Indian Economy-News & Updates

[ares]

Inflation at 7.55% when India is growing only at 5.3% implies NEGATIVE GROWTH of -2.25%

India real GDP = -2.25%

LOL at indian ignorance. The GDP growth rate quoted by india is firstly fake and secondly nominal. To adjust for inflation, you need to look at the US dollar denominated GDP (not growth rate). You would notice that indian GDP in 2011 is smaller than indian GDP in 2010 because of rupee collapse (even while rupee denominated GDP grows). The collapsing currency is due to inflation.


The invisible hand of Adam Smith's free market is fisting india.

Your lack of economic understanding is only triumphed by bullshit you just bloated out...perhaps you should consider taking up economics as a subject in high school.

I will try to explain in lay mans language.

1. Nominal GDP is not adjusted for inflation.

2. Real GDP growth = (Nominal GDP X Base Year Index) / Current price index.(not the b/s pelted out by kkacer)

3. All figures quoting/released by the govts are real GDP growth rates and are already adjustded for inflation.

4. Growth is calculated as per local currencies and not USD.
.USD -INR E/R is volatile, exchange rate changes on daily basis..does that mean the GDP/ GDP growth will be changing daily basis too??!!

 

[IndoCarib]

^^^^
Do not argue with the stupid. Both kkracer & sinochallenged are unbelievably imbecile


India’s BEML opens regional hub in Johannesburg

Manufacturing and engineering group BEML is eyeing African mining, building, defence and rail markets for its heavy equipment products


BusinessDay - India

 

[shuttler]

PM on defensive as more bad news hits economy

PM on defensive as more bad news hits economy | Reuters

By Ross Colvin
NEW DELHI | Thu Jun 14, 2012 4:33pm IST

(Reuters) - The ruling Congress party was in turmoil on Thursday after two key allies signalled they had lost confidence in Prime Minister Manmohan Singh, whose fragile coalition government has struggled to cope with mounting economic problems.

The party was forced to spring to the prime minister's defence, insisting he would remain in his post until general elections due by 2014, after the allies suggested he should be considered for the largely ceremonial position of president.

Congress was blindsided by the comments from West Bengal Chief Minister Mamata Banerjee, who has repeatedly thwarted proposed economic reforms despite being a member of the government, and Samajwadi Party chief Mulayam Singh Yadav.

(Also read: Blog: With stalled reforms, Indian government needs to win new friends, click here)

Congress's ability to get its nominee elected president is widely seen as an important test of its power after it suffered stinging defeats in provincial elections this year. India will elect a new president on July 19 and Singh has already made clear he has no interest in taking the post.

Singh, hailed as the architect of landmark economic reforms he introduced in 1991 when he was finance minister, has been widely criticised by business leaders and investors for weak leadership at a time when India is beset by slowing growth, dwindling foreign investment, and high inflation.

There was fresh evidence of the economic troubles on Thursday. Government data showed that exports from Asia's third-largest economy fell 4.16 percent in May over the previous year, while inflation rose in the same month to 7.55 percent.

Congress, which has ruled India for most of the 65 years it has been independent, has yet to officially name its presidential candidate, but Finance Minister Pranab Mukherjee is viewed as party leader Sonia Gandhi's top choice.

SURPRISE SNUB

Until Wednesday, the party thought it had the votes it needed to get him elected and much of the focus had been on who would replace him and whether the change in leadership would be a boon to the economy.

But the snub by Congress's allies - Mukherjee was not on their list of potential candidates - threw what had been a relatively smooth presidential race into disarray and fuelled speculation about a new government lineup that would not include Singh, who has been prime minister since 2004.

"We cannot afford to remove Manmohan Singh from the prime minister's post. It is our commitment to the nation. He will stay in the chair until 2014," said Janardan Dwivedi, the Congress party's chief spokesman.

Television news channels showed Congress leaders shuttling back and forth from Sonia Gandhi's New Delhi home as she tried to plot a way forward. Three Congress officials told Reuters that Mukherjee remained her preferred candidate but that the situation was fluid.

News reports said the party was scrambling to muster the votes it needed from a coalition of smaller parties. It was not clear whether it would get the magic number it needs to get its candidate through the electoral college.

"The Congress would lose face badly if it does not now run with Mukherjee," the Economic Times warned.

With the next general election widely expected to produce a fragmented parliament with no clear winner, Congress wants to make sure it controls the presidency. The new president will play a key role in deciding which party takes the lead in forming a government.

The political drama is a major distraction at a time when the flagging economy and global economic uncertainty require the government's full attention, a government official said.

"It is not correct to say that the work has stopped. Work is going on. But it does act as a distraction," the official said on condition of anonymity. When the situation is bad, you would want complete focus on the economy."

