Indian Economy : News,Discussions & Updates

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
India’s steel exports rise in 2017 as China’s plunge
Mumbai: In March 2017, India’s beleaguered steel industry achieved what had been unthinkable even a few months ago. The country’s iron and steel exports during the month were more than double their imports.

The enormity of this development can be gauged from the fact that exactly a year earlier, in March 2016, India’s iron and steel imports were about three times their exports and local steelmakers were pleading with the government for protection.

What brought about this turnaround?

While a lot of the credit for it was rightly given to the government’s decision to protect the domestic industry by imposing a minimum import price (MIP), anti-dumping duty, etc. on steel imports, an important factor was also the fact that Chinese steel exports had started plunging.

Data sourced from the International Trade Centre (ITC) reveals that starting January 2017, Chinese steel exports have been dropping by at least 25% year-on-year every month.

With the Chinese export blitzkrieg of the previous two years slowing steel prices all over the world recovered from a slump, giving a much-needed respite to Indian steelmakers too.

China’s apparent steel consumption in the first six months of the year increased by 9-10%, bringing comfort to the steel industry, Seshagiri Rao, joint managing director and group CFO of JSW Steel Ltd, told analysts in August.

“On the top of this, their exports have come down by 28%,” he added.

What the slowing of Chinese exports also did for Indian steel makers was open up overseas markets that were until now the fiefdom of the Chinese.

For instance, while China’s exports to South Korea—by far its biggest market—dropped over 16% (y-o-y) to just over 3 million tonnes (mt) in the April-June quarter of 2017, India’s exports to the country surged by over 20% to 0.63mt.

While China’s exports to Vietnam, similarly, dropped over 41% (y-o-y) in the April-June quarter of 2017; India’s exports to the South-east Asian country surged by 329% (y-o-y) during the quarter, ministry of commerce data shows.

Companies including JSW Steel saw record jumps in their exports during the first six months of 2017.

The share of exports in JSW Steel’s sales in the January-March quarter of the year, for instance, jumped threefold from the year-ago period to 36%, before moderating to 23% in the April-June quarter, which was still a four percentage points jump from the year-ago period.

The company, however, attributed this more to poor domestic demand.

An analysis by Mint of steel trade data since January 2016 also reveals that India’s steel exports are more or less negatively correlated to China’s exports and its own imports. In other words, the growth of India’s steel exports are as dependent on a fall in Chinese steel exports as they are on a fall in India’s own steel imports.

And with India’s imports rising once again on a year-on-year basis in the last few months, there are chances that the good work of the first half of 2017 might get undone going forward.

What’s required to stop this from happening, according to Rao of JSW Steel, is for the government to relook at the safeguard measures currently in play.

That’s because the anti-dumping duty on steel gets triggered only when the import price is below $489 per tonne, which is irrelevant at current international price levels that are significantly higher for most grades.
India’s steel exports rise in 2017 as China’s plunge
 
  • Like
Reactions: Pundrick

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
India consumer confidence 'very optimistic': Mastercard
confidence in India is likely to remain high over the next six months with a very optimistic outlook, according to a survey.

"Consumer confidence in India remains high with consumers indicating a very optimistic outlook over the next six months," Mastercard Index of Consumer Confidence (H2 2017) revealed on Thursday.

Consumer confidence in India has remained stable at 84.6 points over the last six months and the market rated a "very optimistic" sentiment for four out of five components -- employment, economy, regular income and stock market, it said.

Outlook towards quality of life in India remains high, Mastercard said, with stable growth from the previous index findings.







related news

Bangladesh (80.4 points) and Vietnam (89.5 points) were two other countries in Asia Pacific where the markets have exhibited a very optimistic sentiment, it said.

On the other hand, Sri Lanka at 39.5 points exhibited least optimistic market with declines in confidence towards quality of life (-4 points) and economy (-3.2 points).

