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from Expert Zone:

Where the growth in Q1 came from

(Any opinions expressed here are those of the author and not of Thomson Reuters)

GA man walks his cow under high-tension power lines leading from a Tata Power sub station in Mumbai's suburbs February 10, 2013. REUTERS/Vivek Prakash/FilesDP growth of 5.7 percent in the April-June quarter was unexpected in view of the southward drift of India’s economy over the past two years. No wonder it pepped up the Bharatiya Janata Party-led government at a time when the ruling coalition is listing its achievements after 100 days in office. The question is where this growth came from and whether it will be sustained in future.

India’s economy has been slowing after achieving 9 percent growth three years ago. That was because the Congress-led government failed to fuel the economy. The absence of policy reforms, paralytic governance - combined with persistent inflation - discouraged investment. Growth tapered to 4.7 percent last year.

The Q1 data seems to signal a recovery with growth jumping to 5.7 percent. Some sectors did perform exceedingly well with over 10 percent growth. The first is electricity though its size in the overall economy is small. But it has now come up against stubborn problems like coal shortage, which has harassed the power sector. Coal production is unlikely to increase and the power sector will have to fall back on imports. The 10 percent increase in power generation contributed 3.4 percent to the increase in GDP in the first quarter.

Business services such as finance, insurance, and professional services like IT also exhibited high growth. This sector is a major contributor to GDP and constitutes nearly a fifth of the economy, and developed at a double-digit rate. Consequently, about a third of the increase in GDP has come from this sector alone.

from India Insight:

Schools, NGOs fight the odds to keep India’s children safe

The red, blue and yellow walls of Gunjan Play School in Noida, a suburb east of India’s capital, are conspicuous in the afternoon sun. Many of the students have left, but the chatter of children fills the air and occasional peals of laughter still ring out from the classrooms.

Urvashi Chakravarty has just stepped out after spending several hours teaching and looking after as many as 40 children. Clad in a crisp purple sari, she is still on duty, waiting for parents to come and get their little ones before she can sign off for the day.

from India Insight:

Budget 2014: Reactions from the common man

Security personnel stand guard near sacks containing the papers of the federal budget for the 2014/15 fiscal year, at the parliament in New Delhi July 10, 2014. REUTERS/Adnan AbidiPrime Minister Narendra Modi's new government on Thursday unveiled a first budget of structural reforms that seek to revive growth, while spurning the temptation to resort to higher borrowing.

(Click here for Budget 2014 highlights)

India Insight spoke to people in New Delhi’s central business district for their thoughts on the budget:

from India Insight:

When the Right To Information becomes a fight for information in India

The Congress party-led government that drafted the Right To Information (RTI) Act in 2005 touted the law as one of its success stories for the average Indian in the last election. Whether it played any role in the election's outcome is difficult to say, but activists who specialize in RTI requests throughout India say that government workers have found many ways to frustrate their attempts to get responses to their questions.

Filing an RTI is easier than it used to be, but extracting information is getting harder each year, said Neeraj Goenka, an RTI activist in Sitamarhi, a town in the state of Bihar.

from India Insight:

Railway Budget 2014: Highlights at a glance

In his maiden budget, Railway Minister Sadananda Gowda said the bulk of future railway projects will be financed through public-private partnerships and his ministry would seek cabinet approval for allowing foreign direct investment in the state-owned network, excluding passenger services.

India's railway, the world's fourth-largest, has suffered from years of low investment and populist policies to subsidise fares. This has turned a once-mighty system into a slow and congested network that crimps economic growth.

from India Insight:

Short skirts, bad stars, chow mein: Why men in India rape women

Demonstrators from All India Democratic Women's Association (AIDWA) hold placards and shout slogans during a protest against the recent killings of two teenage girls, in New Delhi May 31, 2014. REUTERS/Adnan Abidi

The 2012 Delhi bus rape case and an ever-longer list of rapes and murders in India have prompted politicians and public figures in India to cite plenty of implausible reasons why rape happens and why men brutalise women or portray women in ways that suggest they had it coming. Many people, when speaking out, tend to minimise the crime or rationalise it in ways that sound ludicrous to many. We created this list of such comments more than a year ago, but it seems like it's time to add some new entries.

(Updated July 15, 2014) Binay Bihari, minister for art, culture and youth affairs in the state of Bihar: The minister said that mobile phones and non-vegetarian food are reasons for a surge in rape cases, NDTV reports. "Many students misuse mobile phones by watching blue films and hearing obscene songs which pollute their mind," he said. On food, he reportedly said that non-vegetarian food "contributed to hot temper... and cited sermons of sants that pure vegetarian food kept the body and mind pure and healthy." (NDTV)

from Expert Zone:

India Markets Weekahead: Wait for post-budget opportunities

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Markets were fairly volatile last week, reacting to tough measures taken by the Narendra Modi government to get India’s economy back on track amid worries over monsoon rains and the situation in Iraq.
cfcd208495d565ef66e7dff9f98764da.jpgLong-term investors hailed the hike in railway freight and passenger fares as a step in the right direction to bring down indirect subsidies. However, the government rolled back the hikes on suburban fares to a large extent due to political considerations.

Monsoon rains have started on a weak note but if the rains pick up in July and the El Nino effect is tempered, it would have a direct impact on inflation and interest rates.

from Expert Zone:

Nehru’s last stand?

(This piece comes from Project Syndicate. The opinions expressed are the author's own)

The victory of the Bharatiya Janata Party and its leader, Narendra Modi, in India’s general election last month has raised a crucial question about the country’s future. With the BJP sweeping to power on a platform of aggressive nationalism and business-friendly corporatism, has the socioeconomic consensus dating to India’s first prime minister, the democratic socialist Jawaharlal Nehru, come to an end?

from India Insight:

Aam Aadmi’s party isn’t over yet, Bhagwant Mann says

The one-and-a-half-year-old Aam Aadmi Party's (AAP) poor performance in this year's parliamentary elections in India was a big letdown for the anti-corruption party's members and its leader Arvind Kejriwal. One of the party's newly elected parliamentarians, Punjabi actor-comedian Bhagwant Mann, is doing his best to keep spirits high. Following are excerpts from two phone conversations with India Insight about the future of the AAP.

 (This interview was conducted in Hindi and translated into English)

Q. Why didn’t the “Modi wave” work in Punjab?

A. There was nothing like a Modi wave in Punjab. Punjab is already affected a lot by drugs and unemployment. So Punjab’s problems are not about [BJP slogan] "Ache din aane waley hain" ("Good days are coming") or "Har Har Modi" (Hindu religious chant, modified for Modi). Punjab wanted a third alternative, it wanted to get out of the two-party mill – Bharatiya Janata Party (BJP)-Shiromani Akali Dal (SAD) and Congress.

from Expert Zone:

The primacy of good governance for Modi

(Any opinions expressed here are those of the author and not of Thomson Reuters)

At his second cabinet meeting, Prime Minister Narendra Modi unveiled a 10-point programme that set out a comprehensive agenda for his ministers. The agenda is a good cocktail of short-term needs and long-term objectives.

The underlying message, however, is of good governance. That is what Modi has been harping on during his election campaign and which he sincerely believes is the secret of his success in Gujarat.

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