Follow palashbiswaskl on Twitter

ArundhatiRay speaks

More GRITtv

PalahBiswas On Unique Identity No1.mpg

Unique Identity No2

Please send the LINK to your Addresslist and send me every update, event, development,documents and FEEDBACK . just mail to palashbiswaskl@gmail.com

Website templates

Jyoti basu is dead

Dr.B.R.Ambedkar

Saturday, July 23, 2011

REFORMS Twenty Years!India moves to open up $450 bln retail secto!Insurance regulatorIrda on Friday said it is mulling over making it mandatory forinsurance companies to go public, even though the final IPO norms are still awaited and most players ar

REFORMS Twenty Years! Insurance regulatorIrda on Friday said it is mulling over making it mandatory forinsurance companies to go public, even though the final IPO norms are still awaited and most players are not keen to hit the market. IRDA for more companies to participate in pension market!Final IPO norms for life insurance company IPO by month-end!

Indian Holocaust My Father`s Life and Time - SIX HUNDRED  NINETY ONE

Palash Biswas

http://indianholocaustmyfatherslifeandtime.blogspot.com/



http://basantipurtimes.blogspot.com/


REFORMS Twenty Years! 

India moves to open up $450 bln retail section!

Insurance regulatorIrda on Friday said it is mulling over making it mandatory forinsurance companies to go public, even though the final IPO norms are still awaited and most players are not keen to hit the market. Final IPO norms for life insurance company IPO by month-end!

IRDA for more companies to participate in pension market!Insurance regulatorIRDA on Friday said that domination of one company in thepension market could be risky and it was important for other insurance companies to participate actively. 

Amidst the fear of a slowdown in the economy, the government intends to push forward economic reforms to spur economic growth.

 Amidst the fear of a slowdown in the economy, the government intends to push forward economic reforms to spur economic growth. "There appears to be some slowdown in the economy… In coming monsoon session of Parliament we intend to further accelerate ongoing reforms in various sphere of economy to boost growth," Finance Minister Pranab Mukherjee told reporters here on Friday.

"We have taken series of legislations during the last budget session to push forward reforms in some of the key segments of the financial sector of the economy like insurance, banking and pension. We intend to take some more reform measures like new Mining Bill and an updated Land Acquisition Bill to promote integrated development of the industry keeping interests of all stakeholders in mind," he said.

Brushing aside criticism from some quarters that the government is slow-pedaling on the reform front, Mukherjee said "the government is doing its job. Some of the reform-oriented legislative measures concerning banking, insurance and pension are pending before the Parliamentary Standing Committees. We look forward to some forward movement in this direction in the monsoon session of Parliament".

"On the taxation front this government has taken pro-reform measures like Direct Tax Code (DTC) Bill as well as the Constitution Amendment Bill (CAB) on Goods and Service Tax (GST). These two crucial Bills are being examined by the Parliamentary Standing Committees. We are waiting for their recommendations. Once these are received we will move fast on these Bills," he said.

While DTC Bill seeks to replace the archaic Income Tax Act 1961 the CAB on GST aims at introduction of the new tax regime GST.

Indicating reform measures in the key energy sector Mukherjee hinted that the government would work towards putting the methodologies in place by end of this year for direct transfer of cash subsidy in respect of kerosene and domestic LPG to targeted beneficiaries. In regard to growth outlook for 2011-12 he admitted that there seems  to be a slowdown in the ongoing growth momentum of the economy and asserted that government would take necessary fiscal policies to keep the economy on trajectory of higher growth.

"While annual indicators of real GDP growth remained positive in 2010-11 there is a perceptible slowdown in terms of quarterly growth rates in the last quarters," he cautioned, hoping the economy would  maintain 8.5 per cent growth rate.

Agriculture remains a laggard as India celebrates two decades of economic reforms

Ashok Gulati Jul 22, 2011, 04.46am IST

July is a month when we need to remind ourselves how reforms have changed India since 1991, from vulnerability to resilience, whether to external shocks (say, oil) or internal ones (droughts).

In 2009, we witnessed the worst drought since 1972, yet the agricultural growth rate stayed positive (0.4%), nor did we resort to any major cereal imports. And in 2010-11, we are likely to have a record harvest of 241 million tonnes (mt) of grain and public sector stocks of 65 mt. This heroic achievement is presumably the result of the doubling investment in agriculture from less than 10% of agri-GDP in 2002 to more than 20% of agri-GDP in 2010. Let us celebrate this resilience and new-found confidence and salute the duo of Narasimha Rao and Manmohan Singh and their teams, who worked to bring about this massive change.

But big challenges remain: a high fiscal deficit, inflation, deficient governance, deficient infrastructure, remnants of crony capitalism in some sectors, recidivist visions of the control raj. While there has been a sea-change in the services sector, as also in the manufacturing after several hiccups, agriculture continues to underperform.

he sector cries out for major reforms, from marketing to investment and institutional change, especially in water management, new technologies (seeds), land markets and creation of efficient value chains. This needs to come uppermost in the reform agenda during the Twelfth Five-Year Plan, if we have to reduce poverty faster than has been the case so far.

In agriculture, normally our Five-Year Plans target increasing production of almost everything. True, with rising incomes and population, India will perhaps need more of most of things. Yet, a strategic vision must factor in three important elements: (1) India's comparative advantage; (2) efficient markets at home and/or abroad; and (3) environmental sustainability.

Plan schemes have to fit within this three-dimensional architecture. We often forget that besides the farmers and the government, there are several other actors in agriculture, especially private companies and NGOs working at the grassroots. These various stakeholders should come together in an institutional framework that can incentivise and unleash a new change in agriculture. To see how, we need to look at the big-bang achievements of the last decade.

http://articles.economictimes.indiatimes.com/2011-07-22/news/29803550_1_bt-cotton-agriculture-seeds


A top Indian government panel has approved a plan to allow foreign direct investment in the country's vast retail market in what would be one of the country's biggest economic reforms.

But it said investors would have to put in at least $100 million to set up multibrand retail stores and would only be allowed to operate in cities with at least one million people, the Press Trust of India said late Friday.

The proposal to more fully open up the Indian retail market, whose annual sales are estimated at around $450 billion, now must go to the federal cabinet for approval and then overcome widespread political opposition.

The move would mark one of the biggest reforms by India's Congress-led government. But analysts say it could be difficult for the embattled government to push through the major changes as it fends off a slew of corruption charges.

Multi-brand foreign groups such as US-based Wal-Mart currently operate as wholesalers but cannot sell directly to the public, amid fears that big international retail chains could swamp small family-run stores.

India's tight foreign investment rules are aimed at protecting small "mom-and-pop" stores in the sector where less than 10 percent of consumers shop in bigger, well-known department stores.

The policy change would mean foreign retailers could start selling to Indian shoppers through partnerships with Indian retailers and be allowed to hold up to a 51 percent stake in local joint ventures.

India has already allowed 51 percent foreign investment in single-brand retail operations such as Nokia or Reebok and 100 percent in wholesale cash-and-carry operations.

"Step-by-step, we're moving closer to opening multi-brand retail in India to FDI. This will invite a lot of interest from retailers the world over," said Kishore Biyani, chief executive of leading Indian retailer Future Group.

Large retailers such as Wal-Mart and France's Carrefour have been lobbying India's government aggressively to open the consumer market to foreign chains as they seek to grow outside saturated Western markets.

23 JUL, 2011, 03.44AM IST, DEEPSHIKHA SIKARWAR,ET BUREAU 

FM Pranab Mukherjee to meet industry heads to allay fears on reforms, growth

NEW DELHI: To combat the perception of policy paralysis, the United Progressive Alliance's key crisis manager finance ministerPranab Mukherjee will meet India Inc's top honchos on August 1 to tell them all is well with the economy and the government is committed to reforms. 

Tata group chairmanRatan Tata,Reliance IndustrieschairmanMukesh Ambani,Bharti Enterprises chairmanSunil Mittal,ADAG chairmanAnil Ambani, andEssar chairman Shashi Ruia will attend the meeting among others. 

"In addition to signal the government's clear commitment to reforms, the idea is to understand what should be done to give impetus to the economy", said a finance ministry official. 

The move comes close on the heels of Mukherjee's interactions with financial media in which he stressed that the perceived lack of progress on reforms was misplaced, stuck to his growth targets, blamed perceptions of a slowdown on global factors and promised that inflation would cool by the end of the fiscal. 

There is a growing perception within the investor community that the government is slacking on reforms to support long-term growth, including an overhaul of its land acquisition policy, taxation system and foreign direct investment rules. These meetings are largely aimed at dispelling this perception. 

A survey of 75 leading companies by The Economic Times newspaper and Federation of Indian Industry and Chambers of Commerce (FICCI) last month showed clear signs of corporate unease with the Congress party-led coalition government. 

Mukherjee, in his interactions with journalists earlier this week, expressed confidence that despite an uncertain global environment the economy will grow strongly because of robust consumer demand and buoyant exports.

BSE
873.60
01.49%
12.85
Vol:423785 shares traded
NSE
873.35
01.45%
12.50
Vol:3498193 shares traded



Saturday, July 23, 2011 6:30:47 PM (IST)  

'FDI will help modernise retail sector, curb inflation'

 

New Delhi, July 23 (IANS) Opening up multi-brand retail for up to 51 percent foreign direct investment would help curb inflationary pressure and modernise the sector, industries and analysts have said, welcoming the recommendation of an official panel.

"It is a great decision. We want this to happen as soon as possible," Rajiv Kumar, secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI), told IANS.

A committee of secretaries headed by Cabinet Secretary Ajit Kumar Seth Friday gave in-principle approval for allowing up to 51 percent foreign direct investment (FDI) in multi-brand retail. This will allow global retailers like Wal-Mart, Carrefour and Tesco to enter the Indian market through strategic partnership in the multi-brand retail segment.

Kumar said entry of supermarket chains like Wal-Mart and Carrefour would modernise the retail sector in India.

"Getting foreign investment is one part, but the real benefit will be that it will help modernise the retail sector and control food inflation, a big problem at the moment," said Kumar.

Talking to IANS, Assocham secretary general D.S. Rawat said the move would send a positive signal not only to foreign investors but also domestic investors who were worried that the government was suffering from a policy paralysis.

"Business confidence is low. No major decision were taken in the last few months. This will send a positive signal to investors in all segments," Rawat said.

Rawat, however, said the government should act swiftly to take a final decision and implement the proposal. "This is just a first step. It has to pass many hurdles," he said.

The committee of secretaries has sent its recommendation to the cabinet. Now the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh would take the final decision on the matter.

The decision is not going to be easy as most opposition parties, including the Bharatiya Janata Party (BJP), have been opposing the move saying the entry of multinationals would put the small retailers out of business.

However, analysts argue that given the size of the Indian market there is enough space for small retailers as well as big supermarkets to flourish side by side.

"Business models of supermarkets and small retailers are different. I don't think supermarkets are a threat to mom-n-pop stores," Gaurav Gupta, a director at Deloitte in India, told IANS.

Gupta said the minimum FDI cap of $100 million as suggested by the committee of secretaries would provide sufficient safeguard to small retailers.

The committee of secretaries has also recommended that at least half of the foreign investment in any project should be invested in back-end infrastructure like cold storage chains and warehouses.

"This will significantly reduce the wastage and modernise the logistics and supply chain," the Deloitte official said.

India currently allows up to 51 percent foreign direct investments in single-brand retail and 100 percent foreign direct investment in cash and carry wholesale trade. No overseas investment is allowed in multi-brand retail.

Global retailers like Wal-Mart and Carrefour have already opened cash and carry stores through strategic partnerships in India and are keen to open the supermarkets in the country where only 4 percent retail business is in the organised sector.

 


India lost for words 20 years after its 1991 reforms

The Independent (blog) - John Elliott - ‎5 hours ago‎

Twenty years ago this weekend, three top Indian officials burned the midnight oil tearing up old import controls and preparing a package of economic reforms that would slowly lead to the booming India that ...

What reforms meant for the government and its finances

Business Standard - ‎6 minutes ago‎
Economic reforms in India in the past 20 years have largely been framed through consensus. Because of this, though the pace of reforms may appear slow, implementation has generally been successful. Therefore, Indiadoes not need 'big bang' reforms, ...

Strategic dimension to 1991

Business Standard - ‎3 hours ago‎
Twenty years ago on this day, 24th July 1991, India's finance minister Manmohan Singh wound up his historic Union budget speech with the famous words: "No power on earth can stop an idea whose time has come. I suggest to this august House that the ...


20 years of reforms: Montek Singh's view - Videos - India - IBNLive
* ibnlive.in.com/videos/.../20-years-of-reforms-montek-singhs-view.html3 days ago
CNN-IBN spoke to economist Montek Singh Ahluwalia who has been working with Manmohan Singh.

More videos for Reforms india 20 years »
Will opening up this sector improve India's fortunes? A  A  A

In this issue: 
» Insurance premiums grow well in BRICs 
» Is Russia the best investment choice? 
» Hotel industry is catering to India's middle class 
» SMEs in China are under financial strain 
» ...and more!

----------------------------- A Good Time To Sell Bad Stocks -----------------------------

It's never too late to get rid of 'bad stocks'.

After all, you never know how bad a market crash could get.

But what are these 'bad stocks'? How do you identify them?

For answers to these questions, and more, click here to read on...

--------------------------------------------------------------------------------------- 

00:00
 
The last time that India made some bold and important reforms was way back in 1991. At that time, because of the precarious state of affairs with respect to India's forex kitty, the then Finance Minister Mr Manmohan Singh decided to liberalise and open up India's economy. This move proved to be highly successful and set the tone for future growth in the Indian economy. Sadly since then, the reform process has hardly been much to talk about. 

Given that India in recent times has grappling with problems of high inflation, poor infrastructure and corporate governance issues, the time now is riper than ever to once again introduce some bold reforms. And one such reform could be opening up India's vast retail sector. At present, India permits only up to 51% foreign direct investment in single brand retail stores and 100% FDI (Foreign Direct Investment) in cash-and-carry stores that can engage in wholesale trading. FDI in multi-brand retail stores is not permitted. 

One major deterrent to the opening up of the sector has been the argument that local kirana shops will become extinct once the competition from big retail stores intensified. There might be some grain of truth in it but the problem may not be as big as envisaged. For instance, one of the advantages of kirana shops for any household is the convenience of location, quickness of delivery among others. Given the expensiveness of India's real estate, poor infrastructure and cultural issues, it seems quite unlikely that kirana stores will completely lose their clout. 

At the same time, multi-brand retail has its own set of advantages. These would be elimination of layers of middlemen, cash transactions entering a formal economy, more investments in retail supply chain and storage and employment to India's burgeoning working class population. 

Ultimately what will matter is whether these retailers have long term interests in mind while investing in India and whether they are committed to developing the requisite infrastructure in the country. If yes, then opening up the retail sector may not be such a bad idea as it is being made out to be at present. And competition for India Inc. will certainly act as a catalyst to improve business operations and take it to the next level. 

Speaking of India Inc., which Indian company do you think is the most trustworthy when it comes to financial reporting? Please take our poll to cast your vote if you haven't already done so. But hurry as this poll closes today at 2 pm. 

01:26  Chart of the day
 
Just as the economies of the BRIC nations are growing at a fast pace, so seems to be the growth of insurance. As today's chart of the day shows, insurance premiums have seen a healthy growth in China, Brazil and India in 2010. Of course, these countries lag way behind the rich countries by volumes (especially the US which accounts for more than quarter of the market). But, when it comes to growth potential, emerging economies certainly take the cake. 

Data Source: The Economist

02:01
 
Oil and energy companies appear to be determining future growth for investors. At least for legendary investor Mark Mobius. Mobius opines that thanks to the healthy oil and energy companies, Russia would be the best investment choice for emerging market investors. In fact, Russia tops his own investment list at the moment. This is despite corporate governance issues that surround Russian companies. He feels that the returns justify the risks on account of the governance. This is where we differ from Mr Mobius. Returns are always a focus for investing. However, one cannot overlook the importance of sound corporate governance. In the long run, stock markets also reward companies with better governance standards. On the other hand, we do agree with Mr Mobius on the fact that oil and energy companies are bound to be good investment opportunities in the light of higher crude oil prices. But in a country like ours, where higher crude prices translate to larger losses for our oil companies due to the habit of subsidizing product prices, it is better to evaluate them more closely before investing in them. 

02:32
 
The middle class in India has come up in a huge way and is hard to ignore. This time, it is the hotel industry where it is making its presence felt. The hotels were once built for foreign travelers leading to concentration of high end properties. However, that hardly serves the mass segment in India and the hotel sector has begun to realise the need for a change. As per the latest industry data, one in five rooms under construction will be budget rooms catering to the rising middle class. So, the focal point will be neither the top nor the bottom but the middle of the pyramid. 

While the shift in the strategy seems easy on the surface, there are quite a few challenges to overcome. These range from the country's poor infrastructure to lengthy approval processes for plans and permits. Further, high cost of land and infrastructure development along with limited returns will make ideal returns on capital a tough goal as far as this strategy is concerned. To compound their problems, unlike previous real estate cycles, it will be tough this time to mop up funds from bank or private equity funds. The recent debacle of real estate in Indiaand painfully long investment horizon periods has made the hotel industry more cautious than ever. While 19 new projects were announced in the first quarter and 21 more were under construction, 52 projects were put on hold or canceled. 

Even if the initial glitches are overcome, it is doubtful if the Indian consumer will like a no frills approach. That said, it's a new trend and the industry should be prepared to test waters and learn our lessons if this concept fails. 

03:16
 
Amidst all the tension surrounding Greece and the US debt markets, investors seem to be turning a blind eye towards another factor that is equally crucial for the fate of global economy. We are referring to crude oil. The latest development in this commodity concerns none other but India. It may be recalled that few months back, the RBI had halted a clearing mechanism of making payments to Iranian oil imports. This was apparently done at the behest of the Americans. Months of non-payment has led the money owed to Iran snowball to US$ 5 bn. With the Middle Eastern nation struggling for cash flows, it has decided to stop shipping oil to India next month onwards. This is certainly likely to make India look elsewhere for the 4 lakh barrels per day that it imports for Iran. As of now, Saudi Arabia can certainly pick up the slack. But should other nations too follow in on India's footsteps, Iran would have a hard time selling its oil. Furthermore, the incremental demand from India could create upward pressure on crude prices should global economy improve further. 

