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Great to see the upswing in FDI to India...a little surprised at how much little Netherlands receives...what do they do with it? Bigger dykes? Windmills ? Cheese? Clogs?
Perhaps this is helpfull:Maybe @Penguin can shed some light on Netherland's in this aspect (huge economic presence in trade and investment). They have historically always been immense traders and bankers so this has just continued into the present day.
http://economictimes.indiatimes.com...tput-fm-arun-jaitley/articleshow/50774663.cms
India may clock 8% growth even this fiscal if rural demand rises along with factory output: FM Arun Jaitley
KOLKATA: Finance Minister Arun Jaitley on Friday said that India could achieve 8% growth even this fiscal if rural demand can be raised along with factory output even as he criticised the Opposition for stalling the reform agenda of the government.
"7-7.5% growth is below our potential... 8% growth is plausible even this year," Jaitley said in Kolkata. "We have to maintain our momentum of growth. Those who play games in Parliament need to understand that they are stalling growth," he said in a veiled attack on Congress.
The Narendra Modi government has cleared hurdles for freeer entry of foreign capital in India while the initiatives like Make in India aims at turning the country into a global manufacturing hub to generate jobs and drive growth. But the state of political affairs has slowed down implementation of GST and land reform.
"The world refers India as the bright spot.. But within the country there are legitimate concerns," he said. The country is facing lower rural demand weighed by three years of bad monsoon, while the manufacturing output is yet to pick up fully while the overstressed private sector is holding back investment.
If the trend related to these sectors can be reversed a bit, the FM said that economy can look forward to higher growth than the projected 7.4-7.5% in FY16.
The finance minister's assertion on growth may assure many, who have turned cautious ever since China started slowing down, impacting the global growth prospects. International Monetary Fund has revised the global growth forecast to 3.4% from 3.6%.
"What happens in China does not affect the supply chain in India and therefore, we are less impacted than other economies," the FM said in the first Suresh Neotia Memorial lecture organised by CII and Suresh Neotia Centre of Excellence for Leadership.
Jaitley said India has been driven on the strengths of increased public spending, increased foreign investment and higher urban demand.
The government has raised spending on infrastructure, rural roads and irrigation and these areas could continue to attract large budgetary support in the coming budget. "Investment in these sectors gives quick return," the FM said.
The FM said the fall in crude has helped the Narendra Modi government increase spending on social infrastructure. which in turn, contributes to growth. But he lamented the state of disruptive politics in India.
"The world's largest democracy cant function unless it has high quality of politics. Evolution of Indian Politics needs to take place," he said, referring to the bane of castebased politics and the prevalent system of political dynasty.
Indian Q4 (Q3 by fiscal) growth data will be released on February 8th. There will probably be a downward revision of a few base % points from the current 7.5% prediction as more better quality CSO base data from the 2012/13 reference series comes online according to most economists I have read/watched.
What is more important is not sheer growth data and numbers....but actual employment figures in the conceptually good programs (skilling, MSME clusters, MUDRA) through their actual implementation long term. More sustainable and better quality growth will arise from that long term.
Apparently there are only about 500,000 good "formal" jobs being generated every year for an intake of 8 million of the labour force. That % needs to drastically increase, THAT will be the single most important result for Modi administration in this term of govt....not what a SNA 2008 method of GDP growth figure states.
I am very happy that RBI governor Rajan has mentioned this plenty of times to Modi govt (employment issue) already....it puts well directed pressure on the govt to do all it can to ensure this long term problem is addressed.
Thus achieving the balance between short term stabilizing of the ship and setting it in the right direction long term will be the most important thing for this year.
@Dungeness @dadeechi
That is a very big "IF" . It is just like saying "If you have money to buy food, I promise you won't be hungry". I am not sure what is the point of this FM, who keeps surpassing his predictions with lots of "ifs and buts". He is more like a big mouth politician than a realistic economist.
I would put my money on RBI chief.
By the way, India has just revised down the GDP growth numbers for 2013-2014, and 2014-2015.
80-90% of Indian employment are in "informal" sectors, meaning "day laborer", so I am not sure what the 500 K "formal" jobs means to hundreds of million Indians in working age. In compression, China created 13 million new jobs, which can be categorized as "formal jobs" in India's terms. http://www.afr.com/news/world/china...015-in-effort-to-calm-markets-20160112-gm41nk
A lot better than previous FMs. Besides an FM is just part of a team. Its those team members that mean a lot more than the FM in making and implementing actionable policies, who is just the media figurehead like you mention....which is also btw a very important role. After all he is strongly responsible for conducting many negotiations and talks with major foreign investors. It is through a lot of what he has done that FDI has increased by nearly 30 billion USD in one year.
If you choose to see only one side of him, that is on you. But don't expect such views to be allowed to go unchallenged. Have you read any of what FM Jaitley has done regarding tax and bankruptcy reform? His lawyer background was instrumental in convincing both foreign and local private conglomerates that the bad precedent set by the previous administration regarding things such as retrospective taxation is a thing of the past....and he is thorough in explaining the details why. This is just one example.
I am not biggest fan of other things he has done/not done....but overall he is a solid performer relatively speaking. Scores around 5 out of 10 from me...maybe 6.
Same RBI chief that said he never doubted the new GDP numbers after you rushed to imply he did in the other thread.
But yes he is a pragmatic chap, there is mutual respect between the Finance Ministry and him in many areas. In fact one interview with him and the main economic adviser of the govt (they both worked together on various papers and international projects before) was quite revealing as to just how close and integrated many of the policy decisions and conceptualisations are made between the two sides.
Yah this is completely the issue with India for sure. But what is promising is that job creation in formal sector doubled from the year previous. It goes to show just how even worse it was in the last administration....where it had stagnated at around 200k per annum (I kid you not) and was even dropping lower than that some years. They focused on giving subsidies and govt welfare job programs to mitigate this policy disaster rather than trying to fix it from the source. It will take a few terms of the kind of govt we have now to reverse this completely and massively increase jobs. There is not one major difference between the RBI governor and govt regarding this (there was a huge difference before if you look at what he said about the previous administration soon after he was appointed - though it was not covered by the media).
The ITI's that have sprung up in the last year or so soon also project to skill and train the labour force to the tune of multiple millions a year by just a couple years from now or so....so that job creation will be at these levels too and then more and more. It has always been an issue of labour supply....there is good demand from companies for skilled labour...they have always complained they cannot expand well because there is shortage of such employable talent to be had.
The point is, as the FM, doesn't his view represent the consensus his team, on that matter, represent Indian government policy on economics? Or he is just saying it on personal capacity or just to entertain media? If I were a potential investor eyeing a foreign market, I would feel very uneasy to hear lots of "ifs or buts" from the head of financial department of that country. He has thrown out a lot of GDP growth predictions since he took his current FM position.
I noticed that too yesterday. I don't know how he can get away with that. Shouldn't a government official be held accountable for what he said? He would be ridiculed by the whole country if the head of China's Reserve Bank flip-flop like he did.
That is nice to know that India is making progress in "formal" job creation. Hundred of maters and phDs fighting over a cleaner position in government maybe an extreme case, but India has so many new university graduates every year, it needs a lot more serious jobs.
Just curious, people who work in a company less than 100 employees, are considered in formal sector or informal sector? I have always wondering how you calculate the unemployment rate, if 80-90% work force are in "informal sectors".