We should work more towards reducing the cost of production of our produce. In Domestic arena it will curb Inflation and for Exporter he can still sell his product as his margins remain healthy despite lower returns on USD vs INR.
This can be done if we rationalise the energy cost. i.e cost of Diesel / Petrol.
Cost of Petrol is kept high to cross subsidise Kerosene and LPG. Which is a big farse. POOR man does not get adequate Kerosene as Kerosene is diverted by powerfull politicians toward Petrol & Diesel Adultration. Resultant black money is used for antisocial activities.
It is also a big illusion that lowering the cost of Kerosene we are doing any favour to poor man. Poor man does not stop producing children and increasing the load on him self & society. He wants more and more things for free, including subsidised bus transport, free immunisation programs, free food for children , free books and fee schools. SC/ST/OBC want Reservation also. Govt. has to work on educating poor man to curb family size and pay for the commodities at market rates.
India becomes more strong and India's internal devils get weeded out
RE:RE:We should not worry about appreciating Rupee against USD
by gatzzz on Jun 21, 2007 03:55 PM Permalink
Before all this, please go and get yourself some education.
RE:We should not worry about appreciating Rupee against USD
by maranare nambi on Jun 21, 2007 06:06 PM Permalink
gatzz what is the fuzz about asoke?? he is talking truth. you will know only when it hurts
RE:RE:RE:We should not worry about appreciating Rupee against USD
by Gopinath D on Jun 21, 2007 06:26 PM Permalink
Give some work for your stupid brian ... if you have one
As we all know,with a view to bring the inflation down by over 2-1/2% in a short span of 4 months, the RBI refrained from buying the Dollars from the money market and allow the Rupee to find its own parity. Resultantly the Indian Rupee traded stronger against U S Dollar by about 3 Rupees to a Dollar in same time span.
This was of course at at the cost of losses of over 10% to the exporters. Despite the financial loss to the exporters especially the indegenous ones who are affected most and possibly closed down their shutters by now. While some of the established ones deversified their sales to traditional domestic markets to cut down the losses. Inspite of the hue & cry by the affected exporters repeated appeals & representations through their representative bodies the relevant Ministry, even an attempt to seek the audience and intervention of the Prime Minister for a way out, the Finance ministry has not come out with an acceptable solution except for waiver of duties to a very tiny segment of the Export Industry. We have not taken into the unemployment generated by this to the ancillary industry that was supplying the raw materials and semi-finished products, transport sector and the like. If we take that into account the damage is much larget than the financial figures reflect.
If we have to achieve our budgeted export targets is it not worthwhile for the Finance Ministry to immediately re-introduce the EXPORT INCENTIVE SCHEME(compensating the Exporter to extent o
RE:Compensate Exports to achieve targets & for retaining the established clientale
by ASHOK on Jun 20, 2007 10:59 AM Permalink
Best way was to bring down cost of Diesel & Petrol. It will reduce Domestic inflation as well as cost of production for the Exporters. Our Diesel & Petrol cost is too high as compared to other developing countries. But it seems politicians have good hold over adultration and petrol pumps.
You have missed the whole point. One currency is NOT valued by how String or big it is compared when compared to other currencies. Its rather.. how STABLE it is... Take case of Kuwaiti Dinar and Omani riyal. Both currencies are very strong . But country itself is not devoleped compared to many western countries.
interest rates on indian rupee are rising. whereas interest rates in dollars are not. as well as due to appreciation of rupee, when you convert dollars to ruppes to invest, then get highre interst rates, and reconvert at maturity into dollars you are also gaining on the appreciation of rupee, apart from higher interest. hence no investor coming into india, wants to invest in dollar denomination, but is converting his dollars to rupees, and then giving the money on interest. this further is adding to the deluge of the dollars into the country. a reduction in interest rates, on rupees and incrtease of the same in dollars, could keep the rupee still weak against the dollars. as its not the increase of exports or insurgence of tourism thats leading to the strengthning of the rupee
Dollar interest rates are kept low because supply is more than demand.
