The Big Bollywood India Thread?

[zugzwang]

India getting a bailout from the World Bank?

http://www.straitstimes.com/breaking-news/money/story/india-cabinet-consider-55bn-loan-world-bank-arm-20130911

NEW DELHI (REUTERS) - India's cabinet will on Thursday consider a finance ministry proposal to borrow an additional US$4.3 billion (S$5.5 billion) from an arm of the World Bank, according to a cabinet agenda document. Under the proposal India would borrow the money from the International Bank of Reconstruction and Development (IBRD), a World Bank subsidiary, according to the note seen by Reuters on Wednesday, which did not give more details.

It was not immediately clear how quickly the money would reach India if approved, or the terms of such loans.

A World Bank spokeswoman said she could not immediately comment. The IBRD usually gives such loans for development and infrastructure programmes, which are often disbursed in tranches over a long period.

[interestrateripoff]

http://uk.reuters.com/article/2013/09/12/uk-india-rbi-rajan-idUKBRE98B0AX20130912

India's slowing economy and its massive current account and fiscal deficits are not structural problems and can be fixed with modest reforms, newly appointed central bank Governor Raghuram Rajan said on Wednesday.

Rajan's commentary on the Project Syndicate website was dated Sept 11, although it was written before he took office on Sept 4, according to the site.

Rajan acknowledged in the column that the economy will expand at a pace that will be its slowest in a decade, with annual growth this year likely to be between 5 and 5.5 percent.

Not structural and easily fixed... Great news all round.

[interestrateripoff]

India bank raises interest rates to curb inflation

India's new central bank governor has raised key interest rates by a quarter of a percentage point in an attempt to reduce inflation.

The repo rate - the rate at which the central bank lends to commercial banks - was raised from 7.25% to 7.50%.

The cash reserve ratio - the percentage of banks' deposits they must keep in cash - has been kept unchanged.

Earlier this week, the rate of inflation hit an annual rate of 6.1%, which was a six-month high.

"Bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately," Reserve Bank of India (RBI) president Raghuram Rajan said.

More hot money to start flowing in seeking a return which will increase inflation further?

[TheCountOfNowhere]

India bank raises interest rates to curb inflation

More hot money to start flowing in seeking a return which will increase inflation further?

I think I posted on another thread, I have a friend in India who tells me life is becoming unbearable due to the dollar exchange rate/inflation. He's a well paid middle class professional too so imagine what the situation for the poor is!!!

Something that is a bigger potential problem in India is their water supply. You can live for a month without food, but 3 days without water and that's it.

http://www.nbr.org/research/activity.aspx?id=356#.Ujv5oYakrTg

[zugzwang]

India bank raises interest rates to curb inflation

More hot money to start flowing in seeking a return which will increase inflation further?

Looks like it!

http://www.theguardian.com/business/2013/sep/20/markets-await-german-elections-india-surprises-with-interest-rate-hike-live

A rate hike usually pushes currencies up. However, the rupee promptly dived as the news hit the wires, as traders realised that the RBI was also cutting some of the exceptional measures introduced to support its currency. The rupee fell from 61.7 to the dollar to as low as 62.55. Stocks also fell on the Indian stock market -- with the Sensex sliding over 2.1% so far today.

* - for the record, the RBI trimmed its marginal standing facility rate by 75 basis points from 10.25 to 9.5 per cent, and cut the minimum proportion of the cash reserve ratio that banks must maintain at the RBI from 99 per cent to 95 per cent.

[interestrateripoff]

Something that is a bigger potential problem in India is their water supply. You can live for a month without food, but 3 days without water and that's it.

http://www.nbr.org/research/activity.aspx?id=356#.Ujv5oYakrTg

And the population is still growing. Something is going to have to give.

[interestrateripoff]

http://www.bloomberg.com/news/2013-10-03/goldman-to-nomura-warn-on-debt-to-reserves-ratio-india-credit.html

Reserve Bank of India data showed the highest ratio of short-term external debt to currency reserves in more than a decade, raising alarm bells at Goldman Sachs Group Inc. and Nomura Holdings Inc.

