As my Chinese friends are hoping for India's failure I will update them on this matter.
In May, exports fell 4.16 per cent year on year to $25.68bn, while
imports fell 7.36 per cent to $41.9bn, according to data released by the commerce and industry ministry.
So deficit is going to improve certainly. High consumption rate is going to sustain the growth rate.
In May, exports fell 4.16 per cent year on year to $25.68bn, while
imports fell 7.36 per cent to $41.9bn, according to data released by the commerce and industry ministry.
So deficit is going to improve certainly. High consumption rate is going to sustain the growth rate.
another news
ACC plans Rs 5,000 cr cement complex
ACC plans Rs 5,000 cr cement complex - The Times of India
CHENNAI: The hope of policy clarifications and increasing demand seem to be bringing the foreign investors back to India. Following Swedish retailer IKEA's Rs 10,500 crore investment announcement for India and Coca-Cola raising its investment by Rs 15,000 crore, Swiss cement maker Holcim-controlled ACC is mulling a Rs 5,000-crore integrated cement complex in Andhra Pradesh.
As my Chinese friends are hoping for India's failure I will update them on this matter.
In May, exports fell 4.16 per cent year on year to $25.68bn, while
imports fell 7.36 per cent to $41.9bn, according to data released by the commerce and industry ministry.
So
deficit is going to improve certainly. High consumption rate is going to sustain the growth rate.
In May, exports fell 4.16 per cent year on year to $25.68bn, while
imports fell 7.36 per cent to $41.9bn, according to data released by the commerce and industry ministry.
So deficit is going to improve certainly. High consumption rate is going to sustain the growth rate.
another news
ACC plans Rs 5,000 cr cement complex
ACC plans Rs 5,000 cr cement complex - The Times of India
CHENNAI: The hope of policy clarifications and increasing demand seem to be bringing the foreign investors back to India. Following Swedish retailer IKEA's Rs 10,500 crore investment announcement for India and Coca-Cola raising its investment by Rs 15,000 crore, Swiss cement maker Holcim-controlled ACC is mulling a Rs 5,000-crore integrated cement complex in Andhra Pradesh.
Worst May be Over on Balance of Payments
many analysts contend the worst is over. The sharp fall in the Indian rupee against the dollar is likely to discourage imports, as companies will have to pay more rupees for goods priced in dollars. It also swells earnings from exports when converted into Indian rupees, which will encourage Indian companies to export more.
These simultaneous developments could reduce the current account gap.
Its worth noting that the rupee has fallen more than 20% against the dollar over the past 12 months. Why hasnt the current account improved over that period? What has suddenly changed now?
Nomura say the benefit of a weak local currency only shows up after a lag as it takes time for importers and exporters to adjust. Some imports are inelastic in nature, which means that the demand for them doesnt fall immediately if their prices increase.
Goldman Sachs estimates that every 1% fall in the value of the rupee, adjusted for inflation, leads to a 1.1% increase in exports with a lag of two months and a similar fall in imports after four months.
The recent fall in crude prices is also likely to lower the current account gap, says Goldman Sachs. India imports three-fourths of its crude oil requirement and, if oil costs less, India has to pay fewer dollars for it though of course it now needs more rupees to buy those dollars.
Nomura expects the current account deficit to fall to 3.0% to 3.5% of GDP in the year that started April 1, while Barclays Capital estimates it at 3.6%.
Worst May be Over on Balance of Payments - India Real Time - WSJ
Revive animal spirit in India's economy, PM to advisors
Revive animal spirit in India's economy, PM to advisors | NDTV.com
Time to go real: Badland, Bihari and now branding Bihar…
New Delhi: The Indian economy is witnessing a transition with many investors jostling for space in the market. As, the urban markets are not offering enough opportunities amid higher competitive environment, business houses are looking for better alternatives and hence exploring India to understand and tap the resources of smaller cities.In real terms India is facing a market shift from the metros to urban markets and finally to the smaller cities. These are the markets of future, where the real India can bank upon and is actually experiencing growth.
