Modi asks billionaires if China's pain can be India's gain
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NEW DELHI: Indian Prime Minister Narendra Modi called bankers and billionaires to his residence on Tuesday to brainstorm on how India can manage global economic turbulence, including opportunities for Asia's third-largest economy in China's market and growth woes.
The morning meeting in New Delhi was attended by tycoons including India's richest man, Mukesh Ambani, Indian Finance Minister Arun Jaitley, central bank governor Raghuram Rajan, economists and state and private bank chiefs.
At the gathering, the Associated Chambers of Commerce & Industry of India (Assocham) told Modi policy makers needed to act fast to "bullet proof" India from global jitters ─ calling for a deep cut in interest rates and new duties to stop dumping of Chinese products such as steel.
India's macroeconomic situation has improved considerably since the "taper tantrum" of 2013, not least thanks to lower prices for the commodities it imports. Then, inflation, for example, was at double digits ─ it has since halved.
The International Monetary Fund considers India's economy a rare bright spot among emerging markets and Modi sees a chance to attract more foreign investment as money flows out of China.
But it will not be easy to turn China's pain into India's gain. Investors and corporates increasingly worry that Modi has not moved fast enough since taking office. Annual growth slowed to 7 per cent in the June quarter.
"Mr. Modi ran a successful state. He campaigned for two years saying he knew what to do. He has been there 15 months with the largest majority since independence yet little has happened," United States investor Jim Rogers told Reuters Trading India on Tuesday. Rogers recently announced he had sold his India investments.
After farmer protests forced the government to drop a major land reform and opposition parties delayed a growth-boosting tax overhaul, expectations are growing that Modi will soon unveil new measures to make it easier for foreign money to enter India.
The government predicts India's economy will grow at 8pc or more in fiscal year 2015-2016, prodded by government spending. Yet private investment has been slow to pick up, with banks and businesses hobbled by bad debts and high lending rates.
In the real economy, there are few signs of an major economic recovery. In the construction and diamond polishing industries, for example, there have been large lay-offs.
Assocham called on central bank chief Raghuram Rajan to slash interest rates by up to 1.25pc points by March to help revive investment and growth.
Also read: Millions go on strike over ‘anti-labour’ reforms in India
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On DawnNews
Comments (68) Closed
Sep 08, 2015 02:36pm
Modi saheeb if you want to beat China ask your countrymen to do one simple thing:
Develop attention to details culture. If any Indian company can achieve this in manufacturing and can take the "Indian" out of the product then there is some chance of beating China.
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Sep 08, 2015 02:44pm
Our economy is growing faster than China .Wow.congrats Mr Modi
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Sep 08, 2015 02:47pm
Modi means business. How many PMs of developing countries have we seen conducting a meeting on global affairs ?
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Sep 08, 2015 02:47pm
It takes time at national level, be it for any country, for the results to show up. No need to worry. The workings are on track.
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Sep 08, 2015 02:50pm
MEANWHILE....let's guess the thought process going on in our PM house?
1. What is for breakfast?
2. What is status of metro bus?
3. What is for lunch?
4. How can we appease the IMF further?
5. What is for dinner?
6. What is the next foreign trip. Can we get an invitation from Somalia or Mongolia?
Pakistan...how you survive with such selfish leaders, that is the real miracle. And what you could achieve with sincere leadership....the real dream.
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Sep 08, 2015 02:55pm
@BHARAT China is 10 trillion USD economy and India is a 2 trillion USD economy. A GDP growth rate of say 7% for India and 7% for china with its much bigger economy has totally different connotations.
Also the China boomerang effect can also be felt by the Indian economy. The BSE crashed 800 points and about 7 lakh crores gone in a couple of days.
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Sep 08, 2015 02:55pm
How productive this will be only time can tell. But at least the thought is there in India led by Modi. Hope that Pakistan will also awaken to these thoughts soon one day.
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Sep 08, 2015 02:58pm
Mr.Modi, with growing Population, We can't match China. China has introduced one child policy 30 years ago. In India, Few produces several children and few produces one child . And our economy depends upon those having one child . Please bring a law, so that these uncultured and uneducated people to have no more than 2 children. We have no dearth of resources . Only golds deposited in temples can feed our defense budget for next 20 years . We are a rich country, but with such people, we can't progress.
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Sep 08, 2015 03:07pm
@HM This article is about Modi, not Kejriwal... and Modi now-a-days, its a normal ritual for him once a year for forty days, eats only once... so either break-fast, lunch or dinner... :)
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Sep 08, 2015 03:08pm
Goal is not so far!!!
