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Guest Post: India - Land of Energy Opportunity

Tyler Durden's picture




 

Submitted by Marin Katusa of Casey Research

India: Land of Energy Opportunity

Quick, what country is the economic engine that will power world growth? If you answered "China," you're far from alone. But there's another country that deserves as much attention and better yet, is much friendlier to investment: India, home to 1.2 billion people. To electrify all those houses, power the industries that keep all those people employed, and fuel the vehicles that more and more Indians own, India's energy needs are shooting skyward.

First question to consider: what kind of energy does India need? Just about every kind, really. India encompasses significant reserves of coal, oil, and gas, but each year it has to import more and more to meet its rapidly rising demand. Domestic production increases have been hampered by land disputes, interminably slow permitting, and government-regulated pricing mechanisms that discourage development.

That's got to change if India wants to keep up, and its government knows it. Domestic supplies always come with better reliability, better prices, and other benefits that we can shorten into two words: energy security.

So India is reaching out to foreign oil majors, quietly setting up deals to exchange stakes in giant, underexplored oil and gas fields for the technical expertise it needs to best develop these resources. These partnerships are working into place slowly. However, they show Delhi is serious about the welcome mat it rolled out in 2000, when it passed a policy that allows foreign companies to own 100% of any oil and gas assets they may want to acquire for exploration and development.

And what we really like is that explorers are welcome in a democratic and reasonably friendly country that harbors none of the risk of asset nationalization that clings to other underexplored locales, like Venezuela.

Oil demand in India is set to rise some 4% annually for the next decade; natural gas requirements are expected to climb 10% per year for the next five years. Put together, India is a place that desperately needs more energy, has resources and reserves to exploit, and is working to encourage foreign investment in them.

We're ready to take India up on the offer, so let's learn a little more about its circumstances and potential.

Setting up Shop

In the 1990s, as India's growth was beginning to snowball, Delhi realized the country needed to look abroad for expertise to shorten its learning curve and for capital to fuel it. Accordingly, the government wrote policies to attract foreign investment. The one we mentioned above is called NELP, for New Exploration Licensing Policy, designed to even out the playing field between national and private companies. India's oil and gas industry has traditionally been dominated by state-owned companies.

With NELP enabling foreign companies to own oil and gas assets, Delhi next needed to develop a fiscal structure. What they chose is a PSC (production-sharing contract) system, and it's not a bad one – not as favorable as the UK North Sea, but not Iraq either. (Governments set up different ways to collect what they consider their share of income from the development of their resources. In India, companies that find oil or gas – and are not state-owned – have to negotiate production-sharing contracts, or PSCs, with the government. PSCs designate a portion of production for companies that they hope will offset their expenses. Beyond this "cost oil, " any "profit oil" is split between government and company, according to the terms of the all-important contract.)

India and Oil

India is the world's fourth-largest oil consumer, trailing only the United States, China, and Japan. The country has 5.6 billion barrels of proven oil reserves, but production averages just 761,800 barrels per day (bbl/d), about the same that it did 25 years ago.

In contrast, the country's consumption has more than tripled in the same period. It currently consumes about 3.1 million bbl/d, and it relies on imports for 70% of that. No government in its right mind would like this trend.

India's oil sector is dominated by state-owned enterprises. The largest oil company is the state-owned Oil and Natural Gas Corporation (ONGC), followed by state-owned Oil India Limited (OIL). The NELP system has opened up opportunities for other companies, however, and India will need that foreign investment and exploration to boost domestic production.

The country is working the other side of the street as well to meet its energy needs. Indian national oil companies have bought stakes in international projects in recent years, aiming to gain control over some non-domestic supplies. For example, the international arm of ONGC has oil and gas operations in 13 countries including Vietnam, Russia, Iran, Iraq, Sudan, and Brazil.

Indian companies are also opening up to the notion of partnering with global firms, as we mentioned earlier. While no state-owned companies have inked major partnerships as yet, privately owned Reliance Industries Ltd signed a US$7.2 billion deal with BP (NYSE.BP, L.BP) in August. Reliance sold BP a 30% stake in 21 exploration blocks and is now using the British energy giant's expertise in deepwater drilling to revamp its plans around exploration and boosting production from its operational fields.