03:47
 
For an economy that has been growing at a break neck, speed slowing down at regular intervals is a must. This is if it wishes to avert a runaway hyper inflationary trend or an asset bubble. China has been attempting to do the same for several quarters now. At 22% the reserve ratio that the Chinese banks have been mandated to keep aside is one of the highest in its history. But the sudden bout of conservativeness seems to be taking a toll on the small enterprises. Especially since the credit squeeze is at a time when the small entities have got used to large doses of cheap funding. The prohibitive interest rates have therefore come as a huge shock to the highly leveraged Chinese SMEs; even driving some to bankruptcy. Although the Chinese government is not known to reveal such facts, the policymakers this time are worried about the SMEs. And why not? After all, these troubled entities account for almost 90% of China's exporters. As per the data cited by the Economic Times, 88% of SMEs in China are under a financial strain! This is certainly not good news for an economy that relies heavily on its industries and exports. 

04:11
 
It was a stellar week for the world markets with all countries expect China closing the week in the green. A new deal worked out to resolve the Greek sovereign debt crisis resulted in gains across the world markets. The biggest gainer of the week was Singapore up 3.2% while China closed the week down 0.9%. Among the other Asian markets, Hong Kong was up by 2.6% while Japan was up by 1.6%. 

Indian stock market was up by 0.9%. While the country faces medium term headwinds due to inflation, higher interest rates and policy paralysis, the new Europe debt deal resulted in FII inflows. This helped push the markets into the green. In Europe, the biggest gainer was France up 3.1%. UK closed the week up 1.6% followed closely by Germany up 1.5%. In the Americas, US was up by 1.6% while Brazil was up by 1.3%. 

Source: Yahoo Finance, Kitco


04:56  Weekend investing mantra
"It is absurd to think that the general public can ever make money out of market forecasts." - Benjamin Graham

Geithner eyes India financial reforms, U.S. access


Credit: Reuters/Jason Reed

By David Lawder and Paul Eckert

WASHINGTON | Tue Jun 28, 2011 6:32am IST

(Reuters) - India has outgrown its financial system, U.S. Treasury Secretary Timothy Geithner said on Monday, calling for cooperation on reforms that would deepen India's capital markets and allow U.S. firms more access to them.

Geithner, speaking at a business forum with Indian Finance Minister Pranab Mukherjee, said India's future growth largely depended on the "next wave" of financial reforms.

The two finance ministers and their top lieutenants will participate in annual economic talks in Washington on Tuesday.

"I think from our perspective, the most important thing we'd like to see is progress on financial reforms that provide a deeper, more liquid market for corporate debt for infrastructure financing, that allow a little more access of American companies and their technology in the financial area," Geithner said. "Our interests are pretty complementary as a whole."

The second installment of the U.S.-India Economic and Financial Partnership talks, launched last year in New Delhi, are not likely to stir acrimony. The two democracies, both powered by domestic-led growth with market-driven currencies, have many common goals.

"If you look at this relationship, one of the things that's so encouraging about it is the relative absence of drama," Geithner said.

Last month, the United States and China held much more controversial bilateral talks, sparring over currency policies, human rights and U.S. high-technology exports.

The U.S. wants to make India one of its top 10 trading partners in coming years. Currently, bilateral trade between the two countries is about $49 billion annually, just over a tenth of the $456 billion annual U.S.-China bilateral trade.

INDIA REFORMS, INFLATION BATTLE

Mukherjee said reforms in India were "a constant exercise" and pledged that India would press forward with its reform agenda and the legislation that would enable it.

The Indian finance minister also acknowledged that India faced serious inflationary pressures and was acting to contain them. He added that while India "could live with" inflation running at an annual pace of 6 percent to 6.5 percent, the level this year may be higher because of high oil prices.

A top Indian central banker noted earlier on Monday that the recent easing of oil prices will aid the inflation fight.

"If this trend persists, it will provide substantial relief for global inflation management, particularly for large commodities importers," said Subir Gokarn, deputy governor for the Reserve Bank of India.

Earlier this month, India raised interest rates for the 10th time in just over a year, boosting the rate at which it lends to banks by 25 basis points to 7.5 percent.

The RBI's baseline forecast anticipates India's annual growth rate slowing to around 8 percent, Gokarn said. This compares to about 8.5 percent for the 2010/11 fiscal year.

"From the inflation management perspective, this is not an entirely undesirable outcome," he added. "If it results in a significant reduction in the inflation rate, it will represent a soft landing, which in turn opens up the opportunity for a reversal of the interest rate cycle."

IMF SUPPORT UNCLEAR

A day before the International Monetary Fund's executive board was set to begin deliberations to select its next managing director, both Geithner and Mukherjee declined to be drawn on which candidate they support -- France's Christine Lagarde or Mexico's Agustin Carstens.

Many emerging market officials, who have pushed for a greater say in how the IMF and similar institutions are run, have called for an end to the tradition of appointing a European to head the global rescue lender.

Mukherjee sidestepped a question on the matter, saying only: "I'm quite confident that these institutions will be reformed."

Geithner, who could swing the vote for Lagarde with a U.S. endorsement, declined to answer, saying that an a selection process that he pledged would be "open" had produced "two very credible candidates."

(Reporting by David Lawder and Paul Eckert, Writing by David Lawder; Editing by Bernard Orr)

MORE REUTERS RESULTS FOR:

http://in.reuters.com/article/2011/06/28/idINIndia-57954120110628


  • DEALS INDIA
  • JULY 22, 2011, 7:24 A.M. ET

India Needs Retail Therapy

By SAMITA SAWARDEKAR

As India struggles to combat inflationary pressures particularly among food products, there is an increasing clamor for supply side reforms that would address the structural issues facing the economy.

One particular contentious topic is the retail sector.

India's retail sector is large – $400 billion according to some estimates - and is set to grow with the nation's increasing levels of prosperity and demographic dynamics. This, along with the low levels of product penetration and the largely unorganized nature of retail makes it an extremely appealing market for global players.

Manpreet Romana/Agence France-Presse/Getty Images

A customer shops for groceries at a neighborhood shop in New Delhi.

ikirana0722
ikirana0722

However, India permits only up to 51% foreign direct investment in single brand retail stores and 100% FDI in cash-and-carry stores that can engage in wholesale trading. FDI in multi-brand retail stores is not permitted.

The arguments for opening up retail start with the technology, expertise and funds that this would bring to build robust supply chains across the nation. This would reduce wastage (estimated at 30% to 40% of total production), improve food safety, hygiene and increase overall efficiency.

As farmers get linked directly to retailers, they will benefit from transparency in pricing, better realizations, knowledge and skills transfer, access to credit and a reduction in the impact of market vagaries.

Moreover, the elimination of layers of middlemen will reduce the huge price differential that exists today between the farm and fork price to the mutual benefit of farmers and consumers.

It's not surprising that these folks have been the most strident opponents of reforms. They have secured support from existing local players in the organized retail sector, most of whom are keen to delay competition on their home turf. They have played up the adverse impact that foreign players will have on the livelihood of the 12 million mom-and-pop retail stores or "kiranas" that dot the country.

While the entry of competition is bound to have an effect, the severity of the impact is debatable. India's expensive real estate, poor infrastructure and cultural issues are stacked in favor of the local kirana. Indeed, many experts believe that both kiranas and large retailers offer distinct advantages to consumers and will coexist as the market expands.

Retail is a high, direct and indirect, employment generator with relatively low "qualifications" requirements that makes it particularly attractive. The opening of the sector also would benefit the exchequer. Organized retail brings cash transactions, which are often unreported, into the formal economy. This, along with an expansion of the market and introduction of services such as logistics and warehousing would improve overall tax collections.

However, reforms in this sector have been slow and ground ceded mostly to vested interests.

This may be changing. Over the last few months, there has been a lot of talk of opening of the sector.

The Economic Survey of 2010-11, which was presented in Parliament in February, recommended opening of the retail sector to foreign investors. A high-level government committee headed by India's Chief Economic Advisor Kaushik Basu also made the same recommendation in its May report. R. Gopalan, India's Economic Affairs Secretary, made a strong case for FDI in retail in a recent interview with The Times of India.

The 1992 economic reforms helped India avert default and lifted millions of people out of poverty. Today, the country needs to deal with its twin problems of slowing growth and high inflation; second-level reforms are urgently required.

A bold move such as allowing 100% foreign direct investments in retail can be the proverbial silver bullet for this government with multiple benefits in terms of controlling inflation, helping farmers and consumers, and silencing its critics.

Will the government provide this retail therapy?

Latest Headlines

FDI in retail under foreign pressure: BJP

PTI
SHARE  ·   PRINT   ·   T+  

BJP on Saturday said it would strongly oppose the government move to allow FDI in retail sector as it would affect small traders and alluded to the UPA government succumbing to US pressure in changing the policy.

"Along with price rise, unemployment has been increasing in this country. 50 per cent of our population, comprising of small traders, street-vendors and the self-employed sustain themselves through retail businesses. The UPA government wants to deprive them of livelihood by allowing FDI in multi-brand retail," BJP spokesperson Shahnawaz Hussain said.

BJP will oppose this policy through which the government proposes to allow 100 per cent FDI in multi-brand retail in cities having population above 10 Lakh.

The party has always counted on the support of small traders and feels that neighbourhood store-owners would be adversely affected by the entry of foreign brands like Walmart, Tesco and Carrefour.

"The government should try to build a political consensus on this issue. The Rajya Sabha Standing Committee report had stated that FDI should not be allowed in retail as small shopkeepers would be affected," Mr. Hussain said.

He alluded to this step being taken under foreign pressure, and mentioned the recent visit of US Secretary of State Hillary Clinton to India in this regard.

"There is a suspicion that this government is working under pressure. Whenever some big leader, especially from the U.S., visits India the government forms a bigger committee to over-rule the decision of its Standing Committees," he said.

A Committee of Secretaries, headed by Cabinet Secretary Ajit Seth, has cleared the proposal to have FDI in retail.

BJP sought to know whether the government had conducted any study on whether FDI in retail will increase or decrease unemployment.

Mr. Hussain insisted that the erstwhile NDA government led by Atal Bihari Vajpayee had started several programmes to generate employment during its tenure.

"The UPA government has been a complete failure in controlling unemployment... In the name of economic reforms this government wants to take away employment for the benefit of the foreign multi-brand companies," Mr. Hussain said.

LATEST IN THIS SECTION

FDI

FDI in retail under foreign pressure: BJP

The Hindu - ‎4 hours ago‎
BJP on Saturday said it would strongly oppose the government move to allow FDI in retail sector as it would affect small traders and alluded to the UPA government succumbing to US pressure in changing the policy.

Making your way through the FDIlabyrinth

Business Line - Rohan Bagai -‎59 minutes ago‎
As I recalled provisions under the foreign direct investment (FDI) and exchange control laws off-hand, I thought something was amiss as I tried to classify Simon's proposed off-the-market transaction as foreign direct investment.

BP-Reliance deal, India's biggestFDI okayed

Times of India - ‎21 hours ago‎
NEW DELHI: The government on Friday gave its consent to UK energy major BP Plc taking 30% interest in 21 out of 23 acreages, including India's gas bowl off the Andhra coast, being operated or explored by Mukesh Ambani's Reliance Industries Ltd for over ...

BJP fights FDI policy, says it'll have bad eco implications

Moneycontrol.com - ‎Jul 20, 2011‎
Some important bills are coming up for consideration in the next few weeks, including foreign direct investment (FDI) in retail and insurance along with some progress on the goods and service tax (GST), etc.

Blueprint for FDI in multi-brand retail may be approved tomorrow

Hindu Business Line - ‎Jul 21, 2011‎
PTI A panel of secretaries is likely to approve tomorrow a final blueprint for allowing FDI in India's multi-brand retail sector, but with tough riders.

Panel on pension Bill asks FinMin to specifyFDI cap

Business Standard - Gyan Varma - ‎Jul 21, 2011‎
At a meeting with finance ministry officials on Thursday, Parliament's standing committee on finance asked them to specify the FDI cap in the pension sector. After the issue of raising the FDI cap in private insurance to 49 per cent from the current 26 ...

No room for complacency on reforms, says Pranab

Express Buzz - ‎14 hours ago‎
NEWDELHI: Finance Minister Pranab Mukherjee on Friday said that there is need to create the appropriate investment climate to attract foreign direct investment (FDI) and the Government is responding to the need by steps like issuing guidelines for ...

UPA on overdrive after season of 'policy paralysis'

Business Standard - Nivedita Mookerji - ‎1 hour ago‎
The Committee of Secretaries (CoS)' recommendation on Friday to allow up to 51 per cent foreign direct investment (FDI) in multi-brand retail is the latest forward-looking action in the UPA regime.

Tale of two deals in Indian oil & gas sector

Business Standard - Ajay Modi -‎Jul 22, 2011‎
The RIL-BP deal, in contrast, will be the single-largest foreign direct investment (FDI) worth $7.2billion in the petroleum sector.

FDI cap may be set lower to push through reforms

Livemint - Asit Ranjan Mishra,Sapna Agarwal - ‎Jul 19, 2011‎
The finance ministry is trying to push through an economic liberalization measure that appears to be perpetually on the verge of approval—foreign direct investment (FDI) in multi-brand retail. While the industry department wants 51% FDI in the sector, ...

Govt clears FDI proposals worth Rs 3845cr

Moneycontrol.com - ‎Jul 19, 2011‎
Published on Tue, Jul 19, 2011 at 18:17 | Source : PTI The Government today announced clearing of 31 FDI proposals worth Rs 3844.7 crore, including that of Multiples Private Equity Fund and global tour operator Cox & Kings .
Bangla FDI cleared Calcutta Telegraph

Vodafone for 100% FDI in Indian telecom sector

Moneycontrol.com - ‎Jul 19, 2011‎
Published on Tue, Jul 19, 2011 at 21:39 | Source : PTI Vodafone, which had a rough patch with its Indian partner Essar, today pitched for India allowing 100% FDI in telecom. Responding to a discussion paper of the Department of Industrial Policy and ...

Pranab seeks image makeover for India in the wake of scams

India Today - ‎Jul 22, 2011‎
Mukherjee appeared worried over the image of the government having taken a battering as this could discourage foreign investors at a time when the country needs foreign direct investments (FDI) to boost its infrastructure. The economic reforms process ...

Market will continue to react positively for Reliance Industries: Sudip ...

Economic Times - ‎8 hours ago‎
Overall from the country's perspective also, it is a good thing to do because a) we will get the FDI in, b) the technical problem in production which is critical for India as a country hopefully will get resolved.

FDI in telecom sector showing declining trend

The Nation, Pakistan - ‎Jul 21, 2011‎
ISLAMABAD (APP) - The telecom sector has attracted merely $79.1 million foreign direct investment (FDI) in the fiscal year 2010-11, showing a declining trend as compared to previous years.

NK Follows China in Legal FDI Framework

Wall Street Journal (blog) - Evan Ramstad - ‎Jul 22, 2011‎
North Korea's system for accepting foreign investment appears to be modeled after China's, a group of Americans who are exploring long-term economic development there has determined.

FDI Caps Rationale Relevance

Moneycontrol.com - ‎Jul 16, 2011‎
"What can be done indirectly, should as well be done directly" - through that one statement the Department of Industrial Policy and Promotion has finally recognized the farcical limits imposed by FDI sectoral caps. In a discussion paper that questions ...

India can emerge as largest portfolio for US Exim Bank

The Hindu - ‎Jul 22, 2011‎
On foreign direct investment, Mr. Hochberg said, "One of the best ways to increase FDI in any country is to increase export.

Hike in insurance FDI to 49% to wait

Business Today - ‎Jul 19, 2011‎
The Bill, introduced on December 22, 2008, envisages hiking the foreign direct investment (FDI) limit in insurance from 26 per cent to 49 per cent.

Foreign firms favour distribution over industry

Viet Nam News - ‎11 hours ago‎
HCM CITY - Many foreign direct-invested (FDI) businesses have shifted from manufacturing to sales and distribution of products in the Viet Nam market, according to a news report.

Images

Financial Times...
Moneycontrol.co...
Hindu Business ...
China Daily
Zee News
Business Standa...
Moneycontrol.co...
Moneycontrol.co...


India moves to open up $450 bln retail sector

AFP - ‎3 hours ago‎
NEW DELHI — A top Indian government panel has approved a plan to allow foreign direct investment in the country's vast retail market in what would be one of the country's biggest economic reforms. But it said investors would have to put in at least ...

FDI in retail under foreign pressure: BJP

The Hindu - ‎4 hours ago‎
BJP on Saturday said it would strongly oppose the government move to allow FDI in retail sector as it would affect small traders and alluded to the UPA government succumbing to US pressure in changing the policy. "Along with price rise, ...

Cong hails Govt approach to bringing FDI in multi-brand retail

The Hindu - ‎5 hours ago‎
As BJP appeared to be against opening of the retail sector, Congress on Saturday hailed the "calibrated and incremental" approach of the government on the issue of bringing FDI in multi-brand retail. The party also criticised BJP for its approach on ...

India closer to opening doors to foreign retailers

Telegraph.co.uk - Szu Ping Chan - ‎5 hours ago‎
Tesco, Wal-Mart and other multi-brand retailers have taken another step closer towards gaining access to India's $400bn (£245bn) retail sector, as top bureaucrats paved the way for direct foreign investment into the country. ...

RPT-UPDATE 2-India closer to opening up multi-brand retailers

Reuters - Abhijit Neogy, Matthias Williams - ‎9 hours ago‎
NEW DELHI, July 22 (Reuters) - India took an important step towards opening up its $450 billion retail sector to foreign players such as US-based Wal-Mart, a move seen aimed at tackling supply bottlenecks and high ...

Wings to retail will empower many sectors to fly CII

Moneycontrol.com - ‎12 hours ago‎
As foreign investors have been waiting in the wings for the government to make up its mind on opening up this sector, Thomas Varghese the chairman of the CII committee on retail says the FDI wil bring cheer across all sectors. ...

Indian retailers celebrate 51 FDI recommendation by CoS

Moneycontrol.com - ‎12 hours ago‎
To the joy of the Indian retail sector, The Cabinet of Secretaries (CoS) yesterday recommended opening up foreign direct investment (FDI) in the multi-brand retail sector to up to 51%. This move allows many of the global retailers like Wal-Mart and ...

Road cleared for 51 pc FDI in multi-brand retail

IBNLive.com - ‎15 hours ago‎
New Delhi: Consumers will soon have more options to choose from as the Committee of Secretaries (CoS) on Friday agreed to open up the retail sector. The CoS has recommended a 51 per cent foreign direct investment (FDI) in multi-brand retail formats. ...

