Knowledge is the fragrance of life




Currently Browsing: Economics

Indian Economic doldrums continues

Though the Prime Minister claims a boom in Infrastructure sector, the Indian economy has started fumbling in 2013 and hardly shows any signal of drastic change in the coming year. GDP growth is languishing even below 5 per cent, instead of projected 10per cent. On the contrary, the inflation rate has shot up much beyond the projected 5 per cent and is now raising its head above 10 per cent. Such a reverse scenario clearly depicts the current Indian economic chaos. It is indeed true that the bureaucratic inertia has always hindered the economic growth as most of the projects can never accelerate their momentum due to prolonged government processes for various clearances. If the bureaucratic blockages extend the initiation of any project, the return on investment is slowed down. India is a country that often witnesses poor coordination between different departments. Perhaps the efforts like one-window counter may resolve such unnecessary delays. Many companies have been hesitant in the wake of a couple of vigilance inquiries at the corporate level that the country has witnessed last year. Whether it is the Governmental probe or the legal probe, the corporate have been slightly shaken. Besides the vigilance inquiries, some projects are tied up for the environmental clearance, which could have been expedited. Many industries have been battered by the paralyzed decision making ability of the Government in various fronts. The ongoing battle regarding Vodafone or Nokia is bound to raise worries. While serious reforms have become inevitable, some quick decisive actions at the administrative level of the government have also become unavoidable to set Indian economy back on tracks. When the inflation rate has gone much beyond the prediction, the announcement of some easy financial packages can hardly remain yielding in the long term. Rather, we should congratulate the RBI for stabilizing the repo rate for the time being, at the least. Who else than Manmohan Singh understands better that India’s slow paced economy has been triggered off by the increase in IOCR? The fall in investment is certainly worrisome, but the ICOR has to be focused upon even more. Sarcastically, the rupee has fallen by .8 per cent this year, which has certainly been alarming to Indian economy. The foreign investors will become cautious while investing in India. The country has been marred by abysmally low investment rate. HSBC continues to show a decline rate in its service industry in India. The news like Toyota’s launch of mini SUV based on Etios platform in India or RIL to...

Indian Economy is paying for Government incompetence

Even after withstanding the pressure of global economic recession, Indian economy has suddenly faced a downturn, with the GDP coming down to nearly 4.8%. When the top security experts of India and US are meeting to find out ways to combat global terrorism, such downward trend of GDP may create a churning. The gross domestic product or GDP growth rate is an inevitable indicator of growth of the entire country and its citizens, as per laws of economics. We must not forget that we had been habituated in the growth rate in the vicinity of 8% for a couple of years before it had been curbed to 6.5% in 2012. Let us attempt to compare some figures, recorded in CIA World Fact Book (based on the year 2012) at a time, when everyone has been emphasizing on developing global linkages and bilateral cooperation to challenge evolving security threats of metro cities, drug trafficking and various intercontinental crimes. Our neighboring country Afghanistan has registered a GDP growth of 10.2. Even the figure 12.3% growth rate is shown for Mongolia. One may be amazed in learning that Bhutan has ensured 9.7%. The war-ridden Iraq has been able to manage an 8.4% GDP growth. We may applaud as we are much ahead of Sri Lanka (6.4%) and Bangladesh (6.1%). Our niggling neighbor, the communist country China has been able to record a growth of 7.8%. The above quoted figures can clearly indicate the comparative position of India with others. If we try to delve into the problem, it clearly pinpoints at the pitfalls of the Central Government, which failed to serve as an efficient deterrent against such decay, though this Government is headed perhaps by the most proficient economist of the country. We do apprehend that it is very difficult for a country like India to challenge such macroeconomic challenges, which have encountered several tarnished scams and corruptions of the highest stature in the last couple of years. It is also true that a segment of the allies, who are the major composition in the Government, did not allow the Government to take drastic decisions, which were necessary. Whether it is the pension bill or the insurance bill, the Congress had to depend upon the allies and some of them had played the role of opposition, in disguise. Instead of showing guts towards bold decisions, Congress has been awfully engaged in mollifying its allies. Perhaps it is the decision taking inability exhibited by the Central Government that has inflicted maximum damage to...

