WE can structure the non-recourse funding by bringing in funds using our associate company in USA that have Billions of dollars of coal reserves provided we get the sovereign guarantee and to build certain humanitarian projects such as building rail, road networks, urban transport systems, hospitals and medical colleges, old aged homes etc.
Ravi Saini - Managing Director Christian Dior Financial Services Limited MD-65, 1st Floor, Pitam Pura Delhi-110088 Cell : 91 9718122391, 9250748852 email : indolac@gmail.com
The author is very stupid. India's foreign exchange reserves are other people's money invested in India in the stock market, real estate and in deposits. The depositors can take these away if and when they would feel like. If India spends this money in future India would go bankrupt, as it would not be fulfil its obligation to the foreign investors. That would give a chance for US to buy up whatever is left after the great sellout in 1991 by Manmohan Singh. For the same reason China also cannot spend this money, but invested in US treasury bonds and in effect paying for the US government. India is doing the same. How US gets this dollar. It just print its own Dollar and buy anything it wants for free from the rest of the world. It puts some in India and India has give those back to the US treasury in exchange for Bonds. In the process US citizens gets dividends, interest payments and gains from the stock market in India for doing nothing. India gets ruined, as it needs to devalue Rupee continuously otherwise it cannot export. as a result import costs will go up. The only people who gain from this game are the US government and the US people investing in India. That is the reason they have forced India to open up its economy. Yes, it creates higher growth rate. But remember Thailand in 1997. In 1998 it went bankrupt.
RE:Foreign Exchange Reserve
by ASHOK on Apr 17, 2007 06:53 PM Permalink
I think you are wrong about saying stupid to the auther.
Great sell out was during Chandersheker Govt, perhaps Mohan Dharia was finance Minister.
Trend was reversed by Manmohan Singh as Finace minister in Narsimha Rao Govt.
Check back History if I am wrong. Also it has taken us 10 years to pile up first 100 Billion Dollar and next 100 Billion has come in 3 years 3 month. As such it is not a great amount, but it is not small enough to be left unattended. Author has done a good Job of accumulating the facts so far.
Much more than this amount is lying in US dollar for China / Japan & USSR
I believe India should not waste time any further and take decision to have couple of Nuclear plants,that to on turnkey as soon as Nuclear issue is resolved. Go far Better Roads. Encourage Indian Bussiness to buy more assets abroad. Consolidate India's postion in Industry outside India. Why should we send iron ore to China, if Tata can process it in Corus and employ more Indians abroad.
Or else Buy Running Oil platforms and start shipping more Crude to Indian shores.
10% stake in Sakhalin oil is not enough!So far Well Done India.
Accumulate another 100 Billion in 2 years now.
As we know india's Net import is higher than Net export of MANUFACTURED goods. But even than we pile up reserves as Indians are worlds largest Foreign exchange senders back home. Also All this service Industry in India, BPO / KPO etc does not contribute to actual physical manufacture. But with the money earned through this route goes into individuals hands and they want to spend it for improving their life style. That is where Indian system is worried, if they bring a part of this 200 Billion back home than they will have to circulate more INDIAN Rupees and that means more strain on Indian manufacturing sector. which is STILL not matching Indian Imports. Well solutions exists. We should not worry much, we know when elections are declared lot of black Money comes out and system takes the load.
Those money were bought by RBI from the market. If you just take the money and spend it, it will not match the check and balances. One way to do it is, Govt can take loan from RBI at market rate or by floating a Special Investment Vehicle.
I think the reserves should not be touched.I law in the country should see that the money alloted for the projects are used just for the projects and the funds be channelled in a right way.And come down heavyly on all the corupt politicans, who have taken our country back by years in all ways of development. These politicans should be made accountable. Our country can get the projects done with out using the reserves by bring almost more then 90% of our corupt politicans under law.
