In recent news the India currency, the Rupee has fallen in value for the second day in a row as investors pull over $300 million from the country this month. This is due to falling trust in the growth of the global market, especially after the U.S. Federal Reserve lowered its expectations for global growth.
The Rupee
The Rupee is the Indian currency and the "cents" are called paises. At the end of the month all cent denominations below 50 paises will cease to be legal tender. This is similar to the argument you may have heard a while ago about getting rid of pennies since they are basically worthless. I don't think this is the same as the south american nation (i can't remember at the moment) that changed its denominations every few years to mask its rampant inflation, but it is interesting nonetheless. The exchange rate for India is on the order or 45 rupees to 1 dollar, so you can imagine that 1 paise is probably just about worthless like our penny.
India was one of the first to use coins and the Rupee was based on the silver standard since the 1400s when it was introduced. This had a negative affect in the nineteenth century when the worlds larger nations were on the Gold standard and new silver deposits reduced its value. Several attempts were made to change this but only recently was it taken away from any mineral standard.
Wikipedia
Varma, Anil. "India Rupee drops on concern global economic growth will falter. <http://www.bloomberg.com/news/2011-06-23/india-rupee-drops-on-concern-global-economic-growth-will-falter.html>
Thursday, June 23, 2011
Sunday, June 19, 2011
India
In recent news, the Indian government has tightened the economy again to try and control inflation that has hit more than 9% recently. This week was the 10th interest rate hike of the past 16 months. Businesses are concerned the policies could hurt growth and new investments, and think that some reforms such as in infrastructure, banking, and the fuel sector are the only way to fix the problems. It seems that India's economy has been losing a little bit of steam in the last year.
This article touches on some of the problems the Indian economy faces. In addition to infrastructure problems discussed last week, it is also constrained by corruption, red tape, and many controls. Also it faces $230 billion in debt, much less than the U.S. but still significant to warrant aid and borrowing. According to the economist, it is obvious that India's growth comes from private companies and a strong workforce, not from government direction like in China. It is a certain type of democracy that has enabled the freedom for growth but has done little to support it. Often the burden of providing clean water, backup electricity and transportation for workers falls on the individual corporations. Because of the governmental problems, China will continue to outstrip India in the global market, but India will be strong through knowledge based products (such as software and technology) especially as those things grow in importance.
"India's surprising economic miracle." The Economist. Sep. 30th, 2010.
Panchal, Salil. "Busines rounds on Indian Government over economy." <http://www.google.com/hostednews/afp/article/ALeqM5j3xPWBIaKsZKT8LtIxO0N1LE1Jgg?docId=CNG.69ead26989f7f2ebf65544104f3b136c.6a1>
This article touches on some of the problems the Indian economy faces. In addition to infrastructure problems discussed last week, it is also constrained by corruption, red tape, and many controls. Also it faces $230 billion in debt, much less than the U.S. but still significant to warrant aid and borrowing. According to the economist, it is obvious that India's growth comes from private companies and a strong workforce, not from government direction like in China. It is a certain type of democracy that has enabled the freedom for growth but has done little to support it. Often the burden of providing clean water, backup electricity and transportation for workers falls on the individual corporations. Because of the governmental problems, China will continue to outstrip India in the global market, but India will be strong through knowledge based products (such as software and technology) especially as those things grow in importance.
"India's surprising economic miracle." The Economist. Sep. 30th, 2010.
Panchal, Salil. "Busines rounds on Indian Government over economy." <http://www.google.com/hostednews/afp/article/ALeqM5j3xPWBIaKsZKT8LtIxO0N1LE1Jgg?docId=CNG.69ead26989f7f2ebf65544104f3b136c.6a1>
Saturday, June 11, 2011
Post 3
According to "The Hindu" the U.S. and India are set to have economic related talks within the next month. Started by Obama this will be the second Economic and Partnership meeting since 2009. The two big topics expected to be addressed are defense and visas. The U.S. is concerned about India's interest in fighter jet contracts with other countries even though India has already bought numerous other defense products from America.
