The Indian Economy

India has walked away from the futures market for some products such as soyabeans and oil. These futures have been closed because the govt. wants to control inflation. The govt. is quietly sitting on the Chicago board of exchange and negotiating millions on wheat meanwhile, to protect the country from a food shortage. Inflation is at 7% and the aim is to reduce it by getting out of the futures market. This measure will encourage "dabba" (box) traders, who use the price on the stock exchange to trade commodities, that is illegal.

If the Indian govt. negates inflation in the effort, the results of the measures taken will bear fruit.

Even Brazil is growing at 5% an year now. That's not much compared to a 7% for 2009 for India, which was growing at 9% the last 2 years. The rupee quietly fell by 2 against a rising dollor in recent past.

On a separate subject, the chinese have poured billions of $'s in tibet. The dalai lama is trying to talk to the chinese. The chinese call him wolf in monk's robes. Talks are the only method of tibetan autonomy. There is a govt.in exile within an Indian govt. in north India.

How are they confident that the inflation will reduce by this action??? 😕

 How are they confident that the inflation will reduce by this action??
One has to wait for the effects of the measures to take place. If it does not work, then the govt. will try something else. Then we may have reached a point where the inmates are running the asylum. In high inflation environments, equity markets do not do very well. India has raised the proportion of deposits that banks must hold in reserve.
Already high prices of energy and food are triggering riots in India. Large swaths of population are acutely sensitive to shifts in prices. Changes in the cost of food in particular are the stuff of political dynamite.These assertions and conclusions are sound. Coming from the leader of the weak rupee evangelicals, they strike a dissonant chord. One would tell them not to worry about a rupee decline. How can one wring their hands over commodity price inflation and not worry about the rupee? Tighter monetory policy is in store for the next 18-24 months.

 

Edited by jagdu - 16 years ago

Will India and US sign the Nuclear Deal or not? I suspect no.
India is the 6th largest consumer of energy. Sensitive military technology would have been sold, pitting Lokheed Martin and Boeing for 126 fighter jets of IAF, a deal valuing $6-8 billion. There's a $7 billion pipeline deal between India, pakistan and Iran, freeing millios of tons of natural gas.

India has 261 cellphone users, and 27 million got added in the 1st 3 montths! Foreign co.'s are allowed to by 745 stake in indian wireless operators. India's main operators are Bharti Airtel and Reliance communications. Britain's vodofone entered the market as #3 and is worth $11 billion as of 2007 end. I have seen Aircel ads on Suntv. Companies from abroad want to acquire a spectrum of their own, and want to absorb smaller companies such as Mahindra Group, but foreign bidders are not allowed.

Ratan Tata does not like Laxmi Mittal, the world's largest steelmaker who was in the news saying steel prices have not peeked. Mittal's luxemborough based company grew 5.4% to $2.37 billion in the first quarter, from 2.25 billion a year ago as sales and shipments grew sharply. Steel prices have gone up 40-50% since December, but have not hit their peek. India's and other developing countries rapid industrialization have made iron ore prices go 71% up.
Ratan has made major acquisition of steel companies in recent months.
India is hoarding steel by erecting export barriers by putting 15% duty on exported steel. Steel's important for ship building, autos, pipelines, bridges and cell phones recently. In 6 months, the price of steel moved up $100. Now it is every month! No wonder alternatives prices are as well. Edited by jagdu - 16 years ago

When Libya's economy can grow 9 % an annum by building roads, bridges and ports, why not India?
Perhaps Mr. M. Singh can visit Pakistan now that they have a civilian govt. and ink a pact for the gas pipeline from Iran, now that the nuclear talks are going nowhere. Mr. Pranab Mukherjee will do well to accompany him and make a few trade pacts.Edited by jagdu - 16 years ago

A few weeks ago, I wrote about Suneil Barti, a man who ran a cycle parts factory in Punjab with Rs. 20,000 and became a b=very big shot with Bharti Airtel.
This time, it is about Anil Ambani, who had 2 little textile factories in Europe, and became India's biggest business magnate. I subscribe to Reliance long distance, and pay 12c a minute to India.
Working with MTN(South Africa) would provide invesors, customers, and people of both countries a unique platform for exponential growth" he said. Mtn will subsribe $40 billion, and reliance $30 billion. MTN has 68 million subscibers, and they bring in $11 billion. reliance has 46 million subscibers and they birng in $5 billion. Reliance stock is at Rs. 543 amd MTN stock is @543 Rand. Their competitors are Vodofone of England and AT & T of the US. My bill here in the US is appx. $40. In India, it is $8. Reliance can cut costs, and understand customers like me whos purchasing power is low, in a country where there are many conusumes. India's principles int he market aremuch better than mine. Can India do the deal? Reliance has said it will buy UK's Vanco group for $77 million. India's companies are trying to find a global base and MTN provides a perfect launch pad to diversify their revenue sources.
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What's up with the Gujjars's? They want to get govt. jobs and university places and are having agitations, Gandhi style.
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To congressmen's dismay, BJP won Karnataka too. On SunTv, the announcer claimed that given their leader had so much black money, what else can be expected 5/26/08.

There's an outsourcing co. called Keane employing 2-300 people every few weeks in my backyard that operates in 10 countries including India, employs 14000 peopleand generateds $1 billion annualy. A WIPRO employee was raped and murdered on her way to night shift. Now the parents of these recruits have begun asking safety questions. This creates a bond between families and organizations, says tata consultancy services. India's oursourcing industry generated $33 billion last year. Company Genpact employing 34000 Parents are encouraged to see the workplace, and on family day the parents get a treat-a performance from it's employees.