Hey friends…

Few days back we got to know about the 9^th rise in the Repo and Reverse rate by Reserve Bank of India (RBI). Generally the people were very agitated after this act of raising rates, also the share markets showed a very negative impact with a downfall of 460 points that day.

RBI is a very proactive institution of India which focuses more on growth of the country.

Now if we consider the present inflation scenario, ultimately its affecting the growth factor.

Inflation is reached new levels (8-9%) which is at the end hampering the development.

Inflation can be due to many reasons such as currency difference, supply-demand mismatch. In India the prime reason is supply-demand mismatch. Due to increasing population demand always rises and due to some or the other reason supply is always constrained i.e. Due to less supply, more demand the prices of a commodity increases thereby causing inflation.

So in such kind of cases the inside situation is the producer knows that the consumer has money and the consumer needs the product no matter how costly it is so taking the advantage of circumstances they increase the prices which leads to price rise and hence inflation.

RBI in order to control prices increases the repo rate i.e. the rate at which RBI lends money to banks.

When banks will get money at a higher rate from RBI then they will lend it an advanced rate topeople which will ultimately increase their EMI or take their liquidity which will lower the prices. As in when consumers will have less money, demand of a commodity goes down which will eventually control the prices.

e.g. a person has surplus money ,he is getting loans at a very low rate from bank so he’ll go and purchase say three flats because he’s getting money very comfortably but if he won’t get loan so easily and when he’ll get that too at a very high rate so he’ll buy only one flat which reduces the demand for flats and thereby dwindling the costs.

Through this post I just wanted to convey that all we do is blaming RBI and other policy makers but without knowing the inside story.

RBI is taking good measures and I don’t comment on politicians but personally RBI is doing well..

Thanks

Take care..:)

Hello friends..hope you are njoyng..:)
In today’s scenario both India and China are amongst the top contenders of global economy and are the world's most assorted nations. Still, if we try to analyze the different economic and market vogues , we can make a contrast between Indian and Chinese economy.
If we see past few years,Trade between India and China stood at $42.4 billion in 2009-10
Of this, import to India was of $30.8 billion, while the country exported goods worth $11.6 billion to China.
China is still a much bigger economy than India, even though the two countries have roughly similar numbers of people
According to a report on Asia’s middle classes this year, India still has about 650 million people living on under $2 dollars a day measured in 2005 while China now has less than 100 million living on that amount
Some important facts and figures related to India and China are as follows:-

Facts
1.GDP

India $1.3123 trillion

China4909.28 billion

2.GDP growth

India 8.90%

China 9.60%
3.Per capital GDP

India $1124

China $7,518
4.Inflation

India 7.48 %

China 5.1%
5.Labor Force

India 467 million

China 813.5 million
6.Unemployment

India 9.4 %

China 4.20 %
7.FDI

India $12.40

China $9.7 billion

Foreign Direct Investment
8.Gold Reserves

India 15%

China 11%
9.Foreign Exchange Reserves

India $2.41 billion

China $2.65 trillion
10.World Prosperity Index

India 88Th Position

China 58th Position

Other add-ons of China
1. Fastest speed train.
2. World manufacturing hub.
3. Own plants for making air planes.
4. Own arms and weapons manufacturing unit.
5. Well developed Telecom companies.
6. Top performer in Sports at world events.
Indians buy aeroplanes , weapons from foreign companies ,our chemical industry is heavily dependent on Chinese and Japanese imports.In matter of sports we are never on top 5 at world events e.g. India hosted the Commonwealth Games in October, China hosted the Asian Games in November but the news coverage of the Indian Games was rife with words like “delays,” “corruption,” “shambles” while China, it appeared, had lovely, shiny venues ready to go about five months ahead of the event.
One of the biggest firm Reliance just gave billion of dollor worth order to china for its power plant but not to BHEL, its we who are making other countries stronger by not working ourselves self dependent.
In order to be considered a developed Country, India needs to focus on the common man. On the prosperity of the general public and on the living conditions that its residents have to face.

some other parts that can help
1. Improve governance and young people in politics
2. Raise educational achievement and increase quality and quantity of universities
3. Control inflation along with introduce a credible fiscal policy
4. Liberalize financial markets and monitoring on foreign investments by bilateral trade
5. Increase agricultural productivity
6. Improve infrastructure and improve environmental quality.

India is well on the way to becoming an Economic Super Power by 2020. India will have a large enough economy forecast at around $ 10.8 Trillion. By 2020 India would be well considered a major global economic player and should have a well developed Infrastructure and production capacity with a much larger skilled resource pool with a comparatively young (median age).