Modi sarkar economic reforms/governance performance thread

[The Outsider]

6 minutes ago, G_B_ said:

regardless. FDI is FDI. It is an inflow which creates a positive balance of payments position creating macro economic stability. Something the previous regime lacked with an acute BOP crisis in 2013. At a time when global FDI numbers are decreasing. An increase in FDI is an achievement worth mentioning.

 

You need to stop being selective and take off that Samajwadi red cap.

 

Chalo, I applaud the FDI!

 

Now address the question that if it really matters for the average Indian? What matters for the average Indian are jobs and there aren't any. If caring about proper jobs for Indians outside of induction in a Shakha to slaughter Muslims and Dalits for beef makes me a Samajwadi with a red cap, so be it. The only jobs Modi has created are state sponsored terrorists in the guise of Gau Rakshaks.

[G_B_]

and keep in mind when you say "fudged" numbers

 

Ultimately due to a fall in oil prices and other commodities, it has created a deflector effect for the economy in total. The issue is with measuring the value of the deflector.

 

According to Dr Rajan the RBI (RBI gov at the time of the interview) this "fudged" number as per The Outsider is no more than 0.5% of GDP. The Outsider makes it sound as if economy is growing at 4%.

 

The interview with Dutt, where Mr Rajan mentions this.

 

 

 

 

 

[The Outsider]

7 minutes ago, G_B_ said:

and keep in mind when you say "fudged" numbers

 

Ultimately due to a fall in oil prices and other commodities, it has created a deflector effect for the economy in total. The issue is with measuring the value of the deflector.

 

According to Dr Rajan the RBI (RBI gov at the time of the interview) this "fudged" number as per The Outsider is no more than 0.5% of GDP. The Outsider makes it sound as if economy is growing at 4%.

 

The interview with Dutt, where Mr Rajan mentions this.

 

 

 

 

 

Not The Outsider, but many independent FIs are saying it. You can check up BoA's calculations for instance which pegs it at around 5% not 4%.

[CG]

and keep in mind when you say "fudged" numbers

 

Ultimately due to a fall in oil prices and other commodities, it has created a deflector effect for the economy in total. The issue is with measuring the value of the deflector.

 

According to Dr Rajan the RBI (RBI gov at the time of the interview) this "fudged" number as per The Outsider is no more than 0.5% of GDP. The Outsider makes it sound as if economy is growing at 4%.

 

The interview with Dutt, where Mr Rajan mentions this.

 

 

 

 

 

World bank has maintained India growth rate this year of 7.1-7.6.Inflation is below 5%,Stable currency and monsoon has been good this year so rural economy will pick up and pay commission reforms will also help .

[The Outsider]

7 minutes ago, CG said:

World bank has maintained India growth rate this year of 7.1-7.6.Inflation is below 5%,Stable currency and monsoon has been good this year so rural economy will pick up and pay commission reforms will also help .

Yeah, all is well! No wonder non political protests are breaking out from significant parts of the country.

[The Outsider]

 

31 minutes ago, G_B_ said:

and keep in mind when you say "fudged" numbers

 

Ultimately due to a fall in oil prices and other commodities, it has created a deflector effect for the economy in total. The issue is with measuring the value of the deflector.

 

According to Dr Rajan the RBI (RBI gov at the time of the interview) this "fudged" number as per The Outsider is no more than 0.5% of GDP. The Outsider makes it sound as if economy is growing at 4%.

 

The interview with Dutt, where Mr Rajan mentions this.

 

 

 

 

 

Raghuram Rajan also said that an economy growing at 7.5-8% feels like gangbusters. Even the biggest Modi bhakt won't attest to gangbusters except Adani and Ambani and some more cronie.

[G_B_]

33 minutes ago, The Outsider said:

 

Raghuram Rajan also said that an economy growing at 7.5-8% feels like gangbusters. Even the biggest Modi bhakt won't attest to gangbusters except Adani and Ambani and some more cronie.

So a worst case scenario of -0.5% still has the economy growing at about 7%.

 

The point is its not as if there is a huge discrepancy in what is reported and what is happening.  

59 minutes ago, The Outsider said:

Not The Outsider, but many independent FIs are saying it. You can check up BoA's calculations for instance which pegs it at around 5% not 4%.

I have given you the interview of Mr Rajan RBI head honcho. Those FI's saying it are saying it on the back of what Rajan is saying.

