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Economy
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the supply of cash from stock mrcket is stopped long back i.e. since jan, so the banks are not receiving any cash, & hence cash crunch,...
In reply to:
Is indian economy collapsing????!!!!
Posted by :
marketman
We have been listening indian growth stories for few years.... our financial markets too witnessed the same trend till recently.... our policy makers repeatedly assuring the investors about the strongness of indian economy.... they are saying india is immune to world financial crisis....
But indian financial markets too collapsing along with the global cues.... almost all investors and many corporates are already in deep troubles.... few are doubting at some pvt sector banks for their suspicious behaviour....
We are also part of globe,india is not from any other planet.... this common logic is ignored by our policy makers and talking nonsenses on daily basis to confuse/mislead the indian investors aswell as indian public....
Atleast the chiefs of global economy taking few steps to control the situation,we havnot seen any types of mesures or useful decisions so far in india.... already stock markets fell more than 50% from their peaks within few months.... banks are struggling for survival,many corporates facing liquidty problem,few companies at the threshold of removing employees from payrolls,experts epecting subprime type issues may occur soon in india too.... interestingly indian rupee is weaken much within short span of time....
By seeing/experiencing all these ill effects,even patriotic indians doubting about the situation of economy in the country.... few people asking questions like Is indian economy too collapsing?! 
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I am bit afraid to write a message as I am well shaken by the magnitude of the crash and as all bearish calls turns true.I lost because of my alltime bullish thinking and were trying to find supports during this bear market.
AS we think for long term gains, India is faring better and current crash is caused purely on external factors.IMF predicts a growth of 6.9 percent even during these tough days.Chinas growth was through the special economical zones and we are in the process of setting up the SEZ.Huge investment will happen in the coming years and will boost our indusrial production during and after the investment cycle.Domestic consumption will support the economy and we will see stock indexes going up and create records in the years to come.
GOD save us all....
In reply to:
Is indian economy collapsing????!!!!
Posted by : Bull 2008
Dear marketman
It is not India but the US that is going through the worst phase after the 1930 crash it witnessed. This has led the mass exodus of dollars and FII`s from our country too, as is witnessed from rest of the world. The Indian economy stands firm even in this crisis.
The present situation is very tricky and painful for all. But the ones who are on the right side of the fall or the ones who moved out before the fall are the gainers. So the oppourtunity is huge but only for the smart ones.
Secondly this fall of the biggies bring huge oppourtunity for India in the mid and long term. None of our banks went bust, we don`t have a subprime like situation, and also we don`t have to bail out anything. We are steady on our growth path. The Nuke deal get signed soon, also still Indian firms are on the buy mode and acquiring firms from rest of the world, we still have the best GDP growth rate in the world. As and when the world realize these facts we will be the biggest benificary.
So biggest fall also opened the door for biggest gains. This is just the start of Indian emergence into big leaque of developed world.
Regards
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Reuters
Get it now Sun Oct 12, 2008 11:26am IST
Overnight Indian interbank interest rates jumped to a 19-month high of 23 percent on Friday, more than double the RBI`s own short-term lending rate of 9.0 percent.
WHAT WE CAN INFER FROM HERE IS IT IS AN INDIRECT MEASURE TAKEN BY GOVT. TO BAIL OUT ICICI.
aahoo
By all corcumstance it can be infered through interbank bowrrowing at higher level interst rate ICICI is able to maintain its liqidity as rumour about this bank is seen. Is it possinble by the ICICI bank to give clarifiactions with this regard....
In reply to:
ICICI BANK COLLAPSE IS THE TIP OF ICEBERG
Posted by : aahoo
Dear boarders
If I were the man who controls the stock market, on hearing the rumours will ban shorting in ICICI bank shares and impose 5 or 10 LC so that the counter may not be in the hands of the speculators and the manipulators. But the people who are in the helm of affairs, I suspect, acted in tandem with them and sold the investors confidence.
aahoo
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Dear boarders
If I were the man who controls the stock market, on hearing the rumours will ban shorting in ICICI bank shares and impose 5 or 10 LC so that the counter may not be in the hands of the speculators and the manipulators. But the people who are in the helm of affairs, I suspect, acted in tandem with them and sold the investors confidence.
aahoo...