RE:RESERVES
by proudind on Apr 17, 2007 12:55 AM Permalink
I don't know what to do. Study other nations & how they implemented. We are not the only nation in the world. There were lot of experiment done by others in the field, some got tremendous success, some may not. We take the successful people & do that way or other similiar way suitable for our country in an Indianized ways.
RE:RE:RESERVES
by Senthil Kumar on Apr 17, 2007 09:24 AM Permalink
> I don't know what to do.
most successful management of Reserves is done by Singapore. They did exactly what was proposed in the article, that is to invest in local infrastructure. Singapore is also doing it only in the last 5 years.
China is having close to 1 Trillion invested in US treasuries. (look from USA's point of view, USA would love it when some one accepts their IOU!)
China already indicated that they made big mistake of parking every thing in US treasuries. Because of all the su*kers who are buying US treasuries, USA is able to maintain its extravagant life style. US treasuries are nothing but USA's IOU. No wonder USA is not afraid of running deficit.
RE:RESERVES
by proudind on Apr 17, 2007 10:25 AM Permalink
If one is scolding USA, then better invest in the USA bond is good, I think. Partly infrastructure & partly in US tresury is good, I think. Normally, no one will tell good things for India in this forum, we should understand logically.
RE:RESERVES
by Sudeep M on Apr 17, 2007 09:05 PM Permalink
Maybe we India and China can start Dollar dumping !!! But we need a currency to shift to. May be an proposed Asian Curreny Unit is an alternative.
It's all about rate of return.Nothing more nothing less.Currently India's Forex reserve which is nothing but a large amount of dollars isn't sitting idly in RBI's vaults.It's held in US treasury bonds.So for argument sake we 100 billion dollars of 10 year treasury bond with yield roughly around 4.7%.Now US govt reports that Inflation rate (ie rate of depreciation of currency ) is 3% annualized.But I live in US and it's pretty obvious that offcial inflation rate is far off the mark.The real inflation rate is close to 5% which is greater than 10 year yield of 4.75.So By holding that India is basically losing it's wealth.It's as simple as that.
Infact any other option that gives it a rate of return over 4.75% would be a return that's worth espousing.The catch is that 4.75 is theoretically risk free as we don't expect US treasury to default.But infrastructure projects certinly can give you a return well in the north of 5%.They have intangible return too as they aid economic development , not only the cash returns from such project.Also with the current pace of M3 growth Forex reserve in dollars will lose it's real value even more.So it's just a no brainer.I wonder why anyone would frown upon such an obvious idea.
RE:Endorsed
by Gadi Mama on Apr 16, 2007 11:10 PM Permalink
This is good idea. If we done some simple math it is coming like every person will have Rs 8333 ($200B for 1.08 Cr Indians). It is ending up like Rs 3666 Cr. for Pune city only. If this is true then this is huge money sitting in RBI custody. Needs to unlished its power.
RE:Endorsed
by ASHOK on Apr 17, 2007 12:48 AM Permalink
I dont think any body is frowning upon the idea. Why do you feel that.
Big question is what we are waiting for, this idea is in the news for more than 2 or 3 years now. Even now what we are listening is just 7 Billion dollar to be set aside. That much money will make just 1 power plant.
RE:Endorsed
by jagmohan swain on Apr 17, 2007 03:43 AM Permalink
"an array of facial expressions ranging from raised eye-brows, sardonic grins and puckered lips." What that tells you sucker?
RE:Endorsed
by proudind on Apr 16, 2007 11:23 PM Permalink
Giving money to people won't solve any problem, it will make poor, more poor. If you distribute, in one day, all money is gone, where do we go for development. Better build infrastructure, poor will get money & product for usage.
RE:Endorsed
by Sudeep M on Apr 16, 2007 11:40 PM Permalink
Distributing money to poor is not necessarily a bad idea. There has been unconditional and conditional cash transfer programs in Latin America and they have been proven to have decreased poverty in general. In unconditional cash transfers, people are just given money. This is the new trend of neo-liberalism
RE:Endorsed
by proudind on Apr 16, 2007 11:48 PM Permalink
I am talking in Asia, distributing money doesn't do any benefit other than making poor more poorer. Lot of example, where NO DISTRIBUTION, but invest in infra gained a lot, IN THE LONG RUN.