 

Even i admit the economy is growing in the 7-7.5% region and not the 7.5-8% region. Keep in mind if we consider the previous regime and old figures the economy was growing at about 4.7%

[G_B_]

1 hour ago, The Outsider said:

Chalo, I applaud the FDI!

 

Now address the question that if it really matters for the average Indian? What matters for the average Indian are jobs and there aren't any. If caring about proper jobs for Indians outside of induction in a Shakha to slaughter Muslims and Dalits for beef makes me a Samajwadi with a red cap, so be it. The only jobs Modi has created are state sponsored terrorists in the guise of Gau Rakshaks.

Good that you applaud the FDI. Its a start.

 

Now with regards to jobs. The average Indian considering that 85% of the work force is employed in the informal sector, with regards to that

 

http://economictimes.indiatimes.com/news/politics-and-nation/swaminomics-robots-likely-to-worsen-shortage-of-good-jobs/articleshow/54002190.cms

 

Informal jobs and real wages in the informal sector are rising. Problem is with formal jobs. For that there are deeper issues with automation.

 

 

[The Outsider]

2 hours ago, G_B_ said:

So a worst case scenario of -0.5% still has the economy growing at about 7%.

 

The point is its not as if there is a huge discrepancy in what is reported and what is happening.  

I have given you the interview of Mr Rajan RBI head honcho. Those FI's saying it are saying it on the back of what Rajan is saying.

 

Even i admit the economy is growing in the 7-7.5% region and not the 7.5-8% region. Keep in mind if we consider the previous regime and old figures the economy was growing at about 4.7%

So, you're rubbishing estimates from FIs of India's GDP based on nothing factual. Excellent.

[The Outsider]

1 hour ago, G_B_ said:

Good that you applaud the FDI. Its a start.

 

Now with regards to jobs. The average Indian considering that 85% of the work force is employed in the informal sector, with regards to that

 

http://economictimes.indiatimes.com/news/politics-and-nation/swaminomics-robots-likely-to-worsen-shortage-of-good-jobs/articleshow/54002190.cms

 

Informal jobs and real wages in the informal sector are rising. Problem is with formal jobs. For that there are deeper issues with automation.

 

 

Duh! Of course job creation is increasing, but is it any where close to the number of employable youth coming out from our breeding factory? 12 million people enter the workforce every year, Modi promised 2 crore jobs every year. Show me one sector where we are going to achieve that from except Gau Raksha.

[G_B_]

5 hours ago, The Outsider said:

Duh! Of course job creation is increasing, but is it any where close to the number of employable youth coming out from our breeding factory? 12 million people enter the workforce every year, Modi promised 2 crore jobs every year. Show me one sector where we are going to achieve that from except Gau Raksha.

 Tourism is one sector which is rapidly adding jobs. Aviation etc etc.  Again, you are totally missing the point. Informal jobs or those on daily wages without formal employment are seeing plenty of jobs and rise in wages. Purely from a micro economic POV, my watchman at our apartment complex in Mumbai has seen his wages double in the past 2 years. He would not be doubling his salary if there was not an issue with supply of labour at the lower end in the informal sector. In contrast a few friends in Mumbai who are engineers in IT are stuck with the same salaries with barely an increase. 

 

About 15% of India's population has a high school education and above.  85% are clearly not going to get white collar jobs where the problems lay. So the 12 million workforce entering, is just a statistic. A lot of these young girls and boys have always been working be it on farms of otherwise.

 

The formal or organised or white collar job creation has slowed down. The primary reason for this is because the IT sector which is about 8% of Indian GDP is hit by automation issues impacting the business model. The second sector which is financial services which is about 5% of the GDP the banks are just coming out of an NPA crisis. 

 

In order to address above, the government is building infra. Projects have been sanctioned. Clearly its going to take some lag for the said projects to be lifted off the ground and work to start. 

[G_B_]

6 hours ago, The Outsider said:

So, you're rubbishing estimates from FIs of India's GDP based on nothing factual. Excellent.

I am trusting the word of Mr Rajan who is in a much better position to make the call with the resources at his disposal. He has said the margin of error is about 0.5% (1% swing in total on either side)

 

Keep in mind the chief statistician has given his own explanation and is independent from the government. 

 

As with anything related to India there is always going to be a margin or error due to big chunks of the economy being undocumented. Only the other day I read hawala inflows into India are adding about 30 billion a year into the informal economy.

 

Once again we come back to the deflector effect. Oil was $120 to the barrel and its been hovering around $40-50. India is close to running a current account surplus. 