In reply to:
ICICI BANK COLLAPSE IS THE TIP OF ICEBERG
Posted by : aahoo
DEAR BOARDERS
Knowledge about any problem or felt difficulty may be optained through FOUR ways
1. Method of Tenacity
2. Method of Authority.
3. Method of Intuition.
4. Method of Science.
Method of tenacity is based on beliefs. Beliefs are universal truths. USA is big boss and he may not fail is the belief. This statement is repeated from WW1 and it becomes truth and is believed by all. Now there is a ? mark for this belief. ICICI bank is the second largest bank in India and it can not fail is the belief. It fact is repeated time and again by ICICI chairman, FM, SEBI chairman and GOV. RBI. Here method of science fails to give us answer towards the problem which we are facing now.
Method of Authority is more reliable than that of the Method of Tenacity. The authorities FM, Chairman of SEBI, Vice-Chairman Planning commission, Governor RBI and the Chairman ICICI bank are giving statement. Even issue of statements, clarifications ICICI shares are down 20% closing. Here we are not able to get answer or solution for the problem that we are facing now.
I want to discuss about Method of Intuition later after discussing about the method of Science. In method of science we try to find answers through systematic observations and experiments with appropriate controls. TA is a way of scientific method. It clearly shows that there is problem with ICICI shares and they predict that it will still go low. One of the many functions of method of science is to prediction of the future.
Now concentrate about Method of Intuition. It agrees with reason and not necessarily with experience.
ICICI bank and rather the Indian stock market can now only be solved by this method of intuition. I suspect that ICICI bank had approached the Indian govt. for its difficulties. That is the only way-out for this bank if the rumours are true. The Govt. I reasonalise is also intent to safeguard the bank. I was surprised the see the announcement of 150 point CRR cut. This is the TIP OF THE ICEBERG. On the announcements the public sector banks strong and in fact 2% upside is seen in SBI. But private banks tanked and are the major losers. But under normal condition they should have also been strong. Let us view the matter in different angle. Suppose if there is no announcement regarding the CRR rate reduction what will be the fat of the private banks.
I have every reason to believe that the sudden announcement has some interior motive. It is intended not to stabilize the market. In the near future the FM, Gov. RBI and other owe an explanation to the country. Even under the present condition people are prepared to sell our country. Fortunately as Parliament election are due India may escape from these sellers.
FUTURE EVENTS WILL BRING OUT THE CULPRITS AND THEIR INTENTIONS
aahoo
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DEAR BOARDERS
Knowledge about any problem or felt difficulty may be optained through FOUR ways
1. Method of Tenacity
2. Method of Authority.
3. Method of Intuition.
4. Method of Science.
Method of tenacity is based on beliefs. Beliefs are universal truths. USA is big boss and he may not fail is the belief. This statement is repeated from WW1 and it becomes truth and is believed by all. Now there is a ? mark for this belief. ICICI bank is the second largest bank in India and it can not fail is the belief. It fact is repeated time and again by ICICI chairman, FM, SEBI chairman and GOV. RBI. Here method of science fails to give us answer towards the problem which we are facing now.
Method of Authority is more reliable than that of the Method of Tenacity. The authorities FM, Chairman of SEBI, Vice-Chairman Planning commission, Governor RBI and the Chairman ICICI bank are giving statement. Even issue of statements, clarifications ICICI shares are down 20% closing. Here we are not able to get answer or solution for the problem that we are facing now.
I want to discuss about Method of Intuition later after discussing about the method of Science. In method of science we try to find answers through systematic observations and experiments with appropriate controls. TA is a way of scientific method. It clearly shows that there is problem with ICICI shares and they predict that it will still go low. One of the many functions of method of science is to prediction of the future.
Now concentrate about Method of Intuition. It agrees with reason and not necessarily with experience.
ICICI bank and rather the Indian stock market can now only be solved by this method of intuition. I suspect that ICICI bank had approached the Indian govt. for its difficulties. That is the only way-out for this bank if the rumours are true. The Govt. I reasonalise is also intent to safeguard the bank. I was surprised the see the announcement of 150 point CRR cut. This is the TIP OF THE ICEBERG. On the announcements the public sector banks strong and in fact 2% upside is seen in SBI. But private banks tanked and are the major losers. But under normal condition they should have also been strong. Let us view the matter in different angle. Suppose if there is no announcement regarding the CRR rate reduction what will be the fat of the private banks.
I have every reason to believe that the sudden announcement has some interior motive. It is intended not to stabilize the market. In the near future the FM, Gov. RBI and other owe an explanation to the country. Even under the present condition people are prepared to sell our country. Fortunately as Parliament election are due India may escape from these sellers.
FUTURE EVENTS WILL BRING OUT THE CULPRITS AND THEIR INTENTIONS
aahoo
...
