Saturday, August 13, 2016

India's 70th Independence Day: Is "Make in India" All Hype?

Some of Prime Minister Narendra Modi's supporters claim that his "Make in India" campaign has brought India to the verge of becoming a manufacturing behemoth 69 years after the nation's independence. Others claim India is already a manufacturing powerhouse. Let's examine these claims based on data.

Manufacturing Ranking:

While India now ranks 6th in the world in terms of total manufacturing output, it still sits at a very low 142nd position terms of manufacturing value added per capita, according to the United Nations Industrial Development Organization's Industrial Development Report 2016.  Pakistan's manufacturing value added is ranked 146th by the same report.


Manufacturing Output:

India's 3% share of the world's total manufacturing output puts it at a distant sixth position behind China's 24%, United States' 17%,  Japan's 16%, Germany's 7% and South Korea's 4%.

The UNIDO data shows that India's manufacturing value added (MVA) per capita at constant 2005 prices increased from US$155.73 in 2005 to $168.42 in 2014.   However, as percentage of GDP at constant 2005 prices in US$, India's MVA decreased from 15.10% in 2005 to 13.85% in 2014

UNIDO reports that Pakistan manufacturing value added (MVA) per capita at constant 2005 prices increased from US$135.03 in 2005 to $143.84 in 2014. Its  MVA as percentage of GDP at constant 2005 prices in US$ decreased from 18.05% in 2005 to 17.41% in 2014.

India's manufacturing output declined 0.7% in April-June 2016-17

Make in India:

Prime Minister Narendra Modi has recognized how far behind India is in the manufacturing sector. His government's highly publicized "Make in India" is designed to Change that.

What does India, or for that matter any other developing country, need to boost its manufacturing output? Most experts agree on two essential pre-requisites for industrial development:

1. Energy and Infrastructure

2. Skilled Manpower

China's rapid industrialization over the last few decades has shown that the focus must be on the above two to achieve desired results. Has India learned from the Chinese experience? Let's examine this question.

Energy and Infrastructure Development:

"Infrastructure is the biggest hurdle to the ambitious Make in India program of the government," Standard and Poor Global Ratings Credit Analyst Abhishek Dangra told reporters on a conference call,  according to India's Economic Times publication.

"The government is scaling up spending, but its heavy debt burden could derail its ambitions to improve public infrastructure," the Standard and Poor report said.

India suffers from huge energy deficit. Over 300 million of India’s 1.25 billion people live without electricity.  Another 250 million get only spotty power from India’s aging grid, with availability limited to three or four hours a day, according to an MIT Energy Report. The lack of electricity affects rural and urban areas alike, limiting efforts to advance both living standards and the country’s manufacturing sector.

Skilled Manpower:

“India doesn’t have a labor shortage—it has a skilled labor shortage,” said Tom Captain, global aerospace and defense industry leader at Deloitte Touche Tohmatsu, according to a Wall Street Journal report.

The WSJ report said that over 80% of engineers in India are “unemployable,” according to Aspiring Minds, an Indian employability assessment firm that did a a study of 150,000 engineering students at 650 engineering colleges in the country.

NPR's Julie McCarthy reported recently that ten million Indians enter the workforce every year. But according to the Labour Bureau, eight labor-intensive sectors, including automobiles, created only 135,000 jobs last year, the lowest in seven years.

Impact on Agriculture: 

Prime Minister Modi's focus on manufacturing is talking away resources and attention from India's farmers who are killing themselves at a rate of one every 30 minutes.

Majority of Indian farmers depend on rain to grow crops, making them highly vulnerable to changes in weather patterns. As a comparison, the percentage of irrigated agricultural land in Pakistan is twice that India.

More than half of India's labor force is engaged in agriculture. Value added per capita is among the lowest in the world. Pakistan's agriculture value added per capita is about twice India's. This is the main cause of high levels of poverty across India.

Chinese Experience:

China has shown that it is possible to make huge strides in manufacturing while at the same time achieve high productivity levels in agriculture.

On the manufacturing front, China has taken care of the basics like energy, infrastructure and skilled manpower development to achieve phenomenal growth.

As part of the China-Pakistan Economic Corridor (CPEC) development, Pakistanis are learning from the Chinese to replicate success in manufacturing.

The first phases of CPEC are focused on building power plants, gas pipelines, rail lines, roads and ports at a cost of $46 billion. At the same time, China and Pakistan are also focussing on skills training via vocational schools and Pakistan-China Education Corridor. These projects will lay the foundation necessary to ramp up manufacturing in Pakistan.

Summary:

Both India and Pakistan want to emulate the success of China in the manufacturing sector. The Chinese experience has shown that development of energy, infrastructure and skilled labor are essential to achieve their manufacturing ambitions. The South Asians must move beyond hype to do the hard work necessary for it. Pakistan is working with China via CPEC to make progress toward becoming a manufacturing powerhouse.

Related Links:

Haq's Musings

Auto Industry in India and Pakistan

UN Industrial Development Report 2016

Indian Farmer Suicides

China-Pakistan Economic Corridor

Robust Energy Demand Growth in Pakistan

Human Capital Development in Pakistan


54 comments:

Mohsin H. said...

Good analysis, Sir!

Another issue is their red tape which Modi has not been able to cut through. Or the issue with the SMEs which, despite all the great press, have been a bit of a drag what with all the resistance to global standards!

Riaz Haq said...

Mohsin H.: "Good analysis, Sir!"

Meanwhile, India's manufacturing output is down 0.7% in April-June quarter and its exports are down 6.8%. Exports fell in July by 6.84% to $21.7 billion. Exports have declined for 20 of the past 21 months. India's power generation growth down to 1.6% in July lowest in yrs.

https://pbs.twimg.com/media/CptgeFVUAAEkVEz.jpg:large

https://pbs.twimg.com/media/Cpqaq3HXYAAfMBJ.jpg:large

https://pbs.twimg.com/media/CpjY8WfVYAEDM7K.jpg:large

Joseph Panchal said...

The "Make in India" is a seed that was recently planted. Proper conditions like the GST, Labor Laws and Training need to go through the legislative process. The germination and fruit bearing will come.

Asma said...

The MIT 10/2015 report you cite is a lengthy one and what you have mentioned from it is duly noted. The research was done from pre Modi to 1 year post Modi. Here is the conclusion:-

Paradoxically, the sheer size of the task ahead—the fact that India is in the early stages of upgrading and modernizing its energy system—is in some ways an advantage. It happens to be embarking on its modernization phase at a time when prices for renewable-energy generation, and for the technology to make it work at the local level, are starting to rival prices for traditional fossil-fuel-generated power.

BMW, for example, said earlier this year that it will build a solar plant to meet 20 percent of the power demand at its factory near Chennai. Indian Railways, which operates the most extensive railroad system in the world and is the nation’s largest employer, plans to build a gigawatt of solar capacity in the next five years. By avoiding the cost of providing universal, grid-based electricity, India can concentrate on what works best for specific locations and specific needs. Every microgrid and local solar system deployed reduces by a fraction the need to extend the grid; every new renewable-energy system installed by a business or factory reduces the pressure to build ultra-mega power plants.

Ananda Tushar said...

American military manufacturer Lockheed Martin could soon be producing F-16 fighters in an assembly line based in India, taking advantage of the new liberalised FDI conditions announced recently. India will also become a platform for export of F16s worldwide after technology transfer terms are negotiated all part of the Make in India thrust.
TATA collaborating with GE and Lockheed Martin will train engineers for this purpose. The government has earmarked $3.5 billion through private public partnership to overcome the skill deficit.

Anonymous said...

F 16 is a plane being phased out in the US and over 40 years old.the tot on offer is less than what we get from Russia for Su 30 mki.

US government are unreliable we should stick with Russia Israel and France and only buy things these countries can't offer like p8 Poseidon and transport planes line c 17...

Riaz Haq said...

#India redfaced as its independence day video shows #Pakistan’s #JF17 jets photoshopped with tricolor via @htTweets

http://www.hindustantimes.com/india-news/culture-ministry-video-features-pakistan-s-jf-17-jets/story-LnWQfOze4EbL2Ne5swuS0N.html

The culture ministry was embarrassed on Friday when social media users pointed out that one of its videos celebrating Independence Day featured Pakistan’s JF-17 Thunder combat jets in the opening segment.
The animated segment at the start of the 1.40-minute video showed two JF-17s, one on either side of a stylised symbol commemorating 70 years of the country’s independence and adorned with the Indian tricolour.
The video, which promoted an online application system for getting no-objection certificates for constructions from the National Monuments Authority, was posted on Twitter on Thursday. Eagle eyed social media users pointed out the jets in the video were Pakistani aircraft and it was removed from Twitter.
An official reaction from the culture ministry was awaited.
The JF-17 looks similar to India’s Tejas light combat aircraft. Both are single-engine jets but the Tejas does not have tailplanes while the JF-17’s air intakes are located further forward on the fuselage.

Riaz Haq said...

#BMI Research puts #Pakistan in top "10 emerging markets". Key Growth Drivers: #Auto & #Textiles #Manufacturing Hub http://read.bi/29mmYQT


"Pakistan will develop as manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply."

A new report from BMI Research has identified the "10 emerging markets of the future" — the countries that are set to become new drivers of economic growth over the next 10 years.

BMI estimates that these countries will cumulatively add $4.3 trillion to global GDP by 2025 — roughly the equivalent of Japan's current economy.

In general, manufacturing and construction are the sectors that will drive the economies. BMI reports that new manufacturing hubs are set to emerge in Bangladesh, Myanmar, and Pakistan, and that these countries will see particularly strong growth in exporting manufacturing industries. And construction growth is going to be widespread throughout all the countries — partly to facilitate increases in urban populations and partly to help develop the manufacturing sector.

On the other hand, extractive industries — like mining, oil, and gas — are going to play a far smaller role in driving growth than they have the past 15 years.

While it might provide bright spots for some countries, the report states, "the ubiquitous commodity-driven growth model that was derailed by the 2012-2015 collapse in commodity prices is not coming back."

Anonymous said...

So BMI's prediction about Pakistan is right, and others prediction about India is wrong. At least in India's case there is already a baseline to compare with their industries producing various things from bikes to cars, trucks and locomotives, many of which is exported too.

what does Pak produce ?

It is amazing that Pakis think what they failed for 69 yrs would suddenly be solved.

You wanna bet. 10 yrs from now you still would be talking about Pak's potential.

Anonymous said...

https://lineshapespace.com/manufacturing-in-india/?utm_source=twitter&utm_medium=paid&utm_campaign=SimpleReach&sr_source=lift_twitter

Riaz Haq said...

