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).

Shift in Infosys management panel…

Infosys

Infosys was founded on 2 July 1981 by seven entrepreneurs, N. R. Narayana Murthy, Nandan Nilekani Krish Gopalakrishnan, S.D. Shibulal , K Dinesh with the present value of $6 billion.

Narayana Murthy who was the founder of company,needs no introduction, he started the company by borrowing Rs.10,000 from wife Sudha Murthy will retire in in august 2011

Nandan Nilekani was of the originator of Infosys became the CEO of Infosys in March 2002, taking over from Murthy. Nilekani served as CEO of the company from March 2002 to April 2007, when he relinquished his position to his colleague Krish Gopalakrishnan, becoming Co-Chairman.He left Infosys on 9 July 2009 to serve as the chairman of the Unique Identification Authority of India.

Krish Gopalakrishnan another founder Infosys Technologies Limited. The initial years of his responsibility at Infosys included management of design, development, implementation and support of information systems for clients in the consumer products industry. But after he took over as CEO and MD his functions included Customer Services, Technology, Investments and Acquisitions.

S.D.Shibulal,was supposed to be the best niche for this place. He’s the co-founder of the company. On June 22, 2007, Shibu took over from S. Gopalakrishnan as Chief Operating Officer. According to the company website, Shibu's focus has been on increasing competitiveness, improving customer experience, enhancing employee engagement and increasing the depth of services.On April 30, 2011, Shibu took over the role of Chief Executive Officer.

This was about the creators of Infosys and the deciding panel for choosing new CEO and MD was laid by Jeffrey Sean Lehman. He stated this thing Narayana Murthy's successor is not his replacement.

But now finally KV Kamath appointed new chairman of Infosys, Shibulal new CEO functioning from 21^st august,2011.

He is the non-Executive Chairman of ICICI Bank, the country's largest private lender. KV Kamath was a natural choice as he was a non-IT person and he has a very acute mind he would have the same kind of keen sense in the business even if he was from the IT industry.

Shibulal as already mentioned is a person who will ensure that his leadership transition is smooth along with making other organisational changes to strengthen our market position and ability to serve our clients better.

While Krish.Gopalakrishnan continued to hold his position as Executive Co-Chairman of the company and will work on enhancing customer, employee and investor connect ensuring that this company moves forward in the strategic direction that it has been set.

According to Mr.Murthy he’s leaving his company in capable hands These three leaders meld an extraordinary range of talents and experiences with a united commitment to drive the company... We could not be in better hands…

Ascending Crude oil Prices

As we all are familiar with rising commodities (like discussed about silver in previous post) and crude oil too…

There are many reasons responsible for the price rise in crude oil in 2010-11.If we focus on some factors then the prime causes are:-

1. 1. BP(British Petroleum) oil spill-It happened on 20 th April,2011 in Gulf of Mexico. It is the largest accidental marine oil spill in the history of the petroleum industry. It is believed that the daily flow rate diminished over time, starting at about 162,000 barrels of oil per day and decreasing the reservoir at a considerate level.At that time crude oil hit the levels of $100.

From then onwards demand for crude oil reached new heights.

2. Unrest in Egypt-Global oil prices could exceed $110 a barrel when political unrest in Egypt continued because of their president Hosni Mubarak, and the other main reason was agitation near Suez Canal or the Suez Mediterranean (SUMED) oil pipeline which passes near Cairo. The canal ships 1.5 million barrels per day (bpd) of crude and the pipeline carries 1 million bpd. Together they account for nearly 3 percent of daily global oil demand.

All this ultimately affected the global oil prices.

3. Libyan turmoil-Growing anti-government movements, military suppression due to Muhammad Gadaffi administration increased more of public chaos and serious political problems. According to OPEC(Oil and Petroleum Exporting Countries) Libya comprises of total 2 % of world’s oil share. It exported 9.7 billion cubic meters to Europe in 2009-10.The actual civil war in Libya was longer than in Egypt, which led Libya to more losses and at the end we could see crude oil trading between $115 - $120.

