Indian Economy-News & Updates

[Humanist]

Pranab's Budget worthy of our praise - Corporate America

Washington: Noting that the Budget presented by Finance Minister Pranab Mukherjee sets forth clear parameters to sustain and spur greater investment in India's infrastructure sector, Corporate America on Monday said the confidence-building measures bode well for the country.

"The sheer confidence this budget represents is worthy of our praise," said Ron Somers, the president of the US-India Business Council (USIBC), adding that the proposals will give greater impetus to invest in the 'India opportunity'.

American industry also praised the liberalisation of foreign institutional investment (FII) in equity mutual funds.

"The opening of the mutual fund industry to FIIs is a step that will serve to mobilise significant amounts of capital and expertise in India's financial markets," Somers said.

"This change, along with the raised FII investment limits in some infrastructure bonds and strides leading to a predictable, streamlined investment tax regime, will ultimately bolster India''s efforts to build-out the country''s infrastructure. US industry stands ready to be full participants in this activity," he said.

US firms read as a favorable indicator the government of India's stated goal to eliminate bottlenecks in the country's food distribution system, which hints toward opening up the country''s multi-brand retail sector.

India is presently battling a steep food price-rise and inflation. These twin challenges can be addressed by improving efficiencies in the farm-to-market supply chain, which will be benefited by inviting into this sector both technology and investment, the USIBC said in a statement.

"The beneficiaries of modern retail, resulting from improved access to food distribution outlets, will be farmers," Somers said.

The Union Finance Minister pointed out "the massive inefficiencies in India's agricultural supply chains" in his Budget, remarking that "high cost hurts rural farmers most".

"India's next evergreen revolution, spawned by the greater efficiencies in India''s farm-to-market supply chain that will be brought to bear by the entry of organised players in this sector, is a 'game-changer' that will benefit the millions of Indians who make their living in the rural agricultural sector," Somers said.

In addition to the 'hard' and 'soft' financial infrastructure attributes of the Budget, combined with the prospect of opening up India''s multi-brand retail sector, US industry hailed India's signal to enhance spending in the defence and security sectors.

India has embarked on a $46 billion upgrade of its military over the next year, it said.

The USIBC said American firms are eager to partner with Indian counterparts to bring the 'best technology' to India's armed forces and security establishment.

 

[SpArK]

India, Russia Exploring $220 million JV for Solar PV Cells​

While India has a number of solar PV module manufacturers, like Moser Baer, Tata BP Solar and IndoSolar, there are almost no producers of silicon ingots. Indian manufacturers import silicon ingots and then process them to manufacture solar modules. IndoSolar recently signed agreement $ 600 million with China's GCL-Poly Energy Holdings to procure 209 million high-grade silicon wafers totaling 815 MW for the next four years.

Demand for solar energy equipment in India is likely to increase rapidly over the next decade. India has already launched the first phase of its ambitious National Solar Mission which aims at installing 20,000 MW of solar power generation capacity by 2022. During the first phase, which ends in 2013, installation of 500 MW capacity each of solar PV and solar thermal has been planned.

The Indian government has mandated state governments to source a set percentage of their power consumption from renewable energy sources. While the state governments have the power to decide that percentage, they must increase the share of renewable energy-based power by one percent every year till 2015. Some states with ample solar energy resources have set solar-specific targets as well.

The government has also launched a program to install solar panels on cellphone towers, advertising hoardings across the country which also represents significant solar energy capacity.

According to regulations, project developers participating in the National Solar Mission are mandated to use solar equipment and solar modules manufactured in India. Before the government unveiled solar energy policies, it was a normal practice for project developers to import solar modules. In order to promote domestic solar module sector, the government unveiled special incentives for module manufacturers. Several companies availed these incentives and set up massive production capacities anticipating rapid growth. But they still have to import silicon ingots from abroad.

The possible joint venture between Rusnano and the Indian government, could eventually help India set up indigenous facilities to produce high-grade silicon ingots which could reduce the overall cost of solar energy technologies helping them compete with conventional energy sources.