Anon: "You wanna bet. 10 yrs from now you still would be talking about Pak's potential."

Yes, I agree.

It's because Pakistan is a young country with even younger demographics. Its potential is virtually unlimited.

It'll continue to grow with time as Pakistan achieves greater successes in the coming decade.

Here's Jacqueline Novogratz of Acumen Foundation:

"I look at the hundreds of young people, each of them filled with unlimited potential, undaunted by the lack of a traditional classroom or teacher or even time for school. Yet they couldn’t be more serious, more focused on learning, their only real hope for changing their own lives in ways that would give them more control."

https://medium.com/acumen-ideas/as-i-leave-the-karachi-airport-waiting-for-my-delayed-pia-flight-to-mumbai-my-twitter-feed-sends-79acf47d1d6c#.dwu82fu1w

Sushma Pandit, MSc said...

You have quoted future predictions such as, "Pakistan will develop as manufacturing hub over the coming years, with the textile and automotive sectors posting the fastest growth at the beginning of our forecast period. Domestic manufacturing investment will be boosted by the windfall from lower energy prices compared to the last decade, and improved domestic energy supply."

That is good for Pakistan but relative to other South Asian countries, Pakistan is expected to grow lot slower. Here are the estimates per capita PPP $ figures for 2016 & 2021 and the cumulative 5 year growth by the IMF economists.

Bangladesh 3841 & 5194 (35.22%)
India 6599 & 9837 (49.07%)
Pakistan 5174 & 6648 (28.49%)

Riaz Haq said...

SP: "the cumulative 5 year growth by the IMF economists."

IMF has been so wrong for so long that these long term forecasts are meaningless.

Here's an assessment of IMF's forecasts record:

In the 2001 issue of the International Journal of Forecasting, an economist from the International Monetary Fund, Prakash Loungani, published a survey of the accuracy of economic forecasts throughout the 1990s. He reached two conclusions. The first was that forecasts are all much the same. There was little to choose between those produced by the IMF and the World Bank, and those from private sector forecasters. The second conclusion was that the predictive record of economists was terrible. Loungani wrote: “The record of failure to predict recessions is virtually unblemished.”

Now Loungani, with a colleague, Hites Ahir, has returned to the topic in the wake of the economic crisis. The record of failure remains impressive. There were 77 countries under consideration, and 49 of them were in recession in 2009. Economists – as reflected in the averages published in a report called Consensus Forecasts – had not called a single one of these recessions by April 2008.

This is extraordinary. Bear in mind that this is not the famous complaint from the Queen that nobody saw the financial crisis coming. The crisis was firmly established when these forecasts were made. The Financial Times had been writing exhaustively about the “credit crunch” since the previous summer. Northern Rock had been nationalised in the UK and Bear Stearns had collapsed in the US. It did not take a genius to see that trouble was on the way for the wider economy.

More astonishing still, when Loungani extends the deadline for forecasting a recession to September 2008, the consensus remained that not a single economy would fall into recession in 2009. Making up for lost time and satisfying the premise of an old joke, by September of 2009, the year in which the recessions actually occurred, the consensus predicted 54 out of 49 of them – that is, five more than there were. And, as an encore, there were 15 recessions in 2012. None were foreseen in the spring of 2011 and only two were predicted by September 2011.


https://www.ft.com/content/14e323ee-e602-11e3-aeef-00144feabdc0

Sushma Pandit, MSc said...

Predicting a recession versus cross country comparisons in a region using existing fundamentals such as savings rate, and others you have mentioned, are two separate issues.

You have articulated Pakistan economic future yourself using BMI. Now, how does Pakistan compare with others in South Asia? That's where IMF comes in.

Riaz Haq said...

#Pakistan: Planting economic seeds for a brighter tomorrow- #CPEC #FDI

http://www.khaleejtimes.com/international/pakistan/pakistan-planting-economic-seeds-for-a-brighter-tomorrow

A few years ago a lot of international firms almost cringed at the idea of investing in Pakistan. Insecurity, instability and unfavourable business environment were the usual key words used to bail out of potential conversations. However, none of that holds true today. Pakistan has made commendable progress in restoring macroeconomic stability and is a rising star in south Asia, exuding confidence and optimism like never before.

Karachi, Pakistan's financial hub of 20 million, is flourishing with a spur in real estate boom and new, upmarket seaside restaurants and cafes. In major cities car sales are on the rise and shopping malls are sprouting to cater for an expanding middle class.

The revived health of the economy is evident from the vital statistics: the annual GDP growth rate for the fiscal 2015-16 that ended on June 30 stood at 4.7 per cent - its fastest pace in eight years. In 2014-15, Pakistan grew at 4.2 per cent, as per Pakistan Economic Survey report.

Inflation, the cornerstone of a healthy economy, has been tamed at around 3 per cent from the highs 20 per cent in 2008, as per the latest Economic Survey published by the Government of Pakistan.

The government's budget deficit too eased from 8 per cent to 5 per cent of the GDP, and the current account deficit is now at 1 per cent of the GDP. Tax revenues have doubled in the last three years, and remittances have reached a whopping $19.9 billion for the fiscal ending on June 2016. The foreign exchange reserves too are at an all-time high at over $21.4 billion, enough to finance over five months of country's import bills. Rightly so, the Pakistani rupee has maintained exchange rate stability during
the year.

The interest rates are at a 43-year low allowing strong credit expansion and helping companies in various industries, such as industrial, food, beverage, textile, electricity and construction.
Investment in infrastructure has seen a significant jump, primarily fuelled by initiatives undertaken as part of the massive China-Pakistan Economic Corridor (CPEC). The $46-billion commitment by China is expected to bolster Pakistan and turn it into a flourishing trade economy in a few years after completion.

Government initiatives

The first signs of improvement appeared in 2013 when Pakistan witnessed a peaceful transition of its civilian government for the first time in history. Since then the government has launched concerted programmes with the military to weed out extremism and terrorism from the soil of Pakistan and create an enabling environment. Zarb-e-Azb has immensely helped in this regard and a smooth implementation of the National Action Plan (NAP) too played an important role.

Concurrently, the government has also been working on the economic front by drafting prudent policies and implementing the same in time. In the last three years, financial coffers have been revived as the tax revenue doubled.
The government is now contouring plans to develop Pakistan into a manufacturing hub. It aims to diversify, grow at a consistently fast pace for the next 10 years, and emerge as the top 10 emerging markets from Asia and Africa. As of now, textile and automotive sectors are showing great potential and the fastest rate of growth.
The government has also managed to complete 11th successful reviews with the International Monetary Fund (IMF), which has further strengthened the confidence of international investors and has placed Pakistan on their radar screen as future investment destination.

Asif said...

Apne Templeton ka zikar kiya lekin out of $100 sirf $6 Pakistan will go to Pakistan. Koi guide 100% ke liye??. Emerging Market 2017 me Pakistan ayega. Please thanks

Riaz Haq said...

Asif: "Koi guide 100% ke liye??"

PAK ETF is 100% invested in Pakistan

Riaz Haq said...

SP: "Predicting a recession versus cross country comparisons in a region using existing fundamentals such as savings rate, and others you have mentioned, are two separate issues."

Unanticipated recessions are the biggest killers of long term growth forecasts.

Riaz Haq said...

What explains #Modi government kicking up a row over #China #Pakistan Economic Corridor (#CPEC) now?

http://scroll.in/article/814059/what-explains-modi-government-kicking-up-a-row-over-china-pakistan-economic-corridor-now … via @scroll_in

By MK Bhadrakumar

The big question is: How do the Chinese assess the Modi government’s proclivity to count the trees instead of seeing the woods? Do they sense this might be a matter of conscious choice?

What rankles most in the Indian mind is China’s relations with Pakistan. The Modi government demands that China should suspend the China-Pakistan Economic Corridor on the plea that Gilgit, Baltistan and Pakistan-Occupied Kashmir are Indian territories.

In reality, though, we have a classic situation where it is entirely up to India to raise dust (or not to raise dust). It is even baffling how economic development of those neglected regions would hurt Indian interests. After all, the people inhabiting those regions are also Indians, isn’t it?

The sensible thing would have been to let the Chinese loosen their purse strings to develop our territories that happen to be inside Pakistan temporarily so that when we finally make them part of Akhand Bharat, they won’t be the impoverished terrorist-infested swathes of land that they are today.

Frankly, India is taking an illogical stance. The Modi government estimates that Economic Corridor is “India-centric”, whereas, it is a strategic initiative by China in self-interest.

China has a good reputation for putting money only where the mouth is – and $46 billion is a lot of money. The Chinese motivations are not difficult to comprehend.

The Economic Corridor boils down to project exports by Chinese industry, which is saddled with excess capacity.
Two it opens up efficient communication links with markets in the Gulf and Africa.
It fuels the economy of Xinjiang.
It mitigates to some extent China’s “Malacca Dilemma” – the fact that 80% of China’s oil imports have to pass through the strait en-route from West Asia and Angola.
It creates leverage to balance the traditional American dominance over Pakistan.
Indeed, finally, it cannot be overlooked that One Belt One Road Initiative has a geopolitical dimension insofar as it counters the US’ strategy to encircle China and "contain" it.
Conceivably, the China-Pakistan Economic Corridor will galvanise Pakistan’s economy. Now, isn’t that a nice thing to happen if it prods our western neighbour to understand that getting rich is the smart thing to do?

If China succeeds in transforming Pakistan as a modern middle-income economy like Turkey or Malaysia, it can only strengthen regional security. But then, a paradox arises: If Pakistan does not collapse as a “failing state” and instead becomes a more prosperous country than India, what happens to Akhand Bharat?

The smart thing would have been to offer to the Chinese an economic corridor through our territory. It is advantageous to be a transit country.

Ramesh said...

https://twitter.com/makeinindia/status/765465794566250498

India moved 15th place to 66.
Pakistan is at 109th. It is expected that with China's help via CPEC it will become 9th within a decade.

Riaz Haq said...

Ramesh: "India moved 15th place to 66. Pakistan is at 109th. It is expected that with China's help via CPEC it will become 9th within a decade."

If you believe this ranking, you must also believe that UAE (41), Qatar (49) and Saudi Arabia (50) are way ahead of India in innovation.


http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2016-intro5.pdf

Iqbal Singh said...

The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation. The operative word is not innovation success but the capacity for it.

Qatar and Saudi Arabia both fund many projects so their ranking is correct

Riaz Haq said...

IS: "The Global Innovation Index is an annual ranking of countries by their capacity for, and success in, innovation."

