Indian Economy-News & Updates

[Bombay Dude]

CM wants 'mega city' tag for Mumbai

Besieged with shortage of land and finances for city's makeover, Chavan wants Centre to act as saviour by giving infrastructural projects national status and relax CRZ norms

It appears that Chief Minister Prithviraj Chavan is now using marketing tactics to woo the Central government. It is apparent from the fact that he tried his best to sell the idea of declaring Mumbai as a 'mega city' to PM Dr Manmohan Singh, who was on a daylong state visit on Saturday.

According to Chavan, once the metropolis is declared as a mega city with the tag of India's financial centre, funds from Central government would be flowing in freely, helping the state to complete the pending projects and start new ones.

If sources in the Democratic Front (DF) government are to be believed, then lack of space and paucity of funds is taking a serious toll on infrastructural projects in Mumbai. Even the ongoing ones are bearing the brunt of cash crunch, including the Metro rail project: Versova-Ghatkopar, Charkop-Bandra- Mankhurd and Colaba-Bandra-Airport corridors. Hence, PM's visit was a precious opportunity for the beleaguered DF government, to request the Centre to allow State government to reclaim land for its proposed coastal road project and seek national project status for city's five important infrastructural projects.

Before visiting the PM, Chavan had a brainstorming session with secretaries of various departments on Friday.

According to sources, the mega city tag was considered as the most viable option of seeking funds from the Central government. So far, based on certain criteria, only New Delhi has been tagged as a mega city.

CM tried his best to sell the idea of coastal roads as the best cost effective option, and to buttress his claim, he put forth before the PM examples of countries such as South Korea, Netherlands, Singapore, Hong Kong and Japan. To materialise the coastal road dream, CM also pointed out that relaxation of the CRZ norms by the Centre was a must. At present, only 22 cities worldwide have met the criteria to be declared as mega cities.

One of the criteria is population over a crore.

The CM said he was sceptical about the Metro III project, connecting Colaba to the airport, due to fund shortage. If the State sticks to the coastal road plan, it will require Rs 6,000 crore with 7 km portion of reclaimed land. Without reclamation, the coastal road will be only 22 km long. With the status of mega city, the state is hoping to secure over Rs 50,000 crore from the Centre.

Most importantly, CM's demand comes soon after his meeting with Congress Chief Sonia Gandhi last Thursday and a 45-minute long meeting with PM a few days ago.

Criteria to be a mega city
>> Less amount of cultivable land
>> Population over one crore
>> City's employment rate should be extremely high

Tokyo
The biggest mega city

The projects
Five projects that the state wants to be declared as national projects:

1 MTHL connecting Sevri-Nhava Seva
-- Rs 10,000 crore

2 Navi Mumbai Airport
-- Rs 14,000 crore

3 Alibag Virar Corridor
-- Rs 10,000 crore

4 Coastal Road
-- Rs 6,000 crore

5 Mumbai Metro
-- Rs 18,000 crore

CM wants 'mega city' tag for Mumbai


I don't know Why the CM has to go and beg at the Centre for Funds when We pay 40%of the Country's Tax and What we get!

 

[Bombay Dude]

Kerala govt floats firm for Rs 77k cr high-speed rail

KOCHI: The ambitious high speed rail network of the state government started chugging along with the formation of a new public limited company, the Kerala High Speed Rail Corporation Ltd, for the purpose. The 630-km rail network, estimated to cost Rs 77,000 crore, will connect the state capital with Mangalore in neighbouring Karnataka in the north.

The Kerala State Industrial Development Corporation has been appointed as the nodal agency to develop the project and the Delhi Metro Rail Corporation was assigned with the pre-feasibility study. The new Company was formed on the basis of the pre-feasibility report submitted by DMRC, according to an official release. Further technical studies and economic evaluation are being planned, it said. The proposed high speed corridor will have two parallel tracks in the standard gauge system similar to the Delhi Metro Rail.

The high speed corridor will have an alignment independent of the existing alignment of the Railways in the state. The project will be implemented as joint venture between the state government and a suitable private partner to be selected later.