India Moves to Open Up to Foreign Retailers

Wall Street Journal - Rajesh Roy, Abhrajit Gangopadhyay - ‎16 hours ago‎
NEW DELHI—A government panel approved a proposal Friday to allow direct international investment into India's retail sector, in a step toward further opening the country's huge retail market to ...

Secretaries' panel clears 51% FDI in multi-brand retail

Daily News & Analysis - Sindhu Bhattacharya, Ashish K Tiwari - ‎17 hours ago‎
A committee of secretaries (CoS) has recommended 51% foreign direct investment (FDI) in multi-brand retail, albeit with some stiff riders, paving the way for the entry of some of the world's biggest retailers such as Wal-Mart, Carrefour and Tesco to ...

Timeline of articles

Timeline of articles
Number of sources covering this story
FDI in retail under foreign pressure: BJP
‎4 hours ago‎ - The Hindu
Indian retailers celebrate 51 FDI recommendation by CoS
‎12 hours ago‎ - Moneycontrol.com

Images

AFP
The Hindu
Moneycontrol.co...
Hindustan Times
Business Standa...
Financial Times
Hindu Business ...
Knowledge@Whart...

20 years of economic reforms: Montek Singh Ahluwalia's view

CNN-IBN
Updated Jul 19, 2011 at 01:39pm IST

Share

5

inShare

Share on TumblrClick to play video

In 2011, India's Foreign Exchange Reserve stands at $315.72 billion, but 20 years ago, in 1991, the foreign exchange reserves were barely a billion dollars and FDI was almost non-existent.
In 1991, when Manmohan Singh became the finance minister in the PV Narasimha Rao-led Congress government, the country was close to bankruptcy and had mortgaged its gold to pay for loan installments.
India's fiscal deficit in 1991 was close to 8.5 per cent of GDP and the balance of payments deficit was huge.
The Government had to choose between continuing with its populist socialist economic structure or pursuing reforms at the cost of public anger. The then prime minister PV Narasimha Rao and finance minister Manmohan Singh chose the second route.
It's been 20 years since Manmohan Singh opened up Indian economy and freed up Indian entrepreneurship.
"India is on the move again, we shall make the future happen. As the poet say sarfroshi ki tamana ab hamari dil mien hai dekhna hai zor kitna bazuaii katil mien hai (We are ready for sacrifice, let's see how much hardship we can endure)," Singh had said while presenting his Union Budget in 1991 that signalled the beginning of economic reforms.
CNN-IBN talked to people who worked with economist Manmohan Singh and those who watched the two decade journey of India.
Expressing his views on 1991 Budget, Deputy Chairman of Planning CommissionMontek Singh Ahluwalia said:
- Manmohan Singh quoted Victor Hugo stating that the idea of India as a country that is ready to take off has come. That set the tone of the budget
- It was time to embark on a broad range of issues
- It was not just a budget but a signal that we are going to do things differently from what we have been doing so far
What worked:
- The focus of the budget was to achieve higher growth rate
- In the 90s India's growth rate was 5.6 per cent on an average but now for the past five years we have been averaging a growth rate of 8.2 per cent - that has been a big achievement
- India is the fastest growing country after China
What did not work:
- Less success in making growth more inclusive
- 50 per cent of the population is dependent on agriculture and in the last 10 years agriculture growth rate has gone up from 2 per cent to 3 per cent but it should have reached 4 per cent
- Education and health indicators are also lagging behind for rapid and sustainable growth
- Could have done better in health and education sectors
Achievements:
- We managed the balance of payment without import control
- There was a lot of apprehension, in fact 1991 we were faced with a balance of payment crisis but we managed the macro economic situation
- In the past 20 years we have had many problems but the one problem that we have not had is that of balance of payments
(Follow IBNLive.com on Facebook and on Twitter for updates that you can share with your friends.)
#20 years of reforms #economic reforms #Manmohan Singh #Montek Singh Ahluwalia #PV Narasimha Rao
http://ibnlive.in.com/news/20-years-of-reforms-montek-singhs-view/168562-3.html

20 years on, Indians recall life before the boom

Agence France-Presse
10:18 am | Thursday, July 21st, 2011
3share18 14
NEW DELHI – When economic reforms were launched 20 years ago this week, India was a country where you couldn't buy a Coca-Cola, a telephone line would take a year to install, and there was only one TV network.
For New Delhi garage owner Promod Bhasin, 56, life before the financial revolution that began with the budget of July 24, 1991 was so different that now he shakes his head in disbelief.
"You had to book a telephone call if it was to out-of-town, and keep ringing up the switchboard to see if it had 'matured'," he said. "Applying to get a new line at home was an endless bureaucratic battle."
In the decades before 1991, India resisted almost all foreign investment, and international brands were scarce as the country tried to be self-sufficient following socialist and nationalist ideals.
But the country was brought to the brink of collapse by stagnant growth under the "Licence Raj" — the planned economy in which the government controlled every aspect of business from labor to production.
"All goods and services were so limited," said Bhasin, now the father of two fashion-conscious daughters aged 23 and 18. "People would beg relatives travelling abroad to bring back Levi jeans and electronics.
"I had lived in America in the 1970s and knew what the outside world looked like. Here 95 percent of everything in the shops was Indian-origin and only a few very select places sold foreign products."
Bhasin tells how Indians making rare trips abroad had to apply for a daily amount of rupees in foreign currency, with any leftover sum being carefully returned to the bank afterwards when the balance was checked.
"Now we have holidays to Malaysia and Thailand without worrying," he said. "I think the government at last realised they just had to get India going again."
The reforms lifted many restrictions on foreign direct investment and opened the path to deregulation, privatization and tax reform.
For Promod's wife Minoo, 46, recalling India in the 1980s reveals the consumerist attitudes that dominate in today's cities and towns.
"I used to make baby clothes because what was sold was such poor quality," she said. "Not many toys were available. People now buy stuff from around the world. It didn't change overnight, it was slow, but everything is different now."
Some icons from India's more insular age survive, such as Thums Up, a fizzy cola drink introduced in 1977 that thrived in the absence of Coca-Cola and Pepsi.
Bought out by the Coca-Cola Company in 1993 as the markets were opened up, Thums Up remains a fixture at every roadside stall and is the biggest-selling soft drink brand in India, according to its makers.
"We drank Thums Up and there were only a few types of car, like the Ambassador which is still around," said Naresh Kambiri, 78, who has owned a bookstall in Connaught Place in New Delhi since 1966.
"There was (state-run) Doordarshan television but no private channels. What we wanted friends to bring back from abroad was chocolate, an electronic calculator or even a color television."
Like many, Kambiri has mixed feelings about India's headlong rush to modernity begun in 1991 by Manmohan Singh, then the finance minister and now the prime minister.
"The choice is better but we worry about the system now. Where the money and power are is wrong and getting worse. Corruption is bad," he said.
"And now people are obsessed with foreign goods just to show them off, before we wanted foreign goods for use."
Gurcharan Das, a successful businessman who wrote the bestselling book "India Unbound" about the nation's transformation, told AFP that Indians should not be too nostalgic.
"The budget of 1991 was a momentous moment, equal even to independence in 1947," he said. "Exciting things finally began to happen and you could see people gaining a sense of pride and a belief they could decide their own fate.
"The stories of before were horrific. You would tremble if a lowly government official called you to Delhi. Everything had to have a licence, but after 1991 you could set up your own business.
"Even among the poor, people believe they have a better life today than before, and that their children's lives will be better again.
What disappoints Das is India's failure to push on.
"Singh was more courageous then than now. We desperately need more government, bureaucratic, judicial reforms," he said.
"In 1991 they almost went further than was needed at the time. In a bonfire of controls and red tape, decisions were made and policies implemented very rapidly. We need to get that focus back."
http://business.inquirer.net/8047/20-years-on-indians-recall-life-before-the-boom

1991 economic reforms: Did we switch our economic thinking?

Published on Thu, Jul 21, 2011 at 14:47 |  Source : CNBC-TV18

Updated at Thu, Jul 21, 2011 at 16:16  


This week marks the twentieth anniversary of the 1991 economic reforms. CNBC-TV18's Karan Thapar talks to the Former Governor of the Reserve Bank of India, Bimal Jalan, Former Chief Economic Advisor, Shankar Acharya and Planning Commission Member and Former Chairman of the Boston Consultancy Group, Arun Maira about whether fundamental questions of was it a conversion in economic thinking or merely an experience response to a crisis. Does the failure to take on board privatisation detract from the overall reform picture and is the slow pace of reform today prove that Manmohan Singh's commitment has either run out or is checked.

Below is a verbatim transcript. For complete details watch the accompanying video.

Q: What motivated the reforms in 1991? Did they reflect a genuine conversion in economic thinking or were they merely a response to the economic crises?

Acharya: I think it was both. The crisis was definitely an opportunity but it need not have been an opportunity that was grasped. The fact that it was grasped was due to both great credit to Dr Manmohan Singh and a number of other people who were there at that time in government.

The fact that also in the decade prior to that particularly, the five years prior to that, there had been a growing consensus in official and technocratic circles that the old system was just wasn't working and you had to take very serious changes in economic policy.

Q: There is a view that the economic reforms didn't begin in 1991, they date back to Rajiv Gandhi's first budget of '85 when he said slashed taxes and abolished debt duty and some people say in fact it even goes back earlier to Indira Gandhi's decision to return IMF's loans and not take any more funds from the IMF. If you accept that view, would you say that the reforms are an evolutionary process that led to new thinking and new commitment rather than a short-term knee jerk response to expediency and a new problem?

Jalan: It's a process absolutely. We could not have undertaken the kind of reforms which happened in 1991 and resolved the balance of payments crises, it could not have happened unless there was movement towards reforms in the early 1980s. For example, long-term fiscal policy, when I was in the ministry of finance at that time in 1985 in the first long-term fiscal policy presented to the parliament, then that happened.

The problems in balance of payments of issues had started emerging in 1987-88 and they were known. Unfortunately, we had political changes and political turbulence, the Bofors crises and then elections and then division between different parties etc. So it was postponed and that is what led to the crises, the postponement of the reforms which were in process.

Q: But the thinking that led to the reforms predates the crises?

Jalan: Absolutely, because the idea was it should happen. One must also remember just that the induction of the then finance minister, Dr Manmohan Singh was a tribute to the fact that the then Prime Minister knew that something radical had to done.

Q: On Dr. Manmohan Singh, he had been chief economic advisor, finance secretary, governor of the RBI and deputy chairman of the Planning Commission under the previous socialist thinking regimes and then shortly before he became finance minister he was in fact secretary general of Nyerere South Commission. All persist that his thinking was markedly different to what he introduced when he became finance minister. Would you accept that he was an unlikely architect?

Maira: No, the reforms were a combination of many things. It was not merely the financial sector reforms but there were also industrial sector reforms. My own experience in the 1980s when the reform did begin to take place in the automobile industry in which I was, we suddenly found in the mid '80s or early '80s the influx of foreign companies.

After a long time, the Japanese producers and soon thereafter in the '80s itself the broad branding of the industry and truck producers could make cars and visa versa and again foreign companies were welcomed to do that too.

So, there was a set of industrial reforms underway along with the financial sector reforms so we needed many authors and many experts. Dr Manmohan Singh had to come in because there was a financial crisis that has been building up. I am sure he was the best person at the time to deal with that crisis having the broader experience of the economy too.

Q: Another key question about the reforms is the issue of who gets credit. Everyone associates them with Dr Manmohan Singh because he was the finance minister and the economist but in your eyes how much of the credit actually goes to Narasimha Rao, the Prime Minister who solidly stood by, championed and supported the process and sheltered Dr Manmohan Singh?

Acharya: A tremendous amount of credit goes to Shri Narsimha Rao who was the Prime Minister because he gave the political strength to Dr Singh. Mr Chidambaram and others who brought in the reforms from 1991 onwards, without that political strength I don't think Dr Manmohan Singh as finance minister could have done all the things that he was able to do in those few years.


  1. News for Reforms india 20 years

    *

  2. India lost for words 20 years after its 1991 reforms

  3. The Independent (blog) - 5 hours ago

  4. Popular contrasts of India's elephant and China's tiger economies are being trotted out in various articles and studies, as they have been for 20 years....

  5. 2 related articles

  7. 20 years of reforms: C Rangarajan's views

  8. IBNLive.com - 7 related articles

  9. 20 years of reforms: Bimal Jalan's views

  10. IBNLive.com

  11. 20 years of economic reforms: Raghav Bahl's views - India News ...

  12. ibnlive.in.com/news/20-years-of...reforms-raghav.../169081-3.html - Cached

  13. 1 day ago – It's been 20 years since Manmohan Singh opened up Indian economy and freed up Indian entrepreneurship. In 1991, when Singh became the ...

  14. 20 years of economic reforms: C Rangarajan's views - India News ...

  15. ibnlive.in.com/news/20-years-of-reforms-c.../169345-3.html- Cached

  16. 1 day ago – It's been 20 years since Manmohan Singh opened up Indian ...

  17. Show more results from in.com

  18. India lost for words 20 years after its 1991 reforms« Riding the ...

  19. ridingtheelephant.wordpress.com/.../india-lost-for-words-20-years-after-its-...

  20. 5 hours ago – India lost for words 20 years after its 1991reforms. Twenty years ago tonight, three top Indian officials burned the midnight oil tearing ...

  21. India lost for words 20 years after its 1991 reforms| John ...

  22. blogs.independent.co.uk › Independent Blogs

  23. 5 hours ago – Twenty years ago this weekend, three top Indian officials burned the midnight oil tearing up old import controls and preparing a package of ...

  24. India's economy: One more push | The Economist

  25. www.economist.com/node/18988536 - Cached

  26. 17 hours ago – Twenty years after India's historic economicreforms, it's time for another big effort. Jul 21st 2011 | from the print edition ...

  27. 20 years of reforms: Montek Singh's view - Videos - India - IBNLive

    		28.
    29. *

  29. ibnlive.in.com/videos/.../20-years-of-reforms-montek-singhs-view.html3 days ago

  30. CNN-IBN spoke to economist Montek Singh Ahluwalia who has been working with Manmohan Singh.

  31. More videos for Reforms india 20 years »

  32. The Elephant That Became a Tiger: 20 Years of Economic Reform in India

  33. www.cato.org/pub_display.php?pub_id=13435 - Cached

  34. 3 days ago – Author: Swaminathan S. Anklesaria Aiyar, Published: 2011-07-20, Type: Development Policy Analysis.

  35. 20 years of reforms: Montek Singh Ahluwalia's view - India News ...

  36. jay-parkhe.posterous.com/20-years-of-reforms-montek-singh-ahluw... - Cached

  37. 4 days ago – In 2011, India's Foreign Exchange Reserve stands at $315.72 billion, but 20 years ago, in 1991, the foreign exchange reserves were barely a ...

  38. 20 Years of Reform of India | Authspot

  39. authspot.com › Short Stories - Cached

  40. 2 days ago – How to reform India which also makes the country has a strong enough economic position now? As India reformslaunched 20 years ago this week ...

  41. Governance reforms India's top priority for next 20 years ...

  42. www.siliconindia.com/.../Governance_reforms_Indias_top_priority...- Cached

  43. 16 Oct 2007 – Governance reforms India's top priority for next20 years-Business news- London: Exuding optimism on a day when the Sensex hit a record ...

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    Next



    He said the industry is competing with other sectors for capital and the IPO would help them to raise some. "The capital has to grow. We need capital," Narayan said.

    He added that the final IPO guidelines for the life insurance industry will be ready by the end of the month.

    However, none of the existing laws, be they the Companies Act or the Sebi or Irda Acts, make it mandatory for any company in any sector to get listed. If the Irda wants to have its way, then all these Acts mentioned above will have to be amended, besides the LIC Act.

    LIC, despite being the nation's largest financial entity, is fully owned by the government and is not a company under the Companies Act but is governed by the LIC Act.

    Interestingly, among the 22 private life players only a few like HDFC Standard Life and Reliance Life, are keen to tap the primary markets to mop up funds. Most of the players says that they are not looking to raise capital.

    Last month, Irda had released a set of draft guidelines for insurance companies to raise funds through public offers.

    As per the draft norms, only those with 10 years of operations and strong financials would be allowed to access the capital markets.

    Insurance firms planning public offers have to seek 'formal approval' from Irda and then approach the Sebi for final approval, the draft norms had said. As part of the eligibility criteria, the insurers should have maintained the prescribed regulatory solvency margin during the preceding six quarters, it said.

    "There is a structural problem that will unwind for the regulator and the industry as a whole, and will affect the country. More than 90 per cent of all the pensions are actually in theLIC. There is such a huge concentration in one institution. I think that is a recipe for high risk," IRDA Chairman, JHari Narayan, said at an insurance summit here.

    "I think it is too much of a risk to be allowed to continue. Therefore, we must build up mechanisms which allow other companies also to participate actively in the pension market," he added.

    Narayan further said that pension funds should offer life annuity and companies that sell pension products should have a guaranteed capital.

    "I think at the very minimum that every product that is sold as a pension product should have a capital guarantee so that the principal is safe," he said.

    Pension plans are estimated to account for about 30 per cent of the life insurance industry's business.

    Meanwhile, Narayan said that the regulatory body was working towards creating an exchange for re-insurance, but did not divulge when the mechanism would be in place.

    "We have tried to create a platform on re-insurance, which is more transparent and more like a re-insurance exchange. Initial work is going on. What we visualise is that all matters on re-insurance will be routed only through the exchange. The advantage will be that transactions are clear and there cannot be any glitches in terms of the fine print of the policy," he said.

    Insurance watchdogIRDA today said the final guidelines to allowlife insurance companies to raise funds from the capital market will be out by this month-end.

    "With regard to life companies, the work onIPO guidelines is more or less complete and we would be going for gazetting the same as regulation very shortly, perhaps toward the end of this month," IRDA Chairman J Hari Narayan told reporters on the sidelines of a FICCI event here.

    For life companies, the clause mandating a three-year track record of profitability as a precondition for tapping the capital markets has been removed in the draft guidelines, he said.

    As per existing Securities and Exchange Board of India (SEBI) norms, any company which proposes to come out with a public offer should have a three-year track record of profits.

    "As regards non-life companies, there is little more work to be done and that may take 2-3 months," he said.

    Last month, IRDA had released a set of draft guidelines for insurance companies to raise funds through public offers.