Other reasons were Dollar-denominated commodities become cheaper with a weak dollar, in turn increasing the price of oil and Heating oil demand from the Northern hemisphere along with debt crisis in euro-zone.

Present situation

Top oil exporter Saudi Arabia is unhappy with high oil prices and concerned about their impact on the global economy. Unrest and violence in North Africa and the Middle East and strong demand growth in Asia have pushed prices to their highest levels since 2008.Rising fuel demand led by growth in China, India and the Middle East has outpaced Riyadh's expectations, and Saudi Arabia now sees medium to long-term oil consumption higher than it had previously anticipated.

If we see further rising demand should push up crude oil prices in 2011 in the near term. At the same point in time ,lack of new significant oil discoveries confirm that there is an impending oil crisis that will hit the global economy. This would further drive up already accelerating oil prices.

That was all…but still if you are more interested in looking for oil prices then following is the link

http://www.oil-price.net/en/articles/oil-price-at-comfortable-level.php

take care..stay blessed..:)

Hey wats up friends..??

Its been long since I posted..so here I go…as we all are aware of rising silver prices..but whats the reason behind it increasing so suddenly and that too so steeply…and why only silver not gold…???????????

In 2007 commodity prices soared when there was actually a slowdown in the global economy. Then there goes a concept of USA Federal Reserve intervention that keeps track for all the currency reserves. For maintaining their own accounts, they keep on printing dollars which ultimately reduced the value of currency and increase the value of commodity in global markets. Silver remains valuable because it is in great enough supply to be useful as money. Silver is not only used as money and for jewelry. It has many industrial uses.. We need it for mirrors, medical devices, as catalysts in chemical reactions, in photovoltaic cells for solar-power technology, in rechargeable silver-zinc batteries, in household appliances and in high tech products such as cell phones and TVs. 45% of the demand for silver comes from the electronics industry alone. Increasingly, silver antimicrobial and antibacterial qualities are being used in many types of medical applications. There are many ongoing research projects on the use of silver based compounds for therapeutic and antibacterial purposes. Increasing industrial demand and application for silver forecast higher prices due to economic growth in China, India, Vietnam, and Brazil. Their growing middle classes are now demanding the quality of life and standard of living enjoyed by many in the West and thus the demand for silver will likely increase.

As gold prices continued to move higher, silver buying increased. People have now even shifted to silver as an investment avenue which earlier was limited to gold. Gold is harder to find and mine. Silver is relatively more abundant and can be consumed in industrial processes. The gold silver ratio has exhibited quite a bit of volatility. A higher ratio shows both gold strength and silver weakness. When the ratio declines – as it appears to be doing right now – it means silver is getting stronger. It should be noted that a declining ratio doesn't mean the gold price is falling. It could mean that both metals are rising, but that silver is rising faster than gold. If we see records for the past five weeks Silver had just soared 33% in five weeks. Gold only went up just 4% over the same period.

Summing up, the short-term signs appear bullish for precious metals market.The rates of silver are likely to drop up to Rs55,000 and again it may go beyond Rs70,000 in near future…

Go and get silver as soon as possible…It’s a very beneficial deal for future..

And I hope I was able to explain you with the relevant points..

Take care…have a great time…

Hey friends...Wat's up..??

Governments come and go. But their visions outlined in the annual fiscal planning (the Union Budget) have a long lasting impact on the economy.

A view of Indian Economy in terms of Gross Domestic Product (GDP)

1.Savings to GDP-

In Financial year(FY08) a person used to save 37 % out of his income but presently due to soaring prices of almost all commodities its reduced to 32 %.

2. Investment to GDP-From Financial year(FY08) investments have been reduced from 38 % to 31 %

As we all are aware of rising inflation and Global Macroeconomic crisis so how should be the budget and what is the wish list of a common man..??