China: one country, two realities
Deng Xiaoping’s famous formulation of how China would reabsorb Hong Kong into its administrative fold was ‘one country, two systems’.
But huge protests on Sunday, the 15th anniversary of Hong Kong’s return, met with a virtual blackout in mainland Chinese media, suggesting that a new formulation might be more apt: one country, two realities.
As Enid Tsui reported in Monday’s FT:
Up to 400,000 people took to the streets in Hong Kong on Sunday in an outpouring of dissatisfaction as the city’s new leader was sworn in by Hu Jintao, the Chinese president…. The turnout on Sunday – the 15th anniversary of the former British colony’s return to China– was the biggest since 2003, when half a million people marched against a controversial anti-sedition law and a collapse in property prices.
The protests were, in other words, rather hard to miss. Yet Chinese media outlets were clearly intent on averting their eyes.
China News Agency only saw celebrations:
The government of the (Hong Kong) special administrative region organised more than 300 celebratory activities. Hong Kong residents also organised their own series of brilliant and varied activities. For several days, there was a surge in the passion of Hong Kong citizens for celebrations of the return and more than 100,000 people participated.
China Daily also had its rose-tinted glasses firmly affixed:
More than 40,000 people packed Hong Kong Stadium for a performance by an 80-member parachute team from the People’s Liberation Army. On Sunday evening, hundreds of thousands of people crowded the promenades on both sides of Victoria Harbour for a fireworks display.
For anyone in China with a CNN or BBC satellite feed, hourly news broadcasts showing the protests – er, celebrations – were interrupted.
Only the Global Times, a newspaper that prides itself on challenging foreigners who criticise China, dared to mention the protests at any length. But it reported the protests in its English edition, not its Chinese edition, and sought to cast Western media as the villain.
The important event was also an occasion for protests, as local residents demanded more rights regarding individual benefits. Some protestors held signs reading “Give me five more days of holidays from work.” However, some Western media interpreted the protests as “anti-China” campaigns. “The Western media are obviously sensationalizing the protests,” said Dai Qingcheng, a current affairs commentator in Hong Kong.
The fatal flaw in this version of events is that Hong Kong media have devoted far more column space and broadcast time than Western media to reporting on the protests.
Beijing had hoped that the 15th anniversary would be a celebration of how Hong Kong and China have steadily grown closer together. Instead, it was a showcase of how the two are as far apart as ever, living two separate realities.
(Additional reporting by Emma Dong)
China: one country, two realities | beyondbrics
India’s decade: the highest housing price rise in the world
Rats. Raw sewage in the streets. Garbage to go. These are but of a few of the quality-of-life issues that continue to afflict many parts of major Indian cities like Mumbai.
And yet, few Mumbaikars – or Delhi-ites – would be surprised to learn that India has seen the biggest rise in housing prices of any country in the world in the ten years from 2001 to 2011, according to a study released by Lloyds TSB International this week. They need only look at their rent check, or downpayment.
Prices in India grew a staggering 284 per cent over the 10-year period. Rounding out the top three were two more Brics: Russia, at 209 per cent and South Africa, at 161 per cent. China clocked in at 47 per cent, just below the UK’s 50 per cent, while Brazil didn’t figure in the study of 32 countries.
The reason for India’s astounding growth? A simple case of supply and demand – India has a whole lot of people and not very much housing – and economics: India’s GDP growth over the same period closely tracks the housing price growth, at 280 per cent.
That means more Indians have more money to spend on housing. But housing remains scarce for a few reasons, said Sandipan Pal, analyst at Motilal Oswal.
First, there’s an element of artificial suppression – developers don’t want to flood the market with properties only to drive down prices.
Second, real estate trends are highly dependent on Mumbai and the National Capital Region that includes Delhi – India’s largest, and most expensive, markets. Especially in the case of Mumbai – a sliver of connected islands make up the main part of the city – there is a finite amount of space, explaining why, despite the quality-of-life issues, prices continue to rise.
Outside of these two cities, the picture is completely different – with more options, lower prices and more buyers.
