Ramanisblog

Tag: economic growth

  • S& P Rating, Report,Increase Debt to Improve Rating?

    S& P’s rating of India has come in handy for all and sundry to call for advanced reforms in Indian economy.

    The Ups and Downs of your Credit Rating
    The Ups and Downs of your Credit Rating (Photo credit: GDS Infographics)

    The report  cites ‘political indecision,slow implementation and introduction of Economic Reform‘ as the cause for S&P’s decision to downgrade Indian Economy.

    Look at S& P’s Rating.

    Country                   S&P rating               Debt as % of GDP

    Germany                    AAA                                 78.9

    UK                                 AAA                                 88.4

    US                                  AA+                                  106.6

    Japan                           AA-                                    235.8

    China                            AA –                                      22

    India                            BBB                                       67.6

    *

    What do the letter ratings mean?

    The general meaning of our credit rating opinions is summarized below.
    ‘AAA’—Extremely strong capacity to meet financial commitments. Highest Rating.
    ‘AA’—Very strong capacity to meet financial commitments.
    ‘A’—Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.
    ‘BBB’—Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
    ‘BBB-‘—Considered lowest investment grade by market participants.
    ‘BB+’—Considered highest speculative grade by market participants.
    ‘BB’—Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
    ‘B’—More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
    ‘CCC’—Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.
    ‘CC’—Currently highly vulnerable.
    ‘C’—Currently highly vulnerable obligations and other defined circumstances.
    ‘D’—Payment default on financial commitments.

    Note: Ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

    Specific ratings are also available from Standard & Poor’s Ratings Desk by emailing ratings_request@standardandpoors.com. 

    http://www.standardandpoors.com/home/en/ap

    “Although finance minister Pranab Mukherjeehas put up a brave face on the economy, evidence that it is on the skids can`t be glossed over any more. The industrial growth rate was a mere 0.1% in April, after falling to -3.2% in March. The fall in overall GDP growth has begun showing up in shrinking employment numbers, with jobs in labour-intensive industries such as textiles being hit particularly badly. Like the threatened downgrade of India`s investment rating by global agency Standard & Poor`s, the finance minister`s reassurances too could acquire junk status unless backed by vigorous government action.

    The outlook on India`s sovereign ratings had already been revised down to the last notch of the investment grade last April. A further fall to speculative grade will not only significantly impact foreign investment inflows but also push up cost of borrowings from abroad, denting income and employment growth. The slowdown in growth and higher government spending has already eroded the targets for improvements in government finances and dampened investment flows. To reverse this trend, the government must end the policy paralysis which prevents it from implementing decisions in a wide range of areas, including multi-brand retail, pension, insurance, land acquisition, project clearances, railway fares, oil pricing, fertiliser subsidies and the goods and services tax.”

    http://timesofindia.indiatimes.com/home/opinion/edit-page/On-the-brink/articleshow/14065518.cms

    Countries with Higher Debt % to GDP are given better Rating,USA,Germany UK and Canada and Japan.

    Does it mean you increase your Debt to be rated as Stable?

    The rumbles on rating usually starts when US/Europe faces Monetary crisis.

    Is it to enable them to stabilize themselves at the cost of others?

    How is it that limping economies can help improve a better performing Economy?

    I know the reply will be in jargons, which does not make common sense.

    How has the increase in FDI in Insurance benefitted India?

    Policy Decisions to help multi-brand retail, pension, insurance, land acquisition, project clearances, railway fares, oil pricing, fertiliser subsidies and the goods and services tax are needed?

    For?

    To allow multi Brand Retail Chains,allow people.under the guise of Corporates to grab agricultural lands, increase Rail Fare, Goods and Service Tax?

    How are these Companies performing in relation to improving Indian Economy?

    Even to-day LIC  is performing better.

    Handing over infrastructural projects to foreign business may help them make more money.

    Why not pump India money for these projects?

    Yes policy indecisions are there.

    They are to be corrected,not necessarily the one relating to FDI alone.

    Look at Argentina,Brazil,Ireland, Greece and now Spain who followed IMF prescriptions till the other day!

  • India, a case of reverse imperialism: Forbes

    For a change nice to hear about India.Unfortunately,unlike China,does not know how to flex its economic muscle in the Diplomatic arena.
    Story:
    India is still labelled an emerging market, but the Forbes magazine has argued that the country’s economy has already emerged. And as the economy spreads its wings, its companies are turning to new international markets, perhaps beginning a reverse imperialism.

    For proof, the US business magazine lists not only the recent high profile acquisitions by Indian firms, but also facts such as four of the top 10 billionaires in the world are Indian, and that with an annualised five-year total return of 42.2 per cent, India comes second after Brazil in terms of the growth of the world’s largest public companies.

    In comparison, the growth percentage in Britain and the US are 17.1 per cent and 11.1 per cent respectively, indicating that the balance of economic power in the world is starting to shift, the magazine said in a commentary piece in its latest issue on Friday.

    -“The reason for this reversal of fortunes is that for established companies in the US and Britain it is difficult to grow as quickly as those expanding from nothing, as is the case for start-ups in India.

    During the 18th century, when the British colonised India and started exploiting the subcontinent’s vast natural resources and to expand trade, tea became an important commodity and came to symbolise British colonial rule.

    In a case of reverse imperialism, Tata Tea, part of the diversified Tata Group, bought Tetley, Britain’s largest tea company, in 2000. Tata Tea has since become the second largest tea manufacturer in the world by volume, surpassed only by Unilever, based in London and Rotterdam.

    This March, in another example of British brands being picked up by an old colony, Tata Motors acquired Jaguar and Land Rover from Ford for $2.3 billion. Tata Motors hopes the acquisitions will boost its ability to be a “meaningful player” in the global market.

    India’s monetary muscle is strengthened by a cheap domestic labour market and its companies’ high price-to-earnings ratios, the magazine quoted Tarun Khanna, a professor at Harvard Business School’

    http://www.hindustantimes.com/News/chunk-ht-ui-worldsectionpage-focusindia/India-a-case-of-reverse-imperialism/Article1-315907.aspx