Dollar deposits are just kept in US treasuries for 5.5% return and deposit holder is paid any where between 4.3 to 4.9%. And differential is kept as profit by banks.
indian govt is totaly of chotia, all business, smuggler and blackmarketer,, being a economist , by adopting simple method one can control the inflation and collect huge taxes from the burgeoning rich class, finance ministery has to deduct 20% base tax from all people and keep in development bank pool to use in some poverty alliviating programes,all transaction should be in cheque and atm credit card, all people whose worth is more 5 lakhs should have permanent identy accountant no,..all business transaction should in cheque ,,all rich peopel should be taxed, thoroughtly,, all education,, should be thorough free laon from bank,,all property shouldbe tradeed thourugh property machanism, theere should be huge tax for second home buyer,, more onwer of home,, it is simple measure if govt take seriously,inflation may control, india is very chotia county all political party are super businessmen, no law for them, see how third front ,, we need dictator ship like chine and two party system like usa,, strong judicialry,, other wise i reguest to english come and teach us how to rule and admin the adminstration without corruptin and any biase, come on indian do something to this country otherwise it is gooing to hell with 50 %poor people,, violence,, strike, will the rountine ofday, what type of gdp are our press talking,,,see chine is going to build bus raod upto mounteverest , our govt are not able to maintain metropolitan road, what a difference
RE:indian need chine type polit bereau govt or two party system like usa not this khichhri of regional parties
by ASHOK on Jun 20, 2007 10:05 AM Permalink
It is easier said than done. Just look at Local Cable guy. He collects money ( anything from 250 to 350 Rs per connection) Pays no Service tax! Shows pirated movies and Local police is dooing nothing about it. Best way is to go for Direct to home Sattelite dish ( as in that case, big corporates do pay tax)
This is just one example. can site a number of examples where govt is doing nothing to mop up taxes. Rather it is more busy increasing tax rate and punishing the honest tax payers.
Dude its not rupee appreciating...ITS DOLLAR THAT'S DEPRECIATING. Rupee is NOT rising against other currencies around the world. which means its still the same for us. Only trading with US will get effected. Rest is still the same
I would like to point out that exports (mainly IT and BPO) contribute significantly to the GDP of India. Along with a huge pool of English speaking talented people, the main advantage for the american companies is the cost factor. We already have other countries emerging as cost-effective alternatives (like Romania, Russia, Philippenes, Vietnam etc.) Lets take China, China has somehow kept its currency low, as to maintain their cost advantage. No country can dare to beat China on prices. Secondly, the annual salary hikes in India are significantly higher than those in the US and elsewhere. To maintain these hikes, the Indian companies will either have to increase their billing rate, or take lesser profits, or give lesser pay increases. Neither of these bode very well for the IT/BPO professionals. On top of all this, inflation in India is around 10% compared to 4-5% in the US. That would put lot of people in a very bad situation if the rupee were to grow very strong. I think the rupee should be held stable at 40-42 Rs.
RE:undesirable situation...
by Sam on Jun 20, 2007 08:08 AM Permalink
well said, agreed, rupee becoming too strong will create un-desirable speculations, keeping in mind that the infrastructure in India is still at its infancy stages & the government is still as 'clueless' as ever. This may crush India under its own weight.
Goldman Sachs recently predicted that India would overtake the US to become the second-largest economy in the world after China by 2042 in a report that sharply lifted the investment banks forecast of the countrys long-term growth rate.
Adil Zainulbhai, head of McKinsey in India, said the surge in incomes would depend on the government undertaking a reform programme to reduce the fiscal deficit, promote competition and invest in infrastructure, healthcare and education.
The size of the addressable market for businesses will surge as internal migration lifts the urban population from 318m to 523m and reduces the proportion living in harder-to-reach rural areas from 71 to 63 per cent.
Indias middle class, defined as those earning between $4,400 and $22,000, will rise from 50m people, or 5 per cent of the population, to 583m people, or 41 per cent by 2025, more than tenfold
The number of Indians living in deprivation, defined as those with incomes of less than $5.40 a day, has already fallen from 93 per cent of the population in 1985 to 54 per cent today and will decrease to 22 per cent by 2025.
The number of global Indians with incomes of over $22,000 will rise tenfold to 24m, their average incomes climbing from $35,000 in 2005 to $50,000 in 2025.
