Tuesday, January 28, 2020

India 2025 and price collusion in Nepal

Ejaz Ghani writes in Financial Express: Will India become a $5-trillion economy in 2025? There are two contrasting outlooks: optimistic and pessimistic. Both views are grounded in reality. The optimistic view is that growth will be propelled higher by rise of the middle class, young demographics, and changes in globalisation. The pessimistic outlook is that poor physical and human infrastructure will transform India’s demographic dividend into a disaster.

[...]Both the optimistic and pessimistic outlooks are backed by equally strong arguments. Both views agree that growth is not automatic, and it should not be taken for granted. India’s demographic dividend and the rise of the middle class is a time-bound opportunity. In particular, it provides policymakers an incentive to redouble their efforts to tap into demographic dividend by improving physical infrastructure to promote entrepreneurship and job creation.

Pluralism in development is of great value today. India’s growth will be driven by competitive federalism and increased competition between the states. A move towards increased expenditure flexibility in favour of the states presents an opportunity to align local development needs and priorities with the resources available. The challenge is to find out what works best, in what context, and in what setting. This is not just about structural transformation, and a shift from agriculture to industry, but the ‘ownership of process’. Where India ends up in 2025 will depend a lot on what choices are provided today, and what actions are taken to reshape tomorrow.

Manufacturers of building materials fail to give reason for price hike

Krishna Prasain writes in The Kathmandu Post: Manufacturers of building materials have failed to give a reason for the recent hike in the prices of their products. The government had given cement and iron rod producers until Monday to explain the price increase, but there has been no response from them. Last week, the department had summoned the manufacturers and asked them to provide a valid reason for the price increase following complaints from consumer rights activists that building materials had become dearer by 10-20 percent over a month.

According to Rabi Singh, president of the Federation of Nepal Contractors Association of Nepal, the price of iron rods increased by Rs12 per kg over a month. “The price of iron rods swelled from Rs58-61 per kg in December to Rs69-74 per kg currently,” he said. Singh said that prices of PPC cement and OPC cement, which used to cost Rs490-540 and Rs600-680 per sack respectively, had bloated by Rs20-30 per sack. “It is clear that cement factories have formed a cartel and raised the prices without any basis,” said Singh. Around two months ago, the prices of construction materials such as cement, iron rod, gravel, brick and sand had plunged by 30-40 percent which traders attributed to a slowdown in Indian economy.