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Old 29th November 2020, 13:00   #826
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Re: Understanding Economics

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Originally Posted by Sree View Post
Thank you Sir for your words of wisdom. Your rich experience and your language makes it a pleasure.
A more overt political oped has come in this weeks economist. I didn’t feel like sharing it, lest it hurts anyone.
Thank you for your broadmindedness. Please share the economist article. They do have a bias against India but they usually make insightful points and back it with data.

Quote:
Originally Posted by Samurai View Post
The article is all over, just complaining and complaining... Reminded me of NRI friends & relatives. And at end the author revealed something, he doesn't live in India. He wants to pontify about India without living in India. The guy lives in a bubble.
+1. Oh, don't get me started on NRIs.

Quote:
According me, India's greatest problem is corruption. Our problem isn't socialism or capitalism. I think we have decent enough balance. It always a generation or two to change any culture. I started new company this year and I haven't paid a single bribe to anyone so far. That is because I could everything online. I was able to renew my driver's license last year without paying any bribe, again due to online transactions. When compared to few years ago, let alone few decades ago, these are major improvements.
+1. Digitization and consequently taking the discretion or act out of the hands of the junior Govt official is the a most efficacious way to reduce corruption at the grass root. The seniors in the Govt also recognize that.
Quote:
Progress is often 2 steps forward and 1 step backward. It is an iterative process, that is the only option in this imperfect world.
In the most complex nation on earth plus 2 minus 1 is actually a great speed to progress at.

I don't at all support expenditures like the VVIP Boeings or new Parliament or the complete ineptness of handling of the lock down but every Govt be it MMS or Vajpayee or PVNR were a mixed bag of plus and minus. Same with the current team. We upper class Indians are often blind to the progress at re-distribution at the grass root level having covering crores of people - LPG cylinders most now know about but the RBSK health cover schemes {managed by the States} are now covering over a third of the poor for major health expenditures. I see this daily in my work. A decade back the same family would be ruined to absolute poverty due to a health setback of one member. Most upper middle class Indians living in 'India' and not 'Bharat' have not even heard of this. Direct Transfer to Beneficiary etc add to the list. God alone knows that a hundred things could work better in India and each of us has a duty to do our bit beyond merely earning a living and building our own net worth.
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Old 29th November 2020, 13:16   #827
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Re: Understanding Economics

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Originally Posted by AMG Power View Post
Statues for 3500 crores a pop, Parliament surroundings at 20,000 crores, Bullet trains at 24000 crores, VIP planes at 8400 crores.
When government spends, we need to look at where the money goes. If it is mainly going into local economy, then it is fiscal spending to increase demand. That is a good thing. I hope the Statue and Parliament expenditure mainly goes to local businesses, who in turn can create jobs for citizens, who in turn spend that money at local businesses... not a bad deal at all.

But the expense on bullet train to a significant extent and all on the VIP plane, would go out of the country. That is not good at all.
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Old 29th November 2020, 14:03   #828
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Re: Understanding Economics

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Originally Posted by Samurai View Post
When government spends, we need to look at where the money goes.
It isn't expenditure, it's revenue. There is an obvious eagerness to find more such sources of revenue generation. As to whose revenue, it's probably better not to get into that.

But I agree with what you've stated. That's the theory part.

Last edited by AMG Power : 29th November 2020 at 14:07.
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Old 30th November 2020, 09:04   #829
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Re: Understanding Economics

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Originally Posted by AMG Power View Post
Statues for 3500 crores a pop, Parliament surroundings at 20,000 crores, Bullet trains at 24000 crores, VIP planes at 8400 crores.
Statue: infrastructure spending, tourism (helps Indian companies, long term employment)
Parliament: infrastructure spending (helps Indian companies)
Bullet train: dirt cheap loans, make-in-India via JV (includes technology transfer)
VIP Planes: $300 to $450 million is the list price of a new Boeing 777. The extra bits (custom interiors, communications, missile defence etc) don't cost that much over the base cost (for 2 aircraft).

