kawaraj
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Indian Economy-News & Updates
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Koovie
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Does this make you happy???
Things like this happend before. And no country crashed and fell appart like some economists on PDF predict it with our country
India's economic growth to quicken in 2013 - OECD
PARIS (Reuters) - India's economic growth is likely to rise to more than 7.5 percent in calendar year 2013 but continued government policy uncertainty could erode the country's longer-term growth prospects, the OECD said on Tuesday.
A cyclical upturn in investment, stronger external demand and the effects of recent monetary easing will boost growth, the report said, although it warned that high inflation would dampen the investment climate.
The prediction of higher growth in the Organisation for Economic Cooperation and Development's outlook report should cheer Prime Minister Manmohan Singh's government - which has faced an avalanche of criticism over how it has run Asia's third-largest economy and its scant progress making key reforms.
The upbeat OECD forecast stood in stark contrast to the pessimistic view offered on Monday by Morgan Stanley, which cut its growth forecasts for India, citing a high budget deficit and slowing private investment. It said it now expected the economy to grow by 6.8 percent, instead of 7.5 percent, in 2013.
Standard & Poor's rating agency cut its outlook for India's credit rating to negative from stable in April, reflecting worries about high deficits and political paralysis that has stalled progress on major economic reforms.
India's economic growth slowed to 6.1 percent in the three months to December, the weakest annual pace in almost three years, while the rupee slumped to record lows against the dollar on Tuesday.
"A moderate cyclical pick-up in investment is projected in the near term," the OECD said. "Later this year and into the next, growth is set to pick up to around trend rates, supported by the delayed effects of the recent monetary policy easing."
"However, still high inflation will limit the room for significant further relaxation," it added.
POLICY UNCERTAINTY
India has had rapid economic growth after opening up its economy in 1991. But investors fret that Singh's government is now squandering a chance to tap the country's potential.
The current account deficit is the highest since 1980. Reforms such as opening India's supermarket sector to foreign chains like Wal-Mart (WMT.N) stuttered as the government failed to convince powerful coalition allies. Inflation is the highest among the so-called BRICS group of major developing nations.
Costly subsidies have pushed the fiscal deficit to 5.9 percent from a target of 4.6 percent of GDP in the fiscal year that ended in March 2012. The government must push consolidation to help reduce inflation and the current account deficit, the report said, warning that an expected rise in global oil prices could again force New Delhi to overshoot its spending target.
Continued policy uncertainty and more fiscal slippage "would weaken investment sentiment and result in softer near-term growth and an erosion of longer-run prospects," the OECD said, though adding that India's pace of growth could overtake China's by 2020.
(Reporting by Matthias Williams in NEW DELHI; Editing by Richard Borsuk)
India's economic growth to quicken in 2013 - OECD | Reuters
shuttler
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From an earlier report when the rupee was on way of another record nosedive hitting new bottom of around 55.5 to the dollar:
USD to INR Conversion Chart - Bloomberg
.
the above growth rate prediction was slashed by MS to 6.3%.
indian government is hapless to the bleeding of the rupees and tomorrow will be another rupee day of bungee jump!
.
The "sick man"'s certificate by Fitch will be released fairly soon!
.
USD to INR Conversion Chart - Bloomberg
.
the above growth rate prediction was slashed by MS to 6.3%.
indian government is hapless to the bleeding of the rupees and tomorrow will be another rupee day of bungee jump!
.
The "sick man"'s certificate by Fitch will be released fairly soon!
Dance
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India faces mass default and restructuring as devaluation looms
SINGAPORE, May 22 (IFR) - India's mounting economic and political woes are prompting market players to raise the specter of a Greek-style crisis in Asia's third largest economy.
This is not simply idle speculation. Last Friday, the rupee crashed to an all-time low against the dollar of 54.9 and it was stuck most of Tuesday at the psychologically significant Rs55/USD level, where the currency is seen as having no obvious technical support. And the implications of a rupee collapse would be immense.
"It could go to stratospheric levels against the dollar and it looks to me as if the Indian government is aiming at a de facto devaluation in an effort to prop up flagging economic growth. And you then have to worry about all the unpleasant boxes such an action would inevitably tick, such as straining further the country's already strained balance of payments as well as bringing on an almighty wave of inflationary pressure," said a credit analyst at a ratings agency in Singapore.
He added that a spike in the rupee would strain the cashflow of corporates and banks as they struggled to service dollar-denominated debt and that the odds of a widespread Indian debt restructuring would be low.
