Impact of Obama's triumph on India

Impact on India
Focusing on the economic interests alone, Indo-US relations are in for a long haul.
Our bilateral trade is expected to cross a record $100 billion this year and more importantly a huge number of Fortune 500 companies continue to have strategic business interests in India with perhaps the highest exposure in the Indian IT Industry.
But Obama has set a limit of 65,000 on H-1B visas for software engineers to enter the US, and India's share in this is just 7%. Moreover, Obama has cracked down on L-1 visas — Infosys  complains that half its applications for such visas have been rejected. Obama's victory means India will face four more years of anti-visa pressure. He also wants to discourage US investment abroad of the sort that exports jobs. India has been the recipient of precisely such investments — IBM and Accenture now have more employees in India than in the US. Stiffer tax rules on such companies could impact future investments.

Obama prides himself on being a green enthusiast. There is growing green pressure in the US to oblige India and China to slash carbon emissions, which are growing because of rapid increase in coal-powered electricity. US greens want new trade barriers against countries whose imports are competitive because they have lighter environmental standards (especially on carbon) than the US — the greens call this environmental dumping. Obama will seek stronger action from India and China, but it remains to be seen how discomforting that is.

Collaboration is key to survival in today's uncertain world. I hope in the 45th tenure of US Presidency this one thought will reign supreme above all lines..:)

Obama back with a bang.. !!!

US elections are culminated with the victory of Barrack Obama.Winning of Obama marks innovation in the US is good for the US, but it is also good for the rest of the world, as computers, mobile phones and the internet, for example, demonstrate. Obama stands for inclusive growth, accommodation of immigrants and equality of opportunity, and Romney stood for the opposite.
Now it can be expected that the fiscal cliff($600 billion) i.e. combination of expiring taxes and overboard government spending cuts will be fixed by working on monetary policy,easing interest rates and quantitative easing(QE).As the president will do something to minimize the effect of tax increases and spending cuts.
All over the world markets and price of different commodities increased, Dow Jones
industrial futures up 0.1 per cent to 13,213 and S&P 500 futures adding 0.1 per cent to
1,426.90. Britain's FTSE 100 rose 0.3 percent to 5,899.13. Germany's DAX rose 0.6 per cent to 7,419.95. France's CAC-40 rose 0.8 per cent to 3,507.30. Crude oil jumped to $88.72 per barrel,the euro rose to $1.2845.
A win for Obama is a positive for the capital market as that would ensure flow of Foreign Institution Investors(FII) money into India by continuing the QE thing which allows buying of shares worth $40 billion per month ensuring enough liquidity.
Obama's victory means that the hope of disciplining global finance stays alive and that fiscal policies will be more responsible and supportive of near-term growth.
Obama's foreign policy, too, is more  adaptive to the more dispersed nature of global power.
Below is a breakdown of the possible implications by sector:-


1.Alternative Energy: Obama has said he will continue to support development of renewable energy technologies such as solar and wind, but he will need the support of Congress to extend or renew tax breaks that have underpinned the growth of those industries.

2.Healthcare: Hospitals and health insurers will benefit from the phased-in implementation of Obama's healthcare act, which requires most individuals to have health insurance.

3.Rundown: Under a Democratic government the industries most likely to benefit include healthcare facilities and services, food and staples retailers, home-building and life sciences tools and services.

4.Education-Govt will back taxes to avoid education cuts,less college costs,easy  funding in education/training programmes so that more people have an opportunity to be educated so that they can really be qualified thoroughly in their area of work.

Hiee friends ....
wats up... :)

Recently we saw a hike in diesel prices and some changes in FDI(Foreign Direct Investment) policies
Increase in diesel prices by Rs.5,limiting the supply of LPG cylinders to 6 in a year,clearance of 51 % FDI in retail sector,Policy Changes in Aviation Sector,Rate changes by RBI.
There were protests all over the country by the public as well as opposition parties.

The reason RBI and policy makers gave was primarily to consolidate fiscal gap(Difference between earnings and expenditure)
On the government decision to allow FDI into multi-brand retail, it has been said that it will create an opportunity to improve infrastructural facilities in the agricultural marketing field which may ultimately lead to price reduction,due to wide variety and easy availability.And also it will strengthen our growth process and generate employment in these difficult times

But we see from a different prospective,it will push up inflation in the near run.For Example,Diesel hike causes Rs.1200 crore burden on Indian Railways,yearly.

Whats new is Mamta Bannerjee protested to take her support back,but today when Samajwadi party lended its support.
As a result Sensex closed after rising 403 points at 18752.
Tomorrow there's a news that our PM Dr.Manmohan Singh is going to give a message that why this diesel hike and other changes are being done.The Prime Minister is also likely to explain the reason behind the hike in diesel prices citing under recovery by oil marketing companies. He could also put forth the government's stand on capping the number of LPG cylinders to six per annum.

Singh would also touch upon various economic reforms being pushed by the UPA government.


But if these reforms will continue at greater pace,then it will surely create problems for Indian Public and growth of the country.