Also, consumer confidence amongst people over 30 has outpaced those in the under 30 segments in Singapore (+11 points vs + 5.3 points) and China (+5.7 vs +0.4 points).

In Singapore, a rising ageing population, as well as growing optimism towards the economy, income and employment have contributed to this observation, Mastercard said.

According to the survey, overall in Asia Pacific, rising economic growth, increased travel and greater intra-regional economic cooperation fuelled the region's confidence at 68.5 points.

"The Index indicates that Asia Pacific millennials (aged 18–29 years) are very confident about the next six months (72.9 points), while the older generation (aged 30 and above) are tempered in their outlook towards the future (66.7 points)."

Also, optimism across both age groups in the region has increased since the latter half of 2016.

Consumers above 30 years tracked a 6.3 point jump in optimism, while people aged below 30 years tracked a 5 point lift, as per the survey.

"These lifts are reflected across buoyant consumer sentiment towards the stock market, employment and economic performance," it said further.

The Mastercard Index of Consumer Confidence measures consumer sentiments across five components: economy, employment, stock market, regular income and quality of life.

The methodology for the survey was based on respondents replies on six month outlook on the economy, employment prospects, stock market performance, regular income prospects and quality of life.

The results of the responses were converted in five component indexes which were subsequently averaged to form the Mastercard Index of Consumer Confidence (MICC) score.

Mastercard, which has been doing this survey since 1993, said the survey is the most comprehensive and longest running of its kind in the Asia Pacific region.
http://www.moneycontrol.com/news/bu...dence-very-optimistic-mastercard-2471051.html
 

Bali78

Senior member
Dec 26, 2017
1,136
1,151
USA
Thought of sharing this info regarding India's tax collections over last 15 years. This data is available in Dept of Finance website.


Year. Tax collection(Crores) % growth
2003-04 : 254348.24
2004-05. : 304957.55 19.89
2005-06 : 366151.61 20
2006-07 : 473512.45. 29.32
2007-08. : 593147.13. 25.26
2008-09. : 605298.05. 2.048
2009-10. : 624527.23 3.17
2010-11. : 793071.72 26.98
2011-12. : 889176.36 12.11
2012-13. : 1036460.45. 11.65
2013-14. : 1138733.74 9.86
2014-15. : 1244884.53 9.32
2015-16. : 1455648.11 16.93
2016-17 : 1703242.94. 17
2017-18 : 1911579.46* 12.23
 

Butter Chicken

Senior member
Dec 2, 2017
1,220
1,166
India imposes antidumping duty on 98 products from China

India has imposed antidumping duty on as many as 98 products, as on December 27 last year, imported from China, Parliament was informed on Wednesday. The products on which the duty was imposed include flax fabrics, vitamin C, certain fibres and chemicals, Minister of State for Commerce and Industry C R Chaudhary said in a written reply to Rajya Sabha.

He also said trade deficit with China stood at USD 36.73 billion during April-October this fiscal. “Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power,” he said.
 

Butter Chicken

Senior member
Dec 2, 2017
1,220
1,166
Government plans to auction 'enemy' properties worth Rs 1 lakh crore

NEW DELHI: Over 9,400 'enemy' properties, worth more than Rs 1 lakh crore, are set to be auctioned with the home ministry starting the process of identifying all such estates, officials said.

The properties were left behind by people who took citizenship of Pakistan and China.

The move came after the amendment of the 49-year-old Enemy Property (Amendment and Validation) Act which ensured that the heirs of those who migrated to Pakistan and China during Partition and afterwards will have no claim over the properties left behind in India.


At a recent meeting, Union Home Minister Rajnath Singh was informed that the survey of 6,289 enemy properties has been completed and that of the remaining 2,991 properties which are vested with the custodian will be completed, a home ministry official told PTI.
 

