Lot of people don't understand the devastating effect of rupee depreciation on common man.
In mathematics they call it boundary condition analysis. Similar approach could be used to find the appropriate value of Rupee.
For a theoretical case : Lets Assume 1$ = Rs. 1000
Now practically all our goods would be exported to outside world. Exports would be so profitable, common man wont get any products (whether it is grains or gadgets).
1 Liter petrol would be Rs. 1000 1 gram gold would be Rs. 16,000
Oil would be so expensive that even oil we get in India would get exported.
What effectively happened is, we are giving all our minerals and work force of every Indian man and eomen to the betterment of people outside India (like USA). What do we get for that?? USA will print their own currency and give it to you.
In bottom line, It is like plain old Slavery.
In boundary condition analysis. Lets look at the other side.
Lets assume $1 = Rs. 1
Now every thing in world will get imported. 1 Liter petrol will be less than Rs. 1. 1 gram gold would be Rs. 20. You can buy a good computer for Rs. 150. You can have a round trip for USA for less than Rs.1000.
You can buy a nice private jet for Rs. 50 lakhs.
Now You can't export any thing.
*Unless* the product you export is really really needed by the importing country.
Currently USA is importing like mad. They run huge deficit. Why do they do that??
Importing improves ordinary people lives. Now exporters of the country need to im
RE:Thought Experiment ...
by Nishant T on Jul 26, 2007 10:38 PM Permalink
That analysis is too one sided. Do you know ill-iffect of too much importing..well, for once the trade deficit will be too much, which will make us dependent a lot on foreign aid, good will etc. Too much import will cause many industries to be unviable..they will close, jobs will be lost..that will have even more bad effect overall. Why is China not degrading its currency..even after US pressurinsing it to do so.. I am not an expert on this subject, but know for a fact that there has to be a balance. And free market will ensure that balance..
RE:Thought Experiment ...
by Ajay on Jul 26, 2007 09:40 PM Permalink
Let Indian companies charge the same rate as american companies , the so called myth of Quality Indian consultants will be history within 1 year. I am an independednt consultant and WIPRO/TCS/InFOSYS charges less than i do. With Re at 25 to a $ i'll cream them anyday.
Reply me so that I can correct myself. I am a common man but I want to see my place, district, state and country the way I have seen in other parts of the world.
With warm regards, SK GUJRAL 4/14 MOHIT NAGAR DEHRA DUN Satin16@rediffmail.com
RE:INDIANS - PART 4
by Prem Shukla on Jul 26, 2007 10:02 AM Permalink
SK Gujral sahab,
If you really want to see your place, see yourself from inside. What you can do for your place. going here and there won't make any difference. if you really love your place do something for it and then see, not only you can see your place but other too would see your place and then you will be proud to be Inadian, not part 4 but part one and only one.
RE:INDIAN - PART 3
by Kuldeep Kumar on Jul 26, 2007 09:41 AM Permalink
thanks mr. lee for writing here, hope someday the people will understand that what is the cause behind of what is going on.
Dont think this is something specific to IT companies...its a factor which affects everybody in india...just dont show ur vent if you cud not be in some particular industry...even for the industrial or the service industry, nobody wud want to buy a costlier product...u just dont get it..do u?
Jobs lost are a big blow for the worker and his family. Alternative jobs could be the remedy. Government must provide. Also, provide interim aid till the jobs frutify as we have no social security.
1 USD = RS 40 or 50 it doesnt matter, ultimately money will not be useful unless u have either of the two "FOOD GRAINS AND OIL" unfortunately our India do not have sufficient oil resource but we have ample irrigated land. instead of concentrating of the money valuing and devaluing invest on agriculture and we shall make other countries depend on us
First to clear one thing, these stupid article writers won't consider both positive and negative impact of the issue. Author has stated negative impact I am telling positive impacts
1. It has easened the Loan that we have borrowed from the west i.e 130-150 $ billion atleast we can pay some of the amount. 2. We can Purchase capital goods from USA or from west by giving less ruppes 3. Petroleum sector is major winner as they have to pay less rupees to purchase crude in dollars. 4. Petrol and diesel were cheap inflation will be within RBI Norms.
Lastly IT had party for last 10 years now if it doing not well then dont worry concentate on engg. sector
10 years before no big IT companies were there in India. Currently so many Co. has reached pinnacles. Now the scene has changed. IT Comp. crying for less profit. This is part of business.
RE:Positive Impact of Rupees Appreciation
by Udhyakumar N on Jul 26, 2007 08:34 AM Permalink
Totally agreed! But when you see the difference between your ( ve) points and the article's (-ve) points, it is very clear that benefits and losses have targeted very different communities. No poor farmer or daily labor is going to buy stuff from USA, but they are definitely concerned about drop in the rate of their crop produce and loss of jobs in the garment industry. You are right about the fact that there are winners and losers when market changes. Unfortunately, this change has more unpleasant influence on poor labors and farmers.
RE:RE:Positive Impact of Rupees Appreciation
by nagesh nagesh on Jul 26, 2007 09:22 PM Permalink
Well Said Uday Kumar, coming to the point, I am very much concerned about the farmers and workers who are losing jobs.
RE:Positive Impact of Rupees Appreciation
by hellavauser on Jul 26, 2007 08:26 AM Permalink
dude...whoever u r...dont think theres something specific to IT companies...its a factor which affects everybody in india...just dont show ur vent if you cud not be in some particular industry...even for the industrial or the service industry, nobody wud want to buy a costlier product...u just dont get it..do u?
