Msn1270 the GDP figures look good compared to many other countries as they are not inflation adjusted, and as Tvsh rightly pointed out, the stage of development maturity of the west doesnot allow a very high rate. Ofcourse that doesnt mean that everything is hunky dory in Europe; it is not. For a real feel of the economy, we need to look at the inflation adjusted growth rate and compare it to other developing countries. India is doing quite badly currently compared to other developing countries including China. As it is, our state of infrastructure is 20 years behind China's state of development. Add to that the our high rate of corruption at all levels which means that only 50% or less of the planned expenditure actually reaches the ground level. The picture is not pretty friends and we need to vote the right people to represent us in the state and country level who will work for the country's development and not rob us of our (tax payer's money).
Finally, to harishmk's starting comments, yes in India passenger car sales are down 26% and commercial vehicle sales are down 35%. The vehicle industry is going through its worst year in a decade. Sorry, msn1270 I would love to see our country do well but can't pretend everything is fine when they are not. Hopefully, with all our efforts, we will get over it and soon.
What are the indicators of economy slowdown in India?
Re: What are the indicators of economy slowdown in India?
All the art of living lies in a fine mingling of letting go and holding on....
Re: What are the indicators of economy slowdown in India?
There cannot be any better example of economic slowdown, than this.
Eight core sectors log negative 2.6% growth in February
http://www.hindustantimes.com/business-news/WorldEconomy/Eight-core-sectors-log-negative-2-6-growth-in-February/Article1-1035475.aspx
Eight core sectors log negative 2.6% growth in February
http://www.hindustantimes.com/business-news/WorldEconomy/Eight-core-sectors-log-negative-2-6-growth-in-February/Article1-1035475.aspx
Re: What are the indicators of economy slowdown in India?
Parkom,parkom wrote:Msn1270 the GDP figures look good compared to many other countries as they are not inflation adjusted,.
The GDP growth figures present are real GDP growth figures adjusted for inflation. The nominal GdP figures are higher.
http://www.rediff.com/business/slide-sh ... 110307.htm
"According to recently released data, India's nominal GDP is expected to grow at 14 per cent in 2011-12, to reach Rs 90 lakh crore (Rs 90 trillion). At a dollar exchange rate of Rs 45, this works out to $2 trillion.
However, if inflation is assumed to be 7 per cent and the real growth rate is 9 per cent as projected, the growth rate of 14 per cent may actually understate nominal growth rate by 2 percentage points, which means India's nominal GDP in dollar terms will actually exceed $2 trillion this fiscal!"
Re: What are the indicators of economy slowdown in India?
Dear Parkom
I never said, everything looks perfect in india. I've already clarified system is not working in right direction in India.
Policy makers are not functioning for the people or the country, rather they are giving excuses of for political compulsion,
Which needs a 180 degree change. I just mean there is nothing like economic slowdown as of now. This speculation is there since last one year.
w.r.to car sales, last year all the car manufacturers made the big gimmick during December 2011and march 2012, that they are going to make a steep hike in the prices of their vehicles and people danced to their tune. This time also they composed the similar tune, but this time people ignored. In the whole of 2012, diesel vehicles accounted more than 60% in the total sales figure. petrol vehicles were very dull. In the last 4-6 months, both the price of petrol/diesel prices are hiked very steeply and is not that affordable anymore. So the affordability factor makes the difference for individuals. People have deferred their spending's.
The popular belief in India is the slowdown means everything crashes in a short period (stock market, Real Estate, Bullion....etc) & people will loose their savings, investments....etc. When stock market can come up from 8000 points(2008-09) to 19000 - 20000 points in 3 years, don't we consider this as a steady progress in the market. some level of consolidation or moderation is expected at intervals in all domains. We should not immediately consider it as the economic slowdown.
I never said, everything looks perfect in india. I've already clarified system is not working in right direction in India.
Policy makers are not functioning for the people or the country, rather they are giving excuses of for political compulsion,
Which needs a 180 degree change. I just mean there is nothing like economic slowdown as of now. This speculation is there since last one year.
w.r.to car sales, last year all the car manufacturers made the big gimmick during December 2011and march 2012, that they are going to make a steep hike in the prices of their vehicles and people danced to their tune. This time also they composed the similar tune, but this time people ignored. In the whole of 2012, diesel vehicles accounted more than 60% in the total sales figure. petrol vehicles were very dull. In the last 4-6 months, both the price of petrol/diesel prices are hiked very steeply and is not that affordable anymore. So the affordability factor makes the difference for individuals. People have deferred their spending's.