The $97 billion maturing in less than a year amounted to 34.3 percent of reserves as of June 30, the highest since at least March 2001, RBI figures released Sept. 30 show. The ratio was 146.5 percent during a balance-of-payments crisis in March 1991, according to the report’s partial data for the 1990s. Including longer-term debt, repayments due by June 2014 total $170 billion, or 60 percent of reserves. Indonesia’s comparable ratio is 55.8 percent.

Asia’s third-largest economy faces significant risk as banks and companies seek to refinance global borrowings, even as the government acts to trim the current-account deficit, Goldman wrote in a Sept. 30 research note. Nomura said the slowest economic growth in a decade and a budget deadlock in the U.S. will damp inflows, further straining India’s finances.

Getting closer to a crisis or nothing to really worry about unless the US really does go into deadlock?

[fluffy666]

Indians aren't just going to hand over their gold to their government the way Americans did. Attempting to confiscate it would lead to civil war.

They like gold precisely because they don't trust their government.

Indeed.

But the problem is that gold is not a productive asset. And if a country routinely puts all it's economic surplus into buying gold then it is very unlikely to develop much...

[zugzwang]

Indeed.

But the problem is that gold is not a productive asset. And if a country routinely puts all it's economic surplus into buying gold then it is very unlikely to develop much...

Productive assets? It's dollars they need. Just like the Indonesians, the Turks, the South Africans... The shadow banking system hit Peak Debt in 2008 and has been contracting ever since and now the world's central banks are scrambling around for reserves as the dollar tide goes out. Bernanke's done everything he can to keep liquidity in the system, by his own account he's erred on the side of recklessness, but QE is hurting the US economy and can't continue indefinitely. The law of diminishing returns. He has to scale back.

Thus, the almighty dollar looks set to climb for years, reversing the trend of the last three decades, driving up US treasury yields and the cost of debt for everyone, everywhere. Global depression straight ahead. Don't be a debtor!

[fluffy666]

Productive assets? It's dollars they need. Just like the Indonesians, the Turks, the South Africans... The shadow banking system hit Peak Debt in 2008 and has been contracting ever since and now the world's central banks are scrambling around for reserves as the dollar tide goes out. Bernanke's done everything he can to keep liquidity in the system, by his own account he's erred on the side of recklessness, but QE is hurting the US economy and can't continue indefinitely. The law of diminishing returns. He has to scale back.

Thus, the almighty dollar looks set to climb for years, reversing the trend of the last three decades, driving up US treasury yields and the cost of debt for everyone, everywhere. Global depression straight ahead. Don't be a debtor!

I think there's too much sugar coating here..

[interestrateripoff]

http://www.bloomberg.com/news/2013-10-28/cancer-express-carries-sufferers-of-india-s-deadly-waters.html

Mahendra Singh parts the crowd massed on the dimly lit platform to pull his ailing mother-in-law on board the train locals call the Cancer Express.

The farmer from northern India jostles for space in the blue train before gently laying Charanjit Kaur down on the bare wooden bench. Cradling two small bags, the couple are bound on an overnight train for a hospital a state away in Rajasthan where she’s to be tested for suspected water poisoning.

“I thought we were done with this disease,” said Mahendra, 55, who lost his mother to breast cancer four years earlier. “But it never goes away. People say we’ve dirtied our water and that’s why we’re suffering.”

Mahendra and farmers across Punjab state helped India double farm yields in 50 years, making the country a food exporter from a chronically hungry one in the 1960s. The “Green Revolution” introduced them to chemical fertilizers and pesticides that seeped into increasingly scarce water sources and contaminated food and soil. People in the second-most populous nation are now paying for it with their lives.

With health issues costing India 2 percent of gross domestic product a year at a time the economy is growing at its slowest pace in a decade, Mahendra paid less than $2 in rupees for the 330-kilometer (205-mile) trip.

What an economic exchange you can have food to eat but at the cost of poisoning the water supply.

[interestrateripoff]

http://uk.reuters.com/article/2013/10/29/uk-india-economy-cbank-idUKBRE99S09D20131029

India's central bank raised interest rates for the second time in as many months on Tuesday, warning that inflation is likely to remain elevated despite sluggish growth, and rolled back an emergency measure put in place in July to support the rupee.