Understanding Economics-screenshot_2.jpg

This aircraft will be used for atleast 30 years - when you amortize the the cost over this period, cost to exchequer is just Rs. 300 cr per year. You cannot use the old Boeing 747 forever as Air India One.

Quote:
Nothing for the underprivileged, nothing for the unemployed, nothing for those businesses hit by Covid, Nothing for those who may lose their jobs.
Even if there is something for underprivileged, it does not hit the headlines. It is boring news. It is not as sexy as "Rs.8,000 cr for shiny new aircraft - see interiors pics here". So you have to read between the lines:

Jan Dhan, cash transfers boost ATMs in Bharat
http://timesofindia.indiatimes.com/a...w/79482863.cms

Understanding Economics-screenshot_1.jpg

Remember that politicians are extremely canny - cash transfers, income guarantee, employment guarantee etc are vote catchers. They will not let a good opportunity to win votes pass by.

Last edited by SmartCat : 30th November 2020 at 09:40.
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Old 30th November 2020, 11:11   #830
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Re: Understanding Economics

Half of young US adults now live with their parents, mentioned this article in VisualCapitalist.

Understanding Economics-dsyoungadultslivingwithparents.png

Though the article mentions,

Quote:
And while the widespread effects of COVID-19 have yet to be fully captured, young adults are already now living with their parents to a greater degree than witnessed in 120 years—surpassing even the Depression-era generation.
the article has resulted in many hilarious banter between the GenX/Millennials on one side and Baby boomer generation on the other. Whereas the 60s generation blame the later generations as taking everything easy and how they were more skilled / resourceful, the younger generation used the same argument against the previous generation and blaming them of making their life easier resulting in them left with fewer life skills and capacity to do hard work.

On a serious note, will technology, automation, monopolies, oligarchies result in societies where even higher education will not lead to creation of jobs?
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Old 30th November 2020, 12:42   #831
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Re: Understanding Economics

Quote from the article:
Quote:
With more than 9 million infections, India is the second-worst affected country after the United States.
Even a rookie reporter understands the concept of "per-capita" but this guy doesn't??

Quote:
Originally Posted by V.Narayan View Post
We upper class Indians are often blind to the progress at re-distribution at the grass root level having covering crores of people - LPG cylinders most now know about but the RBSK health cover schemes {managed by the States} are now covering over a third of the poor for major health expenditures. I see this daily in my work. A decade back the same family would be ruined to absolute poverty due to a health setback of one member. Most upper middle class Indians living in 'India' and not 'Bharat' have not even heard of this. Direct Transfer to Beneficiary etc add to the list.
Wise words, indeed.

After the 2019 general election, veteran journalist Mr. Shekhar Gupta had given a candid 'confessional' speech, which was widely shared on WhatsApp. He made the same points; English media, both producers and consumers of it, are out of touch with ground realities. He gave examples of Toilets, Electricity, and LPG distribution (Ujjwala yojana) and its impact. Understandably, these bread and butter developments finds very less traction amongst the elite media and its consumers. And then they are surprised over election results.
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Old 30th November 2020, 12:45   #832
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Re: Understanding Economics

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Originally Posted by SmartCat View Post
Even if there is something for underprivileged, it does not hit the headlines. It is boring news. It is not as sexy as "Rs.8,000 cr for shiny new aircraft - see interiors pics here". So you have to read between the lines:

Jan Dhan, cash transfers boost ATMs in Bharat
http://timesofindia.indiatimes.com/a...w/79482863.cms

Remember that politicians are extremely canny - cash transfers, income guarantee, employment guarantee etc are vote catchers. They will not let a good opportunity to win votes pass by.
Smartcat, you are one of the best numbers guy I have read, but I am trying to parse this information to find the good news here.

That article is all about the ATM transactions and shows an increase in percentage. What they call as "quantum leap" is 9.5% to 12% increase in Rural transactions.

From the graph,
2018 --- 3.58 Cr/43.7 Cr
2019 --- 4.11 Cr/43.3 Cr
2020 --- 4.63 Cr/38 Cr

Given that Urban India has options to bypass ATMs altogether, it is very logical that the total numbers will come down in a lockdown year. Rural India with no such options is still going thru ATM transactions. This quantum leap is basically about urban India not going to ATMs rather than anything happening in rural India, right?

