Hi everyone, I am just a student so don't have extensive knowledge about exports and imports. But as I said I do have a question for everyone. Despite China's yuan being repeatedly lowered down in value, China still remains the world's largest production factory. Are their some lessons that we being their neighbors can learn from them?
RE:Question question
by KJ on Aug 06, 2007 12:58 PM Permalink
Well, China's Yuan hasn't been significantly revalued to start with. Secondly, China has traditionally offered significant incentives to local production. Land costs have been nominalized, infrastructures have been provided free of costs, tax benefits and 10-15% benefits on exports. So even if you sell the product on cost, one makes significant money through such government benefits.
Secondly, the yuan has been pegged to the dollar. With the rate stable for fairly long periods, it has led to stable planning of the export industry. Today, the Rupee has apprectiated by over 12% in a period of 4months. Such short spurge is unthinkable.
Congress started this caring only to control the inflation which was over 7% till 2months back. Ofcourse, vote banks help!
Here are some interesting fact about INR. I have found from Wikipedia...For more information read on Wikipedia. ================================================
India has been one of the earliest issuers of coins in the world (circa 6th Century BC). The origin of the word "rupee" is found in the word r%u016Bp or r%u016Bp%u0101, which means "silver" in many Indo-Aryan languages such as Hindi. The Sanskrit word rupyakam (Devnagari:%u0930%u0942%u092A%u094D%u092F%u0915%u092E%u094D) means coin of silver. The derivative word R%u016Bpaya was used to denote the coin introduced by Sher Shah Suri during his reign from 1540 to 1545 CE. The original R%u016Bpaya was a silver coin weighing 175 grains troy (about 11.34 grams) [1]. The coin has been used since then, even during the times of British India. Formerly the rupee was divided into 16 annas, 64 paise, or 192 pies. Decimalisation occurred in Ceylon (Sri Lanka) in 1872, India in 1957 and in Pakistan in 1961.
Among the earliest issues of paper rupees were those by the Bank of Hindostan (1770-1832), the General Bank of Bengal and Bihar (1773-75, established by Warren Hastings), the Bengal Bank (1784-91), amongst others.
Historically, the rupee was a silver based currency. This had severe consequences in the nineteenth century, when the strongest economies in the world were on the gold standard. The discovery of vast quantities of silver in the U.S. and various European colonies resulted in a decline in the relative value of si
All this hype and hysteria seems to be ill-placed. True, a sudden re-adjustment of value will make the system unstable and serve heavy repercussions. But the current mood of the business community is to hinge the value to current value or above, rather than using the opportunity to re-adjust (though with adequate damping factor) to Rupees correct value.
But it is rather sad that we have to take someone else burden and keep the economy repressed, for a vague and flimsy excuse of our export margin decreasing. As pointed out by other posters, India's import quanta is way higher than export (exports = $102.7 billion ; imports = $149.2 billion : data from http://statisticsofindia.com/mambo/index.php?option=com_content&task=view&id=127&Itemid=71).
Lots of praises have been flaunted on the aggressive nature of our market. But fact of matter is we seems to have found a place right below the Damascus's sword, and fear prevents us to move to a safer place.
WELL RUPEE MIGHT GO STRONGER.. HW FAR IS INDIA GOING STRONGER IN SELF RESPECT,DISCIPLINE,POPULATION,HYGINE,CLEANINESS,RULES AND REGULATIONS,CORRUPTIONS,BRIBE,POLITICS AND CRIME ???
We are going back in it.. infact saturated to the worst in the world.. Just a part of body shaping out well in a human doesnt mean he is smart... right from his brain to his thoughts everything should shape to cope up with his economy growth...
THAT WILL NEVER HAPPEN IN THIS NATION.. AND WE WILL BE THE UGLIEST FOR EVER...
RE:INDIA !!!
by Dragon Cares on Aug 06, 2007 01:02 PM Permalink
well said Vijay baskar; I totally agree with you. It's the reality which 99% of Indians dont want to accept/agree and we(Indians) are very happy to live in our past pride instead of learning new things to move forward. Its peoples thoughts and attitude that need to be grown stronger.
RE:INDIA !!!
by Anil Datta on Aug 06, 2007 01:30 PM Permalink
It is right. We have not learnt the meaning of cleanliness, order and fairness.
Uneducated people having no education or resources may be pardoned for living in the conditions in which they are forced to live.
But, if you see people in a Honda City or a Skoda Octavia misbehaving on the road, or spitting from the cars or trying to jump the queues, how do you pardon them?
And they have better means of escaping the punishment with better contacts in higher place or a better ability to bribe officials.
RE:INDIA !!!
by Virendra Patel on Aug 06, 2007 12:53 PM Permalink
I fully agree with you 100% Vijay, India will never have health, safety, hygiene and cleaniness and to think of it, we as a nation do not know the meaning of the words of safety and regulations. Shame on us, shame on dear old India.