The Reserve Bank of India (RBI) lifted its policy repo rate by 25 basis points (bps) to 7.75 percent, in line with expectations in a Reuters poll.

"Overall WPI (wholesale price index) inflation is expected to remain higher than current levels through most of the remaining part of the year, warranting an appropriate policy response," RBI Governor Raghuram Rajan said in his review.

The Indian central bank is looking rather impotent.

“There’s little central banks around the world can do to prevent food prices from rising,”

Mexico’s central-bank governor, Guillermo Ortiz

[zugzwang]

http://uk.reuters.co...E99S09D20131029

The Indian central bank is looking rather impotent.

"There's little central banks around the world can do to prevent food prices from rising,"

Mexico's central-bank governor, Guillermo Ortiz

At least not while we still have these gigantic property debt overhangs to inflate away...

[Sancho Panza]

http://globaleconomicanalysis.blogspot.com/2013/10/food-inflation-in-india-hits-184-rbi.html

'Annual food inflation accelerated to 18.4 percent in September, its highest since mid-2010, pushed up by prices of vegetables including onions and stirring public discontent ahead of national elections which must be held by next May.'

Historically,periods of rampant food price inflation always end peacefully.

Edited October 29, 2013 by Sancho Panza

[interestrateripoff]

http://www.bbc.co.uk/news/business-24740842

The new governor of the Reserve Bank of India, Raghuram Rajan, told the BBC in his first international interview that India has enough foreign-exchange reserves to safeguard against a repeat of the 1991 balance of payments crisis.

Mr Rajan said that India has enough money to pay for all of its short-term debts tomorrow if it needed to, as it has reserves that are equal to 15% of GDP. This is a key difference from two decades ago when the country was rescued by the IMF.

He said that a country with $280bn (£175bn) in reserves can finance itself, and points out that India's external debt is about 22% of GDP. He said that very few countries with such low level of debt has had an external crisis. Mr Rajan was also adamant about anyone who suggests that India should seek IMF assistance should know that there will be "no IMF, it's not going to happen". And that India is a creditor to the IMF.

Famous last words? Will he be tested on this?

[Sancho Panza]

Indian stock market hits record high

'India's main stock index, the Sensex, has hit a record high, propelled by an increased inflow of foreign capital.'

Can you eat stocks?

[interestrateripoff]

Indian stock market hits record high

'India's main stock index, the Sensex, has hit a record high, propelled by an increased inflow of foreign capital.'

Can you eat stocks?

Share certificates made out of sugar paper?

[interestrateripoff]

http://uk.reuters.com/article/2013/11/06/uk-india-roads-idUKBRE9A50AO20131106

Flashing lights on the roof, tailgating politicians' motorcades, smashing up toll booths, and beating up toll collectors.

Welcome to India's network of privately run highways, where endemic toll dodging is a drag on the finances of road operators such as GVK Power and Infrastructure and Reliance Infrastructure, and a deterrent to private investment in a country where poor infrastructure shaves an estimated 2 percentage points from economic growth each year.

Ambulances, fire trucks and the cars of senior government officials are among those exempted from paying tolls, but other drivers often claim a free ride, said Isaac George, GVK's chief financial officer.

"If an MP (member of parliament) has to be exempted, it's not just his car that is exempted. The entire entourage which follows or goes in front seeks an exemption," he said. "The government has to do something because these are all revenue leakages."

..

The resistance to paying tolls is part of a wider pushback against India's attempt to charge for services such as electricity that have been heavily subsidised or free, and which are plagued by under-investment.

Drivers use threats, violence, protests and claims of powerful connections to demand toll exemptions. Road developers lose up to a tenth of their toll revenues because of dodgers, said Vishwas Udgirkar, an infrastructure specialist at consultancy Deloitte.

..

Last month, security camera footage showed 6 men, armed with rods, assaulting staff and stealing money from a toll booth outside New Delhi. Two years ago, a toll collector was shot dead during a payment dispute at a booth near Gurgaon, where cars are charged 27 rupees (44 cents).

