A short analysis of Chinese Intellectual property conflict with USA.

Taken from our wordpress blog.”Brinks of economic thoughts.”

 

A short analysis of Chinese Intellectual property conflict with USA.

 

 

 

An introduction

 

WTO Uruguay rounds meet of 1986-94 did make an introduction of Intellectual Property Rights within the multipolar trading system in the world due increasingly interconnected trade system. New innovations form a significant part of the human evolution. Ideas, inventions, scientific discoveries not only pave way for betterment of humans but also do bring along with them a financial worth for the creators. Innovators are assigned with a legitimate right to not only own their creation, but also prevent others from using their inventions.

There is a considerable variation in which these rights have been created and enforced in nations. With the passage of time these differences have led to bilateral and multilateral tensions in economic relations. These rules were actually supposed to settle the disputes in a systematic manner.

 

USA-China Relations-A very short insight.

 

The relationship between USA and China has been regarded by many as the most important bilateral relationship in this century.USA has the world’s largest economy while the People ’s Republic of China has the second largest economy. These 2 nations have come a long way since June, 1844 when formal diplomatic relations were established between the Chinese empire and the USA government. Post WW2,USA recognized Republic of China based in Taiwan, as the Chinese government.USA formally recognized People’s republic of China in 1979.Since that time relations between both nations have seen conflicts to mutual support on varied range of issues.

 

USA-China Intellectual property rights conflict

 

USA government now has formally launched an investigation into the Chinese conduct with regards to the Intellectual property rights under section 301 of Trade Act of 1974.

The investigation will be looking after the cases to conclude whether acts and practices of the Government of China with regards to technological use, IPRs and innovation are discriminatory and restrict U.S. interests. US President’s Donald Trump’s memorandum clearly notified that US is one among the forerunners of free and fair trade practices in field of research and development globally. And he will be more than willing to take any sufficient measure to ensure that US innovators, researchers are properly rewarded. On a broader scale it is clearly evident that US has concluded that practises adopted by China with regard to Intellectual property matters is violation of set rules of WTO laid Intellectual property Right rules. The section 301 authorises the US trade representative with the power to take steps where they feel US interest have been hampered by unfair trade practises.

Although one irony can be seen in the opposition of protectionist steps taken by the Chinese administration.USA has been opposing heavy subsidies which are given to the domestic industries in China. It hampers any prospect for the foreign player to operate in the market. These subsidies are already prohibited under the WTO rules. At same time we see USA on a conflict with the developing world on huge agricultural subsidies given to its agricultural sector and farmers.

US trade representatives have been long concerned about deficit which exists in the bilateral trade with China, which currently stands at around 325 Bn $.Total trade between these 2 neighbours stand at around 650 Bn $.USA has been arguing that some reason of this deficit have been that China has been copying US products and services and then selling them back to USA.There have been serious issues with counterfeit goods and even online piracy.

US firms were especially upset about certain partial rules which required local association or disclosure of intellectual property to enter into the Chinese market, which they insisted facilitates transfer and copying of their original ideas.

Commission on the Theft of American Intellectual Property has come up with indicative figures that the annual cost to the US economy from pirated software and theft of trade secrets is ranging anywhere between $225bn and $600bn.China is blamed for nearly 90 % of US items coming back into the US markets.

USTR report clearly made conclusions that few Chinese practises have been a cause of concern for USA’s interest. The report has also made a series of disclosure of steps which USA can take to WTO with regards to Chinese compliance with the Intellectual Property Rights.

After its accession to the WTO, China undertook a revision of framework of laws and regulations with regards to IPR of domestic and foreign stake holders. Protection of trade secrets in China has become a serious problem. Registration of trade marks in bad faith has been one among the major concerns raised.

China has been aggressively insisting on the import restrictive policies, thus setting a limited market scope for the foreign goods, manufacturers and service suppliers. China has also been pointed out for deploying export restraints, on number of goods where it holds leverage as it is one among the biggest producers of such goods globally.

China has also been one among the largest producers of steel. The Chinese government actions have led to consistent overproduction of steel thus resulting in distortion in global markets. China has imposed ban on import of remanufactured products.

The biggest cause of concern has been about sharing of innovation and technology of a product. In notable number of cases Chinese officials have forced foreign operators to licence their technology and Intellectual property on unfavourable terms. China has investment restriction into many service sectors companies.