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Sep 08, 2015 03:09pm
Being an Indian, would love to see such Economical meetings with Pak Leaders going above the current stupid matters and leading to rise and growth of both the countries and their people!!
"Sabka Sath.. Sabka Vikas"
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Sep 08, 2015 03:14pm
@mimi sur Agreed..!! We should apply 1 kid in India too and no reservation law.
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Sep 08, 2015 03:17pm
These are all policy making issues which are adjusted based on scenarios.But one thing for sure India will keep growing for at least 8 % for next 3 decades,anything more is certainly desired and will be achieved given India's strong core financial and macroeconomic fundamentals .But China will never grow at 8 % again.The reason simple there is no need for China to use cement in just 5 years than the US used in full 100 years.Using that much cements spread over many years are the more advisable choice but the unnecessary sense of urgency took China down.
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Sep 08, 2015 03:32pm
Yeah !! I believe......only we indians can do this !!!!
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Sep 08, 2015 03:49pm
He is Zardari of India. Lets wait for the bubble to blastofy..
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Sep 08, 2015 03:50pm
@Mimi Sur - Yes, population explosion will keep the country pulling back. That is why one only needs to look at per capita GDP to realise where we really are. India at 143 is even below some African nations like Sudan, Nicaragua, Zambia. Pakistan too at 150. A lot to do before taking inane pleasure as most trolls do!
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Sep 08, 2015 03:53pm
Despite of several challenges, at least, the Indian Government is trying their best for the economic growth. Turning China's pain into India's gain would be the distant dream but attempting to boost economic growth is a good beginning.
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Sep 08, 2015 04:04pm
India has the same problem as Pakistan. Open hearth steel making is a 19th century technology. The British brought it to India. South Asia lacks the technology of Basic Oxygen Plants, and electricity is too dear to run Electric Furnaces. It takes nearly a full day to produce one single heat of steel in one open hearth furnace. A heat of steel is 200 tons. China is simply running more furnaces. Japan can melt a heat of steel at the BOP Shop in 50 minutes. Don't cry "dumping". Cry inefficiency.
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Sep 08, 2015 04:17pm
@Q Adil Nawaz Sharif know all these and a capable one to deal with economy and create growth. However, he is not allowed by establishment to work. There are no proper circumstances in Pakistan for the development of economy. The Kashmir phobia and unending comparison and rivalry with India has become the curse for the economy. If Nawaz Sharif is given a free hand, then he can set right. Now his days are numbered. So no chance for Pakistan in the near future to come out of this mess.
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Sep 08, 2015 04:20pm
Modi is a selfish and mean spirited person. They way he treats Opposition in India, they way he denigrates minorities and the way he looks at the neighbors of India. Absolutely, nobody in the neighborhood trusts him.
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Sep 08, 2015 04:26pm
Compared to India, Chinese economy is based on assembly lines for products invented by others. There is no solid base for it. It can be manipulated easily.
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Sep 08, 2015 04:26pm
@hm: if this the case in Pakistan than how come China is investing in CPEC and india trying best to stop by using militancy ????
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Sep 08, 2015 04:31pm
@Syed Abbas
Go on day dreaming. No harm in that. Comparing Zardari with Modi is nothing but the level of frustration.
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Sep 08, 2015 04:32pm
@point of view
Its a national commitment of the government and the only priority as of now
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Sep 08, 2015 04:34pm
We Pakistanis will never catch up and continue to be in the sorry state we are, God can only help us
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Sep 08, 2015 04:36pm
@BHARAT ,congratz but poverty is also growing , indian economist needs to focus on poverty reduction, emplyoment oppertunites ,heath issue
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Sep 08, 2015 04:37pm
The latest GDP figures which are on the records of both China and India show that India can not compete with China atleast till 2025.
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Sep 08, 2015 04:41pm
There is heavy taxation in India. 14% service tax even on mobile charge, beside taxation on every border of state and other taxation. Thus huge money is collected by state.
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Sep 08, 2015 04:47pm
Modi has brought positivity in people, that is the main reform done by him in India. Now it's People's duty to make India prosper.
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Sep 08, 2015 04:56pm
This is what a progressive PM of a progressive nation discusses..
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Sep 08, 2015 04:59pm
Modi is nothing but sign of Positivity and Possibilities in abundance.
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Sep 08, 2015 04:59pm
@Kamal Pasha : don't worry about India!!