[CG]

 Tourism is one sector which is rapidly adding jobs. Aviation etc etc.  Again, you are totally missing the point. Informal jobs or those on daily wages without formal employment are seeing plenty of jobs and rise in wages. Purely from a micro economic POV, my watchman at our apartment complex in Mumbai has seen his wages double in the past 2 years. He would not be doubling his salary if there was not an issue with supply of labour at the lower end in the informal sector. In contrast a few friends in Mumbai who are engineers in IT are stuck with the same salaries with barely an increase. 

 

About 15% of India's population has a high school education and above.  85% are clearly not going to get white collar jobs where the problems lay. So the 12 million workforce entering, is just a statistic. A lot of these young girls and boys have always been working be it on farms of otherwise.

 

The formal or organised or white collar job creation has slowed down. The primary reason for this is because the IT sector which is about 8% of Indian GDP is hit by automation issues impacting the business model. The second sector which is financial services which is about 5% of the GDP the banks are just coming out of an NPA crisis. 

 

In order to address above, the government is building infra. Projects have been sanctioned. Clearly its going to take some lag for the said projects to be lifted off the ground and work to start. 

This is true .Today poor can get 1kg rice for re 1 and wheat and pulses for subsidized rates.With food security the rates of low pay jobs like domestic help or driver have been increasing.

[Tibarn]

http://asia.nikkei.com/Politics-Economy/Economy/India-overtakes-Indonesia-Philippines-on-competitiveness-index?n_cid=NARAN012

Quote

India soared to 39th place on a global index of the most competitive economies as rated by the World Economic Forum, jumping 16 spots for the second straight year.

The South Asian country's improvement is "the largest this year," the Geneva-based forum said in its latest Global Competitiveness Index of 138 countries, which assesses aspects such as institutions, infrastructure and the macroeconomic environment as well as health and primary education. 

India's recent reforms focused on improving public institutions, opening the economy to foreign investors and international trade, and increasing transparency in the financial system. The country surpassed Indonesia (41st) and the Philippines (57th), 

...

India climbed 16 positions last year as well, ending five years of decline to secure 55th place out of 140 countries in the GCI rankings. 

Good job by the government, but I am still not a fan of the Finance Minister. I guess the PM is listening to the Niti Aayog though. I also want to see the Ease of Doing Business rankings for this year before I give too much praise, as I think that indicator is more valuable. 

 

Quote

But the report cites areas needing massive improvement, such as a labor market "segmented between workers protected by rigid regulations and centralized wage determination (112th), especially in the manufacturing sector, and millions of unprotected and informal workers." The WEF also noted rules that let states levy value-added taxes, hindering the efficiency of the domestic market (81st).

The WEF report also points to "large, publicly owned enterprises [that] further reduce the overall efficiency of the [Indian] economy, especially in the utilities sector and the financial market, where there is growing concern about the incidence of nonperforming loans."

A lack of infrastructure (68th) and technological readiness (110th) remain bottlenecks, while tax regulations and corruption are among the most problematic factors for doing business in India. 

Bolded are the main challenges, according to the report:

 

1) Centralized wage determination: This will remain a problem I think. They recently passed a minimum wage law for domestic help, correct?

2)Large, publicly owned enterprises: This is the most disappointing. NDA 1 had a disinvestment minister, Shourieji. He was there for the taking, but I guess his cold relations with Jaitley kept him out of the government(Swamy as well). 

3) Infrastructure: This seems to be going well on the national level, the Gadkari-Goyal-Prabhu trimurti is possibly the best thing the government has. However, the shelving of the Land Bill and the Bihar election were big blows. Leaving the land laws to the states will benefit mostly the NDA states and Orissa, while leaving the rest of the east behind once again. Bihar is the most backward state, and the "great" progress they made earlier was with the BJP in charge of infrastructure. In this regard, the UP election will be a big deal. If either the BJP or SP come to power, there should be improvement, as Akilesh has actually given good effort on Ease of Doing Business reforms.                   

4) Tech readiness: I'm not sure about this one. The Digital India stuff should help, but I don't know. 

 

I would add a 5th one to this list, Education. RTE is a ticking time bomb in my opinion. NDA has shown no signs of repealing it. The former HRD minister, Irani, even met one of the main anti-RTE activists, but she took no action. I doubt Javadekar will either.   

Edited September 28, 2016 by Tibarn

[diga]

Quote

India has risen rapidly among all countries in the global competitive stakes by climbing 16 notches to the 39th position during the past year in the WEF’s Global Competitiveness Index.

