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The Indian Finance Minister Mukherjee presented his new budget and talked about the new administration's plans for investment and its priorities. The Rural Employment program which guarantees 100 days of work to each indigent family will get an increase in funding to $8.1 billion or 391 billion rupees for this fiscal year. THe goal was set for cutting in half the percentage of the people in India that are poor in five years, which the government measures by calories consumed. The Indian government estimates that 27.5% of Indians were poor in 2005 using this measure. To finance investment government spending will increase 36% and the deficit for the 2009-10 fiscal year will reach an estimated 6.8% of GDP, up from an estimated 6.2% in 2008. Abig part of this spending will be increases in infrastructure spending which will go up from 6% to 9% of GDP by 2014.

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Modi refers to an ecosystem that continuously shrinks the pool of capital from government revenues, revenues intended to fund development roads, bridges and other infrastructure illegally siphoned away, that stalled and suffocated rapid development in India for 75 years. Without foreign investment there can be no rapid development in India. Without strong and efficient institutions foreign investment has not come to India in the last 30 years in the way it has come to China. These institutions of good governance that prevent such siphoning away of revenues enable 100% of every dollar or rupee of taxes to go into development essential for funding infrastructure, climate infrastructure, logistics and the other inputs of capital, labor, energy and land to build manufacturing capabilities. An ever widening pool of the inputs of capital, labor and land year after year- a process that Japan, then South Korea, then China has accomplished is possible. I It is only now taking place in India. What Mohandas Gandhi, Nehru and Sardar Patel failed to grasp in the 30's, 40's and 50's is that it was possible to have an independent India and still remain a backward undeveloped nation for a staggering period of 75 years or almost half of the period the British ruled India. What Mao failed to grasp in China and which was corrected by other leaders to make China an advanced economy able to fulfill the aspirations of the Chinese people, is also the situation that prevailed in India. Post independence leaders in China and India both isolated their economies, both limited human potential, both let institutions fail in good governance.  It is only now moving India into the process of developing an advanced developed economy by 2040, able to fulfill the aspirations of a youthful population of 1.2 billion people. ...

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This report in DW.com looks at the problems behind the suspension of all operations at India's Jet Airways.  Jet Airways faced little competition in its early years in the early 1990's and was a success as a full service airline competing with state controlled Air India and Indian Airlines. By 2005 the emergence of low cost carriers operating on thin margins and using a cost efficient model of operation hit Jet Airways hard. It still operated as a full service airline failing to change its model to tackle a cost conscious growing Indian market. The $500 million used to acquire a weak budget airline Air Sahara was a costly move leading to a writeoff of the entire investment and a lost opportunity to adapt Jet Airways to the new cost efficient models roiling the airline industry in Asia.  It is difficult to operate in a environment where a depreciating rupee could add an additional burden from volatile oil prices for cost of fuel to operate. Airlines that operated on razor thin margins such as Indigo and SpiceJet used cost and efficiency parameters as key to flying passengers. Jet Airways failed to make this the priority, continuing to operate as a full service airline. The favorable oil price environment for a brief period in 2015 was not used by the airline to streamline costs.  Add to this the effect of Goods and Services Tax which increased costs by 18%, the effects of demonetisation in reducing passenger ability to buy with cash, and the 5% tax on jet fuel in 2018, creating a financial crisis at Jet Airways.  In the end banks decided not to extend further financing for the airline to operate and looked for a large buyer. ...

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Montek Singh Ahluwalia, head of India's Planning Commission, tells a weekend business conference of the government's intention to move towards making the rupee fully convertible and lifting all restrictions on foreign exchange transactions. India's prime minister, Manmohan Singh also said the government "was far more comfortable" making this move.This would make India vulnerable to sudden foreign exchange outflows. India has foreign exchange reserves of $144 billion and is in a position to make the move, especially as it brings the advantages of attracting more foreign investment to the country. Another advantage is the opportunity to make Bombay a financial hub in Asia, especially as the Indian economy develops and India's strengths in the financial industry and its human resources in that area make themselves felt.

