expected to churn out a record sugar production of about 35 million tonnes in 2018/19 year starting in October, while Brazil's output could retreat by about 10 million tonnes from a year ago to about 30 million tonnes.

With fuel prices on the rise and sugar prices trading near 10-year lows in New York, the incentive for Brazilian mills to produce the sweetener is low. Indian mills have little option but to produce sugar as their biofuel production capacity is limited.

The change in leadership over sugar production, which Brazil has held since the 1990s, is expected to reflect in trade flows around the world, with Brazilian exports losing a slice, while Asia gains a foothold in the global market amid a glut in supplies, especially in India.

"It certainly looks like India will overtake Brazil as the world's largest sugar producer," said Michael McDougall, senior vice president-sales at ED&F Man.

"The big question is how will India deal with the surplus, given the estimate on consumption is around 25 million tonnes."

Along with India, Thailand, the second largest exporter behind Brazil, is in Asia, a major consumer region.

The surplus production will allow India to increase exports, while Thailand will remain a major exporter, said consultant Julio Maria Borges, from Job Economia, adding that Brazilian exports in the new crop year are expected to decline by about 9 million tonnes.

INDIAN EXPORTS

India could start new season with inventory of over 10 million tonnes and could produce another 35 million tonnes in the season, estimates the Indian Sugar Mills Association (ISMA) said.

Total supplies would be around 45 million tonnes against local demand of 25.5 million tonnes, making exports essential from the country, says Abinash Verma, director general of ISMA.

The industry body has requested the government to make exports of 7 million tonnes mandatory in the next marketing year, Verma said.

"Yes, exports are necessary and we will decide quantum after consulting with all the stakeholders," said an Indian government official, who is involved in the decision making.

In March, India asked mills to export 2 million tonnes of sugar and fixed a mandatory export quota for each mill, but mills have so far managed to export around 500,000 tonnes.

"The gap between local and overseas prices is huge and many mills are not exporting surplus despite the government order," says B. B. Thombare, managing director of Natural Sugar & Allied Industries, a sugar mill based in western Indian state of Maharashtra.

In the Indian market, mills were selling sugar around $430 per tonne against export prices of around $330, said a Mumbai-based dealer with a global trading firm.

India traditionally produces white sugar that has limited demand in the world market. A few mills could produce raw sugar that can be sold easily in the world market, says Thombare.

In August, global raw sugar prices fell to their lowest level in a decade as the dollar rose against the Brazilian real. On Wednesday, raw sugar was trading around 10.87 cents per lb.

A jump in Indian exports could further depress global prices.

"Prices could fall below 10 cents if Indian government provides subsidy and sets an ambitious target for exports," said India head of a global trading firm, who declined to be named.
India to surpass Brazil as top sugar producer, eyes bigger export share

 

[Volcano]

Thousands laid off as India pushes biggest tax reform

• By Reuter Sep 9, 2018, 6:09 PM ET

Adnan Abidi/Reuters

Tilak Raj Bathla's tiny weaving factory is one of the few still humming on a once busy road in the northern Indian city of Panipat, known as the country's "textile city."

Nearby, more than two dozen other workshops are locked from the outside, while dogs and cows roam through other abandoned factories. Scrap dealers enquire about idle powerlooms.

Adnan Abidi/Reuters

This aerial view shows an industrial area in Panipat, India, Aug. 29, 2018.


India launched the Goods and Services Tax (GST) just over a year ago, its biggest-ever tax reform, aiming to replace more than a dozen federal and state levies and unify the sprawling economy.

The move improved economic efficiency but critics say the complexities of the new regime have driven many small enterprises out of business and forced hundreds of thousands out of jobs.

For Prime Minister Narendra Modi, the drawbacks of the GST, especially the job losses, could prove costly in major state elections later this year and a general election in mid-2019.

Adnan Abidi/Reuters

Ram Pratap, who lost his job as a powerloom operator earlier this year, poses for a picture inside a weaving factory where he used to work, in Panipat, India, Aug. 24, 2018.more +


Bathla says his neighbors, most of them unschooled, could not comply with monthly online filings required under the GST regime. Some of his customers and suppliers could not afford to hire accountants to navigate a system which has been amended more than 200 times already, while others struggled to cope with delays in tax returns caused by glitches in the centralized software.