We are going to achieve better results in coming years under this government. Give 10 years at least to this government.
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Sep 08, 2015 05:03pm
From what is written , it would appear that the billionaires are more interested in increasing their personal fortunes. Lower interest rates and import duties will increase their profitability without an improve in efficiency.
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Sep 08, 2015 05:12pm
Iam happy for that our Prime Minister is concerned about the situation and has an optimistic approach. To even think of making China's pain into India's gain takes courage. As an educated Indian I understand China is way ahead of us but we wish to compete and take up the challenge. This makes me feel glad that though the Europe is facing economic challenge, China is turbulent and we seem to still stable which is a very good sign. As far as Pakistan is concerned i feel it has immense potential but mis directed vision. Every state faces corruption but the intent to evade it in our daily routines is the national duty of every citizen.
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Sep 08, 2015 05:51pm
Pakistan imports from India exceeds USD 2 billions.This figure could double if FTA is fully implemented between the two.The historical issues are hampering the growth of both,e.g. the defense expenditure could be curtailed if historical issues are amicably solved.Since India is a bigger country in land & population ,it must exercise a bigger heart in solving the issues,ofcourse once the issues solved India will get the much bigger economic benefit.
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Sep 08, 2015 05:53pm
India trying to live in the shadow of China, and pick up the crumbs that fall from gargantuan mighty China's economy. Don't waste your time India, just make peace with Pakistan by resolving Kashmir and live in harmony. We will help you.
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Sep 08, 2015 06:19pm
@N.S Could you please let me know the Economy of pakistan
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Sep 08, 2015 07:21pm
@Rathor China is largest Asian economy, India is third largest, Pakistan is 7th Largest. CPEC will take us to 4th place, knocking at India's door. TAPC and IPC oil pipelines will takes us to 2nd place.
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Sep 08, 2015 07:53pm
Its sad that someone like Raghu Rajan, a respected economist, has to sit through these meetings.
Chaiwalla has the zero-sum game mentality, which isnt shocking given his background.
Growth economics works a little differently....
Also, to those saying India is growing faster than China, please look at the statistical game that were played to change 4.5% growth to 7%.
Again, I feel sad for Rajan... he should return to the civilized world.
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Sep 08, 2015 08:26pm
@zak having multiple oil pipelines can improve your spot in world economy? Hmmm.. we did not know that. Modi wake up.. please build pipeline from all countries..
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Sep 08, 2015 08:31pm
@Cyrus The biggest Steel Baron is Indian called Laxmi Mittal with plants in USA, France & even China. India invented metallurgy of lead, iron, gold, silver copper, brass... In recent past Indians invented micro steal plants ... do your research first.
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Sep 08, 2015 08:42pm
@zak
at present India GDP is 9 times of that of Pakistan GDP and our economy growth is growing at 7%. Pakistan economy is at present growing at 4.2% only.
Now if your dream of china-Pakistan economic corridor gets completed in next 5 years then there is a possibility that you may have GDP growth of 6 %. after 5 years which will be still less than our present growth rate.
Believe me India is not going to take Back Gear.
we are going to have 9% to 10% GDP growth rate very soon.
I also wish best of luck to Pakistan to have good economic growth.
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Sep 08, 2015 09:11pm
India can say bye-bye to its economic growth if it ever goes to war with Pakistan. Modi is losing popularity because of his inability to deliver on his promises. This may provoke him to do something rash. This will be followed by an overwhelming response, dealing a death blow to india' economy. So watch this space.
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Sep 08, 2015 09:12pm
India is one of the greatest consumers emerging market in Asia which needs more invest with bigger return by foreign investors . It is looking towards China for investment of surplus in India. Moreover international monetary agencies are also giving its economy positive rating . In the market economy relations are attached with trade for more profit as such India holds much opportunities for this .
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Sep 08, 2015 09:32pm
@Rahi Milla Who told you that Modi isn't delivering? Indian economy is projected to grow 7%, which higher than the previous government's accomplishment. Just today Moodys projected that in 2016 the rate would be much higher. Investments are pouring in, BTW, if you buy OnePlus One or Xiaomi phones, they are made in India, just from this year. Relax, cool down, sit back, Modi is delivering.
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Sep 08, 2015 10:52pm
@hm Selfish & incompetent; a very lethal combination for failure.