    As per the draft norms, only insurance companies that have completed 10 years of operation and have strong financials will be allowed to access the capital market.

    Insurance firms planning public offers have to seek 'formal approval' from IRDA and then approach the Securities and Exchange Board of India (SEBI) for final approval, the draft norms had said.

    As part of the eligibility criteria, the insurance company should have maintained the prescribed regulatory solvency margin during the preceding six quarters, it had said.

    In addition, the insurance company should have embedded the value of at least twice its paid-up equity capital, the guidelines had said, adding that the insurance company should be fully compliant with the corporate governance guidelines issued by IRDA.

    Hari Narayan said IRDA will come out with a standard definition of critical illness for health insurance purposes within the next 2-3 months.

    Asked if the insurer can invest in Indian Depository Receipts, he said, "An IDR is essentially investment abroad and according to the Insurance Act, money should be invested in India. There is a legal matter which we are examining."

    7 JUL, 2011, 02.54AM IST, SHILPY SINHA,ET BUREAU
    IRDA scraps profit rule for life insurance IPOs

    MUMBAI: The insurance regulator has scrapped the minimum three year profitability clause for life insurers to float initial public offerings, throwing a lifeline for many companies that would have struggled for capital. TheInsurance Regulatory and Development Authority, or Irda, took the decision in a recent board meeting, two people familiar with the matter said.

    The decision to do away with the requirement, which was part of the draft guidelines for IPOs, follows lobbying by insurance firms that the absence of higher foreign investment and access to public funds could cripple their businesses.

    This would be a relief to a number of insurance companies such asICICI Prudential, HDFC Life and Max New York Life, which have been in operation for 10 years but do not have a three-year profitability record. "The industry raised concerns on the profit requirement,'' said an Irda official who did not want to be identified.

    "We are addressing them." IPO norms for life insurance companies have been dragging on for years as Irda debated how to be in line with the requirements stipulated by the market regulator and also facilitate fund-raising by insurers. Insurance officials believe their business is unique and can't be clubbed with other businesses for which theSecurities & Exchange Board of India sets rules. Foreign direct investment in insurance is promised to be increased to 49% from 26%.

    Valuing insurance companies in India may become tricky with some arguing they are at a growth stage and the market has huge potential. While insurers may look for high valuations due to market potential, their losses could be talked down as it happened in the case of dotcom companies. The insurance regulator had prescribed a minimum embedded value for which the insurers objected to and sought flexibility.

    Embedded value is the current value of future profits of a company. "Embedded value cannot be the magic ratio. Minimum stipulations do not help investors to take a decision. There are other factors like persistency, conservation ratio, productivity of the sales force, new business written and the analysts report investors can look at," said Sanjiv Pujari, appointed actuary atSBI Life.

    http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/IRDA-scraps-profit-rule-for-life-insurance-IPOs/articleshow/9131020.cms

    The week that was: RIL-BP deal okayed, CG punished

    Moneycontrol.com - ‎8 hours ago‎
    The past week has been an eventful one for India Inc and the world. Policy decisions have come through towards the end of the week, in India and globally, but terror struck again. The week ended on a bad note after a bomb went off in the government ...

    BP's technical expertise will boost RIL: SMC Cap

    Moneycontrol.com - ‎10 hours ago‎
    One of India's biggest FDI deals now stands approved by the Cabinet Committee on Economic Affairs (CCEA). The USD 7.2 billion deal between Mukesh Ambani-led Reliance Industries (RIL) and British Petroleum (BP) is believed to cut the ribbon for many ...

    BP-Reliance deal, India's biggest FDI okayed

    Times of India - ‎21 hours ago‎
    NEW DELHI: The government on Friday gave its consent to UK energy major BP Plc taking 30% interest in 21 out of 23 acreages, including India's gas bowl off the Andhra coast, being operated or explored by Mukesh Ambani's Reliance Industries Ltd for over ...

    Brokerages seal RIL-BP deal as positive turn for big boy

    Moneycontrol.com - ‎Jul 22, 2011‎
    The Cabinet Committee on Economic Affairs today approved UK-based BP purchasing 30% stake in Reliance Industries' 23 oil and gas blocks, which includes the most-valuable KG-D6 gas fields, for USD 7.2 billion. Brokerages across the board are endorsing ...

    Stage set for BP to enter Indian E&P space

    Business Standard - ‎Jul 22, 2011‎
    The Centre's nod to the Reliance-BP deal may provide the British oil major its long-desired footprint in the Indian exploration and production sector. The $7.2 billion deal is the biggest ever foreign direct investment in the country and will allow RIL ...

    $7.2 bn RIL-BP deal cleared after 5 months

    Business Standard - ‎Jul 22, 2011‎
    The government on Friday gave unconditional approval to Reliance Industries' (RIL's) proposal to sell 30 per cent interest in 21 oil and gas blocks to BP. It withheld permission for two blocks. The two companies had announced on February 21 that BP ...

    India Clears Way for Major BP Venture

    Wall Street Journal - Rakesh Sharma, Mukesh Jagota - ‎11 hours ago‎
    NEW DELHI—India on Friday approved Reliance Industries Ltd.'s proposed $7.2 billion asset sale to BP PLC, paving the way for the UK oil giant's largest venture in the South Asian nation. ...

    Reliance-BP deal cleared

    Calcutta Telegraph - ‎20 hours ago‎
    New Delhi, July 22: The cabinet committee on economic affairs (CCEA) today cleared the $7.2-billion deal that BP Plc struck with Reliance Industries Ltd (RIL) in February under which Europe's second-largest energy giant will acquire a 30 per cent ...

    $7.2 bn deal: Govt approves BP buying stake in RIL's 21 blocks

    Economic Times - ‎Jul 22, 2011‎
    MUMBAI: The Cabinet on Friday approved UK's BP buying 30 per cent stake in Reliance Industries' 23 oil and gas blocks, including the showpiece KG-D6 gas fields, for $7.2 bn, ET Now said on Friday. India's oil ministry had earlier recommended approval ...

    CCEA clears RIL-BP deal for 21 blocks

    Livemint - Utpal Bhaskar - ‎Jul 22, 2011‎
    The cabinet committee on economic affairs (CCEA) cleared one of India's biggest foreign direct investment deals on Friday, allowing Mukesh Ambani-owned Reliance Industries Ltd (RIL) to offload a 30% stake in its hydrocarbon blocks to London-based BP ...

    Timeline of articles

    Timeline of articles
    Number of sources covering this story
    The week that was: RIL-BP deal okayed, CG punished
    ‎8 hours ago‎ - Moneycontrol.com
    India Minister: Cabinet Panel Approves Reliance Industries-BP Deal
    ‎Jul 22, 2011‎ - Wall Street Journal

    Images

    Indian Express
    Business Standa...
    Business Standa...
    Moneycontrol.co...
    AFP
    The Voice of Ru...
    RTT News
    domain-B
    Hindu Business ...

    ONGC exploring fields for uranium mining in Tripura exploring fields for uranium mining in Tripura

    AGARTALA: TheOil and Natural Gas Corporation (ONGC) is all charged up to take up the new challenge ofuranium mining in Tripura.

    ONGC Chairman and Managing Director (CMD) A. K. Hazarika told mediapersons that a pilot project is being launched to explore fields for uranium mining in the riverbed of rivers Krishna and Godavari.

    "ONGC is looking for uranium in our fields, because we are drilling many wells for oil and gas, while drilling we encounter with minerals called uranium. But we were not having so many interests earlier," said Hazarika.

    "Now our energy center, which is created for looking different alternative energy, they are identifying these various logs taken long back earlier which were looking for oil and gas, but that logs are also now showing potential for uranium deposition in many of the places," he added.

    Hazarika further said that the ONGC is working towards revamping its ageing infrastructure and technology at the oil fields across the country especially one at Lakwa in Assam.

    "For oil and gas business, yes, we have taken one project in Assam for repairing and revamping the assets of Assam for improving the surface bottle necking. So, that is called Assam renewal project," said Hazarika.

    "That will help us in improving the production as well as repairing, removing the surface bottle necking of our process complexes and pipelines, where we are spending around nearly 2400 crores, so already contracts are going on," he added.

    ONGC has signed a Memorandum Of Understanding (MOU) with Nuclear Corporation of India as they are looking forward to start a nuclear project in the near future.

    Hazarika is presently on a two-day visit to Tripura, during which he would meet Chief Minister Manik Sarkar and Minister for Power and Transport Manik Dey with regard to the progress made in the 726 MW gas-based power project at Palatana.

    India's statistical system undergoing transformation: Pranab

    NAPAM: The Indian statistical system was undergoing a steady transformation in response to the new challenges ar ISI )ng out of globalisation and liberalisation of the country's economy, Union Finance Minister Pranab Mukherjee said here today.

    The Indian statistical system resolved many significant structural and operational changes in the statistical system both at the Centre and the states, said Mukherjee inaugurating the North East Centre of the Indian Statistical Institute (ISI) here in Sonitpur district.

    "Statistics today has become a powerful tool for planning and reforms. It forms the foundation of all effective planning in the world today. All major nations use statistical tools and techniques for national planning," pointed out Mukherjee who is also the chairman of the Indian Statistical Institute.

    "The importance of unbiased and trustworthy statistical data cannot be undermined for a democratic society. Decisions based on rigorous statistical outcomes are precise and, therefore, augment anticipatory results," he said.

    "In any economy the industry and commerce bank critically upon statistical information on which they base their investment decisions," the minister added.

    The North East Centre was the fourth centre of the Indian Statistical Institute, which was first started in 1931 in Kolkata and subsequently its two other centres came up after 1949 at the initiative of the then Prime Minister Jawaharlal Nehru for better statistic connectivity with south Asia, he said.

    7 JUN, 2011, 10.36PM IST, ET BUREAU
    FM asks institutional investors to stay bullish on India

    NEW DELHI: India growth story is intact and the government is committed to doing all that is necessary to achieving and sustaining a higher economic growth rate.

    Finance minister Pranab Mukherjee on Wednesday asked foreign institutional investors to remain bullish on Indian economy's long-term growth prospects amid concerns of a policy paralysis and corruption slowing investments into the country and a slowing economy and growing subsidies derailing goevrnment's fisc.

    "The government would continue to take investor friendly policies to encourage further growth,"Mukherjee told a group of 30 FIIs in an interaction organised by his ministry.

    In the closed-door interactive session moderated by Chanda Kochhar, MD and CEO ICICI Bank, Mukherjee asked FIIs remain optimistic and take a long-term view of the Indian economy and its performance rather than being disturbed by the short-term statistics.

    "The next generation financial sector reforms have alreadybeen initiated which include among other steps, the widening and deepening of the Indian securities markets, liberalising the policy on foreign capital flows, strengthening the regulatory and other institutional architecture and reducing transaction cost in the securities markets," he said in an hour-long meeting attended by key finance ministry officials and chief economic advisor Kaushik Basu.

    Mukherjee assured the gathering that the consultations were underway to build consensus on raising foreign direct investment in insurance and opening up multi-brand retail.

    Giving an overview of the economic situation Mukherjee said the goevrnment was confident about reducing fiscal deficit and achieving the target of 4.6 % of GDP announced in the 2011-12 budget. Mukherjee said Indian economy would grow at a pace of around 8.5 %. Allaying any apprehensions slowdown on government revenues, he said revenue collection are unlikely to witness any decline and hence there was no need to have any undue fear on the issue of fiscal deficit.

    The Reserve Bank of India governor D Subbarao had said in May the country would find it difficult to achieve its fiscal deficit target this year, unless it made adjustments to account for the rise in fuel and fertiliser prices. Independent analysts also have pointed at bond markets expecting a shortfall of about Rs 60,000 crore and fiscal deficit of 5.2-5.3% as against targeted 4.6% in 2011-12.

    On the issue of fuel subsidy, Mukherjee said though it is difficult to accurately estimate the burden on the government, in view of the volatility in the international crude prices but for any requirement of additional subsidy, funds would be committed with least impact on the fiscal deficit, according to a finance ministry statement.

    Mukherjee said it would also be too premature to reach a judgement on the disinvestment programme as only the first two months of the financial year have gone by. Underlining the resolve of the government to pursue the issue of disinvestment, he said the public issue ofPower Finance Corporation had helped the goevrnment successfully raise Rs.1,145 in May.

    The finance minister said inflation is likely to moderate in the months ahead especially as the monsoons are expected to be normal strengthening economic prosperity of farmers.

    http://economictimes.indiatimes.com/news/economy/indicators/FM-asks-institutional-investors-to-stay-bullish-on-India/articleshow/8764942.cms

    India's economy

    The half-finished revolution

    India's liberalisation began with a bang in 1991, but two decades on the unreformed parts of the economy are becoming a drag on growth. Time for another bang

    Jul 21st 2011 | MUMBAI | from the print edition

    IN A strange reversal of the norm elsewhere, in India the economic policymakers and economists have become the optimists while bosses do the worrying. In June a deputy governor of the central bank predicted that the country's economy would grow at a double-digit rate during the next 20-30 years. India has the potential for such a feat, with its vast and growing labour force and now famous entrepreneurial spirit. But in the past six months the private sector, which is supposed to do the heavy lifting that turns India from the world's tenth-largest economy (measured at market exchange rates) into its third-largest by around 2030, has become fed up.
    "Why the hell should I pay my taxes?" asks the boss of one of the country's biggest firms. "What happens in India is not because of the government but in spite of the government," says the head of a pharmaceutical company. Corruption has "paralysed the government," reckons the chief executive of one of India's most prestigious firms. "We know what the problems are and we have done nothing…somebody's neck has got to be on the line," says the leader of a bank. Some important foreigners are fed up too. The former head of one of India's largest foreign investors shakes his head and says it was naive about putting shareholders' cash there.
    Businesspeople have always loved to carp about India's problems even as they have rushed to take advantage of its terrific growth rates. But lately their irritation has had a nervous edge. In the first quarter of 2011 GDP grew at an annual rate of 7.8% (see chart 1); in 2005-07 it managed 9-10%. The economy may still be slowing naturally, as the low interest rates and public spending that got India through the global crisis are belatedly withdrawn. At the same time, the surge in inflation that began last year and was first caused by food prices has spread more widely, causing some to doubt whether in the medium term India can really grow at the 8-10% the optimists hope for without overheating.
    • »The half-finished revolution