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its not that theres no effects of the global economy finacial collapse on the asian emerging, china india. clearly the vast housing, realty sectors in asia, the india economy have seen unprecedented downfall a collapse only to reveal the huge defaults in mortgage,personal loans, increase in foreclosures. the bubbles in the local india economy have only started to go bust with the signs of effects coupled with the global crises being felt with many big businesses finding difficult to be in business and many small going out of business. the various big banks only see their books filled with huge mortgage, personal corporate loans going bad and many going down. if seen the thing actually going wild in the past few years was the huge bubble growth all over the benefitting the most being the asian china, india other emerging and with the bubbles globally collapsing these economys to see unprecedented effect on the propects of many sectors actually survive any longer. ...
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After several years of rapid growth, 2009, will prove a testing year for India.
Inflation : Inflation continues to pose a threat. Inflation peaked at 12% in early August ‘08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices and higher interest rates will reduce inflation without causing too much of a slowdown.
Economic Growth. After reaching growth of 9.8% in 2007/08, growth is expected to slow down to 7%. This might not be a bad thing as it will avoid inflationary pressures building further. However, some worry the global credit crunch could reduce growth much more.
Global Recession and Indian Economy : It appears that Europe, Japan and the US are entering into recession. Falling house prices, crisis in the financial system, and lower confidence could lead to a sharp downturn, with the worst still to come.
Many argue, that India’s growth is not so dependent on growth in the West. However, the Indian stockmarkets have been hit by the global crisis. India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. However, I still feel that India’s economic success is not dependent on growth in the West, and at worst India’s growth rate will be less than hoped for.
The Indian government still have a target of 10% growth for 2010/11, but, I think this could prove unrealistic.
/TC/...
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India can weather financial storm: FM
New Delhi, October 10: Finance Minister P Chidambaram expressed confidence that India can weather the storm of financial crisis blowing across the world saying the country`s economic fundamentals and the banking system were strong.
He admitted there is a liquidity crunch in the market and that the economy was facing `spill over and ripple` effects of the global storm but held out an assurance that the "RBI is ready to take further steps and infuse more liquidity if necessary".
Referring to the current global meltdown, Chidambaram said "there is a storm blowing in the world. We did not create the storm. We are facing the spillover effects or the ripple effects of the storm.
"We must brace ourself and weather the storm. I am confident that the Indian economy is strong and resilient to weather the storm and I would request all players in the economy to cooperate with the government in weathering the storm," he told PTI.
Chidambaram said "the weekend is a good time for people to reflect. Firstly, those who have money... there have been wage increases for the government servants, and many have received Diwali bonuses.
"Those who have money should spend some money and should save some money. Savings in banks are completely safe.
Our banks are well regulated and well capitalised. Depending on your risk threshold you can save in some other instruments.
Someone with a low risk threshold should save in a bank," he said.
...
In reply to:
India`s future
Posted by : sambala
If India successfully manages its relationships with Pakistan and China, will the country`s rise to global prominence trigger serious anxieties elsewhere in the world? India`s rising economic and political power will certainly prompt some insecurity. However, the threat that rising powers pose to the existing world order depends on perceptions of their intentions as well as of their capabilities. As a result, India`s democratic political system will go a long way towards calming the apprehensions of established powers. India`s vibrantly free press, independent judiciary and messy electoral politics may sometimes hamper economic development, but they also make the prospect of an Indian superpower seem far less threatening than that of a resurgent China or Russia.
From the Economist Intelligence Unit ViewsWire
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Indian economy to perform well: IMF
Washington, October 11: Dismissing fears of global financial contagion impacting India, the International Monetary Fund has said that the country`s economy will continue to perform well.
"Overall, we see the Indian economy continuing to perform well," said Oliver Blanchard, Economic Counselor and Director of International Monetary Fund (IMF) Research Department here recently.
Pointing out that there will be some impact of the tighter global liquidity conditions on India, he said, "We don`t see major drag from this impact on the country."
According to the projections made by the World Economic Outlook (WEO) released recently by the IMF, India is likely to register a Gross Domestic Product (GDP) growth of 7.9 per cent in 2008-09, which may slip to 6.9 per cent in 2009-10.
"We are projecting that the growth in India will come down from eight per cent in 2008 to seven per cent in 2009.
But seven per cent is still a strong rate of growth," the IMF official said.
A likely seven per cent growth rate at a time when the world economy is on a downhill path, would reflect India`s internal growth dynamics, he said.
Giving reasons for relatively mild impact on India of the ongoing financial turmoil, Blanchard said, "India is still largely a closed economy, has strong internal growth dynamics, from rapid productive growth, from its process of integration into the global economy that is still continuing".