Butter Chicken

Senior member
Dec 2, 2017
1,220
1,166
Direct tax collection jumps 19% to Rs 6.89 lakh crore this fiscal

NEW DELHI: Direct tax collections during the first nine-and-a-half months of the current fiscal have risen by 18.7 per cent to Rs 6.89 lakh crore, the tax department said today.
The collections till January 15, 2018 represent over 70 per cent of the Rs 9.8 lakh crore revenue target from direct taxes, the Central Board of Direct Taxes (CBDT) said in a statement.

"The provisional figures of direct tax collections up to January 15, 2018, show that net collections are at Rs 6.89 lakh crore which is 18.7 per cent higher than the net collections for the corresponding period last year," it said.

Gross collections (before adjusting for refunds) have increased by 13.5 per cent to Rs 8.11 lakh crore during April, 2017 to January 15, 2018.

Refunds amounting to Rs 1.22 lakh crore have been issued during this period.

Stating that there has been "consistent and significant" improvement in the position of direct tax collections during the current fiscal, the CBDT said the growth rate of total gross collections has improved from 10 per cent in Q1, to 10.3 per cent in Q2, to 12.6 per cent in Q3 and to 13.5 per cent as on January 15, 2018.

Similarly, the growth rate of total net direct tax collections has climbed up from 14.8 per cent in Q1, to 15.8 per cent in Q2, to 18.2 per cent in Q3 and to 18.7 per cent as on January 15, 2018.
 

Pundrick

Well-Known member
Dec 2, 2017
352
363
Direct tax collection jumps 19% to Rs 6.89 lakh crore this fiscal

NEW DELHI: Direct tax collections during the first nine-and-a-half months of the current fiscal have risen by 18.7 per cent to Rs 6.89 lakh crore, the tax department said today.
The collections till January 15, 2018 represent over 70 per cent of the Rs 9.8 lakh crore revenue target from direct taxes, the Central Board of Direct Taxes (CBDT) said in a statement.

"The provisional figures of direct tax collections up to January 15, 2018, show that net collections are at Rs 6.89 lakh crore which is 18.7 per cent higher than the net collections for the corresponding period last year," it said.

Gross collections (before adjusting for refunds) have increased by 13.5 per cent to Rs 8.11 lakh crore during April, 2017 to January 15, 2018.

Refunds amounting to Rs 1.22 lakh crore have been issued during this period.

Stating that there has been "consistent and significant" improvement in the position of direct tax collections during the current fiscal, the CBDT said the growth rate of total gross collections has improved from 10 per cent in Q1, to 10.3 per cent in Q2, to 12.6 per cent in Q3 and to 13.5 per cent as on January 15, 2018.

Similarly, the growth rate of total net direct tax collections has climbed up from 14.8 per cent in Q1, to 15.8 per cent in Q2, to 18.2 per cent in Q3 and to 18.7 per cent as on January 15, 2018.
Still not enough to control fiscal deficit to 3.2 % level of GDP. Lets hope GoI at least maintain 3.4% this time as that won't affect much and we'll have favourable comments from rating agencies as well. GoI has done lot of adventure this FYI and now they need to sail the boat smoothly to make sure that business sentiment reaches its peak in 2018-19 and we achieve 7.5-8% growth rate in FY18-19.(y)
 

Ashwin

Agent_47
Staff member
Administrator
Nov 30, 2017
4,901
8,019
Bangalore
Still not enough to control fiscal deficit to 3.2 % level of GDP. Lets hope GoI at least maintain 3.4% this time as that won't affect much and we'll have favourable comments from rating agencies as well. GoI has done lot of adventure this FYI and now they need to sail the boat smoothly to make sure that business sentiment reaches its peak in 2018-19 and we achieve 7.5-8% growth rate in FY18-19.(y)
New Delhi/Mumbai: Moving to limit the fiscal slippage in 2017-18 ahead of the 1 February budget presentation, the finance ministry on Wednesday pared its additional borrowing requirement before 31 March to Rs20,000 crore from Rs50,000 crore.