Indian media offered differing interpretations for Wednesday's embarrassing snub by the regional allies, but analysts agreed it was typical of the machinations that complicate Indian politics and confound good governance.

"Everybody has a chess game in mind," said analyst Surjit Bhalla, chairman of Oxus Investments, expressing hope that the latest developments could provide the impetus to shake up the political landscape and break the policy inertia.

 

[IndoCarib]

Centre for Monitoring Indian Economy expects revival in FY13; pegs GDP growth at 7.3% - The Economic Times

 

[shuttler]

Rise in inflation fails to quell rate cut view


Jun 14, 2012

Rise in inflation fails to quell rate cut view | Reuters
(Reuters) - Inflation accelerated in May, adding to an avalanche of harsh data for the beleaguered leaders and making it harder for the RBI to revitalise the flagging economy with a widely expected RBI interest rate cut next week.

The 7.55 percent rise in the wholesale price index (WPI) over a year earlier came as both food and fuel price pressures intensified. The outcome matched expectations in a Reuters poll, but an upward revision to the March number to a 2012 high of 7.69 percent raised worries of greater pressure to come.

"The most important negative is the massive revision to the March number, which means the May headline inflation may be revised upwards" said Rajeev Malik, an economist with Singapore-based brokerage CLSA.

"I don't think this data, especially the revision, gives much breathing space to the Reserve Bank of India."

Most analysts expect the Reserve Bank of India to cut its repo rate to 7.75 percent from 8 percent when it meets on Monday, following a 50 basis point cut in April.

A slump in economic growth in the first quarter to a nine year low of 5.3 percent will trump immediate concerns about inflation, they said. A drop in core inflation, which excludes food and fuel, eases concerns about cutting rates, they said.

The RBI might also cut required levels of bank reserves as well.

"Growth is in stagnation, especially manufacturing. The loss of momentum is very, very perceptible," said Shubhada Rao, chief economist at Yes Bank in Mumbai.

But a 3 basis-point rise in the benchmark 10-year bond yield to 8.32 percent signalled some expectations that more aggressive policy easing was unlikely.

The one-year OIS rate rose 4 basis points to 7.53 percent. Bank shares pulled back from an earlier rally to push down Sensex 0.9 percent.

India's inflation is higher than major industrialised economies and its peers in the so-called BRIC grouping, which includes Brazil, Russia, and China.

It is one reason Prime Minister Manmohan Singh has balked at cutting diesel subsidies blamed for the government's wide fiscal deficit. New Delhi is under increasing pressure to reform after the January-March slide in growth.

Finance Minister Pranab Mukherjee said he was "confident" headline inflation would remain between 6.5-7.5 percent throughout the fiscal year 2012/13, possibly suggesting he is comfortable with that range.

India cautiously raised petrol prices last month but has not tackled more politically sensitive and subsidised fuels, such as diesel. Speaking on the sidelines of an OPEC meeting in Vienna, India's oil minister blamed high global oil prices for weak growth in India, which is a net importer of crude.

Adding to India's economic gloom, provisional trade data on Thursday showed exports slumped more than 4 percent in May from a year earlier, the second fall in three months. The trade deficit widened to $16.3 billion.

"We are passing through difficult times," senior trade ministry official Anup Pujari told reporters.

Azim Premji, the chairman of Wipro, this week berated the government as "without a leader," Standard & Poor's warned the country could be downgraded to junk status because of political inaction, and data on Tuesday showed India's industrial output growth flatlined in April.

EASED CONCERNS

The WPI showed inflation quickened from 7.23 percent in April, keeping it near the highest levels this year.

Core inflation dropped to 4.85 percent, down by about a percentage point from February. Economists calculate core inflation from the data.

"Since core inflation is still below 5 percent, I would expect RBI to cut rates by 25 basis points as that is the key number," said A. Prasanna, an economist at ICICI Securities Primary Dealership in Mumbai.

India's repo rate of 8.00 percent is the highest central bank policy rate among major economies in Asia.

One reason behind the slowdown in India's economy was a series of 13 rate rises between March 2010 and October 2011 to quell inflation, which nevertheless remains relatively high.

Supply bottlenecks that stoke price pressures remain largely unattended by the government. A fall in the Indian rupee by 13 percent against the U.S. dollar since early February has raised import price pressures.

The economic slowdown has been deepened by the euro zone debt crisis, a policy logjam in New Delhi and its preoccupation with selecting a president from the political ranks next month for the mostly-ceremonial role.

Capital inflows have slowed and the current account and fiscal deficits widened, raising fears in some quarters that India could face a repeat of a 1991 balance of payments crisis.

This week's industrial output data suggested little pick up in activity from the first quarter, triggering fresh calls for the government to restart an economic liberalisation programme stalled since 2004.

