India’s balance of payments position on a razor’s edge, says Nomura

The sharp drop in exports and higher oil prices in India are offsetting the improvement in the country’s trade deficit, says Nomura Economic Research

Nomura Economic Research believes that India's balance of payments position is on a razor's edge. This is predominantly due to the fact that oil prices are already above $110/bbl, and that there have been large external commercial borrowing redemptions and rising FDI repatriation. 
According to initial estimates by the ministry of commerce, India’s trade deficit widened to $15.5 billion in July 2012 from $10.3 billion in June 2012. Exports contracted for the third straight month, by 14.8% y-o-y (year-on-year) last month, following a 5.5% contraction in June 2012. There has been weaker demand from the US and Europe and a strong negative base effect, which has more than offset the positive impact of rupee depreciation. 
Likewise, imports contracted 7.6% y-o-y in July 2012 after a 13.5% decline in the same month last year, reflecting weak domestic demand and negative base effects.
Nomura believes that the bounce back in oil prices has increased the oil import bill over June 2012. Non-oil imports have started to fall, reflecting a slowing economy.  The sharp drop in exports and higher oil prices are offsetting the improvement in the country’s trade deficit. 
The global financial agency expects the lagged effect of rupee depreciation and lower oil prices to narrow the current account deficit to around 3% of GDP in FY13 (year ending March 2013) from a record high of 4.2% in FY12. 




5 years ago

One wishes, those managing the country's finances also keep a close watch on the balance of payment fluctuations along with analysts and researchers. Recently there was an observation by Dr C Rangarajan that import of gold in the recent past was very high. While oil bills may have to be under 'essential' category, import of gold and several other luxury articles and expenses on 'lifestyle' of top businessmen, politicians and bureaucrats may have to be pruned.

L&T Construction to develop New Cuffe Parade project of Lodha

Spread over 23 acres, the ‘New Cuffe Parade' project will entail an investment of around Rs10,000 crore from the Lodhas over the next five to seven years

Mumbai: L&T Construction on Tuesday said it has won a contract from Lodha Developers to construct the iconic residential project 'New Cuffe Parade' in the city, reports PTI.
L&T Construction's Buildings and Infrastructure (B&F) division will be constructing this project using advanced technique, the company said in a statement.
Spread over 23 acres, the project will entail an investment of around Rs10,000 crore from the Lodhas over the next five to seven years, making it one of the largest private investments in the Mumbai metropolitan region.
In its first phase, New Cuffe Parade will comprise four 63-storey towers with over 15 acres dedicated for lush green landscape, the statement said.
"B&F IC has been offering pioneering solutions in residential buildings that cover design and construction of large townships and high-rise apartments. The company will be finishing construction of 63 storey towers in record time," it said.
The project is designed by WOHA, the world's foremost 'green' architects for high-rise buildings, with landscape consultancy from Sitetectonix, Singapore.


Independence and freedom: Have we always been free?

Do we really have the freedom of choice when it concerns basic issues like hunger, shelter, clothing and shelter for the millions? The prevailing policy paralysis has to be put to an end with radical reform measures

