Archive for ‘Economists’

04/06/2019

Delhi metro: Will free public transport make women safer?

Indian commuters travel in the compartment reserved for women on the metro in New Delhi, India, on June 10, 2015Image copyright GETTY IMAGES
Image caption Mr Kejriwal has proposed free travel on buses and the city’s famed Delhi metro rail service

The chief minister of India’s capital Delhi created a minor sensation when he announced that women would no longer have to pay for public transport.

Arvind Kejriwal said that free rides on city buses and the metro would help improve women’s safety in the city.

Delhi reports some of the highest numbers of rape in India. The 2012 gang rape and murder of a student on a bus in the city sparked massive protests.

However not everyone is convinced that Mr Kejriwal’s proposal will help.

Dinesh Mohan, a transport expert with the Indian Institute of Technology in Delhi, told the BBC that making public transport free wouldn’t solve the problem.

“You need to think about the entire journey and not just the metro – you have to take into account how safe or unsafe sidewalks are and what the journey to the metro station is like in the first place. So if the idea is to make it safer for women, that experience has to be continuous. Safety can’t begin and end at the metro station. I don’t see any thought behind this initiative yet.”

The Delhi metro already reserves a coach exclusively for women on every train it runs.

On social media, the proposal caused a great deal of debate as well.

Many people, including economists and columnists, dismissed the idea and some women even said that they would continue to pay to ride the metro.

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However the proposal also had its share of defenders.

Despite Mr Kejriwal’s announcement, women will have to wait a while to see if it is actually implemented.

The proposal still has to be approved by the federal government because it is an equity partner along with the Delhi government in the Delhi Metro Rail Corporation.

But Mr Kejriwal has said that the federal government’s permission is not necessary as the Delhi government will bear the cost.

Delhi transport minister Kailash Gahlot said since this qualifies as a subsidy, they did not require any such permission.

Some have dismissed the entire thing as a pre-election gimmick by Mr Kejriwal – Delhi will hold state assembly elections next year.

The Delhi Metro Rail Corporation has not officially reacted to the news. But the Times of India newspaper quoted a “source” in the department as saying that implementing the proposal, if it came to pass, would be “difficult”.

Architect and urban planner Sonal Shah said on Twitter that a number of factors had to be taken into consideration for women’s safety to be addressed effectively. She said that transport access was “not equal for men and women”, adding that a number of existing issues with public transport had to be addressed first.

Source: The BBC

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09/05/2019

India’s incredulous data: Economists create own benchmarks

NEW DELHI (Reuters) – Economists and investors are increasingly showing that they have little or no confidence in India’s official economic data – presenting whoever is elected as the next prime minister with an immediate problem.

There have been questions for many years about whether Indian government statistics were telling the full story but two recent controversies over revisions and delays of crucial numbers have taken those concerns to new heights.

The government itself has admitted there are deficiencies in its data collection.

A study conducted by a division of the statistics ministry in the 12 months ending June 2017 found that as much as 36 percent of the companies in the database used in India’s GDP calculations could not be traced or were wrongly classified.

But the ministry said there was no impact on GDP estimates as due care was taken to adjust corporate filings at the aggregate level.

Last December, the government held back the release of jobs data but an official report leaked to an Indian newspaper showed the unemployment rate had touched its highest level in 45 years.

Economists and investors are now voting with their feet – by using alternative sources of data and in some cases creating their own benchmarks to measure the Indian economy.

Ten economists and analysts at banks, think-tanks and foreign funds interviewed by Reuters said they were moving to use alternative data sources, or at least official data of a different kind.

Among the numbers they prefer are fast-moving indicators like car sales, air and rail cargo levels, purchasing managers’ index data, and proprietary indices created by the institutions themselves to track the economy.

Many economists said they were stunned when the government upwardly revised GDP growth for 2016/17 to 8.2 percent from 6.7 percent, although the demonetization of high value notes hit businesses and jobs in that financial year.