    Reprints

    Related topics


    To raise the economy's growth potential, India could do with another dose of reform, aimed at markets for inputs, from electricity to labour and land, that are still choked. The chances of that look slight. The government has been clobbered by a corruption scandal over the award of telecoms licences in 2008, which has already brought down two ministers. Meanwhile, efforts to make it easier to buy land, cut the large public deficit or introduce a new sales tax have been allowed to drift. Faced with ominous long-term problems, for instance in electricity supply, the government has frozen. And there have been long delays over small decisions, such as the approval of investments by foreign firms. Even when decisions are made they sometimes seem to backfire. On July 8th reports of a draft bill aimed at settling the terms on which mining companies can acquire and exploit land ended up sending the shares of firms in the industry lower rather than higher. A cabinet reshuffle on July 12th was widely dismissed as a damp squib.
    Not all is doom and gloom. The outside world chortles at a good Indian fiasco, such as the 2010 Commonwealth games, yet pays less attention to successes such as the cricket world cup this year. Some well-run states, such as Gujarat, continue to motor along; some former basket-cases, such as Bihar, are creating a strong record of reform. Exports are roaring, with engineering doing particularly well, helped by special economic zones, which are freer of red tape than the rest of India and account for 22% of all exports.
    But in India as in many fast-growing places, the confidence to invest today depends on the conviction that the long-term trajectory is intact, and it is that which is in doubt. Already big Indian firms sometimes seem happier to invest abroad than at home, in deals that are often hailed as symbols of the country's growing clout but sometimes speak to its weaknesses—for example, purchases of natural resources that India has in abundance but struggles to get out of the ground. Now, with reform flagging, firms could cut their domestic expansion plans.
    The data are both unreliable and mixed, but suggest that in the first quarter of 2011 capital expenditure slowed sharply. Foreign direct investment into India has been subdued for a year (though it did pick up in May). The most recent industrial-production figures have been soft, showing an annual growth rate of 5.6%, about half that of 2010. A further dip in investment could be self-fulfilling: if fewer roads, ports and factories are built, this will both hurt short-term growth figures and reduce the economy's long-term capacity, which will in turn do little to boost confidence.
    Don't worry, we're on autopilot
    From the stately avenues of New Delhi, such worries are viewed as hysterical. After all, there have been doom-mongers about India's miracle ever since liberalisation began in 1991. And despite outsiders' desire for more orderly progress and their endless whingeing about the roads, India's chaotic model of development has rewritten the rule books. Compared with that of East Asian tigers, it often seems back to front. Services have boomed and manufacturing has stagnated as a share of output (see chart 2), while most people still work informally and live rurally. India has world-class information-technology exporters but imports lots of fridges; it has 15 times more phone subscribers than taxpayers; and in the coming years most Indians are likelier to be connected to a national, biometric, electronic identity-system than to a sewer.
    But overall, the formula seems to work. It has yielded rapid growth for two decades and India has sailed through the financial crisis that has battered the West. Growth has transformed living standards and cut poverty (see table), although there is some controversy over how to measure the latter. Middle-class folk say their children laugh when told what it was like before 1991, when phones took years to get, soap burned your skin and red tape suffocated the economy. Back then, the leading founder of Infosys, a big technology firm, has recalled, importing a computer would take about three years and require 50 trips to Delhi to get official approval.
    That all came to an end 20 years ago, on July 24th 1991, when Manmohan Singh, then minister of finance, facing a balance-of-payments crisis, told parliament that "the room for manoeuvre, to live on borrowed money or time, does not exist any more." He attacked the prioritisation of producers over consumers, and swept away tariffs and the mesh of licences used to micromanage firms. The reforms were less dramatic than events in the Soviet Union—where a month later Boris Yeltsin stood on a tank and denounced an attempted coup—but also changed hundreds of millions of lives. Mr Singh's speech marked India's entry into global capitalism. He ended by paraphrasing Victor Hugo: "No power on earth can stop an idea whose time has come."
    Today such radicalism seems alien, even though Mr Singh is prime minister, heading a coalition led by the Congress party. Plenty of heavyweight people think that progress is still being made, if more quietly. Suman Bery, an economist, speaks of the "old Indian formulation that at the end of every two-year period it seems as if you have got nowhere but in each seven-year period you look back and things have been transformed." Reform is not a word that describes what happens in government any more, says a senior official, but "nuts-and-bolts" changes do occur, at a pace that India's democracy can handle. Added up, they make a difference.
    That may be good enough if the foundations of growth are strong enough. Assessing those foundations is not easy to do neatly, but demography, at least, is in India's favour, with the ratio of workers to dependants forecast to rise until 2030 or so, in marked contrast to China. Over the past decade demography has added about 1.7 percentage points to the growth rate of GDP per person, reckon Shekhar Aiyar and Ashoka Mody, of the IMF. This boost will not get much bigger but it will last for a couple of decades. Better still, because workers save more than non-workers, India's saving rate is rising towards East Asian levels and should provide more domestic funds for investment. Taken together, more workers and more capital explain about half of the recent growth rates of about 8%, estimates Chetan Ahya, of Morgan Stanley. A recent OECD study put the proportion at three-quarters.
    It can be a short leap from there to the view that because a fair amount of growth is assured the government doesn't have to try very hard. Entrepreneurs can be relied on to work their magic. This fits a romantic view of Indian businessmen who triumph against the odds, from Bangalore's IT gurus to Mumbai's dabbawallas, who deliver 200,000 lunches daily, and the car-valet squads who will miraculously find scores of parking places for your wedding guests, often by bribing the neighbours' janitors. But if more capital and bodies are to support near-double-digit growth, they have to be used ever more efficiently. For that, wheeler-dealing and inert government are unlikely to be enough. More reform is needed too.
    For a start, the demography cuts both ways. India will need to create 10m-13m jobs a year in the next two decades as people enter the workforce, many of them from its poorest regions and unskilled. That will probably require more manufacturing or large service companies; and that in turn demands a state that is better at organising such things as education and transport. Nor is an unreformed state certain to shrink. It may find new things to mess up: the telecoms industry, once a pin-up of Indian capitalism, has been battered not just by graft but also by a licensing system that has become incoherent.
    From outputs to inputs
    Most important, the reforms that began in 1991 are half-finished. They freed markets for products, so that vibrant competition reigns from shampoo to ringtones. At the same time, what economists call factor markets—those for basic inputs like land, power, labour and to a lesser extent capital—remain less reformed and under more state influence. It is easy to forget the difficulties this can create.
    Take an engineer who runs a quarrying firm in Tamil Nadu, providing stone for sands, grits and gravels used in everything from houses to roads. He has done all the right things, including buying kit from Finland, and employs about 100 people (about half of them informally). He has also had a bellyful. "The licensing processes are becoming more difficult day by day," he says. Clearances that took three weeks in 1997, the year he started up, can take three or four years. Many officials demand bribes. Like many bosses he is keen to replace workers with more machines, despite India's abundance of people, because of "labour laws that are inimical to employment creation" and an education system that means finding "quality manpower is a major, major problem". Power is cut for four hours a day and deliveries by lorry that should take three days take nine. He has had enough. "I will not try to grow," he says. It's just too hard. He says that if he had known what it would be like, "I would never have come into this business."
    The influence of unreformed India varies. In airlines, where riotous competition has taken hold, its role is confined to a half-dead Air India. It burns a lot of money, but has lost so much market share that it inflicts itself on relatively few travellers. In electricity, however, it is a different story. For India to grow at 8-10% a year, supply must at least double in a decade. The government has rightly sought private investment in power stations. But the supply chain these plants will join is still largely unreformed and in poor shape.
    At one end, fuel, which in India means coal, is dug up by a state monopoly that seems unable to raise its production fast enough. Even today there are shortages, although India has the world's fifth-largest reserves. At the other end, the wholesale buying of power from generators and its distribution to consumers is largely in the hands of state firms that do not charge market prices and together made losses equivalent to 1% of GDP last year. Generating companies, with their big investment plans, are being squeezed by the need to import more expensive foreign coal to top up supplies and by the bankruptcy of their main customers. An industry which should be booming is regarded as toxic by many investors and as a potential source of bad debts by some bankers. "The reforms will happen: after the whole system collapses," predicts a power-firm boss.Compare the population and GDP of Indian states to those of entire countries using our interactive map
    New power-generation plants are just part of the investment in infrastructure that India needs, probably at a rate of about 8-10% of GDP every year, if it is to sustain growth close to double digits. It is difficult to tell whether the economy's iffy patch has bogged down such investment. Vinayak Chatterjee, chairman of Feedback Infra, a firm which advises on and helps implement projects, jokes about a "decision-paralysis-linked slowdown". Official figures also suggest that the proportion of big government projects facing delays or cost overruns has risen. Mr Ahya, of Morgan Stanley, thinks that infrastructure spending will still be an adequate 8% of GDP this fiscal year. In the next five years, though, the government wants that share to rise to 10%. Perhaps half of that, or $500 billion over the five years, would have to come from the private sector. Such a sum may not be forthcoming if Indian companies continue their collective strop.
    Second best
    What does all of this mean for India's long-term growth rate? In April the Planning Commission, a state body which aims to think far ahead, asked: "Is 10% growth feasible?" It concluded that "even 9% will need strong policy action." The recent bout of inflation has pushed down some other estimates of India's sustainable growth rate to 8% or below. Food prices, which were the original cause of inflation, have since moderated but the overall rate of increase in prices is likely to continue at about 10% for the next few months.
    That is especially worrying for the poor. On a dusty roadside in north-west India where labourers gather to be picked up in trucks for informal construction work, a man in a T-shirt says his wages have doubled in the past two years but complains that most of the increase has been eaten up by higher living costs. The central bank, which has raised interest rates ten times since the start of 2010, insists that the costs of getting richer—such as diets with more protein—are partly to blame. But India looks like an economy operating at full capacity. Had it managed to build more roads, factories and houses and to educate its people better, it might have grown faster, with less inflationary pressure.Give us a job
    How bad would it be if the Indian economy could grow at only, say, 7% a year rather than 10%? Certainly, the economy would have thinner safety buffers. But in other respects it might not be too shabby. Growth would have to be much slower than that before India's public-debt dynamics became a worry. The ratio of debt to GDP is 66% and has been falling despite a public-sector deficit of about 8%. The vast majority of the debt is domestically owned, so a wobble from foreign investors would be manageable. A recent improvement in the current-account deficit, thanks to surging exports, suggests that India could be less reliant on foreign funds than in the past. And its reserves of gold and foreign exchange amount to $311 billion.
    Might lower growth hurt the banking industry? "Fundamentally the reason why bad debts haven't built up is because the economy is doing so well," says the boss of one lender. A slowdown would mean more sour loans, both from infrastructure and property projects and from small firms, he says. Even so, like most bank bosses he does not think there is a systemic problem lurking in banks' balance-sheets.
    Indeed, compared with a fragile world economy, an India on autopilot could chug along quite happily, growing faster than most other countries. The government would carry on acting like a tinkering housekeeper with a habit of pinching loose change. Plenty of new firms would still triumph despite the red tape and most people would be better off. There would be fewer roads and more poor people than there might otherwise be, but the opportunity cost of the forfeited reforms would be a subject confined to scholarly debate. All that would still be a vast improvement on how things once were. Yet it would be a curious finale for the politicians and officials now in power who pushed through the reforms of 1991. Twenty years ago they said the yardstick against which India should be measured was its potential. On that measure, there is much to do.
    from the print edition | Briefings2

    http://www.economist.com/node/18986387?story_id=18986387&fsrc=rss

  44. India Economic Reform

  45. The economy of India is one of the fastest growing economies in the world. Since its independence in the year 1947, a number of economic policies have been taken which have led to the gradual economic development of the country. On a broader scale, India economic reform has been a blend of both social democratic and liberalization policies. 

  46. Economic reforms during the post independence period 

    The post independence period of India was marked by economic policies which tried to make the country self sufficient. Under the economic reform, stress was given more to development of defense, infrastructure and agricultural sectors. Government companies were set up and investment was done more on the public sector. This was made to make the base of the country stronger. To strengthen the infrastructure, new roads, rail lines, bridges, dams and lots more were constructed. 

    During the Five Years Plans initiated in the 1950s, the economic reforms of India somewhat followed the democratic socialist principle with more emphasis on the growth of the public and rural sector. Most of the policies were meant towards the increase of exports compared to imports, central planning, business regulation and also intervention of the state in the finance and labor markets. In the mid 50's huge scale nationalization was done to industries like mining, telecommunications, electricity and so on. 

    Economic Reforms during 1960s and 1980s

    During the mid 1960's effort was made to make India self sufficient and also increase the production and export of the food grains. To make the plan a success, huge scale agricultural development was undertaken. The government initiated the 'Green Revolution' movement and stressed on better agricultural yield through the use of fertilizers, improved seed and lots more. New irrigation projects were undertaken and the rural banks were also set up to provide financial support to the farmers. 

    The first step towards liberalization of the economy was taken up by Rajiv Gandhi. After he became the Prime Minister, a number of restrictions on various sectors were eased, control on pricing was removed, and stress was given on increased growth rate and so on. 

    Economic Reforms during 1990s to the present times 

    Due to the fall of the Soviet Union and the problems in balance of payment accounts, the country faced economic crisis and the IMF asked for the bailout loan. To get out of the situation, the then Finance Minister, Manmohan Singh initiated the economic liberation reform in the year 1991. This is considered to be one of the milestones in India economic reform as it changed the market and financial scenario of the country. Under the liberalization program, foreign direct investment was encouraged, public monopolies were stopped, and service and tertiary sectors were developed.

    Since the initiation of the liberalization plan in the 1990s, the economic reforms have put emphasis on the open market economic policies. Foreign investments have come in various sectors and there has been a good growth in the standard of living, per capital income and Gross Domestic Product. 

    Due to the global meltdown, the economy of India suffered as well. However, unlike other countries, India sustained the shock as an important part of its financial and banking sector is still under government regulation. Nevertheless, to cope with the present situation, the Indian government has taken a number of decisions like strengthening the banking and tertiary sectors, increasing the quantity of exports and lots more. 

    Related Links



    1. [PDF] 

      ECONOMIC REFORM IN INDIA

      harrisschool.uchicago.edu/.../ipp%20economic%20reform%20in%20india...
      File Format: PDF/Adobe Acrobat - Quick View
      India's recent progress toward economic growth stems fromreforms undertaken after the ... a blend of democratic politics and central planning. ...
    2. [DOC] 

      Economic Reforms in India Since 1991: Has... - Planning Commission

      File Format: Microsoft Word - Quick View
      by MS Ahluwalia - Cited by 291 - Related articles
      India was a latecomer to economic reforms, embarking on the process in earnest only in 1991, in the wake of an exceptionally severe balance of payments ...
    3. [PDF] 

      India's Economic Reforms - PlanningCommission

      File Format: PDF/Adobe Acrobat - Quick View
      by MS Ahluwalia - 1994 - Cited by 103 - Related articles
      India's Economic Reforms. Montek S Ahluwalia*. The past three years have ...

    4. Economic liberalisation in India - Wikipedia, the free encyclopedia

      en.wikipedia.org/wiki/Economic_liberalisation_in_India- Cached
      The economic liberalisation in India refers to ongoingeconomic reforms in ... Five-Year Plans of India resembled central planning in the Soviet Union. ...
      You visited this page on 23/07/11.
    5. [PDF] 

      DRAFT India's Economic Development Strategy and Economic Reforms ...

      File Format: PDF/Adobe Acrobat - Quick View
      India's Economic Development Strategy and Economic Reforms: ... decades of planning and state intervention, Indiaswitched tactics from fiscal prudence ...
    6. [PDF] 

      ECONOMIC REFORMS & POVERTY ALLEVIATION: INDIA

      File Format: PDF/Adobe Acrobat - Quick View
      rise in the rural and all-India poverty ratios since economic reforms ... The Planning Commission estimates the population below the poverty line using the ...
    7. [PDF] 

      25 E . RECENT ECONOMIC REFORMS AND THE ROLE OF PLANNING

      File Format: PDF/Adobe Acrobat - Quick View
      given the name of economic reform by some writers. We shall learn in the present lesson the role of economic planning inIndia after these economic reforms. ...

    8. Economic Reforms in India - List No. 5 - Manohar Books

      Banerjee, Brojendra Nath: Economic Reforms and Vital Sectors in India. ... Planning and Economic Policy inIndia:Evaluation and Lessons for the Future. ...

    9. Montek Singh Ahluwalia - Planning Commission, Government of India

      Shri Montek Singh Ahluwalia is currently the Deputy Chairman of the Planning Commission for India. He has been a key figure inIndia's economic reforms from ...

    10. Two Decades of Economic Reform in India

      10 Jun 2011 – India Economic Reforms. However, India'ssocialistic planning failed to develop a strong economy and efficient institutions. ...

    11. The Independent (blog)
      Business Standard - 35 minutes ago
      Economic reforms in India in the past 20 years have largely been framed through consensus. ...After four decades of planning for industrialisation, ...
      3 related articles

    Ads

    1. Economic sustainability 

      Sustainable Business Over Long Term
      Helping Businesses & Community.

    See your ad here »

    1 2 3 4 5 6 7 8 9 10 Next


    Economic liberalisation in India

    From Wikipedia, the free encyclopedia
    		 This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (April 2011)

    The economic liberalisation in India refers to ongoing economic reforms in India that started on 24 july 1991. After Independence in 1947, India adhered to socialist policies. In the 1980s, Prime Minister Rajiv Gandhi initiated some reforms. In 1991, after India faced a balance of payments crisis, it had to sell 67 tons of gold to the International Monetary Fund (IMF) as part of a bailout deal, and promise economic restructuring. The government of P. V. Narasimha Rao and his finance minister Manmohan Singh (the present Prime Minister) started breakthrough reforms.[1] The new neo-liberal policies included opening for international trade and investment, deregulation, initiation ofprivatization, tax reforms, and inflation-controlling measures. The overall direction of liberalisation has since remained the same, irrespective of the ruling party, although no party has yet tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies.[2] The main objective of the government was to transform the economic system from socialism to capitalism so as to achieve high economic growth and industrialize the nation for the well-being of Indian citizens.[3][4] Today India is mainly characterized as a market economy.[5]

    As of 2009, about 300 million people—equivalent to the entire population of the United States—have escaped extreme poverty.[6] The fruits of liberalisation reached their peak in 2007, when India recorded its highest GDP growth rate of 9%.[7] With this, India became the second fastest growing major economy in the world, next only to China.[8] An Organisation for Economic Co-operation and Development (OECD) report states that the average growth rate 7.5% will double the average income in a decade, and more reforms would speed up the pace.[9]

    Indian government coalitions have been advised to continue liberalisation. India grows at slower pace than China, which has been liberalising its economy since 1978.[10] McKinsey states that removing main obstacles "would free India's economy to grow as fast as China's, at 10 percent a year".[11]

    For 2010, India was ranked 124th among 179 countries in Index of Economic Freedom World Rankings, which is an improvement from the preceding year.

    Contents

     [hide]

    [edit]Pre-liberalisation policies

    Part of a series on the
    History of Modern India
    Emblem of India.svg
    Pre-Independence British Raj Red Ensign.svg
    British Raj (1858–1947)
    Indian independence movement (1857–1947)
    Partition of India (1947)
    Post-Independence Flag of India.svg
    Political integration of India (1947–49)
    Indo-Pakistani War of 1947
    States Reorganisation Act (1956)
    Non-Aligned Movement (1956– )
    Sino-Indian War (1962)
    Indo-Pakistani War of 1965
    Green Revolution (1970s)
    Indo-Pakistani War of 1971
    Emergency (1975–77)
    Siachen conflict (1984)
    1990s in India
    Economic liberalisation in India
    Kargil War (1999)
    2000s in India
    See also
    History of India
    History of South Asia
    This box: view · talk · edit
    Further information: Economic history of India and Licence Raj

    Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure toFabian socialism. Policy tended towards protectionism, with a strong emphasis on import substitution, industrialization under state monitoring, state intervention at the micro level in all businesses especially in labour and financial markets, a large public sector, business regulation, and central planning.[12] Five-Year Plans of India resembled central planning in theSoviet Union. Steel, mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalized in the mid-1950s.[13]Elaborate licences, regulations and the accompanying red tape, commonly referred to asLicence Raj, were required to set up business in India between 1947 and 1990.[14]

    Before the process of reform began in 1991, the government attempted to close the Indian economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market. India also operated a system of central planningfor the economy, in which firms required licenses to invest and develop. The labyrinthine bureaucracy often led to absurd restrictions—up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used. The government also prevented firms from laying off workers or closing factories. The central pillar of the policy wasimport substitution, the belief that India needed to rely on internal markets for development, not international trade—a belief generated by a mixture ofsocialism and the experience of colonial exploitation. Planning and the state, rather than markets, would determine how much investment was needed in which sectors.

    — BBC[15]

    In the 80s, the government led by Rajiv Gandhi started light reforms. The government slightly reduced Licence Raj and also promoted the growth of the telecommunications and softwareindustries.[citation needed]

    The Vishwanath Pratap Singh government (1989–1990) and Chandra Shekhar Singhgovernment (1990–1991) did not add any significant reforms.

    [edit]Impact

    [edit]Narasimha Rao government (1991–1996)

    Present Prime Minister Manmohan Singhwas then Finance Minister in Cabinet of Prime Minister P V Narasimha Rao

    [edit]Crisis

    The assassination of prime minister Indira Gandhi in 1984, and later of her son Rajiv Gandhi in 1991, crushed international investor confidence on the economy that was eventually pushed to the brink by the early 1990s.

    As of 1991, India still had a fixed exchange rate system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of paymentsproblems since 1985, and by the end of 1990, it was in a serious economic crisis. The government was close to default,[19] its central bank had refused new credit and foreign exchange reserves had reduced to the point that India could barely finance three weeks' worth of imports.

    A Balance of Payments crisis in 1991 pushed the country to near bankruptcy. In return for an IMF bailout, gold was transferred to London as collateral, the Rupeedevalued and economic reforms were forced upon India. That low point was the catalyst required to transform the economy through badly needed reforms to unshackle the economy. Controls started to be dismantled, tariffs, duties and taxesprogressively lowered, state monopolies broken, the economy was opened to trade and investment, private sector enterprise and competition were encouraged andglobalisation was slowly embraced. The reforms process continues today and is accepted by all political parties, but the speed is often held hostage by coalition politics and vested interests.

