The Outsider Posted May 30, 2015 Posted May 30, 2015 Even Modi cheer girls like Surjeet Bhalla have zero faith in the GDP figures. It is laughable and embarrassing that a country is unable to calculate its GDP numbers using a method where the rest of the world is comfortable with the calculation.
seedhi Posted May 30, 2015 Posted May 30, 2015 Extremely encouraging to see the increase in manufacturing growth rate.
seedhi Posted May 30, 2015 Posted May 30, 2015 I agree in general. Re the rate cuts. I think the degree of cuts it the issue. Some say it should be lowered to 6%. That might be a bit short sighted. But there is certainly no harm in cutting them to 7% in the coming quarters. India already has one of the lowest tax to gdp ratios in the world. Its a regressive move. Better government start spending on infrastructure. India will need infra. I am not talking about lending money via the banks. I am talking about building roads bridges and other items. Will take care of the stagnant cement demand as you said. I dont think the PPP model is the way to go right now.Yes, this is what the govt is planning to do. Cut wasteful expenses like NREGA and redirect them to infrastructure creation. PM Modi speeds up capital spending on roads, rural infrastructure, railways in April to boost growth http://www.hindustantimes.com/business-news/pm-modi-speeds-up-spending-on-roads-railways-and-rural-infra-in-april-to-boost-economic-growth/article1-1352764.aspx
randomGuy Posted May 30, 2015 Posted May 30, 2015 ^corporate leaders had suggested that govt. spends on infra projects to spur economic revival. DMIC is the focus. CEO amitabh kant's videos are available on utube. ------------- New Delhi: Ahead of the assembly elections in Assam, the Narendra Modi government has decided to issue an executive order to help religious minorities from Pakistan and Bangladesh who live in India, to get residential permits, sources told NDTV. The decision is expected to affect the fate of lakhs of immigrants who are residing across the country but do not have any papers to support their residential status. For those who wish to avail the offer, the cut-off date for immigration is December 31, 2014, the sources said. http://m.ndtv.com/india-news/hindu-sikh-immigrants-from-pakistan-bangladesh-may-soon-be-legal-residents-of-india-766252 Good job. It is India's moral obligation
G_B_ Posted May 30, 2015 Posted May 30, 2015 Even Modi cheer girls like Surjeet Bhalla have zero faith in the GDP figures. It is laughable and embarrassing that a country is unable to calculate its GDP numbers using a method where the rest of the world is comfortable with the calculation. I think most people will agree the numbers are suspect. However these new method of calculation is actually what the rest of the world does. They have adjusted the base year taken market prices. Maybe rather than 7.5% its fair to say the economy is growing between 6.5 to 7% but its not as if the economy is growing at like 2% and modi gov is saying 7.5%. If it makes you comfortable you can say with confidence India is growing at 6.5%
G_B_ Posted May 30, 2015 Posted May 30, 2015 Right said. FDI , low inflation both are amazing for india. both are GoI's achievement but FDI more so, a direct consequence of make in India and of PMs visits to various nations and also meeting leading CEOs there. First sign of recovery will be seen in banking sector(NPA reduction and credit growth) and eventually in capital goods and infra companies ( larger deal pipeline.) agree. This is an FDI led recovery IMO. If exports come to the party IMO its going to be a 10 plus growth rate. I think if i had to make a call India is growing at about 7%. With inflation between 5-6%. With the Modi led gov making investment options easier for NRIs i expect FDI and remittances to rise substantially over the period of these 5 years. @seedhi rg Re Infra I think the key point is raising capital for infra projects. I was reading the Economist and it said only 18 billion USD had been raised via the stock exchange since 2008. The way Indian firms raise capital for projects needs a fundamental change. While debt usually does top equity in terms of raising money , (Pecking order theory) there needs to be a degree of flexibility. So Modi gov needs to ensure that the stock markets are a real source of raising money for firms. Especially locals. I notice one of the key issues in Modi's visit to China was their sovereign wealth fund lending money to Indian firms in terms of the Yuan. I feel that is a disaster waiting to happen. The yuan is an undervalued pegged currency. Its all well and good if the peg remains to the USD. But if its gone then the debt becomes expensive. I feel they need more IPO's and more disinvestment of the government held assets to raise capital. The same can be directed into infra. GST is also important in this regard. From Malayasia to New zealand GST (or VAT in the UK) has raised the net tax collected. So it gives the government more money to pour into infra. India needs to spend its way out of this exports crisis. Infrastructure is the only way forward.