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The Hindu's Piyush Pandey describes the fire sale of assets that is planned as the Reserve Bank of India pushes forward with the effort to clean up the balance sheets of Indian banks. Indian banks have an estimated 5 lakh crore of bad loans. Separately Crisil ratings agency cited the bad loans in the banking system as a hurdle that must be cleared for India to make the necessary investments in infrastructure in the next five year period 2018-2022. The Hindu's own review shows a startling amount of debt in the ten largest corporate business groups in India-  500,000 crore of debt to the banks. Anil Ambani's group alone owes 121,000 crores to the banks, with some of the businesses not able to service the debt. Canadian pension funds, Nippon Life Insurance and other foreign companies are taking stakes in business as this process takes place. The Mukesh Amani Group alone has increased the debt load as a result of the 150,000 crore rupees spent on Reliance Jio. Other investments that have led to losses is the steel business of Tata Group in Britain, which is down to zero value, says the Hindu. This report gives details of the fire sale for the other leading companies in India. ...

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Prime minister Modi's address in Hindi to the nation on May 12 on "Atman Nirbhar Bharat" (self reliant India) as India looks ahead to a situation beyond the coronavirus. What would the economy look like as India moves forward? He says the emphasis will be on planning for the need for land, labor, liquidity, and laws to develop the Indian economy. A bold package of economic action for an investment of 20 lakh crore rupees or $280 billion was announced with details to be provided later. The basic philosophy of the next move forward was what the prime minister concentrated his speech on. Modi says there are 5 pillars for the Atman Nirbhar Bharat, or Self Reliant India. The first action not to go for incremental change- go instead for a quantum leap, be bold. This applies to both technology and investment and creating an environment where results can be achieved. Second action to make the kind of infrastructure that would set a new standard in the world. Third a "sabhi ke sapno ke aadhar," taking everyone along, be technology driven. Third action celebrate and build on India's vibrant demography, once seen as a weakness this will be turned into a strength. Fifth action be Demand driven - "demand or supply chain puri samtha ke saman karne ki jaruat che." The demand and supply chain  should be taken good care of. That also means be local and local manufacturing. Be vocal for local is the new message said Modi, because this is what worked and is saving us in the pandemic. As external supply chains failed countries in Europe and North America, it is the local supply chain for medicine, health care equipment, and food supplies, local technology for citizen id and bank accounts for direct deposit, agricultural supplies, strong and large national postal and rail networks and millions of employees spanning the country in all directions, that have proved of amazing value in this crisis. "Is local ne bhi bachaya, ham sabki jinnadari hai," - the local saved us and is everyone's responsibility.   ...

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Because India is still largely rural with about 65% of the population in the countryside rural poverty is a matter of huge importance. In a country of a billion people this is easily about 600-650 million people the vast majority of the world's poor. Though low inflation in agricultural produce and in agricultural wages have increased concern for rural poverty in India there are changes in multiple dimensions that have raised the quality of living in a big way. There is a major thrust in government programs directed at multiple levels for clean India, housing healthcare, cooking gas, electricity, banking, in the rural villages. About 4 million homes are built annually with government assistance and investment in rural programs has more than doubled in the last 7 years.  The National Food Security programs NFGSA guarantees purchases of rice and wheat at very low prices -set at 2 rupees per kilogram of wheat and  3 rupees per kilogram of rice or about $0.03 per kilogram.  This reduces the pressure on migration to cities making cities less inhabitable and finding it hard to cope as in countries like Indonesia, Philippines and in Africa. It gives more time for urbanization to take place in a better way as more resources and infrastructure is created for urbanization. Some states in India are about 50% urbanized with Tamilnadu (Madras or Chennai),  and Kerala (Cochin, Thiruvanathapuram) in the south and Maharashtra (Bombay or Mumbai) and Gujarat (Ahmedbad) in the north west, are at about 50% urbanization rate. The low inflation rate for agricultural wages affecting farm incomes combined with contributions by rural people to complement government contributions for housing, healthcare,  reduces the mount of money available for consumer spending in rural areas, affecting the economy. A problem in the short run, but with synergistic changes across multiple dimensions pushing the country forward across urban and rural areas. With the huge urban infrastructure spending increases creating more space for economic growth across the country. There is a general sense that for development a multi dimensional approach is needed, and a rising tide lift all boats as India urbanizes like China has done in the last 20 years. ...