The popular belief in India is the slowdown means everything crashes in a short period (stock market, Real Estate, Bullion....etc) & people will loose their savings, investments....etc. When stock market can come up from 8000 points(2008-09) to 19000 - 20000 points in 3 years, don't we consider this as a steady progress in the market. some level of consolidation or moderation is expected at intervals in all domains. We should not immediately consider it as the economic slowdown.
Re: What are the indicators of economy slowdown in India?
Interesting discussion but my opinion on real estate market is quite simple. As long as there is an influx of people into Bangalore, the real estate prices will keep going up. This influx will accelerate during economic boom and typically slows down a little during a downturn, but hasn't turned negative yet(more people moving out than moving in). Thus even during the last slowdown, the population of Bangalore went up steadily.
Re: What are the indicators of economy slowdown in India?
msn1270, unfortunately, in our country, stockmarket is very sentimental and largely moves upward/ downward due to FII investment/ divestment. You would have seen that the markets rose rapidly from the 2009 levels though the fundamentals didnot improve, and is now seeing 6 monthly lows now. Hence, it would not be correct to equate the state of the economy with the sensex.
It is a given fact that prices of fossil fuels are not going to go down, and hence people donot put off decision of buying a car just because fuel prices are going up, they decide not to buy a new car or replace an existing one when they realize that their jobs and sustained earnings are under some short term threat due to the state of the economy and they would buy again when the economy looks up.
As a country, we are victims of the government's lack of direction and policy paralysis. We see some changes happening, but largely cosmetic, with the 2014 elections in view. Changes like the interest rates coming down by a few basis points, now what stimulus did they provide to the industry? The economic slowdown is real and will take sometime and real efforts to pass over.
It is a given fact that prices of fossil fuels are not going to go down, and hence people donot put off decision of buying a car just because fuel prices are going up, they decide not to buy a new car or replace an existing one when they realize that their jobs and sustained earnings are under some short term threat due to the state of the economy and they would buy again when the economy looks up.
As a country, we are victims of the government's lack of direction and policy paralysis. We see some changes happening, but largely cosmetic, with the 2014 elections in view. Changes like the interest rates coming down by a few basis points, now what stimulus did they provide to the industry? The economic slowdown is real and will take sometime and real efforts to pass over.
All the art of living lies in a fine mingling of letting go and holding on....
Re: What are the indicators of economy slowdown in India?
Gents
For Your Information.
"Car sales fall 7 percent in FY13, first drop in a decade".
"The industry, like the rest of the economy, has slowed down very substantially,"
http://in.reuters.com/article/2013/04/10/india-autos-sales-tata-motors-maruti-for-idINDEE9380FI20130410
For Your Information.
"Car sales fall 7 percent in FY13, first drop in a decade".
"The industry, like the rest of the economy, has slowed down very substantially,"
http://in.reuters.com/article/2013/04/10/india-autos-sales-tata-motors-maruti-for-idINDEE9380FI20130410
Re: What are the indicators of economy slowdown in India?
5th April Revenue Secretary said, Central Govt Finance Ministry has exceeded the Target of 10.3 lakh crores (Direct + Indirect tax collection) set for the fiscal 2012-13. Exact numbers will be revealed by third week of this month(After 20th April). Hence things are not worst as being speculated. If at all any speculated slowdown is there, it has to reflect in the 2013-14 financial year only. As I said earlier Due to election expenditure, the money rotation will be there in the market and
we can't get the real effect.
on the other side, Automobile companies are similar to Real Estate Developers. When dollar -rupee rate is at Rs. 57 also they hike prices, when rupee comes down to Rs. 53 also, they make another hike saying input cost is high. They blame everyone else for their bad performance, like blame the Central Government for High excise Duty & Sales tax, Banks for high Interest Rates, Petrol Companies for keeping fuel Rates High, Insurance companies for making insurance premiums high, rupee depreciation, spend more money on the media advertisement rather than reducing their car prices.
They feel, rest all people(Central+State Govt, Banks/Oil Companies/Insurance Companies...etc) need to make charity to the country and only automobile companies need to reap the profit. ??
we can't get the real effect.
on the other side, Automobile companies are similar to Real Estate Developers. When dollar -rupee rate is at Rs. 57 also they hike prices, when rupee comes down to Rs. 53 also, they make another hike saying input cost is high. They blame everyone else for their bad performance, like blame the Central Government for High excise Duty & Sales tax, Banks for high Interest Rates, Petrol Companies for keeping fuel Rates High, Insurance companies for making insurance premiums high, rupee depreciation, spend more money on the media advertisement rather than reducing their car prices.