 

In increasingly interconnected world financial services have emerged as major front. Financial economy has a significant impact on geo-economics. But China has still not opened its banking and financial industry to outside players. Same can be said about insurance, telecommunications, and internet, legal and other services.

Overall report indicated that many steps have to be taken by China in order to fulfil its commitment to WTO compliances.WTO membership has introduced China to best global practises ,but still much needs to be done on the forefront of transparency.

Report has been very much critical of land laws, licensing laws and administrative laws which in a way prohibit possibilities of foreign players to participate, or rising of barriers to make entry of outside playersdifficult.

Report has commended the Chinese intent to allow US service provider to operate into maritime sectors.

 

Chinese reaction

 

Chinese commerce ministry has issued a statement showing its concern and the potential of the matter to affect the bilateral relations. The remark clearly made that if any kind of disrespect is made towards the trade rules, Chinese administration will not be sitting idle. Official media has been also critical of the possible steps taken by USA.

 

 

Conclusion

 

Trade matters are nowadays deciding the bilateral and multilateral relations. Given the way global community is exhaustively interconnected it leaves no chance to not gain by mutual interactions. World order has moved for its betterment to multipolar realities, much better than earlier existing bilateral blocks. Owing to this fact trade and commerce has also gained momentum among the major powers. Any kind of discrimination done intentionally to harm this spirit must be dealt strictly. People do gain by innovation, not only financially at an individual level, but also impact the society on a larger scale in a positive manner.

One true opinion also exists; there had been many cases of investigation under section 301 of US Trade Act. But as USA worked ,a more proper dispute settling system evolved  up with WTO, where best global practises could have been adopted ensuring mutual benefit among participating parties. In case if USA tries to leave aside the system for whose formation it played a prominent role, it might set an example to other nations to take similar steps unilaterally. This may then become a bigger problem.

 

 

Harsh Vardhan Pathak

 

References

 

(http://www.wipo.int/treaties/en/ip/paris)

 

(http://www.wipo.int/treaties/en/ip/berne/)

 

https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm

 

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2017/august/ustr-announces-initiation-section

 

https://ustr.gov/sites/default/files/2016-China-Report-to-Congress.pdf

 

 

 

 

 

 

 

 

Uttarkashi and Bhattwadi Block.

Abstract.

 

This report is about Economy, Criminality and Overall Development of Bhattwadi block. Bhattwadi is the block in Uttarkashi District of Uttrakhand state. Bhattwadi block amalgamates 99 villages. Three of these pertinent points have further bifurcated into as follows. Failure of Agriculture and Devastation caused by flash flood and landslides, the curse of wrong research and policies, road connectivity and infrastructure, Health status and Education. Bhattwadi imbued with slew number of the proletariat and very less number of bourgeoisie and semi bourgeoisie population. But Bhattwadi also ensures punitive injection of wrong analyse, wrong interpretation, wrong economic policy implementation and wrong data collection problems which further have serious cascading repercussion in life of villagers. Health status of Bhattwadi block is on alarming state, although Janani “Suraksha Yojana” has shown some hope of improvement.

 

The economy of state:

 

The economy of Bhattwadi district is majorly dependent on Agriculture and farm based products this reason has a bonanza of famous Garhwal Potatoes, Rice, Brown flour(madwa) and rajma (pulses). But condition of Agric economy demise in sorrow state, reason being government have yet not identified its potential like quality of Garhwal products, government should provide and identified  their framer’s products and providing them common platform for agriculture market where they can sell at market prices( for an example Champagne a villages wine which have proliferated in international market.

 

Criminality:

 

While investigating in various villages our team has identified numerous amounts of cases of Bride trafficking and girls trafficking cases. Numerous numbers human trafficking has been observed.  Villagers, bride families, their natives and relatives positively responded for bride trafficking. We may assume all these as tools of marriage or bride trafficking.

 

Overall Development:

 

All most every village we have covered, lack with basic life supporting amenities like less number of CNG gas connections, Road connectivity, Health facilities, Education only up to primary level, Drugs dealing, the mellow cooperation of Police, Failure of MGNREGA, fragile old houses and high volatility of electricity supply.

