GDP falls to the lowest ever

What went wrong? Why is the situation so bad? Who is to be blamed?
The fiscal deficit was growing. The government was spending much too much than earning. But the currency notes were getting printed. Everyone were getting salaries. No concrete efforts made to control the deficit.
Because the amount of money with public were more imports became easier. The government turned a blind eye to this. Foreign companies began to make better quality items here too. Also in the imports side, even fruits and vegetables were imported. Government did nothing.
In this process, domestic production began to slow down. People liked imported things and local items got a back seat. Gradually it covered the whole gamut of Indian growth mechanism and industry, services were all affected. The GDP fell drastically.
As a first step, a zero profit objective for PSU oil giants is recommended. Why should they make profits? The subsidy in diesel and kerosene should be given in such a way that profit is zero. This step in itself will give a lot of money to the government. The diesel and kerosene prices may rise but the advantage is poor in villages will get food as transport will become costly.

Lessons from businessmen

Birla, the great Indian businessman switches off light whenever he or his family members leave room. Birla also insists on eating food together with all the family members present. Discipline is very important. And many rich men take care to see to it that one is particular about things.
Do you recall any important points from the lives of rich which can improve our values?

What is the value of rupee?

What is the correct value of rupee? You may have wondered many nights sometimes without sleep. Is 50 rupees equal to a dollar?
If I were to be a consultant in foreign exchange, I will advise my customer with the statement "Rupee is nothing but an acceptance that an Indian needs a lot of things". It is not enough that I have a bag of rice. I need some wheat, some cement, some clothes. How to go about it? Rupee is the answer. It is very basic definition actually.
So, next time someone says the bottle of whisky is 5400 in India. It is only 100 in US. Then, just thank god that you get to drink the stuff. Do not worry about anything else.

Inflation - Who causes it?

Inflation happens when prices of common items rise. The poor are unable to buy food because of this. They then die in many numbers because of inflation.
Agriculture output is more or less constant or rising. Because of better technology. Demand is same. Then why should price rise? The factor that causes inflation is what lies between. Transport. The transporters may not cooperate and may refuse to take load or may charge exhorbitant or may be facing margin pressures due to hike in fuel price. But it is now clear that inflation is more or less caused by transporters.
But how inflation mechanism is controlled?
There are three or four things involved here. Fuel (comes from refineries), grocery malls, financial wizardry. There are private companies which are into all the three above. They are into refineries, malls and finance. It can be said with more certainity now that they are better placed for triggering inflation.
So next time when you eat roti knowing fully well that a poor fellow does not get to eat the same; you know whom to blame.

Derivatives - What we have missed ?

Derivatives, mathematically means change in one thing by the change in other. In economy this factor is traded for money and is a business.
If we look at history, we had a progressive vision of growth of India by our erstwhile political leaders. The changes made by some of the policies were great investment opportunities in the form of derivatives. But all those opportunities have been wasted by financial corporations and industry. They had a myopic vision of change and it will not be wrong to say that this short sightedness has resulted in today's sorry state.
I am absolutely right when I say that Nehru's vision of India was welcomed by even foreigners. Maybe the concern of foreigners had been whether India can take it. Whether the poor will be benefitted. Whether everyone will get food.
A chain is as strong as the individual strength of each of its links. And it is weak at the weakest link. Derivatives based economy is for strengthening the country and not for finding weakness as the present economic vision is heading for.

Banking Finance - humour !!

I was keen to learn about banking finance. No, not from books. But from newspaper and analysis and application of thinking abilities.
I have a method for this complex system. And I shall share it with you.
Can banks do without IT? No, it cannot. So I thought let me look at banking from the IT angle.

1)IT can do complex calculations.
2)IT follows logical steps.
3)IT has hierarchy in permissions.
4)IT can connect to the whole world.

1)
If a wise guy says,  "Don't you know XYZ Bank offers higher interest and that too with more flexibility and more facilities?". Then do not be awed by his knowledge. You can satisfy yourself with the thought that maybe XYZ Bank has better methods for more complex calculations.

2)
If the wise guy says, "Don't you know GHI Finance Ltd. needs lesser documents for verification and quicker processing for loans?". You can satisfy yourself with the thought that maybe GHI Finance is using overloaded functions with lesser parameters though all the steps are followed.

3)
If your boss says, "Go and submit this bank guarantee.". You must go one step ahead and after submitting the bank guarantee to clerk, you contact the super user (bank manager) to ask whether he has approved receipt of bank guarantee.

4)
If the wise guy says, "What? You got only 78 rupees to an english pound? I managed to get 79 rupees." You can satisfy yourself with the thought that today the world is connected by Internet and maybe the wise guy managed to log on to a better site.

Beware of Bullish Bubble Bursting

The Bull (Stock Exchanges) charges and runs amock. It sees red everywhere. Be a move by RBI. Be a step by the government. It charges with speed and carries the sensex with it, making it rise.
Those who are not experienced with working with shares are well advised to invest in the mutual funds domain and keep the risks low. The fund manager of the mutual funds is committed to see that your interests are considered. It is his job you see. It is my hunch that a mutual fund's fund manager is more interested in financial challenges and less in making money for himself. So play safe. Buy mutual funds.
The Indian market is unique in its own way and the bubbles do not burst easily. And if it does it causes explosion. Not just a burst. But an explosion.
Harshad Mehta is a recent past. He siphoned off 4000 crores from the system. He not only bought shares but also created a shortage of funds in the market. The result shares were sold. The sensex were seriously affected and only some made money at the loss of general public.
Use your thinking and invest wisely. Do not day dream about high returns. Contribute to national growth. Invest in post office schemes. Make the nation grow. Believe that India is superior to individuals and India is not a coterie of successful individuals. Your money can do wonders for you. You deserve it. But your money is needed by country. Contribute for the welfare of nation and reap the benefit.