Economic growth - queries and concerns

Recently the Central Statistics Office (CSO) has published a listing of growth and TamilNadu is first from the last in the list. Bihar has topped the list with a nearly 11% GSDP (Gross State Domestic Product) growth. Gujarat once the engine of growth has stood at 6th place with a 8% growth. TamilNadu registered a 3.4% growth. Bihar has overtaken most of the industrialized States in growth. Political motive cannot be attributed as it is a fact that “the CSO never seeks political approval for any of its reports. Even the Prime Minister need not be provided with any data before it is made public.”

Gold Quest of UPA II

With the title I'm not referring to the dubious company which asked for  Rs. 30,000/- initial investment and some MLM. In turn it offered a gold coin and a promise of a million rupees in due course if you get more people in to invest Rs. 30,000/-. The weird thing is when busted the legal advisor of the company turned and offered to take up the case of the aggrieved people. The case nor the fraud was heard of thereafter. The legal advisor was none other than Nalini Chidabaram, wife of Mr.P.chidambaram, Hon'ble Finance Minister of India.

Indian Economy in 2012 - Nothing to base hope on.

We have had a tumultuous calendar year that ended yesterday. The UPA II Government had projected a GDP growth at  7.6 (+/-0.25) %for FY'13. Chief economic adviser Kaushik Basu was confident about 9% growth but was worried about the impact debilitating politics would have on the economy.  With a projected GDP growth of 9% in 2011-12 and ending up with 6.9%, the start of the FY 2012 -13 was upon an established lie. We didn't have any analysis on why we missed the forecast of 9% growth in 2011-12 and what exactly are going to do to achieve the >7% growth as projected.  (Economic survey 2011-12)

Wholesale FDI in retail - Does harm national interests

The UPA -II Government is keen on bringing the FDI in multi brand retail in this winter session of parliament. Opposition parties oppose this with many a reason ranging from politics to personal to people's well being. Let us leave off the personal reasons opposing the FDI, but look at political and well being reasons as they are important for an informed decision on such a key issue.

Maruti's Manesar Miseries - a Human Resource Perspective

Maruti Suzuki. The nation's passenger automobile pride. 

All was going well and Maruti was thriving in the market with new models and a proud palpable presence on the India roads.  The company was in news for all the good reasons until recently. The recent unrest at the Manesar plant is not the first of its kind. It is the fourth in a year. The plant has been facing labor disquiet for decades and unrest for the past few years. Maruti is being managed by the all dedicated Japanese Management now. Japanese have a reputation for dedication to work and make it a culture in their organizations. Then why this unrest and arson?

Inflation Skyrockets

Inflation is defined as "a rise in the general level of prices of goods and services in an economy over a period of time."  The never dwindling inflation in the Indian economy has reached a 10 week high despite hopes expressed by the economist PM and lawyer FM, along with helplessness conceded by other statutory bodies created to work on economic issues. The suspicion of hoarding expecting a price rise cannot be ruled out since this inflation does not fit into it's abstract economic definition.

Turnaround King(pin)s of India

The title of Turnaround King was given to Jack Welch for his wonderful job at GE and also to Louis V. Gerstner for his historic turnaround of IBM. Nithish Kumar was given that title for his great turn around of Bihar. Come to think of turnarounds of economies and businesses one has to wonder why such a nation brimming with brilliant minds, have starvation deaths in the first place, keep aside Governmental apathy towards that for discussion later.

Desi Subprime?

This was posted on Ambie's Blog on Monday 8 December 2008.

A news report that the RBI has a package proposal to accelerate the growth of the dawdling real-estate sector, by offering special consideration to the upper middle and middle class people who plan to take home loans up to Rs 20 lakhs, ring an alarm bell. The reason for the slowdown in the real estate sector is e unreasonable spike in prices, and the upward interest rates. The high interest rates, indeed, saved many from the inflated sale price of the property market.

Now that the proposal through banks to infuse money and induce people to buy houses would give only a notional stimulus to the real estate market, but would not be beneficial to the buyers in the long run. With a constantly inflationary economy, such packages would not do much help to the common man, but for pushing him into more troubled finances, as the constant price rise and slow growth of the economy are antithetic in nature.

The moot question is whether naturally savings minded Indian middle class would plunge into such offers and find themselves in the middle of a meddle. The Indian home buying scenario is not dominated by market forces or economic incentive packages. It is a family event and the women of the family have a definite say in the decision making. Given fact that Indian women are not price sensitive but price performance sensitive, we cannot expect that the inflated prices would be paid by the Indian middle class families for a few thousand bucks incentive from some banks.

The mathematically shrewd lot of Indian middle class men would calculate the interest rate/EMI and would finally conclude that the few thousand Rupees of discount/incentive by the banks would not be beneficial to them at the end of the day, as they would end up paying more than the incentives they got vide EMI and interest on loan. So, this stimulus package would induce people who have no financial plan and care free of the money spent, as they could easily be dragged into a financial deal which might not be beneficial to them.

Come to think of the IT professionals, they were the lot to be wooed in by such packages. But given the volatility of the industry, and the stress many from IT industry have undergone during the meltdown of the US economy and it's global impact, only a few takers could be found for such an incentive to home buyers.

The need of the hour is to curb the unreasonable price hike of the property and related materials, so that the industry could be trimmed from the economic obesity. In general, the Government, instead of putting money in people's pockets, should try and keep inflation under check. Any deal without having inflation under control would not work and deliver the expected result. Instead this stimulus package would further feed the inflation, and hence fillip would be given to the inflation not to the economic growth.

With this step the Government has started a walk into a land of financial mines and economic quick sand. Let us hope the mindset of the Indian middle class would help people from falling prey to such failed economic models and save the nation from a desi subprime.