 

Agriculture, Health and Infrastructure:

 

More than ninety percent of the people are engaged in agriculture. Agriculture is the only source of income for villagers. They had use Hybrid seeds for plantation provided by AJIVIKA and BHUVNESHWARI and RELIANCE. Reliance has adopted Barsu for 5 years. They also provide a POLY house for the incubation of their fields from wild animals and snowfall. Seeds that they brought from Punjab and Haryana are of a bad quality which reduces soil fertility and their production. But most of the crop got damaged by wild animals such as bears, wild boars, wild pork, monkeys and languor. Natural calamities like Floods, Landslide, heavy rainfall, hailstorms, Earthquakes, etc had affected these areas heavily. In June 2013, heavy rainfall resulted in flash floods and landslides and caused huge destruction in these areas.  After 2013 floods lead to the reduction of fertility of land. Whatever grown in fields it is used for self-consumption and not for income generation.  Agricultural techniques of farmers is either absolute or outdated, even now villagers uses traditional methods for agriculture due to which they do not get surplus production. This impedes them more dependent upon government Rationing. They have very fewer land left for cultivation, all their fields got eroded while flashing floods. Sometimes Government also takes their lands for the construction of roads but do not pay any compensation. Houses, roads, markets all the things had affected and connectivity of this area with infrastructural facilities had been hurdled. Roads, Bridges are still under reconstruction. Villages like Gajoli, Naugaon has poor road connectivity because road is broken and underwent reconstruction. Due to which these villages become isolated. After 1991 earthquake, aluminium sheets for houses were provided by HYDRA, RSS, INDRA AWAS YOJANA, Tata Trust and ANGLE SHADE had provided houses more than 30 percent of villagers. The health condition of the people alarming. More than 70 percent of the people do not have toilet facilities and proper sanitation. Bhattwadi often suffers from lack of access to healthcare presentation and rare time for emergencies evacuation. People living in rural areas tend to have a higher rate of tobacco and alcoholism. Around one in five of all women have a Hysterectomy due to pulling heavy wood stock, water canes etc. People are not concerned about their health and hygiene children’s were not even wearing slippers and were wearing filthy clothes.

 

Conclusion:

 

As if till now after visiting and a number of villages, interviewing villagers and their respective Pradhans the sorrow state of villages has been observed. Entire Garhwal area has been paved by proletariat population hence government should frame policy accord to support the agric sectors, government should also imping and revamp guaranteed employment scheme(MGNREGA). And should seriously implement recommendations by people like Comrade PC joshi, PS Rawat and Mr. Mangain.

 

 

Villages Reports.

 

 

Village and Block Village: Jhamak  Block – bhatwari

 

 

 

Key informants interviewed (who are they?) The local leader (Gram Pradhan) was very pessimistic regarding government allocation of funds, it is so ludicrous to construct china walls to protect proliferation of forest fire and spending millions on it, rather than understanding basic root cause why forest fire ignites, the very basic notion of forest fire is Palm trees(Chid) these trees do not possess any bonanza for mountain soil but rather act like impurities injections, the falling leaves of Palm tree ignites like fire in cotton he said. Government should initiate re-plantation of trees which are not only lucrative for mountains soil but also for wild animals and villagers, authorities should allot funds in these directions, coherently involving local villagers and other government departments he further stated.

 

Employment opportunity in the villages It was very astonishing that Jamak have such a naive percentage of MGNREGA employment scheme villagers are found in very negligible amount those who have participate in MGNREGA scheme due to lack of development projects in village. But Jamak also endure some favour after construction of dam, there are the villagers found to be employed in Hydro project dam.  But proportionate population remains unemployed with highly dependency on farming with disguise employment.
Challenges faced Entire Uttarkashi belt come under purview of high seismic earthquake zone so jamak. But jamak is also bless with human construction (Maneri Dam) this village endure heavy shocks of tunnel blasting from last 30 year the entire village soil has shaken and lost its density which has its cascading impact, soil sedimentation due to which villagers living in Kacha and semi kacha houses have to live in fear of   house demolition.

 

Case study Jamak is also observed seismic on the ground of Bride trafficking villages was not openly stating about incidences but mentioning three to five cases of such incidence. It was also observed that squareness of bride trafficking more diverted towards scheduled tribe rather than general category.

 

Case 1. Anju is the daughter of Umeed lal and belong to scheduled caste, while investigating with her younger sister told that Anju was married to Mureet 3 years ago and hole marriage was sponsored by in laws.

 

Case 2. While investigating another case of bride trafficking mushroomed. Junk dealer sold his two daughters one in panjab and Uttar Predesh amount was not stated.  

