gattaca Posted January 16, 2015 Posted January 16, 2015 that is lowest price i guess. have they given where the price will stabilize in long run (say 8-9 months down the line)? The lower the better for India Trade deficit was down at $9 billion for dec. Vs $ 16 billion for Nov. due to oil price cut. Imagine India becoming a trade surplus country :woot: Goldman Sachs said U.S. crude oil may fall below bank’s six-month forecast of $39 a barrel and future rallies could be thwarted by the speed at which any lost shale output can recover. “You can always undershoot to the downside,†Jeff Currie, Goldman’s head of commodities research, said in an interview on Bloomberg Television’s “Surveillance.†The forecast of lower prices was based in part on the bank’s estimates for default rates among the most-indebted U.S. producers, he said. 70 for next year. after 6 months is 40.
Malcolm Merlyn Posted January 16, 2015 Posted January 16, 2015 Oil prices less than 70 is good for Indian economy.
Sachin=GOD Posted January 16, 2015 Author Posted January 16, 2015 2 different views on where Oil Prices will go in 2015: A New Ceiling for Oil Prices http://www.project-syndicate.org/commentary/oil-prices-ceiling-and-floor-by-anatole-kaletsky-2015-01 The Price of Oil in 2015 http://www.project-syndicate.org/commentary/price-of-oil-in-2015-by-jim-o-neill-2015-01
Kalia_Test Posted January 16, 2015 Posted January 16, 2015 Oil prices less than 70 is good for Indian economy. Can't be so sure. It depends on why the price is less than 70. - If it is due to some new discovery/innovation ( supply ), then yes again only to an extent. - If it is due to developed economies ( specifically those to whom we export) going into recession and therefore no demand, then hard to see how we will benefit much from low crude.
Precambrian Posted January 16, 2015 Posted January 16, 2015 Almost as if even gods were waiting for Modi to take power. Modi govt so far is doing a nice job of using this to address both the populist requirements as well as plug the deficit factor. But it should build on this momentum and drive growth in required sectors.
Sachin=GOD Posted January 21, 2015 Author Posted January 21, 2015 Is the initial euphoria over reduction in oil prices set to end? India's wish for a moderation in oil prices has been more than granted, which hasn't proven to be the panacea that it hoped for Read more: http://forbesindia.com/article/special/is-the-initial-euphoria-over-reduction-in-oil-prices-set-to-end/39395/1#ixzz3PRpWqLaG
randomGuy Posted January 24, 2015 Posted January 24, 2015 Is the initial euphoria over reduction in oil prices set to end? India's wish for a moderation in oil prices has been more than granted, which hasn't proven to be the panacea that it hoped for Read more: http://forbesindia.com/article/special/is-the-initial-euphoria-over-reduction-in-oil-prices-set-to-end/39395/1#ixzz3PRpWqLaG Say Govt gives coupons worth 700/- per month only for Groceries bought from Govt. shops (like mother diary) and from select few large private stores (big bazaar, reliance fresh etc) to everyone who wants to collect. Say 50 Cr people use their coupons every month. It comes to $6-7 billion per month - similar to Indias monthly saving from to crude oil price drop . We can than take back other wasteful subsidies. People will enjoy real food security. what do you say?
Tiger80 Posted January 24, 2015 Posted January 24, 2015 Say Govt gives coupons worth 700/- per month only for Groceries bought from Govt. shops (like mother diary) and from select few large private stores (big bazaar, reliance fresh etc) to everyone who wants to collect. Say 50 Cr people use their coupons every month. It comes to $6-7 billion per month - similar to Indias monthly saving from to crude oil price drop . We can than take back other wasteful subsidies. People will enjoy real food security. what do you say? This will further push inflation up.India needs either more subsidies given to producers of vegetable's, Dals , milk , meat or import massively them from other countries. Our per capita availability of food is very poor . Even Pakistan has much better availability of milk and meat compare to India
Sachin=GOD Posted January 24, 2015 Author Posted January 24, 2015 Say Govt gives coupons worth 700/- per month only for Groceries bought from Govt. shops (like mother diary) and from select few large private stores (big bazaar, reliance fresh etc) to everyone who wants to collect. Say 50 Cr people use their coupons every month. It comes to $6-7 billion per month - similar to Indias monthly saving from to crude oil price drop . We can than take back other wasteful subsidies. People will enjoy real food security. what do you say? Such schemes should only be made available to the really poor and not the middle class. For the middle class some incentives on opening more businesses and cheaper loans etc will be better in the long term.