India, Russia Exploring $220 million JV for Solar PV Cells

 

[Archie]

I have a question

What is the expected GDP of the Indian Economy for the yr 2011-12

Coz i have read many reports both on this forum and on the internet , which states that Indian Defence budget at 36.5 Billion USD is actually only 1.8 % of GDP
and as per my calculation that translate to GDP of 2 Trillion USD in 2011-12 , which dont think is possible coz the most optimistic estimate for Indian GDP for 2010-11 is at 1.52 Trillion USD

 

[ares]

I have a question

What is the expected GDP of the Indian Economy for the yr 2011-12

Coz i have read many reports both on this forum and on the internet , which states that Indian Defence budget at 36.5 Billion USD is actually only 1.8 % of GDP
and as per my calculation that translate to GDP of 2 Trillion USD in 2011-12 , which dont think is possible coz the most optimistic estimate for Indian GDP for 2010-11 is at 1.52 Trillion USD

Indian govt expects 9.3 % growth in this finacial yr(forecast for 2010 was 8.5%..they achieved 8.6%)
Now rest all depends on inflation how much inflation.. Goldman sachs predicts inflation to be around 6.7% in this FY.

So real GDP growth would be 16%.
GDP Nominal as of now= $1430 Billion

Predicted GDP at the end of this FY = $1658.8 Billion

This figures will vary if Rs to $ exchange rate varies.

 

[Maritimer]

India's GDP at current market prices according to Central Statistics Office
FY 2009-10: INR 65.50 trillion (~$1430 billion)
FY 2010-11: INR 78.77 trillion (~$1730 billion) that is growth of nearly 20% (9.7% real growth +10.6% inflation)

Press release dated 7 Feb 2011

The budget announced on 28 February 2011 gives estimate of Fiscal deficit at INR 4.12 trillion equal to 4.6% of GDP. This makes GDP for FY 2011-12 = INR 90 trillion (~ $ 2trillion), which implies that growth rate will be 14% (9% real growth + 5% inflation)

Extract of budget speech dated 28 Feb 2011

 

[gulte]

Indian govt expects 9.3 % growth in this finacial yr(forecast for 2010 was 8.5%..they achieved 8.6%)
Now rest all depends on inflation how much inflation.. Goldman sachs predicts inflation to be around 6.7% in this FY.

So real GDP growth would be 16%.
GDP Nominal as of now= $1430 Billion

Predicted GDP at the end of this FY = $1658.8 Billion

This figures will vary if Rs to $ exchange rate varies.

You havn't taken savings into consideration, Inflation should only be added to amount spent. At present savings are somewhere around 35%.

 

[Varad]

GEAR UP FOR THE $2-TRILLION ECONOMY



Posted: Wed Mar 02 2011, 09:25 hrs
New Delhi:

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. 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. 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?

 

[Kinetic]

India's GDP at current market prices according to Central Statistics Office
FY 2009-10: INR 65.50 trillion (~$1430 billion)
FY 2010-11: INR 78.77 trillion (~$1730 billion) that is growth of nearly 20% (9.7% real growth +10.6% inflation)

Press release dated 7 Feb 2011

The budget announced on 28 February 2011 gives estimate of Fiscal deficit at INR 4.12 trillion equal to 4.6% of GDP. This makes GDP for FY 2011-12 = INR 90 trillion (~ $ 2trillion), which implies that growth rate will be 14% (9% real growth + 5% inflation)

Extract of budget speech dated 28 Feb 2011

If everything goes normal, we will have a GDP of $2 trillion next year and leaving Japan as the third largest economy in terms of PPP.

 

[Varad]

India will be USD 5 trillion economy by 2022-25: Mukesh Ambani

NEW DELHI: Reliance Industries Chairman Mukesh Ambani today said that India would become USD 5 trillion economy by 2022-25.

A more optimistic ICICI Bank chairman K V Kamath said that India would be USD 5 trillion economy by 2022.

India, at present, is a USD 1.2 trillion dollar economy. Participating in a discussion organised at the meeting of the Institute of International Finance ( IIF )) here, Ambani said, "India will be a USD 5 trillion economy by 2022-25 ... there can be a debate whether it would 2022 or 2025."

Citibank CEO Vikram Pandit, who was also a participant, underlined the need for expanding trade and commerce as it would help every one, especially the emerging economies.

He said that the financial crisis is behind but the imbalances that caused the financial crisis still need to be worked out.