This first major deal could well act as a model for future exploration partnerships in India. Companies know that international partners can bring valuable expertise, especially with respect to increasing output from mature fields.

One aspect of India's oil sector that needs adjustment is its subsidy system. The government subsidizes prices of domestic oil products to help disadvantaged Indian consumers. But requiring its national companies to sell their products at reduced prices regularly forces them into major financial losses – more than US$23 billion in fiscal 2010-2011 alone, according to the International Energy Agency.

And the subsidy situation only gets worse as the rupee depreciates. Global oil costs have eased some 8% this year, but the rupee's 9% slide against the dollar has wiped out any cost savings. The oil minister said recently that every one-rupee decline in the Indian currency against the dollar increases annual revenue loss for the three state-owned refiners by 80 billion rupees, or US$1.6 billion.

No easy solution for this issue, unfortunately. Clearly, raising prices for Indian consumers would carry a heavy political price. But just as clearly, the Indian government cannot continue subsidizing oil prices at this level for long.

India and Natural Gas

When it comes to India and natural gas, the question is really one of keeping pace with electricity demand. The country was gas self-sufficient for years, but economic growth turned it into a net importer in 2004 despite steady increases in production.

Even imports are not enough: According to the World Bank, roughly 40% of residences in India are without electricity, and blackouts are still common in main cities. Import needs have climbed by an average of 35% annually.

Natural-gas demand in India is projected to grow 10% annually for the next five years as the country works to diversify away from a reliance on coal, which currently generates 70% of India's power.

Several large natural-gas deposits have been discovered in India over the last few years, primarily offshore in the Bay of Bengal. But demand will continue to outpace production for the next several years at least. For one thing, Reliance's huge KG-D6 field – its first offshore field – is producing 20% to 40% less gas than expected, a problem that will take even its new partner BP at least three years to reverse.

Then there's the subsidy issue again. Some gas finds are being left undeveloped because the regulated price of natural gas is simply too low to justify the cost of developing the field. The price more than doubled in May 2010, but US$4.20 per MMBtu is still only one-third that of the open market in Asia.

The country is trying to add infrastructure to help meet its growing import needs, but it's running into hurdles here, too. A variety of economic and political issues keep delaying the Iran-Pakistan-India pipeline, under discussion since 1994. Similarly, India is the planned endpoint for the Trans-Afghan pipeline from Turkmenistan, but work is yet to begin due to concerns about route security and the adequacy of Turkmen supplies.

A liquefied natural gas (LNG) terminal has made it to construction phase, adding a third to two already in operation in India. Long-term growth demand for LNG in India remains unclear, however, because… you guessed it… that gas subsidy means domestic gas is notably cheaper than imported LNG.

 

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Thu, 01/12/2012 - 01:42 | 2057443 superflyguy
superflyguy's picture

I almost fell on the floor laughing when I read "friendlier to invest".

http://in.reuters.com/article/2008/09/23/idINIndia-35604720080923

I guess this guy would disagree ... if he was still alive :-)

 

Thu, 01/12/2012 - 04:10 | 2057546 fnord88
fnord88's picture

India IS VERY friendly when you want to invest. Just no so friendly when you want to know where your money has gone. 

Thu, 01/12/2012 - 08:22 | 2057712 I think I need ...
I think I need to buy a gun's picture

jim rogers says it will fail to exist in 30 years whats that all about?

Thu, 01/12/2012 - 07:54 | 2057661 whatsinaname
whatsinaname's picture

Responding to ChickenTikka's views - yes the picture painted in the West is by MBAs/technocrats that come to India and live in Western style hotels and fed grandiose stories by snake charmers is sometimes far from accurate. 

Here is an on the ground report -

The middle class here has definitely transformed over the last few years. They have bought into the "India Shining" slogan propagated by the media/govt oligopoly. Yes, they are not profligate spenders as their Western counterparts but lifestyles and cultural changes are apparent in a big way. People are driving big European cars in streets that are severely stressed due to poor traffic sense and management. The man on the street is yet the man on the street and getting worse by the day. 