So why isn't US #1?

US dominates the list of top universities and spends 2.81% of its GDP and demonstrated of greater success than any other countryl

Iqbal Singh said...

US at #4 is an excellent rating. Mr. Riaz, I understand your reservations but many corporate businesses use this index in addition to other factors before they invest internationally.

Riaz Haq said...

IS: "many corporate businesses use this index in addition to other factors before they invest internationally. "

The primary motivation for US businesses is cheap labor. Be it Google, Apple, Cisco, etc, they all do real R&D in the United States and then use cheap labor for more mundane work in countries like India.

Besides, almost all of the basic research and development is funded by the US government that requires it to be done in US.

Major innovations like transistors, computers, networking as well as life-sciences have come from US taxpayer money put into DARPA, NSF, NIH, etc.

Jaishankar said...

"The primary motivation for US businesses is cheap labor. Be it Google, Apple, Cisco, etc, they all do real R&D in the United States and then use cheap labor for more mundane work in countries like India."


GE has set up shop in various countries to manufacture turbines to medical equipment. All that requires local engineering capacity to innovate (something the local firms were not doing). Boeing makes fuselages in the same manner. India makes auto parts for all the major Auto makers.
Your comment is only half true.

Riaz Haq said...

Dirty laundry: Welspun tangle highlights #India's #quality challenge. #MakeInIndia #Modi http://reut.rs/2bLju9n via @Reuters

Questions over the exact provenance of bedsheets sold by Welspun India to America's middle classes have not only wiped $740 million off the firm's market value, but also revived one of Indian manufacturing's enduring headaches: quality.

India's government, desperate to accelerate growth and create more jobs, has backed a "Make in India" manufacturing push. India already makes everything from car parts to t-shirts, but is trying to move up the chain to make higher-end products, like Apple's iPhone.

One major hurdle, however, has been product quality, often blighted by low salaries, poor training and sketchy suppliers. As India manufactures more, cheap is not always cheerful.


Quality assurance experts in India and beyond, however, said damage from the Welspun case could be contained - if the authorities and businesses move quickly to put in place stringent quality assurance standards.

"The government and the companies should themselves put in place better quality control standards to ensure India's image is protected," said a certifier at the Indian arm of a Europe-based textile certification company.

The $108 billion textile industry accounts for a tenth of India's manufacturing production, 5 percent of GDP and 13 percent of export earnings, according to government data. It is the country's second-largest employer after agriculture.

----
It's not clear what led to the problem. Welspun, whose share price nearly halved this week, has said it would do an external audit of its supply chain.

Other Indian manufacturers distanced themselves from Welspun, but many fretted over the broader impact as the country tries to bet on quality, not just cheap workers, where it faces constant competition from regional rivals.

"It's high time exporters improve the quality of their products," said S.C. Ralhan, president of the Federation of Indian Export Organisations, set up by the government and industry to promote exports. He said the group would take up the issue of quality with its members.

Arvind Sinha, national president of the Textile Association of India, said India's image as a manufacturing destination for textiles could be tarnished.

"This is another blot on the Indian exports resume," said an analyst at a local brokerage, who asked not to be named as it would violate his firm's policies. "The Welspun fiasco could have ripple effects and force companies to scout for options in other regions in Asia that have unscathed records."
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DRUGS AND NOODLES

India has been here before.

Its $15 billion pharmaceutical industry, a global supplier of cheaper generic medicines, has been dogged by quality concerns, with health regulators in the United States, Britain and Europe barring some plants from producing drugs for their markets because of inadequate standards.

Highlighting weak official checks and under-resourced testing facilities, Nestle India had to pull its popular Maggi instant noodles off the shelves last year after local regulators found some samples contained unsafe levels of lead. Subsequent tests at government-accredited laboratories showed the noodles were safe for consumption.

Riaz Haq said...

Chinese-backed coal excavation and power plants will displace thousands of people and deplete groundwater in Thar, a region ravaged by drought.


The Thar desert in Sindh province contains 175 billion tonnes of lignite coal – one of the largest untapped coal deposits in the world. It is also one of the most populated deserts in the world – home to world heritages sites and endangered species. Most of the 1.6 million people who live in the Thar desert region live in poverty and are highly vulnerable to extreme weather events. Twenty five percent of people live within the proposed coal development area. They thought they would benefit, but that has not been the case.

----

It was only in 2015 that work began on the fields, when the Thar coal project was included as part of a string of energy and infrastructure deals signed under the USD 46 billion China-Pakistan Economic Corridor. These agreements included eight coal-fired power plants and a 3,000-kilometre network of roads, railways and pipelines to transport oil and gas from Gwadar Port on the Arabian sea to Kashgar, in the northwestern Chinese province of Xinjiang.

In December 2015, China approved a USD 1.2 billion investment for surface mining of Thar coal and the establishment of 660 MW power projects. The deposits are divided into 12 blocks, each containing 2 billion tonnes of coal. In the first phase the Sindh provincial government has allocated block II to Sindh Engro Coal Mining Company (SECMC) to excavate 1.57 billion tonnes of coal and build a 660 megawatt power plant. The plant is expected to send power to the Pakistani national grid by June 2019 and will later be expanded to produce 1,320 MW of power.

A state-owned Chinese company, the China Machinery & Engineering Corporation, is providing the machinery and technical support for the excavation of coal and building and running the power plant. The local company will provide human resources, management and be responsible for the distribution of power. SECMC say the project has created 200 technical jobs and 1,600 menial positions. But locals have been protesting that the company has not even given them the menial jobs. Around 300 Chinese, including the engineers, miners and experts are also working on the site.


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The Chinese team have started excavating the first pit. In the first phase SECMC will relocate five villages, which are located in block II, including Thario Halepoto village.

SECMC has started paying villagers for their homes and agricultural land. SECMC’s chief executive officer, Shamsuddin Ahmed Shaikh, claims that his company will do all they can to help the villagers.

“We will construct model towns with all basic facilities including schools, healthcare, drinking water and filter plants and also allocate land for livestock grazing,” he told thethirdpole.net

He said that the company is paying villagers above market prices for their land – PKR 185,000 (USD 1,900) per acre. However locals say this price does not take into account its high environmental value and they do not want to be relocated to the new towns, the exact location of which is yet to be decided.


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A SECMC official said that the company will plant 10 trees for every tree cut. So far the company has planted 12,000 trees in an 18 acre area called the Green Park and more trees will be planted in next two years.

---

SECMC’s Shaikh rejected such claims saying his company would only use 1,400 acres for two reservoirs to store the water extracted during excavation. “It will be natural underground saline water, not toxic or poisonous in any way and it will not affect any village,” he claimed.


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http://thewire.in/62053/pakistans-coal-expansion-brings-misery-to-villagers-in-thar-desert/

https://vimeo.com/179874726

Riaz Haq said...

#India’s falling #exports killed 70,000 #jobs in just one quarter. #Modi #AchheDin http://qz.com/784625 via @qzindia

India’s dismal export growth is leading to massive job losses. And, after months of shrinking exports without any signs of improvement, the employment situation in Asia’s third-largest economy is set to worsen.
The jobs market is already in pain. In the July-September quarter of the 2015 fiscal year, India recorded the lowest job growth compared to the same period in 2009, 2011, and 2013.
Plummeting exports are adding to the problem. Some 70,000 jobs were lost in the second quarter of 2015 alone due to a fall in India’s exports, according to the Associated Chambers of Commerce & Industry in India (Assocham). Most of these were contractual in nature, the joint study by Assocham and Thought Arbitrage, a research institute, said.

“While contractual jobs were lost, not adequate regular jobs were added to compensate that loss. Textile has been most affected,” the industry body, which represents over 450,000 Indian business entities, said in a release on Sept. 18.
India’s export growth has been negative in the last couple of years. Lacklustre global demand is one reason. It also doesn’t help that India’s manufacturing sector is still weak. Private investment in manufacturing is yet to pick up, which means exporters are scrambling for funds. Their funding costs are high too. All this has had an impact on the jobs market because exports have been slacking in sectors that are labour-intensive, such as engineering goods, leather, textiles, and rubber, among others.
Eight of the 14 labour-intensive sectors saw exports shrink in the 2016 financial year. In the previous year, job growth in these sectors was the slowest in seven years.

Riaz Haq said...

Few jobs, weak #industrial prod, bad loans. What’s #India celebrating? #AchheDin #MakeInIndia #Diwali http://qz.com/805686 via @qzindia

The world’s fastest-growing major economy may have hit an air pocket.
India’s 7.6% annual growth in the 2016 fiscal year has made it a standout performer amid a sluggish global economic environment. So far, this year, the GDP numbers look good and a bountiful monsoon will help further. Benign global oil prices will also add to the headline GDP number since India imports over 75% of its crude oil requirement.
But there are some reasons to worry. Data released over the last few weeks show that the bad-loan mess in the banking system remains serious, industrial production has fallen for two straight months, and unemployment is at a five-year high.

The index of industrial production (IIP), which measures the country’s factory output, fell for the second straight month in August, Central Statistics Office data showed on Oct. 10. The index fell 0.7% in August, following a 2.5% drop in July. Manufacturing and mining growth contracted in August, indicating that a recovery is still far away. In the first five months of the current fiscal year (April-August), the IIP contracted 0.3% compared to an expansion of 4.1% in the same period a year ago.

“Manufacturing performance continues to face headwinds from subdued business and investment environment,” the Reserve Bank of India said in its bi-monthly monetary policy review statement on Oct. 04.

Former RBI governor Raghuram Rajan’s goal of purging Indian banks of toxic loans remains unfulfilled, new data shows. On Oct. 10, Reuters reported that non-performing assets in the Indian banking system had shot up from $121 billion in December 2015 to $138 billion in June 2016, according to RBI data. The central bank has given banks a March 2017 deadline to make provisions for bad loans. So, many big lenders have posted massive losses in recent quarters. Yet, the bad-loan pile is only getting bigger.
Meanwhile, the government is now also planning to consolidate public sector banks to make the system more efficient. It will soon merge two large banks based in Mumbai, Reuters reported on Oct. 11.
Unemployment

In 2015-16, the unemployment rate in Asia’s third-largest economy stood at a five-year high, according to a Labour Bureau report dated Sept. 15 (pdf). This is critical at a time when the Modi government is pushing its ambitious “Make in India” initiative to boost manufacturing and job creation. Employment was a top item in the election manifesto of Modi’s Bharatiya Janata Party. The all-India survey by the Labour Bureau (pdf) showed that 77% of the households that participated in it did not have a regular salaried or wage-earning member.