It appear Indians don't like paying or won't pay to use poor quality roads.

What are the toll roads like anyone driven on one?

[zugzwang]

India's 10yr yield on the rise again.

Taper fear is back.

Edited December 11, 2013 by zugzwang

[interestrateripoff]

http://uk.reuters.com/article/2013/12/16/uk-india-economy-inflation-idUKBRE9BF0DZ20131216

Surging vegetable prices led India's wholesale price inflation to a 14-month high in November, reinforcing expectations the central bank will have to raise interest rates again this week at a time the country's economy is flagging.

Policymakers have been grappling with high prices for food staples such as onions and potatoes even after the Reserve Bank of India (RBI) raised interest rates by a quarter percentage point in each of its previous two reviews.

The struggle to beat inflation, despite good monsoon rains this year, shows how India is suffering from longstanding problems with infrastructure and supply chains. High food prices are also becoming a major headache for an embattled government facing elections by May next year.

That has saddled the central bank with the difficult task of having to raise interest rates in an economy growing at its slowest pace in a decade, which threatens to further undermine confidence among businesses and investors.

Radical idea inflation booming put up interest rates.... Isn't that just going to attract more hot money?

[interestrateripoff]

http://www.bloomberg.com/news/2013-12-24/india-opponents-seeking-9-growth-cite-thatcher-in-vote-push-1-.html

India Opponents Seeking 9% Growth Cite Thatcher in Vote Push

For India’s main opposition party, the mood in the world’s second-most populous country is similar to that in 1979 Britain, when Margaret Thatcher came to power on a message of strong leadership and effective governance.

“Mrs. Thatcher won on the slogan of ‘Labour can’t govern - - elect a government that rules,” Arun Jaitley, a leading member of the Bharatiya Janata Party, said yesterday in an interview with Bloomberg TV India in his New Delhi home. “That’s the sentiment that exists in India. The whole country is disillusioned.”

The BJP is touting its management of state governments it leads to end Prime Minister Manmohan Singh’s 10-year rule in elections due by May and return Asia’s third-biggest economy to annual growth rates of nine percent. Opinion polls show it winning the most seats among 543 up for grabs while falling short of a majority.

Boom time.

[interestrateripoff]

http://www.bloomberg.com/news/2014-01-12/fed-fueled-inflation-may-cost-india-s-congress-ex-minister-says.html

Indian Prime Minister Manmohan Singh’s ruling party would lose a national election if it were held today because of voter anger over the highest inflation in Asia, a former member of his cabinet said.

Singh’s government should’ve done more to insulate Asia’s third-biggest economy from unprecedented stimulus engineered by Federal Reserve Chairman Ben S. Bernanke, according to Mani Shankar Aiyar, a former petroleum minister who served in the cabinet from 2004 to 2009. He said U.S. monetary easing helped fuel India’s price rises, which exceeded 11 percent in November.

“On inflation I have no defense to offer -- none,” Aiyar, a lawmaker and senior party member, said in a Jan. 9 interview at his New Delhi home. “If there were an election today, we would do very badly.”

When everything is priced in dollars there's not much you can do apart from stop pricing everything in dollars.

[interestrateripoff]

http://www.bbc.co.uk/news/business-25923743

India's central bank has unexpectedly raised interest rates in an attempt to rein in stubbornly high consumer prices in a crucial election year.

The Reserve Bank of India (RBI) raised the benchmark repo rate - the amount at which it charges to lend to commercial banks - to 8% from 7.75%.

Economists had expected no change after its meeting in Mumbai on Tuesday.

The RBI said that another near-term hike was unlikely if inflation eased to a more comfortable level.

More hot money to flow in?

[interestrateripoff]

Britain offers one billion pound credit line for Indian infrastructure projects

The govt running £100bn + deficit and we are giving India a £1bn credit line.

[interestrateripoff]

Reagan-Era Weapons Hinder India Army as Modi to Stem Decay

Working off 1980s blueprints, India’s biggest state-run weapons maker last year went to the deserts of Rajasthan to test a locally produced piece of artillery. When it fired, the barrel cracked.