Inflation here is still very bad although food prices have eased. The government has NO control on fuel prices and driving here is very very expensive. The rupee has weakened due to lot of foreign banks repatriating much needed money but that is having very adverse effects on the petrol-dollar costs and hence the deficit.

The recently ignited equity markets interest has all but died down now among retail investors. People are still crazy about gold - gold might be a big contributor to India's fiscal deficit since India imports most of its gold. BUT the big worry here is the real estate market which is a worry to a conservative wart like me. Its a huge bubble just waiting to collapse. Thing keeping it alive is the "underground" funding markets, burgeoning urban populations and favorable demographics.

There has been some progress on the infrastructure front but its still nowhere near Western levels. Indians seem to have a knack for mismanaging town, city & highway planning. The ruling party has been bogged down by partisan politics and coalition party haranguing. Corruption is at unseen levels and almost obscene as it has penetrated every aspect of day to day life here. Some business secors have been opened up and freed but there are still lot of restrictions to growth. And yes the class wars, regional differences, the imbalanced advancement of the now large Muslim population versus the Hindu population is a big hurdle to balanced growth. In some ways India is a lost opportunity.

BUT THE BIGGEST IRONY HERE - INTEREST RATES IN INDIA ARE NOW HIGHER THAN DURING THE 2008 CRISIS. THE RBI IS STILL ON THE FENCE REGARDING LOWERING RATES OR THE RESERVE RATIO FOR BANKS SINCE THE PRICE OF CRUDE JUST REFUSES TO GO DOWN. THANK YOU BIG BEN !

The RBI is doing the best it can to manage the currency / IR crisis but I dont think it can do much against dollar shenanighans.

Thu, 01/12/2012 - 11:05 | 2058238 Migrated Bird
Migrated Bird's picture

Second most of the comments above. As someone who has lived in US for close to 10 years and moved back to India, a lot of what is projected as "India Shining" is just plain bullshit. You need to be on the ground to experience what it is and how bad things are. Imagine achieving the growth that tooks US a good part of 50 years in 10 years in a country with 1.2B people , virtually no infrastructure to speak of and corrupt politicians to the hilt. 

I am part of a very small group who think that the India property bubble will collapse sooner or later. I will give you an example. I live in bangalore, the so called "silicon valley" of India. The apartment I live in next to trash collecting place and a cement godown and opposite a so called lake which is actually a sewer. This property is one of the most desired in this locality. I rent and the apt I rent was bought for around 80K USD in today's dollar terms in 2005. Today the asking price is close to 180K USD. Essentially you are looking at prices doubling in 5 years. I have a friend who lives in a apt next a gas container station

http://www.wikimapia.org/#lat=12.9800897&lon=77.6926035&z=17&l=0&m=b&search=akme%20ballet

There is a 3 bedroom apartment quoted at close to 200K USD.

http://bangalore.craigslist.co.in/reb/2778859505.html

 

FYI A crore is essentially 10 Million. So the asking price is 15 Million Rupees. Approx 300K USD. remember this is for a place with no municipal water. They depend on private tankers and ground water . This is just an example. I can give you 1000's of example like this. If this is not a definitions of property bubble, then I do not know what is.

Sorry for teh rambling post but I just had to get it out of my chest.

Thu, 01/12/2012 - 11:29 | 2058335 ChickenTikka
ChickenTikka's picture

So whatsinaname is correct, India is now filled with newly minted miliionaires.  Well, what else would happen when the place gets flooded by foreign investment?  Yep, you'll see lots of wealthy people in "european cars," but that doesn't really mean much.  It's temporary and artificial. 

As soon as foreign investors get wise to this scam this place is going to implode.  Lights out! 

I can't tell you how many multinationals have opened up shop here hoping to sell products to an Indian consumer that is just unwilling to pay for them on the promise that, "Someday, they will."  Good luck. 

