Chakravyuha Of “Budget” 2007-08 – Inventor’s Exclusive

[Grassroots India Trust]

From: Ravinder Singh <corruptio...@yahoo.com>
Date: Mar 1, 2007 1:51 AM
Subject: Chakravyuha Of "Budget" 2007-08 – Inventor's Exclusive

 

Chakravyuha Of "Budget" 2007-08 – Inventor's Exclusive

 

Small & Micro Industries Growth Rate 15% To Corporate 5.3%

Value Added By Organized Industry = $41b

Or Rs.202,932 Crores (2003-04); 6% Of GDP

Hunger Growth 2%

Dressing Rate Stagnant

Customs Cover For Reliance Polymers/ Textiles = 39%

 

The problem with India is our stalwarts like Abhimanyu learn great things only when they are in womb of their mothers but nothing there after. Training in Oxford, Cambridge and Harvard do not train them to do anything correctly.

 

Manmohan Singh and P. Chidambaram learnt the art of entering PMO and MoF but don't know how battle with the ground realities. When the story of farming was told their mothers went to sleep both come from villages though. PM from Gah in Pakistan and Chidambaram from a village near Kaveri delta. This message explains they have no idea of where lakhs of crores of rupees are invested and how much is the productivity that I could figure out in just couple of hours.

 

Their budgets have no more intelligence than dirty dhoti or lungi or pyjama wearing Commission Agents sitting next a wooden box that contain cash and few account books. All they do is mark up substantial profits on all commodities they sell over purchase price. Why dirty because they arrive at their businesses as early as 8 AM and shut down shop after 8PM and they don't get time to change it. Most of their capital is deployed for stocking grains and commodities and selling at 50% profit. Their profits growth is very fast also considering quick turnaround. The same way GDP growth is attributed to putting most of the resources after Auto Industry, Aviation, IT, Infrastructure, Consumer Durables, and Housing For Rich- all high growth sectors.

 

As per the data in Chapter 8 on his website Food-grains production was 176 MT in 1990 that is now 208 MT projection for 2006 and this years production ending March2007 is less than that. Even to a naked eye this is 18% growth in 17 years. This is not even one 1% compound growth. As a matter of fact in table 10 the figure for 2000-01 is 197 MT so in six years food production increase is 11 MT under 6% in six years when population growth is over 1.7% annually and per capita consumption is at 50% of China. Obviously Oxford-Cambridge-Harvard training was not available to our starwarts when they were in the womb.

 

http://indiabudget.nic.in/ub2007-08/bs/speecha.htm

 

But I can't imagine in page table 1 of the survey when the food production in first year of Manmohan- Chidambaram duos first year 2005-05 fell from 213 MT to 198 MT the growth in (table 10 page S-1) the growth is depicted as zero and they have actually clubbed Food-grains and processing together to avoid Embarrassment. Hunger and Malnutrition of Indians spread far and wide. In three years the duo could not break the NDA record of 213 MT.

 

Total Central Government Expenditure in 1990-91 was Rs.97,947 Crores that has gone up to Rs.563,145 crores in 2006-07. Therefore money flowed through GOI treasury like Tsunami even by the standards of a poor country Rs.50,00,000 Crores, just Rs.15,00,000 Crores over last three years alone. But food production is stagnant and farmers are committing suicides, over half our population is starving and hungry.

 

Chapter 2 of the survey gives a figure of Rs.19,61411 Crores i.e. Rs.271,000 Crores advanced to commercial sector in first 9 months and 19 days. This may go up by another Rs.60,000 crores by year end to 2020,000 crores. Thus the credit advanced to the farmers around Rs.175,000 crores is less than 9% when agriculture accounts for 20% of GDP but more importantly serve nearly 700 million population.

 

In Chapter 6 the growth rate of the world is average 5% and Indian growth of average 6% to 7% that is actually nothing spectacular when growth largely materializes from suppressing investment on education, healthcare, R&D, diverting NRI remittances to trading kinds of businesses.