They feel, rest all people(Central+State Govt, Banks/Oil Companies/Insurance Companies...etc) need to make charity to the country and only automobile companies need to reap the profit. ??
Re: What are the indicators of economy slowdown in India?
msn1270, Tax collection is a lagging indicator, while auto sales, etc. present the current situation. More over, Tax collection is also a function of compliance, when the tax officers are stirict, and go after offenders, they tend to collect more. You will see a dip in tax collection next year due to economic downtrend. Elections are only for a few states, the national election is next year.msn1270 wrote:5th April Revenue Secretary said, Central Govt Finance Ministry has exceeded the Target of 10.3 lakh crores (Direct + Indirect tax collection) set for the fiscal 2012-13. Exact numbers will be revealed by third week of this month(After 20th April). Hence things are not worst as being speculated. If at all any speculated slowdown is there, it has to reflect in the 2013-14 financial year only. As I said earlier Due to election expenditure, the money rotation will be there in the market and
we can't get the real effect.
on the other side, Automobile companies are similar to Real Estate Developers. When dollar -rupee rate is at Rs. 57 also they hike prices, when rupee comes down to Rs. 53 also, they make another hike saying input cost is high. They blame everyone else for their bad performance, like blame the Central Government for High excise Duty & Sales tax, Banks for high Interest Rates, Petrol Companies for keeping fuel Rates High, Insurance companies for making insurance premiums high, rupee depreciation, spend more money on the media advertisement rather than reducing their car prices.
They feel, rest all people(Central+State Govt, Banks/Oil Companies/Insurance Companies...etc) need to make charity to the country and only automobile companies need to reap the profit. ??
Re: What are the indicators of economy slowdown in India?
tvsh
Central tax collection is one of the official indicator of the economic status othe country. When the expenditure/money rotation by Government and Individuals is high, tax collection will also be high & vice versa. After 2008-09 year, tax collection is steadily increasing year on year till date. We can't ignore it casually.
Do not underestimate the election expenditures. 10 States are undergoing elections this year mainly Karnataka, Rajasthan, Delhi, Madhyapradesh, chattisgharh apart from other smaller states. The above mentioned states are key cash rich states of Politicians. When a Candidate who contested for the BBMP Counciller positions spend 3-4 crores unofficially for getting 300-500 votes in a ward to win the election, can we imagine the amount candidates spend for MLA seat ??. More over for the big political parties, this is like a Quarter/Semi final for next year parliamentary elections to strengthen their position.
For the Karnataka Elections itself, estimated spendings from the candidates is estimated around several 1000 crores. Real estate developers are key funding people to all the politicians. Imagine the amount they spend on the liquor, apparels, Gift items, fuel, food items, hiring vehicles, hotel accommodation, print materials, cash for vote....etc. In all these cases, Government will earn taxes directly or indirectly. So money will rotate for some more time freely, which will push the economic slowdown even though there is reduction is the IIP Data.
Central tax collection is one of the official indicator of the economic status othe country. When the expenditure/money rotation by Government and Individuals is high, tax collection will also be high & vice versa. After 2008-09 year, tax collection is steadily increasing year on year till date. We can't ignore it casually.
Do not underestimate the election expenditures. 10 States are undergoing elections this year mainly Karnataka, Rajasthan, Delhi, Madhyapradesh, chattisgharh apart from other smaller states. The above mentioned states are key cash rich states of Politicians. When a Candidate who contested for the BBMP Counciller positions spend 3-4 crores unofficially for getting 300-500 votes in a ward to win the election, can we imagine the amount candidates spend for MLA seat ??. More over for the big political parties, this is like a Quarter/Semi final for next year parliamentary elections to strengthen their position.
For the Karnataka Elections itself, estimated spendings from the candidates is estimated around several 1000 crores. Real estate developers are key funding people to all the politicians. Imagine the amount they spend on the liquor, apparels, Gift items, fuel, food items, hiring vehicles, hotel accommodation, print materials, cash for vote....etc. In all these cases, Government will earn taxes directly or indirectly. So money will rotate for some more time freely, which will push the economic slowdown even though there is reduction is the IIP Data.