Thu, 01/12/2012 - 01:43 | 2057446 Vlad Tepid
Vlad Tepid's picture

Meh. I just can't get excited about India as a place I would want to put my money.

Thu, 01/12/2012 - 01:46 | 2057450 StockProdigy
StockProdigy's picture

In the long run (20 years or so)  they might outperform China. They are pushing education rather than manufacturing.

Thu, 01/12/2012 - 01:52 | 2057452 Pay Day Today
Pay Day Today's picture

India is never going to have the access to energy required to lift the majority of its people up to European standards of living. As for 100% foreign ownership of oil and gas fields without the likelihood of nationalisation...just wait until India experiences a major energy crunch.

Thu, 01/12/2012 - 02:04 | 2057466 jonjon831983
jonjon831983's picture

I have a conception of India as a booming place... a population younger than China, but politically and ethnically unstable.  Too fragmented to effectively invest in the area.

They are supposedly the largest democrazy in the world and speak the most number of languages?

I'd need to brush up on my modern India.

Interested in seeing what other ZHer's put up about India.

Thu, 01/12/2012 - 02:09 | 2057471 jonjon831983
jonjon831983's picture

I just realized I used the word democrazy.. sigh. so jaded.

Thu, 01/12/2012 - 02:44 | 2057504 NumNutt
NumNutt's picture

Actually your 'democrazy" comment may not be to far from the truth, because even though they are considered a modern emerging country they still strongly enforce a class system in their society. So there are large groups of people that will never rise to a higher position in society because of this reason. Until that changes they will never reach the same position of EU countries, or the US, or even China in my opinion. The only way forward for them is some type of cultural revolution in which they do away with the old class system.

Thu, 01/12/2012 - 05:29 | 2057600 MarcusLCrassus
MarcusLCrassus's picture

I wonder if ORI thinks this could happen. 

 

They seem like a cool country.  Less totalitarian than China, but that caste system is a big negative that they will need to overcome to become truly fully modernized. 

Thu, 01/12/2012 - 09:30 | 2057866 kkam
kkam's picture

You must be really limited in your cranial capacity if you think ORI is the only Indian reader of ZH. As an Indian myself, ORI's comments make me cringe with embarassment, but I usually don't bother to reply. Indians make up 1/6th of the world, and there are many, many readers of ZH who are Indians but don't announce it in their name. Re your comment, it's not clear what your question is. Re caste - most 'western' folks have this stereotype of rigid caste in India which is far from the reality. The inequalities are more 'class' than caste, and class is defined by income and wealth, same as anywhere else in the world. As long as you guys still see India through the lens of caste, you are stuck in the 19th century British description of India. Things have changed, hugely, and you'd better get with the times. It's about money, that's all. Not caste.  

Thu, 01/12/2012 - 10:02 | 2057982 boyplunger
boyplunger's picture

I second that.

Thu, 01/12/2012 - 05:17 | 2057592 ZeroPower
ZeroPower's picture

speak the most number of languages?

Well there's english...and then each person knows at least 4 different dialects of Indian (i.e. Hindi.. but can be anything from kannada to punjab to urdu to etc..)

Thu, 01/12/2012 - 02:06 | 2057469 prains
prains's picture

why would anyone want to invest in a country that can't even wire six buildings to the grid with out it looking like a giant hairball. there's a clue in there somewhere.

love the tandori

Thu, 01/12/2012 - 10:44 | 2058160 zerozulu
zerozulu's picture

US Joos promoted India (incredible India campaign) as a next hide out after US economic collapse. Gave them all the concession possible (nuclear deal). Indian started to think they are some so exceptional people. Jeoos have already realized their mistake. Indians need to wake up too. Honeymoon is over.

Thu, 01/12/2012 - 02:27 | 2057488 ChickenTikka
ChickenTikka's picture

I've been living here for five years now investing in real estate.  Don't believe the hype.  Indians are fiersome self promoters and articles like this appear in virtually every new publication everyday talking about how great and friendly India is.  Yeah, it is "friendly" and what not, but as a business environment it's a complete trap.