RE:INDIA !!!
by Syed Shoeb on Aug 06, 2007 02:04 PM Permalink
Well Vijay, you are correct. Though our economy is growing, our infrastructure is of low standard and our politicians and govt. public are corrupt. The rich people are becoming rich and poor more poor. This should not be the vision of INDIA. I remember RANG DE BASANTI lines, which says, ZIMMEDARI UTHAO ISE BADALNE KI... something like that. Being a true indian I request all young guns to do towards improving india and making it a good and healthy place to live. There are very small things we as young used to skip like traffic rules, our own safety (use of helmet) and we cannot blame govt for this. Yesterday I've seen an ad in LONDON, requesting 2 pound of children who are in need. Can't we've such thing in INDIA. It really feel bad when you see childrens looking for their meal in garbages at railway stations (I noticed this in Bombay). I can only say to rich peoples and politicians and actors and financers that think about our future.
for IT sector there is no need to worry.they can sustain this for our country growth.only textiles and garments industries are unable to compite much when the rupee appriciate.these sectors are unable to quote lesser than that of china,pakisthan,srilanka and bangladesh where they quote less because of free trade (low duty) government help,modern industrial process and chief labour. now indian govt should think about the huge labour involved in these field and help these sector by means of reduction of duties,giving funds directly to the labour funds, help factories for there mordernisation,make exports eassy.....etc.
To me there is anather way to sustain (I AM NOT A COMMERCE STUDENT) .Bypassing dollar we can quote maximum in euro and other appriciated currencies against dollar which will give less compitition for these sector. anyway the countries export is bound to face the compition from less developing countries, hence nedd to modernise time to time to stay alive in each sector.
RE:realise
by chilluchillu on Aug 06, 2007 01:20 PM Permalink
MY MAN, I T IS NOT THE THING WHICH DRIVES THE COUNTRY ITS BOOM WILL BUST SOONER OR LATER, WHAT WILL SUSTAIN INDIA IS AGRICULTURE, MANUFACTURING ETC...
Still not getting an idea what is the impact of this. Of course, the exporter will have a negative impact. With the inflation also on the rise, what is the real impact of this on the common man. Will it reduce the prices in the future??How the buying power of common people going to increase. Most of the upper class are the ones who earn money in dollars, either through direct exporting or being part of a company which is exporting something (mostly software) to US. So looks like this is bad for the common man??I am not sure..
RE:Stronger Rupee
by Dragon Cares on Aug 06, 2007 01:08 PM Permalink
Hello Chandu: All these kind of hype in the media are really a bullshit when it comes to reality. Because, these people are just seeing the Upper class people shopping in the big malls in the big cities; and nobody cares about a common man who is living in the rural areas; untill all the villages are equiped with proper infrastruture like roads, medical facilities, schools, etc, no meaning of talking about 'India is growing faster'. For all these media guys and CEOs & politicians, "India is growing faster" bcoz they only see metro cities like Mumbai, Chennai, Delhi, Bangalore & Hyderabad; and they tend to close their eyes to see the realities in the villages. India could never be a match for Korea/Japan/China with respect to common man's cost of living and basic facilities available to common man in the rural areas.
RE:RE:Stronger Rupee
by Chandu on Aug 06, 2007 01:28 PM Permalink
Thanks for the clarifications guys. As Gandhiji said " the soul of India lies in the villages". And the villagers are basically farmers. How this will affect the farmer ? I think the agricultural products also become overpriced in the international market due to this and will bring down the farmer's fortunes. OR will it reduce the cost of his production by bringing down the cost of fuel and other essential things which are imported.??
RE:Stronger Rupee
by KJ on Aug 06, 2007 12:54 PM Permalink
Its good for the common man. Appreciating ruppee will help in restrictive RBI intervention of buying dollars from the market which will curb inflation to a fair extent. Imports will also become cheaper to control monopolistic practices in certain sects (Cement, Steel etc). Cheaper imports should also bring down the costs of cars and other medium-high end products. However, at the end of the day, the local industries dependant on exports will be constraint which might lead to downsizing in certain industries (textiles, SSI's, leather, etc)
RE:What was the Rupee value at the time of Independence ?
by Ajay Banerjee on Aug 06, 2007 01:24 PM Permalink
For a long time until the mid-1960s, the exchange rate was fixed at 1 pound = Rs 13.33 and 1 dollar = Rs 4.75
RE:What was the Rupee value at the time of Independence ?
by KJ on Aug 06, 2007 12:48 PM Permalink
Strongest value of rupee against USD so far has been in the past one month. Around 40.10approximately.
RE:RE:What was the Rupee value at the time of Independence ?
by Greg Chappell on Aug 06, 2007 12:51 PM Permalink
But I think many years back, when Congress was on Power and Dr. Manmohan Singh was the FM, then India had de-valuated INR against USD.
Those time, before devaulation, 1 USD was 30 INR probably.
A country when develops, the currency appreciates. This is a positive indication how rupee is more valued in the market now. We have seen this happenning with developed nations. But at the same time the government has to be aggressive on the exports to maintain the balance and optimize or increase the cash inflow.
RE:Lets get aggressive on exports
by chanakya maurya on Aug 06, 2007 12:30 PM Permalink
Bhrushtaachaar and junglee taxation system is adding cost to each and every transaction be that domestic oriented or export oriented.
Every step in any business is fraught with bhrushtaachaar at all levels.
Bharatvarsh is a nett importer and would ultimately benefit from a strong rupee.
Exports would not die.
Bhrushtaachaar needs to be pruned at all levels.
It starts in the North Block and percolates down to municipal peon.
RE:Lets get aggressive on exports
by Pramod on Aug 06, 2007 12:33 PM Permalink
Chine is developing much faster than India, yet their currency has not appreciated, for whatever reassons, like ours. It is rumored that if china's currency is free floated, it will appreciate by as much as 40%.
