The jokers at the planning commission install 35L toilets while projecting a 50 cents a day as survival metric for Indian. Scum of the earth can be better then these guys
Minister of State for Planning Ashwani Kumar defended India on Thursday, saying its expected growth rates and projects to boost internal trade and development do not warrant a junk status credit rating.
On Monday, Standard & Poor's warned that India could become the first so-called BRIC economy to lose its investment-grade credit rating citing slowing economic growth and policy inaction for instituting economic reforms.
The rating agency cut India's BBB-minus rating outlook to negative in April, meaning it expects to make a decision within a 6-24 month time frame.
The news knocked the rupee and stocks lower.
"People are entitled to ask what are you going to do about delayed decisions, what are you going to do about second generation reforms," said Kumar.
"But
I am appalled by the suggestion of S&P that India is compared with junk status," Kumar told Reuters.
India reported its worst economic growth rate in nine years for the first quarter of 2012, marking a dramatic slide in world's second fastest growing economy.
Gross domestic product growth slowed to 5.3 percent, from 9.2 percent in the same period a year ago.
"I recognize that our last-quarter GDP growth figures at 5.3 percent have not given us any comfort," Kumar said during a visit to the United States.
He reiterated a government growth forecast of 7 percent in 2012, and said that despite the difficulties of the global economic situation, India expected an average annual growth rate of 8.5 percent between 2012 and 2017.
53 comments:
Why bother about S&P or Moody's; these are the same who rated subprime mortgages as prime and caused havoc. In any case; India is different - bubble theory holds no water. Just imagine 35 Laks on toilet..........Indians are super rich...NRIs are poor :-) ....
how can indians be rich when 50cents a day is what the rich survive on. surely these must be slumdog millionaires
Related news
http://economictimes.indiatimes.com/markets/bonds/bond-yeilds-swaps-rise-duvvuri-subbarao-adds-to-caution/articleshow/14143593.cms
The bond yields and swap rates rose on Friday after the central bank governor said inflation cannot be controlled without sacrificing growth in the near-term, raising some caution ahead of the RBI policy decision next week.
Subbarao must be applauded for making this statement, controlling inflation is the primary responsibility of RBI, not ensuring fake growth.
Typically, you have artificial growth, due to increase in money supply. At a particular point,growth cannot be sustained by money supply and starts dipping downwards. Attempts to boost growth by inflating money supply results in inflation and growth remains tepid. At this point we hit unemployment, inflation and low growth a situation called stagflation. After this stage, rates cannot be raised and typically beyond a certain point, interest rates may have to be raised drastically. Interest rates have risen as high as 25% in some situations...be prepared for massive deflation in the near future. RE will deflate in a massive manner..so will other goods and bads will decline to zero.
http://india.blogs.nytimes.com/2012/06/13/what-happens-if-india-is-downgraded-to-junk/
There you go...
Strict adherence to the topic of the post.
Growth is going bust:
http://www.firstpost.com/business/even-diesel-cars-arent-selling-over-100000-cars-unsold-345298.html?utm_source=MC_TOP_WIDGE
thanks to Dhiman for not spamming his theories
I'm checking India's Report Card and would post shortly on my findings. Does India really need a Planning Commission? The PC spends more than 100 crores in just salaries and foreign trips.
Dhiman
thanks to Dhiman for not spamming his theories
I'm happy to know that I've made such a deep impression on your mind.
What do bond yields, S&P or diesel cars have with real estate?
Vik, aam aadmi, Getafix, Pawan, stay on topic, peasants!
Or else, His Royal Anonymous Eminence will shut this blog down!
@Monty
Excellent observations. I can't predict the real estate situation due to the involvement of massive black money factor. However, the interest rates may hover around 18-22% dealing a massive blow to banks and EMI paying employees. This situation is around the corner.
UPA is not certain that it can form next govt. However, they are painting rosy pictures as a vote catching gimmick. Either way, they aren't worried much as most have made enough money to last few generations
I will stay to the topic but it's going to make this a very boring place...also I am afraid that constricting oneself like this means one cannot go into the roots of the problem, even if sometimes the discussion veers off into the abyss.
It's like discussing the size and nature of warts on a small pox patient and forcing oneself not to talk about the disease.
Well in any case I guess everyone has found blogs for their own where bigger things are discussed, so this is like a side show for them.
pl go thro ' this http://economictimes.indiatimes.com/markets/real-estate/realty-trends/home-sales-more-than-halve-in-ncr-mumbai-study/articleshow/14150859.cmsp
If the above report is indeed true, expect prices to follow. The laws of economics apply here too. We are not different.
Gravity is a bitch when it comes to prices. Eventually prices/credit/sentiment run out of steam and fall back to normalcy.
Stay liquid. If you have waited this far to buy a house, a year more will not hurt.
I will stay to the topic but it's going to make this a very boring place...also I am afraid that constricting oneself like this means one cannot go into the roots of the problem, even if sometimes the discussion veers off into the abyss.