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India's roadmap for the first of 25 years to 2047 shows key goals of Inclusive Development and Empowered youth, women and all sections of society in growth. It builds on the work since 2014 of Leaving No One Behind.  Sab Ka Saath, Sab Ka Vikas, Sab Ka Viswas, Sab Ka Prayas remain the key ideas behind it. With All, For Everyones progress, Confidence of All, Efforts of All. To provide essential nutrition as the floor foodgrains were provided to 800 million for 28 months and extended to Jan. 1, 2024, investing $31 billion. Building also on having achieved the doubling of per capita income to 2 lakh rupees, about $2500 since 2014, ensuring better quality of living and life of dignity for all citizens.

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This report in The Mint gives information on the extensive preparation for 5G in India including auctioning of 5G spectrum for 51,236 Mhz that was allocated to telecom service providers for 150,000 crore rupees. Jio bid 88,000 crore for half of the spectrum with Airtel Bharti bidding with Vodafone for the rest. The cumulative economic impact on transformation of India is expected to be $450 billion for India by 2035, according to the Ministry of Communications. PM Modi will be shown three different case studies of use in education and other fields. PM's vision is for India to develop 5G parallel to global standards and take the lead in 6G technology. Jio video case will show how a teacher in a school in Mumbai reaches out to students in Maharashtra, Gujarat and Odisha. The Airtel video will show how a girl in Uttar Pradesh learns about the solar system using 5G augmented reality. The Vodafone case will show how safety of workers in an underground construction tunnel of Delhi Metro can be maintained through creating a digital twin of the tunnel on the dias. The digital twin would help give safety alerts to workers from a remote location. Other demos include smart ambulances, health diagnostics, precision drone based farming, smart agri-programme and others. ...

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India's Supreme Court ruled that Vodafone PLC does not owe $2.2 billion in taxes on the acquisition of a majority stake in Hutchison Essar Ltd. The Indian tax authorites were directed to return 25 billion rupees ($500 million) which Vodafone had deposited. With declining foreign investment in India and a lower growth rate of about 7%, this tax case had assumed larger significance. The Supreme Court decision emphasized that taxing Vodafone "would amount to imposing capital punishment for capital investment." Vodafone had difficulties in its Indian operations- a $3.4 billion impairment charge in May 2010 because of strong competition. Vodafone is estimated to have invested $26 billion in India since 2007, and in the fiscal year ending March 2011 showed only $115 million in profit on sales of $3.86 billion.

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A revolution is taking place in the lives of rural families in India. Under the Jal Jeevan Mission put forward by the prime minister clean drinking water from tap water will reach every family in India. It was launched on Aug 15, 2019 and plans to do this by 2024. The impact is huge. Out of 180 million rural families only 33 million families have clean drinking water from tap water in the country. Clean water brings life to the countryside and access through individual tap water connection brings a revolution to people's lives in a country of 1.2 billion people. This report in the Economic Times tells us what most of us do not know that with the growth in population from about 300 million after independence in 1947 to 1.2 billion today and the drought conditions in parts of the country, the per capita water availability has fallen sharply today. Dropping from 5000 cubic metres of water per capita in India in 1951 to 1545 cubic metres of water in 2011.  The infrastructure capital to be invested is 3.5 trillion rupees or $ 50 billion. $50 billion in cement, pipes, construction, pumps, equipment, wages, conservation, skill building, knowledge in water management to revive the rural economy. Hit hard by coronavirus it boosts the rural economy. The infrastructure project could be a model for other Asian, African and Latin American countries.  Cholera and other water borne diseases can never be eliminated without clean drinking water from tap water for all families in India. It means so much during this pandemic.  ...