On the eve of the 66th Independence Day, we as Indians need to ask ourselves whether we have attained real freedom of choice after hoisting of the tri-colour. Instead of a Tryst with Destiny are we now face a Twist with Destiny. The Purna Swaraj promised to the free people in 1947 is proving to be a myth. Witnessing, as we do today, what is going on across the country since independence, one wonders whether we have at all been liberated from the colonial rule of domination of the British. The accompanying pictures speak louder than words. 
This is written as a take off on columnist-satirist Jug Suraiya’s “Independent Thoughts” appearing in the Times of India’s spiritual promotional feature The Speaking Tree. I’d like to address his very first concern—“Just how independent is independence?” Jug goes on to concede that it is a “funny question to ask...” I’d say indeed it is!
Do we really have the freedom of choice when it concerns basic issues relating to addressing the needs of hunger, shelter, clothing and shelter for the millions? In common terms roti, kapda aur makan? More particularly, are we at all liberated from the all pervasive conditions of abject poverty, hunger, malnutrition deaths, squalor, absence of basic amenities like drinking water, sanitation, primary education, health care, insecurity and lawlessness? Additionally, we have coupled with fractured growth, environmental degradation, decline in public services, rising suicides among farmers and youngsters—both in the urban and more particularly rural Indian hinterland?  Jug also tags along the lack of freedom from inequality, injustice and exploitation, quoting Ivan Karamazov – “If everything is permissible, then nothing is permissible.”
As Ashok Upadhyay in his column in the Hindu Business Line, asks—“It happens only in India!”—“By any reckoning of nationhood, could India not offer the weary West of a fantasy of greatness defined in purely material-economic terms: High GDP, skilled workforce, high spending middle-class, stout loyalty to the English language and Bollywood? What can we offer the Western world but a sad reflection of its worst excesses?” Not to forget the scourge of corruption right from the top from the mantri-shantri-babu down to the chaprasi levels. Upadhyay rightly terms Team Anna and Ramdev highlighting corruption as just trivialization of issues. He has justifiably coined the members of Team Anna and Ramdev as “self-appointed leaders of an assumed following.” Subsequent events have proven this.
The former Lok Sabha Speaker, speaking in Kolkata, has very rightly lamented that Parliament and state assemblies, central to the nation’s polity and both symbols of unity “face severe crisis of credibility and confidence while questions are asked about the workability of our democratic setup based on the Parliamentary system and about utility and relevance of our vital democratic institutions. Politics in the country carries with it image of intrigue, hatred, venality, disorder and anarchy strongly detested by our people. There is an urgent need to restore democracy and win back peoples’ confidence by empowering them to recall their elected representatives when they are not acting in peoples’ interests, by sending a message to the politicians who do not follow the democratic norms.”
Come Independence and Republic Days all music systems blare loudly—Sarey Jahan se achha Hindoosthan hamara, Vande Mataram and Jana Gana.  Leave alone the aam admi, even the neta hoisting the flag will not be able to sing them through or tell you what they stand for! At the most they will mouth the familiar short take of Mera Bharat Mahaan; others add—Magar hum sub hai pareshaan, kyuki 99% hai beimaan! How true.
Post-independence, our Parliament and legislatures have enacted quite a few Acts. But they have chosen to retain in the Statute books the more than a century old Indian Penal Code. The Lok Pal Bill in its 42 long years of back and forth sallies has seen practically every government at the Centre that has come and gone since it was first introduced. The government began by then trying to cultivate till then relatively an unknown Ramdev Baba engaging him in negotiations at airports and five star hotels of Delhi. Though the government managed to get Anna to withdraw his fast with a dubious motion in the Parliament at the very last moment, its enactment is still a long way off. The India Against Corruption ends as damp squib with the sinister members of Team Anna displaying political ambitions that they earlier attacked most vigorously. Thank god that it has been nipped in the bud. The Central Bureau of Investigation that is invoked at the drop of the hat is governed by the Delhi Special Police Act!
John Donne is quoted—“No man is an island.”  Our neta-babus love to go abroad Rio, Kyoto or Doha to make lot of long winded speeches on the destruction of rain forests in South America or the melting of polar icecaps and the pollution of the Nile. They go any length to catch the first flight abroad. Balbir Punj, a BJP MP justifies the MPs’ expensive jaunts by asking why not when the mantis-shantris-babus enjoy too. This was made at the sidelines of Advani’s nasty “Illegitimacy” spat in the Lok Sabha.  
The same not-so-honourable-elected representatives are least concerned with the environmental degradation right here under their noses that results in climate changes with widespread consequences on the monsoons in India—degradation of the Western Ghats encompassing six states extending from Gujarat to Tamil Nadu in an eco-system covering an area of 1,59,000sq km, fuelling half a dozen rivers; the melting of Himalayan snows that goes into the  major rivers—Ganga, Yamuna, Brahmaputra  and their numerous tributaries—add to the chemical and leather discharges into the Ganga and Yamuna at Kanpur and Kolkata and plastic garbage clogging the Mithi in Mumbai resulting in massive floods, not to write about the rampant deforestation on the hills, valleys and plains and sand mining eroding the sea beaches and riverbeds.
The country desperately cries for a substantive change of the likes brought about by PV Narashima Rao who headed a minority government. The sweeping changes not only pulled out the country out of a massive international debt trap but turned around the economic outlook to thrust India into the club of emerging nations from BRIC to G7 to G20. 
Today we stand on the brink. Disregarding political agendas going by the term of coalition compulsions, or Western slowdown, we need to emerge out on our own by capitalizing on our inherent strengths of a vibrant economy with a strong manufacturing base, large middle class market, skilled labour force, foreign collaborations and regulatory mechanisms in place that all advanced nations have come to accept.

The prevailing policy paralysis has to be put to an end to by coming out with radical reform measures, without fear or favour:

1. Bring about the speedy return of billions stashed abroad, by putting out the names in public domain well before the Supreme Court on the Ram Jethmalani PIL or Ramdev's agitation forcing the government into doing it sooner or later.
2. Revise the regressive taxation that squeezes the middle class and salary earners by bringing in higher rates that will tax letting the "Big Fish" who have been getting away with no taxes on unearned incomes like dividends and capital gains. Introduce the Warren Buffet models by taxing the rich higher. With higher threshold, bring all wealth, gifts and assets passing on to heirs on death, as is prevalent as Death Duties in the West.
3. Differentially tax high end luxuries like imports, music systems, SUVs and sports cars, villas, yachts, private aircraft all used by the high and mighty.

 It is fervently hoped that the government gathers the will to kick in the initial steps.

(Nagesh Kini is a Mumbai based Chartered Accountant turned activist.)




Vaibhav Dhoka

4 years ago

We have inherited most of the culture from our colonial rulers.They left physically but our mindset never left them.In every aspect we did DITTO from pre Independence to post Independence. Britishers went and we have ruler,executives and bureaucracy and Judiciary with British mindset.Only word changed rest nothing changed.

ashok sen

5 years ago

A lot of our ills in this country stems from our DNA.
We are a laid back society, with the attitude, SAB KUCH CHALTA HAI.Do what you want,to get what you want,immaterial of what harm you do to others in the process.
To correct this, we have to start at the grassroots.Get morally strong teachers having ethics in primary schools all over the country.The question is where will such teachers come from a morally corrupt society.It can come from within us,people who have made it, and are beyond 50 years of age,and now need to give back to society.
Somehow a set of leaders, learned and with value systems have to come to the fore to correct the system as it exists today, otherwise there is little hope for us.


nagesh kini

In Reply to ashok sen 5 years ago

The demented old fashioned tottering foggies need to be shown the exit and the best of gen-next from all shades of opinion across party lines - combination of INC,BJP,JDU to converge to take charge to bail the economy. TINA!

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