Perspectives on key issues- I

I am back again after a long time.Its the Diwali break at school. Happy Diwali to all my readers.

Tried to figure out answers to a few key issues being raised in Indian business media lately. There are no easy answers considering the scale and complexity of the problems. However, the idea was to crystallize thoughts in my mind. Comments are MOST welcome.

1. Impact of rising rupee on IT/ITeS companies:

Excessive speculative FII inflows as developed economies still not out of recession fully and emerging markets fetch attractive ROI.Could spell trouble for small and medium software companies in India. According to analysts, every 1% rise in the rupee could have 30-40 basis points impact on operating margins.With Coal India IPO on the anvil, we might witness further appreciation in the rupee.RBI has to intervene by buying out the dollars through the public sector banks to rein in the rupee to maintain India’s export competitiveness.Companies need to diversify their clientele across geographies and hedge their forex reserves better.


2. Was it right to award the Nobel Peace Prize to Liu Xiaobo?

Xiaobo was awarded this year’s Nobel Peace Prize for his long and non-violent struggle for fundamental human rights in the world’s second largest economy.Many Chinese dissidents within the establishment and the intelligentsia are working for incremental political reform, greater economic and social equality and a negotiated compromise between the conflicting interests in the complex and stratified Chinese society.Chinese govt. perceives this award as another act of the West to derail its progress by promoting internal strife and has made its displeasure public.It was right. His selection can be justified on the premise that more people around the world and inside China will know what the Chinese dissidents like him stand for, and for a time will remember them and their cause a little better.


3. Commonwealth Games- Lessons for India

Major loopholes were improper planning, huge cost overruns and ramapant corruption besides problems in ticket vending and hygiene in the CWG Village.International sports events like the CWG have become branding events for emerging economic superpowers.Lessons need to be learnt in plugging the loopholes if India wants to host the Olympics in the near future.Proper utilisation of the sports infrastructure created for the CWG to enhance the standards of sports in India is crucial. More players should be able to access the facilities created to improve their game.The Games have prevented any major embarassment or disaster since their opening. All the nations participated. India’s best CWG performance till date. But a lot of things remain to be learnt.

Vital Stats! (Vol-I)

Compiled a few vital statistics from various sources to aid my memory.Happy reading and please add to the figures with your comments.

Indian Economy (Eco.Survey FY10 and e-newspapers)

1. GDP growth rate in India in FY10: 7.4%
2. GDP growth rate projected for FY11: >8.5%
3. Fiscal deficit of FY10 : 6.9% of GDP (budget estimate, according to new series)
4. Global rank in terms of nominal GDP ($1.25 trillion,FY09): 11th
5. Global rank in terms of PPP: 4th
6. FDI inflow in FY10 : $ 49.30 billion (RBI)

Business India

7. Interest rate on Employees Provident Fund (EPF) for FY11 : 9.5% (+1%)
8. Number of EPF subscribers : almost 5 crores
9. Interest rate on Senior Citizens’ Savings Scheme : 9%
10. Bank deposits offer up to 7.5%
11. Total size of the workforce in India: 38 crore
12. Organized workers in India constitute around 15% of the total workforce : 5.7 crores

Business Line

13. Wireless subscriber base in India as of August 2010 : 67.06 crore
14. Wireless teledensity stands as of August 2010: 56.61%
15. Bharti Airtel market share as of August 2010 : over 20%
16. Total broadband subscriber base as of August 2010: over 1 crore

Income Tax rates FY 11:

17. Rs. 160,001/- to Rs. 500,000/- 10%
18. Rs. 500,001/- to Rs. 800,000/- 20%
19. Above Rs. 8 Lacs 30%