In his opinion the market will determine the rupee's level, with a formal devaluation seen as unlikely given the consequent need for interest rates to be pushed significantly higher to contain capital flight and counter toxic inflation levels.
This scenario was seen in the UK in 1992 when the country exited the ERM and the government pushed short term interest rates up to 15% from 10%, spending billions of pounds of reserves to defend the currency in the process.
Should something similar occur to India, it would almost certainly lose its coveted investment-grade rating, with a one-notch demotion required for that to occur. S&P has India on negative watch for its Baa3 foreign currency rating while Moody's and Fitch retain a stable outlook on the country.
As the country's government faces political impasse amid infighting, principally between prime minister Manmohan Singh and finance minister Pranab Mukherjee on the subject of tax reform, and India limps from one corruption scandal to the next, the sense of decay is palpable.
Surprisingly, India's deteriorating economic fundamentals and toxic politics have not yet impacted the relative value of its issuers offshore debt. In fact, on Tuesday India's dollar offshore curve recovered the 10bp it had widened on Monday. But that situation is unlikely to hold much longer.
"As market players start to fret about the possibility of a full-blown rupee devaluation, you will see this start to impact spreads on the country's offshore curve. If the currency goes in a big way, you will have a unilateral replaying in India of the Asian financial crisis, which involved default on short-dated offshore debt and a mass round of debt restructuring. India is hanging in the balance right now, and the worst case scenario seems increasingly likely to play out," said a Hong Kong-based syndicate head.
Just as the tide moves against them, though, Indian corporates are seeing the need for offshore funding increase. According to the credit analyst, many Indian corporates have reached borrowing ceilings with local banks and are sizing up offshore bond issuance as a result. That would be a tall order and an expensive trip, though.
With massive convertible maturities coming up, some in dollars, a local market that is increasingly saturated and has less support from foreign investors and a closed dollar market, it seems inevitable that restructuring will soon become the main activity for Mumbai-based investment-bankers.
India faces mass default and restructuring as devaluation looms | Reuters
SINGAPORE, May 22 (IFR) - India's mounting economic and political woes are prompting market players to raise the specter of a Greek-style crisis in Asia's third largest economy.
This is not simply idle speculation. Last Friday, the rupee crashed to an all-time low against the dollar of 54.9 and it was stuck most of Tuesday at the psychologically significant Rs55/USD level, where the currency is seen as having no obvious technical support. And the implications of a rupee collapse would be immense.
"It could go to stratospheric levels against the dollar and it looks to me as if the Indian government is aiming at a de facto devaluation in an effort to prop up flagging economic growth. And you then have to worry about all the unpleasant boxes such an action would inevitably tick, such as straining further the country's already strained balance of payments as well as bringing on an almighty wave of inflationary pressure," said a credit analyst at a ratings agency in Singapore.
He added that a spike in the rupee would strain the cashflow of corporates and banks as they struggled to service dollar-denominated debt and that the odds of a widespread Indian debt restructuring would be low.
In his opinion the market will determine the rupee's level, with a formal devaluation seen as unlikely given the consequent need for interest rates to be pushed significantly higher to contain capital flight and counter toxic inflation levels.
This scenario was seen in the UK in 1992 when the country exited the ERM and the government pushed short term interest rates up to 15% from 10%, spending billions of pounds of reserves to defend the currency in the process.
Should something similar occur to India, it would almost certainly lose its coveted investment-grade rating, with a one-notch demotion required for that to occur. S&P has India on negative watch for its Baa3 foreign currency rating while Moody's and Fitch retain a stable outlook on the country.
As the country's government faces political impasse amid infighting, principally between prime minister Manmohan Singh and finance minister Pranab Mukherjee on the subject of tax reform, and India limps from one corruption scandal to the next, the sense of decay is palpable.
Surprisingly, India's deteriorating economic fundamentals and toxic politics have not yet impacted the relative value of its issuers offshore debt. In fact, on Tuesday India's dollar offshore curve recovered the 10bp it had widened on Monday. But that situation is unlikely to hold much longer.
"As market players start to fret about the possibility of a full-blown rupee devaluation, you will see this start to impact spreads on the country's offshore curve. If the currency goes in a big way, you will have a unilateral replaying in India of the Asian financial crisis, which involved default on short-dated offshore debt and a mass round of debt restructuring. India is hanging in the balance right now, and the worst case scenario seems increasingly likely to play out," said a Hong Kong-based syndicate head.
