India Fudging GDP to Show Faster Growth Than China's?

[RiazHaq]

#India’s economic recovery much slower than expected: BofA Meryl Lynch Trims GDP growth from 6% to 5.5% for 2015-16

India’s economic recovery much slower than expected: BofA-ML - Livemint …


Global financial services major Bank of America Merrill Lynch on Monday said Indian economy is recovering at a much slower-than-expected pace, but faster enough to overtake Brazil and Russia to become the second largest emerging market after China.

The firm on Monday also trimmed its growth forecast for India to 5.5% from 6% for the current fiscal, as per the old GDP series. As per the old series, the base year for calculation of national accounts was 2004-05.

“Is recovery happening? Yes, but even more slowly than we expected. At the same time, India’s relatively faster growth is allowing it to overtake Brazil and Russia in GDP to emerge as the second largest emerging market after China,” BofA-ML said in a note.

The Central Statistics Office (CSO) has now adopted the new series of National Accounts with 2011-12 as base year and subsequently revised the Gross Domestic Product (GDP) growth rate to 6.9% in 2013-14 from 4.7% and 5.1% in 2012-13 from 4.5%.

The RBI has also lowered its economic growth forecast for the current fiscal to 7.4% from its previous projection of 7.6%. The April-June quarter GDP slipped to 7% from 7.5% in the preceding quarter. “We have cut our GDP forecasts to 5.5% from 6% for 2015-16 and to 6.5% from 7% for 2016-17 (in the old GDP series) on poor rains as well as delays in global recovery and domestic lending rate cuts,” it added.

The global brokerage firm said that the coming months could see a consumption recovery largely driven by four factors -- softer lending rates, public sector salary hikes after the 7th Pay Commission, household savings on lower oil prices and a possible hike in wheat MSP before the early-2017 Punjab/UP polls.

On RBI rate cut, BofA-ML said, “We expect the RBI to cut another 25 bps in February after it meets its under-6% January 2016 inflation mandate.” Reserve Bank Governor Raghuram Rajan, on 29 September, effected a more-than-expected interest rate cut of half a per cent to boost the economy.

 

[Bombermanx1]

Shouldn't anyone ask this @RiazHaq credentials and what he did in real? or is it free for all?
If so i can claim to be a expert too in some field.

 

[SarthakGanguly]

Haq's Musings: India Fudging GDP to Show Faster Growth Than China?

Indian government now claims that the country's GDP grew by 6.9% in 2013-14, well above the 4.7% growth the country had announced earlier.

Based on the latest methodology, it is claimed that the Indian economy expanded 7.5 percent year-on-year during the last quarter, higher than 7.3 percent growth recorded by China in the latest quarter, making it the fastest growing major economy in the world, according to Reuters. Is it wishful thinking to make Indian economy look better than China's?


India GDP Revisions. Source: Financial Times


The GDP revisions have surprised most of the nation's economists and raised serious questions about the credibility of government figures released after rebasing the GDP calculations to year 2011-12 from 2004-5. So what is wrong with these figures? Let's try and answer the following questions:

1. How is it possible that the accelerated GDP growth in 2013-14 occurred while the Indian central bankers were significantly jacking up interest rates by several percentage points and cutting money supply in the Indian economy?

2. Why are the revisions at odds with other important indicators such as lower industrial production and trade and tax collection figures? For the previous fiscal year, the government’s index of industrial production showed manufacturing activity slowing by 0.8%. Exports in December shrank 3.8% in dollar terms from a year earlier.

3. How can growth accelerate amid financial constraints depressing investment in India? Indian companies are burdened with debt and banks are reluctant to lend.

4. Why has the total GDP for 2013-14 shrunk by about Rs. 100 billion in spite of upward revision in economic growth rate? Why is India's GDP at $1.8 trillion, well short of theoft-repeated $2 trillion mark?

Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "


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Haq's Musings: India Fudging GDP to Show Faster Growth Than China?

Cheerleader.

 

[SR-91]

Sweden's Top Economist Puts China's GDP Growth At 3%, But Others Are Even Less Optimistic

China’s economy is officially growing at 7%, but few economists actually believe that number to be accurate.

Mauro Gozzo, chief economist at Business Sweden – an organization jointly owned by the government and the business community – estimates that the real growth of China’s gross domestic product is just 3%.


“China is wrestling with serious economic difficulties and our estimates place the actual growth at a much lower rate than the official data,” he said in a new report. “We have often pointed out that the official statistics should be taken with

According to Gozzo, the slowdown is the result of failed economic policies, which has brought to light the impossibility of combining a market economy with central planning.

For example, the country has seen the real appreciation of the currency during the last two years, which is part of the government’s rebalancing of the economy from exports and investments to private consumption. But it has also weakened the industry.