randomGuy Posted January 24, 2015 Posted January 24, 2015 This will further push inflation up.India needs either more subsidies given to producers of vegetable's' date=' Dals , milk , meat or import massively them from other countries. Our per capita availability of food is very poor . Even Pakistan has much better availability of milk and meat compare to India[/quote'] this step for food security is additional to the subsidies to farmers. We can take back various other wasteful subsidies. Scheme should be only for poor. anyone can come and say his yearly income of say <60k INR and collect his 700/- coupons which he must use within a month and the rest of the amount will lapse after the month.
Tiger80 Posted January 24, 2015 Posted January 24, 2015 this step for food security is additional to the subsidies to farmers. We can take back various other wasteful subsidies. But this step will put inflation on roof top. You want 30-35 thousand crore of paper money to be distribuited every month to people with out increasing supply of foodstuff. Scheme should be only for poor. anyone can come and say his yearly income of say <60k INR and collect his 700/- coupons which he must use within a month and the rest of the amount will lapse after the month. Barely 10-15% of India work in organised sector which means govt has no means to know what is the income of a person .Just multiply 60k into 10 , means even people earning 5-6 lakhs will declare themselves poor and take benefit of free coupons
randomGuy Posted January 25, 2015 Posted January 25, 2015 But this step will put inflation on roof top. You want 30-35 thousand crore of paper money to be distribuited every month to people with out increasing supply of foodstuff. Barely 10-15% of India work in organised sector which means govt has no means to know what is the income of a person .Just multiply 60k into 10 , means even people earning 5-6 lakhs will declare themselves poor and take benefit of free coupons The idea is that people think they have an assurance of their food security and that they are not working for food but for other stuff like buying a house, car, holiday travel etc....that even if they are unemployed, at least they will have coupons worth 700/- for eatable items. They might not ever avail the coupons but the confidence, the assurance levels will go up hence so will the quality of life. Poor people dont drink enough milk on average and this will help increase milk consumption n nutrition among poor. If even 50cr. people use it, the bill will be roughly what we are saving thru low oil prices.... Slight increase in prices will be there but real advantages seem much more. Only slight increase though. since only 700 rs. coupons are being given...people will use judiciously as the amount is low.
Precambrian Posted January 25, 2015 Posted January 25, 2015 The idea is that people think they have an assurance of their food security and that they are not working for food but for other stuff like buying a house, car, holiday travel etc....that even if they are unemployed, at least they will have coupons worth 700/- for eatable items. They might not ever avail the coupons but the confidence, the assurance levels will go up hence so will the quality of life. Poor people dont drink enough milk on average and this will help increase milk consumption n nutrition among poor. If even 50cr. people use it, the bill will be roughly what we are saving thru low oil prices.... Slight increase in prices will be there but real advantages seem much more. Only slight increase though. since only 700 rs. coupons are being given...people will use judiciously as the amount is low. what happens when we lose these "savings" when the oil prices go up? Further the excess demand created by these 5-6 billion per month will toast the economy by spiking up the inflation. Not just that, it might also create demand for conspicous goods. Worse, gents of families might actually use this opportunity to spend more on liquor. How do you cap the usage at 50 crores? What is preventing it from being used by 95% of the people? Most importantly, how does it address the lowest rung of the population, who doesn't have access to such "supermarkets"? Obviously existing PDS infrastructure is woefully inadequate to address the excess load. I am not saying that your idea is stupid, just that it is impractical.