 

In Chapter 7, Manufacturing sector growth in Industry with weight of 79%, was only 2.9%, 6.0%, 7.4%, 9.2%, 9.1% that don't even meet the growing demand of consumer goods and durables. This years figure is said to be 10.6%.

 

But in table 7.4 of chapter 7, growth of Auto sector is 18.04% in numbers in value growth could be 25%. But in table 7.6 growth in manufacture of cloth has gone up from 40 billion square meters to 52 billion square meter or 30% in six years. This is less than 5% annually but population growth is 1.7% so per capita clothe production growth is 3.3%. Since much greater percentage of our textiles is exported so we can conclude our use of clothes has sharply declined and be below 2001 level.

 

[7.11 Production of fabrics increased by 9.25 percent in 2005-06 and, in the current year upto November 2006, by 8.20 per cent over the corresponding period of the previous year (Table 7.6). In US dollar terms, the value of exports increased by 21.8 per cent in 2005- 06 and 11.7 per cent in the current year up to September 2006.] The difference in just two years between over 17.45% production but exports growth over 33.7% is over 16%. In real per capita terms the clothe consumption is stagnant.

 

Table 7.11 gives very startling figures. India manufacture of electronics goods is Rs.56,600 crores or $12b just 1.4% of GDP. This too includes imported components like hard disc etc. Value additions could be just 0.5% of GDP. Perhaps the lowest for any country that produces 0.5 million engineers and equal number of science graduates.

 

Small & Micro Sector @39% weight Contributes 15% + Growth. Corporate growth Is 6% of 9.2% Point Of Manufacturing Sector. Ambanis and Corporate Contributed just 3.2% of Manufacturing Growth in 2005-06.

 

Software production is clubbed with Hardware is Rs.129,000 crores or $28b or $25 per capita.

 

Micro and small industries production is Rs.4,70,000 crores or $105b representing growth of 13.9% in 2005-06 to 16.9% a year earlier in table 11 (two tables 11 in the document). Paragraph 7.4 tells us that Small and Micro sector contributes 39% of Indian manufacturing.

 

Stagnant Employment By Corporate/ Industry

 

Table 7.17 gives data of employment in Organized sector means medium and large industry is 7.8 million in 2003-04 that is less than 7.9 million employed by organized industry in 1987-88.

 

Underwear Technologies= Value Addition Only 15.7% Including 6% Salary & Benefits. Value Additions $41b Or 6% Of GDP.

 

In the same table 7.17 Input to organized industries was Rs. 10,39,623 Crores and Output was Rs.12,87,380 Crores, depreciation was Rs.44,823 Crores and Net value addition was Rs. 2,02,932 Crores. Thus the NVA of Indian industry is only 15.7%. Salary and benefits are Rs. 58336 crores and Rs. 14117 crores = Rs.72453 Crores or 5.6%. Profit in 2003-04 was Rs.92,345 crores or 7.1%.

 

Value Additions By Organized Industry Rs.202,932 Crores or $41b or less than 6% of GDP. 

 

This is also an indicator of low value additions by Corporate India, even when its exports are $40b the value additions is only $6b. So I am not impressed by their export figures.

 

Customs Duty; Manmade Fiber = 34%, Natural Fiber = 12%  and Cars = 12%

 

Chapter 2 page 38 gives Customs Duty charged to man made textiles made by Reliance that not only protected it but also let charge substantial profit margin. The Customs Duty from 2001-02 onwards were 49%, 31%, 31%, 46%, 39% and 34% last year. The figure for 1990-91 was 83% for Synthetic fiber and 20% for natural fibers.

 

In 2001-02 the Customs duty on synthetic fiber was 31% but only 8% for natural fibers so GOI had consistent policy of protecting Ambani and Killing Indian Cotton Farmers. Both fibers make clothe but poor mostly wear synthetic clothes.

 

This is yet another illustration of how Ambanis, largest synthetic yarn producer Corrupted every government of the day.

 

Market Cap Of Listed Corporate = $834b, P/E = 22.76 Profits = $36b [Chapter 4].

