India: the Bric going nowhere (for now)

[P. Rajah]

India: the Bric going nowhere (for now)

by Chris Marshall on Dec 06, 2011 at 17:25


India, in case you’ve been distracted by the eurozone’s crisis, is in a
mess.

Both the stock market and rupee have been tumbling as foreign investors
have withdrawn their money. Inflation, while thought to be peaking, is
not far off double figures, and economic growth is slowing.

Political inaction, poorly timed attempts to bring down inflation, and
the country’s vulnerability to the eurozone crisis have acted like
emergency lighting for investors, clearly signposting the way to the exits.

Those emerging market fund managers who are not tied to India alone have
been underweight to the country for the past couple of months, instead
opting for fellow Brics Brazil, Russia and China, which in turn are
hardly safe havens.

Analysts have also taken fright. ‘India explodes’ read the title of a
recent note from UBS. The same note to clients warned that ‘investor
sentiment has gone from cautious to outright scared’.
What’s next?

http://citywire.co.uk/money/india-the-bric-going-nowhere-for-now/a549870

--
Astrology: Fraud or Superstition?
http://www.seesharppress.com/astro.html

Ass-troll-ogers/jyotishitheads are the bane of humanity, and must be
cleansed or otherwise purified for the benefit of society.

http://www.nowpublic.com/world/vhp-terrorism

"I agree with you that the plans of Hindus' must fail."
Jay Stevens Maharaj, 11/14/2011, revealing his strategy of sullying
the image of Hindus

"Spit on Christianity so that it may be purified."
Jay Stevens Maharaj, 6/30/2006

"Let [Christians and Muslims] go after each other so that both
destructive philosophies and ways of life are
themselves destroyed."
Jay Stevens Maharaj, 10/09/2006

[Arindam Banerjee]

On Dec 10, 4:37 pm, "P. Rajah" <u...@this.com> wrote:
> India: the Bric going nowhere (for now)
>
> by Chris Marshall on Dec 06, 2011 at 17:25
>
> India, in case you’ve been distracted by the eurozone’s crisis, is in a
> mess.

It will get out of it and do immensely well when it throws out all the
corrupt quotawallahs and their evil quotabaazi.

Cheers,
Arindam (bin Einstein ban Gandhi) Banerjee, greatest genius of all
time, sole god among lotsa devils.

[Mirza Ghalib]

On Dec 9, 9:37 pm, "P. Rajah" <u...@this.com> wrote:
> India: the Bric going nowhere (for now)
>
> by Chris Marshall on Dec 06, 2011 at 17:25
>
> India, in case you’ve been distracted by the eurozone’s crisis, is in a
> mess.
>
> Both the stock market and rupee have been tumbling as foreign investors
> have withdrawn their money. Inflation, while thought to be peaking, is
> not far off double figures, and economic growth is slowing.
>

The decline of the rupee was quite predictable. The only bet
is how low it gets in the short term, say a year. At this point
it is a little over 52 to a US dollar.

[P. Rajah]

The reason the rupee is dropping is directly related to two major
issues: first, the failure to have a comprehensive, ongoing and
politically independent economic plan. The second is the thorough
mismanagement of foreign currency. Specifically, the extremely liberal
distribution of foreign currency to students, temporary employment
overseas(i.e., contract employment), certain industries(such as movies)
which do not have to establish the necessity of spending overseas, and
even ordinary individuals. From what I understand, students can avail up
to $100,000 per year(and can receive another $100,000 per year from
relatives). Wouldn't we have loved to have such largesse in our day!
Those traveling on employment contracts can take out $100,000,
regardless of how much they might earn. That has surely created a shadow
business for moving illegal money out of India, and turning it "white"
if necessary. Businesspeople can take out $25,000 per trip, even if the
trip is for 2 or 3 days, even if it is only to attend a seminar or a
trade show. People traveling overseas for medical treatment can take out
$100,000 on "self-declaration", plus another $25,000 for "maintenance"
expenses. Ordinary individuals resident in India can gift up to $200,000
to anyone overseas, plus another Rs. 5,00,000(approx $10,000) in kind,
if they show the relevant tax information to prove that it is their own
money. And God alone knows how much the movie business has taken out of
the country, given that a single song-and-dance sequence(which does not
materially affect or contribute to the story line) set overseas, to pick
one instance, has a 7-figure dollar cost, when you factor in all the
costs involved. What all this has added up to is a tremendous outflow,
possibly tens of billions per year, of hard-earned foreign currency,
plus the impact it has on currency valuation.

A country like India, still trying to find its feet as a nation of
global economic importance, can ill-afford to squander its resources in
this manner.

[Mirza Ghalib]

> Astrology: Fraud or Superstition?http://www.seesharppress.com/astro.html

>
> Ass-troll-ogers/jyotishitheads are the bane of humanity, and must be
> cleansed or otherwise purified for the benefit of society.
>
> http://www.nowpublic.com/world/vhp-terrorism
>
> "I agree with you that the plans of Hindus' must fail."
>     Jay Stevens Maharaj, 11/14/2011, revealing his strategy of sullying
> the image of Hindus
>
> "Spit on Christianity so that it may be purified."
> Jay Stevens Maharaj, 6/30/2006
>
> "Let [Christians and Muslims] go after each other so that both
> destructive philosophies and ways of life are
> themselves destroyed."
> Jay Stevens Maharaj, 10/09/2006

I generally agree with your diagnosis. But there is another
reason. The surge in the last 10 or so years was caused
by India's lead in one particular technology- software.
In other areas it lacking as ever. I have compared Indian
products in the market, and they are as shoddy as ever.