The second topic the nations hope to iron out is regarding visas. Indians make up about 44% of inter company transfer visas, and over 6.5 million Indians traveled to the U.S. last year, but there are accusations that Indian companies are misusing the visas.
I think this is an interesting article as it indicates the significant level of India's economy and its impact on U.S. concerns. The U.S. is worried about India's defense spending and contracts, hoping to get a slice of the pie. It seems that India is worried about getting too deeply involved with U.S. military contracts. Further more it is worried about the impacts of so many businesses and there visa practices. Indian travel to America has also been growing, increasing 8% since last year.
Lakshman, Narayan. "Focus on economics in upcoming India-U.S. meetings" The Hindu. (online version of India's National Newspaper). 6/12/2011
The second topic the nations hope to iron out is regarding visas. Indians make up about 44% of inter company transfer visas, and over 6.5 million Indians traveled to the U.S. last year, but there are accusations that Indian companies are misusing the visas.
I think this is an interesting article as it indicates the significant level of India's economy and its impact on U.S. concerns. The U.S. is worried about India's defense spending and contracts, hoping to get a slice of the pie. It seems that India is worried about getting too deeply involved with U.S. military contracts. Further more it is worried about the impacts of so many businesses and there visa practices. Indian travel to America has also been growing, increasing 8% since last year.
Lakshman, Narayan. "Focus on economics in upcoming India-U.S. meetings" The Hindu. (online version of India's National Newspaper). 6/12/2011
Friday, June 3, 2011
Blog week 2
In recent news, it has been estimated that India will grow to be the world's 3rd largest economy by 2030. It is now at $1.4 trillion but estimating from its trajectory, businessman Mukesh Ambani says it will be $30 trillion in just 20 years.
Short history lesson. India was controlled by the British Empire until 1947, when Ghandi helped to peacefully gain its independence. But not long after internal conflict resulted in the splitting off of Pakistan. The two nations have been at war since, and it has led to both nations experimenting with nuclear weapons. Despite overpopulation, extensive poverty and corruption, India's economy and world status continue to grow. It is currently on the UN security council.
India's economy has been steadily increasing since it shifted to a more open market in the 1990's, with privatization of many industries and the reduction of regulation. Most of its workforce is in agriculture, but most of its money comes from its service sector. Since India has a large english speaking population, it has been able to export a lot of IT services and such.
Recently India has been working to reduce its debt and has successfully prevented inflation and other issues from the global economic crisis, and in fact its economy was still growing throughout the crisis. But it has some long term problems such as education, urban migration and poor infrastructure that it will have to combat in the long term.
Sources:
World fact book.
http://economictimes.indiatimes.com/news/economy/indicators/india-to-become-30-trillion-economy-by-2030-mukesh-ambani/articleshow/8710774.cms
Short history lesson. India was controlled by the British Empire until 1947, when Ghandi helped to peacefully gain its independence. But not long after internal conflict resulted in the splitting off of Pakistan. The two nations have been at war since, and it has led to both nations experimenting with nuclear weapons. Despite overpopulation, extensive poverty and corruption, India's economy and world status continue to grow. It is currently on the UN security council.
India's economy has been steadily increasing since it shifted to a more open market in the 1990's, with privatization of many industries and the reduction of regulation. Most of its workforce is in agriculture, but most of its money comes from its service sector. Since India has a large english speaking population, it has been able to export a lot of IT services and such.
Recently India has been working to reduce its debt and has successfully prevented inflation and other issues from the global economic crisis, and in fact its economy was still growing throughout the crisis. But it has some long term problems such as education, urban migration and poor infrastructure that it will have to combat in the long term.
Sources:
World fact book.
http://economictimes.indiatimes.com/news/economy/indicators/india-to-become-30-trillion-economy-by-2030-mukesh-ambani/articleshow/8710774.cms
Subscribe to:
Posts (Atom)