Third, is that oldest of Indian problems: red tape. Major Indian developers are sitting on millions of square feet of land, likely in part because they don’t want prices to plummet, but also because India makes it incredibly difficult to obtain permissions and approvals to build. The licensing process is long, cumbersome and often arbitrary, not to mention notoriously corrupt.
Pal said the current economic slowdown is likely to keep prices relatively stagnant for the next year or so, though growth is still likely to be positive – just as last year it clocked 8.7 per cent, second only to Hong Kong.
As long as the Indian economy continues to grow – 5.3 per cent may be disappointing from an Indian perspective, but few other countries would balk at it – and Indians continue to gain more purchasing power, prices are likely to continue to rise.
Unfortunately for many, the same does not necessarily apply to the quality of life in major Indian cities.
India’s decade: the highest housing price rise in the world | beyondbrics
Unlike Chinese poster here we don't pretend to be what we are not.
Even turkey is showing the eyes to dragon now.
Turkey Inc muscles in on China in Africa
Turkey Inc muscles in on China in Africa | beyondbrics
Tide May Be Turning for Indian Stocks
Despite some tough economic news recently, India's benchmark 30-stock Sensex jumped 7.5% in June, recouping most of its losses over the last three months. It gained 12.8% for the first six months of this year, making it among the best-performing markets in Asia.
Tide May Be Turning for Indian Stocks - WSJ.com
"The angst over falling Indian economic growth is so yesterday," Deutsche Bank AG analysts wrote in a research note last week. The firm was among a handful of brokerages that have upgraded Indian stocks within the last two weeks.
"The Sensex is trading at...the most attractive valuation since July 2009 and at a 20% discount to the past five years' average," Deutsche Bank said in its note.
China milk: not so Bright
China’s dairy industry is the cow that keeps on giving – scandals.
Earlier this month it was mercury in the baby formula of Yili, the mainland’s largest dairy producer by revenue. In December, products of Mengniu, China’s second largest dairy, were destroyed after they were found to contain aflatoxin, which can cause severe liver damage. Four years ago it was melamine in milk: an industrial chemical added to boost apparent protein content, it eluded government quality control until hundreds of thousands of chinese infants had kidney stones from it.
So what’s the lastest?
Thursday’s mainland newspapers carried yet another tainted milk story but this time it involves Bright Dairy & Food, a listed unit of Bright Food which recently bought control of the UK’s Weetabix. Bright said it had recalled hundreds of cartons of milk after a “mechanical error” tainted the batch with alkaline water. Such news may not be the best kind of publicity for a company in the midst of an overseas buying spree.
Bright said a brief mechanical delay during routine maintenance at one of its Shanghai factories caused a “small amount” of alkaline cleaning solution to be flushed into 300 cartons of milk. “We deeply apologise for any impact this has had on our customers. From today on, we will strictly strengthen relevant management procedures,” the company said, thanking media and customers for their “supervision”.
The remarkable thing is that Chinese internet users, normally near-hysterical in their reaction to food safety breaches, have taken this one relatively calmly. Bright seems to have earned points for disclosing the error promptly and recalling product voluntarily – and some netizens pointed out that it was “only” an error. That will presumably be a comfort to anyone who may have been sickened by buying milk from Shanghai’s most famous dairy brand.
China milk: not so Bright | beyondbrics
Even as India’s GDP growth is falling, Ms Naina Lal Kidwai thinks the perception Indians have of themselves is lower than how the world perceives them.
She also has a different take on the “policy paralysis” afflicting the country. For her, the big ticket reform is not about Foreign Direct Investment (FDI) limits in retail or insurance. Real reform is to march forward on infrastructure investment, and in particular put the power sector back on track, she says.
Ms Kidwai should know, for she dons national and international roles – locally as the Country Head of HSBC India, the Senior Vice-President of the industry body FICCI and a Member of the Government-Industry Task Force; and globally as the Executive Director on the Board of Hongkong and Shanghai Banking Corporation Ltd, Non-executive Director on the Board of Nestle SA and Member of the World Economic Forum's Global Agenda Council on Climate Change.