"I have a GST registration, but I can't work as my vendors and buyers are unable to comply with a complex tax structure," the 50-year-old said, adding his monthly sales had fallen to about 250,000 rupees ($3,511) from about 1 million rupees before the GST. Only 2 of his 10 powerlooms are currently being used.

The government has said it is simplifying the tax measure to make it accessible to everyone. Finance Ministry spokesman D.S. Malik said requests from small businesses have been considered "from time to time." But he declined to comment on job losses.

Adnan Abidi/Reuters

A man is seen behind a dust-covered window of a weaving factory, that was shut a year ago, in Panipat, India, August 29, 2018.


Nevertheless, India's economy gathered pace in the April-June quarter, expanding 8.2 percent compared to 5.6 percent in the same period a year earlier. Economists said the number was coming off a low base as companies held off production in the year-ago period ahead of the implementation of the tax measure in July last year.

But while big firms have since shaken off the effects of the change and are set to gain from a uniform tax regime, small businesses across the country are still hurting.

A survey by the All India Trade Union Congress (AITUC) in July found that a fifth of India's 63 million small businesses – contributing 32 percent to the economy and employing 111 million people - faced a 20 percent fall in profits since the GST rollout, and had to sack hundreds of thousands of workers.

Adnan Abidi/Reuters

A man carries rugs on a rickshaw in an industrial area in Panipat, India, Aug. 24, 2018.


Readymade garments, gems and jewellery, leather, handicraft and basic machinery manufacturing are hit the most, industry bodies from across the country say.

According to estimates by the Centre for Monitoring Indian Economy, a Mumbai-based consultancy, nearly 5 million workers lost their jobs over the past year. But it was not clear how many were from small enterprises.

India's unemployment rate rose to 6.4 percent in August from 4.1 percent in July last year despite an additional 17 million people joining the workforce.

But it did not give data on how many people were laid off or from which industries.

India's labour ministry releases jobs data once every five years, last reporting unemployment at 5 percent in 2015/16 (April-March).

Adnan Abidi/Reuters

Ram Pratap who lost his job as a powerloom operator earlier this year, poses for a portrait with his wife and daughter inside his house in Panipat, India, Aug. 24, 2018.more +


More than 50 workers and factory owners Reuters spoke with in Panipat, about 90 km (55 miles) north of New Delhi, said over a third of the city's 10,000 weaving units had closed or curbed production.

Chand Multani, president of the Panipat Handloom Owners' Association, pointed to the tax headaches behind a bedsheet that costs barely $2 as an example.

The weaving of the sheet, its dyeing, ironing, embroidering and packaging are all done by separate businesses. Under the new system, each business has to pay GST at each stage of production which the businesses can claim back provided they have registered with tax authorities and have a GST number.

For a lot of small businessmen this is way too much work. "How can all these different operations comply with tax rules?" asked Multani, waving the sheet in the air.

Adnan Abidi/Reuters

A labourer works on a powerloom machine inside a weaving factory in Panipat, India, Aug. 29, 2018.


The GST replaced several federal and local taxes and tore down tariff barriers between India's 29 states, but critics say that has been to the benefit mainly of large, nationwide businesses.

For Panasonic Appliances, India's leading electric goods maker, GST has meant cutting costs by 4 to 5 percentage points, for example. India's consumer goods stock index has risen 26 percent in the past year, outpacing the broader Mumbai market.

"GST ... has improved the competitiveness of the manufacturing sector," Panasonic India CEO Manish Sharma said.

Modi, in an Independence Day speech on Aug 15, said the businesses that faced "teething difficulties in adopting GST had accepted the challenge and the country is now moving ahead."

Adnan Abidi/Reuters

Dust-covered winding machines are seen inside a weaving factory, which was shut earlier this year, in Panipat, India, Aug. 24, 2018.


But Rahul Gandhi, his main challenger in next year's election, has zeroed in on the job losses and shuttered businesses.

"This GST is a way of removing money from the pockets of the poor," he said last month.