You can't criticize India in a public forum and get away with it.   So what we usually get is a pangyric from Thomas Friedman talking only about how amazing the place is.  The truth is not as sunny.

This place has real problems.  The CEO's and MBA students that visit for a week, stay in hotels, and listen to propoganda all say how great the place is.  But just try and get something relatively simple done here and you will see for yourself.  A nightmare. 

Thu, 01/12/2012 - 02:44 | 2057503 prains
prains's picture

see post above

Thu, 01/12/2012 - 03:10 | 2057518 respect the cock
respect the cock's picture

I have a buddy who works in the mortgage biz...he always tells me Indians are the absolute biggest pain in the ass to deal with.

They are obsessed with numbers and will literally haggle him before obtaining quotes from 100 other lenders, and ultimately continuing endlessely with their indecision.  

On the other hand...if you wait tables they're a piece of cake.  Water (no ice) and the tofu curry every time.  

Interesting folks.

Thu, 01/12/2012 - 08:07 | 2057684 Urban Redneck
Urban Redneck's picture

Wall street assclowns and math nerds they employed to bankrupt the world would need to hire experts in POLITICAL & NON-FINANCIAL RISK before wading into those waters.  The problem is that their concepts of risk are entirely math-based, which doesn't work well in such circumstances over any timeline that would be used in the energy industry.

Thu, 01/12/2012 - 11:22 | 2058306 ChickenTikka
ChickenTikka's picture

Here's an example of what i mean that just came out today:

http://www.bbc.co.uk/news/entertainment-arts-16526687

A bunch of guys make a tv show with poddy humour - all of India is offended.  In a country where 1 million people die per year from something like diaorreah you'd think the Indian government would have better things to do.  But no, they are so hell bent on promoting this vision of India that just flat out doesn't exist to PC westerners and business moguls. 

One Indian diplomat told the BBC News website: "People are very upset because you cannot run down a whole society, history, culture and sensitivities." 

Really?  That's terrible.  Shouldn't you be trying to end the war in Pakistan, Mr. Indian Diplomat with hurt feelings?  Wouldn't that be a better use of your time?

I know literally dozens of CEO's from foreign companies investing here in this "India" miracle.  I can't think of anybody that is actually making money.  Everyone is here just because we have been fed this promise that India is the future.

Take Telecom for example.  This is an industry where you can have about 3-4 profitable companies max. 

We have about 25 in India.  The majority of them are foreign companies.  We got Norway Telecom, we got Etislat (Dubai), we got MTS (Russia) and none of them are profitable.  It's all a big promise that has yet to deliver.

Guess who has gotten rich?  Wealthy Indians who got bought into/out by these multinationals.  What a scam! I wish I were smart enough to have done the same thing.  But no, I am just another dumb white investor that got suckered into "Incredible India." 

 

Thu, 01/12/2012 - 02:46 | 2057501 Coldfire
Coldfire's picture

Getting something like this done in India requires a continual program of competitive bribery. It ain't Kansas. So if you go, bring bags of cash and leave your lawyers behind. They'll only FCPA the deal to death.

Thu, 01/12/2012 - 02:47 | 2057506 natty light
natty light's picture

Pakistan next door is a wild card.

Thu, 01/12/2012 - 02:58 | 2057515 Hugh G Rection
Hugh G Rection's picture

Where the fuck is Our Regional Idiot? This thread has his name all over it.

ORI- no more wheezing da juice!

Thu, 01/12/2012 - 04:28 | 2057558 AnAnonymous
AnAnonymous's picture

The article is written by a US citizen going by the name of Marin Katusa. He is the primary cause of the US citizen made quality of the article.

Useless to call for a resident in India to comment what is nothing but US citizen cheap propaganda.

