A recipe for disaster.

The net debt of top 6 steel producers is already at Rs 1,525.57 billion and is set to rise higher due to the falling value of the rupee. Livemint, 2 August. Tata Steel's debt is set to rise to Rs 632 billion in 2014 and the reason is that 62% of Tata Steel and 40% of Jindal Steel's debt is in foreign currency and so will increase as the rupee falls. Tata bought the Anglo-Dutch company, Corus Steel in 2006 and therefore has the technology to manufacture high end steel for exports. The global economy maybe down but defense and properties are still booming and, with huge reserves of iron ore and coal in India, Tata should be having an advantage over competitors in other countries. Trouble is that mines are presented to to relatives and friends who either export the produce illegally or just sit on them, hoping to sell out if prices rise. The Indian School of Business in collaboration with a leading business school in Brazil, Fundacao Dom Cabral has published a list of Indian companies which are the most " internationalized ". Livemint, 6 August. ONGC Videsh, the government owned oil company is at the top with 77% of its business as Transnational. Its total assets are Rs 255 billion of which Rs 252 billion are abroad and its total revenues are Rs 227 billion of which Rs 221 are from abroad. This is not surprising as India has very little oil and it is probably heartening that a state owned company has so much enterprise. Trouble is that the next 14 companies on the list are all private companies which earn a significant,if not a larger, share of revenues from abroad. Number 2 on the list is Tata Steel with 63% of business Transnational. Its total assets are Rs 1,258 billion of which Rs 757 billion are in foreign countries and it has revenues of Rs 1,329 billion of which Rs 977 billion are from abroad.  Number 7 is Hindalco, an aluminium company 55% of whose business is Transnational. Its total assets are Rs 885 billion of which Rs 466 are abroad and its revenues are Rs 808 billion of which Rs 618 is from abroad. Reason? Exorbitant taxes. The government is thinking of reducing taxes on electronic goods in duty free shops in our airports. Taxes including VAT, octroi and local taxes add 25% to electronic goods and 23% to mobile phones. HT, 10 August. Why were they called duty free in the first place? Huge taxes to finance massive spending leading to massive deficits, rising prices and a falling rupee. A recipe for disaster.