randomGuy Posted January 25, 2015 Posted January 25, 2015 what happens when we lose these "savings" when the oil prices go up? Further the excess demand created by these 5-6 billion per month will toast the economy by spiking up the inflation. Not just that, it might also create demand for conspicous goods. Worse, gents of families might actually use this opportunity to spend more on liquor. How do you cap the usage at 50 crores? What is preventing it from being used by 95% of the people? Most importantly, how does it address the lowest rung of the population, who doesn't have access to such "supermarkets"? Obviously existing PDS infrastructure is woefully inadequate to address the excess load. I am not saying that your idea is stupid, just that it is impractical. Thanks for taking the effort of going through the posts and replying. This topic is one that I am passionate about. Low oil prices give the opportunity to implement the program straight away. But when they rise in future, the money can be allocate if the program is worth the money, say at the cost of other wasteful subsidies. The worthiness is most important. Like I said, it will provide assurance, better nutrition, mental relief and so, better quality of life . From what I observe, many times the poor have limited money but enough money to spend on quality nutritious food but they dont spend or hesitate to spend money on quality nutritious food (like milk etc). Coupons will only be for eatable items, so the poor will be forced to use them or else they will lapse. Apart from the big private stores, the coupons will be accepted at all govt. shops like the mother dairy that sells milk, milk products, bread etc. Like you said, PDS system is woefully inadequate in infra (improper storage, distribution, wastage, corruption etc) but even more inadequate in quality, nutritional value etc. For ex. - the quality of wheat and rice is quite bad. Milk(for wholesome nutrition) is not even covered under PDS. How do we ensure that no undeserving person uses this? Thats a very valid concern. (rich and upper middle class will anyways wont care to use it) Perhaps by media campaigns(like swachh bharat campaign) making that kind of use uncool..
Precambrian Posted January 25, 2015 Posted January 25, 2015 Thanks for taking the effort of going through the posts and replying. This topic is one that I am passionate about. Low oil prices give the opportunity to implement the program straight away. But when they rise in future, the money can be allocate if the program is worth the money, say at the cost of other wasteful subsidies. Very vague. What are these wasteful subsidies? How'd you decide "its wirth the money"? The worthiness is most important. Like I said, it will provide assurance, better nutrition, mental relief and so, better quality of life . At what cost? Apart from the big private stores, the coupons will be accepted at all govt. shops like the mother dairy that sells milk, milk products, bread etc. I haven't heard about Mother Diary. And talking about poor people who are in the remotest regions of the place - the target population. Like you said, PDS system is woefully inadequate in infra (improper storage, distribution, wastage, corruption etc) but even more inadequate in quality, nutritional value etc. For ex. - the quality of wheat and rice is quite bad. Milk(for wholesome nutrition) is not even covered under PDS. Indeed, because of supply chain issues. How'd u think the same system would be able to support then a highly perishable thing like milk? How do we ensure that no undeserving person uses this? Thats a very valid concern. (rich and upper middle class will anyways wont care to use it) Perhaps by media campaigns(like swachh bharat campaign) making that kind of use uncool.. WHat % of Indian population does this rich and upper middle class form? Not more than 5% I guess. The remaining, yours truly included, bargain each day for our vegetables and fruits. Obviously then coupons worth INR2800 (700 per head, assuming a 4 member family) aren't going to be get wasted by a middle class family, even if they are earning 80000 a month. As I said, too impractical.