Bond prices rose, stock indices surged to lifetime highs and the rupee gained as the markets cheered the announcement.

“Government has reassessed additional borrowing requirements taking note of revenue receipts and expenditure pattern. Requirement of additional borrowing being reduced from Rs50,000 crore as notified earlier to Rs20,000 crore,” economic affairs secretary Subhash Chandra Garg wrote in a Twitter post.

The risk of the government breaching its fiscal deficit target of 3.2% of gross domestic product (GDP) in the fiscal year ending March increased significantly after it exceeded its Rs5.5 trillion full-year borrowing target by November-end because of lower-than-expected revenue collections and higher expenditure.

Govt cuts additional borrowing target to Rs20,000 crore for FY18
 

Pundrick

Well-Known member
Dec 2, 2017
352
363

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Tier-2 customers driving the $14.5 billion e-commerce industry in India: RedSeer report
According to the report, India's e-tailing industry which has grown to over USD 14.5 billion in revenues still holds a large growth potential




Online shoppers from India's Tier 2-3 cities and remote corners are now driving the growth of e-tailing industry, said Bangalore based research firm RedSeer in its year-end review.
According to the report, the population of online shoppers from India's Tier 2 and plus cities is growing over three times faster than its metros.
"The e-tailing industry saw a rapid increase in the number of shoppers in Tier 2 plus cities in 2017, contributing nearly 41 percent of the overall online shoppers in 2017. This is going to be a significant lever for the growth of e-tailers in the Indian market in 2018 as well," the report said.

It also attributed the growth to a sharp rise in affordable data offerings by the telecom operators. Overall, in 2017 the internet sector evolved with a clear value proposition in consumers mindset.

While sectors such as online cabs, hotel aggregation and online travel agencies have proven their value to customers, e-tailing is still considered a sector with large growth potential, the report highlighted.
"There are sectors which are showing clear signs of growth and hold a large potential but can still be driven by discounting. These are followed by sectors which have proven their value and might not be driven by heavy discounting. Then there are emerging sectors which are in nascent stages but can potentially grow large, and finally the sectors which are matured and might not show exceptional growth from here," the report said.
According to the report, India's e-tailing industry which has grown to over USD 14.5 billion in revenues annually still shows a large growth potential.
There was 34 percent year on year growth in the number of unique shoppers across Tier 2 and plus cities. India's Tier 1 and metro cities too reported decent growth of 18 percent and 11 percent in terms of addition of online shoppers, the report said.
Tier-2 customers driving the $14.5 billion e-commerce industry in India: RedSeer report
 

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Marriott plans to add 20 hotels in India in 2018
Betting big on the revival in leisure spend by domestic tourists and increased business events, global hotel chain Marriott International looks to expand its presence in India by adding 20 more properties under its brand from the existing 98 hotels in the next one year.
On Friday, the company launched its latest 155-room property under the brand of Renaissance Ahmedabad - a distinctive lifestyle brand from Marriott. Located near Gujarat High Court, the newly built property aims to provide top-end luxury experience to the visitors with local feel.