Case 3.  The boy went to delhi in search of job opportunities but never returns, police did not support the search of boy.

No strong signals were identified between Umeed lal and its in laws nativness. Villages also told about the incompetency of poor schedule tribe who cannot afford expenditure like marriage, it is a bliss that some one ready to take away their daughter without demanding for dowry.

 

`Health From the last few year “Janani suraksha yojna” playing imperative roll on women after their deliveries, 1400Rs amount of money is given by the government hospitals to these ladies and Ambulance drop infant baby and mother to her native place (Khushi ki Gadi) called in local language. But due to lack of doctors in PHC and CHC villagers have to travel Uttarkashi government hospital even for basic health problems.

 

Education It has been observed that Jamak ensure satisfactory level of primary education facilities. But the higher level of education accessibility remains absent, children who wanted to pursue their higher studies have to travel or migrate uttarkashi for completing their higher degrees.

 

Overall experience Jhamak is the most fragile village, which comes under highest seismic zone of earthquake and heavy landslides reason being its geographical location paved by Himalayas most unstable up folding mountains, Maneri Hydro project Dam due its artificial lake, it continuously weakening Jamak soil density, causing heavy landslides now and then, the underground tunnel which passes through Jamak bed also plays pertinent roll for heavy landslides and earthquakes.

 

Its already mentioned about dependency on farming sector by Jamak people. Jamak already endured more than three-time mega devastation by natural calamities one in 1991, another in 2004 and the last in 2013. Heavy land slides and mellow earthquake tremors have eroded numerous amount of fertile land, reduce per capita land holding area of villagers. Which further damping the amount of farm products and their revenues.

 

Jamak was observed good cooperation of police, reason may be nativeness of Hydro dam, but good cooperation of police have reduce alcoholism of villagers and they feel sense of incubation from fear and crime. Reliance, RSS and Tata trust have provided villagers with seeds, fruit plants and teen sheets.

 

 

 

Village and Block Village:Naogaon  Block –Bhattwadi

 

 

Keyinformants interviewed (who are they?) Naogaon is the other interior and last village of bhattwadi block. While interviewing with Gram Pradam some fascinating facts have immersed. Earlier their use to be numerous amount of agriculture production use to happen, but now situation is totally ironical, our major crop use to be mandwa,Potato,Cholai,Rice but interference of wild animal usually destroy our crops due to which we have to depend on government regular rationing. In every landslides we usually lose our cattles and fertile land.

 

Employement oppertunity in the villages While investigating Naogaon it was observed that numerous amount of people acquire higher bachelor degrees but due to lack of employment apportunities they have to dependent of agriculture. The another fascinating fact was Naogaon do not have few numbers of people who are employed in MANREGA, most of house holds have worked only for nine to ten days that to without wages, neither government provide any unemployment guarantee.

 

Challenges faced Naogaon is the most difficult terrain with the point of view of road connectivity, medical emergencies and regular necessary ration supply, this village is the most affected by cloud bust, flash floods and weekly mellow tremors of earthquakes. Villagers complain about government negligence of not providing them 100 guaranteed employment scheme due to which they have to migrate Dehradun and other states in search of employment.

 

Case study Case 1.  While investigating villagers waffling about network of bride trafficking they said there are few shopkeepers in Uttarkashi who are in touch with some villagers, these villagers connect link between girls parent families and shopkeeper with clients.

Case 2. One case of child adoption was found where boy was adopted 10 years ago due to demise of this blooded parents.

Case 3. Three years back, case was found where intercaste marriage look place when parents denied for marriage ceremony couple decided move out from village but when they came back both of them forcefully re-married to different individuals.

 

Health This village face extreme difficulties during women deliveries.To reach Naogaon 5 kilometres upstream serpentine path breaks breath several several times, it can be imagine how these pregnant women could reach road side waiting for ambulance. From last four year “Janani shuraksha Yojana” have shown positive implementation, pregnant women are drop and picked by 108 ambulance service without any charges with 1400Rs to women. But due to absences of road connectivity it becomes way difficult for victims to reach road side area. Therefore almost every major and minnor cases have to approach Uttarkashi government hospital. Almost all the villagers do not have any medical  insurance, even small surgery like women uterus operation drag their entire savings.

