Twenty22-India on the move

IMF forecasts

The International Monetary Fund (IMF) has said India's potential is enormous but it needs to continue with reforms to remain in the economic `sweet spot' while reiterating its forecast that the country's growth will pick up marginally next year.
In its annual Article IV consultation report released on Wednesday, IMF said the Indian economy is on a recovery path, helped by lower fuel and commodity prices and positive policy action from the government.
IMF expects Indian economy to grow 7.3% this year and 7.5% next fiscal, making it “one of the fastest-growing large economies in the world“. India's official statistics show the economy growing 7.6% in FY16. IMF credited the NDA government with improved economic management.Increase in public infrastructure investment and initiatives to reinvestment and initiatives to unclog stalled projects have bolstered investor sentiment and encouraged private investment, it said. IMF took note of the government's commitment to fiscal consolidation also.
IMF however, cautioned that the recovery has been uneven and there were downside risks.
It listed NPAs and weak private sector balance sheet as vulnerability.Banks have become more cautious in lending, which could become a growth drag, the IMF said while welcoming the Reserve Bank of India's drive for more stringent recognition and resolution of bad loans. The high fiscal deficits and upside risks to inflation constrain the scope for countercyclical policies, it said.
There are external risks as well, such as deterioration in global growth and more.
IMF said the goods and services tax was a priority and further labour and energy reforms will improve productivity. Tax revenues can be increased further, including through better revenue administration. Better targeting of food and fertiliser subsidies would save substantial funds, it said, and called for reform of Food Corporation of India. IMF also urged the government to address long-standing supply bottlenecks, labour and product market reforms, and further improving the business climate to boost potential growth and generate jobs.

Uber rolls out bike taxis in Bengaluru

Uber is launching motorbike taxis in Bengaluru from Thursday , a service that will be priced lower than an autorickshaw. The bike taxi may enable a commuter to get around faster than in a car or an auto in congested Bengaluru. Rival Ola plans to shortly launch a similar bike taxi service. Uber launched the service, called UberMoto, for the first time in the world in Bangkok, about 10 days ago.
Bengaluru is the second city to see the service. The pilot project is expected to be extended to other Indian cities once Uber gains greater confidence about the model. A customer can share a ride with Uber's motor bike taxi drivers for Rs 3-5 per km, besides a minimum fare and a per-minute fare, say sources familiar with the development. The service is targeted at short trips. Uber declined to comment on the matter.
Ola declined to comment on its plans, but sources said its service is in the works.
The segment has seen a lot of interest. Some 20 bike taxi startups have been launched in India over the past 18 months, including Gurgaon-based Baxi and MTaxi and Bengaluru-based Rapido, Pillionaire, Heybob and Headlyt. Headlyt charges Rs 5 per km and has a base fare of Rs 15. Some keep their base fare at Rs 10 for the first 1-2 km and then charge in the range of Rs 4-5 per km.
Baxi has raised $1.5 million from a clutch of investors, has 400 bikes on its platform, and says it is seeing about 3,000 rides a day in Gurgaon and Faridabad. It charges a 10% commission on the total fare.
With the Karnataka government making it mandatory for pillion riders to wear helmets, UberMoto drivers will have a helmet available for its riders. At the end of the trip, customers can choose to pay using cash or wallet. UberMoto will also allow any two-wheeler owner to register himself on the platform to offer rides, say sources.

Of Water levels in Maharashtra's dams....

The water crisis in the drought-struck region of Marathwada is worsening long before the summer sets in.Water levels in the region's dams are already down to 6% of capacity . Six of the region's 11 major dams are at dead storage level. The biggest dam in the region, Jayakwadi, has only 2% water left.
Last year at this time, water levels in Marathwada's dams were much higher, at 18%.“There is extreme scarcity of water in Marathwada. In the worst-affected areas of Beed, Latur and Osmanabad, the water level in dams is 1% or less,“ said Aurangabad divisional commissioner Umakant Dangat. However, he said that surface water was still available.
Water resources minister Girish Mahajan said water supply to industries outside the main industrial hub of Aurangabad could be hit in the coming months. “Drinking water is the first priority . Currently, the Jayakwadi dam has enough water for the Aurangabad industrial area but smaller industries in other districts could be affected,“ he said.
While Marathwada has faced two successive drought years, rainfall across the state has been deficient since 2014.The result: Dam water levels have dipped dramatically . Dams across Maharashtra have only 27% of their water left, compared to 43% at this time in 2015. Water levels in the state's major dams are at a five-year low for this time of the year.
While Marathwada has seen the sharpest decline, water levels in dams in north and western Maharashtra have halved compared to last year.Water levels in western Maharashtra's dams have dropped to 31% from 56% at this time last year. In north Maharashtra, dam water levels have fallen to 26% from 47% last year.
In Amravati division, which sees the highest farmer suicides in the state, dam water levels have dropped to 26% from 37% last year.
Critics question how the government can plan major industrial expansion in this arid belt. Marathwada is a key hub for the Delhi-Mumbai industrial corridor. Several projects for the region were also inked during the `Make in India Week'.“In fact the time has come to even stop construction activities in Marathwada to ensure there is enough drinking water,“ said water expert Pradeep Purandare.
He also said that the state government's flagship water conservation scheme Jalyukta Shivar Yojana is laying emphasis on the wrong things. “The focus of the scheme is not watershed development but the widening and deepening of rivers. In the long run, this will be an ecological disaster,“ said Purandare.

Knight Frank Wealth Report 2016

At 1,094, Mumbai has the most ultra high net worth individuals (UHNWI) in India followed by Delhi's 545.The next decade will see the numbers increase to 2,243 in Mumbai and to 1,128 in Delhi, said the Knight Frank Wealth Report 2016. UHNWI are those with net assets of over $30 million (approximately Rs 204 crore), excluding their primary residence. According to the data prepared for the 2016 report by wealth intelligence company New World Wealth, there are now 1,87,500 UHNWIs across the world.
Meanwhile, in the past 10 years, the billionaire count in India jumped 333% to 78 people while the global growth was just 68% to 1,919 people. By 2025, India will account for 6% of the world's billionaire population. So where do the super-rich prefer to stay?
This year, London has beaten New York for the second successive time to win the accolade of “the most important city to UHNWIs“, according to the Attitudes Survey of wealth advisors' results. Singapore, Hong Kong, Shanghai and Dubai are on positions three to six.
Residential real estate accounts for a quarter of the average UHNWI's investable wealth, according to the survey , while commercial property investments make up 11%.
“Over the past 10 years, 54% of the respondents said their clients had increased their allocation to residential property . Just over 40% expected it to increase further over the next 10 years, with 30% of clients likely to consider a residential purchase in 2016,“ said the report.
When asked what factors had been growing in importance as a reason for UHNWIs to buy residential property , the most popular response (55% of the respondents) was as an investment to sell in the future.