T Balakrishnan, additional chief secretary (industry and commerce), Alkesh Kumar Sharma, managing director KSIDC and T P Thomas Kutty, executive director, KSIDC are the first directors of the new Company. The company will undertake detailed feasibility report for the project and identify suitable rail technology for implementing the high speed corridor. Steps have also been initiated for release of a notification for the acquisition of the land needed for implementing the project. The width of the land required to be acquired for the high speed rail corridor is 13 metres. The high speed corridor will use a green field route to keep the rehabilitation task to the minimum, the release said.

Kerala govt floats firm for Rs 77k cr high-speed rail - Times Of India

 

[jha]

This Railway Ministry wont do a thing for High Speed Rail...States have to do it themselves and Keep the ministry out of it..
Just compare Metros from Delhi and Kolkata...Huge Privatization is needed in Railways..

 

[Bombay Dude]

This Railway Ministry wont do a thing for High Speed Rail...States have to do it themselves and Keep the ministry out of it..
Just compare Metros from Delhi and Kolkata...Huge Privatization is needed in Railways..

The Dude in your DP and the Dunac Didi and Delhi!

The Entire Railways is concentrated in Delhi.

 

[SpArK]

news.outlookindia.com | India, Switzerland Sign MoU on Financial Dialogue

India today signed an MoU on financial dialogue with Switzerland that will pave the way for exchange of views between the two sides on financial and macroeconomic issues.

The agreement comes at a time when the issue of black money stashed in Swiss banks has become a matter of major political debate back home in India.

The agreement was signed during President Pratibha Patil's visit to Switzerland during which she has held bilateral talks with her Swiss counterpart Micheline Calmi-Rey on a number of issues including economic cooperation.

 

[tamygu]

UPA policies are leading to a scorched earth syndrome


If there is a single theme running through this year’s faltering economy, it is this: the business of trying to correct all wrongs has got us into an economic tailspin, with growth tapering off and inflation far from doing so.

Taken together, the UPA’s social spending thrust (and benign neglect of economic reforms) amount to a scorched-earth policy.

Officially, it is all about inclusive growth and correcting historical wrongs to the disadvantaged. But the net effect of these policies will be to leave a fiscal and economic mess that no successor government will be able to handle easily. If Rahul Gandhi actually wins the elections in 2014, he will have a time-bomb on his hands.

The only thing that’s gone right for India this year is the monsoon. The Indian Meteorological Department predicted with considerable aplomb in June that the monsoon would be sub-normal. Thankfully, the prediction went wrong. The IMD now has the unenviable record of seven wrong forecasts out of 10.

But while the Met got egg on its face, our farmers got bountiful precipitation. We have not only had exceedingly good rainfall equal to 101 percent of the long period average, but also good spatial spreads. So, a bumper kharif is likely.

The UPA has run out of ideas and is pursuing policies with the single-objective of winning the next election.Reuters
But every other signal is turning from amber to red, thanks to mistimed and often misdirected efforts to correct wrongs.

The fiscal wrongs, created by excessive spending, excess borrowing, and failure to rein in oil subsidies, has had to be righted by a tougher-than-needed monetary policy of rising interest rates. The economy has already hit a speedbreaker. The GDP growth target has been brought down from 9 percent around budget-time to less than 8 percent now. The year will probably end well below 8 percent. Inflation is close to double-digits (9.78 percent), and the Index of Industrial Production was down to 3.3 percent in July.

To correct the fiscal wrong, Finance Minister Pranab Mukherjee is stamping on spending – but largely in the capital outlays area – which is making things worse. When government fails to spend on things like infrastructure, the slowdown can only accelerate as business incomes are crimped. Mukherjee should cut wasteful expenditure, not infrastructure and capital spending.

To correct the current account deficit – the gap between the country’s external earnings and expenses – the Reserve Bank is letting the rupee go weak in the knees. (But it is also true that it does not have enough ammo to just sell dollars and allow the rupee to rise.) This policy will have the side-effect of making imported inflation worse. Even when crude prices fall abroad, they don’t fall at home.

As for social policies, the less said the better. They are all inflationary and business-unfriendly.