"This is not GST, this is Gabbar Singh Tax," he said, referring to the villain in one of Indian cinema's most popular movies.

Modi's popularity fell below 50 percent in July from 53 percent in January, while Gandhi's rose to 27 percent, up from 22 percent, according to a survey by India Today magazine. Eighteen months ago, the score was 65 percent to 10.

To address grievances, the GST Council, which administers the tax measure, has approved more than 200 amendments since the law came into force.

Adnan Abidi/Reuters

Dilip Soni, third from left, who lost his job as a power loom operator earlier this year and now works as a packaging labour, sits with his family as they wait to have their lunch in Panipat, India, Aug. 29, 2018.more +


M.S. Mani, senior partner at Deloitte, said too many changes to rules and rates were damaging, particularly for small businesses.

The Federation of Indian Export Organisations estimates that nearly $2 billion of tax credits, mainly of small exporters, were yet to be refunded, mainly because of software glitches in the system and the difficulties in matching the hundreds of thousands of invoices.

Adnan Abidi/Reuters

A scrap dealer searches for useful material at a weaving factory, that was shut a year ago, in Panipat, India, Aug. 29, 2018.


About 230,000 small businesses have closed down due to compliance and cash flow problems, leading to large-scale job losses, said Amarjit Kaur, national secretary of the All India Trade Union Congress.

"GST has proved a death warrant for us," Ravinder Kashyap, 22, who lost his job as a powerloom operator earlier this year, said in a small rented room in Panipat that he shares with four friends.

He said his employer had lost sales orders because of the mess caused by the tax and so had let him off along with scores of others. "If this carries on for one or two years, we'll have to commit suicide."


A locked gate of a weaving factory, that was shut a year ago, is seen in Panipat, India, Aug. 29, 2018.

Thousands laid off as India pushes biggest tax reform

 

[Pundrick]

Thousands laid off as India pushes biggest tax reform

• By Reuter Sep 9, 2018, 6:09 PM ET

Adnan Abidi/Reuters

Tilak Raj Bathla's tiny weaving factory is one of the few still humming on a once busy road in the northern Indian city of Panipat, known as the country's "textile city."

Nearby, more than two dozen other workshops are locked from the outside, while dogs and cows roam through other abandoned factories. Scrap dealers enquire about idle powerlooms.

Adnan Abidi/Reuters

This aerial view shows an industrial area in Panipat, India, Aug. 29, 2018.


India launched the Goods and Services Tax (GST) just over a year ago, its biggest-ever tax reform, aiming to replace more than a dozen federal and state levies and unify the sprawling economy.

The move improved economic efficiency but critics say the complexities of the new regime have driven many small enterprises out of business and forced hundreds of thousands out of jobs.

For Prime Minister Narendra Modi, the drawbacks of the GST, especially the job losses, could prove costly in major state elections later this year and a general election in mid-2019.

Adnan Abidi/Reuters

Ram Pratap, who lost his job as a powerloom operator earlier this year, poses for a picture inside a weaving factory where he used to work, in Panipat, India, Aug. 24, 2018.more +


Bathla says his neighbors, most of them unschooled, could not comply with monthly online filings required under the GST regime. Some of his customers and suppliers could not afford to hire accountants to navigate a system which has been amended more than 200 times already, while others struggled to cope with delays in tax returns caused by glitches in the centralized software.

"I have a GST registration, but I can't work as my vendors and buyers are unable to comply with a complex tax structure," the 50-year-old said, adding his monthly sales had fallen to about 250,000 rupees ($3,511) from about 1 million rupees before the GST. Only 2 of his 10 powerlooms are currently being used.

The government has said it is simplifying the tax measure to make it accessible to everyone. Finance Ministry spokesman D.S. Malik said requests from small businesses have been considered "from time to time." But he declined to comment on job losses.

Adnan Abidi/Reuters

A man is seen behind a dust-covered window of a weaving factory, that was shut a year ago, in Panipat, India, August 29, 2018.


Nevertheless, India's economy gathered pace in the April-June quarter, expanding 8.2 percent compared to 5.6 percent in the same period a year earlier. Economists said the number was coming off a low base as companies held off production in the year-ago period ahead of the implementation of the tax measure in July last year.