Renaissance is among the 15 brands that the company operates in India including Courtyard by Marriott and JW Marriott among others. The Renaissance Ahmedabad Hotel features a contemporary design juxtaposed against the heritage background of Ahmedabad and ensures the visitors get a feel of local culture.
"Ahmedabad being known as UNESCO World Heritage City, we expect a combination of business and leisure visitors. The property has been designed in such as way to give a local feel with luxury hospitality to the visitors," said Neeraj Govil, Area Vice President, South Asia, Marriott International. The property will also have 30,000 square feet area for meet space.
With the latest launch in Ahmedabad, Marriott has three Renaissance properties in India the other two being in Lucknow and Mumbai each.
Senior officials from the hotel group stated that the overall average occupancy hovered at around 75 per cent and the increased business activity will further boost the business for the brand.
"For the January-December period, we have achieved a double digit growth in revenue per available room. Out of the 20 planned hotels in 2018, four would come up in Bengaluru itself," said Govil adding that in Gujarat, Marriott will have seven new hotels in the next three years.
Hospitality investment player SAMHI Group - having investments from global agencies like World Bank and Goldman Sachs among others, has investments in 14 properties being managed by Marriott with over 2000 keys in India. The SAMHI Group has total 29 hotels across India of which 24 are operational.
Betting big on the revival in leisure spend by domestic tourists and increased business events, global hotel chain Marriott International looks to expand its presence in India by adding 20 more properties under its brand from the existing 98 hotels in the next one year.
On Friday, the company launched its latest 155-room property under the brand of Renaissance Ahmedabad - a distinctive lifestyle brand from Marriott. Located near Gujarat High Court, the newly built property aims to provide top-end luxury experience to the visitors with local feel.

Renaissance is among the 15 brands that the company operates in India including Courtyard by Marriott and JW Marriott among others. The Renaissance Ahmedabad Hotel features a contemporary design juxtaposed against the heritage background of Ahmedabad and ensures the visitors get a feel of local culture.
"Ahmedabad being known as UNESCO World Heritage City, we expect a combination of business and leisure visitors. The property has been designed in such as way to give a local feel with luxury hospitality to the visitors," said Neeraj Govil, Area Vice President, South Asia, Marriott International. The property will also have 30,000 square feet area for meet space.
With the latest launch in Ahmedabad, Marriott has three Renaissance properties in India the other two being in Lucknow and Mumbai each.
Senior officials from the hotel group stated that the overall average occupancy hovered at around 75 per cent and the increased business activity will further boost the business for the brand.
"For the January-December period, we have achieved a double digit growth in revenue per available room. Out of the 20 planned hotels in 2018, four would come up in Bengaluru itself," said Govil adding that in Gujarat, Marriott will have seven new hotels in the next three years.
Hospitality investment player SAMHI Group - having investments from global agencies like World Bank and Goldman Sachs among others, has investments in 14 properties being managed by Marriott with over 2000 keys in India. The SAMHI Group has total 29 hotels across India of which 24 are operational.
 
  • Informative
Reactions: bonobashi

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Mauritius largest source of FDI in India, says RBI
Mauritius was the largest source of foreign investment in India, followed by the US and the UK, according to a census by the Reserve Bank.
Singapore and Japan were the next two sources of foreign direct investment (FDI), said the Census on Foreign Liabilities and Assets of Indian Direct Investment Companies 2016-17, released by RBI on Friday.

Of the 18,667 companies that participated in the census, 17,020 had FDI/overseas direct investment in their balance sheets in March 2017, it said.
“96 per cent of the responding companies were unlisted in March 2017 and most of them had received only inward FDI; unlisted companies had higher share of FDI equity capital vis-à-vis listed companies,” it said.
Further, over 80 per cent of the 15,169 companies that reported inward FDI were subsidiaries of foreign companies (single foreign investor holding over 50 per cent of the total equity).
“Mauritius was the largest source of FDI in India (21.8 per cent share at market value) followed by the USA, the UK, Singapore and Japan whereas Singapore (19.7 per cent) was the major ODI destination, followed by the Netherlands, Mauritius, and the USA,” the census said.
The census yields comprehensive information on the market value of foreign liabilities and assets of Indian companies arising on account of FDI, ODI and other investments.
“It is important to note that changes in outstanding asset/liabilities would be different from flows recorded in the balance of payments (BoP) during a year, as the former would also include valuation changes due to price and exchange rate movements,” the central bank said.
High equity participation
The census data further said non-financial FDI companies had a much higher share in total foreign equity participation vis-à-vis financial FDI firms.
“The ratio of market values of inward to outward direct investment, increased to 4.3 in March 2017 from 3.6 a year ago; equity participation accounted for 94 per cent and 79 per cent shares in inward and outward FDI, respectively,” it said.
The manufacturing sector accounted for nearly half of the total FDI at market prices; information and communication services and financial and insurance activities were the other major sectors that attracted FDI.
Total sales, including exports, of foreign subsidiaries in India increased by 18.7 per cent during 2016-17 whereas their purchases, including imports, increased by 20.1 per cent.
Mauritius largest source of FDI in India, says RBI
 
