Ramanisblog

Tag: Indian Economy

  • Falling Rupee Vs US $

    world economy 2012.
    Description English: Gross domestic product based on purchasing-power-parity (PPP) share of world total in 2012

    The fall of Indian Rupee against US $ is phenomenal .

    It has resulted in spiraling prices, causing hardship to people across all the sections of the society.

    The ornamental tinkering by the RBI, like cancelling 0% rate is no solution.

    Lets us look at this issue in simple English.

    Economy is determined by Demand and Supply.

    Higher the demand, less supplies, the prices of products go up.

    That means more money in circulation and less produce.

    In this case the producers stand to gain for the specific produce they produce but have to shell out more money for the other products,

    So what they earn on one hand goes out by the other.

    So , all in all, every one pays more than what they can and what the produce is worth(here one should know the products ‘worth’ is only ‘notional’)

    To restrict this Governments discourage by increasing Savings incentives and by making the produce dearer by tax .

    This is scene number 1.

    Next scene is when then there is more produce , less money

    Here the producers get less for their produce.

    Others look to gain but it is an illusion for the society can not meet the total demand and this drives the prices higher.

    So we come to the first scene.

    The Cycle is complete.

    To put it jargon, inflation and deflation occur.

    For inflation, you restrict money supply and this after some time causes Deflation.

    This forms a vicious cycle.

    If we look at a Home and understand how we budget this will become easy.

    We have a fixed income.

    We have expenses,

    We allocate money for each item and if we find this more, we , if we are intelligent, cut down our expenses by not buying more.

    The non prudent will borrow forgetting that they have to pay up the next month thus increasing the next month deficit.

    Most people, especially of this generation, budget more than they earn and borrow.

    This causes strain on the Home budget.

    So they work more, without trying to cut down expenses.

    This will go on till it breaks one day.

    This exactly what has happened to Indian Economy.

    The basic difference is that in our Homes we do not link our Income to the neighbor’s Income when we plan our expenses.

    In modern economy, which , in my opinion , is complete non sense , skullduggery, book fudging and downright criminal to aid the rich and the corporate, spending beyond means is taken as indicator of Growth.

    Taking the Keynesian Model as its Gospel, Indian economy is following the doomed path traveled by Brazil, Argentina, Greece and Ireland.

    How?

    To be continued.

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  • In India, warnings of a microfinance bubble.

    The problem is more political than economical.More than 90% of those who receive the loans are party cadres of the ruling party,who have no scruples about repayment.So long as the ruling party stays in power,the creditor is safe in not repaying; we have seen instances of loans extended to people by the Government being written off keeping in mind elections.
    Those who take the loans are confident that even if the opposition comes to power the loan will not be called in as it might affect the vote bank of the party.
    So, so long as politicians keep on splurging money to further powerlust,economy will go for a six.
    Story;
    Lending to the poor has proved so profitable in India that microfinance institutions saw their loan portfolio jump from $252 million to $2.5 billion in two years, raising fears of a subprime-like microfinance bubble.
    Microfinance institutions (MFIs) watched their loan portfolio in India jump from $252 million to $2.5 billion between 2005 and 2009, according to data compiled by Sa-Dhan, an umbrella group for the sector. Last year alone the number of borrowers jumped 59 percent to more than 22 million people, and loan portfolio grew 56 percent. When including government-supported microcredit programs, the sector overall grew to more than 70 million borrowers and a $7.5 billion market.
    http://www.csmonitor.com/World/Asia-South-Central/2010/0630/In-India-warnings-of-a-microfinance-bubble