Khalpat Posted June 1, 2015 Posted June 1, 2015 Jayaprakash Narayan @JP_LOKSATTA 26m GoI's impact on India is limited to fiscal & monetary policy,key infrastructure &national security.All things that matter are in states All states are trapped in vicious cycle of vote buying, corruption, transfers, freebies & divisions. We need radical change in states Modi's agenda of growth & jobs needs honest, competent & innovative state govts. One way is to directly elect chief ministers We need serious national debate about direct election to transform state governance.Rs 5-10 cr for Assembly &daily pressures will not do.
amiret Posted June 1, 2015 Posted June 1, 2015 @GB The problem with the revised GDP numbers is that they are not comparable with the past . In the words of the chief Statistician TCA Anant of the Central Statistics Office : " It is entirely possible that 5% growth rate in the old series is qualitatively in the same ballpark as 6.5% or 7% in the new series. It is possible. I don't know," he said " LINK 4.7 % of 2013-14 has been revised to 6.9% , I doubt the 9% + growth years under Dr.MMS will be revised upwards , if the govt propagandists have anything to do with it. modi govt can claim we are growing at 15% + but unless we can effectively compare with the past they have very little meaning . Again in the words of TCA Anant : "Once the back-series is worked out and understood, only then-...higher growth rates relative to the past become meaningful," Anant said at a conference called by the Central Statistics Office . The back series data will be available only by the year end .
The Outsider Posted June 1, 2015 Posted June 1, 2015 I think most people will agree the numbers are suspect. However these new method of calculation is actually what the rest of the world does. They have adjusted the base year taken market prices. Maybe rather than 7.5% its fair to say the economy is growing between 6.5 to 7% but its not as if the economy is growing at like 2% and modi gov is saying 7.5%. If it makes you comfortable you can say with confidence India is growing at 6.5% The new calculations make no sense. 4.7% of 2014 became 6.9% and 4.5% of 2013 became only 5.1%! I agree that the extrapolation doesn't have to be linear but a change in the base year and some other minor changes alone can't possibly play out to give such numbers.
Cricket_Hacker Posted June 1, 2015 Posted June 1, 2015 Core sector output dips 0.4% in April, against 5.7% rise in the same period a year ago Read more at: http://economictimes.indiatimes.com/articleshow/47501441.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
G_B_ Posted June 1, 2015 Posted June 1, 2015 @amiret yes lets wait. I think there is a degree of mumbo jumbo in the new GDP figures. I am not going to deny that. @outsider cant disagree. All we have to do is wait. But i think we can all agree that the economy is improving. The degree to which it is improving is up for debate. We have to keep in mind that the absolute GDP has not changed. Clearly with a fall in oil prices (which is India's second largest import and impacts inflation) it was going to boost GDP growth by 1-2%. Thats rudimentary economics. With rate cuts going to come I feel in a few years India will be a solidly 8% plus economy. So if you say the indian economy grew by 4.7% in 2013-2014 as per the old figures. With the dip in oil and improvement in macro economic situation + rate cuts which have already taken place i think its fair to assume that the Indian economy is in the 6.5%-7% zone say for 2014-2015. http://www.economist.com/news/international/21627642-america-and-its-friends-benefit-falling-oil-prices-its-most-strident-critics Many economists are saying that the dip in oil prices have added about 2% growth to the Indian GDP. With a combined effects of rate cuts (inflation falling) better fiscal deficit and macro indicators. Lets also keep in mind the price of another commodity which India imports a lot gold has also fallen on average from 2013-2014 and other key commodities like Copper Aluminium have also fallen.