But while big firms have since shaken off the effects of the change and are set to gain from a uniform tax regime, small businesses across the country are still hurting.

A survey by the All India Trade Union Congress (AITUC) in July found that a fifth of India's 63 million small businesses – contributing 32 percent to the economy and employing 111 million people - faced a 20 percent fall in profits since the GST rollout, and had to sack hundreds of thousands of workers.

Adnan Abidi/Reuters

A man carries rugs on a rickshaw in an industrial area in Panipat, India, Aug. 24, 2018.


Readymade garments, gems and jewellery, leather, handicraft and basic machinery manufacturing are hit the most, industry bodies from across the country say.

According to estimates by the Centre for Monitoring Indian Economy, a Mumbai-based consultancy, nearly 5 million workers lost their jobs over the past year. But it was not clear how many were from small enterprises.

India's unemployment rate rose to 6.4 percent in August from 4.1 percent in July last year despite an additional 17 million people joining the workforce.

But it did not give data on how many people were laid off or from which industries.

India's labour ministry releases jobs data once every five years, last reporting unemployment at 5 percent in 2015/16 (April-March).

Adnan Abidi/Reuters

Ram Pratap who lost his job as a powerloom operator earlier this year, poses for a portrait with his wife and daughter inside his house in Panipat, India, Aug. 24, 2018.more +


More than 50 workers and factory owners Reuters spoke with in Panipat, about 90 km (55 miles) north of New Delhi, said over a third of the city's 10,000 weaving units had closed or curbed production.

Chand Multani, president of the Panipat Handloom Owners' Association, pointed to the tax headaches behind a bedsheet that costs barely $2 as an example.

The weaving of the sheet, its dyeing, ironing, embroidering and packaging are all done by separate businesses. Under the new system, each business has to pay GST at each stage of production which the businesses can claim back provided they have registered with tax authorities and have a GST number.

For a lot of small businessmen this is way too much work. "How can all these different operations comply with tax rules?" asked Multani, waving the sheet in the air.

Adnan Abidi/Reuters

A labourer works on a powerloom machine inside a weaving factory in Panipat, India, Aug. 29, 2018.


The GST replaced several federal and local taxes and tore down tariff barriers between India's 29 states, but critics say that has been to the benefit mainly of large, nationwide businesses.

For Panasonic Appliances, India's leading electric goods maker, GST has meant cutting costs by 4 to 5 percentage points, for example. India's consumer goods stock index has risen 26 percent in the past year, outpacing the broader Mumbai market.

"GST ... has improved the competitiveness of the manufacturing sector," Panasonic India CEO Manish Sharma said.

Modi, in an Independence Day speech on Aug 15, said the businesses that faced "teething difficulties in adopting GST had accepted the challenge and the country is now moving ahead."

Adnan Abidi/Reuters

Dust-covered winding machines are seen inside a weaving factory, which was shut earlier this year, in Panipat, India, Aug. 24, 2018.


But Rahul Gandhi, his main challenger in next year's election, has zeroed in on the job losses and shuttered businesses.

"This GST is a way of removing money from the pockets of the poor," he said last month.

"This is not GST, this is Gabbar Singh Tax," he said, referring to the villain in one of Indian cinema's most popular movies.

Modi's popularity fell below 50 percent in July from 53 percent in January, while Gandhi's rose to 27 percent, up from 22 percent, according to a survey by India Today magazine. Eighteen months ago, the score was 65 percent to 10.

To address grievances, the GST Council, which administers the tax measure, has approved more than 200 amendments since the law came into force.

Adnan Abidi/Reuters

Dilip Soni, third from left, who lost his job as a power loom operator earlier this year and now works as a packaging labour, sits with his family as they wait to have their lunch in Panipat, India, Aug. 29, 2018.more +


M.S. Mani, senior partner at Deloitte, said too many changes to rules and rates were damaging, particularly for small businesses.

The Federation of Indian Export Organisations estimates that nearly $2 billion of tax credits, mainly of small exporters, were yet to be refunded, mainly because of software glitches in the system and the difficulties in matching the hundreds of thousands of invoices.