The wrongs done to tribals in the past are now sought to be remedied by the repeal of the Mines and Minerals (Development and Regulation) Act and the compulsory sharing of 26 percent of profits with tribals and others displaced by new mines. The mining companies expect to take a hit of Rs 15,000 crore due to this.

The upshot: coal, cement, steel and aluminium prices will be raised when the Mines Bill is legislated in the winter session of parliament. This means power and infrastructure costs will also rise. This effectively means widespread inflation, as costlier power, oil and infrastructure mean every other cost has to rise. So forget about taming inflation.

The draft Land Acquisition Bill – again intended to correct past wrongs to farmers who were expropriated in the name of promoting public projects – will push up the cost of real estate, manufacturing, and just about everything once again. The Bill seeks to give sellers twice the market price for land in urban areas and four times the market price in rural areas. Since land is the main cost in realty projects, middle class home buyers can kiss goodbye to dreams of owning a house even in distant suburbs.

The Food Security Bill, primarily intended to ensure that no one goes hungry in India, by making rice available at Rs 3 and wheat at Rs 2 a kg, will cost over Rs 1,00,000 crore in food subsidies – thus busting the budget and pressuring inflation. To procure so much food for the scheme, minimum support prices will keep rising faster than inflation, and the free market for grains will be starved of supplies. Can this lead to anything but even more inflation?

If every single effort to correct wrongs is leading to higher costs, how is the government going to put the economy back on rails?

The only answer to this puzzle is the possibility that the UPA has run out of ideas and is pursuing policies with the single-objective of winning the next election.

However, these policies will surely bankrupt the government by 2014. So is it planning a scorched earth policy from which no successor government can hope to escape? Or does it anyway expect to lose the next election, and so doesn’t care?



http://www.firstpost.com/politics/upa-policies-are-leading-to-a-scorched-earth-syndrome-98261.html

 

[tamygu]

India's factory PMI growth falls to 30-month low


India’s manufacturing growth nearly stalled in September, hitting its weakest spot since March 2009 (30-month low) on slowing output and orders growth following a series of interest rate hikes.
The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 from 52.6, very close to the 50 mark which divides growth and contraction.
The output index plunged by its biggest amount in one month since November 2008, to 51.1 from 56.0.
The data suggest that September was the worst month for India's factories since March 2009 — when it shrank, just as world stock markets carved their lowest point since the financial crisis began.
With developed economies perilously close to a second recession, emerging markets, which have provided the motor for global growth in recent years, are also facing the crunch.
' Growth momentum in India's manufacturing sector eased further in September. This was driven by weaker orders, with export orders still contracting due to the weaker global economic conditions,' as per reports.
India's factory sector has gone from robust growth to near stall speed in just five months and the survey also suggested more weakness lies ahead.
The new orders index, a reliable gauge of future output, fell for the sixth straight month, while export orders contracted for a third month thanks to weak global demand.
Inflation pressures were slightly less intense than in August, the survey showed, but still remain.
'While the persistent inflation pressures support RBI's tightening bias, the slowdown in manufacturing growth suggests that the end to the tightening cycle is at least now in sight,' reports stated.
The Reserve Bank of India ( RBI) is faced with near double-digit inflation which it has tried to control through a dozen interest rate hikes over the past 18 months.
Indian inflation climbed to 9.78 percent in August from a year ago, and has hovered over 9 percent for many months now.
A similar PMI survey released on Friday showed manufacturing in Asian emerging peer China contracting for a third month.
The Japan Manufacturing PMI on Friday showed contraction there for the first time in five months, more evidence that the bounce following the devastating earthquake in March is fading.




http://www.sharekhan.com/stock-mark...c-924b-bb2f2aa000de/MustKnowNews/161/News.htm

 

[tamygu]

Can India and America Up Their Investment Game?

My latest column is out in India’s financial daily, the Business Standard. I used this month’s column to talk a bit about structural impediments hindering U.S. investment in India. These challenges will grow if, as many economists suspect, India’s growth continues to slow from its restored post-crisis clip of 8 to 9 percent a year to something more on the order of 7 to 7.5 percent. And in that context, it’s worth noting that Indian stocks have just completed their worst quarter since 2008. And of course food price inflation remains as stubborn as ever.