  • Bigotry In The Indian Premier League And The Bigger Picture

    The writer very cleverly abuses India in the guise of trying to bemoan Pakistan’s current status.Yes, IPL incident is a deliberate snub
    The reason has been obliquely hinted, that nobody wants to have a Pakistani in the team , taking into consideration the situation prevailing over there.No cricketing reason whatsoever.
    No doubt Pakistani players are exciting to watch.Then you can nor be sure whether they will take part in the competition as and when demanded by the franchisees for their country is in such a shape that their President does not know who is running the country or what will happen to Pakistan or himself.Under the circumstances, it is prudent on the part of the franchisees not to have bought any of them, for we are talking of investments and returns , not charity.
    Added to this is the PCB’s propensity of recalling players, players in match fixing scandals, dope scandal.
    Even if it were to be because of souring relations between the two countries,what is wrong in India treating these players as persona non grata?Let Pakistan understand their chaotic , region and world destroying policies have a price.
    many over there will no doubt feign ignorance over Pakistan’s malicious acts against India.
    If you close your eyes, world shall not cease to exist.
    You do so, as has been proved, at your own peril.
    Further, Pakistan declares that Pakistan parliamentary panel will not be coming to India as a retort.
    You are Welcome to take such an action.
    Keep on doing things like this with all countries,say for example with Sri Lanka whose cricketers were attacked in Pakistan;US, because it is ‘Satan’;Bangladesh ,for it seceded from you;UK,EU and Japan for they are cordial with India.
    Please be content with China and North Korea: from the former you can get Nuclear Technology and later give Pakistan away in a platter;with North Korea to whom you can sell nuclear secrets.
    Remember, sins of rulers visit their subjects.

    Story:
    What I am about to write may hurt my Indian friends and I am sorry. There are crooks, cranks and madmen in every country including India and there is no exaggeration in what I write. I am merely writing from the heart as I always do.

    Much has been said about the Indian Premier League’s decision to leave out Pakistani cricketers in the year that Pakistan is the defending World Twenty20 Cricket Champion. Indians have come up with the stupidest excuses – excuses that cannot and should not make sense to any reasonable person. But then we are not dealing with reasonable people.

    Forgive me for being harsh, but the truth is that Indians today are drunk with power and acting like the world’s newly rich. All of a sudden a hitherto mal-nourished and largely backward people through no fault of their own, mired in religious superstition and other such meandering parochialisms, find themselves sitting on a lot of wealth (or so they think) primarily – though not completely- because they have perfected the fine art and exact science of geometric population multiplication. In the process they have learnt to use terms that they have not arrived at organically – secularism, democracy, economy- etc but as events repeatedly show are clever ploys to claim a stake in the world. A few hours after the world trade center bombing, I ran into a few Indians in New Jersey and shared my feelings of profound sorrow with them. They responded with one line “America is finished now- India is the next world super power”- Again and Again I ran into Indians who repeated the same line to me . To me this response sums up the Indian uber-nationalist psyche for better or for worse. Ofcourse this is not to suggest that there aren’t any fine Indians- many manyIndians are genuine humanists and liberal secularists. They are not driving Indian policy however.

    When Mumbai happened (and Pakistan mind you has had its fairshare of Mumbais too- many of which can be traced to India as well according to Pakistan’s government), India’s intelligentsia on a power-trip began to strategise how to hurt Pakistan and destroy it. These are not random Zaid Hamid like offbase characters or Kashifiat type Jamaat-e-Islami crazies who are laughable at best. Take a look at this brilliant professor at the IIM who wrote this ridiculous piece . India’s crook, cranks and madmen are ordinary respectable members of society. It is this thinking that is behind IPL franchises opting out of choosing Pakistani players. (One must take heart from the fact that Indian captain said in 2009 WT20 that India would win the tournament because all its cricketers play in the IPL. Pakistan ended up winning the tournament without even a single player playing in the IPL that year).

    The irony is that many Pakistanis don’t understand just how far we have squandered our natural advantage over India. If there was ever a country in the subcontinent that had the potential of being a first world country, it was Pakistan. Pakistan is a naturally resource-rich country which is also at the crossroads of world’s energy and commercial transport hubs. Despite our many failures, we have a growing middle class, a free media and a growing consciousness which will transform Pakistan into a modern democracy. We do however need to throw out this unnatural obsession with religion. We should also sue for peace with India but as the IPL has proved abundantly, we need to look in all directions.

    If we can put our house in order , Pakistan has the potential and ability to outdo India in every field and stand. Everyone other than Pakistanis themselves knows it. Indians know it and this is why you find so many Indian trolls baiting and abusing Pakistanis on Pakistani websites. In the information age – catching up will never be the problem but first we have to make up our minds. Do we want to live respectably with our heads held high? That would mean hard choices – one of which is to do away with our own crooks, cranks and madmen who have kept us mired in pipedreams and shadows.

    The question is who is going to bell the cat? No instead we shall continue to persecute our minorities, let the mullahs lead us astray and watch ridiculous Indian fillums like 3 Idiots as a national past-time.
    http://pakteahouse.wordpress.com/2010/01/22/bigotry-in-the-indian-premier-league-and-the-bigger-picture/#comment-25549