Adnan Abidi/Reuters

A scrap dealer searches for useful material at a weaving factory, that was shut a year ago, in Panipat, India, Aug. 29, 2018.


About 230,000 small businesses have closed down due to compliance and cash flow problems, leading to large-scale job losses, said Amarjit Kaur, national secretary of the All India Trade Union Congress.

"GST has proved a death warrant for us," Ravinder Kashyap, 22, who lost his job as a powerloom operator earlier this year, said in a small rented room in Panipat that he shares with four friends.

He said his employer had lost sales orders because of the mess caused by the tax and so had let him off along with scores of others. "If this carries on for one or two years, we'll have to commit suicide."


A locked gate of a weaving factory, that was shut a year ago, is seen in Panipat, India, Aug. 29, 2018.

Thousands laid off as India pushes biggest tax reform

I mostly don't have radical view on articles, but after reading this one very carefully for 2 times. I came to know how to write an article with dramatic Title & Photoop.

There is simply no content in that title, this website has just gathered some cheap actors for few bucks(obviously with sad faces) and has wrote the same repeating words over and over again. I mean article about GST would have been relevant a year ago or may be till April this month, but now everything is going smooth.

Why Reuter is allowing such article to be printed when it has no meaning and content at all ?

And this Adnan abidi has got some skills in taking pictures..

 

[RISING SUN]

India ranks third globally in terms of number of family-owned businesses
India, with a total of 111 companies and $839 billion total market capitalisation, continues to rank third globally in terms of number of family-owned companies, Credit Suisse said in its report released this week. It closely follows China (159 companies) and the US (121 companies).

The rating agency analysed over 1,000 family-owned, publicly-listed companies, and compared their 10-year performance to a control group of more than 7,000 non-family owned companies globally.

In the Non-Japan Asian region, China, India and Hong Kong dominate. Family businesses from these three territories have a combined market capitalisation of $2.85 trillion.

Better performers

Family-owned businesses proved to be better performers financially vis-à-vis non-family owned companies. In 2017 alone, Non-Japan-Asia-based family-owned companies generated 25.63 percent greater cash flow return on investment (CFROI) than their non-family owned counterparts, and delivered a 4.2 percent outperformance in annual average share price return since 2006, Credit Suisse said in its report.

Indian family-owned companies generated a 13.9 percent annual average share price return since 2006, compared to 6 percent by their non-family-owned peers.

In terms of sector contributions to total market capitalisation, Tech (18 percent), Consumer Discretionary (16 percent) and Materials (15 percent) make up the top three sectors.

Eugène Klerk, Head Analyst of Thematic Investments at Credit Suisse and the report’s lead author, said: This year we find family-owned businesses are continuing to outperform their peers in every region, every sector, whatever their size. We believe this is down to the longer-term outlook of family-owned businesses relying less on external funding and investing more in research and development.

“Our research on a global scale also suggests family-owned companies with special voting right structures perform relatively in line with those with ordinary shares, contrary to the fears expressed by many investors,” Klerk further added.

Asia outperforms other regions

Asia-based family-owned companies generated much higher returns than their global peers, the report said. Out of the top 50 most profitable companies globally, 24 were from Asia, with a total market capitalisation of $748 billion.

The list also included 12 Indian family-owned companies with a total market capitalisation of $192.2 billion, generating an average annual CFROI return of 22.7 percent to 43 percent over a three-year period.
India ranks third globally in terms of number of family-owned businesses

 

[advaidhya]

Demonetization was a complete failure. None of its objectives were achieved and we lost 1.5 % of our GDP in addition to the capital needed for new notes. Small unorganized businesses perished. There were other ways to achieve digitization.

What was the objective of demonetisation? Explain.... Who told you that these were objectives?

The reality is that the objectives are a secret. We can only guess

 

[Volcano]

What was the objective of demonetisation? Explain.... Who told you that these were objectives?

The reality is that the objectives are a secret. We can only guess

Cut the bullshit !! i listened you the Modi's "Mere deshavasiyom" speech and he was talking all about capturing black money and nothing else. There was no word about Digitization or anything else.

Once that proven to be a flop, BJP media cell started pulling up theories like "Objective was secret", it was for "Digitization" excuse.