  • Informative
Reactions: bonobashi

bonobashi

Well-Known member
Dec 3, 2017
887
413

Most boats get built now in Taiwan or on Mainland China; there has been a shift from American boatyards over the last two decades, particularly of the premium category known as passage-makers. Now that the gloss has gone off, there is a real potential for stepping into this lucrative market for Indian boatyards, particularly those now hanging around with surplus capacity but no orders.
 

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Indian equity market to become 5th largest in the world this year: Report
India will overtake China to be the fastest growing large economy in 2018 and the country’s equity market will become the fifth largest in the world.

According to a Sanctum Wealth Management report, when the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospects of strong long-term growth.

“India will become the fastest growing large economy in the world, eclipsing China. Indian equity market will jump to become the fifth largest in the world,” the report noted.

At a time when developed economies are cheering 2-3 per cent growth, India is focused on breaching 7.5 per cent. Moreover, India also benefits from a favourable contrast to other emerging markets. On the other hand, China is downshifting to a slower pace of growth.

“Prospective returns for equities are much higher than the 6-8 per cent that one can expect from fixed income,” it noted.

However, if inflation or rates rise, markets are not likely to register further gains. Muted earnings could also impact market performance. “Considering the fact that Nifty50 is in a broader uptrend, a sustained move beyond the 10,490-10,580 levels could lead to a rally towards 11,200-11,500 levels in the medium term,” it noted.

As per the Sanctum Wealth Management report, a major factor that has changed is that the domestic buyer now sets market prices. Domestic mutual funds had bought equities worth $15.3 billion against $8 billion by foreign investors in 2017.

The report, that identifies various big-picture trends at play this year in the domestic and global economy, noted that Aadhaar, Jan Dhan, Demonetisation, and GST, are working to create a new inclusive infrastructure in India.

“Given the rapid pace at which the Indian economy is developing, investors today are faced with the need to make crucial investment decisions amidst multiple cross currents, using a complex array of choices,” Sanctum Wealth Management Chief Executive Officer Shiv Gupta said.
Indian equity market to become 5th largest in the world this year: Report
 
  • Informative
Reactions: Dagger

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Physical banks will be irrelevant in next 3 yrs in India: Amitabh Kant
Aayog CEO Amitabh Kant on Thursday said physical banks in India will be irrelevant in the next 3 years as data consumption growth and data analytics are likely to further boost financial inclusion.

"Days of physical bank will be over...India will throw huge amount of data, Kant said, adding data analytics would boost financial inclusion in the country.

While speaking at a panel discussion here, he said India is the only country with over a billion biometrics.

In the next three-four years, India will have a billion plus smartphones, Kant said.

The NITI Aayog CEO also pointed out that mobile data consumption in India is more than the US and China put together.

Participating in the panel discussion, Paytm founder Vijay Shekhar Sharma said the new banking model in this world will come out of India and Paytm will be early example of that India model.
Physical banks will be irrelevant in next 3 yrs in India: Amitabh Kant
 

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Textile imports increase 19.7% on surge in Bangladesh shipments
Even as textile exports continue to advance at a slow pace, imports have increased on the back of a sharp surge in shipments from Bangladesh. Textile imports grew 19.7% year-on-year to around $1.4 billion between April and December 2017 while exports went up by a measly 2% y-o-y to $26.1 billion for the timeframe.
India's imports of garments from Bangladesh increased 66% y-o-y to $111.3 million during July-December 2017, according to the latest statistics released by Export Promotion Bureau of Bangladesh. While knitted apparel imports from Bangladesh soared 77% y-o-y to $36.5 million between July and December 2017, woven apparel imports grew 62% y-o-y to $74.8 million.