So, isn't this the exact kind of article with really not much behind it, but just using numbers to push a vibe?

From the news that Fin Ministry has generated in the last 6 months, what I have deduced is there was an average increase of about Rs 1500(for this year roughly) passed to BPL families thru direct benefit. To add to this, about 10k crore or so has been added to MNREGA budget.
There has been enough news about this and I think the only reason it does not stay on is because this was woefully low.


Also, about the VIP plane -- agreed on the long term use etc. but does it have to be exactly in 2020 when the world is facing a once-in-a-century crisis ? India is a large economy; we can negotiate and postpone deals --- its not like Boeing has 50 other customers waiting.
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Old 30th November 2020, 13:04   #833
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Re: Understanding Economics

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Originally Posted by ashokrajagopal View Post
To add to this, about 10k crore or so has been added to MNREGA budget.
MNREGA budget was increased by 40,000cr, above the budgeted 61,000cr, in the first Covid stimulus package.

Source: Hindustan Times

Quote:
Originally Posted by ashokrajagopal View Post
Also, about the VIP plane -- agreed on the long term use etc. but does it have to be exactly in 2020 when the world is facing a once-in-a-century crisis ? India is a large economy; we can negotiate and postpone deals --- its not like Boeing has 50 other customers waiting.
Plane deliveries are part of long procurement process. Most of the payments would have already been made to Boeing much before. These are not exactly a Flipkart "cash-on-delivery" type transactions.

Source: Business Today


Quote:
Aircraft are part of Air India's 2006 order of 68 aircraft given to US-based aircraft maker Boeing;
Quote:
In the recent Budget speech by Finance Minister Nirmala Sitharaman, a total of Rs 810.23 crore was allocated for the purchase of two new aircraft for Special Extra Section Flight (SESF) operations. This provision is on top of an estimated Rs 4,741.85 crore allocated by the government over the past two years -- 2018/19 and 2019/20.
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Old 30th November 2020, 13:10   #834
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Re: Understanding Economics

Its ironical-my BIL who just got his Green card in the US, sometimes reflects whether that country has the right direction in future, to raise his family in, given the deeper than ever social divide, the sham of an election that has hopefully concluded, and a horrendous response at all levels to the pandemic. And then there are inanities like legalising recreational drugs in a number of states etc. And this author is losing hope in India?

Last edited by fhdowntheline : 30th November 2020 at 13:11.
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Old 30th November 2020, 13:11   #835
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Re: Understanding Economics

Quote:
Originally Posted by ashokrajagopal View Post
Given that Urban India has options to bypass ATMs altogether, it is very logical that the total numbers will come down in a lockdown year. Rural India with no such options is still going thru ATM transactions. This quantum leap is basically about urban India not going to ATMs rather than anything happening in rural India, right?
Since I live part-time in rural/small-town, I can bring some news here. Even in villages, 90% of the shops accept UPI payments. Even those who don't accept credit card, are fine with UPI payment. When I am in rural areas in Udupi district, I always ask for UPI option, and 90% of the times they agree for UPI payment. Since everyone has a bank account and a mobile these days, it has become a natural choice. Mostly older folks who are uncomfortable with smartphones still operate in cash mode. And also folks who earn in cash, prefer to pay in cash.
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Old 30th November 2020, 13:12   #836
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Re: Understanding Economics

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Originally Posted by ashokrajagopal View Post
What they call as "quantum leap" is 9.5% to 12% increase in Rural transactions.
This is actually quite impressive, when overall number of ATM transactions fell 12%

Quote:
Given that Urban India has options to bypass ATMs altogether, it is very logical that the total numbers will come down in a lockdown year. Rural India with no such options is still going thru ATM transactions.
I don't think fall in ATM transactions has anything to do with options available or bypassing of ATMs. Overall ATM transactions falling is a sign of overall velocity of money falling during the lockdown. Conversely, ATM transactions increasing in rural area is a sign of increased velocity of money in those areas. There are also other signs such as increased sales of FMCG companies like Hindustan Unilever/Britannia in rural areas.