 

Education Nawa Goa again faces hindrance in education sector, it has been observed that only primary education is available rest after completing 8th students have to move uttarkashi to attain his secondary and higher education.

 

Overall experience This village also endure reams of wrong research and policies. Villagers told that  few investigators also approach to their village, they have observed our few cattle due to which they wrongly pulled us from BPL to APL ration category which reduced our food share, we have to lost one to two cattles in every flash deluge and flash floods, if we would been been stayed in BPL category we would have gain some financial support from government in form of cattles or money villager said.

 

Mahila mangal daal (women community) also honestly fulfilling their social responsibility by control home made alcohol and other form of drugs.

 

Under Swach Bharatt Abhiyan Swajal department have to provide financial support to families for constructing toilets but in middle of construction Swajal have stopped its financial support to poor families.

 

 

 

By Mohit Pandey

Mohitpande2@gmail.com

Phone Number 7351705526

China’s economic outlook and debt issues-A short analysis of IMF report of 15th August 2017

Taken from out blog’Brink of economic thoughts”

China’s economic outlook and debt issues-A short analysis of IMF report of 15th August 2017

IMF Executive Board concluded 2017 Article IV in Consultation with the People’s Republic of China. It concluded that sustainable growth path continues and has advanced across other domains. It is necessary to understand the issues related to China’s economy given a fact that its interconnections affect the global economy on a large scale. Given the fact that China has come up with a unique concept like Belt road Initiative, which provides it an access to not only Europe but world markets, either by land ways or seaways. It has to be necessarily understood that why economic thinkers have continued to warn about the debt problem of China. It can be referred as a problem not of the Chinese government or state owned enterprises {SOEs}, but of the Chinese public sector companies.

 

What is the need to study Chinese economy-Its positive sides and ill practices?

 

Ken Rogoff  had said last year in 2016 that slowdown of the Chinese economy is the biggest threat to the world. China is today working on ground with 21st century maritime silk route. It has started developing infrastructure in and around Asia for successful completion of the Belt road Initiative. This belt road initiative is expected to bridge the gap in field of infrastructure not only in Asia pacific, but also in eastern and central Europe. It has not only futuristic plans to expand road networks in east Europe, central Asia and east Africa but also the plans to foster collaboration in the region of South China Sea and Indian Ocean through extensive use of water bodies. China has been pioneering the Asian Infrastructure Investment Bank, established in 2016 having large chunk of investment to carry out in this region .Reportedly Chinese government was frustrated with the slow growth in investment in this region and wanting to have a greater input in IMF, World Bank and Asian Development Bank .China has initiated the Silk Road fund. There had been issues with underinvestment in infrastructure in industrialized world post 1980 and China in this time silently attained specialization in land transportation and civil engineering works .This dream has the potential to change not only the European economic order but also the international geoeconomics.This being on positive side.

But on negative side China is blamed of dumping. Donald Trump has ordered review of Chinese trade practices. This is with regards to the Intellectual property and may even go up to an extent of trade sanctions. Nations have blamed China of seeking trade benefits while trading in their nation, but not returning the same gesture while operating in Chinese lands. It thus becomes necessary to estimate about the Chinese economy amidst the conflicts which it faces with its neighbors on the disputed issues.

 

IMF report on China

 

Growth has remained strong in China but at the same time the sets of vulnerability are very high.GDP growth registered has been as high as 6.5 % in last few years. Demand and supply side growth parameters have been strong in China which is driven by local enhanced consumption and services sectors. Due to steps taken in industrial sector industrial profits have grown up. Chinese authorities have taken steps in last 18 months to stabilize the exchange rate expectations. China officially maintains a managed floating rate arrangement. From December 2015 China has been publishing RMB effective exchange rate index.

 

Ahead of its full party congress scheduled later this year Chinese economy is well poised now.IMF authorities believe that China will be able to meet its output target but public and private debt will also increase. There are interesting observations made about the Chinese economy. One among says that in case what may transpire in case trading partners raise barriers?  E.g. If  USA allows increase of 10 % In tariffs, the GDP of China may fall by 1 %.Growth however would be sustainable although it may be lower than expected.IMF authorities have although disagreed with it due to brighter growth prospects.

 

Low consumption and high national savings have translated into lower welfare for Chinese peoples and excessive debts. China will have more elderly population and less working population from 2015 to 2050.Demographic changes will have an impact on the national savings over time. State owned enterprises have been less profitable as compared to private players thus reducing the economy wide productivity. It is thus expected that the Reforms have to be accelerated to enhance productivity for State owned enterprises.