She spoke to Business Line last week in Brussels, where she was leading an Indian business delegation to the European Commission headquarters which met Mr Antonio Tajani, the Vice-President of the European Commission.
Expressing surprise over the 20 per cent growth in India-European Union trade in 2011 despite the Euro Zone crisis and the slowdown in India’s growth, she said this suggests that the industry is finding ways to better engage even during what could be perceived as a downturn. Ms Kidwai also offered a solution for the “black money” issue affecting India.
Excerpts from the interview:
What is the perception of European business about India?
We are disappointed to see our GDP growth falling down to 6-6.5 per cent. We would rather see it at 8-9 per cent levels.
The rest of the world, however, sees 6.5 per cent as a respectable growth rate. Though they think India is not an easy market to operate in, they are prepared to give it a serious look.
Our perception of ourselves is lower than how the world perceives us. But we need to ensure that the boardrooms of large companies do not get infected by this negative perception.
We need to lift the perception, reassure them that change is happening, and tell them that (the recent) Ikea type of proposals (of an investment of Rs 10,500 crore) are still forthcoming.
But what are the big ticket reforms that would give foreign investors confidence on Indian economy?
The big ticket reform does not necessarily mean allowing FDI in multi-brand retail or raising the FDI cap in insurance, as they may be mere “pro-reform” signals. We have lived without FDI in multi-brand retail and a higher FDI cap pension and we were still growing at nine per cent.
Real reform is to march forward on infrastructure investment, and in particular put the power sector back on track.
Many new projects took off, but are now stalled. They have to be completed fast. The Prime Minister’s Office is putting more focus on the power sector.
We need labour reforms, further growth in services sector, more investment in roads, ports and airports too, and we also want to see the expeditious completion of the Delhi-Mumbai Industrial Corridor project because it will spur the kind of growth we actually require.
Is the banking sector ready to fund these long-term projects?
The power projects are not stalled because of lack of bank finance, but due to the issue of coal supply.
No infrastructure project today is stalled because of the banking sector. Today there is no urgency for our banking sector to reform or grow in way that needs financing.
Yes, 5-10 years later, we would need a larger banking sector and strong long-term debt markets.
That is a problem which could play out if we realise our dream of $1 trillion investment in infrastructure. Then we would also need pension reforms, so that our pension funds can invest in long-term corporate debt, and bigger banks that can take some of this on to their books, and most importantly we need a strong sector so that the loans that are given don’t turn bad. There has to be the confidence and the risk profile providing a degree of comfort for this.
How is the rupee volatility impacting different sectors?
The weakening rupee helps the services (exports) sector. But it is not so good for imports, especially given our huge oil bill. Things like “millennium bonds” would bring dollars into the country and could temporarily contain the rupee’s downward slide.
The FICCI has also proposed that India should look at the Switzerland-Germany tax (evasion) treaty by which Switzerland has given (over) $5 billion to Germany as tax on the monies of the latter’s citizens but without giving the names of the perpetrators (of tax evasion).
A similar pact can ensure that the money of those (Indian) individuals (in Switzerland) comes back with penal interest. If we can also catch those perpetrators, nothing like it.
Business Line : Industry & Economy News :
Even as Indias GDP growth is falling, Ms Naina Lal Kidwai thinks the perception Indians have of themselves is lower than how the world perceives them.
She also has a different take on the policy paralysis afflicting the country. For her, the big ticket reform is not about Foreign Direct Investment (FDI) limits in retail or insurance. Real reform is to march forward on infrastructure investment, and in particular put the power sector back on track, she says.
Ms Kidwai should know, for she dons national and international roles locally as the Country Head of HSBC India, the Senior Vice-President of the industry body FICCI and a Member of the Government-Industry Task Force; and globally as the Executive Director on the Board of Hongkong and Shanghai Banking Corporation Ltd, Non-executive Director on the Board of Nestle SA and Member of the World Economic Forum's Global Agenda Council on Climate Change.
She spoke to Business Line last week in Brussels, where she was leading an Indian business delegation to the European Commission headquarters which met Mr Antonio Tajani, the Vice-President of the European Commission.