Appreciating the Budget 2011-12, Ambani also said fiscal consolidation proposed in the Budget would lay the foundation of "strong growth".

Finance Minister Pranab Mukherjee in the Budget 2011-12 proposed to reduce fiscal deficit to 4.6 per cent of the GDP from 5.2 per cent in the current fiscal.

 

[Varad]

India among world's top 10 manufacturers, says UNIDO


NEW DELHI: India has emerged as one of the top ten manufacturers of the world, primarily helped by strong economic growth, according to a UN agency.

The United Nations Industrial Development Organisation (UNIDO) has said that India is listed as one of the top 10 manufacturers of the world in 2010.

India along with other leading developing economies such as Brazil and China showed strong performance in economic growth in 2010 and the manufacturing value added (MVA) of all these countries grew by over 10 per cent last year (at constant USD of 2,000), the agency said.

As per UNIDO's just released International Yearbook of Industrial Statistics 2011, the three nations' share in world manufacturing output has reached 32 per cent compared to 20 per cent 10 years ago.

UNIDO said that world manufacturing is showing first signs of recovery from the recent financial crisis.

"India tops developing countries (China excluded) in production of textiles, chemical products, basic metals, general machinery and equipment, and electrical machinery," the statement said.

The report noted that India has overtaken Brazil in the production of motor vehicles and now ranks second among developing countries after Mexico.

On the other hand, Asian competitors -- Thailand, Malaysia and the Philippines -- are ahead in the production of electronic goods such as computers and office equipment.

"The MVA of industrialised countries grew by 3.4 per cent in 2010. However, developing economies were the major force of world industrial growth. In 2010, MVA of developing countries grew by 9.4 per cent," it added.

{Link Posting Not Allowed Due to 5 Posts Rule}

 

[John Doe]

At Rs 6.14 cr, Cognizant CEO is top paid - The Times of India

CHENNAI: With IT companies and their stocks emerging strongly from the recession, the focus is shifting to how much their top executives are taking home as salary.

Late last week, IT major Cognizant disclosed its top executives' remuneration to American stock exchanges. CEO Francisco D'Souza earned $1.36 million as salary and bonus in 2010. That would roughly be Rs 6.14 crore converted at Rs 48.58 per dollar. This includes a base salary of Rs 2.44 crore and a bonus of Rs 3.7 crore.

In comparison, Vineet Nayar, the managing director and chief executive of HCL Technologies, took home a total of Rs 4.54 crore out of which Rs 1.2 crore was base salary (as of June 2010), according to think tank CMIE.

Natarajan Chandrasekaran of Tata Consultancy Services (TCS) earned Rs 2.97 crore, which included a bonus of 2 crore. S Gopalakrishnan of Infosys earned Rs 1.01 crore and Arun Jain of Polaris Software got Rs 1.62 crore. Even Wipro's two outgoing CEOs Girish Paranjpe and Suresh Vaswani were paid Rs 2.11 and Rs 2.96 crore respectively (as declared on March 31, 2010).

On a standalone basis, these salaries are not globally competitive, say recruiters. "Salaries of Indian CEOs are artificially kept low because astronomical figures at higher level will raise demands for appropriate increase in salaries in levels down the chain. This is particularly true of Indian IT companies," said Ganesh Shermon, partner & country head (human capital) at KPMG India.

"But if you combine their other two sources of income - commissions (a percentage of the overall profit as pay) and stock options, then yes, the salaries are truly competitive in the global sense. Indian IT stocks are doing better than global stocks and this helps too," Shermon said.

However, even on a standalone basis, CEO salaries are rising. "Local growth factors in conjunction with strong demand for talent are fuelling this (salary) growth," says James Agarwal, consulting director and business head at BTI Consultants, a HR firm specialising in senior executive searches. Indian talent, he said, is in high demand not only within the country but also globally and the influx of MNCs is only reinforcing the trend.

"Also the fact that average tenure of CEO in India is lesser compared to western nations contributes to this since they need stronger incentive."

An interesting feature is that, unlike the US, where bonuses will be huge compared to salaries, in India salaries are almost equal to the bonuses paid out. TCS, and to some extent Cognizant, is an exception. "Indian corporates play it safe by having a stronger guaranteed component. Ideally, a big chunk of it should be bonus which should be evaluated on the basis of the company's performance. Increases in salary should happen in bonuses and not in the guaranteed component which should be affected only by inflation," Shermon said.