India has registered a growth of nine per cent during 2007-08 and according to Prime Minister Manmohan Singh it is likely to register a growth of 7.5-8 per cent during the current financial year.
...
In reply to:
Is indian economy collapsing????!!!!
Posted by : marketman
We have been listening indian growth stories for few years.... our financial markets too witnessed the same trend till recently.... our policy makers repeatedly assuring the investors about the strongness of indian economy.... they are saying india is immune to world financial crisis....
But indian financial markets too collapsing along with the global cues.... almost all investors and many corporates are already in deep troubles.... few are doubting at some pvt sector banks for their suspicious behaviour....
We are also part of globe,india is not from any other planet.... this common logic is ignored by our policy makers and talking nonsenses on daily basis to confuse/mislead the indian investors aswell as indian public....
Atleast the chiefs of global economy taking few steps to control the situation,we havnot seen any types of mesures or useful decisions so far in india.... already stock markets fell more than 50% from their peaks within few months.... banks are struggling for survival,many corporates facing liquidty problem,few companies at the threshold of removing employees from payrolls,experts epecting subprime type issues may occur soon in india too.... interestingly indian rupee is weaken much within short span of time....
By seeing/experiencing all these ill effects,even patriotic indians doubting about the situation of economy in the country.... few people asking questions like Is indian economy too collapsing?!
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Dear Tally and bull2008
I have nothing against the FII`s. They played and play their game their way and we should be doing it our way. Herd mentality is the worst virtue we have. Tally as u rightly mentioned the confidence which I spoke about in my post, Yes we need loads and loads of confidence. We lack in this aspect very badly. And another thing we tend to back off when we reach a mental road block. This is why we always never make a decision in the first instance. We always think ten times to make a decision by then its too late, the opportunity has passed over you. Except for the PM we dont have any politicians who have the guts to act on a brilliant but tough decision. This is why we always lag behind. Time is of essence always remember.
Regards
bubbu64 ...
In reply to:
Is indian economy collapsing????!!!!
Posted by : tally
Dear bubbu, It is not difficult for us to bring back the market without the help of FIIs. Fundamentals of Indian economy are sound. Agriculture is expected to do well. Govt has given enough money in the hands of farmers. Even if 50% of this money is utilized to improve farming, the country will achieve much higher agriculture growth. Govt, PROMOTERS and investors must act to overcome void created by the exit of FIIs. Firstly, the Govt must create stock market stabilization fund with a seed money of Rs. 10000 cr. The fund may be put at disposal of UTI, SBI and other M/Fs of repute. As the fundamentals of the economy are strong, the Govt is sure to make handsome profit on this fund in coming years besides stabilizing the market. Secondly, the Indian investor should show the real grit and confidence and start investing. There are some 15 million investors in the market - direct and via MF. If each investor just makes an investment of Rs 25000/, total investment will amount to Rs 37500 cr. Total investment of some Rs 50000 cr will have profound effect on the stock market recovery. Cascading effect will bring more money from investors and may be FII outflow will stop. Govt will not only recover money, but get much higher taxes the vibrant stock market and IT. Promoters will also make hand some profits and much more money for their future plans.
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If India successfully manages its relationships with Pakistan and China, will the country`s rise to global prominence trigger serious anxieties elsewhere in the world? India`s rising economic and political power will certainly prompt some insecurity. However, the threat that rising powers pose to the existing world order depends on perceptions of their intentions as well as of their capabilities. As a result, India`s democratic political system will go a long way towards calming the apprehensions of established powers. India`s vibrantly free press, independent judiciary and messy electoral politics may sometimes hamper economic development, but they also make the prospect of an Indian superpower seem far less threatening than that of a resurgent China or Russia.
From the Economist Intelligence Unit ViewsWire...
In reply to:
India`s future
Posted by : sambala
India`s China strategy is to focus on trade while putting potentially volatile border disputes to one side. This is paying off in economic terms; trade between China and India boomed from US$3.6bn in 2001 to US$39bn in 2007, according to Chinese customs statistics. Admittedly, this phenomenal growth has occurred from a very low base. But the two countries` focus on trade has also allowed symbolic gestures of greater mutual trust, such as the reopening in 2006 of an overland trading route through Sikkim that had been closed since the 1962 Sino-Indian war.
India knows that its ambition to be a global power will depend partly on its ability to mediate and resolve the rising number of crises in neighbouring countries. However, India`s ability to intervene in countries such as Sri Lanka and Nepal is limited by resentment at India`s perceived paternalism towards its smaller neighbours. India will focus on aiding the democratic transition in Nepal, for example, but it will tread a fine line between preserving its influence there and pushing the new Maoist-dominated government into China`s arms. Indian policymakers have noted worriedly that Prachanda, Nepal`s prime minister, made China, not India, the destination of his first official international trip. That India is also fighting a home-grown Maoist insurgency has heightened its ambivalence towards Nepal`s new government.