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As the coronavirus surges in India with over 300,000 cases a day on April 26, a clear picture on the vaccination drive in the country is critical. The following is the picture of the vaccination progress from Union Health Ministry in India as shown in The Hindustan Times. India has vaccinated 140 million people with at least one dose says this report in The Hindustan Times.  On Saturday 24th April 2.4 million doses were given for that day at 8 pm. This was done over 99 days. This means about 12% of the population of 1.2 billion has been vaccinated.  This compares with the vaccination in Germany for about 21% of people vaccinated with over 18 million getting the first dose in Germany by around April 25. Both Germany and India have suffered from vaccine shortages, some skepticism about vaccinations. Gradually sentiment is shifting in both countries so that once skeptical Germany now has about 75% of people willing to take vaccine on April 25, 2021. In India about 6 million healthcare workers have 2 doses of vaccine, and about 9 million have 1 dose. About 6 million frontline workers have 2 doses and 12 million frontline workers have 1 dose of vaccine.  There is a shortage of vaccine supplies and a bold decision was made by the Indian government on April 25th 2021, after the surge of cases to a world wide maximum of over 300,000 cases a day. The decision was to give immediate regulatory approval for the three major vaccines in the US to be brought and used in India. And delivery will be speeded up - no customs duties and fast processing of supplies access to speedy logistical supply routes. This is a huge step forward for the vaccination drive as this means Pfizer, Moderna and J&J vaccines can now be used in India. The government is also urging the companies to make in India or export to India with prices that provide flexibility in pricing for the private market. The locally produced Covishield Astra Zeneca based vaccine produced by Serum Institute will be allowed to be sold to the private market at 600 rupees or close to about $10. Pfizer and Moderna, J&J can price in a way that would be somewhere around this price range. The access to more vaccines and the ability of the companies to make a reasonable profit in the Indian private market means that vaccine supplies should open up in May and June.  This could give a huge boost to vaccination numbers so that India's vaccination percentage of population vaccinated should keep up with that in countries like Germany and France that were slower to get started in Europe but are now catching up quickly. This is a massive achievement because the population numbers are huge compared to Europe. ...

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Reports of ATM's running out of cash in India in 8 states. The government says this is a result of a spurt in demand and will ease in a few days. The government's policies are to increase the number of debit card and digital transactions to shift more of the transactions in an underground economy into the formal economy so that tax revenues to fund infrastructure can be generated. As a result fewer currency notes of Rs. 2000 or about $30 are being printed. This is aggravated by black market hoarders of 2000 rupee notes. Public confidence in the banks was shaken by some high profile scandals leading to people keeping extra cash at home increasing the demand. The government plans a bailout of $32 billion for bad loans at banks.

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To cut the deficit estimated at 5.5% of GDP, the Indian government is cutting fuel subsidies. It is reducing the $5.6 billion spent on fuel subsidies. About $4.4 billion is also is spent on subsidies by state owned energy companies. Prices for gasoline will rise only moderately by 3.5 rupees a liter to about 55.7 rupees a liter. This should improve the situation for state owned energy companies and for private sector companies like Reliance and Essar.

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The Vice Chief of the Indian Army explains in detail how the scheme that is rolled out for Agnipath is a pilot project and how the lessons learned will be incorporated over the next 5 years. He says the recruits leave with something like 24 lakhs rupees for a second innings at age 22, with the opportunity to get 13 lakhs in preferential basis loans in government assistance to start an enterprise. Others could choose to enhance their education and go on to get degrees under preferential educational setup. The idea is not to set them up for life but get them off to a good start as they are only about 22 years and with special technical skills acquired during their 4 years in the armed services. Technical skills acquired in the airforce could be even more advanced. Private industry in an India almost twice the size of the economy that exists today and the fastest growing economy in the world would easily absorb 30,000 of such highly trained disciplined people in the scheme who leave. The US GI Bill and other similar programs for the military have shown that this works and private industry is eager to take in these people on a preferential basis. These in fact have proven to be even more attractive opportunities using the example of the US experience than a government job. Lt. Gen. Raju says about the All India regiments replacing the homogenous units of the past. The Rastriya Rifles  and similar units in the Army have shown that the bonding happens for people from different parts of the country. He could have said that it is seen in the cricket teams where the bonding is between people from different regions and places. These units have performed very well says Raju in the LAC, in Kashmir, in border areas and in other situations. ...