U.S. companies have grown increasingly concerned, "fearing that the investment environment has deteriorated," White House international affairs adviser Michael Froman said on Tuesday, a day before high-level talks aimed at cementing U.S.-India ties.

"There is no room left for any fiscal stimulus, so to trigger growth, the RBI has to lower policy rates," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.

 

[shuttler]

Air India may sack an additional 300 striking pilots
June 11th 2012

Air India may sack an additional 300 striking pilots - NY Daily News

India's civil aviation minister has suggested that the government may fire 300 more striking Air India pilots. Advertisements placed in newspapers are seeking new recruits to replace the pilots who have been on strike since early May.

The Indian national carrier Air India may sack 300 more striking aviators, Civil Aviation Minister Ajit Singh said on Monday, as the airline advertised for hiring new pilots. The airline has already sacked 101 pilots.

"The pilots are on an illegal strike since May. How long do they (pilots) expect us to wait for them to resume duty? If the situation remains the same, then the rest (300) of pilots may also be terminated. But this decision will be taken by the Air India management," Ajit Singh told IANS.

"Not only has the illegal strike caused severe losses to the airline, but also wavered the trust of passengers from Air India. If they want to come back, then they are welcome."

When contacted, the striking aviators said they are studying the situation and are currently on the agitation.

"We are looking at the situation. We all are together in this and our unity would not break. Our only demand right now is the reinstatement of our sacked colleagues and recognition of our union," a senior committee member of the Indian Pilots Guild (IPG) - the now de-recognized union - told IANS.

Earlier, the Air India management had sacked 101 pilot-members of the IPG. Representing aviators of the erstwhile Air India, the IPG went on strike May 8 against the move to train their counterparts from Indian Airlines on the soon-to-be-inducted Boeing 787 Dreamliner.

The airline on its part has given advertisements on its website for hiring of new pilots for a contractual period of five years.

The advertisements call for both commanders and co-pilots, who can operate Boeing 777s, 747s and 737s. The applicants will have to go through an interview and flight simulator tests in Mumbai.

The airline has set July 23, 2012, as the closure for hiring process. Air India expects to hire nearly 100 pilots, who will pool in with 90 more trainee pilots to meet the shortfall in the manpower.

However, it will take Air India nearly four-five months to get the trainee pilots trained as well as give orientation to the new recruits.

Currently, the fleet of Boeing's ultra-long haul aircraft are being operated by executive pilots.

Ajit Singh June 6 said that Air India will go ahead and hire new pilots to tackle the prolonged strike that has crippled the international operations of the national carrier.

The 35-day long strike has severely hit Air India's international operations, with the airline only operating 38 from the original 45 services. Among the seven axed international destinations are Hong Kong, Osaka, Seoul and Toronto.

"Operations to northeast Asia have been hit badly, so have US and European services. Under the new scheme of things, we are trying to mitigate losses by operating to key destinations only," an Air India official said.

 

[IndoCarib]

^^^
OMG ! Air India is sacking its striking pilots ! India is finished

 

[shuttler]

Your lack of economic understanding is only triumphed by bullshit you just bloated out...perhaps you should consider taking up economics as a subject in high school.

I will try to explain in lay mans language.

1. Nominal GDP is not adjusted for inflation.

2. Real GDP growth = (Nominal GDP X Base Year Index) / Current price index.(not the b/s pelted out by kkacer)

3. All figures quoting/released by the govts are real GDP growth rates and are already adjustded for inflation.

4. Growth is calculated as per local currencies and not USD.
.USD -INR E/R is volatile, exchange rate changes on daily basis..does that mean the GDP/ GDP growth will be changing daily basis too??!!

what was the real gdp before cpi adjustment? a double digit growth? again?

^^^
OMG ! Air India is sacking its striking pilots ! India is finished

you need to row a boat home! good for you!

 

[kkacer]

http://web.worldbank.org/external/d...ontentMDK=20370107&menuPK=659160&piPK=2470429

spread your ignorance now !!

World Bank and Your India Gov Miss the Target all the time, India always talk about Big Mouth Future, But miss target all the time

 

[kkacer]

India's exports falls by 4.16 % last month

June 14

India's exports has fallen by 4.16 per cent.

Director General of Foreign Trade Anup Pujari said exports came down to 25.68 billion US dollars in May compared to 26.7 billion US dollars in the same month last year.

The trade deficit is 16.3 billion in May.

India's exports falls by 4.16 %

 

[kkacer]

Monsoon 50% below normal in second week

June 14

Monsoon rains are crucial for agriculture as only 40 per cent of the cultivable area is under irrigation. The farm sector contributes about only 15 per cent to the country's Gross Domestic Product (GDP), but it employs about 60 per cent of India's population.

India's bad run with the monsoon continued with the country receiving 50 per cent less rains than normal in the past week, according to data released by the weather office.