The lead in software industry is gradually being eroded
because other countries like Russia, China and s few
smaller players are fast coming up.

If you look closely, India's foreign currency stash was not
as big as the government made us believe. China has probably
10 times as big, and is targeting Africa and Latin America
in a big way.

India must first attain self sufficiency in food. Next comes
widening of the industrial base, so that it can become a
player in the international market.

[Call Centre]

Its much worse than that. Its about 8 times more in China but its a
positive reserve. They don't owe dollars so their net balance is a
very very positive big reserve. Most of our reserves are due to
borrowings. We have to return a large chunk of it. So, in reality the
situation is far far worse. (How much net dollars does India have
versus China). What will be our positive reserves after we return all
our borrowed dollars. When you take that into account the difference
could be 50 or 100 times.

>
> India must first attain self sufficiency in food. Next comes
> widening of the industrial base, so that it can become a

> player in the international market.- Hide quoted text -
>
> - Show quoted text -

[P. Rajah]

> I generally agree with your diagnosis. But there is another
> reason. The surge in the last 10 or so years was caused
> by India's lead in one particular technology- software.
> In other areas it lacking as ever. I have compared Indian
> products in the market, and they are as shoddy as ever.
>
> The lead in software industry is gradually being eroded
> because other countries like Russia, China and s few
> smaller players are fast coming up.
>
> If you look closely, India's foreign currency stash was not
> as big as the government made us believe. China has probably
> 10 times as big, and is targeting Africa and Latin America
> in a big way.
>
> India must first attain self sufficiency in food. Next comes
> widening of the industrial base, so that it can become a
> player in the international market.

You cannot achieve self-sufficiency in food with a runaway population. I
recall that the 1981 census placed India's population at 670 million. In
the last 30 years, we have added 530 million to that number. That is
*huge*. It is more than the _entire_ population of the 27 countries that
comprise the European Union. The per capita availability of food in
India, measured both in grain availability as well as caloric intake,
has gone down despite "record" production. When you factor in the
realities that a certain segment of the population now can afford more
food, as well as more expensively processed food, and that the price of
grain is now buffeted by the shenanigans of the world's commodities
exchanges, it is realized that not only is there less per capita
availability, but those at the lower end of the economic spectrum have
even less available to them than the per capita decline would suggest.
It is truly a horrendous specter of mass starvation that faces India,
even as the chant of "next superpower" seems to be blinding the more
affluent Indians.

There is a very good book about the world's food system, and its impact
on the global poor, by Raj Patel:
Stuffed and Starved: The Hidden Battle for the World Food System
http://www.amazon.com/Stuffed-Starved-Hidden-Battle-System/dp/1933633492

While it does tend to have an anti-western bias, that bias is not wholly
undeserved. Nevertheless, it is a very worthwhile read, backed with
masses of citations. One personal consequence for me is that I no longer
buy any products from Chiquita or Dole.

The truth about India, as reflected in the figurative mirrors of our
minds, is camouflaged by the romantic and wholly made-up imagery we
drape over the mirror.

[P. Rajah]

>> I generally agree with your diagnosis. But there is another
>> reason. The surge in the last 10 or so years was caused
>> by India's lead in one particular technology- software.
>> In other areas it lacking as ever. I have compared Indian
>> products in the market, and they are as shoddy as ever.
>>
>> The lead in software industry is gradually being eroded
>> because other countries like Russia, China and s few
>> smaller players are fast coming up.
>>
>> If you look closely, India's foreign currency stash was not
>> as big as the government made us believe. China has probably
>> 10 times as big, and is targeting Africa and Latin America
>> in a big way.
>
> Its much worse than that. Its about 8 times more in China but its a
> positive reserve. They don't owe dollars so their net balance is a
> very very positive big reserve. Most of our reserves are due to
> borrowings. We have to return a large chunk of it. So, in reality the
> situation is far far worse. (How much net dollars does India have
> versus China). What will be our positive reserves after we return all
> our borrowed dollars. When you take that into account the difference
> could be 50 or 100 times.

Actually, India is in a net negative position. That is, if all foreign
investments and repatriable accounts are called in, India will have to
borrow to pay off the last few billion. There was an account of it
recently, and off the top of my head, I think the numbers were about
$300 billion in reserves versus about $320 billion "callable". India's
current account deficit for this year is approaching the level that
triggered the 1991 crisis. I don't see a repeat of that, in terms of
having to fly gold to Europe, etc., but it will play out on the same
basis(a BoP crisis), but in different language and on different terms.

>> India must first attain self sufficiency in food. Next comes
>> widening of the industrial base, so that it can become a
>> player in the international market.

--
Astrology: Fraud or Superstition?

[Mirza Ghalib]

On Dec 12, 12:54 am, Call Centre <outsourcingbusin...@yahoo.com>
wrote:

Thanks for the input.

India's (post-liberalization) situation can be likened to a sick
person, who splurges on all temptations before the inevitable
happens. In the huge foreign exchange largess that Mr Rajah
pointed out is a hidden desire to be counted among the big
players in the international field.

I read an article on India dating back to 1995. Hotels were
quoting their rates in dollars. Lay people like me were being
contacted with offers of "one time opportunity" to invest in
Indian private equity. There was the the widespread delusion
that India was now an international player and finally the
"take-off" moment had arrived. Never mind in the nation's
backyard 70 percent of the population gradually slipped
further in poverty.

I had the shame of my life when last year the projected
successor of Delhi's throne, Rahul Gandhi took Bill Gates on
a visit to the poorest areas of UP to apprise him of Indian
poverty. Perhaps the hope was that Gates would summarily
write a check. Unfortunately that did not happen.