    — India Report, Astaire Research[8]

    [edit]Later reforms

    • Atal Bihari Vajpayee's administration surprised many by continuing reforms, when it was at the helm of affairs of India for five years.[20]
    • The Vajpayee administration continued with privatization, reduction of taxes, a sound fiscal policy aimed at reducing deficits and debts and increased initiatives for public works.
    • The United Front government attempted a progressive budget that encouraged reforms, but the 1997 Asian financial crisis and political instability created economic stagnation.
    • Economic and technology-related sanctions have repeatedly not proved to be very effective in compelling nations to change their sovereign decisions made in enlightened self-interest. India faced severe sanctions after Pokhran-I (five nuclear tests on May 11 and 13, 1998 at the Pokhran range in Rajasthan Desert), and sanctions that were more comprehensive were imposed following Pokhran-II. There were dire predictions of the collapse of the economy, double-digit inflation etc.
    • After five years, most of the sanctions have been lifted and the Indian economy is continuing to grow at an acceptably satisfactory rate. The anticipated growth rate for 2003-04 is 6.0%. Though India's Gross National Income is only $477.4 billion by conventional calculations, it translates into $2,913 billion purchasing power parity (PPP), according to the latest world development indicators. In PPP terms, it is the world's fourth largest economy, behind only the US, China and Japan.
    This list is incomplete; you can help by expanding it.

    [edit]Impact of reforms

    The HSBC Global Technology Center inPune develops software for the entire HSBCgroup.[21]

    The impact of these reforms may be gauged from the fact that total foreign investment (includingforeign direct investment, portfolio investment, and investment raised on international capital markets) in India grew from a minuscule US$132 million in 1991–92 to $5.3 billion in 1995–96.[22]

    Cities like NOIDA,Gurgaon,Gaziabad,Bangalore, Hyderabad, Pune, Chennai and Ahmedabad have risen in prominence and economic importance, become centres of rising industries and destination for foreign investment and firms.

    Annual growth in GDP per capita has accelerated from just 1¼ per cent in the three decades after Independence to 7½ per cent currently, a rate of growth that will double average income in a decade. [...] In service sectors where government regulation has been eased significantly or is less burdensome—such ascommunications, insurance, asset management and information technology—output has grown rapidly, with exports of information technology enabled servicesparticularly strong. In those infrastructure sectors which have been opened to competition, such as telecoms and civil aviation, the private sector has proven to be extremely effective and growth has been phenomenal.

    — OECD[9]

    Election of AB Vajpayee as Prime Minister of India in 1998 and his agenda was a welcome change. His prescription to speed up economic progress included solution of all outstanding problems with the West (Cold War related) and then opening gates for FDI investment. In three years, the West was developing a bit of a fascination to India's brainpower, powered by IT and BPO. By 2004, the West would consider investment in India, should the conditions permit. By the end of Vajpayee's term as Prime Minister, a framework for the foreign investment had been established. The new incoming government of Professor Manmohan Singh in 2004 is further strengthening the required infrastructure to welcome the FDI.

    Today, fascination with India is translating into active consideration of India as a destination for FDI. The A T Kearney study is putting India second most likely destination for FDI in 2005 behind China. It has displaced US to the third position. This is a great leap forward. India was at the 15th position, only a few years back. Thanks to the hard work of the politicians in control in Delhi for the last five years. To quote the A T Kearney Study "India's strong performance among manufacturing and telecom & utility firms was driven largely by their desire to make productivity-enhancing investments in IT, business process outsourcing, research and development, and knowledge management activities".

    Still, India has not made into the grade where manufacturing investment will be targeted to it. That status belongs to China. But, progressively positive noises are being heard in the world financial circles to consider India at par with China. A few of the remaining antiquated labor laws in India need to be repealed and neglected infrastructure are upgraded to put an investor at ease. The irony is that all plans to redress the labor laws or upgrading of the infrastructure are shot down by left leaning politicians at the federal level. Only recently a proposal to use a part of India's huge foreign reserves to rebuild infrastructure was shot down by these politicians. To the contrary, they have nothing-worthwhile alternative to offer.

    [edit]Ongoing economic challenges

    Main article: Economy of India
    This list is incomplete; you can help by expanding it.

    OECD summarized the key reforms that are needed:

    In labour markets, employment growth has been concentrated in firms that operate in sectors not covered by India's highly restrictive labour laws. In the formal sector, where these labour laws apply, employment has been falling and firms are becoming more capital intensive despite abundant low-cost labour. Labour market reform is essential to achieve a broader-based development and provide sufficient and higher productivity jobs for the growing labour force. In product markets, inefficient government procedures, particularly in some of the states, acts as a barrier to entrepreneurship and need to be improved. Public companies are generally less productive than private firms and the privatisation programme should be revitalised. A number of barriers to competition in financial markets and some of the infrastructure sectors, which are other constraints on growth, also need to be addressed. The indirect tax system needs to be simplified to create a true national market, while for direct taxes, the taxable base should be broadened and rates lowered. Public expenditure should be re-oriented towards infrastructure investment by reducing subsidies. Furthermore, social policies should be improved to better reach the poor and—given the importance of human capital—the education system also needs to be made more efficient.

    — OECD[9]

    [edit]Reforms at the state level

    The Economic Survey of India 2007 by OECD concluded:

    At the state level, economic performance is much better in states with a relatively liberal regulatory environment than in the relatively more restrictive states".[9]

    The analysis of this report suggests that the differences in economic performance across states are associated with the extent to which states have introduced market-oriented reforms. Thus, further reforms on these lines, complemented with measures to improve infrastructure, education and basic services, would increase the potential for growth outside of agriculture and thus boost better-paid employment, which is a key to sharing the fruits of growth and lowering poverty.[9]

    [edit]See also

    [edit]References

    1. ^ Timeline:India -BBC 1991
    2. ^ "That old Gandhi magic". The Economist. 27 November 1997.[dead link]
    3. ^ "India's surprising economic miracle". The Economist. 30 September 2010. Retrieved Sep 30th 2010.
    4. ^ Chakrabarti, Anjan; Cullenberg, Stephen (2003). Transition from socialism to capitalism in india. ISBN 9780415934855.
    5. ^ "India's great journey to market economy". Rediff.com. Retrieved 2010-03-29.
    6. ^ Nick Gillespie (2008). "What Slumdog Millionaire can teach Americans about economic stimulus". Reason.
    7. ^ https://www.cia.gov/library/publications/the-world-factbook/geos/in.html#Econ
    8. ^ a b c "The India Report". Astaire Research.
    9. ^ a b c d e f "Economic survey of India 2007: Policy Brief". OECD.
    10. ^ "India's economy: What's holding India back?". The Economist. 6 March 2008.
    11. ^ "The McKinsey Quarterly: India—From emerging to surging". The McKinsey Quarterly.
    12. ^ Kelegama, Saman and Parikh, Kirit (2000). Political Economy of Growth and Reforms in South Asia. Second Draft.
    13. ^ Sam Staley (2006). "The Rise and Fall of Indian Socialism: Why India embraced economic reform".
    14. ^ Street Hawking Promise Jobs in Future, The Times of India, 2001-11-25
    15. ^ a b c d "India: the economy". BBC. 12 February 1998.
    16. ^ "Redefining The Hindu Rate Of Growth". The Financial Express.
    17. ^ "Industry passing through phase of transition". The Tribune India.
    18. ^ Eugene M. Makar (2007). An American's Guide to Doing Business in India.
    19. ^ India's Pathway through Financial Crisis. Arunabha Ghosh. Global Economic Governance Programme. Retrieved on 2 March 2007.
    20. ^ J. Bradford DeLong (2001). "India Since Independence: An Analytic Growth Narrative".
    21. ^ "HSBC GLT frontpage". Retrieved 2008-08-22.
    22. ^ Local industrialists against multinationals. Ajay Singh and Arjuna Ranawana. Asiaweek. Retrieved on 2 March 2007.
    23. ^ "IMF calls for urgent reform in Indian labour laws".
    24. ^ Kaushik Basu, Gary S. Fields, and Shub Debgupta."Retrenchment, Labor Laws and Government Policy: An Analysis with Special Reference to India". The World Bank.
    25. ^ R. C. Datta / Milly Sil (2007). "Contemporary Issues on Labour Law Reform in India".
    26. ^ Aditya Gupta (2006). "How wrong has the Indian Left been about economic reforms?".
    27. ^ Basu, Kaushik (27 June 2005). "Why India needs labour law reform". BBC.
    28. ^ "A special report on India: An elephant, not a tiger". The Economist. 11 December 2008.
    29. ^ "India Country Overview 2008". The World Bank. 2008.
    30. ^ Gurcharan Das (July/August 2006). "The India Model". The Foreign Affairs.

    [edit]External links



    23 JUL, 2011, 03.52AM IST, AMITI SEN,ET BUREAU
    Government's health insurance scheme to cover rickshaw pullers, cab drivers, miners, sanitation workers and toddy workers

    NEW DELHI: India's flagship health insurance scheme may soon be extended to cover seven more unorganized sectors, as the government gradually expands its scope to include most of the workers engaged in informal vocations.

    The labour ministry, in separate Cabinet notes, has proposed to expand the Rashtriya Swasthya Bima Yojana to include rag pickers, rickshaw pullers, taxi and autorickshaw drivers, miners, sanitation workers and toddy workers.

    "Our aim is to gradually cover all workers in the unorganised sector," a ministry official said. The ministry circulates separate Cabinet notes for individual sectors to ensure that if differences crop up among Cabinet members on a particular sector, it does not hold back approval for other sectors.

    ET had reported on Monday that theRSBY will also pay for doctor visits and medicines if pilots underway prove feasible.

    The RSBY provides Rs 30,000 crore annual health cover to a family of five against a token registration charge of Rs 30. States give 25% of the funds required for the scheme while the rest is given by the Centre.

    The scheme initially covered all below-poverty-line families and later MGNREGA workers. Earlier this year, the Cabinet cleared a proposal to include domestic workers, beedi workers and street vendors as well. Labour minister Mallikarjun Kharge has asked state governments to expedite the process of putting in place implementing agencies. The Centre has already issued guidelines to states for identification of domestic workers, street vendors and beedi workers.

    In his budget speech this year, Finance MinisterPranab Mukherjee had also announced that more sectors, including non-coal mining, would be extended RSBY cover.

    A budgetary allocation of Rs 350 crore was made for the RSBY in the current fiscal, but the labour ministry wants an additional Rs 150 crore because of the increasing scope of the scheme. The ministry can also dip into theNational Social Security Fund for which Rs 1,000 crore has been allocated.

    Some trade unions argue that the government should not pick and choose sectors and, instead, provide a blanket social security cover to all unorganised workers. But the labour ministry says that providing universal health cover to 360 million workers at one go would be a tall order.

    "We are taking a lot of care to ensure proper implementation of the scheme so that benefits reach the targeted groups and leakages are minimum," the official said.

    http://economictimes.indiatimes.com/news/economy/policy/governments-health-insurance-scheme-to-cover-rickshaw-pullers-cab-drivers-miners-sanitation-workers-and-toddy-workers/articleshow/9330894.cms


    23 JUL, 2011, 02.10PM IST, DEEPSHIKHA SIKARWAR,ET BUREAU
    Government prepares ground for TDS on services, to primarily impact B2B service providers, including IT majors like TCS, Infosys, Wipro, BPOs & consultancy services

    NEW DELHI: The finance ministry is exploring the option of introducing tax deduction at source, or TDS, in the services sector to stem tax evasion, though some experts say the move could raise transaction costs and lock up working capital.

    The proposed tax regime will be similar to the one in place for income tax, where employers deduct tax before paying out salaries. It will mainly affect business-to-business service providers such as IT majors TCS, Infosys and Wipro, BPOs and consultancy services, as it will lock up their working capital.

    North Block hopes the system will give a one-time kicker to revenue by collecting taxes that may have to be refunded later, allowing the government to create a float of thousands of crores of rupees that could come handy in the current fiscal.

    "We are examining if such a system can be replicated in service tax,"Central Board of Excise and Customs (CBEC) chairman S Dutt Majumder told ET.

    Data from the Directorate General of Central Excise Intelligence (DGCEI), the intelligence wing of the indirect taxes body, shows that there has been a 70% increase in evasion cases over the past two years, he added.

    The services sector contributes nearly 60% to the overall economy. CBEC has set up a study group to examine the modalities of the TDS method for the sector and also sought comments from stakeholders. The group is expected to give its report next month.

    The study group will also examine whether the TDS method can be applied uniformly to all taxable services or only to certain specific or sensitive taxable services. Service tax is levied at the rate of 10%.

    The department feels this is a neater way of collecting service tax, which contributes 20% to indirect tax collections. "The TDS system followed by the income tax (department) is a very neat and efficient way of collecting tax," Majumder said.

    But his assessment is not shared by those likely to be affected.
    http://economictimes.indiatimes.com/news/economy/policy/government-prepares-ground-for-tds-on-services-to-primarily-impact-b2b-service-providers-including-it-majors-like-tcs-infosys-wipro-bpos-consultancy-services/articleshow/9330672.cms
    What reforms meant for the government and its finances
    Business Standard /  July 24, 2011, 0:54 IST

    India Inc reminisces the historic day when the country's economic policies got a new direction. Business Standard catches up with some of the witnesses.
    J J Irani
    Former director, Tata Sons
    I remember it very well. That year, I was the president of the Confederation of Engineering Industry, which was later CII. There was euphoria in the Indian industry. India was on the brink of bankruptcy—our gold had been pledged and there was no option but to liberalise. There were many good things that happened—restrictions on imports and exports were removed, items like steel were deregulated. But implementation was the best part, since India had always been long on planning, short on implementing. Most measures were followed up vigorously by the Finance Minister.
    The second step to liberalisation is long overdue. FDI in retail and pension reforms must be taken care of. But packages for infrastructure are the most important. This country cannot progress without a dramatic progress in infrastructure. In 1991, the Finance Minister was very lucky because he had the full support of the then-prime minister, Narasimha Rao. Right now, there are a lot of restrictions. The country feels it has a very nice prime minister, full of integrity. But he should pass some of that to his group of ministers, which he has not been able to do.
    Adi Godrej
    Chairman, Godrej Group
    It was a watershed budget—a move from a controlled economy to a free enterprise system. It was a system that created value the world over. It was the biggest reform India had ever seen. There were a series of steps, like doing away with licensing, all in quick succession. The signal to move towards a free enterprise was far greater. Budget 1991 offered no disappointment. The then-PM, Narashimha Rao, should also be credited for giving Manmohan Singh the freedom to go ahead with all the progressive steps. An FM couldn't have done so much on his own.
    The quick implementation of the goods and services tax (GST) would contribute 1.5-2 percentage points to the gross domestic product and, to me, this would be a very big step. Opening up of sectors through foreign direct investment is not a gamechanger by itself. Implementation of GST would be a landmark.
    N Vaghul
    Chairman emeritus, ICICI Bank
    In 1991, India took a U-turn. From being a socialist economy, it moved to become a market economy. The turnaround did not happen out of conviction. Reforms happened due to compulsion when we ran out of funds (foreign exchange to pay for imports). It was a half-hearted attempt.
    I think the agenda for reforms is open. China began reforms 10 years before us. It was thought that we would bridge the gap in the future. Today, the gap has only widened by 30 years. The laundry list for reforms is long. First, state interference (control) has to be curtailed substantially. We need to understand the difference between regulation and control. Second, we need to carry out further reforms in the financial sector. Third, we have to pursue investment and reforms in infrastructure. Currently, it looks like the economy has lost its steam.
    Venu Srinivasan
    Chairman & Managing Director, TVS Motors, and ex-president, CII
    It was a watershed event because it assured a new phase in which people moved away from the licence raj. It was not really a budget, but a set of reforms like the opening up of revenue convertibilities and a certain degree of capital movement and borrowings—a set of what you have seen in the last 20 years of compounded growth of seven-eight per cent. The Budget was the process through which a whole set of reforms was announced. It is a landmark event in the history of the Indian economy.
    First, manufacturing reforms—the Factories Act, the Labour Act, the ESI Act — a whole gamut of rules needs to be looked at. This would make India a competitive place for manufacturing. Second, agricultural marketing—the APMC Act, eliminating the middle man and setting up storage chains, allowing people to buy directly from the farmers —need to be looked at. Third, let foreign funds access and participate in the retail sector.
    Baba Kalyani
    Chairman & Managing Director, Bharat Forge
    The 1991 Budget signalled to the world that the Indian economy was open for business by creating conditions that allowed fair play in the market. Dismantling the system of industrial licensing, reducing the import duty levels, liberalising the import-export policy and currency devaluation gave the economy an outward orientation and set it on an irretrievably new direction. Most of the policy announcements were beyond expectations. Industry, which had been kept on a tight leash till then was unshackled from regulation and given the opportunity to perform and deliver.
    Economic reforms in India in the past 20 years have largely been framed through consensus. Because of this, though the pace of reforms may appear slow, implementation has generally been successful. Therefore, India does not need 'big bang' reforms, all bundled in one Budget. Instead, a gradual approach is more suited to our system. In the current context, the Land Acquisition Bill, opening up of some critical sectors of the economy for private sector participation and incentivising the development of hybrid technologies in the mobility and transportation sector are the key priorities.
    Tarun Das
    Former chief mentor, CII
    The most important feature was a change in direction for the country, moving from a closed economy to an open economy framework that was based on deregulation and competition. I think Manmohan Singh had, while referring to India's destiny in his Budget speech, said when the time had come for an idea, no one could hold it back. It was a time of euphoria. There was no major disappointment in the Budget. There were so many positives that the 1991 Budget should really have been called "Dream Budget One".
    We need a drastic rationalisation of the tax structure, the abolition of different surcharges, cesses and exemption and reduction of customs and excise duties. There is still a long-pending agenda. I have always seen Manmohan Singh as a person who commands enormous knowledge, a person with vision and integrity. He still contributes consistently to economic policymaking. As PM, his contribution to foreign policy, domestic policy and the movement of the country has been enormous. This is a country which has to move forward based on consensus and he is the ideal PM — understated and low-key.(Click here for HOW THE ECONOMY FARED)[WHAT HE SAID]
    Excerpted from his 1991 Budget speech
    The crisis in the economy is both acute and deep. We have not experienced anything similar in the history of independent India.
    There is no time to lose. Neither the Government nor the economy can live beyond its means year after year.
    But there can be no adjustment without pain. The people must be prepared to make necessary sacrifices to preserve our economic independence and restore the health of our economy.
    Macro-economic stabilisation and fiscal adjustment alone cannot suffice. They must be supported by essential reforms in economic policy and economic management.
    The time has come to expose Indian industry to competition from abroad in a phased manner... After four decades of planning for industrialisation, we have now reached a stage of development where we should welcome, rather than fear, foreign investment.
    Before coming down heavily on tax evaders, I would like to give them a last opportunity to come clean. The black money so mobilised will be utilised for the achievement of social objectives such as slum clearance and low cost housing for the rural poor.
    It is my intention to rationalise and simplify the procedures, rules and regulations pertaining to indirect taxes, so that the delays in the system are eliminated, and the interface between the tax collector and the tax payer is reduced to the minimum.
    I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, "no power on earth can stop an idea whose time has come." I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.

    http://www.business-standard.com/india/news/what-reforms-meant-forgovernmentits-finances/443707/

    India lost for words 20 years after its 1991 reforms

    • By John Elliott from Riding the Elephant blog
    • The Foreign Desk
    • Saturday, 23 July 2011 at 1:15 pmTwenty years ago this weekend, three top Indian officials burned the midnight oil tearing up old import controls and preparing a package of economic reforms that would slowly lead to the booming India that is widely admired today, with growth of 8-9%, 300-350m people enjoying the benefits of a consumer economy, and businessmen operating internationally.