Just as the tide moves against them, though, Indian corporates are seeing the need for offshore funding increase. According to the credit analyst, many Indian corporates have reached borrowing ceilings with local banks and are sizing up offshore bond issuance as a result. That would be a tall order and an expensive trip, though.
With massive convertible maturities coming up, some in dollars, a local market that is increasingly saturated and has less support from foreign investors and a closed dollar market, it seems inevitable that restructuring will soon become the main activity for Mumbai-based investment-bankers.
India faces mass default and restructuring as devaluation looms | Reuters
SinoChallenger
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This is what happens when you are drowning in debt. indians businesses soon will no longer accept rupee, gold only. Then you might as well use the rupee as TP.
Alternatively, new delhi might start demanding all private individuals and hindu temples exchange their gold with the government for "gold certificates" to defend the currency.
With a collapsing rupee, looks like the Rafale deal is off
SinoChallenger
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This is why the Maoists are now in full control of 30% of india. Once the rupee collapses, the revolution will spread like wildfire, and we can look forward to the People's Republic of India.
This is what happens when you are drowning in debt. indians businesses soon will no longer accept rupee, gold only. Then you might as well use the rupee as TP.
Alternatively, new delhi might start demanding all private individuals and hindu temples exchange their gold with the government for "gold certificates" to defend the currency.
With a collapsing rupee, looks like the Rafale deal is off
SC you are so wise. I think we have problems in India maybe Americans will help them?
SinoChallenger
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USA will try to exploit them. China is a hard target. They tried and failed. india is a soft target by comparison.
The present situation in india (rupee collapsing to 60 per $ and beyond) looks just like how they tried to prop up Chiang Kai-Shek and the Nationalist government in the 1940's against the Communists in the countryside led by Mao Zedong.
Anyway.... we shouldn't stray too far off-topic
Abingdonboy
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Short term hiccups in the long run India will be fine. Fear mongering by you guys only works amongst the ignorant- I am studying Economics at LSE and I can see India is going to come good soon enough.
Abingdonboy
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shuttler
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Designed to be doomed
Rohith B R
Lack of expertise in civic agencies, coupled with local leaders pushing for “their projects,” has given the City its infrastructure white elephants
Every time one takes a flyover or an underpass, one gets the feeling it could have been designed better and the ride far better. What has led to this are the planning lapses on the part of the civic agencies.
One example is the major design flaw discovered at a bridge on the stormwater drain (SWD) being built by the Bruhat Bangalore Mahanagara Palike (BBMP), near the Gali Anjaneya temple on Mysore Road. Gaping potholes on flyovers, water pools in underpasses and pedestrian subways are all the result of the design flaws.
Faulty designs in infrastructure works have become the norm in Bangalore. These have not just cost the exchequer dear, but also emerged as nightmares for road-users.
Taxpayers want to know who decides on the designs, whether stakeholder meetings are held properly before executing a project and whether there are remedies. Deccan Herald spoke to urban planners, civic experts and the public, to throw more light on the issue.
According to Sudhakar K, a civic expert, the root cause for the faulty design of many infrastructure works lies in the decision-making process itself. Often, explains Sudhakar, it is the local corporator or legislator who suddenly comes up with a project for his ward or constituency.
The local representatives put pressure on the civic agencies to execute their “plan,” irrespective of whether there is provision for such a subway, road or bridge in the Comprehensive Development Plan (CDP) for that area.
Projects initiated by civic agencies, urban planner AS Kodandapani points out, are doomed because of the serious shortage of expertise. The BBMP and BDA, which implement a major chunk of infrastructure projects, lack this critical requirement.
Kodandapani recalls that the problem of design had started with the city’s first flyover. The traffic congestion in and around Majestic area could have been easily avoided, if an access to the Sirsi Circle flyover was provided to buses coming out of the KSRTC/BMTC bus stands in that area, and moving towards Mysore Road. Due to lack of such an access, the buses are forced to negotiate congested areas, triggering traffic chaos daily.
In some cases, the task of preparing the Detailed Project Report (DPR) for
infrastructure projects is entrusted to private agencies, who charge exorbitant amounts. Once the reports are submitted, whether planners and engineers in the civic agencies do a verification is a matter of debate.