Tiger80 Posted January 25, 2015 Posted January 25, 2015 The idea is that people think they have an assurance of their food security and that they are not working for food but for other stuff like buying a house, car, holiday travel etc....that even if they are unemployed, at least they will have coupons worth 700/- for eatable items. They might not ever avail the coupons but the confidence, the assurance levels will go up hence so will the quality of life. Poor people dont drink enough milk on average and this will help increase milk consumption n nutrition among poor. If even 50cr. people use it, the bill will be roughly what we are saving thru low oil prices.... Slight increase in prices will be there but real advantages seem much more. Only slight increase though. since only 700 rs. coupons are being given...people will use judiciously as the amount is low. MNREGA INTRODUCED 33000 crores into economy per annum and many economists blamed it for inflation , you want 4-5 lakh crore into economy without increasing productivity.What you are saying is mother of all helicopter scheme.Wheat flour will go rs 100 per kg Inflation happens when the total amount of money increases relative to the total amount of goods that are produced in the economy. If a scheme merely adds more money to the pot without increasing production, it will cause inflation. If you increase production and at the same time increase the total amount of money appropriately, there is no inflation. If you do a pure income transfer, without raising the total amount of money, you do not have inflation. So what is the NREGS doing? If it is merely printing money and handing it to unemployed people (who are not producing anything), then it leads to inflation. This inflation reduces the real incomes of people who are producing something. So in this case, it is a pure income redistribution scheme. Drèze knows this as he knows basic economics. But he cannot admit the truth because his job depends on being economical with the truth. - See more at: http://www.deeshaa.org/2011/04/11/old-story-nrega-causes-inflation/#sthash.C1vKsizP.dpuf This is what mnrega did even though on the paper there should have been some productive work your scheme has no productive work but just hand paper coupons for foodstuff .These type of helicopter schemes never work may be for 1-2 years they give some relief but ultimately people suffer
randomGuy Posted January 26, 2015 Posted January 26, 2015 ^dont compare with mnrega. Goals are different. Only food inflation will rise mainly as food coupons are being given. Inflation can not be a reason to not implement this program Food has 12% weight in CPI - http://stats.oecd.org/Index.aspx?DataSetCode=MEI_CPI_WEIGHTS Inflation can be tackled thru competition n incentives to producers. Precambrian - Media campaigns like swachh bharat campaign can be used so that only the poor avail the scheme. ( I and most upper middle class also bargain for veg. Fruits BTW).
Precambrian Posted January 26, 2015 Posted January 26, 2015 ^dont compare with mnrega. Goals are different. Only food inflation will rise mainly as food coupons are being given. Inflation can not be a reason to not implement this program Food has 12% weight in CPI - http://stats.oecd.org/Index.aspx?DataSetCode=MEI_CPI_WEIGHTS Inflation can be tackled thru competition n incentives to producers. Precambrian - Media campaigns like swachh bharat campaign can be used so that only the poor avail the scheme. ( I and most upper middle class also bargain for veg. Fruits BTW). Aha, how will incentives given to producers help the situation? Where will the govt find money for that now? Where will the govt find money for all the campaigns as well? And most importantly, how will campaigns achieve that only the poor use coupons? As I said before, a family of four gets coupons worth Rs 2800 to spend in a month, how in the earth are they going to simply waste that?
randomGuy Posted January 26, 2015 Posted January 26, 2015 Aha' date=' how will incentives given to producers help the situation? Where will the govt find money for that now?[/quote'] Like I said, inflation is not a reason to not have this program. food is just 12% of CPI. And even within food, only the milk prices are expected to go up with this scheme. Other food prices will not have a major impact. Milk production and storage can be given tax benefits. Competition between various players(amul, mother dairy, paras etc) keeps the prices down. If their production cost is the same for different producers, they can not increase the selling price beyond a certain point. Those with income say <60K per annum shall be entitled for the coupons. similar to swachh bharat campaign, which is trying to make spreading of garbage uncool and unethical in society ,a media campaign can be launched for making the coupons use by inapplicable people uncool.
Precambrian Posted January 26, 2015 Posted January 26, 2015 Like I said, inflation is not a reason to not have this program. food is just 12% of CPI. And even within food, only the milk prices are expected to go up with this scheme. Other food prices will not have a major impact. Milk production and storage can be given tax benefits. Competition between various players(amul, mother dairy, paras etc) keeps the prices down. If their production cost is the same for different producers, they can not increase the selling price beyond a certain point. Those with income say <60K per annum shall be entitled for the coupons. similar to swachh bharat campaign, which is trying to make spreading of garbage uncool and unethical in society ,a media campaign can be launched for making the coupons use by inapplicable people uncool. Two questions I have been asking and you have not given me any answer: 1. Where will the govt find funding for all these? 2. How'd do you identify precisely the target population earning less than 60K per annum? And given most of these are in the most rural areas, how'd you ensure last mile connectivity to such groceries and ensure all infrastructure including storage, transportation etc? Most importantly, how'd you determine what is exactly important for them? Or are you saying its just milk that they need through this scheme?
Recommended Posts