Expressing surprise over the 20 per cent growth in India-European Union trade in 2011 despite the Euro Zone crisis and the slowdown in Indias growth, she said this suggests that the industry is finding ways to better engage even during what could be perceived as a downturn. Ms Kidwai also offered a solution for the black money issue affecting India.
Excerpts from the interview:
What is the perception of European business about India?
We are disappointed to see our GDP growth falling down to 6-6.5 per cent. We would rather see it at 8-9 per cent levels.
The rest of the world, however, sees 6.5 per cent as a respectable growth rate. Though they think India is not an easy market to operate in, they are prepared to give it a serious look.
Our perception of ourselves is lower than how the world perceives us. But we need to ensure that the boardrooms of large companies do not get infected by this negative perception.
We need to lift the perception, reassure them that change is happening, and tell them that (the recent) Ikea type of proposals (of an investment of Rs 10,500 crore) are still forthcoming.
But what are the big ticket reforms that would give foreign investors confidence on Indian economy?
The big ticket reform does not necessarily mean allowing FDI in multi-brand retail or raising the FDI cap in insurance, as they may be mere pro-reform signals. We have lived without FDI in multi-brand retail and a higher FDI cap pension and we were still growing at nine per cent.
Real reform is to march forward on infrastructure investment, and in particular put the power sector back on track.
Many new projects took off, but are now stalled. They have to be completed fast. The Prime Ministers Office is putting more focus on the power sector.
We need labour reforms, further growth in services sector, more investment in roads, ports and airports too, and we also want to see the expeditious completion of the Delhi-Mumbai Industrial Corridor project because it will spur the kind of growth we actually require.
Is the banking sector ready to fund these long-term projects?
The power projects are not stalled because of lack of bank finance, but due to the issue of coal supply.
No infrastructure project today is stalled because of the banking sector. Today there is no urgency for our banking sector to reform or grow in way that needs financing.
Yes, 5-10 years later, we would need a larger banking sector and strong long-term debt markets.
That is a problem which could play out if we realise our dream of $1 trillion investment in infrastructure. Then we would also need pension reforms, so that our pension funds can invest in long-term corporate debt, and bigger banks that can take some of this on to their books, and most importantly we need a strong sector so that the loans that are given dont turn bad. There has to be the confidence and the risk profile providing a degree of comfort for this.
How is the rupee volatility impacting different sectors?
The weakening rupee helps the services (exports) sector. But it is not so good for imports, especially given our huge oil bill. Things like millennium bonds would bring dollars into the country and could temporarily contain the rupees downward slide.
The FICCI has also proposed that India should look at the Switzerland-Germany tax (evasion) treaty by which Switzerland has given (over) $5 billion to Germany as tax on the monies of the latters citizens but without giving the names of the perpetrators (of tax evasion).
A similar pact can ensure that the money of those (Indian) individuals (in Switzerland) comes back with penal interest. If we can also catch those perpetrators, nothing like it.
Business Line : Industry & Economy News :
Despite policy paralysis, India’s growth is still among the highest for emerging economies
Arvind Panagariya, Professor at Columbia University
Panic has struck the vast majority of commentators on the Indian economy in the wake of the recent decline in the growth rate. In turn, they have spawned a number of myths that pose additional threats to future growth by creating self-fulfilling negative expectations.If the India growth story is to sustain, these myths must be exposed for what they are and balance restored to the policy discourse.
Despite policy paralysis, India?s growth is still among the highest for emerging economies - Economic Times
The states are together growing faster than the Indian Union!
Take a closer look and you’ll find that if you added up the state domestic products of all the states and UTs, the growth rate of their totals does not match the all-India growth rate computed on the same basis
The states are together growing faster than the Indian Union! - Columns - livemint.com
I heard somewhere yesterday that Rs. can recover to 50 level by next January if government don't do any mischief. Will find souce pretty soon.
separate one here.
rupee may recover by March
Profit Top 10: India facing key political risks; rupee may recover by March