India's Growth Story

India's Growth Story...during the last week there were some important decisions held in Indian Political Ministry in which one was making Mr.P Chidambaram as the finance minister of India who has rescripted the rules for elevating the economy...the initiatives will include disinvestment in infrastructure and power and energy .There have been power projects totalling 18,000MW which are not getting executed and many more like that....they are facing
problems ranging from ranging from non-availability of coal to environmental clearance.
Coal India, which has near-monopoly over coal mining in the country, has been unable to increase production to keep pace with the rapid expansion in generation capacity, particularly by the private sector. Problems related to land acquisition have also hit mining.
other reason would be following global trends...


India need to follow its own path and not global trends...India should promote rapid urbanization and expansion of manufacturing.
The government is considering higher rural spending, a sugar export tax and zero import duty to mitigate the impact of a drought.Along with that  India has the highest savings and investments rate in the world,projecting GDP at 6.5% for this fiscal. India still has some advantages, including the fact that it is starting from a low base, with an average income of $1,500. It's always easier to catch up from a low base, and some Indian states are indeed showing real dynamism.
Of the 180 economies tracked by the IMF, India ranked 29th in terms of its average growth rate in the 1980s, 27th in the 1990s and 26th during the last decade which is a proud fact.
:):)

Economic Crisis and Recession 2012

Hey friends….

Hope you all doing great…

Sorry for not writing any post for so long…. And moreover I was finding to write something persuasive other than this crippled economy news….

Indian Economy has been slowing down due to global implications....India’s currency, the rupee, is falling; investment is down; inflation is rising; and deficits are eating away at government coffers.

You all might be aware of what’s happening…western countries and euro zone have been confined in their own situation where are not able to generate enough of capita, as expected in their GDP’s. Indian IT Cos are the ones who are the most affected victims of this situation…

Many of the Economists and Entrepreneurs can prognosticate a dreadful economic era coming…

The chance of a double-dip recession is increasing because of risks related to ending global monetary and fiscal stimulus.

The factors which are aggravating the situation are tax increases and spending cuts in United Sates that may push the world's biggest economy into recession, the job market never left the recession to begin with.  Over four years have gone by since 2008, when the U.S. hit its employment peak;

 A hard landing for China's economy as China posted a three-year-low growth rate of 7.6 percent in the second quarter after 2008 recession. In China Car sales are down, cement production is down, steel production is down, construction stocks are down. In short vastly overblown;

 Further slowing in emerging markets; and a military confrontation with Iran.

When it comes to Indian economy it is still expanding, with growth projected between 6 percent and 7 percent this year. Indian business leaders, foreign investors and analysts say India’s strengths are being undermined by growing political dysfunction. Foreigners are also pulling back their investment in Indian stocks and bonds totaled only $16 billion in the last fiscal year, compared with $30 billion the year before. Structural reforms needed in India to boost growth as in merging the fiscal gap that is uniting the difference between earnings and

expenditure, enough combination for raising revenues and have a more efficient tax system...

Rest I’ll come back with another post stating further about Indian Scenarios...

Take Care

Stay Blessed... :)

Petrol Prices

Hiee friends… J

Great to see you after such a long time…my Internship experience in Mysore was amazing… J It was a wonderful journey..

But I missed writing blogs…

The day I came back…I was stunned because of…

Stature in petrol prices…

In the present scenario, India is subjected to face the massive petrol price hikes which have shaken off common man. Striking increase of Rs 6.28 per liter which amounts to an increase of about Rs 7.5 after including the taxes. The hike will be between Rs.7.54 and Rs.7.98 in the four metros and would be higher or lower in other.

The main reasons for hike in fuel prices are,

A) Global increase in prices of crude oil which inevitably increases prices in India.

B) Another reason is purchasing power (difference in exchange rates/currency rates), the value of rupee is downsized considerably in terms of dollar.

Currently 1 USD=Rs.56.23

USA supplies 45% of Indian Oil demands.

I’ll update another blog post on the differences in currency.

Earlier if we were paying Rs.50 or something, now we’ll have to pay Rs.56 which leads to hike in prices..

C) And if there’s any scope left, that is taken up by Government of India. As they don’t provide non-Government Oil Cos with any subsidies on petrol products as given to LPG, diesel and kerosene. So oil companies are bound to increase the petrol prices and some of them have even closed their outlets.

D) Last but not the least VAT (Value Added Tax) 25-30 % cost is added to the actual value.

·         Excise duty  : 14.35 rupees per liter

·         Customs duty : 7.5 percent

·         Sales tax or VAT: 20 percent.

Deregulation in oil prices-in India oil prices are regulated by government; no private company can sell it on their market prices. In this cases if certain amount of price is lost, then that has to be paid by Govt...But recently Govt. has stopped providing them with the subsidies, so companies can themselves decide the prices. So in this case companies have the power to decide the price themselves. Every fortnight, all the oil companies will meet and revise the prices based on the market situation. The gloomy truth is that, this will not be suitable for India because in India most of the people are poor and they cannot tolerate the high inflation. In the coming days, there is a proposal to deregulate the prices of Diesel and Cooking gas. If it happens, cooking gas price will be Rs.800 per cylinder.

When economy is recovering and in the growth path, the demand for crude oil price is more.

According to the recent news, the prices of petrol will be DECREASED by Rs.2 from this midnight…

Hope to see further deductions… J