IMF authorities have marked that it is necessary to allow foreign firms to operate in the economy to enhance efficiency of the economy. China has now the largest banking system in the world. The recent growth in non financial debt sector has raised concern for small term macroeconomic stability. The large stocks of intra-financial sector credit have continued to raise important risks for financial stability. IMF authorities have recognized that the growth in the size and complexity of the financial sector raises risks but also argued the problem was manageable.IMF authorities also continued to disagree with the “augmented” debt and deficit concepts used by staff. The authorities also disagreed with staff that the monetary stance was accommodative.

China has foreign currency reserves, at US$ 3 trillion, which is more than adequate to allow a continued gradual move to a floating exchange rate.

Some progress has been made in data frameworks, but still major data gaps remain, undermining policy making and credibility, IMF surveillance, and G20 commitments.IMF authorities also agreed with the need to broaden Chinese  publication of macroeconomic data.

 

Debt sustainability Analysis of China

 

In the narrow coverage scenario, general government debt is on a slightly increasing path. The projection reflects a gradual slowdown of real GDP growth to 5¾ percent y/y by 2022 General government debt under narrow coverage at 37 percent of GDP in end-2016 is increasing gradually. Debt has continued to rise rapidly and consolidation will be needed to prevent it from stabilizing at a very high level. Augmented debt will rise rapidly to about 92 percent of GDP in 2022. China faces relatively low risks to debt sustainability, but is vulnerable to contingent liability shocks. China’s debt profile will largely depend on the implementation of the new budget law and, more fundamentally, on the willingness to reduce public investment..

China’s housing and construction sectors will slow down in 2017. Industries which hold the major of China’s corporate debt, including commodities, building materials and other sectors related to construction, will be facing a major chunk of a sustained housing slump. Slow construction growth coupled with skyrocketed debt, along with sharp reductions in debt maturity periods, can easily cause corporate bankruptcies, testing Beijing’s institutional abilities to cope with them. U.S. protectionism and other international developments could put even more pressure on the Chinese economy, forcing Beijing to trade its economic reforms for greater spending to keep the economy sound.

China’s leaders will be on their guard as threats to the country’s social and economic stability mount.

Conclusion

There are reasons to believe that China can tolerate high levels of government debt-due to high savings, capital controls, strong state controls and confidence.IMF China representative along with the World Bank representative agreed on focus to reform in China. Reforms should be aiming at prevention of further buildup of risks which are stemming from rapid credit growth, intra-financial sect oral claims, and moving the economy to a more inclusive, environment-friendly, and sustainable growth path. This is also giving the markets a more decisive role, so eliminating distortions, and modernizing policy frameworks which will result in a more efficient use of resources, faster productivity growth, and rising living standards across the income spectrum.

 

 

Harsh Vardhan Pathak

 

 

 

Reference

 

http://www.imf.org/en/News/Articles/2017/08/09/NA081517-China-Economic-Outlook-in-Six-Charts

 

 

Kochin Shipyard IPO .-Its first day of trading

 

Much awaited Cochin Shipyard IPO hit the stock market floor on 11th of August. It was open for general public for subscription from 1st -3rd August.It has been one among the most sought after Public Offers in last few months, being receiving subscription applications as high as 76 times. Cochin Shipyard, shares closed 20% higher at Rs522 on BSE, which was the upper end of the price band of Rs424-432 per share.

Cochin Shipyard Limited (CSL) is the largest shipbuilding and maintenance facility in India. It is part of a line of maritime-related facilities in the port-city of Kochi, in the state of Kerala, India. Cochin Shipyard ltd{CSL} is a PSU enjoying”Miniratna” status and the largest public sector in India in terms of dock capacity.
Services provided by the shipyard are building platform supply vessels and double-hulled oil tankers. It builds the first range of indigenous aircraft carriers for the Indian Navy.

Cochin Shipyard was incorporated in 1972 as a Government of India company, The yard has facilities to build vessels up to 1.1 million tons and repair vessels up to 1.25 million tons, the largest such facilities in India. In August 2012, the Government of India announced plans of divestment to raise capital of Rs. 15 billion (15,000 million Rupees) for further expansion through an Initial Public Offering (IPO).