HUL net rises 9% on rural sales
https://www.thehindu.com/business/In...le32903609.ece


Quote:
Also, about the VIP plane -- agreed on the long term use etc. but does it have to be exactly in 2020 when the world is facing a once-in-a-century crisis ? India is a large economy; we can negotiate and postpone deals --- its not like Boeing has 50 other customers waiting.
The process of replacing the old Boeing 747 started in 2012 apparently. Things move at glacial pace, and we eventually got the 777 planes in 2020.
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Old 30th November 2020, 13:16   #837
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Re: Understanding Economics

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Originally Posted by ashokrajagopal View Post
To add to this, about 10k crore or so has been added to MNREGA budget.
There has been enough news about this and I think the only reason it does not stay on is because this was woefully low.

Quote:
Originally Posted by DigitalOne View Post
MNREGA budget was increased by 40,000cr, above the budgeted 61,000cr, in the first Covid stimulus package.

Source: Hindustan Times
Sorry, I had a typo there --- I typed 100k for MNREGA and then changed the text, with numbers not changed. Thanks for correcting.
Rest of it regarding the news holds. ( 40k Cr/"20L Cr" stimulus).

Quote:
Plane deliveries are part of long procurement process. Most of the payments would have already been made to Boeing much before. These are not exactly a Flipkart "cash-on-delivery" type transactions.

Source: Business Today
Which is exactly why there should have been decision about deferring payment for about 2-3 years and including that sum into government's spending kit for the next two years.
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Old 30th November 2020, 13:18   #838
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Re: Understanding Economics

Let's pray for a more competent cabinet. I was talking to a scientist and she said that 200 cr is now the limit for international procurement. Good luck getting the spares for those microscopes.

India is now ruled by a technically illiterate IAS most of whom graduated with history, pali, sanskrit like subjects. It is a shame that such an important economy is being led by folks without the competence to lead a 5 lakh private sector deal, but get a free hand for 500 cr public sector one. Then we say psus are bad. Never blame the IAS leaders, always say PSU people don't work.

I was shocked by the recent vaccine cold storage contract being given to a Luxemborg company which is PE owned, has just 200 employees and 0 presence in Asia. Guess what, they got a contract to build plants in where else but Gujarat. Companies like Linde, Voltas which are experts at cold storage were not even contacted it seems. Oh well, new India.

Instead of following South Korea or Vietnam we are happy being compared to Pakistan. The establishment knows this hence they stop importing basic electronics, R and D components while dreaming of a 5 trillion economy without allowing anything more than screwdriver factories.

Sadly, majority in the north Indian states are happy. God bless India. And god help it.

Last edited by Cessna182 : 30th November 2020 at 13:21.
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Old 30th November 2020, 13:59   #839
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Re: Understanding Economics

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Originally Posted by ashokrajagopal View Post
Which is exactly why there should have been decision about deferring payment for about 2-3 years and including that sum into government's spending kit for the next two years.
Please read the article linked earlier. The budget provisioned (not paid) amount for this year is 816cr for the two planes.

Quote:
The government has allocated Rs 5,552.08 crore for these aircraft so far, which essentially means it will have to earmark over Rs 2,900 crore more in the years to come
Also, what makes you think the government is not renegotiating the payment terms? Do you expect them to do it on Twitter as one president is prone to do ??
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Old 30th November 2020, 14:09   #840
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Re: Understanding Economics

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Originally Posted by DigitalOne View Post
Please read the article linked earlier. The budget provisioned (not paid) amount for this year is 816cr for the two planes.

Also, what makes you think the government is not renegotiating the payment terms? Do you expect them to do it on Twitter as one president is prone to do ??
Its very simple. If it managed to defer, the news should already be published given the amount of Social media campaigning government does.
I expect the govt to publish it if it managed to defer about 2k cr payment for the next 2-3 years.
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