    The reforms, announced in a budget speech on July 24, 1991, had been ordered by Narasimha Rao, the prime minister, who a  month earlier had formed a new government in the midst of a critical foreign exchange crisis. Manmohan Singh (right, with Rao in the early 1990s), who was then the finance minister and is now prime minister, had already devalued the rupee in two stages and dramatically flown 47 tonnes of gold to the Bank of England to cover a desperately needed bridging loan. The reforms had prepared along with P. Chidambaram, then the commerce minister and now home minister, and Montek Singh Alhuwalia, who was commerce secretary and now runs the Planning Commission.
    But India seems to be in no mood to celebrate that momentous event, just as it wasn't at India's 50th anniversary of independence in 1997 when the feeling was downbeat. People then were unsure of what to celebrate, since so little had been achieved in terms of economic development, care for the poor, and industrial efficiency since the British left in 1947.
    Ten years later, that had changed because of the economic boom of the intervening years. But the 1997 mood is now back again. People are aware that, despite all the economic and business successes, 800m people are still desperately poor and under-nourished,with poor access to clean water and health and education services. Public infrastructure and services are crumbling, national security and defence preparedness is woefully inadequate, and governance is sliding into a greedy, corrupt and inefficient abyss with no bottom in sight.
    Popular contrasts of India's elephant and China's tiger economies are being trotted out in various articles and studies, as they have been for 20 years. But the contrast is simplistic because India has its tiger industries such as information technology (IT), autos, pharma, and mobile telecoms that have been spurred by entrepreneurial drive and technological change.
    There are also rapidly industrialising states – notably Gujarat and Tamil Nadu (despite its political corruption). These are taking the place of India's earlier internationally lauded cities, Bangalore and Hyderabad, the capitals of Karnataka and Andhra Pradesh that have been swamped by the greed and corruption of politicians and businessmen in areas such as land acquisition, mining and real estate. (The Karnataka chief minister is this week accused of facilitating multi-million dollar illegal mining).
    India's blundering elephant is the government establishment that has refused over the past 20 years to change the way that the country is run. The 1991 whittling-down of the government's role has not been followed through. The government still controls the mostly unreformed banking and defence sectors as well as the vast array of public sector industries and, in various ways, land useage and licensing, especially in the corrupt telecom sector. Such government controls skew development.
    When the current United Progressive Alliance (UPA) came to power in 2004, led by Sonia Gandhi and Manmohan Singh, reforms were initially held back by Communist-led Left Front that supported the government. Since the 2009 general election, reforms have been blocked by the disproportionate power of other coalition partners that have 20 or fewer MPs out of the coalition's total of 262.
    The main problem however is that Sonia Gandhi, who heads the Congress Party, is not a firm enough believer in reforms to push Singh and his government into a tougher line, and Singh is too cautious. Consequently, a raft of reforms have been delayed including divestments of stakes in public sector businesses, increasing FDI in various sector such as defence, insurance and retail, and – most important of all – curbing subsidies
    Montek Ahluwalia, whose Planning Commission is currently finalising a new five-year plan, argues that the future focus should be on three more urgent areas that would otherwise block economic progress – the use of energy and water, and urbanisation. These areas need changes of action by the central government, and even more by state governments, that has eluded India for the past 20 years.
    It is hard to see how India can tackle these issues, given that failure since 1991. People who are well off will of course do better, and the 300-350m people now enjoying varying levels of consumerism will increase in number and satisfaction. Companies will become more profitable and will become more internationally active. But social tensions will increase, with growing battles over the use of land and other scarce resources. Major reforms will be needed to reverse the trend of bad governance and corruption.
    It is an irony that, though the past 20 years began and now end with Manmohan Singh, he was neither in charge at the beginning, nor is he at the end. That is not a  criticism, but in the early 1990s he could only do what he did courtesy of Narasimha Rao, and now he cannot do what he doesn't do courtesy of Sonia Gandhi and the UPA's coalition partners. Something surely needs to change.
    A longer version of this article is on John Elliott's Riding the Elephant blog –http://wp.me/pieST-1oF
    Tagged in: corruption, economic liberalisation, governance, India, India 1991 reforms

    Recent Posts on The Foreign Desk


    http://blogs.independent.co.uk/2011/07/23/india-lost-for-words-20-years-after-its-1991-reforms/

    T N Ninan: Twenty years later
    The coming decade could finally be India's, as China ages and its working population stagnates, and its savings rate drops
    T N Ninan / New Delhi July 23, 2011, 0:07 IST
    *
    The chief executive of a global corporation once said that whenever they had bet on Indian people, they had been proved right, but whenever they had bet on the Indian market, they had been proved wrong. He said some years later that even the Indian market was proving a good bet, but that betting on the government was still not a good idea. Twenty years after the launch of the economic reform programme, that remains as good a summing up as any.
    The Indian people (more correctly, large sections of the total) have flourished – as managers and workers in enterprises, at home and abroad; as entrepreneurs themselves, again, at home and abroad; and as consumers for whom the reforms have brought manifold benefits. And the Indian market has grown like never before. Many product and service markets have grown tenfold and more in the last two decades, product quality is usually unrecognisable when compared to what was on offer in 1991, and prices in relation to salaries have fallen in most cases, making goods and services far more affordable. The solitary exception would probably be housing, which remains an area of soaring costs.
    Most people have tended to ignore these seminal changes when considering the crisis-ridden environment today, when neither an attack on large-scale and brazen corruption, nor further reform, nor improvement in governance standards, appears to be a realistic expectation. The result is an atmosphere of doubt, as to how long the Indian growth miracle can be sustained, and whether the disjuncture between the assumed requirements of successful politics and sensible economics can be fixed.
    But is a more hopeful narrative possible? For instance, despite all the failures on the education front, the fact is that literacy has climbed in the last two decades from 52 per cent to 74 per cent. The opportunities for secondary and higher, including professional, education have improved dramatically. Heedless of the accepted wisdom that agriculture has been running out of steam, agricultural growth has revived and been better than three per cent on average for the past several years. Despite the manifest failures in public health, the major indices (maternity and child health, immunisation levels, etc) show steady improvement. So, in key areas of activity dominated by the government, the situation now is much better than before. Admittedly, Bangladesh has done better on some of these issues, just as China has done better on growth. But that is no reason to believe that nothing has been or can be achieved here in India, by the government.
    Is there an agenda waiting to be addressed? Of course there is. The deputy chairman of the Planning Commission, Montek Singh Ahluwalia, has written an extended article in Economic and Political Weekly recently, laying out a long list of issues that need to be addressed if the 12th Five-Year Plan (starting next April) is to achieve its nine-plus per cent growth target. It might be a good idea to bullet-point the issues and set specific goals and timelines, so that continuous monitoring and mid-course correction are possible. The government should be addressing issues in such a comprehensive and focused fashion if faith in its ability to deliver is to be restored.
    The world has just witnessed the passage of two decades that have belonged to China, with India getting honourable mention in the dispatches. The coming decade could finally be India's, as China ages and its working population stagnates, and as a corollary its savings (and therefore investment) rate drops — all of it translating into slower growth. But if India is to fulfil its destiny, the government has to snap out of its stupor and get down to business.
    http://www.business-standard.com/india/news/t-n-ninan-twenty-years-later/443587/
  48. '

    ndia to allow foreign investment in mutual funds from Aug 1

    Reuters - Manoj Kumar, Aradhana Aravindan - ‎Jul 22, 2011‎
    NEW DELHI, July 22 (Reuters) - India will allow qualified foreign investors to invest up to $10 billion in domestic mutual funds from August 1, a senior finance ministry official said on Friday. The government expects good inflows from qualified ...

    'Hope goddess luck smiles on me again this year'

    Times of India - ‎Jul 21, 2011‎
    NEW DELHI: Amid fears of the government missing the deficit targets for the year, finance minister Pranab Mukherjee on Thursday said the government could exceed its direct tax collection target by around Rs 10000 crore given the trends so far. ...

    Things are moving, not standstill: FM

    Times of India - ‎Jul 21, 2011‎
    NEW DELHI: Finance minister Pranab Mukherjee on Thursday sought to dispel the notion that decision-making in government has virtually come to a halt. The veteran Congressman's comments during an interaction with the media came on the eve of two crucial ...

    Government's actions will speak louder than its words

    Economic Times - ‎Jul 21, 2011‎
    Finance minister Pranab Mukherjee says that all talk of policy paralysis is bunk. He sought to debunk the perception of governmental drift by pointing to the bills being introduced in the monsoon session of Parliament: on land acquisition, ...

    No promise of fast reforms despite despondency

    Indian Express - ‎Jul 21, 2011‎
    Finance Minister Pranab Mukherjee during a meeting with journalists, in New Delhi on Thursday. Tashi Tobgyal Finance Minister Pranab Mukherjee today admitted there was a sense of despondency that things were not moving, but did not give any assurance ...

    Access to black money in Swiss banks by April, says Pranab

    Hindustan Times - ‎Jul 21, 2011‎
    Finance minister Pranab Mukherjee during the meeting with editors at North Block in New Delhi on...... By April 1, 2012, India could get access to the black money allegedly stashed away in Swiss banks, bringing an end to economic tension between the ...

    RBI Guv meets Pranab ahead of credit policy review

    IBNLive.com - ‎Jul 21, 2011‎
    PTI | 11:07 PM,Jul 21,2011 New Delhi, July 21 (PTI) Amid fears that there would be another round of interest rate hikes to tame inflation, RBI Governor D Subbarao met Finance Minister Pranab Mukherjee here today, ahead of the central bank's monetary ...

    Growth on track despite price crunch: Pranab

    Hindustan Times - ‎Jul 21, 2011‎
    India's economy may have come out of the world's worst crisis in eight decades, but high commodity prices and rising borrowing costs are showing signs of slowing down investment, the government said on Thursday. "Insofar as the largest component of ...

    Pranab Mukherjee's India Is Not Our India

    Wall Street Journal (blog) - Paul Beckett, Vibhuti Agarwal - ‎Jul 21, 2011‎
    Perhaps it is the wisdom of his 75 years, but Finance Minister Pranab Mukherjee appears to see a different India from the rest of us. Pranab Mukherjee at an event in New Delhi earlier this month. ...

    The balancing act: Growth vs Inflation

    Economic Times - ‎Jul 21, 2011‎
    NEW DELHI: Inflation in India based on the Wholesale Price Index (WPI) has been over 9 per cent since December 2010 and in June this year inflation soared to 9.44% from 9.06% in the previous month. A worried finance minister Pranab Mukherjee said that ...
    All 46 related articles »

    India redefining world economic order: Gadkari

    The Hindu - ‎Jul 19, 2011‎
    Bharatiya Janata Party President Nitin Gadkari on Tuesday said India was driving the world economic recovery from the recent recession and helping redefine a new world order. Addressing a meeting of the Indo-British All Party Parliamentary group and ...

    Global terrorism a challenge for entire humanity: Gadkari

    Economic Times - ‎Jul 19, 2011‎
    LONDON: Calling for joint Indo-British efforts in defeating global terrorism, BJP President Nitin Gadkari has said it is a challenge for the entire humanity. Paying tributes to the victims of the recent terror attacks in Mumbai at a meeting of the ...

    BJP supports demand for separate Telangana state: Gadkari

    Times of India - ‎Jul 18, 2011‎
    PTI | Jul 18, 2011, 12.50pm IST LONDON: The BJP supports the demand for the formation of a separate Telangana state, party president Nitin Gadkari has said, citing its policy of favouring the creation of smaller states. "Our party is in full support of ...

    Gadkari reaffirms BJP's commitment to economic reforms in India on UK visit

    Newstrack India - ‎Jul 19, 2011‎
    London, July 19 (ANI): Bharatiya Janata Party (BJP) president Nitin Gadkari has reaffirmed his party's commitment to economic reforms, and said that the fast changing global scenario was helping India play a pro-active role in global recovery and ...

    Need more debate on FDI in retail: Gadkari

    Rediff - ‎Jul 18, 2011‎
    Once it comes to power, the Bharatiya Janata Party's [ Images ] (BJP) focus areas would be infrastructure, agriculture, power and housing. Also on the cards is diversifying agriculture into energy and power sectors to help farmers generate more income, ...

    Indo-UK groups pay tribute to Mumbai terror victims

    Times of India - ‎Jul 19, 2011‎
    The meeting convened by the chairman of the group Virendra Sharma, MP from the Indian-dominated constituency of Ealing-Southall for an interaction with the visiting Bharatiya Janata Party (BJP) President Nitin Gadkari and his delegation observed a ...
    All 12 related articles »

    IMF urges China to 'rebalance' its economy

    BBC News - ‎Jul 21, 2011‎
    The International Monetary Fund (IMF) said China needs to implement economic reforms and rebalance its economy. The 'Spillover Report' on China's economy said inflation, property bubbles and the currency were risks to sustainable growth. ...
    Financial reforms critical to transforming Chinese economy: IMF domain-B
    IMF delivers critical report of China's economy China Daily
    Financial Reforms Critical to Transforming Chinese Economy International Monetary Fund
    Financial Times - AFP

    Stubborn inflation signals administrative paralysis: Jalan

    Moneycontrol.com - ‎Jul 20, 2011‎
    More than 20 years have gone by since India began its tryst with economic reforms. The nation is at a crossroad today with most crucial reforms stalled, slowdown in economy and stubborn inflation becoming a daily nightmare for administrators and the ...

    Finance minister talks growth, US harps on reforms

    Hindustan Times - ‎Jun 28, 2011‎
    Economic reforms are on course in India and the economy is likely to continue growing at 8.5% a year, finance minister Pranab Mukherjee said in Washington even as the US government kept up pressure for greater reforms, on the eve of India-US economic ...
    Geithner Urges Economic Reform by India Wall Street Journal
    No let up in economic reforms: Pranab Rediff
    Next wave of reforms must for India to grow: Geithner Expressindia.com
    Orissadiary.com - Economic Times
    AFP

    Turn in the India Story

    Indian Express - ‎Jul 10, 2011‎
    While economic reforms unleashed economic growth, is growth in peril due to the lack of legal, governance and institutional reforms that should have accompanied reforms? In the immediate post-Independence period we believed we were on our way to ...
    Bears circle India's slowing economy Sydney Morning Herald
    msnbc.com

    Cameron's Mistakes? How Long Have You Got?

    Huffington Post (blog) - ‎Jul 22, 2011‎
    "U-Turn on NHS reforms" - hardly a mistake seeing as the professionals (doctors, nurses etc) did not approve of the radical alterations put forward by Andrew Lansley and the majority of the general public (rightly) failed to grasp the concept; ...
    Video: 'Cornered' Cameron's public defence     Times Now
    British PM challenges Jonathan on economic reform •As Nigeria's total debt ... Nigerian Tribune
    Cameron warns Africans over the 'Chinese invasion' as they pour billions into ... Daily Mail
    Telegraph.co.uk हिन्दी में

    Jordan, Georgia discuss bilateral trade, business ties

    Petra News Agency - ‎4 hours ago‎
    During the Jordanian-Georgian Economic Forum, Minister of Industry and Trade Hani Mulqi on Saturday gave a detailed briefing on the Kingdom's economic reforms, including updating legislations and propping up the business and investment environment. ...

    Peaceful protests call for speeding up political and economic reforms

    Petra News Agency - ‎Jul 22, 2011‎
    Amman, July 22(Petra)-- Peaceful protests were held across the Kingdom after Friday prayers calling for speeding up political and economic reforms and fighting corruption. Demonstrators, including youths and members of political parties and ...

    'Sensex at 20000 pts, reforms, oil willing'

    Indian Express - ‎Jul 19, 2011‎
    Economic reforms and stable crude oil prices could drive the Sensex up to 20000 points by March next year, brokerage company Kotak Securities today said. "We can touch 20000 sometime during the first quarter of next calendar year, ...

    Economic reforms top House agenda

    Philippine Star - Paolo Romero - ‎Jul 17, 2011‎
    MANILA, Philippines - Socio-economic reform measures would likely be the focus of the House of Representatives in the 15th Congress' second regular session that opens on July 25, ...
    House Speaker eyes economic reforms in 2nd regular session Sun.Star
    Globe and Mail

    Debt crises driving economies to the edge of the abyss. By Nadine Hani

    Al-Arabiya - Nadine Hani - ‎3 hours ago‎
    Instead of focusing on economic reforms as a priority to tackle sovereign debt problems and reboot growth, the leaders are occupied with their moral scandals and electoral agendas. After Dominique Strauss-Kahn's sex scandal with a New York hotel maid, ...
    Video: Close up: have euro zone leaders saved the euro?     euronews
    Investors welcome leaders' agreement Irish Times
    EU's Greece bailout will strengthen euro - analysts RIA Novosti
    Business & Finance - Washington Post

    Timeline of articles

    Timeline of articles
    Number of sources covering this story
    India to allow foreign investment in mutual funds from Aug 1
    ‎Jul 22, 2011‎ - Reuters
    Access to black money in Swiss banks by April, says Pranab
    ‎Jul 21, 2011‎ - Hindustan Times
    Pranab Mukherjee's India Is Not Our India
    ‎Jul 21, 2011‎ - Wall Street Journal (blog)
    Not given up on reforms: Pranab
    ‎Jul 20, 2011‎ - Business Standard

    Images

    Indian Express
    Hindustan Times
    Hindustan Times
    The Hindu
    Moneycontrol.co...
    Indian Express
    Business Standa...
    Hindu Business ...
    Chandigarh Trib...
    All related image
Will a spurt of economic reforms drive stockmarkets? A  A  A
Share
PRINTER FRIENDLY | ARCHIVES
23 JULY 2011


The two leading national political parties, Congress and BJP, are engaging in a you-stab-my-back-I'll-stab-yours contest. After the disconcerting revelations on the CWG scam, the Adarsh Housing scam, the 2G telecom spectrum scam, comes the Karnataka corruption scam. The Lokayukta (Ombudsman) in Karnataka, retired Justice Hegde, has charged Chief Minister Yeddyurappa of this BJP state of corruption in land dealings. Both parties are busy pushing the dirt under the carpet which, with so much dirt under it, is touching the ceiling! This leaves little time for economic policy making, thus resulting in a slowdown and in the Finance Minister admitting that GDP growth would be under 8.5%.