Since value additions and profits ratio is 15.7: 7.1 so the value addition by our organized sector could around $80b but the corporate India is promoted by many thousand associations who constantly lobby with the GOI for all kinds of incentives and tax breaks. Last year Business Standards reported $35b worth of tax concessions and breaks to Corporate over and above "Protection Taxes" like the ones to Reliance.

 

Fraud Of Whole Sale Price Index. Chapter 5 Page 86.

 

Weight given to foods in WPI is 15.40 per cent but all survey points to average household spending 50% to 60% of income on food items. This goes up to 80% plus for below poverty line. Therefore WPI for all commodities doesn't reflect inflation that hurt consumers. Consumer Price Index weight of 46.2% for food articles gives more accurate indication of the rising burden on consumers.

 

GOI doesn't want people to know the price increase of the most essential food items. Earlier the weight for food items was 57%. That itself warrant separate index for food items.

 

But most astonishing is weight of only 4.41% given to cereals out of 100% that forms bulk of the diet for poor majority. Even though we know inflation in cereals is over 20% to nearly 30% but GOI figure is 7.66%. Weight of pulses is only 0.6% when actually poor and average consumer spends say 5% on pulses.

 

World Commodities v/s Minimum Support Price To Farmers V/S Protection To Reliance

 

Chapter 5 table 5.11 gives figures of price increase of globally traded commodities from October-December2005 to January 2007 or 14 months. Price increase in Wheat, Rice, Soya Oil, Palm Oil and Cotton were 19.2%, 11.2%, 24.6%, 36.7% and 3.7%.

 

But MSP for wheat and rice increases per quintal are given in table 5.19 for 2000-01 to 2005-06 or five years were Rs.610 to Rs.650 and Rs.540 to Rs.600 or increases of Rs.40 and Rs.60 or 6.5% and 11% respectively- annual growth of 1.2% & 2% respectively that do not cover general inflation levels of WPI of 4.7% annually for the period given table 5.1. This is to be considered in light of Custom Duty advantage of 49%, 31%, 31%, 46%, 39% to Reliance to plunder consumers considering value additions are just about 15.7% and profits 7.1% of turnover.

 

Rs.400 Crores To 700 Million Farmers/ Rs.7800 Crores To Reliance Textiles.

 

Rs.10 per quintal increase in wheat & rice MSP is just Rs.100 per ton and when Indian farmers farmers contributes 42 Million Tons of wheat & rice in 2005-06 for central pool it comes to Rs. 400 crores only to 700 million farmers but Ambanis were allowed something like Rs.7800 crores of "Illigal Advantage" when it has most advanced petrochemical and synthetic yarn plants.

 

Chapter 9 table 9.2 gives the performance of most critical input power is 1.5% and 6.1% for Thermal Power in two years is pathetic. India didn't have widespread power shortages due to 19.1% and 13.8% growth in Hydro Power not attributed to MoP efforts but "God's Blessing" that may not be available this year.

 

In para 9.11 we are informed capacity additions in tenth plan were only 23,250 MW or just about 22% in five years- annual compound growth of just over 4%. In table 9.8 we are informed out of 23,250 MW capacity, hydro power shall contribute as much as 8186 MW or 35%. Since load factor of hydro plants is generally 30%, at least for current projects against 75% or more for thermal projects.

 

Chapter 10 table 10.3 informs that Central and State government expenditure is 27.19% of GDP and education & healthcare accounts for 2.87% and 1.39% of GDP are very poor considering India has twice more young people than developed countries.

 

Indian infant mortality rate for children under 5 years ranking even in South Asia is very poor. In 1990 rate fo India was 125 to 144 for Nepal and 145 for Bangladesh but in 2003-04 figures are 85, 76 and 14 respectively. Table 10.9

 

When GOI has no skills to understand it own data I don't they will ever have an idea how middlemen and commission agents plunder people of India by charging 50% to 500% profits.

 

In conclusion I can say with confidence Manmohan Singh and P. Chidambaram has not learnt basic management since their birth on this planet and are toyed around by corrupt corporate in to yielding all kinds of tax breaks.

 

Ravinder Singh March01, 2007

Corruptio...@yahoo.com

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