Riaz Haq said...

UNIDO in Pakistan

http://dailytimes.com.pk/opinion/10-Nov-16/unido-in-pakistan
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The salient achievements in the past can be seen in various sectors. It is particularly worth mentioning UNIDO’s efforts in building Pakistan’s trade capacity, and how that enabled many sectors to meet global market requirements. This was a multidimensional and intensive task. For example, UNIDO helped with the establishment of a comprehensive food safety system, starting with the passage of Pakistan Food Safety Bill developed by UNIDO over more than three years in cooperation with more than eight ministries. In the process, UNIDO helped 40 laboratories get accreditation, and more than 120 food inspectors and master trainers gain internationally recognised qualifications.

Setting up the first laboratory of its kind in the region for dioxin-testing is yet another good example, and facilitating the resumption of fish exports to the EU market after a seven-year ban is another. Thanks to UNIDO, mango farmers of Multan have now received sufficient training so that they can export their products directly to high-end markets, such as Walmart in the United Kingdom. Similarly, the certification of CE Marking was a gateway for accessing the EU market for various industrial products like surgical instruments, electric fans and cutlery, which will go a long way in boosting exports by capturing a niche in the global market.

In a country like Pakistan where there is a dearth of encouragement of innovation at the state level, UNIDO has been a flag-bearer supporting youth who have innovative ideas, especially in clean technology, and enabling them to access and compete at global arenas like Silicon Valley, USA.

Back in the 1980s, UNIDO started addressing the prevailing environmental issues in Pakistan by establishing the first combined effluent treatment plant at Kasur, a city in Punjab. The plant helped minimise the pollution generated by tanneries that were dumping production waste in adjoining water bodies.

Some personal success stories can also be highlighted. Asra, a young lady from Lahore, was shocked to hear her name announced by the jurist at the National Cleantech Award Ceremony, which was held in Pakistan last year. Asra was the only woman among the five winners who were selected from more than 450 contestants. Her idea was to create a hybrid technology to power bicycles by using the energy generated and stored while pedalling. The idea was further polished and developed with help from UNIDO’s Cleantech Project.

Similarly, Faisal, a young engineer, won the runner-up in the competition of the 2015 Cleantech Global Prize held in Silicon Valley. His novel idea was for a gasifier that runs on agricultural wastes and is mounted on the tractor that it drives.

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Last but not least, UNIDO has given a lot of emphasis to gender mainstreaming. One example is the story of Fakhra, a women hailing from Rawalpindi, who saw her family left helpless when her husband got acutely sick and lost his source of livelihood. She undertook training in fashion design under a UNIDO project entitled “Women’s Entrepreneurship Development.” She subsequently has become a successful businesswoman, running an enterprise that hires more than 10 women.

The gist is that UNIDO’s portfolio is diverse and dynamic in multiple areas. These achievements also clearly depict the inclusive and sustainable industrial development spirit, and are very much in line with the government’s “Vision-2025” for Pakistan. The guiding principle for UNIDO’s concrete role in the future lies in promoting Sustainable Development Goal (SDG) 9 (industry, innovation and infrastructure), and contributing to other SDGs.

Riaz Haq said...

Does India manufacture everything it needs? Here's the answer:


1. India's manufacturing value added per capita is about the same as Pakistan's. it still sits at a very low 142nd position terms of manufacturing value added per capita, according to the United Nations Industrial Development Organization's Industrial Development Report 2016. Pakistan's manufacturing value added is ranked 146th by the same report.

http://www.riazhaq.com/2016/08/indias-70th-independence-day-is-make-in.html

2. India runs huge trade deficits year after year because it imports bulk of of manufactured products it needs from China and elsewhere.


http://www.riazhaq.com/2010/05/soaring-chinese-imports-worry-india.html


Here's an excerpt of a piece by Indian entrepreneur Jaithirth Rao published by Indian Express:

"Uday Kotak said a few months back, in the course of an interview, that he was amazed that in his new office in Mumbai, not one of the furniture or fixture items were made in India. My friend Rahul Bhasin conducted a similar exercise in his office in Delhi and discovered pretty much the same thing. The carpet is from China, the furniture is from Malaysia, the light fixtures are from China, the glass partition is from all places, Jebel Ali in the Middle East and so on. Kotak went on to add that even Ganesha statues are no longer made in India. They are imported from China."

http://indianexpress.com/article/opinion/columns/how-they-killed-our-factories/

Riaz Haq said...

#American engineers find #India's home-made first aircraft carrier is a dud. Need another 10 years to make it work http://blogs.wsj.com/indiarealtime/2016/11/30/u-s-effort-to-help-india-build-up-navy-hits-snag/?mod=e2fb When top American naval engineers recently inspected India’s first locally made aircraft carrier they expected to find a near battle-ready ship set to help counter China’s growing sway in the Indian Ocean.

Instead, they discovered the carrier wouldn’t be operational for up to a decade and other shortcomings: no small missile system to defend itself, a limited ability to launch sorties and no defined strategy for how to use the ship in combat. The findings alarmed U.S. officials hoping to enlist India as a bulwark against China, people close to the meeting said.

“China’s navy will be the biggest in the world soon, and they’re definitely eyeing the Indian Ocean with ports planned in Sri Lanka and Bangladesh,” said retired Admiral Arun Prakash, the former commander of India’s navy. “The Indian navy is concerned about this.”

The February carrier inspection, in the port of Kochi, formed part of U.S. plans to share aircraft carrier technology with India. Indian naval officials followed up with a tour of an American shipbuilding yard in Virginia and strategy briefings at the Pentagon in September, the people close to the meetings said.

The U.S. and India are drawing closer politically and militarily. The two have participated in joint naval exercises with Japan. The U.S. has agreed to sell New Delhi everything from attack helicopters to artillery. Washington has approved proposals by Lockheed Martin and Boeing Co. to make advanced jet fighters in India. And in August, the two countries signed a military logistics-sharing accord.

Riaz Haq said...

Vanguard News: #Nigeria military buying #aircraft, #helicopters from #Pakistan #Russia

http://www.vanguardngr.com/2016/12/nigerian-airforce-expects-aircrafts-helicopters-pakistan-russia/

Concerned about global politics surrounding procurement of sophisticated arms from western countries, Nigerian Airforce (NAF) is expecting arrival of war-planes and helicopters from Pakistan and Russia to boost its fleets. The Chief of Air Staff, Air Marshal Sadique Abubakar made the disclosure at a breakfast briefing with Editors of Online Media in Abuja at the weekend.

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Air Marshal Abubakar said : “I want to say that we have been enjoying support from other countries. (Sometimes arm procurement) is shrouded in a lot of politics. Unfortunately, I’m not a politician, so I cannot be able to say much on that. But what I can tell you is that right now as I speak to you, we are expecting the Pakistani Chief of Air Staff in Nigeria soon. Pakistan has accepted to sell ten trainer airplanes. And that is why the Pakistan Chief of Air Staff is coming for the induction ceremony which is going to take place in Kaduna. “We are really getting support from many countries. Similarly, we have trained so many people in Pakistan, China. In the US, we have pilots that are training right now. We have other pilots that have just finished training from the United Kingdom. We have additional pilots that are training in South Africa. We have more pilots that are training in the Egyptian Air Force and so many other places including Russia…We are really getting support”, he said. On the competence of Nigerian fighter pilots, Abubakar said “In the last 18 months, we have flown almost 3000 hours with no incident. In terms of competence I can tell you that the Nigerian Air Force pilots are amongst the most competent. Because the training curriculum is very clear. And that is why now in the Air Force you look at the wings, pilots wear wings. We have categorized the wings according to their skill levels. We also organize simulation training for our pilots, we organize evaluation visits where pilots are evaluated without any notice. We have also sent over 700 personnel of the NAF to different parts of the world to train and acquire the skills required for them to be effective. The Chief of Air Staff said the air force is currently assisting the Nigerian Army and Navy in the North and South in countering criminal activities of terrorists and militants through operational strategy, air interdictions strategy and soft-core strategy. He explained that the main objective of is to create an enabling environment for the ground and surface forces, to be able to operate with little or no hindrance. He continued: “Another substrategy under this is the reactivation of airplanes. We have embarked on the reactivation of airplanes and today as I speak to you we are on the thirteenth aircraft. What I mean by reactivation is that aircrafts that were not in involved in any fight before the coming of the present federal government; they were parked before but are today part of the fight. “The thirteenth aircraft as I speak to you is being worked upon in Yola and we are hoping that before the end of this month that airplane will be flying. When you train, you must reactivate the platform to be used in flying.” The Air force boss also denied a recent rumour of helicopter crash in Makurdi. Explaining the incident involving Agusta AW 101 helicopter handed over to NAF by President Muhammadu Buhari, he said: “What happened in Makurdi was not a crash. Immediately we received the aircraft from the Presidency, we took one of them to Kaduna to paint it into desert camouflage. They removed the seal of the President and painted it into a combat machine.

Read more at: http://www.vanguardngr.com/2016/12/nigerian-airforce-expects-aircrafts-helicopters-pakistan-russia/

Riaz Haq said...

As #Trump vows to stop flow of #jobs overseas, U.S. plans to make #F16 fighter jets in #India https://www.washingtonpost.com/world/asia_pacific/as-trump-vows-to-stop-flow-of-jobs-overseas-us-plans-to-make-fighter-jets-in-india/2016/12/05/a4d3bfaa-b71e-11e6-939c-91749443c5e5_story.html?postshare=5781481094102076&tid=ss_fb&utm_term=.15dcc38aacee

NEW DELHI — As a new American president bent on retaining American jobs prepares to take office, the Obama administration and the U.S. defense industry are working on a deal with the Indian government to build iconic U.S. combat aircraft in India.

In recent months, Lockheed Martin and Boeing have made proposals to the Indian government to manufacture fighter jets — the F-16 Fighting Falcon and the F/A-18 Super Hornet — in India as the country seeks to modernize its rapidly aging fleet of largely Russian-built airplanes.

In both cases, the aviation companies would be building production facilities in India; Lockheed Martin proposes to move its entire F-16 assembly line from Texas to India, making India the sole producer of the single-engine combat aircraft.

The U.S. military is phasing out the F-16 for its own use, but other countries remain as likely customers.

The proposals have the strong backing of the Obama administration, which has sought a closer connection with the Indian military in recent years. Air Force Secretary Deborah Lee James said she was “optimistic” about the prospect of a deal after a visit to New Delhi in August, and Defense Secretary Ashton B. Carter is set to return to India this week, with procurement high atop the list of discussion topics.