----------------------------- A Good Time To Sell Bad Stocks -----------------------------

It's never too late to get rid of 'bad stocks'.

After all, you never know how bad a market crash could get.

But what are these 'bad stocks'? How do you identify them?

For answers to these questions, and more, click here to read on...

--------------------------------------------------------------------------------------- 

Perhaps the Government may, in the coming weeks, push the accelerator pedal on economic reforms as a way to divert the public gaze from the sordid scams. It has, for example, speedily cleared the $ 7.2b. investment by BP, to buy a 30% stake in some of RIL's KG6 gas blocks. RIL says that the technical expertise of BP would enable it to restore production in the gas blocks, which had dipped. This can be expected. It will drive the stock, a heavyweight in the sensex, and thus the market. 

The group of secretaries has also cleared allowing more FDI in multi brand retail. Investors would cheer this. Another, brilliant, move by Finance Minister Pranab Mukherjee is to induct BJP's Sushil Modi to head the panel to introduce the GST (goods and services tax), a long overdue and necessary reform that, by simplifying indirect tax structure, is expected to add 1-2% to GDP growth! Similarly, there is talk of allowing power consumers to be permitted to freely switch suppliers of power, similar to mobile number portability in telecom. This would ensure that power companies do not unjustifiably hike power rates, with scant regard to customer service. 

There are bills which are pending, e.g. on pension reforms and on framing rules under which insurance companies can be listed; a passage of these would similarly enthuse investors. So would the introduction and passage of a Lokpal Bill, unless it is horribly watered down by the Government. This would be a test of the honesty of Prime Minister Manmohan Singh. If one cuts down to the bone, the sole sticking point is whether investigating agencies like CBI and CVC should come under the purview and direction of an independent Lokpal, or whether, as now, they should be answerable to politicians in Government. When used as an instrument for meeting political ends, or to protect the well-connected, investigating agencies fail, and get a bad reputation. If brought under an independent authority such as the Lokpal, the agencies can truly investigate, without fear or favour. This is the crux. But it is highly unlikely that politicians will give up this power to direct investigations; if only the Prime Minister showed as much backbone in this as he did in the nuclear deal with the US, it may happen. A big IF! 

The market is moving in a sideways range. This is because whenever there is a global crisis (and there are several like Greece, perhaps the US if they fail to strike a deal before Aug 2, and others yet to erupt), investors flee stock markets, bringing them crashing down like Humpty Dumpties. Whenever the crisis get resolved, as in the case of the Euro 109 b. bailout for Greece last week, the money flows back in. When it does, markets rally. The sensex rallied on Tuesday, up 146 points; backed by net FII buying of Rs 418 crores even as domestic funds were net sellers of Rs 109 crores. The BSE-Sensex ended the week up 160 points, at 18722, whilst the NSE-Nifty gained 52, to end at 5633. 

So if there is a flurry of economic reforms, investors, especially foreign investors, will get enthused and cause a rally. After which the next crisis, which could be Spain, or Italy or perhaps even the US, if hard boiled Republicans and Democrats decide to bang their heads instead of meet their minds, and fail to strike a deal. The Economist has a well argued article on the theory of the inevitable compromise and why it is wrong. 

One rating agency in the US has already downgraded US from AAA to AA plus, and Greece has been termed in technical default by another. 

Yet another policy change, which ought to have come in long ago and may have avoided the telecom scam, is to allow spectrum sharing and trading of spectrum. The whole 2G spectrum controversy has arisen because a certain amount of spectrum has been given at a low rate, for start up operations. The decision to price it low was a correct one, in order to cut the cost of telephony thus ensuring its spread. It has succeeded because there are now over 750 m. mobile phone users. There used to be a time when having a land line telephone was a privilege obtained after a long wait or a friendly connection in Delhi. No longer. 

Yet the lower price of spectrum made it possible for successful allottees of it to become squatters. By merely selling the rights to spectrum (or the company that owned it) several persons became rather well off. What if there was no need to sell spectrum, because technology now allows companies to share it? 

This is similar to ATM machines in banks or to telecom towers. Initially all banks boasted of a large network of their own ATMs, as a means to attract customers to open accounts with them. Over time they realised the wastage of duplication and began a process of integrating ATMs so that it is now possible for any bank card holder to use any other bank's ATM, on payment of a nominal fee. The same thing happened with telecom towers. 

Telecom companies similarly acquire more spectrum than they need, in order to cater to peak traffic. During non peak hours, there is low usage of spectrum, called white spaces. If companies were granted the right to use spectrum (not own it) and were also allowed to trade excess spectrum, the tussle for ownership of spectrum would be obviated. This column has long been advocating exploring the possibility of trading spectrum. This would work like power trading in which a temporary shortage of power in one state can be fulfilled by a temporary excess in another. The Government is only now thinking of allowing spectrum sharing and trading. 

The US Government had done this in 1996, when it passed the Telecommunications Act of 1996. Why does it take our Government 15 years to make the same mistakes, instead of studying those others have made before it? 

The Government can also take an easy decision to show its commitment to economic reform - announce the privatisation of Air India. There is absolutely no reason why it should need to own an airline. None! Except free travel for VIPs whenever they have the urge to. The airline has too much debt which it can never repay. Yet the Government is thinking of infusing Rs 1200 crores as additional equity into it. 

This impacts its competitors. Kingfisher Airline does not get the benefit of equity infusion using taxpayer's money; as a result it is unable to pay its fuel bills and, last week, HPCL refused to supply it fuel. Flights must have been cancelled due to this and passengers inconvenienced. Jet Airways has announced a quarterly loss of Rs 123 crores. 

Corporate results were a mixed bag. It is interesting to contrast some bank results. Union Bank showed a 22 per cent dip in net profits for the June quarter, due to higher provisioning for non performing assets. However, Axis Bank showed a 27% increase in net profits due to lower provisioning for NPAs, Yes Banks profits were up 38% for the same reason and Kotak Banks were also up 27%. 

So, watch out for signs of activity by Government on economic reforms. If they do press the accelerator on this, the rally can continue, for at least another 1000 points on the sensex. If they continue dithering and playing the you-stab-by-back-I'll-stab-your game, the markets will slide. That's the long and short of it.

MOST POPULAR | ARCHIVES | TELL YOUR FRIENDS ABOUT STRAIGHT FROM THE HIP | WRITE TO JAWAHIR
Share|

J Mulraj is a stockmarket columnist and observer of long standing. His weekly column on stockmarkets has run for over 19 years. An MBA from IIM Calcutta, he has been a member of the BSE. He is now India Representative for Institutional Investor. A keen observer of events and trends, he writes in a lucid yet readable style and takes up issues on behalf of the individual investor. Nothing pleases him more than a reader who confesses having no interest in stockmarkets yet being a reader of his columns. His other interests include reading, both fiction and non fiction, bridge, snooker and chess.

Disclaimer: 
The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site. 
© Equitymaster Agora Research Private Limited

http://www.equitymaster.com/sfth/detail.asp?date=07/23/2011&story=3&title=Will-a-spurt-of-economic-reforms-drive-stockmarkets

-- 

Union budget of India

From Wikipedia, the free encyclopedia

The Union Budget of India, referred to as the Annual Financial Statement[1] in Article 112 of the Constitution of India, is the annual budget of the Republic of India, presented each year on the last working day of February by the Finance Minister of India in Parliament. The budget has to be passed by the House before it can come into effect on April 1, the start of India's financial year. Former Finance MinisterMorarji Desai presented the budget eight times, the most by any.[2]

Contents

 [hide]

[edit]Chronology

[edit]Pre-liberalisation

Dr. Manmohan Singh, the current Prime Minister of India, was instrumental in liberalising the Indian economy.

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947.[2]

The Union budgets for the fiscal years 1959-60 to 1963-64, inclusive of the interim budget for 1962-63, were presented by Morarji Desai.[2] On February 29 in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday.[3] Desai presented budgets that included five annual budgets, an interim budget during his first stint and one interim budget and three final budgets in his second tenure when he was both the Finance Minister and Deputy Prime Minister of India.[2]

After Desai's resignation, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the only woman to hold the post of the finance minister.[2]

Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for 1982-83, 1983–84 and 1984-85.[2]

Rajiv Gandhi presented the budget for 1987-89 after V P Singh quit his government, and in the process became only the third Prime Minister to present a budget after his mother and grandfather.[2]

N. D. Tiwary presented the budget for 1988-89, S B Chavan for 1989-90, while Madhu Dandawate presented the Union budget for 1990-91.[2]

Dr. Manmohan Singh became the Finance Minister but presented the interim budget for 1991-92 as elections were forced.[2]

Due to political developments, early elections were held in May 1991 following which the Indian National Congress returned to political power and Manmohan Singh, the Finance Minister, presented the budget for 1991-92.[2]

[edit]Post-liberalisation

Manmohan Singh, in his next annual budgets from 1992–93, opened the economy,[4] encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent.[2]

After elections in 1996, a non-Congress ministry assumed office. Hence the final budget for 1996-97 was presented by P. Chidambaram, who then belonged to Tamil Maanila Congress.[2]

Following a constitutional crisis when the I. K. Gujral Ministry was on its way out, a special session of Parliament was convened just to pass Chidambaram's 1997-98 budget. This budget was passed without a debate.[2]

After the general elections in March 1998 that led to the Bharatiya Janata Party forming the Central Government, Yashwant Sinha, the then Finance Minister in this government, presented the interim and final budgets for 1998-99.[2]

After general elections in 1999, Sinha again became the finance minister and presented four annual budgets from 1999-2000 to 2002-2003.[2]Due to elections in May 2004, an interim budget was presented by Jaswant Singh.[2]

[edit]Time of Budget Announcement

Until the year 2000, the Union Budget was announced at 5 pm on the last working day of the month of February. This practice was inherited from the Colonial Era, when the British Parliament would pass the budget in the noon followed by India in the evening of the day.

It was Mr.Yashwant Sinha, the then Finance Minister of India in the NDA government (led by BJP) of Atal Bihari Vajpayee, who changed the ritual by announcing the 2001 Union Budget at 11 am.[5]

[edit]See also

[edit]References

  1. ^ http://indiacode.nic.in/coiweb/welcome.html
  2. ^ a b c d e f g h i j k l m n o p "Chidambaram to present his 7th Budget on Feb. 29". The Hindu. 2008-02-22. Retrieved 2008-02-22.
  3. ^ "The Central Budgets in retrospect". Press Information Bureau, Government of India. 2003-02-24. Retrieved 2008-02-22.
  4. ^ "Meet Manmohan Singh, the economist". [http://www.rediff.com Rediff.com. 2004-05-20. Retrieved 2008-02-22.
  5. ^ "Budget with a difference". 2001-03-17. Retrieved 2009-03-08.

[edit]External links

Yearly budgets
Other resources
View page ratings
Rate this page
What's this?
Trustworthy
Objective
Complete
Well-written

1991: Unshackling the economy

  
A comatose economy and a deep fiscal crisis. It was a mountain to climb for the Cambridge-educated former bureaucrat Manmohan Singh, when he rose to present India's Budget on July 24, 1991. Consider this. India's debt amounted to Rs 182,000 crore and the government was paying every second rupee it earned towards interest (Rs 27,000 crore). Inflation was in double digits and the cash crunch severe. Worse, forex reserves were barely enough for three weeks of essential imports and India appeared weeks away from defaulting on its external obligations.

Internally, the licence raj and a bloated bureaucracy was stifling India's economic growth. Singh, though, was equal to the task. The P.V. Narasimha Rao government ended the licence raj, abolished industrial licensing in all but 18 industries and allowed companies to expand without government permission. The policies did not signal total decontrol but there was a tectonic shift from the Nehruvian policy of dependence on the public sector. Singh's landmark Budget coupled with the 20 per cent devaluation of the rupee set the Indian economy on the path to recovery and a fast pace of growth over the next two decades.

Power to them
Electricity boards, or state-run generation and distribution utilities, were broke and in no position to expand. The government allowed private players in generation sweetening the deal with an assured return. Bad decision (remember Enron?). Years later, lessons learnt, the focus shifted to distribution - helping in part raise capacity 2.5 times to 167,000 MW today, 33,183 MW of which is private-run. Still, large parts of India remain unlit prompting experiments with microgeneration networks and off-grid power.

The chosen one
As Ratan Tata was named to step into the big shoes of his uncle J.R.D. Tata, the choice drew brickbats from within and outside Bombay House. Many said he was chosen the Tata group Chairman only because of his surname. Over time, he has made his critics eat humble pie. When he took over, the Tata group had 1.19 lakh employees and revenues of Rs 30,920 crore. Today, as he prepares to hang up his boots, its employee base has swelled to 3.21 lakh, revenues stand at Rs 293,562 crore and the Tata group can rightfully call itself the first Indian MNC.

Did you know?
India allows 51 per cent FDI in auto manufacturing. GM, Ford and Hyundai were among the global majors which set up factories here. Today, India-made cars sell in Europe and Africa. Next stop: the United States.

Quote of the year
Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.
Manmohan Singh, in his Budget speech



Click Here for Specimen Table  
Figures at All-India / State level : (Currently showing India with State Level consolidated figures)
(Data table headings are shown Year-wise in descending order)
 

Indian Union Budget 2010-11, Budget of India 2010-11

The Union Budget for the year 2010-11 is expected to be presented on February 26th 2010, two days before the usual date earlier in past.

In an informal meeting with journalists, the Union Finance Minister Mr. Pranab Mukharjee indicated so. Each year the budget is presented on February 28.

Actually February 27th is a gazetted holiday on account of Prophet Mohammad's birthday or Id-ul-Milad, as it is popularly known and February 28th is Sunday. Incidentally March 1st is Holi, one of the most popular festival of Hindus. The cabinet has approved the date. 

The other reason is that it is well known fact that all member of Parliament leave for their respective constituencies on week-end to remain between their people.

It is also an honor to MR. Mukharjee to present the Union Budget 2010-11 of India consecutively for the second time after the United Progressive Alliance (UPA) took over the reins of the government for the second time in a row. The First was presented by him last year in July 2009 when the UPA got the clear mandate in the general elections consecutively second time.

The Union Budget 2010-11 of India is widely expected to usher in the second phase of reforms to propel the growth rate of Indian economy, which is facing formidable problems of maintaining high GDP growth in the face of global meltdown. It was argued in Union Budget 1991 of India that the interest payments were 4% of GDP and it could only be curtailed down by lowering the fiscal deficit.

According to the figures extracted from Indian Public Finance Statistics 2008-09, in the year 1991, the central government's liability as a percentage of GDP at market price stood at 55% and at 62% in 2008-09.

For more information, Indian Budget speeches since 1947-48 is available online on www.indiabudget.nic.in in PDF Format.

  1. Budget for whom?

    www.hindu.com/fline/fl2217/stories/20050826003711100.htm- Cached
    26 Aug 2005 – The Finance Ministers of India: First row: R.K. Shanmukham Chetti, ... In his 1991-92 Budget speech, Finance Minister Manmohan Singh ...

  2. India's Budget Process (in Theory) « Independent Indian: Work ...

    independentindian.com/2008/02/.../indias-budget-process-in-theory/ - Cached
    29 Feb 2008 – Rajiv Gandhi and the Origins of India's 1991Economic Reform · 5. ..... There is a "Revenue" Budget referring to expenditures and receipts ...

  3. Budget of India | Indian Budget | UnionBudget-India | Financial ...

    indiaonline.in/Profile/Economy/Budget/index.aspx - Cached
    Manmohan Singh presented the budget for 1991-92 as the Finance Minister. The approach changed with Mr. Manmohan Singh who was the Finance Minister under the ...

  4. Budget 2010-11: Reforms deficit stays even after two decades ...

    articles.economictimes.indiatimes.com › ... › Industrial Policy- Cached
    25 Jan 2010 – While the sea change in India's overall economic fortunes is now ... Anyone who revisits the Budget of 1991-92 would be impressed by the ...

  5. Review & Outlook: India's Lingering Leviathan - WSJ.com

    online.wsj.com/.../SB100014240527487046155045761720137917...- Cached
    1 Mar 2011 – The 2011 budget fails to honor the legacy of the1991 reforms by cutting ... Twenty years ago, India's then Finance Minister Manmohan Singh ...

  6. Budget trivia,union budget 2007-08,budget2007,Indian budget,India

    www.tradeindia.com/newsletters/.../did_you_know_feb_2007.html- Cached
    Budget trivia,union budget 2007-08,budget 2007,India - learn more about the ... a proper Budget and instead had to present an interim Budget for 1991-92. ...

  7. Domestic Airlines in India - Private Airlines in India - Cheap ...

    www.iloveindia.com/airlines-in-india/domestic/index.html- Cached
    1 Aug 2009 – Jagson Airlines is a private low-cost budgetairline based in Delhi, India. In 1991, when the aviation sector was opened for the private ...

  8. India's economy: One more push | The Economist

    www.economist.com/node/18988536 - Cached
    3 hours ago – ON JULY 24th 1991 Manmohan Singh, thenIndia's finance minister, presented a budget to India'sparliament that would change his country and ...

  9. anglais

    www.scribd.com/doc/60606814/anglais - Cached
    1 day ago – In context to India, this implies opening up the economy to foreign ... Presenting the 1991-92 Budget, Finance Minister Manmohan Singh said: ...

  10. National Budget: Will It Address Climate Change Concern? | Society ...

    www.sspconline.org/.../National%20Budget-ClimateCh... -United States - Cached
    22 Mar 2008 – Can we consider this budget the beginning of a concerned India's ... demand growth rate of 19 percent (compounded) between 1991 and 2001. ...
Palash Biswas
Pl Read:
http://nandigramunited-banga.blogspot.com/
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)