“The rebalancing may have been necessary,” he said. “But dealing with the imbalances between the various sectors of the economy has become a big headache for the Chinese administration.”

He added that the devaluation of the yuan in August was not sufficient, and should rather be seen as a signal that China is no longer intent on following the upward movement of the dollar.

At the same time, consumption is being held back by factors like a housing bubble, the system of resident permits, and the absence of social support.

Read more at FORBES.COM

 

[Dragon4]

The firm on Monday also trimmed its growth forecast for India to 5.5% from 6% for the current fiscal, as per the old GDP series. As per the old series, the base year for calculation of national accounts was 2004-05.

 

[Shinigami]

pathetic old fart

 

[RiazHaq]

High joblessness in #Modi's #India forces 75,000 high-school & college grads to beg on the streets 75,000 of country's beggars are 12th passouts - Times of India via @timesofindia

"I may be poor but I am an honest man. I beg as it fetches me more money, Rs 200 a day. My last job of a ward boy in a hospital got me only Rs 100 a day," said Dinesh Khodhabhai (45), a class 12 pass who can speak half-way decent English.
Dinesh is part of a motley group of 30 beggars who seek alms around Bhadra Kali temple in Ahmedabad. Before their work begins, they sip hot tea offered gratis by a city philanthropist.
Sudhir Babulal (51) is a third-year BCom fail beggar who earns Rs 150 per day. Sudhir had come to Ahmedabad from Vijapur town with dreams of a good life but masonry jobs were erratic, fetching him Rs 3,000 for a 10-hour shift and nothing for weeks on end. "After my wife left me, where was the need to keep a house? I sleep on the riverfront and beg," said Sudhir.
Dashrath Parmar (52), who has an MCom degree from Gujarat University, is another pan-handler. This father of three, who aspired for government service but lost even the private job he had, today lives off free meals offered by charity organizations. His mother is hospitalized.
Ashok Jaisur, who cleared high school from Mumbai, begs in Lal Darwaza area. He left his job as a security guard after he lost sight due to cataract and now begs.

"I have only one wish: to make my son Raj an animator," says Ashok who feeds his nine girls and wife from income earned off the streets.
"It's difficult to rehabilitate beggars as they get lured back due to easy money," says Biren Joshi of Manav Sadhana, an NGO working with beggars.
"People with degrees turning to begging reflects the grim employment scenario. People turn to soliciting alms when they do not get decent jobs and have no social support to fall back on," says sociologist Gaurang Jani.

 

[RiazHaq]

Big International Asset Managers Leaving #India - http://FT.com #Goldman #Fidelity #MorganStanley http://on.ft.com/1mXuanp via @FT

International asset managers in India are disappearing at an alarming rate.
Goldman Sachs Asset Management, the $1.19tn fund arm of the US bank, became the fourth global investment manager to quit the country last year. It announced plans in October to sell its mutual fund business to Reliance Capital, India’s third-largest asset manager.


Just weeks earlier Belgium’s KBC Asset Management said it would terminate its push into India with the sale of its stake in Union KBC Asset Management to Union Bank of India.
Fidelity Worldwide Investments, PineBridge Investments and the asset management arms of Morgan Stanley and Deutsche Bank have all sold their mutual fund businesses in the country over the past three years.
The fund houses are reluctant to discuss the reasons behind their exit, but analysts say India has not been the cash cow many asset managers expected.
Sze Yoon Ng, an Asia-based director at Cerulli Associates, the research company, says: “Most [foreign asset managers] are not making money.”
Intense competition, regulatory uncertainty and problems getting fund ranges in front of end investors has meant is not unusual for a foreign asset manager in India to make a loss even after 10 years in the country. “It is hard to stay optimistic when your three-year break-even plan stretches to 10 years and counting,” says Ms Ng.
Fund companies were initially tempted by India’s growth story — its emerging middle class and strong economic expansion. Banking on a population of ready-to-invest consumers, asset managers kept coming to the country, say experts.
“Foreign asset managers saw potential in India: it is a huge country, with great demographics,” says Daniel Celeghin, a partner at Casey Quirk, the consultancy. He has worked with asset managers hat have operations in India. “But you have to be willing to put a lot of time and effort in.”
Franklin Templeton Investments is one of the few global asset managers to have cracked the Indian market. It set up shop 20 years ago and is now the only fully foreign-owned asset manager among India’s top 10 fund houses.
Harshendu Bindal, president of Franklin’s operations in India, says many foreign asset managers came to the market too late and failed to understand the nuances of the country’s “hyper competitive” mutual fund industry.
The market is dominated by just a handful of asset managers. The 10 largest fund houses account for more than 77 per cent of the $200bn of assets under management in India. Lakshmi Iyer, head of investments and product development at Kotak Mahindra Asset Management, the ninth-largest investment manager in India, says the concentration of assets among the top providers “increases the time taken to break even” for entrants.