Kathyayini Chamaraj, executive trustee of the NGO, CIVIC Bangalore, says before the execution of mega projects, the civic agencies do conduct stakeholder meetings with NGOs. However, none of their suggestions or objections are accepted by the decision-makers, she adds.
She cites the case of the stakeholder meetings conducted by the State government while introducing the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) projects to Bangalore. During the consultation meetings, she recalls, many NGOs rejected some of the project proposals. But the decision-makers chose not to take note of it.
Eventually, when the projects were finalised, they were in the format the government wanted. Similar was the case when the Bangalore Development Authority (BDA) came out with its draft of the CDP 2015. Even though thousands of public suggestions and objections were received, not many of them found place in the final CDP. The minutes and notes of the stakeholder meetings are twisted to the convenience of decision-makers, says Kathyayini.
There are ways out indeed. As Kodandapani puts it, one solution to avoid such design flaws, is to publish the sketches and designs of infrastructure projects in newspapers and other media for the reference of public, so that they can give their feedback.
On implementation of projects related to traffic management, he suggests that regular road users of a particular area or junction be interviewed randomly to understand the practical problems associated with a project proposed for that locality.
Civic experts also stress on effective implementation of Section 4 of the Right To Information (RTI) Act, which mandates disclosure of project plan to those set to be affected by the same. In the words of Kathyayini, the Act also mandates the disclosure of rationale of the decision on a particular project to the public. However, she laments, the civic authorities “protect the secrecy” of the project by saying they cannot disclose
details, till it gets clearance from the State cabinet.
Dinakar N, an RTI activist, informs that according to a ruling of the Central Information Commission (CIC), civic agencies can disclose details of the draft report of any project, except its final copy, that needs to be submitted to the cabinet for approval. But Dinakar himself found that this ruling has had no effect. To a query on the CIC ruling, he was told by officials of the civic agencies that the ruling does not apply to them.
Other urban planners feel policy changes are needed to the municipal laws to make it mandatory for projects to go through the process of public consultation before implementation. Experts cite the case of the Panchayat Raj Act, which mandates that any industry or project coming up in villages needs to be discussed and approved at the Gram Sabhas (village meetings). However, in laws pertaining to towns and cities, there is no such provision, they said.
Design flaws keep 70 pc projects pending
The problem in planning and design flaws have kept pending close to 70 per cent of the infrastructure projects that were proposed by the BBMP as early as 2009. While the Kadirenahalli underpass still awaits completion, at the other end of the City, the CNR Rao Junction underpass near IISc appears to be an utter failure.
When questioned about the reason for the failure, a senior official from the BBMP admitted that there was a problem in the planning of infrastructure projects. He attributed it to the lack of expertise. However, he said, Palike engineers alone should not be blamed for such failures. He said, in many instances, pressure from the local corporator or MLA puts them in such a situation that they cannot do much.
Another official said, despite being blacklisted for shoddy work and penalties being levied for the delay, some contractors were back in business with the influence of politicians. He said unless this nexus was broken, one could not expect proper implementation of the projects in the City.
Designed to be doomed
Rohith B R
Lack of expertise in civic agencies, coupled with local leaders pushing for “their projects,” has given the City its infrastructure white elephants
Every time one takes a flyover or an underpass, one gets the feeling it could have been designed better and the ride far better. What has led to this are the planning lapses on the part of the civic agencies.
One example is the major design flaw discovered at a bridge on the stormwater drain (SWD) being built by the Bruhat Bangalore Mahanagara Palike (BBMP), near the Gali Anjaneya temple on Mysore Road. Gaping potholes on flyovers, water pools in underpasses and pedestrian subways are all the result of the design flaws.
Faulty designs in infrastructure works have become the norm in Bangalore. These have not just cost the exchequer dear, but also emerged as nightmares for road-users.
Taxpayers want to know who decides on the designs, whether stakeholder meetings are held properly before executing a project and whether there are remedies. Deccan Herald spoke to urban planners, civic experts and the public, to throw more light on the issue.
According to Sudhakar K, a civic expert, the root cause for the faulty design of many infrastructure works lies in the decision-making process itself. Often, explains Sudhakar, it is the local corporator or legislator who suddenly comes up with a project for his ward or constituency.
The local representatives put pressure on the civic agencies to execute their “plan,” irrespective of whether there is provision for such a subway, road or bridge in the Comprehensive Development Plan (CDP) for that area.