Thu, 01/12/2012 - 08:21 | 2057709 Urban Redneck
Urban Redneck's picture

In this case Canadian (or at least educated and resident)

Marin Katusa, who works with Casey Research (http://www.caseyresearch.com/), is an accomplished investment analyst who specializes in the junior resource sector. He left a successful teaching career to pursue analyzing and investing in junior resource companies. In addition, he is a member of the Vancouver Angel Forum where he and his colleagues evaluate early seed investment opportunities. Marin also manages a portfolio of international real estate projects. Using advanced mathematical skills, he has created a diagnostic resource market tool that analyzes and compares hundreds of investment variables. Through his own investments, Marin has established a network of relationships with many of the key players in the junior ...More resource sector in Vancouver. Marin has the connections, the mathematical and analytical acumen to bring the best investment ideas and most promising Private Placement offerings to Casey Research subscribers. http://seekingalpha.com/author/marin-katusa
Thu, 01/12/2012 - 08:55 | 2057783 AnAnonymous
AnAnonymous's picture

And?

Canadian is a nationality.

US citizenism (Americanism) is a doctrine and US citizens(Americans) are the proponents of the said doctrine.

Canadian nationals can be US citizens. And most of them are actually.

And this guy, no matter where he was born, is definitively a US citizen, as the thoughts pattern exhibits.

Thu, 01/12/2012 - 04:24 | 2057555 AnAnonymous
AnAnonymous's picture

Blablabla, US citizenism, blablabla, US citizenism, blablabla, US citizenism, blablabla...

6666666666666666666666666666666666666666666666666666666666

The country has 5.6 billion barrels of proven oil reserves, but production averages just 761,800 barrels per day (bbl/d), about the same that it did 25 years ago.

6666666666666666666666666666666666666666666666666666666666

Another US citizen who thinks he deserves every single cent he makes thanks to his entrepreneurial spirit.

Ah, it is good to be a US citizen, you get so many indue priviledges thanks to your group.

Thu, 01/12/2012 - 04:36 | 2057563 toomanyfakecons...
toomanyfakeconservatives's picture

Unfortunately, this article is much ado about nothing. India is destined to be just another victim in the looming global petroleum trainwreck that is fast approaching. Skip forward to "Beyond The Peak" beginning at 2:23:43 of Zeitgeist Moving Forward and maybe you'll understand... http://www.youtube.com/watch?v=4Z9WVZddH9w

Thu, 01/12/2012 - 05:02 | 2057582 spdrdr
spdrdr's picture

I personally look forward to gas at $5 per litre (not gallon - litre).

I'm fed up with traffic jams.  A little extra cost will be worth the result.

Thu, 01/12/2012 - 09:27 | 2057860 Calmyourself
Calmyourself's picture

Well aren't we just the snob Charles..  Yes, the bloated belly children will be a welcome sight from the motorway as diesel / food goes through the roof.  Perhaps you should re-read a Simple Proposition chap..  Just think of the opportunity for target identification when only Charles here is motoring along in his Bentley, I would not stop at any lights if I were you..

Thu, 01/12/2012 - 05:41 | 2057614 css1971
css1971's picture

Yeah. Nothing to see here. Move along.

Thu, 01/12/2012 - 06:16 | 2057625 falak pema
falak pema's picture

The problem with India is its huge bureaucracy. It needs to shed weight and modernise. It needs also to set its strategic sights on normalising the Pak/India sixty year divide. Those oil and energy projects should be used for fence mending not for pouring more oil on the fire. But US imperial play has its own agenda when it comes to Pak/afgh, Iran, Turkmenistan pipeline projects, linking India to Persian basin energy source via Pak/afgh frontier. Right now its a huge mine field. 

We are in paradigm change times, but the transition both energy wise and geo political wise will be a bitch. A lot depends on Pax Americana mind set in coming years. It defines all the rules and lays down all the geo political Rubicons. 

The fight for access to RM is now a huge issue, where the USA has practically eliminated from its Oil basket all imports from ME except Saudi, which alone provides 20%. 20% more now comes from Africa, USA's new energy frontier, along with Canada/Mexico. Eurozone has Russia and Norway and some MENA oil, but is very dependent on ME. As for Chindia/JApan they are totally dependent on ME/RUssian Oil/gas. So as PAx Americana decays, which is the logical outcome over coming decade given the financial conundrum in first world, the BRIC countries and India will get more breathing space. How good they are at managing it remains to be seen. 