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India's second largest airline SpiceJet looks for new investors after posting 5 straight quarters of losses in the highly price sensitive Indian airline market. SpiceJet needs about 6 billion rupees to solve cashflow problems, according to CFO of the Sun Group, which owns SpiceJet. IndiGo is now the only airline making a profit in India. Jet Airways sold a stake to Etihad Airways, Air Sahara was absorbed into Jet Arways in 2006, Kingfisher is deeply in debt and grounded all planes. Analysts say the price of fuel is 60% higher in India than the average globally and customers price shop intensively, as a result airlines do not have enough cash flow for a week.

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Chennai, a city of 10 million in India faces a water crisis. It is approaching a situation of Day Zero when the water utility in the city can not any longer provide regular supplies of water through tap water. Tankers with water are used instead. This situation is a result of the 4 reservoirs used for Chennai water suffering from drought in the area- two are dry and the other two are almost dry. Water tankers supply water at the cost of an average salary of 9000 rupees  a month as shown in this story in the WSJ.

Cities such as Shimla, Managalore, Hyderabad, Delhi, also face water supplies crisis. All over India 600 million people live in water stressed areas, according to NITI Aayog, a government policy think tank. By 2030 the demand for water is expected to double. With weak monsoon rains the government is calling for water conservation.

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Russia raises interest rates by 6.5% to 17% on Dec. 15, 2014, as Brent crude prices fall below $60 and pressure on the ruble increases. Anticipation of the U.S. Federal Reserve raising interest rates in 2015 puts pressure on emerging market currencies, adding to pressure on the ruble. All emerging market currencies, the Brazilian Real, South African Rand, Indian Rupee, Indonesian Rupiah, Turkish Lira, also come under pressure as money flows out of emerging markets in a repeat of the situation in January 2014.

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Diesel prices are regulated and subsidized by the Indian government, but gasoline prices are deregulated since 2010, resulting in gasoline costing 64% more than diesel in India. As a result buyers are staying away from gasoline cars and shifting to diesel creating distortions in demand. The government is considering a tax on diesel cars and SUV's of between $3000 to $4600 to correct the distortion. Because lower income people woud be hurt by increasing the price of diesel it continues to be subsidized. Because of the uncertainty car manufacturers are shutting down production to reduce growing inventory of gasoline vehicles. High interest rates of 12% on car loans also reduces demand. Suzuki Maruti sales declined 6% in May 2012, Ford and GM showed sales declines of 14% and 20%. The year ending March 2012 shows Indian car sales growing only slightly by 2.2% to 2 million cars. Sales were rising at 29% only about a year ago. Gasoline costs 68 rupees a liter in New Delhi after a 11.5% increase in May 2012, compared to 41 rupees per liter for diesel. The increase in gasoline prices is a result of the government having difficulty paying the rising imports of oil, costing $141 billion for the year ending March 31, 2012. The sharp slowdown in the car industry and the problems in the energy sector have affected India's growth rate....

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Raghuram Rajan, former chief economist of the International Monetary Fund, is appointed the new chief of India's central bank in August 2013.

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In the year ending March 31 Indians had $14 billion on their cards, 4 times the amount of 2004. According to ratings agency Crisil the amount of unsecured loans and credit card receivables more than 3 months overdue is aabout 7% to 9% of total loans outstanding this year and could go as high as 15%. One of the leading banks ICICI has lifted its provisions for bad loans by more than 43% to 9.24 billion rupees ($185 million). The number of credit cards in India has tripled to 30 million in the past 5 years. Regulations on lending were relaxed leading to car loans and cards being issued to people in rural areas and lower income groups without regular salaries.