But the election of a billionaire businessman focused on keeping jobs at home, rather than creating them overseas, has brought a measure of uncertainty to the talks.

“What will be the U.S. policy posture now that the new president-elect is in the mix?” said one high-level official at an American defense firm in India, who spoke on the condition of anonymity to discuss internal negotiations. “Is he going to continue the policy of engaging in India on co-
production and co-development? All of those are unknown at this point.”

On Thursday, President-elect Donald Trump appeared at a Carrier plant in Indiana, where his team had brokered a deal to save about 1,000 jobs, and on Sunday he let fire a series of tweets that implied a new tax penalty on goods produced by companies that leave the United States.

Riaz Haq said...

#Philippines mulls #defense asset imports from #Pakistan, Says "def industry in Pak very advanced" @PhilstarNews https://shar.es/18yexc

MANILA, Philippines — After Russia and China, the Philippines is now also looking at importing weapons and armory from Pakistan, further diversifying the country's sources from the US, Finance Secretary Carlos Dominguez said.

"I spoke with the (Pakistani) Minister of Defense and my understanding is that the defense industry in Pakistan is very advanced, and that maybe we should look at purchasing military equipment from them...," the Finance chief said.

"I spoke right away with (Defense Secretary Delfin) Lorenzana. He says the equipment in the Pakistan Defense Ministry is very good," he added.

Dominguez mentioned this during his meeting with Pakistani Ambassador Safdar Hayat recently. A statement about the meeting was issued on Wednesday.

Pakistan is located in the Middle East and has been battling terrorist groups such as the Al-Qaeda on its borders for years after the attack in the US in September 2011.

Earlier, President Rodrigo Duterte, upset of criticism from the United States on his war on drugs, threatened to cut ties with the country's oldest ally that has been providing military support, especially in Mindanao.

He then said he could turn to Russia and China for weapons, before backtracking and said training between US and Philippine forces in the south will continue together with armament acquisitions.

There were also reports that the US Senate canceled a gun deal with the Philippines because of the drug war's alleged human rights violations, but these were not verified.

Aside from military equipment, Dominguez said Manila is also keen on importing rice from Islamabad once import restrictions expire next year.

The government said it will not renew the quantitative restrictions on rice that had protected local farmers from cheaper rice shipments for the past decade.

"My efforts from the very beginning have been to concentrate on enhancing trade between the two countries," Hayat was quoted as telling Dominguez.

For his part, the Finance chief said he is looking forward to the first meeting of the Pakistan-Philippines Joint Economic Commission in April next year.

"We'll certainly participate. That will be a good start," he said.

Established in 2009, the commission aims to boost trade and investments between the two countries.

According to Department of Finance data, bilateral trade between the two nations "remained at a narrow base," amounting to $61.3 million in imports and $55.7 million in exports in 2014.

Among others, the country ships corn, vehicles and vehicle parts, cigarette paper, processed fruits and nuts to Pakistan.

In turn, the Philippines receive mostly packaged medicaments, refined petroleum, alcohol, raw tobacco, non-retail pure cotton yarn and textiles from the Middle Eastern nation.

Diplomatic relations between the two countries were established on Sept. 8, 1949, with the Philippines opening a consulate in Karachi.

Riaz Haq said...

#Pakistan #Suzuki to invest $460 million to set up 2nd #automobile manufacturing plant http://www.pakistantoday.com.pk/blog/2016/12/15/pak-suzuki-motors-plans-to-invest-460m-on-second-plant/ …
After the announcement by the Korean and French auto giants to invest in Pakistan’s auto sector, the major incumbent Japanese player Pak Suzuki Motors has unveiled a plan to invest $460 million to set up a second assembly plant in the country.

Pak Suzuki Motors Managing Director Hirofumi Nagao called on the Finance Minister Ishaq Dar on Thursday and discussed his company’s plan of future investment in Pakistan.

The MD said that his company was ready to invest $460 million in Pakistan to set up a second plant. After completion of formalities, the new project would be completed within a period of two years and may start production by the end of 2018, he informed.

The minister asked the Pak Suzuki Motors MD to submit a complete plan with all the details to process the request in accordance with prescribed codal formalities and procedures. He said the government was committed to providing a level playing field to all the prospective investors.

The government has implemented a new auto policy from this fiscal year that provided tax incentives up to three years for the new players in the sector. The incentives were not offered to the existing three Japanese players. However they were provided incentives for modernization and expansion.

Japanese auto giants are demanding the similar policy incentives for making new investment in the country. The government may provide similar incentives to Japanese auto makers if they make investment in setting up new plants, an informed source said.

A week back a big Pakistani conglomerate announced that they planned to assemble autos in the country with the help of Korean auto giant Kia Motors. While a delegation of French company Renault formally informed the Finance minister in Paris that they planned to set up an auto manufacturing plant in Pakistan.

The minister said Pakistan has been projected by JETRO as the second best place for investment in the world. He said that the turnaround of Pakistan’s economy, macroeconomic stability, improvement of energy and security situation in the country has provided a conducive atmosphere to foreign direct investment.

He said that a number of new entrants have shown keen interest to invest in automobile manufacturing sector as well. The meeting was attended by senior officials of the Ministry of Finance and the members of the delegation of Pak-Suzuki.

Riaz Haq said...

#India cruise missile #Nirbhay missile test "an utter failure" http://www.thehindu.com/news/national/Nirbhay-missile-test-%E2%80%9Can-utter-failure%E2%80%9D/article16915750.ece A flight-test of subsonic cruise missile Nirbhay from the Integrated Test Range (ITR) at Balasore in Odisha on Wednesday was “an utter failure”, informed sources in the Defence Research and Development Organisation (DRDO) said. The sources added that the failure was caused by the wing-deployment problem in the second stage of the missile, which flies like an aircraft.

Out of four Nirbhay missions so far, three, including Wednesday's flight-test, have ended in failure.

On Wednesday afternoon, after the missile took off from Launch Complex-III of the ITR, it did not follow the required flight path.

“The booster engine in Nirbhay's first stage started working. The missile lifted off from its launcher. But it started veering dangerously towards one side in less than two minutes of its lift-off,” DRDO officials said.

The missile started flying beyond the safety corridor and threatened to fall on the land. So the “destruct” mechanism in its first stage was activated and it was destroyed.

The DRDO sources called the mission “an utter failure” because the missile started veering towards one side in the “initial phase” of the flight itself. They said, “It is a big failure. We should have a thorough re-look at what has been done so far. Out of four Nirbhay missions, three have ended in failure.”

The sources ruled out any problem with the missile's configuration. They said it could be “a hardware failure” that led to the mission being aborted. “This is a hardware element issue. This is a reliability issue with a component,” they explained.

A successful Nirbhay mission would have lasted for more than an hour. In a normal mission, the contraption will take off vertically like a missile, then a mechanism in its first stage will tilt the missile horizontally and the first stage, with its booster engine, will jettison into the sea. Then the second stage with the turbo-engine will start cruising horizontally like an aircraft with its wings spread out at a subsonic speed of 0.7 Mach.

The missile, conceived, designed and developed by the DRDO, can take out targets 1,000 km away. It can carry a 300 kg warhead.

Previous tests

Nirbhay’s debut flight on March 12, 2013 was a failure. After 20 minutes of lift-off, it deviated from its path and its “destruct” mechanism was activated to ''kill'' it.

The second flight on October 17, 2014 was a big success. The missile travelled 1,010 km instead of the targeted 800 km.

The third mission on October 16, 2015 was again a failure. After 70 seconds of its flight, when it was cruising like an aircraft after the first stage had fallen off as planned, it lost control and fell within the safety zone.

Riaz Haq said...

After Verizon Deal, Yahoo to Become ‘Altaba’ and Marissa Mayer to Step Down From Board

https://www.nytimes.com/2017/01/09/business/dealbook/yahoo-would-become-altaba-after-selling-its-internet-business.html


Still, Altaba (Yahoo's new name) is certainly an unusual name — and it also happens to be close to “Al-Taba,” apparently a manufacturer of scissors based in Pakistan.

http://www.al-taba.com/

Al-Taba Corporation established in 1980 is one of the largest private manufacturers and exporter of vast rang of Instruments. We specialized in Manufacturing Quality Medical Surgical Scissors and Beauty Scissors. It comprises of an integrated manufacturing facility, employing skilled craftsmen to produce broad range of professional Instruments. Its manufacturing process is running on automatic machines under the supervision of experts scissors technicians.

The fate of Yahoo’s $4.8 billion sale of its internet business to Verizon Communications may be uncertain. But in case it goes through, Yahoo has plans for what will remain.

In a regulatory filing, the company said on Monday that when that deal closed, it would rename itself “Altaba.”

Moreover, more than half of the company’s current board members — including Marissa Mayer, its chief executive — would step down.

Why Altaba?

It is essentially a play on the single biggest asset that would remain of Yahoo if and when the deal with Verizon closes: a 15 percent stake in the Chinese e-commerce giant Alibaba. Altaba would also own a 35.5 percent stake in Yahoo Japan. (A Yahoo spokeswoman declined to comment.)

Still, Altaba is certainly an unusual name — and it also happens to be close to “Al-Taba,” apparently a manufacturer of scissors based in Pakistan.

The company said in its regulatory filing that the directors who would remain after the name change would be Jeffrey Smith, the activist investor who helped prod change at the company; Tor Braham and Catherine J. Friedman, former investment bankers; Eric Brandt, a former chief financial officer of the chip maker Broadcom; and Thomas McInerney, a former chief financial officer of the media company IAC.

Among the directors stepping down would be Ms. Mayer; Yahoo’s chairman, Maynard Webb; and David Filo, a Yahoo founder. Mr. Webb would become chairman emeritus of the newly renamed Altaba.

Of course, all those changes depend on whether Yahoo can actually close on the sale of its primary internet businesses to Verizon, given the disclosure of two hacking episodes, the second of which affected more than a billion user accounts.

Verizon executives have said publicly that they are weighing their options, including potentially paying less than the agreed-upon $4.8 billion. Marni Walden, Verizon’s president of product innovation and new businesses, said last week of the transaction’s fate, “I can’t sit here today and say with confidence one way or another because we still don’t know.”

But Tim Armstrong, the chief executive of AOL, which is owned by Verizon, told CNBC that he was optimistic.

“I remain hopeful the deal will close, and I think we’ll see what the outcomes are of the Yahoo investigations in the meantime,” he said.

Riaz Haq said...