Early days, in the new new geopolitical order that will slowly? or fast? emerge...

Thu, 01/12/2012 - 08:09 | 2057685 Green Leader
Green Leader's picture

The disruption caused by the global depopulation agenda will destroy industrial society, not peak oil.

To what extent? That's a big one for us preppers. Dmitry Orlov states that 'boutique industrialism' is simply not possible under a peak oil scenario.

The global depopulation agenda is advancing at a very fast pace. In the island I live, 50% of the population is expected to develop cancer this year. Two days ago, five horses had to be removed from the program at the race track due to 'respiratory problems'.

This came out from Mexico just yesterday:

http://www.youtube.com/watch?v=w_zBcvDgWos

Buckle up, the plagues are coming our way.

 

Thu, 01/12/2012 - 08:21 | 2057711 falak pema
falak pema's picture

which island is that?

Thu, 01/12/2012 - 10:51 | 2058193 Whoa Dammit
Whoa Dammit's picture

Fantasy Island?

Island of Dr. Moreau?

Skull Island?

Japan?

Thu, 01/12/2012 - 11:01 | 2058221 zerozulu
zerozulu's picture

It looks like to me the problem with India is their cast system. I have tenants from India (Patel). Another Patel family lives a block away. One day I asked my tenants if they are related. He said no they are lower cast Patel and they are not even having talking terms. Apparently, there are 37 grades of Patels and they all discriminate each other.

They are not going to change in a decade or so. This cast system has roots going back 3000 years.

Thu, 01/12/2012 - 11:14 | 2058269 ChickenTikka
ChickenTikka's picture

Patel's are from gujurat.  They are the thriftiest people on the planet.  Good luck with that. 

 

 

Thu, 01/12/2012 - 08:21 | 2057710 CEOoftheSOFA
CEOoftheSOFA's picture

I've had dealings with ONCG over the past three years. The state-owned company is so utterly incompetent I'm afraid it dooms the entire country.

Thu, 01/12/2012 - 21:25 | 2060317 catpower
catpower's picture

Ok, first of all, I agree with the post - It is QUITE QUITE QUITE relevant. India is a growing economy with an enormous potential, it just moved from a socio economic classfication of a developing country to a NIC - ( so there is no point comparing it to developed countries ). What India actually needs is a "Resource revolution". 

http://www.mckinseyquarterly.com/newsletters/2012_01.htm

India is ranked 95th out 178 countries by Transparency international for corruption and world Bank ranks India 139 for ease of doing business -  My arguement is SO WHAT!  If india did not possess any opportunities india would not have 3 times as many  Billionaires than United Kingdom - ( keep economic equality aside for a min )  

http://www.dailymail.co.uk/news/article-1357056/Britains-1bn-aid-India-n...

So, if some people are complaining that india is shit to do business because of corruption, red tapism etc, i will agree  with them to some extent, but you guys have to pack your bags - when is rome, act like a roman - you will need the right connections ,you will even need to bribe officials, you will need to do a LOT more !   you CANNOT survive in India with westen ways of doing business  - Not at present atleast.  But with the recent introduction of Jan Lokpal Bill or anti corruption law and with rollout  GST in late 2012 to eliminate the multiple tax systems which amplified corruption are landmark bills. Ofcourse these are just two of the many examples.

Give india 15 - 20 years ( 10 years wil be enough to a positive shift) , it will go through an extremely transformational change. The present midlle class population of India is 50 million house holds or 127 million individuals, this middle class is set to explode to  585 million people or 41% of the population!   The population of whole of europe is 731 million. can you imagine the middle class consumption? note that india has a saving rate of 35% and unlike china there is internal consumption - which will fuel the economy

https://www.mckinseyquarterly.com/Tracking_the_growth_of_Indias_middle_c...

 

Lastly, i am NOT a vey  patriotic person, i am only commenting this after seeing the figures and observing the  changes.

MR.ZEROpower- there is no language called "INDIAN"  "o.0" 

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