“Our response has been to spend time developing an Indian Activity Index, which takes a range of time series data that in the past were strongly correlated with real GDP growth and extract the common signal from them,” said Jeremy Lawson, chief economist at Aberdeen Standard Investments, which manages more than $700 billion in assets.
The preliminary evidence from the index, which includes components like car sales, air cargo and purchasing managers’ index data suggests the government has over-estimated GDP growth, he said.
Our index would suggest that there was stable growth, rather than the rapid acceleration suggested by the GDP figures,” he said, referring to three years of data from 2014.
Even those close to the government have said the lack of accuracy in the official data makes it much more likely that authorities will miss major swings in activity and be unable to react quickly to head off a crisis. It is also a problem for investors who may be misled into thinking the economy is more robust than it really is.
India data conundrum: tmsnrt.rs/2VOwQsy

MISSED FARM CRISIS

The economic wing of the Rashtriya Swayemsewak Sangh, the fountainhead of the ruling Hindu nationalist Bharatiya Janata Party, said the government and the Indian central bank missed anticipating a farm crisis that has now gripped the countryside, with low crop prices driving down farmers’ incomes.

“The fact is the government advisers and the monetary policy committee of the central bank could not diagnose the farm crisis, deflationary conditions in rural economy, and ignored the need to boost growth,” said Ashwani Mahajan, the co-convenor of the group, Swadeshi Jagran Manch, adding the government was now taking steps to address the problem.

The delayed response has cost Prime Minister Narendra Modi at least some support in the countryside in the current general election – although most political strategists still think he can probably hang onto power.

The opposition and other critics have said Modi suppressed jobs data and “massaged” economic growth numbers in an attempt to show that his government has done better than the previous administration.

A spokesman at Modi’s office said no official was available for comment as they were busy with the election while a finance ministry spokesman referred to Finance Minister Arun Jaitley’s previous comments.

In a blog in March, Jaitley criticized economists for doubting the credibility of data and accused them of running a fake campaign against the government.

IDLE CAPACITY

Some investors have been burned by believing in India’s high growth story.

Private power producers invested billions of dollars based on expectations of electricity demand that didn’t pan out in the rural economy. With economic growth pegged at over 8 percent a year, they had expected a pick up in demand by small businesses and household.

Many of the power producers are now facing bankruptcy and legal disputes as many of the new plants they built are working at about 60 percent of capacity.

In the real estate sector, developers said, it could take 3-4 years to clear about 500,000 unsold flats in and around New Delhi that were built on the assumption of higher income jobs in urban areas.

To be sure, the proportion of the Indian economy that is based on the unofficial sector, such as household enterprises, makes it a nightmare to assess economic activity.

P. C. Mohanan, former acting chairman of the national oversight body for statistics, who resigned to protest government interference over the release of the jobs figures and back series data on GDP, said the government hasn’t allocated the resources it needs to measure activity given the growth in the economy.

Gita Gopinath, the International Monetary Fund’s chief economist, told an Indian TV channel last month the IMF had raised the issue of “transparency” with Indian officials in data collection and, in particular, measurement of the GDP deflator – the adjusted inflation rate used to estimate real GDP.

In a statement, the statistics ministry said it was working to address the issue.

A senior official earlier said they were open to suggestions for improvement, just not “politically motivated” criticism.

There are already plans to revamp data compilation and capture the nuanced relationship between prices and real GDP, he said.

Source: Reuters

08/04/2019

China pledges to remove ‘unreasonable barriers and restrictions’ to help SMEs amid trade war

  • The mainland government will also seek to create a level playing field for businesses, most of which are privately-owned, in terms of market entry and regulation
  • Small and medium-sized firms are vulnerable to trade disputes and an economic slowdown even though they contribute the majority of growth and employment
China plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee and the State Council on Sunday. Photo: Alamy
China plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee and the State Council on Sunday. Photo: Alamy
China will “remove all sorts of unreasonable barriers and restrictions” to help small and medium-sized enterprises which are seen as vital to help employment and economic growth amid the trade war with the United States.
Beijing plans to make it easier and cheaper for businesses to access credit through subsidies and certain bank loans, according to a comprehensive policy guidelines jointly released by the Central Committee of the Communist Party of China and the State Council on Sunday.
The mainland government will also seek to create a level playing field for businesses, most of which are privately-owned, in terms of market entry and regulation.