In addition to shipbuilding and ship repair, it also offers marine engineering training. As of May 31, 2017, the company has two docks – dock number one, primarily used for ship repair (“Ship Repair Dock”) and dock number two, primarily used for shipbuilding (“Shipbuilding Dock”). CSL’s Ship Repair Dock is one of the largest in India and enables it to accommodate vessels with a maximum capacity of 125,000 DWT and Shipbuilding Dock can accommodate vessels with a maximum capacity of 110,000 DWT.

The IPO, a fresh issue of 22.65 million shares, was expected to fetch the company Rs978 crore at the upper end of the price band. The Union government also sold 10% of its stake.

The funds from the fresh issue of shares are to be used to fund two major projects and also to improve the shipbuilder’s existing facilities.

On performance front, the company continued to post posted turnover/net profits of Rs.1660.45 cr. / Rs. 69.28 cr. (FY15), Rs. 2096.88 cr. / Rs. 291.75 cr. (FY16) and Rs. 2208.50 cr. / Rs. 312.18 cr. (FY17).

The company has order on hands worth Rs. 2936 crore as on 31.03.17. CSL has association with world leaders like Wartsila, GTT, Rolls Royce Marine. It has completed constructions of 20 FPVs for the Indian Costal Guard ahead of schedules. More that 72% revenue is coming from defence sector. Its foreign clients include NPCC, Clipper, Sigba.

 

One market lot of 30 shares were put to offer at price range of 424-432 Rs.           Whereas a discount of 21 Rs was made for the employees and the retail investors.

Nearly all the broking firms had given a subscribe rating to new issue. And it saw a very heavy demand. It was heavily oversubscribed, nearly 76 times. We have seen recently such demand for few issues like S Chand IPO, which is currently trading very low{468 Rs/share} compared to the enlisted price{680Rs/share} and the Central Depository Services Limited, which is still above its listed price.CDSL started trading on floor with premium price at 260 Rs and even crossed 425 Rs mark, but gradually its price fell .On Friday it closed at around 305 Rs/share.

Due to little downwards movement witnessed in global markets and in Indian markets too, Kochin shipyard did not make a high as expected as 550-600 Rs/share on day 1.

It will be observed that how the share trades from tomorrow .It has all the potential easily to cross 600 Rs/share mark.

 

Harsh Vardhan Pathak.

 

{Sources-Online reviews about the issue /the introduction of the company}

 

RBI Monetary policy.

RBI lowered the bank rate by a margin of 25 base points after 3rd Bi monthly Monetary Policy Committee meeting on 2nd August, 2017. Out of total 6 Monetary Policy Committee {MPC} members, 5 voted for the rate cut. Given the way in which inflation rate has been at the historic low. Many global factors were taken into consideration before doing this.

RBI has made a mandate of maintaining the inflation rate in range of 4% {+
2% or  -2%} with insisting in on maintaining good  growth level in the economy . There had been many assessments which were done before taking this step.

Prominent economies like US and Euro zone have shown better growth figures. In these economies unemployment has been declining, inflation has been declining and the private consumption has been rising. There had been some concerns shared about the situation of Chinese economy slowness, but that also seems to be regaining its growth trajectory.

Better consumer demand has actually resulted into expanded trade volumes globally and thus causing enhancement in export and import figures in prominent economies.

Also was an interesting surge seen in US equities markets, as well as financial markets in Asian economies, while some slowness was noticed in European economies due to factors like Brexit and possible aftermath of British exit from union.

Indian economy is largely dependent upon the South eastern monsoons and a normal monsoon enhances the well being of agriculture sector. It has been pretty good so far this year. Inflation rate had been declining and was gradually registered in lower figures. India which imports crude oil heavily from outside also benefitted from decline in the international oil and crude prices.

 

Overall assessment by RBI officials indicated that inflation will be on lower side for the second half of the year also. Many factors like new regulation acts in real estate {RERA, Real estate regulation Act,}, manufacturing activities, and impact of loan waivers to farmers were taken into consideration.

MPC observed that there needs to be enhancement in private expenditure and investment, betterment of infrastructure and easing of regulation is necessary for speedy conduct of projects. The concerns about recapitalization of PSUs have been widely discussed.

Next meet of MPC will be held in October, 2017.

 

Harsh Vardhan Pathak.

 

Attached is the RBI monetary policy press release link.

 

https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=41256