Mar. 26 – After all we live in a flat world; and the U.S. sub-prime crisis, the plunging dollar, rising oil prices, bankrupt global financial institutions and inflation will take their toll on India too. India’s preparedness at such a time of crisis will impact the extent to which its India shining image gets tarnished.
In a freewheeling interview Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates talks to India’s Finance Minister, Mr. P. Chidambaram. The cool, confident captain who led India to 9 percent growth explains mechanisms the India government has adopted to safeguard itself against such global downturns. The finance minister also tackles issues of India’s falling textile trade, foreign investment in energy and corruption. In separate conversations, Chris Devonshire-Ellis also talks to India’s State Secretary for Civil Aviation and Shri M Ramachandran, State secretary, Ministry of Urban Development.
Mar. 21: India's estimated 5.7 million Indian workers abroad sent home $27 billion in 2007 to make India the top receiver of migrant remittances while the US was the main remittance source, according to latest World Bank data, reported the Times of India. In contrast workers from China ($25.7 billion), Mexico ($25 billion), the Philippines ($17 billion), and France ($12.5 billion) made up the rest of top five, the bank’s new Migration and Remittances Factbook 2008 said. For 2007, recorded remittances flows worldwide are estimated at $318 billion, of which $240 billion went to developing countries.
The US was also the top immigration country in 2005, with 38.4 million immigrants, followed by the Russian Federation (12.1 million), and Germany (10.1 million). Among low-income countries, India had the highest immigration volume (5.7 million), followed by Pakistan (3.3 million).
Mar. 20 – The Senior Partner of Dezan Shira & Associates, Chris Devonshire-Ellis, who publishes China Briefing, India Briefing and the emerging Asia website 2point6billion.com, will meet next week with Kamal Nath, the Indian Minister of Commerce, and Mr. P. Chidambaram, the Minister of Finance, in New Delhi.
Mar. 19: Not everybody is hailing the rising rupee. Indian textile exporters are feeling the strain of falling profits. On Wednesday, The Hindustan Times reported Prime minister Manmohan Singh addressing concerns of the beleaguered textile industry.
Merchandise exports have come under some pressure due to the appreciation of the rupee and could fall just short of the target of $ 160 billion, although the growth rate was strong at 21.8 per cent during April-December 2007-08. India’s exports stood at $111 billion in April-December 2007.
The rupee has appreciated by 12 per cent in 2007 and is currently trading at less Rs 40 to a dollar leading to exports becoming costlier and less profitable.
Mar. 18: The monsoon is still a few months away. But a different kind of deluge—bad news—dampened spirits on Dalal Street. On Tuesday the Times of India said fears of further losses to Indian banks, a slowdown in corporate growth and the fast-spreading contagion of turmoil in global financial markets took their toll on Monday.
The sensex lost 951 points to close at 14,809. This was its second steepest fall, wiping out Rs 3.2 lakh crore in investor wealth. Since January 10, when the sensex touched its peak of 21,206 points, more than Rs 25.1 lakh crore of investor wealth vanished into thin air.
Delivering a budget for the masses instead of India's classes, Finance Minister Palaniappan Chidambaram, proposed waiving loans held by small farmers (600 billion rupees) and pledged higher spending on health and education to spread the benefits of an economic boom beyond the cities to rural voters.
India has a population of 1.1 billion and 60 percent or more live and work in rural areas.Due to risks from turbulence on global financial markets and rising oil, metals, wheat and rice prices worldwide, Chidambaram said while he was confident India's economy would grow by 8.8 percent in the fiscal year ending on March 31 a fall from a scorching 9.6 percent in 2006/07, its fastest pace in 18 years.
While he vowed to keep rising inflation under check, Chidambaram increased defence spending by 10 percent in 2008/09. He also increased urban infrastructure spending to 68.7 billion rupees and Rural infrastructure spending will be 140 billion rupees further, Government spending on national highways will be 130 billion rupees.
Lalu Prasad Yadav, the Railway Minister of the reigning UPA government has done it again – with a Rs Rs 25,000 crore ($2.5 billion) cash surplus – he's made a success story of the Indian Railways . He's proved that low cost airlines are not a major threat to India's Railways.