While trying to manage regional flashpoints, India has also begun to broaden its strategic horizons. India`s expanding ties with the US, including the civilian-nuclear deal now facing its final hurdle in the US Congress, are a major part of this effort. Security analysts have noted a marked shift in India`s acquisitions of military hardware, from conventional land-based systems to means of power projection such as airborne refuelling systems and long-range missiles. India is also mounting a concerted effort to gain a greater say in global institutions, for example by campaigning for a permanent seat on the UN Security Council.
A fraught relationship with Pakistan will not prevent India`s rise. But tensions with Pakistan will remain a major foreign-policy distraction, and another war with Pakistan would be a serious setback for India`s global ambitions. At present there are few hopeful signs that the bilateral relationship will improve markedly. The optimism generated by Pakistan`s return to civilian rule in February has evaporated quickly. Any future agreement over Kashmir would probably focus on the conversion of the current de facto border into an international border, with India granting Kashmir some kind of special status. The danger is that any such an agreement, even if achievable, would fail to appease Islamic militants while angering Hindu nationalists.
The prospects for maintaining cordial relations with China look brighter. To be sure, India and China (along with Japan) are natural rivals for regional supremacy, and this will result in many areas of bilateral friction. The foreign policies of both countries are increasingly being driven by a competitive quest for energy security. China`s growing ties with India`s neighbours, notably Bangladesh, Nepal, Myanmar and Pakistan, will spur India`s military modernisation.
At the same time, though, expanding economic links between India and China will provide valuable opportunities for co-operation and confidence-building. China has already overtaken the US as India`s most important trading partner, and economic interdependence will create common cause in trade negotiations with advanced economies. Also, while India and China both claim major swathes of territory controlled by the other, neither of the sparsely populated border regions they dispute is a flashpoint like Kashmir. Indeed, the eventual outcome of the disputes—namely, official bilateral recognition of the current territorial status quo—is already more or less clear.
CONT.....
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India`s China strategy is to focus on trade while putting potentially volatile border disputes to one side. This is paying off in economic terms; trade between China and India boomed from US$3.6bn in 2001 to US$39bn in 2007, according to Chinese customs statistics. Admittedly, this phenomenal growth has occurred from a very low base. But the two countries` focus on trade has also allowed symbolic gestures of greater mutual trust, such as the reopening in 2006 of an overland trading route through Sikkim that had been closed since the 1962 Sino-Indian war.
India knows that its ambition to be a global power will depend partly on its ability to mediate and resolve the rising number of crises in neighbouring countries. However, India`s ability to intervene in countries such as Sri Lanka and Nepal is limited by resentment at India`s perceived paternalism towards its smaller neighbours. India will focus on aiding the democratic transition in Nepal, for example, but it will tread a fine line between preserving its influence there and pushing the new Maoist-dominated government into China`s arms. Indian policymakers have noted worriedly that Prachanda, Nepal`s prime minister, made China, not India, the destination of his first official international trip. That India is also fighting a home-grown Maoist insurgency has heightened its ambivalence towards Nepal`s new government.
While trying to manage regional flashpoints, India has also begun to broaden its strategic horizons. India`s expanding ties with the US, including the civilian-nuclear deal now facing its final hurdle in the US Congress, are a major part of this effort. Security analysts have noted a marked shift in India`s acquisitions of military hardware, from conventional land-based systems to means of power projection such as airborne refuelling systems and long-range missiles. India is also mounting a concerted effort to gain a greater say in global institutions, for example by campaigning for a permanent seat on the UN Security Council.
A fraught relationship with Pakistan will not prevent India`s rise. But tensions with Pakistan will remain a major foreign-policy distraction, and another war with Pakistan would be a serious setback for India`s global ambitions. At present there are few hopeful signs that the bilateral relationship will improve markedly. The optimism generated by Pakistan`s return to civilian rule in February has evaporated quickly. Any future agreement over Kashmir would probably focus on the conversion of the current de facto border into an international border, with India granting Kashmir some kind of special status. The danger is that any such an agreement, even if achievable, would fail to appease Islamic militants while angering Hindu nationalists.