Tycoon Rajiv Bajaj Warns Against 'Made In #India' Becoming 'Mad In India' #MakeinIndia #Modi http://www.ndtv.com/india-news/tycoon-rajiv-bajaj-warns-against-made-in-india-becoming-mad-in-india-1660296 … via @ndtv

MUMBAI: Peeved at hurdles being faced by his company to launch its quadri-cycle in India, industrialist Rajiv Bajaj today said stifling of innovation by regulatory agencies will turn 'Made in India' into 'Mad in India', taking potshots at the Centre's flagship manufacturing initiative.

"If your innovation in the country depends on the Government approval or the judicial process, it will not be a case of 'Made in India', but 'Mad in India'. After five years, we are still waiting for permission to sell our four-wheeler in the country," the Managing Director of Bajaj Auto told a gathering of IT industry executives .

Stating the quadri-cycle is being sold across countries in Europe, Asia and Latin America, Mr Bajaj wondered why a vehicle which is cleaner, fuel-efficient, safer and whose benefits are as "obvious as daylight", is facing troubles.

"This is the only country that has not given us permission to sell this vehicles. Because for some reason it thinks if four-wheeler is worse, let people continue on three-wheeler," Mr Bajaj said.

It can be noted the Pune-based auto major, the largest three-wheeler maker in the world, has faced multiple hurdles in launching the ambitious vehicle in the country. Meanwhile, Mr Bajaj said his company is "anti-car", and sought to dismiss notions regarding two-wheelers being dangerous, saying it is reckless driving which makes two- wheeler riders most vulnerable.

"We feel people should either walk, cycle or use a two-wheeler. Cars are too big, too fast. they pollute, they congest and kill all of us on two-wheelers. People say two-wheelers are dangerous, My submission is two-wheelers are dangerous only when hit by a car."

Mr Bajaj announced his company is working on a new solution for urban mobility on the last mile connectivity which is safer and cleaner than the available alternatives, but declined to divulge additional details on the same.

He rubbished suggestions of getting back into manufacturing scooters, saying the company does not look it as an extension of manufacturing motorcycles and will continue to focus on its core strength.

"Media and analysts call it de-risking. It is not, it is gambling! this is playing darts, distraction and fragmentation of resources. You must be like (Mahabharat hero) Arjun, see eye of the bird and go for it," he said, adding Bajaj Auto wants to increase its 10 per cent market share of global motorcycle sales.

Riaz Haq said...

More layoffs likely as #India's #manufacturing sales shrink. #Modi #Demonetization #MakeInIndia http://ecoti.in/H8qyXb via @economictimes

http://economictimes.indiatimes.com/news/economy/policy/more-layoffs-likely-as-indias-manufacturing-sales-shrink/articleshow/57374939.cms


Despite the government's efforts to attract investment under its Make in India campaign, sales of manufactured goods fell 3.7 per cent during 2015-16 -- the first decline in seven years --sparking fears of layoffs and debt default in the months to come.

Spurred by a global slowdown and lack of demand, sales of manufactured goods were falling even before demonetisation, affecting sectors ranging from textiles to leather to steel.

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A range of factors including falling investment, increased input costs and higher import duties have caused demand for manufactured goods to fall, a trend that was visible before demonetisation and has strengthened since.

While the services sector grew by 4.9 per cent in 2015-16, faster than the 3.7 per cent recorded in the previous financial year, manufacturing contracted for the first time in seven years, from a growth rate of 12.9 per cent in 2009-10 to -3.7 per cent in 2015-16, ..

Riaz Haq said...

Why #monsoon matters so much for #India - 66% pop are #farmers. 60% of land rain dependent http://Moneycontrol.com

http://www.moneycontrol.com/news/business/economy/heres-why-the-monsoon-matters-so-much-for-india-2260505.html

Despite big strides in industry and services, two-thirds of Indians depend on farm-based income. Nearly 60 percent of the country’s farms lack irrigation facilities, leaving millions of farmers dependent on the rains.

The monsoon is critical to replenish 81 reservoirs necessary for power generation, irrigation and drinking. About half of India's farm output comes from summer sown kharif crops such as rice, sugar, cotton, coarse cereals.

The monsoon also refills 81 nationally monitored water reservoirs crucial for supply of drinking, power and irrigation water supply.

The June-September monsoon is likely to be 96 percent of the long-period average, the Met department said on Tuesday, a forecast that will be cheered by millions of farmers and the government alike.

The south-west monsoon, besides bringing relief from a blazing summer, serves as the lifeblood for the critical summer-sown kharif crop. Here's why the monsoon matters so much for India:

What is monsoon?

It is essentially a shift in the prevailing wind patterns. Drafts of breeze from the south Pacific travel northwards, carrying moisture along the way. It traverses nearly 8,000 km before reaching the Asian land mass, resulting in rainfall and offering respite from a sweltering summer.

How is it distributed across India?

Kerala is the south-west monsoon’s first port of landfall in mainland India. It arrives in Kerala in the first of week of June, having covered Andaman and Nicobar islands a week before. After hitting Kerala, it breaks out into two branches: one over the Bay of Bengal and the other over the Arabian sea. In a normal year, it covers the entire country in a month. It hits Maharashtra around June 15 and Delhi around June 29 before travelling further north-west.
Is monsoon essentially an Asian phenomenon?

No. Monsoons happen in the world’s other regions too such as Europe, Chile, Africa and North America.

How is the monsoon’s progress recorded?

Satellite images now allow weather scientists to fairly monitor monsoon’s course and quantum. According to the Met’s classification, the monsoon is considered normal if rains are between 96-104 percent of the 50-year average rainfall of 89 cms. The monsoon is taken to be below normal if rains are between 90–96 percent. If less than 90, it is considered deficient.

Why is the monsoon so important for India?

Despite big strides in industry and services, two-thirds of Indians depend on farm-based income. Nearly 60 percent of the country’s farms lack irrigation facilities, leaving millions of farmers dependent on the rains.

The monsoon is critical to replenish 81 reservoirs necessary for power generation, irrigation and drinking. About half of India's farm output comes from summer sown kharif crops such as rice, sugar, cotton, coarse cereals.

The monsoon also refills 81 nationally monitored water reservoirs crucial for supply of drinking, power and irrigation water supply.

Riaz Haq said...

#India privatizing #defense industry as part of $11 billion sale of assets to cut #arms imports https://www.bloomberg.com/news/articles/2017-04-18/aircraft-carrier-maker-leads-sale-of-stakes-in-indian-arms-spree … via @business

Want to buy a stake in an aircraft-carrier builder? How about a fighter-jet maker?

India is about to start an $11 billion sale of government assets, including holdings in the shipyard and factories that supply India’s military, offering investors a share of some of the region’s more profitable manufacturers that are benefiting from soaring defense spending.

India is the world’s largest arms importer and Prime Minister Narendra Modi wants to change that while at the same time raising money to reduce the fiscal deficit. Among the biggest stakes to be sold are in Hindustan Aeronautics Ltd., or HAL, which is trying to build a domestic fighter, and Cochin Shipyard Ltd., currently building India’s first home-made aircraft carrier. The shipbuilder has seen profit almost double in the last five years, while earnings at most big global shipyards have slumped.

As India builds its status in the region, “it will find it even more essential that it becomes self-sufficient in designing and manufacturing high-tech weapon systems," said Deepak Sinha, a consultant with the New Delhi-based Observer Research Foundation. Non-state investors can help make the arms-makers more efficient and focused, he said.

Modi has pledged to spend $250 billion by 2025 on weapons and military equipment for a nation that has territorial disputes with Pakistan and China. India makes about 70 percent of its defense purchases abroad and has topped the Stockholm International Peace Research Institute’s list of the largest defense importers for the last seven years.

Riaz Haq said...

#India ministry mocked for 'appropriating' picture of #Spain-#Morocco border as #India-#Pakistan border. #Modi #BJP

http://www.bbc.com/news/world-asia-india-40284480#

Twitter users are ridiculing India's home ministry for using a picture from Morocco's border with a Spanish territory to highlight its work.
Alt News website reported on Wednesday that the ministry used the picture in its annual report to show that it had installed floodlights in border areas.
But the website said the picture was taken in 2006 by Spanish photographer Javier Moyano of the Ceuta enclave.
The ministry has reportedly ordered an inquiry into the "embarrassing gaffe".
Edited Modi flood photo sparks mockery
Prime Minister Narendra Modi's government has faced similar online mockery in the past for using wrong or photo-shopped pictures in official press releases and reports.
India's state-run Press Information Bureau in 2015 tweeted an obviously edited image of Mr Modi surveying deadly Chennai floods.
In the latest gaffe, the home ministry included the picture in its report which was published on its website.
After Alt News reported the error, many Indians took to Twitter to mock the ministry.

Riaz Haq said...

Is #Lockheed dumping obsolete #F16 on #India? - #MakeInIndia #Modi #BJP BBC News

http://www.bbc.com/news/world-asia-india-40344566

Lockheed Martin and India's Tata Group have formalised an agreement to relocate the manufacturing of the most advanced F-16 fighter jets to India.
The effort is aimed at securing a multi-billion dollar deal from Delhi.
The announcement comes days ahead of Indian PM Narendra Modi's visit to Washington for a meeting with President Trump.
But some defence experts are accusing Lockheed of offloading obsolete aircraft on India.
What's in the deal?
India will be able to "produce, operate and export the multi fighter F-16 Block 70 aircraft", a joint release said.
"Contingent upon (the) US and Indian government agreement and approval, F-16 Block 70 aircraft would be produced exclusively in India," said a Lockheed Martin statement to the BBC.
"The F-16 Block 70, the next production version of the aircraft, would be the only F-16 version in production. As such, India would become the future home of F-16 production worldwide."
Many see the arrangement as a boost to Mr Modi's "Make in India" push, although it may take years to bear fruit.
Lockheed and Tata would have to win a formal bidding process to begin co-manufacturing.
Why does India need it?
India needs to replace over 200 aged MiGs that are already pushing the expiry date, experts say.
The Russian-supplied MIGs have faced criticism over the years for alleged malfunctioning and frequent crashes that have killed scores of Indian pilots.
F16s have dominated the global market for years.Image copyrightLOCKHEED WEBSITE
Russians blame the crashes on poor Indian maintenance.
India has been trying to ease its traditional reliance on Russia by diversifying its buying options.
US to buy more F-35 fighter jets from Lockheed Martin
Lockheed Martin shares suffer after Trump F-35 tweet
Why are India's air force planes falling out of the sky?
India and France sign Rafale fighter jet deal
It bought French Rafales off the shelf in 2016 after lengthy and arduous negotiations.
Steeply escalating costs, poor after-sales service and a lack of sophisticated military equipment are the reasons cited by some analysts for the shift away from Russia.
The F-16s are said to be up against competition from Sweden's Saab group and its Gripen jets.
How cutting-edge are F-16s?
F-16s have dominated the global market for years. More than 3,000 of the multi-role aircraft are currently in use by 26 countries.
F-16 production in India will support thousands of jobs in the US, said a joint statement issued from Paris, apparently to counter expected criticism that the deal would fall foul of Mr Trump's "America First" policy.
They were originally conceived in the early 1970s as a "lightweight air-to-air day fighter".
Analyst Brahma Chellaney charges Lockheed Martin with dumping obsolete F16s in India.Image copyrightTWITTER
But some commentators in India are asking if the agreement with the Tatas is an effort by Lockheed to offload old technology in India.
"India a dumping ground for obsolete weapons system?" asked defence expert Brahma Chellaney on Twitter.
"Lockheed Martin signs F-16 deal with Tata. Why Tata? Because they make the noisiest car?"
Defence writer Rahul Bedi agrees with Mr Chellaney.
"F-16s developed in the '70s have already reached the optimum level of modernisation. The US Air Force has phased them out in favour of the much more advanced F-35s," he told the BBC.
Disaster response personnel walk next to the wreckage of an Indian Air Force MiG-21 Bison aircraft that crashed in Soibugh on the outskirts of Srinagar on August 24, 2015.Image copyrightAFP
Image caption

Riaz Haq said...