“Small and medium-sized enterprises is an dynamic power for national economic and social important and is critical for expanding employment, improving people’s livelihood, and to foster innovation,” the guidelines said. “For now, they are facing problems of rising production costs, difficulty in obtaining credit and insufficient capabilities to innovate – these issues demand high attention.”

China will “remove all sorts of unreasonable barriers and restrictions, trying to ensure fair competition and provide sufficient market in terms of market entry, licensing, bidding and the military-civil infusion,” it added.

While most of the policies are not completely new, the move to pull them together into a larger policy document, which will serve as a guideline for local authorities, shows China’s intention to stabilise the domestic economic situation as its trade disputes with the US continues.

Beijing has also designed a variety of financial policy tools, including targeted required reserve ratio cuts and the use of small and medium-sized enterprise loans as collateral for medium-term lending facilities granted by the central bank, meaning banks will have more incentives to offer financing.

To further boost lending, it will also offer some exemptions for interest received from value added tax, while also providing tax breaks for small firms and start-ups, a lower social security contribution ratio and an increase in government procurement, according to the guidelines.

Small and medium-sized enterprises is an dynamic power for national economic and social important and is critical for expanding employment, improving people’s livelihood, and to foster innovation.New guidelines

The need for the Chinese government to support small businesses became even more obvious last summer when it began its trade was with the US. Small private businesses are more vulnerable to trade disputes and an economic slowdown than state-owned enterprises, which are often bigger and enjoy favourable treatments from the government and banks, even though they contribute the majority of growth and employment.
Employment is the top priority on the agenda of Premier Li Keqiang this year, as shown in his government work report revealed last month. China has vowed to create 11 million new urban jobs this year and cap the surveyed urban unemployment rate at 5.5 per cent.
Morgan Stanley economists noted that China’s real gross domestic product growth may slow to 6.2 per cent in the first quarter.
“The main drag is slower investment growth, led by property construction and manufacturing [capital expenditure] amid still-subdued export and business sentiment,” Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai said.
The National Bureau of Statistics is due to release the first quarter economic data on April 17.
Source: SCMP
09/03/2019

China exports saw biggest fall in three years in February

Men stand on a port in ChinaImage copyrightGETTY IMAGES

Chinese exports saw the steepest fall in three years in February, adding to worries about growth in the world’s second largest economy.

Official data show exports from China plunged 20.7% from a year earlier, as its trade war with the US took a toll.

Imports fell 5.2% and the figures sent Asia stock markets sharply lower.

Economists caution the data for the first two months of the year can be affected by the Lunar New Year holiday.

The fall in exports was far bigger than the 4.8% drop forecast in a Reuters poll of economists.

Imports also saw a sharper than expected fall of 5.2% year-on-year, the data showed.

Julian Evans-Pritchard, Senior China Economist at Capital Economics said even accounting for seasonal distortions, the figures were “downbeat”.

“Tariffs are weighing on shipments to the US,” he wrote in a research note.

The US and China have placed tariffs on billions of dollars worth of one another’s goods since July, casting a shadow over the global economy.

Even though officials have sounded more positive about negotiations with the US recently, failure to achieve a deal would see tariffs on $200bn (£152bn) of Chinese goods rise almost immediately and could see the US impose fresh tariffs.

Still, Mr Evans-Pritchard said “broader weakness in global demand means that, even if Trump and Xi finalise a trade deal soon, the outlook for exports remains gloomy.”

The data comes as Beijing this week unveiled $298bn worth of tax cuts to boost slowing growth.

Source: The BBC

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