"It (imports) is negatively affecting the domestic yarn, fabric and garment manufacturers," said Sanjay K Jain, chairman, Confederation of Indian Textile Industry (CITI). "There is a greater need to impose safeguard measures such as rules of origin, yarn forward and fabric forward rules on countries like Bangladesh and Sri Lanka that have FTAs (free trade agreements) with India to prevent cheaper fabrics produced from countries like China routed through these countries," he said.

Garment manufacturers in India have to pay duty on imported fabrics, while Bangladesh can import fabric from China duty free and convert them into garments and sell to India duty free. This has put the garment industry in a spot.

"India can increase its exports of cotton yarn and fabrics provided the sector is restored with export incentives," the CITI chairman stated. "India's share of cotton yarn in world trade is 26% and it is declining steeply as the incentives given to the cotton yarn sector were withdrawn in 2014 and MEIS (Merchandise Exports from India Scheme) which was extended to the entire value chain was not extended to cotton yarn," he said.

"Moreover, there are various state levies up to the tune of 8% on cotton yarn which are not refunded at any stage," Jain pointed out. "Similarly, fabric sector is not getting refund of state levies of around 6%. By including cotton yarn under MEIS and providing ROSL (refund of state levies) for fabrics, Indian can retain its competitiveness in the global market," he said.
Textile imports increase 19.7% on surge in Bangladesh shipments - Times of India
 
  • Like
Reactions: Aravind

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Saudi Aramco planning oil refinery in India as part of expansion plans: Nikkei
Saudi Aramco, the state oil company of Saudi Arabia, is considering entering India as part of its Asian expansion, Nikkei said on Tuesday, citing Aramco’s chief executive Amin Nasser who said that plans for an Indian oil refinery are crystallizing.

“Saudi Aramco is looking at additional investments in China, and India is also a very important destination which we are giving great consideration, and (where we are) currently in discussion with some companies,” Aramco CEO Amin Nasser told the Nikkei Asian Review in an interview.

The Saudi government has said it plans to sell about 5% of Aramco, hoping to raise some $100 billion or more in what would likely be the world’s biggest initial public offer (IPO).

“At the moment, we are prepared for a listing in the second half of 2018,” Nasser confirmed to Nikkei.

Saudi officials have said they may list Aramco on one or more foreign markets such as New York, London and Hong Kong in addition to Riyadh, which would boost the company’s global profile and reduce the strain on the Saudi market.
Saudi Aramco planning oil refinery in India as part of expansion plans: Nikkei
 

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
Is India on the cusp of a fiscal revolution?
Arun Jaitley will present the fifth budget of the Narendra Modi government this week. The budget will be announced against the backdrop of a strong economic revival combined with greater macro risks. This column had noted a fortnight ago that the Indian economy in 2018 would look very different from the one in 2017 because of these two factors, and would thus test the new macroeconomic policy framework.

Various monthly indicators suggest that economic recovery will gather pace over the next few quarters, and investment bank Nomura says in a recent report that a V-shaped recovery will be driven by a strong pickup in investment activity as well as export growth. The flip side is that the current account deficit is expected to widen, interest rates in the bond market have begun to move up and the significant steepening of the yield curve suggests growing worries on the inflation front.

This combination of stronger growth with greater macro risks suggests that the finance minister should avoid fiscal adventurism. The economic recovery has enough internal strength to move ahead without fiscal support while it makes sense to preserve fiscal firepower in case there is a global shock over the rest of the year. It will be a tough political decision in the months leading to the next general election.