How #China beats #India hollow in trade and dominates #Indian homes, #markets #economy #trade http://economictimes.indiatimes.com/news/economy/foreign-trade/china-dominates-indian-homes-markets-and-economy-as-trade-deficit-widens/articleshow/59611452.cms via @economictimes

China seems to be grabbing most of it (solar panels). “The US and Europe are taking measures to protect themselves against Chinese dumping. We (Indians) have instead offered them a direct train to the Indian market. The government must ring fence Indian firms to allow them to grow,” says Chaudhary.

Miles away in Delhi, Rakesh Kumar Yadav shows you another Chinese-flavoured world. He is the president of the Federation of Sadar Bazar Traders Association. The umbrella platform for The umbrella platform for 83 other associations with 35,000 wholesale traders does business worth over Rs 3,000 crore annually and employs at least 100,000 people directly and indirectly.

About a decade back, the traders often used to source products — toys, plastic buckets, idols of Indian gods, among others — from domestic manufacturers. In toys alone, Yadav knows many Indian manufacturers who employed 500-plus people and were their suppliers. “They have all shut down and now import from China. Cheaper and better Chinese imports have wiped out the domestic industry,” says Yadav.

On the border, India is trying to ward off Chinese aggression. In the cold Himalayan plateau, temperatures have shot up as an old political rivalry heats up. India and China are sparring over the Doklam tri-boundary area (the third country being Bhutan), near Chicken’s Neck which connects India’s north-eastern states to the rest of the country. Shrill calls for a boycott of Chinese goods are getting louder, with the Rashtriya Swayamsevak Sangh (RSS) and its affiliate, the Swadeshi Jagran Manch, ..

Read more at:
http://economictimes.indiatimes.com/articleshow/59611452.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Riaz Haq said...

PM #Modi Calls The World To '#MakeInIndia,' But The Initiative Fails To Take Off. #India #BJP #Manufacturing

https://www.forbes.com/sites/suparnadutt/2017/07/24/missing-the-mark-pm-modi-courts-the-world-to-make-in-india-but-the-initiative-fails-to-take-off/#25382564785c

Just months after taking office in 2014, Indian Prime Minster Narendra Modi, standing below an immense logo of a lion, unveiled an economic vision for India to be a global manufacturing power. Investors should rush to “make in India,” he said. He claimed that his strong leadership would usher in economic revival by increasing the share of manufacturing in the country’s gross domestic product (GDP) to 25% by 2025, and creating 100 million new jobs by 2022. He vowed India would train apprentices by the hundreds of millions to service that manufacturing boom, reduce bureaucracy and improve infrastructure, paving the way for foreign investors.

Three years into his five-year term, although parts of India’s $2.3 trillion-strong economy are in better shape today than they were earlier — deficits are lower; businesses face somewhat less red tape — the contribution of the manufacturing sector to GDP is barely 16%, progress in improving the country’s inadequate roads, rail lines and ports has been slow and the job creation rate has fallen. Between, 2014 and December 2016, only 641,000 jobs were created. That is far too few, considering roughly one million people join the labor force every month.

Demonetization effect

Official GDP statistics show first-quarter growth in the economy, at an annual rate, was just 6.1% — unimpressive for a big, poor country with much catching up to do. Last November, demonetization severely set back the manufacturing sector. In the automobile industry, sales dipped 19% in December, the biggest monthly fall in 16 years. Sales of FMCG products fell 40-50%. The informal sector, which comprises over 80% of the economy, was the worst hit. Hundreds of small units downed their shutters, leaving thousands jobless.

Meanwhile, sectarian strife and instability, a worry in itself, also matters for the economy. Popular columnist Swaminathan S. Anklesaria Aiyar wrote in Times Of India that although Modi wants to sell India to the world as a global manufacturing hub, it will not be possible “if India’s fastest growing industry is lynch mobs.”

Also, the recent start of Goods and Service Tax (GST), supposed to create a single market, replacing lots of local taxes with national ones, was good to see, but the system, with six tax rates for different goods, is overly complicated and some in business complain it has been implemented poorly.

Almost nothing has gone as planned to attract investors to make in India.
Defense manufacturing

“Initially, the Make In India program was mainly focused on defense production, but little has happened there. The local production of big ticket items eludes us. Even as he was announcing this, PM Modi ordered ready to fly Rafale jets in France,” says Mohan Guruswamy, chairman of Centre for Policy Alternatives Society.

According to a new data released by Stockholm International Peace Research Institute (SIPRI), India is the world’s largest importer of major arms, accounting for 13% of the global total sales between 2012 and 2016. 
Lockheed Martin Corp and Saab AB have promised to build products in India, but not much has progressed due to red tape, reliance on state-owned companies and constant delays. While a manufacturing unit for assault rifles, a joint venture between India and Israel, was launched this month in Madhya Pradesh, the Army rejected the indigenous guns built by the Rifle Factory Ishapore after they failed the firing tests last month. This leaves India overwhelmingly reliant on foreign imports, mainly from Russia, the U.S. and Israel.

Riaz Haq said...

#Indian Army Vice Chief says #Pakistan's #defense #industrial base better than #India's. #military

http://indianexpress.com/article/india/pakistan-defence-industrial-base-better-than-ours-army-vice-chief-4766949/

Lt. Gen. Sarath Chand, Vice Chief of Army Staff (VCOAS), said the ordnance factories have not been able to keep pace with changing technology while "there is no competition whatsoever" and it is "an unsuccessful method of supporting our defence requirements".

A top Army general on Tuesday said Pakistan has a better military industrial base and exports more defence equipment than India, as he came down heavily on ordnance factories which manufacture weapons for the forces. Lt. Gen. Sarath Chand, Vice Chief of Army Staff (VCOAS), said the ordnance factories have not been able to keep pace with changing technology while “there is no competition whatsoever” and it is “an unsuccessful method of supporting our defence requirements”.
“I would even go to the extent of saying that Pakistan probably has a better industrial base, as far as defence production is concerned, than our country. In fact they export defence equipment abroad, definitely more than what we are doing,” he said.
He wondered whether the functioning of ordnance factories is because of the assured orders they have or the lack of accountability. “There is little or no research and development. They do not even have the capability of absorbing the industry through transfer of technology, and in some cases they have even failed to assemble products that have been imported from abroad,” Lt. Gen. Chand said.
“It is very hard to see ordnance factories changing in the present state. Overall it has become an unsuccessful method of supporting our defence requirements,” he said. He was speaking at the inaugural session of AMICON 2017, a two-day conference organised by the Army and the CII.

He noted that having indigenous industrial capability is very crucial for the country. He further cautioned that in an event of a war, one has to look abroad for its sustenance. “And very often, friends have let us down whenever the chips have been down,” Lt. Gen. Chand observed.
He said the ‘Make in India’ programme, the Defence Procurement Policy 2016, the strategic partnership model, and the creation of the Army Design Bureau (ADB), are major steps taken by the government for fast-tracking indigenisation in the sector.

Riaz Haq said...

After Spending #Indian Rs. 36 billion, Made-In-#India Akash #Missile Fails Tests, Says Auditor. http://www.ndtv.com/india-news/3-600-crores-later-made-in-india-akash-missile-fails-tests-says-auditor-1730496 … via @ndtv


3,600 Crores Later, Made-In-India Akash Missile Fails Tests, Says Auditor
The Akash and its newer variant, the Akash Mk-2, are a medium-range surface-to-air missile system designed to intercept enemy aircraft and missiles at a distance of 18-30 km.


As many as a third of the home-made Akash surface-to-air missiles have failed basic tests, says the country's national auditor, claiming the deficiencies of the missiles "posed an operational risk during hostilities."

The report of the Comptroller and Auditor General (CAG) is a big setback for the Make-In-India initiative which seeks to reduce India's dependence on imported arms. The report, given to parliament, says, "the missiles fell short of the target, had lower than the required velocity, and there was malfunctioning of critical units."

The Air Force has refused to comment on the report.

The Akash was produced by the state-run Bharat Electronics. The auditor says that though 3,600 crores have been paid to the manufacturer, none of the missile systems are installed at the six designated sites even though it has been seven years since the contract was signed.

The Akash and its newer variant, the Akash Mk-2, are a medium-range surface-to-air missile system designed to intercept enemy aircraft and missiles at a distance of 18-30 km. Tested extensively by the Indian Air Force, the Akash, which was first handed over in December 2008, was seen as a breakthrough indigenous system and in 2010, an additional six squadrons were ordered.

http://www.ndtv.com/india-news/3-600-crores-later-made-in-india-akash-missile-fails-tests-says-auditor-1730496

Riaz Haq said...

Here is one #surgical strike from #Pakistan #Indians eagerly await. #Sialkot #Trade #surgery http://economictimes.indiatimes.com/news/politics-and-nation/here-is-one-surgical-strike-from-pakistan-indians-eagerly-await/articleshow/59837835.cms … via @economictimes

The worsening of political ties between the two countries notwithstanding, India imports scissors, forceps and other surgical instruments such as needle holders and retractors from Pakistan, not only for domestic use but also for export to Afri can countries, among others.