As many as 13 sub-divisions received scanty rains, while West and East Uttar Pradesh received no rainfall during the past week.


Monsoon 50% below normal in second week - Business Today - Business News

 

[IndoCarib]

GE India to invest Rs 1,100 crore on new facility - The Economic Times

BERNAMA - India Invites Brazilian Companies To Invest In Its National Infrastructure

 

[KRAIT]

GE India to invest Rs 1,100 crore on new facility - The Economic Times

Sensex surged today, now this news....some relief....

 

[IndoCarib]

India doesn't yet face balance of payments crisis

(Reuters Breakingviews) - In 1991, the loudest of wake up calls, in the form of a currency crisis, aroused India from the stupor of four decades of failed economic policies. Some hope that the decline of the rupee, which hit a record low against the dollar on May 31, and the sharp drop in the GDP growth rate, to 5.3 percent last quarter, will provide a similar jolt to get India back on the reform track. Breakingviews has run the numbers.

After coming within weeks of running out of foreign currency reserves, India changed course. Reforms driven by Prime Minister Narasimha Rao and his Finance Minister Manmohan Singh led to rapid economic growth and the accumulation of a large reserve of foreign currencies. Now the dangers are a reversal of the momentum of reform and a reversion to complacency.

As far as foreign exchange is concerned, India's persistent trade and current account deficits mean that it has to run just to stand still. For four of the past five years, it has been able to move forward -- capital inflows of Foreign Direct Investment and portfolio investment have more than covered the current account shortfall. Over the past year, it has had to run harder. The deficit shot up from 2.7 to 4 percent of GDP, thanks largely to higher oil prices, and the current account deficit of $76 billion is the widest ever.

That shortfall should be set against the country's foreign currency reserves. Those have fallen from a peak in July 2008 of $307 billion, which then covered almost 14 months of imports, to $286 billion, now enough to cover only around seven months of imports. But as our calculator shows, that's still a more than comfortable defence under most scenarios.



Even if capital flows were to reduce to zero as they did in 2008, following the collapse of Leman Brothers, reserves would drop by only $40 billion over twelve months, still leaving a healthy $250 billion or so of cover. Of course, the more a country defends itself with foreign exchange reserves, the weaker its defences appear.

In today's environment, India can cope. But there are two big risks. First, a catastrophe, say in the euro zone, could leads to a flight of foreign capital. Foreigners own about $200 billion worth Indian equities. A rush for the exit could trigger a spiraling decline. Second, a repeat of the 1991 oil shock could precipitate a sharp increase in both the trade and fiscal deficits, the latter because of wasteful government subsidies of domestic fuel prices.

No country would be immune to such shocks. But India's dependency on foreign investment, and ballooning trade gap, puts it particularly at risk. India can become more resilient by encouraging more foreign direct investment: lifting caps on retail, aviation and insurance sectors would be a start. It could also reduce fuel subsidies. Even better, it could renew the 1990s political spirit of Rao and Singh. Investors need the red carpet, not red tape.

BREAKINGVIEWS: India doesn't yet face balance of payments crisis | Reuters

 

[cloud_9]

Essar Energy commissions 600MW unit 2 of Salaya I power project

MUMBAI: Essar Energy, the India-focused integrated energyc ompany, on Friday announced that it has commenced commercial operations at the 600 megawatt (MW) unit 2 of its 1,200MW Salaya I power project.

This follows the commencement in April of commercial operations at Salaya I, unit 1, also 600MW, and means the entire project has now been fully commissioned. This takes Essar Energy's total installed operational generation capacity to 2,800MW.

Salaya I, in Gujarat state, is Essar Energy's first coal fired power project and has been built at a total investment cost of US$1.1 billion. Most of the power produced will be sold to the Gujarat state electricity utility, GUVNL, under a long term contract.

Salaya I is one of three power projects due to be commissioned by Essar Energy in 2012, the others being the 1,200MW Mahan I project and the 510MW Vadinar P2 project. Together these three projects will add 2,910MW of capacityand will take Essar Energy's total installed capacity to 4,510MW.

GE to focus on local energy products at Rs 1,000-cr facility in Chakan

PUNE, JUNE 15: GE India is setting up a new manufacturing facility at Chakan, in Maharashtra's Pune district, in which it will invest over Rs 1,000 crore ($200 million).

The signing of a memorandum of understanding today with the Maharashtra government, which has granted it ‘mega project' status, was followed by a ground-breaking ceremony at the site.

Spread over 68 acres, the multimodal plant at Pune, GE's first of its kind, is scheduled to begin manufacturing in the third quarter of 2013, Mr John Rice, Vice-Chairman, GE, said.

The focus will be on developing localised products and solutions for the energy sector in the first phase of operation.