The prospects for maintaining cordial relations with China look brighter. To be sure, India and China (along with Japan) are natural rivals for regional supremacy, and this will result in many areas of bilateral friction. The foreign policies of both countries are increasingly being driven by a competitive quest for energy security. China`s growing ties with India`s neighbours, notably Bangladesh, Nepal, Myanmar and Pakistan, will spur India`s military modernisation.
At the same time, though, expanding economic links between India and China will provide valuable opportunities for co-operation and confidence-building. China has already overtaken the US as India`s most important trading partner, and economic interdependence will create common cause in trade negotiations with advanced economies. Also, while India and China both claim major swathes of territory controlled by the other, neither of the sparsely populated border regions they dispute is a flashpoint like Kashmir. Indeed, the eventual outcome of the disputes—namely, official bilateral recognition of the current territorial status quo—is already more or less clear.
CONT........
In reply to:
India`s future
Posted by : sambala
As India`s clout grows it will reshape the world around it
India`s growing power will reshape the world as we know it. India`s real GDP has surged by an annual average of nearly 9% in the past five years, and across all measures of influence—from military might to diplomatic sway to economic weight—the country`s clout will continue to strengthen. India is on track to be the fastest-growing economy in the world in 2008-30, averaging annual expansion of 6.3%. It will also overtake China to become the most populous country in the early 2030s.
How will the rest of the world react? As India acquires the means to shape the global economic and geopolitical landscape, its leaders will face a familiar dilemma. Like rising powers in the past, India is keen to expand its influence in line with its increasingly global interests—but it needs to do this without provoking a backlash from currently dominant countries or being caught up in rivalry with other emerging powers.
How India manages its rise—and how the rest of the world responds—will have huge implications for the country`s stability and growth prospects. One potential obstacle is geopolitical: India needs to promote regional peace and stability in order to have a strong claim to be a major world player. But South Asia is an especially tough neighbourhood. India shares borders with countries that are embroiled in civil war (Sri Lanka), have just emerged from civil war (Nepal), or are under military or military-backed rule (Myanmar and Bangladesh). Civilian rule has recently been restored in Pakistan, but the political scene there remains fragile and a destabilising Islamist insurgency is gathering steam. This leaves China as India`s least volatile neighbour—but China, which is helping to build ports and quasi-military facilities in Pakistan, Myanmar and Bangladesh, is also India`s chief geopolitical rival.
On this list of strategic headaches, India`s decades-long stand-off with Pakistan is the most dangerous. Conflict with nuclear-armed Pakistan is hardly a far-fetched scenario—India and Pakistan have fought three wars since becoming independent in 1947. The territorial dispute over Kashmir that sparked two of those wars remains unresolved. Indeed, a fresh wave of violence in the Indian-administered part of Kashmir suggests that the situation there is growing increasingly volatile.
Another challenge is to manage the global reaction to India`s growing economic power. India has so far largely avoided attracting the sort of criticism levelled against Chinese—and earlier Japanese—overseas investments. But this will almost certainly change as India becomes a bigger player in the global economy. If the government meets its goal of massively expanding the export-oriented manufacturing sector, for example, India will become another big target for developed-country protectionists. If the government is to succeed in its quest for energy security, India will find itself in sharper competition with other major powers and under attack for its investments in pariah states like Myanmar and Sudan.
These issues will come to the fore as Indian overseas investment—which surged in 2007 and 2008 amid a clutch of high-profile, high-value acquisitions of foreign firms—increases dramatically. More major companies will join the ranks of Corus, an Anglo-Dutch steel company purchased by an Indian firm, Tata Steel. That deal, completed in 2006, symbolised corporate India`s triumphant emergence on the global stage. It has been followed by a rapid succession of big-ticket Indian investments overseas, including a recently announced US$1.2bn tie-up between Reliance Big Entertainment and Steven Spielberg`s DreamWorks film studio. Frictions will also emanate from trade negotiations—India was blamed, along with China, for the collapse of the latest meeting of the Doha round of world trade talks in late July this year. As India`s global economic footprint grows, a marked rise in trade-related controversies in areas like labour standards, product safety and intellectual property seems all but inevitable.
To minimise the external risks to India`s rise, the government`s most pressing order of business is to secure its strategic periphery. First and foremost, this means forging a stable peace with Pakistan, which in turn requires a resolution of the seemingly intractable conflict in Kashmir. In July this year India cancelled bilateral talks on security co-operation, blaming Pakistan`s military intelligence agency for a suicide attack on India`s embassy in Afghanistan. However, the government`s efforts to create negotiating momentum will continue. In September a top-level bilateral meeting produced a pledge to restart the countries`"composite dialogue" and to open two trade routes across the de facto border in Kashmir.
CONT.....