Come now, aam aadmi - I was just being sarcastic - don't take that off-topic thing seriously. I certainly am not.
I'm just trying to chide anonymous commenters on the absurdity of their demand.
>> inflation cannot be controlled without sacrificing growth in the near-term
that's like administering steroids to a patient who is fighting infections and cancers. it seems to help short-term but it is in fact preventing the immune systems from doing their job. inflation is like infection and rate cut is the steroid. these rate cuts and corresponding short-term growth are just steroidal effects.
here you go
http://www.rediff.com/business/report/sbi-cuts-lending-rates/20120615.htm
govt says all is well.back to this time it is different and india is fundamentally strong statements.
-skg
Stay liquid. If you have waited this far to buy a house, a year more will not hurt.
A year? The bubble took a decade to inflate. Give it at least 5 years to deflate completely.
The economic times article mentions:
If this trend continues, there could be 'stage 1' price correction in the range of 5 per cent to 20 per cent.
The author has himself emphasized `stage 1`. There will be stage 2, 3, 4 and 5 correction too once the cat is left loose amongst the pigeons.
alright we have had enough negativity.
http://kaipullai.com/2012/02/24/dr-elattuvalapil-sreedharan-the-bharat-ratna-no-one-talks-about/
this made good reading. i suggest also reading the post about mallya's hand in the air india debacle
http://kaipullai.com/2011/11/28/the-curious-case-of-vijay-mallya-and-his-bailout-and-one-more-scam/
Pavan,
You are correct.
US has had only one round of corrections after 5 years. There shall be more once the interest rates start going up.
India is yet to have its first round. You guys have a long way to go.
India is drowning in its own excreta’
http://www.thehindu.com/health/policy-and-issues/article3524150.ece?homepage=true
just imagine the demand for toilets and therefore houses i.e. RE. India is destination for RE demand, there are not enough houses and infrastructure to support necessities. Why do you think RE in India will go down ?
Govt explores way to cut home prices
http://timesofindia.indiatimes.com/india/Govt-explores-ways-to-cut-home-prices/articleshow/14160219.cms
how can indians be rich when 50cents a day is what the rich survive on. surely these must be slumdog millionaires
Yes we're all millionaires. But we like to report our income as only 50 cents. We like our skin to be fair and our money to be black...
Bharath Maa Ki ...
@Banker..
History says when RE prices balloon due to excess money supply and sometimes stays high for a protracted period of time, there is a surfeit of theories which arise to explain the phenomenon. After the bubble is pricked, these same theories disappear. Black money has been around for a long time in India..I don't think Black money is responsible for the bubble or for sustaining it. As Keynes said (para phrased) - Markets can remain at stratospheric levels longer than one can remain solvent..
@Banker
UPA is not certain that it can form next govt. However, they are painting rosy pictures as a vote catching gimmick. Either way, they aren't worried much as most have made enough money to last few generations
True. The next govt. will be busy witch hunting and prosecuting the UPA politicians, leaving the bureaucracy continuing the corrupt practices. The scenario will not be much different than what is going on now. The motto of all politicians irrespective of the party they belong is to make as much money as possible during their tenure. The bureaucrats assist them fulfilling their goals
My point is, no matter who comes to power, the situation is going to be the same. Those with brain power prosper and those lacking it continue with the slavery and curse their fate. This is our culture
Those with brain power prosper and those lacking it continue with the slavery and curse their fate. This is our culture.
I wish this was remotely true.
In India, you are rich if you have political connections and you can game the system to your benefit. That is why the old timer industrial families are still the biggest business houses in India be it Tata or Birla or Ambanis.
They capture each and every opportunity that arises in any field. For example TCS, a tata company, is the biggest Indian IT company today. We need more Narayan Murthys - the first generation entrepreneur who make it on their own skill, guts and luck not the Tatas and Birlas.
People in general are bound to follow the herd, they will go where ever majority is going. This is what is happening in real estate, when you hear stories of your fellow human being of becoming overnight crorepatis by investing in real estate you are bound to get a major influx of money towards real estate.
What I have found on this blog is that majority of people blame RBI and GOI for inflating the real estate bubble, I will beg to differ as they are not powerful enough to create a bubble so large in size.
Lets be clear about one thing that prices are rising because people are putting their hard earned money in real estate. If people stop buying prices will fall there are no two ways about it.
Inflation is blamed for such high real estate prices. Food and commodity prices are rising but prices of finished manufactured goods has been falling or remained flat due to increased productivity eg. Price of Hyundai Accent when it was launched in year 1999 was 6.5 lakhs today the similarly specified model is selling for Rs 5 lakhs, similarly music cassette used to sell for around Rs.50 each now even CDs are available for rs 10 to 15. Why is the inflation not being reflected in manufactured goods. My belief is houses are also manufactured so why are their prices not falling.