Considering the different sectors that affect the Indian Economy

1.Construction and Real Estate-India is on the verge of witnessing a sustained growth in infrastructure buildup along with a slew of announcements in housing, road, port and airport development. Government has given Rs 1,735 billion earmarked for the infrastructure development in FY 2011, we believe this a step in the right direction. Other than that what other expectations are better funding mechanism for infrastructure projects and

Lowering provisioning norms for bank lending to construction/real estate companies. This will infuse liquidity and re-instill confidence in the battered down sectors.Providing additional tax breaks in order to encourage private sector participation in the infrastructure sector. 2.Energy-2010 has been a crucial year for Indian energy sector as oil and gas industry witnessed long awaited reforms like deregulation of petrol prices and substitution of oil bonds with cash subsidies.It is unlikely that Government will deregulate diesel prices due to high inflation levels and forthcoming state elections. Rather, it may slash taxes and duties on refined petroleum products and crude oil to ease the under recoveries burden for Oil Marketing Companies(OMCs) 3.Information Technology (IT)-The last couple of quarters have been encouraging for the Indian IT industry.India will continue to dominate the IT off shoring market. This is because of the fact that global clients are now trying to justify every dollar they spend towards technology outsourcing. Hence, there is a growing pressure on technology budgets that will force companies in the US and Europe to outsource to the low cost but high value destinations like India and avoiding litigation along with reduction in minimum alternative tax for companies. 4.Banking-n the current fiscal (FY11), the Indian Banking industry has had to deal with tight monetary policy and low liquidity. This is despite the economy expected to grow at a healthy pace of 8.6% this fiscal.So the areas of concerns are Tax benefits on long-term infrastructure bond investments,Higher exposure limits for banks to finance UMPPs (ultra mega power projects) and other power projects,Liquidity concerns need to be addressed as the situation has not completely eased yet,The Government set up a Financial Stability and Development Council (FSDC), a regulatory body to oversee issues related to regulation, financial inclusion, and financial stability during the last budget. More clarity on the working of the same is needed. 5.Fast Moving Consumer Goods(FMCG)- This sector along with companies showing solid growth and firm margins. However, as the year progressed inflation played spoilsport. As input costs continued to climb, margins of FMCG companies came under pressure. The considerable changes can be road map for implementation of Direct Tax Code and goods and services tax.Exemption of oil refining industry from excise duty and Expand limits for income tax exemptions. 6.Telecom-The Indian telecom industry has continued with its strong subscriber additions during the current year. At the end of December 2010, the total subscriber base stood at nearly 747m, of which wireless subscribers contributed to nearly 94%. As we are all aware of 2G and 3G scams so the basic need now is Clarity on the tax treatment for the 3G spectrum fee outflow. So,thank you for giving your precious time in reading this... Soon I"l be updating the details of upcoming BUDGET... Lastly as I always say please leave your suggestions and comments Thanks you...

British Petroleum ( BP ) is making one of the biggest foreign direct investment(FDI) in India, with a $7.2 billion tie-up with Reliance Industries to explore for deepwater oil and gas.BP will take a 30 percent stake in 23 oil and gas blocks and form a 50:50 joint venture with Reliance for the sourcing and marketing of gas.

In the fiscal year that ends in March, India is on track to bring in $27.6 billion in FDI inflows, down from $35.6 billion in the previous year.

Below are some facts about major foreign investments in India:

* India's environment ministry last month approved plans by South Korea's POSCO to build a $12 billion steel mill, a boost for the foreign investment climate in Asia's third-largest economy after several setbacks for big ticket industrial projects.

* Vodafone entered India in 2007, paying $11.1 billion to buy a 67 percent controlling stake in Hutchison Whampoa Ltd's mobile business in India, in which India's Essar Group is a partner. The deal is the largest inbound foreign direct investment to be completed.

* Miner Vedanta Resources' planned deal worth up to $9.6 billion for control of energy firm Cairn India, slowed by disagreement over royalties, will be decided by India's cabinet, which could delay it further.

* Japanese drug maker Daiichi Sankyo paid up to $4.6 billion in 2008 for control of India's Ranbaxy Laboratories Ltd.