Here’s my argument, which reflects in part a perspective from my new perch in Chicago rather than Washington, DC...

http://blogs.cfr.org/asia/2011/10/02/can-india-and-america-up-their-investment-game/

 

[tamygu]

Mining companies to take a hit of Rs 15,000 cr

Mining companies have warned of a price spiral in commodities once the new mining law provisions are in place. The industry sees the government decision of mandatory profit and royalty sharing impacting it by an estimated Rs 15,000 crore every year. This would include a Rs 12,200-crore hit on non-coal mining companies and Rs 2,800 crore on coal miners.

Industry also raised doubts over implementation of the proposal arguing that the provisions on the lack clarity. Rana Som, chairman of NMDC Ltd, India’s largest iron ore miner, says there is a need to review and examine the issues raised by the industry on royalty, profit-sharing and the methodology of providing assistance to project affected persons before the Bill finally becomes an Act.

Mining companies to take a hit of Rs 15,000 cr

 

[tamygu]

Business Line : Industry & Economy News : August infrastructure growth slumps to 3.5%

 

[Gandhi G in da house]

Trinidad and Tobago seeks India's help in broadband service - Tech News - IBNLive

Port-of-Spain: Trinidad and Tobago is seeking assistance from India to boost broadband services in the country. Public Administration Minister Carolyn Seepresad-Bachan said: "A critical element for the building of a knowledge-based economy is widespread access to affordable high speed broadband services," She was speaking at a function to mark the ITEC (Indian Technical Economic Co-operation) Day over the weekend.
ITEC, launched in 1964, is the flagship programme of India's technical and economic cooperation that addresses the infrastructure and skill development needs of developing countries. Its training programmes have contributed to capacity building and human resource development in many parts of the world. "The implementation of an enhanced broadband strategy will involve a public-private partnership and deployment of incentives aimed at encouraging foreign and domestic investment," she said at the event held at the residence of the Indian High Commissioner Malay Mishra. "India and the ITEC programme are very important to us as a people and as an emerging economy," she noted.
Mishra said the Indian government will consider any additional requests for more seats in ITEC. He noted that since the programme took root in 1964 it has been making a tremendous progress. "ITEC has now become a world classroom as it attempts to enhance human development through a network of human resources programmes. Programmes can be customized to fit the needs of any country, Mishra said. Seepresad-Bachan referred to India's initiative to empower 250,000 panchayats (village councils) in rural India by "democratising information for transparency, accountability, collaborations and decentralized decision-making".
ITEC, the flagship programme of India's technical and economic cooperation addresses needs of developing nations.
"Panchayats perform a very important function as they act as the foundation nodes of information collection and dissemination" she told the gathering of ITEC graduates and officials. "It is the view that broadband will enable wider public access to government information, which is a prerequisite of good governance," she said. Over 40 per cent of the population of Trinidad and Tobago are of Indian origin, whose forefathers had come to this Caribbean nation between 1845 and 1917 to work on sugar plantations. Besides the Trinidad and Tobago minister and the Indian high commissioner, other senior officials also attended.

 

[tamygu]

India’s abject return to talk of Hindu growth rates

India has quickly come to regret Manmohan Singh’s second term as prime minister. The country’s most respected bureaucrat was handed a powerful mandate by his country’s voters two years ago and had a magnificent opportunity to modernise the economy. How distant that dream now seems.

Far from being in pole position among emerging markets, as it deserves, India trails in terms of attracting foreign capital and beating inflation. Some economists and industrialists fear India’s economy could shrink back towards what was derisively called the “Hindu rate of growth” from initial projections of 9 to 7 per cent this year. There is even speculation that the Singh government may not last the distance until elections in 2014 – though those who predict this may not appreciate that India’s electorate has nowhere else to go.

Yet with its young population and fast rising prices India urgently needs new direction – and Mr Singh urgently needs to salvage what until a year ago could have been seen as a near Nehruvian legacy. He has tried to wriggle from the mire with two limp cabinet reshuffles. Now he needs to execute his strongest suit, administrative reform, to restore a sense of principled purpose.