In free market prices fall continuously as reducing prices is what markets are best at. As much as you might argue that real estate is regulated and controlled sector there is no doubt that more land has been opened up for construction in last decade then the first 55 years after our independence. So even with more land being opened up prices are rising instead of falling.
I want to ask you guys why is it so?
Thanks
with brain power prosper and those lacking it continue with the slavery and curse their fate. This is our culture
While it's true that those with brain power will usually be above average, Indian culture really rewards those who have absolutely no ethics or morals.
On one hand we have witnessed the rise of illiterate street thugs into politics and the highest echelons of wealth and power.
On the other hand we have corrupt to the core business houses (yes the very same businesses who are the toast of Dalal street) who aid and abett these politicians in exchange for favors and permits to get around our laws and exploit the countries resources.
And then everything in between, from your local fraudsters who prey on the elderly and uneducated to lifestyle and spiritual gurus who offer their "services" for a price...
Those with "brain power" are left to wonder why despite a decade of phenomenal growth there is no infrastructure or services for the common man.
Our priorities are so fu@ked that the country which has launched multiple missiles and rockets and is certainly not technologically/scientifically challenged can't even provide clean water to it's citizens.
Things that our ancestors, the Harappans, accomplished thousands of years ago, modern India finds it to be mission impossible!
Who says you can't get real estate for cheap? If you are an "important" government servant you can avail of numerous such benefits including almost free property.
http://en.wikipedia.org/wiki/Adarsh_Housing_Society_Scam
If you understand how the various bureaucracies involved in approving/providing housing work and calculate all the "stakeholders" who have to be "satisfied" before they approve a project you know why common man has to shell out 2x or 3x the basic cost.
This might increase taxes in Bengaluru
http://www.bangaloremirror.com/article/10/2012061720120617013148784e7fe6c6c/As-BBMP-drowns-in-debt-get-set-for-lacklustre-budget.html?pageno=1
Just wondering what will happen if nousing, IT, stock bubbles burst at the same time.
@Anon above, if the "educated" citizenry of an elite city like Bangalore cannot hold their local government officials accountable, what hope is there for the rest of India?
every action has equal and opposite reaction.
law of physics and law of karma.i dont know if any body agrees with me or not but it explains a lot of things to me.
-skg
NRIs from the middle east are being blamed for high property prices
http://www.mid-day.com/news/2012/jun/170612-NRIs-arent-letting-you-buy-a-home.htm
Once upon a time in mumbai :)
http://economictimes.indiatimes.com/markets/real-estate/realty-trends/mira-road-virar-segment-sanpada-khargar-belt-in-mumbai-provide-decent-housing-options/articleshow/14188467.cms?curpg=4
Ahmedabad real estate market is burdened with 30 billion rupees worth of unsold inventory
http://news.estatelister.com/report/ahmedabad-real-estate-market-is-burdened-with-30-billion-rupees-worth-of-unsold-inventory/1523
I want to ask you guys why is it so?
From my perspective it has mainly got to do with speculation fuelled by credit. No one invests on a car, it is pure end user demand where as most RE is either a investment or speculation. Once the speculation ends, the bubble bursts and you should see stable or declining prices wrt to inflation. From another perspective, speculation is helping to increase supply which should make housing even more affordable whenever the bubble bursts
http://outlookindia.com/article.aspx?281278
NRIs will rescue RE!
Kulbir, it is the fault of the RBI and the GOI to a large extent, because the person who controls the Interest Rates and the Money Supply controls the rates of everything.
The GOI and RBI under the current fiat money regime have a monopoly over money, whereby they are the only one's who can set the interest rates and the supply of rupees.
Secondly with policy decision the government and the RBI can easily create a bubble in any sector, like the tax rebates for real estate etc.
For example if the GOI and the RBI want to blow up a bubble in lets say toothbrushes, all they have to do is create a policy that rewards toothbrush manufactures immensely, give them tax breaks, customs duty breaks, cheap loans, be the buyer of last resort at exorbitant prices and thus a bubble is created for all to see.
Also you may have heard of the the plunge protection team in the US, which invests the governments money in the stock market when the markets are tanking buying up shares and holding the market, I have no doubts that India also has such a team. similarly in the recent dollar appreciation against the rupee the RBI was intervening in the forex market overtly.
Kulbir, lets take the example of cars, a government can and has infact created a bubble in cars, that government is Venezuela!
Here is the BBC link, where OLD CARS are EXPENSIVE than NEW cars!
"A year ago my car cost me 54,000 bolivars (around $25,115) and I can already sell it for over 65,000 ($30,230)," says a happy Hernando Camacho, who drives a Renault Clio.
And in Venezuela people invest in cars for appreciation against inflation here!
Many Venezuelans view buying a car as a more secure investment than keeping their savings in a bank, where they can be eaten away by an inflation rate that hit 30.9% in 2008.
here is the link http://news.bbc.co.uk/2/hi/americas/8028865.stm
So kulbir, thee is no limit to the absurdity that a government can cause in the markets with their policies and the central bank with their printing.
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