G_B_ Posted June 1, 2015 Posted June 1, 2015 Core sector output dips 0.4% in April' date= against 5.7% rise in the same period a year ago Read more at: http://economictimes.indiatimes.com/articleshow/47501441.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst Indian factory growth accelerates in May, strong domestic demand-PMI Read more at: http://economictimes.indiatimes.com/articleshow/47496517.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst The headline HSBC India Purchasing Managers' Index (PMI), compiled by Markit, surged to 52.6 in May, from 51.3 in April, with levels of production and new orders rising at the fastest rates since January 2015. The PMI is a composite gauge designed to give a single figure snapshot of manufacturing business conditions. A figure above 50 indicates the sector is expanding while below that level means contraction. conflicting news.... maybe its just the economy moving through the gears...reminds me of middle overs consolidation before going all out in the final 15 overs... (with powerplay)
Gollum Posted June 1, 2015 Posted June 1, 2015 Going through posts must say G_B_ your GK especially w.r.t politics, global affairs, economics is staggering.
mishra Posted June 1, 2015 Posted June 1, 2015 Going through posts must say G_B_ your GK especially w.r.t politics' date=' global affairs, economics is staggering. [/quote'] +1. More of like 'internal guy'
G_B_ Posted June 1, 2015 Posted June 1, 2015 I thank you for the compliments (if indeed they are :P) In general on the revised Indian figures, i would also like to raise a point that a big chunk of India's economy remains in the informal sector. I think some 15% of Indian pay their taxes or are even reaching the threshold to pay taxes. There is no accurate documentation and the range of India's informal economy is from 40% of GDP to 100% of GDP. I dont think traditional metrics of measurement of the GDP are 100% applicable to India or even any south Asian nation. I was reading a while back for example the Hawala receipts to India and Pakistan are nearly as big as official remittances. This article endorses that feeling. Maybe its just a case of the new numbers provide a better picture of the informal economy. Italy did that in the 1980s to add to its GDP , known as the Il sorpasso http://en.wikipedia.org/wiki/Il_sorpasso_%28economics%29 China has routinely added new segments to its GDP provided a better measure of the informal economy, This article does highlight the problem in documenting change in India and the villages http://www.economist.com/news/asia/21586891-activities-out-sticks-may-add-more-gdp-was-thought-hidden-value Yet statisticians struggle to capture the change. Measuring an economy in which the informal sector generates half of output and over nine-tenths of jobs is a tough task. The GDP data depend on infrequent surveys of productivity. Soon, however, the figures will go through one of their periodic rebasings. The last rejig was in 2004-05. Mr Mishra thinks the next one could revise India’s GDP up by 15%. Pronab Sen, chairman of the National Statistical Commission, reckons it will be perhaps 8%—in line with earlier revisions, although he adds that the spread of mobile phones and their economic effect makes things unusually uncertain this time. Raghuram Rajan, the new head of India’s central bank, reckons a revision of 10% is possible. It could very well be that even as a BJP supporter who poo pooped the MMS government, things were maybe not as bad as they were made out to be in the later years of UPA-2
The Outsider Posted June 1, 2015 Posted June 1, 2015 @amiret yes lets wait. I think there is a degree of mumbo jumbo in the new GDP figures. I am not going to deny that. @outsider cant disagree. All we have to do is wait. But i think we can all agree that the economy is improving. The degree to which it is improving is up for debate. We have to keep in mind that the absolute GDP has not changed. Clearly with a fall in oil prices (which is India's second largest import and impacts inflation) it was going to boost GDP growth by 1-2%. Thats rudimentary economics. With rate cuts going to come I feel in a few years India will be a solidly 8% plus economy. So if you say the indian economy grew by 4.7% in 2013-2014 as per the old figures. With the dip in oil and improvement in macro economic situation + rate cuts which have already taken place i think its fair to assume that the Indian economy is in the 6.5%-7% zone say for 2014-2015. http://www.economist.com/news/international/21627642-america-and-its-friends-benefit-falling-oil-prices-its-most-strident-critics Many economists are saying that the dip in oil prices have added about 2% growth to the Indian GDP. With a combined effects of rate cuts (inflation falling) better fiscal deficit and macro indicators. Lets also keep in mind the price of another commodity which India imports a lot gold has also fallen on average from 2013-2014 and other key commodities like Copper Aluminium have also fallen. I have no idea how you are coming up with that extrapolation. For starters, can you please explain how a drop in oil prices necessarily equates to a 1-2% growth in GDP?