Indian artisans sought to compete with their Pakistani counterparts but eventually gave up, suppliers told ET. "These instruments are manufactured with the aid of hammer forging, a technique available in Pakistan " said Vipin Yadav, owner of Leo Manufacturers.

"Setting up an industry having this technique will entail substantial cost, which we won't be able to bear without government support. While we manufacture 50 pieces a day, Pakistan, with the help of hammer forging, produces 5,000 pieces a day. And at a much cheaper price."

Read more at:
http://economictimes.indiatimes.com/articleshow/59837835.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst



Riaz Haq said...

Nikkei #India #Manufacturing PMI dips sharply in July 2017. #MakeInIndia #GST #Modi

http://www.business-standard.com/article/news-cm/nikkei-india-manufacturing-pmi-dips-sharply-in-july-2017-117080100274_1.html

Output slides following implementation of goods and services tax

PMI survey data indicated that the introduction of the goods & services tax (GST) weighed heavily on the Indian manufacturing industry in July. New orders and output decreased for the first time since the demonetisation-related downturn recorded in December last year, with rates of contraction the steepest since February 2009 in both cases. Consequently, companies purchased fewer quantities of inputs for use in the production process, leading to an overall decline in holdings of raw materials and semi-finished items. Cost burdens increased further, but factory gate charges were lowered as firms attempted to win new business.
At 47.9 in July, down from 50.9 in June, the Nikkei India Manufacturing Purchasing Managers Index (PMI) was at its lowest mark since February 2009 and highlighted the first deterioration in business conditions in 2017 so far. The downturn was widespread across the three broad areas of manufacturing, with intermediate goods producers the worst affected.

Incoming new work dropped for the first time in the year-to-date and at the steepest pace since early- 2009. Anecdotal evidence indicated that the GST launch hampered demand. Different to the trend for total order books, new export orders continued to rise in July. That said, the rate of expansion softened from June's eight-month high.

Lower sales triggered an overall accumulation in stocks of finished goods. The rise in holdings of manufactured products was marginal, but interrupted a two-year period of ongoing depletion.

Discouraged by the downturn in factory orders, companies lowered production in July. The fall ended a six-month sequence of growth, and the rate of reduction was the most pronounced since the global financial crisis.

Fewer output requirements caused a reduction in purchasing activity. Although moderate, the contraction in buying levels was the quickest in eight-and-a-half years. Subsequently, inventories of inputs decreased.

According to Indian manufacturers, higher tax rates sparked greater cost burdens in July. However, the pace at which input costs rose was moderate and much weaker than its long-run average. Reflecting attempts to win new business in the face of a competitive environment, some companies lowered their selling prices. Overall, the rate of discounting was marginal. Prior to July, charges had increased for 16 months in succession.

After having increased in June, payroll numbers fell in the current reporting month. But, with the vast majority of panellists signalling unchanged headcounts, the rate of job shedding was marginal overall.

The 12-month outlook for output remained positive in July, with companies expecting more clarity regarding the GST to support growth. New projects in the pipeline and improved product quality were also mentioned as reasons underpinning positive sentiment. The level of confidence was at an 11-month high.

Commenting on the Indian Manufacturing PMI survey data, Pollyanna De Lima, Principal Economist at IHS Markit and author of the report, said: "Manufacturing growth in India came to a halt in July, with the PMI down to its lowest mark in almost eight-and-a-half years amid widespread reports that the sector has been adversely affected by the implementation of the goods and services tax. The reductions in output, new orders and purchasing activity were all the steepest since early-2009.

"The downturn was broad-based across all sub-sectors covered by the survey, with output scaled back among firms in the consumer, intermediate and investment goods categories amid falling order books.

Riaz Haq said...

#India's #Manufacturing growth slows to 1.2% from 10.7% last year as #GDP growth hits 3-year low of 5.7% #Modi #BJP

http://economictimes.indiatimes.com/news/economy/indicators/indias-q1-gdp-slips-to-5-7-from-7-9-in-the-same-quarter-a-year-ago/articleshow/60309685.cms

Gross value added (GVA) in the manufacturing sector fell sharply to 1.2 per cent, from 10.7 per cent year on year, as the businesses focussed more on clearing inventories rather than production ahead of the July 1 launch of GST.

A separate set of official data showed that growth of eight core sectors slowed to 2.4 per cent in July due to contraction in output of crude oil, refinery products, fertiliser and cement.

Uncertainty about new indirect tax rates under GST ..

Riaz Haq said...

India simply cannot afford to boycott “Made in China”

Devangshu Datta, Scroll.in

https://qz.com/1079903/india-simply-cannot-afford-to-boycott-made-in-china/


A few days after the Doklam standoff erupted in June, a series of bizarre online advertisements interspersed my surfing experience. A televangelist yoga teacher-cum-entrepreneur started exhorting Indians to start boycotting Chinese goods. Presumably the Indian conglomerate that the yoga teacher fronts sensed an opportunity to expand its product lines.
The yoga teacher wasn’t the only person advocating the boycott of Chinese goods. The Swadeshi Jagran Manch, the Rashtriya Swayamsevak Sangh (RSS), and other front organisations for the ruling dispensation all made similar high-decibel noises. The arguments they proffered in favour of Swadeshi are stupid.
Swadeshi is a stupid idea under most circumstances and especially so when it is applied to the India-China trade relationship. This is the argument its proponents offer:

China is an enemy.
India buys lots of Chinese goods.
If India stops buying Chinese goods, China would hurt more because it has a trade surplus with us.
Indians could start producing such goods domestically and, thus, stimulate the domestic industry.
If India stopped importing goods from abroad in general and produced everything domestically, it would have a strong economy.
On the face of it, this might seem a plausible set of premises connected by a glib chain of logic. So let’s address them one by one.


1. ‘China is an enemy’

Perhaps true. It is certainly very friendly with one of India’s neighbours, which New Delhi does not get on with. It also has live border disputes with India (and Bhutan) in multiple places. China has excellent relationships and huge economic ties with several other neighbours. In Facebook-speak, India’s relationship with some of these neighbours is complicated.

For instance, India’s relationship with Nepal has deteriorated because of objections over its new constitution, adopted in 2015. That year, it imposed an unofficial blockade of goods into the Himalayan nation to protest against it.
India’s relationship with Myanmar is more or less okay except that Naypyidaw was quite unhappy about Delhi tom-tomming surgical strikes against Naga insurgents in its territory in 2015.
Our relationship with Sri Lanka is so-so and likely to remain that way because of the ill-conceived military operation led by the Indian Peace Keeping Force in the island nation in the late 1980s.
With regard to Bangladesh, the enclave business has been largely sorted out with the historic land swap in 2015 but there are still disputes about river-water sharing. There is a knee-jerk tendency among Indians to scream about illegal Bangladeshi immigrants. There is also a knee-jerk tendency for Bangladesh to scream about being bullied by its bigger neighbour. There are also accusations that Indian separatists have havens in Bangladesh and that Bangladeshis are part of Islamic terror networks.

2. ‘India buys lots of Chinese goods’

Yes indeed, India buys all sorts of stuff ranging from solar power equipment and high-end electronics to plastic buckets, Hindu idols, and winter coats. China’s exports to India were an estimated $61 billion in 2016-17 while India’s exports to China were $10 billion in that period. So China has an enormous surplus with regard to India.
3. ‘If India stops buying Chinese goods, the Chinese would hurt more because China has a trade surplus’

Looking at India’s trade deficit with China in the context of gross domestic product or GDP, however, China has less exposure. Its exports to India amount to about 2.7% of India’s GDP (about $2.26 trillion in 2016, according to World Bank data) and about 0.5% of Chinese GDP (about $11.2 trillion in 2016, according to the World Bank). India’s exports to China amount to about 0.08% of Chinese GDP and about 0.45% of Indian GDP.

Riaz Haq said...

India simply cannot afford to boycott “Made in China” Part 2

Devangshu Datta, Scroll.in

https://qz.com/1079903/india-simply-cannot-afford-to-boycott-made-in-china/



If there was a trade war, India would have to source the same goods from elsewhere and ditto for China. India is internationally competitive in the things it offers to China. Similarly, China offers good value in its exports to India. But both India and China would also need to find other markets and that would not be easy since both nations are large markets themselves.
As a thought experiment, assume that both countries have to pay a 10% premium to source from elsewhere, China then pays the equivalent of 0.09% of its GDP and an absolute amount of about $11 billion while India pays the equivalent of 2.9% of GDP and an absolute amount of about $66 billion.
Which nation loses more?
4) ‘Indians could start producing those goods domestically and thus stimulate domestic industry’

Indians do not buy Chinese goods out of a desire to do charity. They buy them because imported alternatives are more expensive and India cannot produce the same things as cheaply at the same quality. If India tried to produce the same goods locally, or imported them from other nations, it would have to pay a premium either way. That premium would mean that Indians will have less money to spend elsewhere. More than that, it would mean the unproductive use of human resources and of capital.
5) ‘If India stopped importing goods from abroad in general and produced everything domestically, it would have a strong economy’

No it would not. India tried this idiocy for decades. It banned all imports (except the ones that were absolutely necessary) and produced shoddy overpriced Ambassador cars, fridges that did not cool, telephones that did not work, bottles with defective caps, paper cups with holes. Indians were fleeced by their compatriots for years in the name of swadeshi. What is more, producing goods domestically will not necessarily generate net employment. Chinese companies operating in India employ huge numbers. Those people would be laid off in a trade war.
There are also a few things India simply cannot produce domestically.
One is energy—India is woefully deficient in crude, high-grade coal and gas. It has to import these energy commodities and will always have to do so.
India is also deficient in rare-earth metals. These are required to produce solar power equipment, wind turbines, cellphones, laptops, and most other electronic gear. Guess which nation has a 90% global monopoly in rare earths? Here is a hint—its initials read “PRC.” As India moves further in the direction of clean, green energy, it becomes ever more dependent on Chinese rare earths.
At the beginning I had said that swadeshi is a stupid idea under most conditions, not just in the India-China context. Let me explain why in a series of Q&As.
As mentioned earlier, India will always have to import some commodities, so:
How does one pay for imports?
By generating foreign exchange from exports.
How does one generate foreign exchange from exports?
By producing globally competitive goods and services.
How does one produce goods and services that are globally competitive?
By focussing capital and human resources in areas where there is a competitive edge. Economic theory says that if Nation A has a competitive advantage over Nation B in producing two separate items, Nation A should nevertheless focus on producing the one item where it has the larger margin.
How does one produce goods and services that are uncompetitive?
By squandering capital and resources in uncompetitive sectors swadeshi ensures the production of uncompetitive goods and services.