According to the World Economic Forum’s (WEF) latest Global Competitiveness Report for 2016-17 this marks the biggest scale of improvement in competitiveness among all countries and is the second year in a row India has gone up 16 ranks in the WEF index.

http://www.thehindu.com/business/Economy/world-economic-forum-india-now-ranks-39-among-most-competitive-economies/article9155344.ece

 

For the ICF's expert on everything .... 

[Tibarn]

[Tibarn]

On 9/27/2016 at 9:19 PM, Tibarn said:

http://asia.nikkei.com/Politics-Economy/Economy/India-overtakes-Indonesia-Philippines-on-competitiveness-index?n_cid=NARAN012

Good job by the government, but I am still not a fan of the Finance Minister. I guess the PM is listening to the Niti Aayog though. I also want to see the Ease of Doing Business rankings for this year before I give too much praise, as I think that indicator is more valuable. 

 

Bolded are the main challenges, according to the report:

 

1) Centralized wage determination: This will remain a problem I think. They recently passed a minimum wage law for domestic help, correct?

2)Large, publicly owned enterprises: This is the most disappointing. NDA 1 had a disinvestment minister, Shourieji. He was there for the taking, but I guess his cold relations with Jaitley kept him out of the government(Swamy as well). 

3) Infrastructure: This seems to be going well on the national level, the Gadkari-Goyal-Prabhu trimurti is possibly the best thing the government has. However, the shelving of the Land Bill and the Bihar election were big blows. Leaving the land laws to the states will benefit mostly the NDA states and Orissa, while leaving the rest of the east behind once again. Bihar is the most backward state, and the "great" progress they made earlier was with the BJP in charge of infrastructure. In this regard, the UP election will be a big deal. If either the BJP or SP come to power, there should be improvement, as Akilesh has actually given good effort on Ease of Doing Business reforms.                   

4) Tech readiness: I'm not sure about this one. The Digital India stuff should help, but I don't know. 

 

I would add a 5th one to this list, Education. RTE is a ticking time bomb in my opinion. NDA has shown no signs of repealing it. The former HRD minister, Irani, even met one of the main anti-RTE activists, but she took no action. I doubt Javadekar will either.   

Somewhat of an update. The government is looking at PSUs to sell. Hopefully they do start taking disinvestment seriously.

[Tibarn]

http://swarajyamag.com/economy/when-it-comes-to-jobs-achche-din-seem-elusive

Quote

Take LFPR, which includes people looking for work as well as in jobs. After increasing from 53.1 per cent in 2012-13 to 55.6 per cent in 2013-14, it dropped to 52.4 per cent in 2015-16. In rural areas, the LFPR dropped from 58.8 per cent to 55.8 per cent between 2013-14 and 2015-16, and in urban areas from 47.9 per cent to 43.7 per cent over the same period. The standard explanation is that people are opting for higher education and the sharp drop in LFPR among urban men and women is often cited as proof. But could this also be the case for a drop in rural women in the LFPR? This whole issue needs closer study.

...

The unemployment rate also merits concern. It dropped from 4 per cent to 3.4 per cent between 2012-13 and 2013-14 but went up to 3.7 per cent in 2015-16. Rural unemployment was what pushed this up – it increased from 2.9 per cent to 3.4 per cent, after dropping to 2.9 per cent in 2013-14. In urban areas, however, unemployment has been declining continuously – from 5.3 per cent in 2012-13 to 4.9 per cent in 2013-14 and to 4.4 per cent in 2015-16.

...

The number of those who were employed through the year has gone up from 60.5 per cent in 2013-14 to 60.6 per cent in 2015-16. This slight improvement is driven by the urban areas, where this category increased from 78.5 per cent to 82.1 per cent. In the rural areas, those employed for 12 months dropped from 53.2 per cent to 52.7 per cent, no doubt a result of the two consecutive years of drought.

 

[The Outsider]

Some more excellent news on the economy (if people's nationistic Koolaid has been digested):

 

1. Capital formation declined by 3% in Q1. If you calculate for cronies it might be +20%.

 

2. Net sales of all firms declined by 2%. Of manufacturing firms the decline was almost 5%. Make In India. LOL!

 

3. Credit to micro and small industries declined by 3%. In medium industries the decline was 11%. Of course, cronies have Lakhs of Crores of loan.

 

4. IIP declined by 1% y/y. Make in India. LOL!

 

 

[The Outsider]

10% of the telecom auction got sold. An kahan gaya scam?