Projects initiated by civic agencies, urban planner AS Kodandapani points out, are doomed because of the serious shortage of expertise. The BBMP and BDA, which implement a major chunk of infrastructure projects, lack this critical requirement.
Kodandapani recalls that the problem of design had started with the city’s first flyover. The traffic congestion in and around Majestic area could have been easily avoided, if an access to the Sirsi Circle flyover was provided to buses coming out of the KSRTC/BMTC bus stands in that area, and moving towards Mysore Road. Due to lack of such an access, the buses are forced to negotiate congested areas, triggering traffic chaos daily.
In some cases, the task of preparing the Detailed Project Report (DPR) for
infrastructure projects is entrusted to private agencies, who charge exorbitant amounts. Once the reports are submitted, whether planners and engineers in the civic agencies do a verification is a matter of debate.
Kathyayini Chamaraj, executive trustee of the NGO, CIVIC Bangalore, says before the execution of mega projects, the civic agencies do conduct stakeholder meetings with NGOs. However, none of their suggestions or objections are accepted by the decision-makers, she adds.
She cites the case of the stakeholder meetings conducted by the State government while introducing the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) projects to Bangalore. During the consultation meetings, she recalls, many NGOs rejected some of the project proposals. But the decision-makers chose not to take note of it.
Eventually, when the projects were finalised, they were in the format the government wanted. Similar was the case when the Bangalore Development Authority (BDA) came out with its draft of the CDP 2015. Even though thousands of public suggestions and objections were received, not many of them found place in the final CDP. The minutes and notes of the stakeholder meetings are twisted to the convenience of decision-makers, says Kathyayini.
There are ways out indeed. As Kodandapani puts it, one solution to avoid such design flaws, is to publish the sketches and designs of infrastructure projects in newspapers and other media for the reference of public, so that they can give their feedback.
On implementation of projects related to traffic management, he suggests that regular road users of a particular area or junction be interviewed randomly to understand the practical problems associated with a project proposed for that locality.
Civic experts also stress on effective implementation of Section 4 of the Right To Information (RTI) Act, which mandates disclosure of project plan to those set to be affected by the same. In the words of Kathyayini, the Act also mandates the disclosure of rationale of the decision on a particular project to the public. However, she laments, the civic authorities “protect the secrecy” of the project by saying they cannot disclose
details, till it gets clearance from the State cabinet.
Dinakar N, an RTI activist, informs that according to a ruling of the Central Information Commission (CIC), civic agencies can disclose details of the draft report of any project, except its final copy, that needs to be submitted to the cabinet for approval. But Dinakar himself found that this ruling has had no effect. To a query on the CIC ruling, he was told by officials of the civic agencies that the ruling does not apply to them.
Other urban planners feel policy changes are needed to the municipal laws to make it mandatory for projects to go through the process of public consultation before implementation. Experts cite the case of the Panchayat Raj Act, which mandates that any industry or project coming up in villages needs to be discussed and approved at the Gram Sabhas (village meetings). However, in laws pertaining to towns and cities, there is no such provision, they said.
Design flaws keep 70 pc projects pending
The problem in planning and design flaws have kept pending close to 70 per cent of the infrastructure projects that were proposed by the BBMP as early as 2009. While the Kadirenahalli underpass still awaits completion, at the other end of the City, the CNR Rao Junction underpass near IISc appears to be an utter failure.
When questioned about the reason for the failure, a senior official from the BBMP admitted that there was a problem in the planning of infrastructure projects. He attributed it to the lack of expertise. However, he said, Palike engineers alone should not be blamed for such failures. He said, in many instances, pressure from the local corporator or MLA puts them in such a situation that they cannot do much.
Another official said, despite being blacklisted for shoddy work and penalties being levied for the delay, some contractors were back in business with the influence of politicians. He said unless this nexus was broken, one could not expect proper implementation of the projects in the City.
Designed to be doomed
shuttler
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shuttler
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you are giving LSE a really bad name!
Aramsogo
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No wonder we never hired from LSE. Oxbridge, Imperial, grande ecole, but never LSE.
kawaraj
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Happy? I feel so sorry about it.
I already had warned you guys when INR is at 51 level to sell Rupee position, and hold Dollars, does that means I am pro-American? no, I hate Americans and despise them.
At this moment you are talking happy, for the suffering of average Indians. No, hell no. American Hedgefunds are shorting your currency. You gov have to admit this before handling it. And you pro-US media is so silent about it.
it's now at 56 benchmark.
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