Texan Posted June 2, 2015 Posted June 2, 2015 Even Modi cheer girls like Surjeet Bhalla have zero faith in the GDP figures. It is laughable and embarrassing that a country is unable to calculate its GDP numbers using a method where the rest of the world is comfortable with the calculation. And yet, both IMF and World Bank have pegged India's growth rate at 7.5% for 2015 and higher in 2016.
amiret Posted June 2, 2015 Posted June 2, 2015 A Must read article in today's financial express : As we await the 10 year quaterly history from CSO of GDP components, based on new method, to be able to make historical trend analyis, one cannot help but express bewilderment at the trend of GDP in the new series. If we jog our memory on economic growth in India post 2008 meltdown, we find that economic growth had rebounded very strongly during the years of 2009 and 2010 and it was evident in various surveys and even many anecdotal evidences. The global co-ordinated monetary and fiscal pump priming had caused a significant jump in global and Indian economic growth. In India, growth started to roll over in 2011, as effects of stimulus began to wane. Therefore, one can easily conclude that almost all of the key economic indicators in India would show a peak growth during 2010-11. Infact, it was the case in GDP old series. At the same time, economic growth showed signs of bottoming sometime last year. Therefore, a trend analysis of GDP growth should paint a picture where growth rate peaked between 2010-2011 and then troughed somewhere around 2014. However, what we find in the new series is exact opposite. In the new series of GDP, growth troughed in 2011 and surged to its peak last year. How can a trend of GDP be so baffling that it follows a path which is divergent to true economic performance. http://www.financialexpress.com/article/economy/bewildering-trend-of-gdp-in-the-new-series/78975/
amiret Posted June 2, 2015 Posted June 2, 2015 This is what is relevant to the ordinary investors : The Q4FY15 earnings season has been a wake-up call for analysts with corporate India posting its worst results in several years, a performance that is completely out of sync with what has been billed an an improving macroeconomic environment. Next year earnings estimates have also been downgraded . With most companies turning out numbers way below estimates, analysts have had little choice but to downgrade earnings estimates for FY16. In November last year, the EPS forecast for the Sensex was Rs 1,903 but that number has now been cut sharply to just Rs 1,763, putting the earnings growth for this year at just 15%, and that too on a much smaller base. http://www.financialexpress.com/article/economy/anaemic-numbers-earn-india-inc-a-downgrade/78947/?SocialMedia
G_B_ Posted June 2, 2015 Posted June 2, 2015 I have no idea how you are coming up with that extrapolation. For starters, can you please explain how a drop in oil prices necessarily equates to a 1-2% growth in GDP? lets see a. it reduces indias import bill improving current account deficit. this leads to less pressures on the rupee. In the space of a year India's CAD went from about 5% during the highs of FY2012 of to less than -1.5% of GDP for FY 2015. Which is a big jump. b. it reduces inflation. this in turn causes rate cuts. boosting natural growth Edit:Rajan has just cut the repo rate by 0.25% today an hour or so ago. Each rate cut of 0.25% such as this is expected to add about 0.25- 0.5% to the GDP growth. In FY year 2014-2015 i do believe Rajan made two rate cuts of 0.25%. c. it has a knockon effect of reducing the price of other commodities. Ie it acts as a global barometer for commodity prices. India is also a major importer of other commodities. d. it reduces fiscal deficit in our budget. This allows our government to boost say spending in other areas such as infrastructure. oil fell from highs of 115 to 45 during the financial year 2014-2015 before stabilising in the 60s. As per many agencies and banks a $10 fall in oil leads to a 0.1-0.2% extra growth in india in terms of direct growth. In addition there are indirect benefits such as sentiment (more FDI inflows etc) lastly in econometric terms gdp growth is a difference stationary process. whereby shocks to the gdp growth equation are permanent. when u say extapolation what exactly do u mean. As gdp growth is a non stationary variable i need to know what sort of extapolation u are talking about.
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