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Sep 08, 2015 11:08pm
Modi is in for rude awakening, he needs to understand the world today is global and very much interconnected; jitters in Chinese stock market creates turbulences in European and US stock exchanges. Worldwide demand of steel and iron is on decline, Aluminum is fast replacing steel in auto industry, and several other industries. Mittal invested heavily in Steel; see where Mittal Empire will be one year from; Mittal himself got work cut out for him, must as to give a good advice to Modi. Every rise has a fall.
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Sep 08, 2015 11:47pm
@wiseman The 7% projected growth is because of a dubious, unreliable new calculation method started by Modi government. Check it out in Google search.
If the same calculation method was applied earlier in the previous government, a higher percentage in growth would have been reported.
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Sep 09, 2015 12:09am
@Cyrus Open hearth process is long gone. Steel Authority of India (SAIL) has LD converters which take about 50 to 60 min to convert hot metal to steal of predefined composition. I work in one of the steel plants of SAIL. There may be a couple of open hearths here and there, but most of the steel is made using LDs at SAIL.
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Sep 09, 2015 12:37am
Thanks Mr Modi for sharing yours and your people's mindset towards China. The People's Republic off Chinese will take it from here.
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Sep 09, 2015 01:08am
@N.Sid - Yes, that is correct; there are doubts on 7% figure:
http://www.firstpost.com/business/statistics-wish-fulfilment-new-gdp-numbers-la-la-land-2284538.html
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Sep 09, 2015 01:21am
@Mr M.Tariq let them take care of their crashing markets first.
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Sep 09, 2015 05:50am
@a khan Nothing wrong in making more money as long as we do not exploit poor people. Let every body progress and move up in life.
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Sep 09, 2015 08:37am
@zak : LOL. You have no clue, do you?
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Sep 09, 2015 12:12pm
China might have grown fast and now crumbling fast but that is possible only in monopolist govt setups. Not in democracies like India & Indonesia. India needs to ensure economic growth but not at the cost of environment , labor unrest & other social aspects.
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Sep 10, 2015 02:12am
@Cyrus dear, britisher learned from india...den dey upgraded ....go and read indian history...
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Sep 10, 2015 04:31am
@Vectra;
Please separate analysis from wishes.
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Sep 10, 2015 04:46am
@Rathor;
'Could you please let me know the Economy of Pakistan.'
India is 143rd globally and Pakistan is 150th. In the South Asian context, out of seven South Asian countries, India is 4th Pakistan is 5th in terms of per capita GDP. The great economic miracle, Bangladesh is 6th.
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Sep 10, 2015 07:43am
@Cyrus What is the status of Pakistan steel mill,still Indian steel mills don't make losses
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Sep 10, 2015 09:21am
@Sadary sahab tell you one thing today Indian companies are where when Chinese companies were 10 yrs ago...there is many companies who can become big India already india have lots of big companies...nd China manufacturing become over productive China is export based economy nd today is no demand so China want to shift there plants nd India is best place for set-up...but India needs to do reforms quickly as possible
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Sep 10, 2015 09:30am
@Mustafa
The Economy of India is the seventh-largest
in the world by nominal GDP and the third-largest by purchasing power
Source:
https://en.m.wikipedia.org/wiki/Economy_of_India
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Sep 10, 2015 10:58am
@Zak lol .
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Sep 10, 2015 12:36pm
If only he can be part of solution on Kashmir issue - sky will be limit of what we can achieve...
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Sep 10, 2015 01:52pm
Dear Indians
If you are doing good, keep quiet, If you doing bad , keep quiet, Do not Explain, Do not Complain
Dear Pakistanis
If we are not good, Fine, If we are good, Fine..!
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Sep 10, 2015 02:52pm
@Naveed Khan India is fine with the way Modi treats the opposition. Unlike other politicians in India Modi does not appease the minority. If his plans for development succeed it will benefit all Indians, not merely the minorities or the majorities for that matter.
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Sep 10, 2015 03:37pm
@amit lunia well said.
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Sep 10, 2015 05:29pm
@zak , where are you getting this information that, Pakistan economy is the seventh, in reality it is the 26th ( as per PPP) and 43 as per nominal measurement. India is 3rd in PPP measurement and 9th in nominal measurement. Stop fooling yourself.
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Sep 10, 2015 05:34pm
@just_someone , this so called chaiwala is the one under whose leadership Gujarat has grown over 10% for a decade. Now its the time of India as a whole. And Rajan would be his most important advisors . so quit feeling sorry for Rajan as he is about to do fulfill his potential in tango with PM Modi.
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