Let me tell a bit about my perception of IMF, WB, Developmental loans, SAP's etc etc.
In the 1970's the price of oil floated in the global market. The countries in the Arabian Gulf became rich suddenly. We now know from the British intelligence reports that there was secret American plan to attack Iran. This was easy for America then, as she was the only nation post WW2 to remain as economic and military superpower. Threatened by the possibility of war, Iranians and other oil producing countries promised to deposit their bonds with Americans and Europeans. In the 80's when dollar started floating, these rich countries found it hard to give the mature money back to the Gulf countries. They came up with the idea of re-engineering the IBRD to become the developmental bank. This is to lend money to the poor African and Asian countries for the purpose of development. The rationale is that a Government is the best agency you can lend to. They cannot go missing, they are not privately owned and for many other reasons. The reality is that the African and Asian countries will never be able to pay back these loans. This also enabled the rich countries to impose sanctions over these poor countries. Then came the Structural Adjustment Policies (SAP). The economic theory is that, if your economy is export led, devaluing your currency will propagate economic growth, as we have seen in the case of Japan. But if your country has external debts, and import led economy, you will do more harm to your economy by SAP. And since the debts are in USD, it will always increase as you devalue the currency. WB and IMF has been forcing all the indebted countries to adopt SAP. I believe, the affluence we see in the west is due to crooked policies targeted to the poor countries and poor people of the world. I see it as injustice, not as success of free market economy.
In the case of India, I believe devaluing might do some good at this stage since there is a small growth in manufacturing sector. But to invest external money in infrastructure development might be a bad idea when we need to devalue the currency for economic growth.
RE:WB, IMF Developmental Loans and SAP
by ASHOK on Apr 17, 2007 12:38 AM Permalink
I believe, the affluence we see in the west is >>>due to crooked policies targeted to the poor countries and poor people of the world. I see it as injustice, not as success of free market economy. >>>
And you propose India should further subsidise its export by devaluation.
Have you seen Crowded in indian roads with cars moving at 10 kmts per hour in city like Mumbai.
RE:WB, IMF Developmental Loans and SAP
by Sudeep M on Apr 17, 2007 08:54 PM Permalink
I might be wrong in saying that.
But I would like to highlight my main point.
Devaluation can be good or bad depending on political and economical stuation of your country. Hence there is a huge difference when the decision of devaulation is done by the economists in a home country versus when it is done by "experts" flying in from WB to "help" and "strengthen" the economy. As you know, in most cases it is imposed on the country. And it has never worked. (If interested, you can read 'Globalization and its Discontents by Joseph Stiglitz)
I agree India need some serious infrastructue input. But it feels like it is a combination of lack of political knowledge and will. And what we need is some young committed leadership.
Nothing is better than infrastructure. If you think infra after all rich, then tell when???
divide the $1b into 1.25 b & you can give almost 75 paise. Poor cannot drink a chai for that amount. So, concentrate on infrastructure to give some decent jobs to the needy, instead of telling emotions. Learn from another country, if you don't know how they gave basic necessity for their people after developed themselves by better infrastructure.
RE:Nothing is better than infrastructure. If you think infra after all rich, then tell when???
by proudind on Apr 16, 2007 11:06 PM Permalink
Thanks for the correction. Still, Is the poor will build a big bungalow with that money (Rs. 34.40 & they can eat for 1 year with that money???
RE:RE:Nothing is better than infrastructure. If you think infra after all rich, then tell when???
by rak jag on Apr 16, 2007 11:00 PM Permalink
Correcting math. It comes Rs 34.4 not 75 paise.
This Manmohan Singh / PC and party was in comand, see above article of Oct 2004 !!! Same topic was discussed. How long we will keeping hearing all this. Maybe govt. will change and new govt will start all over again.