The four critical reforms are all potentially near at hand – but often appear elusive. The first is the overhaul of the arcane tax system, repeatedly delayed by opposition from powerful states. Direct sales tax and goods and services tax reform would iron out disparities between India’s 28 states, improve compliance and end a Byzantine system in which taxes are levied on taxes. Leading industrialists such as Adi Godrej, chairman of the eponymous Mumbai-based consumer goods empire, identify this as the single greatest move Mr Singh can make to accelerate economic growth.

The second is new land reform laws, which are crucial to unlocking India’s much-needed industrialisation and create jobs.

Third is the mines and mineral development bill. This sector has committed heinous, but largely unobserved, wrongs to the environment and rural communities. India has plenty of natural resources to feed its factories but either they are illegally exploited or untapped.

Finally, Mr Singh must cleanse the state’s procurement processes. He can lean on internet technology to run honest tenders and secure financial transfers.

There are a string of other reforms, including raising the foreign investment caps in the insurance sector, opening multi-brand retailing to foreign direct investment and boosting farm output. But Mr Singh’s chief aide, Montek Singh Ahluwalia, warns that approaching India’s parliamentary democracy with a shopping list of reforms is an exercise in futility.

Reforms, like the clipping of subsidies, take place at the margins. Or they come in response to calamity, most notably in 1991 when India’s balance of payments problems threatened default. Today’s crisis is not yet showing up in the current account. Many Indians sense their country’s economy might never fulfil its potential, especially if Mr Singh’s leadership continues to falter and the political system jams.

 

[Gandhi G in da house]

Economy to grow by 8% in current fiscal: PMEAC - Indian Express

With persistently high inflation, slowing industrial expansion and global uncertainties posing a challenge to economic growth, the Prime Minister’s Economic Advisory Council (PMEAC) today lowered its forecast for GDP growth to around 8 per cent in 2011-12, from its earlier estimate of 8.2 per cent.

“Growth rate of the economy can be close to 8 per cent,” C Rangarajan, chairman, PMEAC said while speaking at a golden jubilee function of the Indian Economic Service officers. He also pitched for reducing the country’s reliance on capital flows as a means to bridge the current account deficit (CAD), besides ensuring that the CAD does not exceed 2.5 per cent of GDP. He also cautioned on the perils of growing beyond 9 per cent as it would trigger inflationary pressures. “If we continue to grow in the range of 8-9 per cent, as projected in the 12 th Five Year Plan, then we will have a current account of deficit of 2.5per cent of the GDP. I see, at this moment, a problem in financing the current account deficit of that order,” he said. The CAD is expected to exceed 2.5 per cent by the end of this fiscal, he said.

 

[lemurian]

For citizens abroad, booming India beckons

Nirmala Ganapathy
The Straits Times
Publication Date : 02-07-2011

India's booming economy is increasingly catching the attention of Indians who once migrated abroad for higher pay and a better quality of life.

So much so that job search portal Monster.com this month launched Return2home, a site for overseas Indians looking for jobs in India.

Within 10 days, 700 job-seekers applied for the 277 job listings put up by 32 companies, including Tata Consultancy Services, Indian information technology major Infotech and engineering firm ABB.

"We have been noticing this trend (of returning Indians) in the last couple of years," said Sanjay Modi, managing director for the portal's India, Middle East and South-east Asia operations.

"It is a combination of turmoil in the Western economies with India showing consistent growth."

Last year, the number of Indians - mainly those working in the Gulf countries and the United States - who applied on the website for jobs in the IT, banking and finance, construction, and oil and gas sectors rose by 65 per cent.

India's economic growth of 8 per cent, rising salaries and an infrastructure that is slowly improving are making it attractive for Indians abroad who are uneasy with the uncertain economic climate in the West and the Gulf countries.

Sangita Srinivasa, her husband and their three children moved to Bangalore almost two years ago after 20 years in the US.

"Ultimately, it is about opportunities. When you compare the (economic) climates, I think it makes a lot of sense to be here rather than there," she said.

Sangita, 41, who stopped working to raise her children, found no problem in picking up a job as a content writer while her husband works in the financial sector.

Neighbours and friends in similar situations helped them and their children, aged between five and 14, adjust to the change of living in a chaotic Indian metro.