 

[Archie]

India’s $2-trn tryst

The Indian economy would grow to $2 trillion in 2011-12 joining the elite league of the US, Japan, Germany, China, UK, France and Italy as the mass of economic activity shifts to Asia. Budget 2011-12 has forecast that India’s gross domestic product (GDP) at the end of March 2012 would reach Rs 89,80


860 crore or nearly $2 trillion at an exchange rate of Rs 45 to a dollar.
India also is set to outpace China as the world’s fastest growing major economy in 2011 after the latter lowered its economic growth target to 7% over the next five years to ease pressures on environment.

The Indian economy is forecast to expand at between 8.75% and 9.25% in 2011-12, riding on a domestic consumption and investment boom despite a high inflation.

“In many ways the renewed dominance by 2050 of China and India, with their much larger populations, is a return to the historical norm
India

 

[Varad]

New Indian Power Sets on Sri Lanka's railways from March 10

Mar 05, Colombo: The Planning Director of Sri Lanka Railway Vijaya Samarasinghe says that the Power Set locomotives imported from India will start running on local railway from March 10.

The first Power Set will ceremoniously begin the journey from Matara railway station on March 10 along the newly built high-speed Galle - Matara railway line.

Twenty Power Sets of the S-20 type are to be imported from India under a special Indian credit line.

Three of them have already arrived in Colombo ports, said the Planning Director of Sri Lanka Railway.

Sri Lanka signed a US$ 67.4 million Line of Credit Agreement with the Export-Import Bank of India in March last year to upgrade the Southern coastal railway line from Colombo to Matara.

In addition to upgradation, Sri Lanka has used the Line of Credit for supply of 20 sets of Diesel Multiple Units (DMUs) and three units of locomotives among other items.

Sri Lanka : New Indian Power Sets on Sri Lanka\'s railways from March 10

 

[Nirvana]

Dharavi redevelopment is a Rs. 22,000 CR jackpot

Mumbai has often been derisively referred to as Slumbai, and its biggest slum, Dharavi, as Asia's largest shanty town. But the city's much-frowned-upon squalor, it seems, could also be its biggest windfall.

In a presentation made before Chief Minister Prithviraj Chavan at Sahyadri on Wednesday afternoon, MHADA pegged at a gasp-inducing Rs 22,000 crore the profit the government could make out of Dharavi's redevelopment.



The numbers presented by MHADA were quite compelling. Dharavi is spread over an area of 7,55,14,000 sq feet.

The area required to rehabilitate the slum's inhabitants is 3,23,65,000 sq feet. Which means the developer is left with 4,31,49,000 sq feet to exploit commercially.

At Rs 16,000 per sq feet, which is the market price in that area, this 4,31,49,000 sq feet is worth around Rs 60,000 crore.

The developer will have to pay the government a premium of anything between Rs 5,000 to Rs 6,000 for every sq feet of land that is commercially exploited.

A back-of-the-envelope calculation, assuming a premium of Rs 5,000, shows that government stands to make over Rs 21,000 cr.

While the chief minister, soon after assuming charge, had said that he would prefer a government agency to carry out Dharavi's redevelopment, Wednesday's presentation more or less convinced him that involving private builders would be much more profitable for the government.

If MHADA were to redevelop Dharavi, as per government rules it could exploit the extra area only to create low-cost housing.

For a government, laden with a massive debt, a large dose of cash inflow, which will be possible only if a private developer is involved, is most welcome.

Interestingly, the first government proposal for Dharavi's redevelopment had decided to charge a premium of just Rs 450 for every sq feet of land that the developer gets to commercially exploit.

How things have changed since. To put things into focus, Brihanmumbai Municipal Corporation's annual budget is around Rs 21,000 crore. Now, under the new plan, MHADA will redevelop Sector V, which is close to Sion station.

Dharavi redevelopment is a Rs. 22,000 CR jackpot, News - Cover Story - Mumbai Mirror

 

[Humanist]

Problem with our country is that we are way too democratic... It will be difficult to convience the people who live in Dharavi.... But i hope this news materialise asap....