The real analysis is to register the correct evaluation i.e. if Rupee is improving or US $ Is Declining. This analysis will provide the correct measures to be taken by the class of markets being handled by the Indian Exporters. It is evident that US $ is declining against other currencies too. So any more mesures to support the conclusion of Indian economy being shining?
RE:Rupee Improves or US$ declines
by DS on Oct 04, 2007 03:01 AM Permalink
Good Point... its actually the US $ going down. One more thing, if we say that 1 rupee means more now than before... more in what sense... parallely (obviously) things become costlier too... isn't it? so where's the gain? I think more factors should be looked upon in order to determine whether Indian economy is really shining... and whether everyone is benefiting... or only a few rich!
The artcile made for an interesting read. But I wonder if a rising Rupee will mitigate cost advantages in the IT/ITES sectors resulting in lesser work coming to India. But I believe having established a global reputation of possessing a great tech talent pool, I think IT work will continue to come in. The same applies to the fledgling manufacturing sector which is expected to grow rapidly. But on a macroeconomic level, I guess the demographics are favorable and therefore domestic consumption will ensure a robust economic growth in the years to come.
RE:Interesting Read and a few queries
by yajuvender chauhan on Jun 27, 2007 12:20 AM Permalink
The artical is worth reading. Falling dollar is a good sign in the short run & its the evidence that the domestic economy is growing in real terms & not a myth anymore. The exports has definitely taken a hit but not to forget here that the smart exporters must already be having forward currency contracts saving them from disgrace in the short run. In the long run since imports will become cheaper the exporters will definitely go for improved methods of productions thereby reducing their costs & improving overall product competetiveness. The domestic consumption is growing that means foreign investment will continue to come in to support increased demand that would also mean the interest rates will be stabilized over a period of time. Another thing to consider here is the fact that USD is falling against every other currency & not just rupee so the offshoring jobs will continue to flow in. As per the deloitt study China can be a threat to offshoring to India but no less than 10 years by that time India would already built up the infrastructure that will suit other dimensions of business. This is a start India need to build on to make a huge gain.
Rapid growth may lead to manpower crunch: HIGH- SUSTAINED growth in India is generating huge employment opportunities in the country, and a flow-on effect to many sectors - a phenomenon which is increasingly highlighted in reports. The Organization for Economic Cooperation and Development (OECD) in its Employment Outlook 2007 report released this week has said that India, the world's second-fastest growing economy after China, generated more than 11.3 million new jobs every year from 2000 and 2005 - higher than Brazil (2.7 million), Russia (0.7 million) and China (7 million). This bloc of four countries is referred to as the BRIC nations. Paris-based OECD comprises 30 developed countries, including the US, UK, France, Germany and Japan. The OECD report comes in the wake of other indicators of high employment avenues in India, resulting in a manpower crunch as well. Federal Finance Minister P Chidambaram recently said that the Indian economy should grow at 10 per cent in the current fiscal year, following on 9.4 per cent in the last fiscal year and 9 per cent in 2005-2006. In a recent study, industry body, the Associated Chambers of Commerce and Industry in India (Assocham), has identified aviation, hospitality, brokerages, insurance, software, business outsourcing and retail as sectors that will generate maximum jobs for young people. In another study, it said that the country's booming construction industry, currently at US$70 billion, will rise to US$120 billion by 2010, re
RE:Indian economy highest employment generator, generated more than 11.3 million new jobs
by Amit Arora on Jun 25, 2007 07:52 PM Permalink
In another study, it said that the country's booming construction industry, currently at US$70 billion, will rise to US$120 billion by 2010, requiring manpower of over 90 million from the current 30 million. The OECD report says that India also has the lowest rate of jobless people among BRIC nations. The country's unemployment rate stood at 6 per cent in 2005, compared with China's 8.3 per cent, Russia's 7.9 per cent and Brazil's 9.3 per cent. Moreover, the employment to population ratio is also lowest in India, the world's second-most populous country after China, at 50.5 per cent in 2005. In contrast, it stood at between 66-71 per cent in the other three BRIC countries. The study "Job Opportunities in Emerging Sectors" by Assocham said that high consumer spending has resulted in big interest in the retail sector, 97 per cent of which is still unorganised. It is estimated that the organised segment alone will add up to US$14 billion in market size by 2010 to cross US$21.5 billion, creating two million jobs directly. The hotel sector will need a new workforce of at least 94,000 by 2010-11.The aviation space is growing at 25 per cent yearly. The industry is expected to add 130 planes to the current fleet of 270 airliners and create 200,000 jobs by 2017, the study also said. The information technology (IT) and IT-enabled sector - the biggest employment generator - with a work force of 1.63 million in recent times, will continue to hire most aggressively and is expected to fall
I guess it is 900 billion USD and not 900 million USD as mentioned in this article.. Are the articles getting reviewed at all by rediff? "In short, at Rs 45 to a US dollar it would still be roughly $900 million. At Rs 40 to a US dollar, the GDP of India now stands at $1 trillion."
Why the hell Rediff.com keeps posting old articles as new. Its a nuisance as the readers start reading them as new only to later figure out that they have read it before, some days or sometimes a few weeks back.
While author has touched upon the issue - the real reason for the US$ to weaken is EURO has become strong. It is robust growth of European Economy which is driving USD weaker. Well Rupee getting stronger no doubt gets lower export returns but at the same time ensures lower import cost & custom duty on that - which ultimately results in lower production cost - deriving benefit of the entire cross section of Indian public. This is one of the most important factor.
Ultimately a Country's potential lies in its qualitative products & production values - one shpuld not really worry about the exchange rates as export/import are not based on these.