A recent survey among Indian IT professionals in the US found that half of those surveyed had plans to return soon. Many want to rejoin their families, others seek better opportunities, and a small number plan the move for their children's education.

Last year, around 60,000 Indians returned to India, but the number was still a trickle compared with the 641,000 Indians who emigrated to different countries in the same year.

"It works both ways. Indians also go on global assignments... and you have fairly good companies giving good salaries (in India)," said marketing manager Ravi Perti of Olive Telecommunications. The Indian company manufactures and designs mobile phones and computers, and has hired a handful of Indians from outside the country.

Though inflation and the rising cost of living remain a concern in India, the easy availability of domestic help and chauffeurs, being close to ageing parents and a return to their roots help ease the transition for many.

But chaos of a different kind awaits those who are used to a more streamlined system.

For blogger Tony John, who returned to India six weeks ago after 12 years in the US, the biggest hassle was getting a broadband connection in Bangalore. He got one only after numerous calls, complaints and e-mail messages sent to the company.

"We are quickly learning how to live like an Indian," said John, who runs a number of websites. "I was stopped by the police for violating one-way traffic. I drove through that road because I did not notice the one-way sign and I was simply following other cars. I told the officer I am new here and didn't know it is one-way. He simply said 'Give 100 rupees (US$2.2) and go'."

So far, though, he has no regrets. "We do not think about going back," he said.


Welcome back Mrs. Madhuri Dixit

 

[kavish]

India to Double Its GDP From $1 Trillion in 2006 to $2 Trillion This Year. $4 Trillion by 2015?

With the Union Budget projecting gross domestic product (GDP) to be R89,80,860 crore in 2011-12, the size of India's economy is now poised to touch $2 trillion in the year.


Part of New Delhi skyline, shown here, with greenery around.

If one assumes the current exchange rate of R45 per US dollar to hold in 2011-12, the size of the Indian economy would be $1,996 billion at dollar rates.

But the Budget estimate, which assumes a 14% growth in GDP at market prices, is likely to be an underestimate.

If one assumes a 9% GDP growth, as estimated last month by the C Rangarajan-led Prime Minister's Economic Advisory Council (PMEAC) and earlier by the World Bank, and assume an inflation rate of around 7%, GDP at market prices is more likely to grow at 16%, which would ensure that the size of India's GDP would be R91,38,419 crore or $2,031 billion in 2011-12.

In fact, the PMEAC, in its Review of the Economy done as early as February 2010, had estimated the size of India's GDP to touch $1,999 billion in 2011-12.

But what is really impressive is the pace at which the size of the economy has doubled from $1 trillion to $2 trillion. India's GDP touched the first trillion in dollar terms in 2007-08, when the size of the economy grew from $949 billion in 2006-07 to $1,241 billion in 2007-08.

And now, in just four years, the economy is projected to move up and touch $2 trillion.

And the bigger GDP will increase the per-capita wealth. According to PMEAC estimates, per capita GDP when the economy touched the first trillion-dollar mark was $1,090 or R43,817.

And now, when the GDP touches the second trillion in 2011-12, the per capita GDP would be around $1,662 or R74,780. So the big question is when the size of the economy will double yet again and touch $4 trillion mark.

But what is really impressive is the pace at which the size of the economy has doubled from $1 trillion to $2 trillion. India's GDP touched the first trillion in dollar terms in 2007-08, when the size of the economy grew from $949 billion in 2006-07 to $1,241 billion in 2007-08.

And now, in just four years, the economy is projected to move up and touch $2 trillion.

And the bigger GDP will increase the per-capita wealth. According to PMEAC estimates, per capita GDP when the economy touched the first trillion-dollar mark was $1,090 or R43,817. And now, when the GDP touches the second trillion in 2011-12, the per capita GDP would be around $1,662 or R74,780.

So the big question is when the size of the economy will double yet again and touch $4 trillion mark. Will we repeat the feat in another four years and hit the the $4 trillion mark in 2015-16 or would we reach there even earlier?

India to Double Its GDP From $1 Trillion in 2006 to $2 Trillion This Year. $4 Trillion by 2015? - BIZ INDIA