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As India`s clout grows it will reshape the world around it
India`s growing power will reshape the world as we know it. India`s real GDP has surged by an annual average of nearly 9% in the past five years, and across all measures of influence—from military might to diplomatic sway to economic weight—the country`s clout will continue to strengthen. India is on track to be the fastest-growing economy in the world in 2008-30, averaging annual expansion of 6.3%. It will also overtake China to become the most populous country in the early 2030s.
How will the rest of the world react? As India acquires the means to shape the global economic and geopolitical landscape, its leaders will face a familiar dilemma. Like rising powers in the past, India is keen to expand its influence in line with its increasingly global interests—but it needs to do this without provoking a backlash from currently dominant countries or being caught up in rivalry with other emerging powers.
How India manages its rise—and how the rest of the world responds—will have huge implications for the country`s stability and growth prospects. One potential obstacle is geopolitical: India needs to promote regional peace and stability in order to have a strong claim to be a major world player. But South Asia is an especially tough neighbourhood. India shares borders with countries that are embroiled in civil war (Sri Lanka), have just emerged from civil war (Nepal), or are under military or military-backed rule (Myanmar and Bangladesh). Civilian rule has recently been restored in Pakistan, but the political scene there remains fragile and a destabilising Islamist insurgency is gathering steam. This leaves China as India`s least volatile neighbour—but China, which is helping to build ports and quasi-military facilities in Pakistan, Myanmar and Bangladesh, is also India`s chief geopolitical rival.
On this list of strategic headaches, India`s decades-long stand-off with Pakistan is the most dangerous. Conflict with nuclear-armed Pakistan is hardly a far-fetched scenario—India and Pakistan have fought three wars since becoming independent in 1947. The territorial dispute over Kashmir that sparked two of those wars remains unresolved. Indeed, a fresh wave of violence in the Indian-administered part of Kashmir suggests that the situation there is growing increasingly volatile.
Another challenge is to manage the global reaction to India`s growing economic power. India has so far largely avoided attracting the sort of criticism levelled against Chinese—and earlier Japanese—overseas investments. But this will almost certainly change as India becomes a bigger player in the global economy. If the government meets its goal of massively expanding the export-oriented manufacturing sector, for example, India will become another big target for developed-country protectionists. If the government is to succeed in its quest for energy security, India will find itself in sharper competition with other major powers and under attack for its investments in pariah states like Myanmar and Sudan.
These issues will come to the fore as Indian overseas investment—which surged in 2007 and 2008 amid a clutch of high-profile, high-value acquisitions of foreign firms—increases dramatically. More major companies will join the ranks of Corus, an Anglo-Dutch steel company purchased by an Indian firm, Tata Steel. That deal, completed in 2006, symbolised corporate India`s triumphant emergence on the global stage. It has been followed by a rapid succession of big-ticket Indian investments overseas, including a recently announced US$1.2bn tie-up between Reliance Big Entertainment and Steven Spielberg`s DreamWorks film studio. Frictions will also emanate from trade negotiations—India was blamed, along with China, for the collapse of the latest meeting of the Doha round of world trade talks in late July this year. As India`s global economic footprint grows, a marked rise in trade-related controversies in areas like labour standards, product safety and intellectual property seems all but inevitable.
To minimise the external risks to India`s rise, the government`s most pressing order of business is to secure its strategic periphery. First and foremost, this means forging a stable peace with Pakistan, which in turn requires a resolution of the seemingly intractable conflict in Kashmir. In July this year India cancelled bilateral talks on security co-operation, blaming Pakistan`s military intelligence agency for a suicide attack on India`s embassy in Afghanistan. However, the government`s efforts to create negotiating momentum will continue. In September a top-level bilateral meeting produced a pledge to restart the countries`"composite dialogue" and to open two trade routes across the de facto border in Kashmir.
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`Global response`
Bush appears with world financial leaders - vows nations will work together.
President Bush on Saturday once again tried to reassure a nervous public that world leaders were working together to address what is unfolding as the worst global financial crisis since the Great Depression.
"We recognize that the turmoil in the financial markets is affecting all our citizens," Bush said, standing in front of financial ministers from the world`s top economies gathering in the nation`s capital. "All of us recognize this is a serious global crisis that requires a serious global response for the good of our people."
The president did not announce any new actions to stem the financial panic gripping the world, but reiterated measures world leaders are taking to strengthen financial systems.
Bush mentioned the latest step being contemplated by the United States - injecting much-needed capital into banks.
Treasury Secretary Henry Paulson said Friday that the administration may use the authority granted in the $700 billion rescue plan enacted on Oct. 3 to take ownership stakes in financial institutions to stabilize and restore confidence in them.