There is a broader issue that needs to be introduced into the Indian fiscal debate at this point in time. Is India ready for a fiscal revolution? Thomas Piketty has shown in his empirical work that most Western countries underwent fiscal modernization between 1914 and 1950. For example, income tax moved from being an elite tax levied on a thin slice of the population to a mass tax that a growing proportion of citizens paid.

The Indian nation state sits on a weak fiscal foundation. There are two consequences of this. First, low tax revenue means that essential tasks such as national security, the provision of public goods and offering social security cannot be done without running what would be among the highest fiscal deficits in the world.

Second, the low proportion of direct taxpayers leads to weak political incentives for good governance. Almost all Indians pay regressive indirect taxes but it could be argued that people are more alert about how their money is being spent when it is a question of progressive direct taxes. The Indian fiscal contract is very different from the one in developed countries.

The most reasonable criticism of the view that Indians pay far too little tax as a proportion of gross domestic product (GDP) is that we are a poor country. Tadit Kundu and Pramit Bhattacharya have shown in a data story published recently in this newspaper that India is not an outlier in terms of the tax-GDP ratio once the numbers are adjusted for per capita income. Indians pay enough tax given their average incomes.

Is that about to change? Here are two optimistic guesses about why the fiscal foundations of the Indian state could be strengthened in the next decade.

Global economic history suggests that income tax collections as a per cent of GDP tend to rise sharply once average incomes cross the $2,000 threshold—from 1% of GDP to around 5% of GDP. These four extra percentage points can make a world of difference. India is on the cusp of that threshold. What has happened in China is instructive. Its income tax revenue as a per cent of GDP began to climb in the early years of this century.

Many alert readers will notice that China had a lower level of per capita income at the turn of the century than India has today. Then why was there an inflexion point in its income tax collections? Piketty has argued that one reason why India has had less success in making the income tax a mass tax could be because “the proportion of formal wage earners in the labour force is ridiculously low”.

This is a very useful backdrop to examine the ongoing debate about whether India is creating adequate jobs in formal enterprises—as well as welcome the data in the Economic Survey released earlier this week on the formalization of the Indian economy. The very possibility that India is creating more formal sector jobs than most people assume, plus the fact that average incomes are close to $2,000, provides the initial conditions for a fiscal revolution.

Higher collections of direct taxes—on income, corporate profits, capital gains and property—could create fiscal space for the government to reduce rates on regressive indirect taxes such as the goods and services tax (GST). One of the central aims of the 1991 tax reforms was to move away from a heavy dependence on regressive indirect taxes. That job is still half done.

The even more powerful possibility— and it is only a possibility right now—is that higher direct tax collections could provide the next few Indian governments with the financial resources to maintain national security, provide public goods, build infrastructure and fund a meaningful social security system without being forced to run up huge fiscal deficits.

Is such a fiscal revolution just around the corner? It is impossible to say for sure—but some of the answers are blowing in the wind.

Note: The complete data on income tax collections in India and China can be accessed here: Income Inequality And Progressive Income Taxation In China And India, 1986–2015, by Thomas Piketty and Nancy Qian, American Economic Journal: Applied Economics, 2009.
Is India on the cusp of a fiscal revolution?
 
  • Like
Reactions: Aravind

RISING SUN

Senior member
Dec 3, 2017
10,421
5,262
After US & China, India best on equity charts since May 2014
After the US and China, India is the third-best performer in global equity markets in dollar terms since Narendra Modi became the Prime Minister in May 2014. The NSE Nifty rallied 56 per cent since, while the Nasdaq and China's Shanghai Composite gained 81 per cent and 70 per cent, respectively. Over the last four years, since the government came to power, the Indian stock market, especially the mid- and small-cap stocks, had a dream run, though there have been some disappointments in between. Currently, the market is trading at all-time highs. However, a recurrence of the Sensex's record 169 per cent rally during the UPA I government between May 2004 and May 2009 remains a distance dream for investors.


Indian Stock market: After US & China, India best on equity charts since May 2014 - The Economic Times