When the market becomes costlier

To say that the market should be the last avenue where the Government should put its paws may seem to be an understatement. The Government of the center and various states has been brazenly interfering in the price tags of varied products in the market just to maintain their vote faces. The results become disastrous in most of the cases, though the ruling parties become hardly ready to sacrifice their ridiculous pro-poor faces to create a churning in the polls. The basic economic rules conform that the pricing of a product depends upon a lot of factors, where the demand supply graph plays a pivotal role. As an example, we frequently watch the special discounts on refrigerators and air-conditioning systems in the winter season. Even a learner can understand that such products require a boost to be sold in the winter and that’s why the special offers are announced. We must understand that no company or brand is ready even to withstand the irreparable market losses due to unnecessary high selling price in this competitive era. When a new product is launched, the marketers spend several brain storming sessions to decide on their prices and commissions as they know even better that their decision is going to make or decimate the fortunes of the new product in the market. Why should the marketers become reluctant in devising the right price label for the worth of their products? Apart from political ball games, the price of a product depends upon the need and want of the customers. One student may desire a separate laptop for his studies, but it can not fall under the top priorities of his parents, if they have already got one at home. As every individual needs to buy soaps every month, the splurge of soap brands are inevitable, whereas the popular brands of laptops are comparatively lesser in numbers. We should not forget that the sponsors of the premium slots in any television channel have to pay significantly higher prices as the chances of visibility become higher. It is revealed that some of the serials in some of the TV channels lack sponsors, whereas the cricket matches in India enjoy the splurge due its overwhelming popularity. Unfortunately, Indian society is yet to gear up to accept entrepreneurship as the mode to create change. Had the small entrepreneurs grown up in the Indian market, even the consumers would be ready to greet them cordially. Most of the citizens could be strongly associated with some products or...

Lessons from the Nokia debacle

Why such a drastic downfall of Nokia even after its consistent stellar show in the market? Perhaps the answer in its blatant form is lack of dynamism, creativity and innovation. Nokia had cemented their position in the market, but the tendency to ignore the mammoth competition in the market has also fueled their inevitable process of decay. There are plenty of such examples that identify the ruthless ambition of the individuals or companies or groups for their transformation from the leader into a straggler despite their innate potential. The history has got a classical example of the dwindling Motor City, Detroit. The elaboration is redundant. Nokia had been the prime market leader in the domain of cellular phone. Their prompt reaction to switch over to the sleek models awarded them a new lease of life, while some others had been found to totter in that contemporary time frame. The name of Siemens may only be recalled faintly now. Even Alkatel is practically non-existent in today’s market. Nokia’s mind boggling features and exceptional customer services had fostered their enormous growth. They had captured even more than 35% market share in mobile phone regime. Perhaps they had taken the market for granted, which had paved the way for Samsung or LG or ZTE or Google phones including the classified ranges of products of Apple. Even the newly promising company Micromax has shown talents to advance well. Perhaps the confidence of a cemented market share had eluded Nokia from an accurate survey of its competition at hand. It is often said that even if there is no competitor the brand has to develop a culture to compete with its inner self. Nokia perhaps forgot such fundamental marketing theories and they have been facing the consequences today, which have become full of sarcasm. They have witnessed their leading brand to almost hit a rock bottom situation; as a result, they are to hold hands of Microsoft as their survival tonic. It is really an exhibition of impudence of their think tank that they could not drive the brand forward. Even the employees and managers could not demonstrate proper discipline and commitment, which always play pivotal roles in deciding the fate of any company irrespective of its size and scale of operations. Certain Questions become highly pertinent. Why should the people go for Nokia phones, when most of them consciously avoid the most popular Android platform? Does the phone provide adequate security through software locking? Are their prices competitive? Why did they take so...

Non-conducive business environment in India

Though Sensex in India had taken a dip after maintaining a steady growth for quite some time, it could hardly draw the attention of the business magnets. Sensex has again climbed up out of the blue and that hardly reflects the healthy or stable economic condition of the country. The boost of Sensex was triggered off by a sudden investment by foreign capital venture capitalists. Similarly, the news of the country’s foreign exchange reserves exhibiting a well deserved growth curve has failed to attract the venture capitalists. This is indeed true that the foreign exchange reserves which had been showing a continuously downward trend has dramatically changed aided by RBI’s several pragmatic steps to boost inflows to come out of such an economic turmoil. On the contrary the market speculates the realty prices to fall by 10 to 15 percent in near future due to various factors, out of which the diminishing capacities of the buyers are also been taken into account. The above news flashes have certainly depicted an unstable economic condition that is difficult to withstand by the business investors. Such a turbulent condition, fueled by the acts of some Government agencies, may continue up to the next general election, which may result in a change in the Government at the centre in the next year. The lack of responses in Twitter and Facebook in favor of Congress has been endorsed and there have been enough indications that Narendra Modi or any other leader may occupy the most precious chair of the Indian Government by dislodging Manmohan Singh in 2014. Changes in business policies have become vibrantly evident, if BJP comes into power. According to the survey of the World Bank, the angel investors never like to start a business in Mumbai, the business capital of India or Bangalore, the silicon valley of India. Any entrepreneur has to overcome a lot of legal hurdles and inevitable bureaucratic hassles to launch his commercial or industrial firm, which would cost him too dear. Why should that prompt a businessman to invest among such political doldrums and economic turbulence? India has been marred by several unseemly incidents that have vividly exposed an accord of discomfort of various business houses in the last couple of years. Whether it is the hyperactive CBI against Kumar Mangalam Birla or SEBI’s red eyes on Sahara or RIL, the businessmen of the country, the large conglomerates in particular, have been highly displeased for obvious reasons. It is also hard that the rivalry between Modi and...

« Previous Entries

Knowledge House - Knowledge Mart | Partner of Skill Hut