Rather than go it alone, several international asset managers have tried to gain a foothold in India by partnering with local banks and other financial institutions to create mutual fund businesses.
India’s biggest asset manager, HDFC Asset Management, is a joint venture between Standard Life Investments, the UK fund house, and HDFC, a bank. Prudential, the UK-listed insurer, and local provider ICICI Bank operate ICICI Prudential Asset Management, India’s second-largest asset manager. BlackRock and Amundi Asset Management also have joint ventures in the country.

 

[RiazHaq]

#India revises recent past GDP growth estimates downwards. Not growing faster than #China

http://www.nasdaq.com/article/india-cuts-recent-economic-growth-estimates-20160129-00351 …


India's government said Friday that economic expansion in the past few years was slightly slower than previously estimated, in the first revision to controversial new statistics that show India zooming ahead of China in 2015 to become the world's fastest-growing major economy.

Year-over-year growth in India's output was 7.2% for the 12 months that ended March 31, 2015, the Statistics Ministry said, down from the previous calculation of 7.3%. For the year prior, the growth estimate was cut to 6.6% from 6.9%. Expansion in the year before that was bumped up to 5.6% from an initial reading of 5.1%.

The scheduled updates were the first tweaks to India's data on annual gross domestic product since the country's statisticians a year ago revamped their methods and data sources for estimating GDP, a broad measure of an economy's total output.

Friday's modest revisions, based on additional data that have come in since last year, are likely to reassure analysts and India watchers that the new figures are trustworthy.

They also lend credence to the perhaps more-startling conclusion yielded by the revised calculations: that at 7% or more in the first three quarters of 2015, India's growth is besting China's as the latter country's construction and investment boom cools.

Questions about India's new statistics are likely to persist, however.

"Understanding the real economy and the pace and strength of economic recovery is unusually difficult this year," the Finance Ministry wrote in a December paper.

Last year's GDP revision was long in the works, part of a regular process of updating the reference year for marking economic trends. Indian statisticians tapped fresh data on mom-and-pop stores, mutual funds and livestock. They also adopted techniques that bring the GDP computation more in line with United Nations guidelines.

Few economists believe India's statistics suffer from political meddling, as is widely thought to be the case in China. But even Indian officials have been flummoxed by the disparity between the fast clip of GDP growth and other signs that the economy has for years been plodding ahead at best.

In 2012, the government's budget deficit swelled, sapping private investment. Inflation shot up. Corruption scandals hurt the credibility of the administration of the day, led by the Congress party.

India was also battered by global forces. In 2013, after the U.S.Federal Reserve hinted that it might soon taper its bond-buying program, capital that had been funding higher-yielding investments in emerging markets suddenly took flight. The rupee plunged, impelling the central bank to keep interest rates high.

By the old GDP numbers, 2013 and 2014 were the first two fiscal years to see consecutive growth of below 5% since the 1980s.

Now, by Friday's updated data, growth in those years was 5.6% and 6.6%, respectively. If output was expanding so quickly even in that period of tumult, some economists hypothesize, then at full steam India's annual growth could be in the double digits.

That will be hard to confirm without more years of revised GDP estimates. The statistics office says it is still working to produce refreshed figures from as far back as 2005. Output data for the final quarter of 2015, and the first advance estimate of growth in the 12 months that end on March 31, are due to be released on Feb. 8.

"More than the revision, what we're keen on is what's happening with the past series," said Anurag Jha, a Citigroup Inc. economist in Mumbai. Right now, he said, "we are working with all these uncertainties."

 

[Guynextdoor2]

It takes only half as long to make yourself stronger than to wait for your enemy to get weaker. Guess that's why Pak continues to be weak.

 

[karan.1970]

Riaz and his perpetual India hating nonsense..

At least something on defence.pk is consistent across years..

 

[bloo]

Haq's musings are indeed amusing!!

This guy needs to see a psychiatrist pronto!

I wonder how and why the management is allowing this fellow to promote his website on PDF? Is that allowed? If so, then I should promote mine too free of cost! @WebMaster

The only thing amusing is the stupendous amount of butthurt.

 

[Aftab720]

Riaz and his perpetual India hating nonsense..

At least something on defence.pk is consistent across years..

I guess he's the most famous guy here

 

[karan.1970]

Haq's musings are indeed amusing!!

This guy needs to see a psychiatrist pronto!

I wonder how and why the management is allowing this fellow to promote his website on PDF? Is that allowed? If so, then I should promote mine too free of cost! @WebMaster

Anything Anti India would have a blank cheque of sorts here. So as long as your site meets that criteria, you are good...

 

[Aftab720]