Other countries are also taking action to inject liquidity, protect citizens` savings and strengthen financial institutions in their own nations, he said.
Finance leaders from the world`s top economies, the Group of Seven, pledged Friday night to take steps to keep leading institutions afloat, unfreeze credit, ensure banks have enough capital to kick start lending and safeguard depositors` funds and restart the secondary markets for mortgages and other securitized assets.
It`s vital that countries work together so that their actions don`t undermine others, Bush said, pointing to the emergency interest rate cut enacted this week as an example of a coordinated effort.
He plans to expand discussions beyond the G-7 ministers - representing the United States, Britain, Canada, France, Germany, Italy, and Japan - to the leaders of the G-20 emerging market and industrialized nations, who are also meeting Saturday.
"We`re in this together, we`ll come through this together," the president said.
But he warned that it will take time to see the results. So far, all the measures world leaders have taken have done little to calm jittery markets.
"The benefits will not be realized overnight," the president said.
Week of fear
The president`s remarks cap a week in which fear gripped the financial markets worldwide. The Dow Jones industrial average had its worst week ever, falling just over 1,874 points, or 18%. Wall Street lost roughly $2.4 trillion in market value during the week, according to losses in the Dow Jones Wilshire 5000, the broadest measure of the market.
Since the mid-September collapse of Lehman Brothers sparked the latest chaos in the financial markets, Bush has repeatedly tried to reassure the Americans.
"We can solve this crisis - and we will," said Bush, in a speech at the White House Friday, his 27th commentary on the nation`s financial health. "Here`s what the American people need to know: The U.S. government is acting, and we will continue to act, to resolve this crisis and return stability to our markets," he said.
The government has started taking a number of steps to attack the crisis, Bush said Friday. These include helping homeowners to refinance into more affordable mortgages; cutting the target for the federal funds rate; unveiling a plan to support the market for commercial paper; and offering government insurance for money market mutual funds.
The plan will authorize the Treasury to buy bad mortgage-related investments from finance companies, unfreezing the credit markets by freeing up banks and finance firms to lend once again.
By Tami Luhby...
In reply to:
Is indian economy collapsing????!!!!
Posted by : marketman
Yes,in bear markets, intelligent investors concentrate on dividend pay outs.... buying stocks which have huge dividend record is defintely better idea in this situation.... but stick to quality grwoth oriented business models.... there may be few corporates sell their shares and pay the dividends.... be careful in selecting counters on the basis of dividend criteria....
Tracked by: 0 Boarder
Dear bubbu, It is not difficult for us to bring back the market without the help of FIIs. Fundamentals of Indian economy are sound. Agriculture is expected to do well. Govt has given enough money in the hands of farmers. Even if 50% of this money is utilized to improve farming, the country will achieve much higher agriculture growth. Govt, PROMOTERS and investors must act to overcome void created by the exit of FIIs. Firstly, the Govt must create stock market stabilization fund with a seed money of Rs. 10000 cr. The fund may be put at disposal of UTI, SBI and other M/Fs of repute. As the fundamentals of the economy are strong, the Govt is sure to make handsome profit on this fund in coming years besides stabilizing the market. Secondly, the Indian investor should show the real grit and confidence and start investing. There are some 15 million investors in the market - direct and via MF. If each investor just makes an investment of Rs 25000/, total investment will amount to Rs 37500 cr. Total investment of some Rs 50000 cr will have profound effect on the stock market recovery. Cascading effect will bring more money from investors and may be FII outflow will stop. Govt will not only recover money, but get much higher taxes the vibrant stock market and IT. Promoters will also make hand some profits and much more money for their future plans....
In reply to:
Is indian economy collapsing????!!!!
Posted by : bubbu64
Dea bull 2008
If India can make it without the help of the FII`s ( which is not possible in reality) and run ahead on its own steam with courage and conviction steadily and without falling pray to the charms of the CDO`s, SIV`s etc. We have the ability ( we threw out the brits without firing a bullet), we have the knowledge ( indian have the best brains in the world and has been proven, I have lost count), we have the perseverance (many have made it from the worst poverty levels and even the middle class i.e NRN ) and finally we have the self control ( we didnt attack pakistan despite Kargil ). All in all we make a great package but we only lack in one aspect very much needed in today`s tough world and that is self confidence ( we tend to get weak kneed at times or even falter when the going gets tough ). You have the confidence then I am sure India can even be the no 1 developed country in the world. Other boarders can make any comments on what I have written.
Regards
bubbu64
