10 mln Indians to lose jobs over economic meltdown

[roadrunner]

^^ we shall see.

I think China is going to come out of it a bit better off.

 

[ejaz007]

There is going to be effect on Indian economy due to the global slow down. How much effect only time shall tell. Unfortunately job loss do take place once economy slows down or goes in recession.

The actual number of job losses shall depend on what kind of bail out package or incentive does government offer to the businesses and how soon it comes.

The bigger the economy the higher the job losses are.

We should not be jubiliating on the job losses occurring across the border or in some other country simply because with every job loss an entire family has to suffer.

 

[keeninterest]

India has 260 billion reserves that is 25% of its economy.
By any standards it is in good position to handle meltdown.

thanks mate you pointed it out. people across tend to believe the forex reserves have reduced big time in india but that has not happened at all, as a matter of fact it is just a reflection of depreciation of rupee to a dollar, and other market dynamics. this year when the rupee traded at 40 to a dollar the forex reserves were at a healthy 315b usd but now when it is around 48.5-49 to a dollar it is at 250(+)b usd. now that is around rs9 depreciation or some 20(+)% depreciation which should more or less come to around the figure we have at the moment as our forex reserves, so clealy there has been no “flight of capital” as some would like to believe. the other reason that we see a fall in forex reserve is because rbi has had to sell dollars to quite an extent to increase the flow as the demand had shot up in the open market, which at the end of the day helped stop the fall of rupee at times when there was severe pressure on rupee when all those major banks were going bust and still we were able to maintain it at the above mentioned levels is commendable, this shows that the foreign currency inflow was always at a healthy rate than what part of the media wanted the world to believe about the economic state of india. as i understand the GoI wanted the rupee to be at 46 to a dollar as that would benefit the exporter community and so initially they let the slide of rupee to happen but if people recall the slide from 45 to 48 happened between 2 odd trading sessions, may be more and there was always the imminent pressure on the rupee to fall further below 50 to around 52 but that was not allowed to happen when rbi went on an overdrive to arrest the slide and they did it in some 2-3 trading sessions and it took some 7-10 days to stabilise at the current levels.




a glimpse on the chinese gdp, since china is being discussed. calculations are for 2007 as i have the all the required figures only for 2007 and not 2008, so kindly bear.

GDP = consumption + gross investment + government spending + (exports − imports)
=1,083b+1,505b+516+(1220b-904)=3,420b usd

consumption= 1,083b (derived figure, and this will be lower as i do not have their services exports figures for the concerned fiscal, though i recall some one pointing out the figure as 50b odd but i am not sure so not included)
investment= 44% of gdp
government spending= 516b
exports= 1.22t
imports= 904b

now imagine the the exports nullify to 0, that would mean the chinese economy would fall by 36% to just 2,200b usd, that is the extent they are influenced by external pressures, though they get saved by the massive forex reserves they sit on and a trade balance which is in their favor, which in it self takes care of their foreign debt which gives them the confidence to increase the spending big time which helps the banks run better which further helps run the economy better than the rest/most of the world, this is the primary reason why they will be the first ones to be emerging out of the slow down, though even at current growth rate levels they are an envy of most, but they did get a rude shock of 6.8% in the last quarter of last fiscal, is that a sign of times to come, lets wait and watch!

PS: someone on the thread on forex reserves said, there is no value of paper money, i suggest that person to pay a visit to prc and if that person feels like then also pay a visit to india, some good lessons will be learnt on the value of paper money.

 

[Vinod2070]

^^ we shall see.

I think China is going to come out of it a bit better off.

I think "I hope or I pray" would be a better word but I know you have serious issues differentiating the two.

You like to believe what you hope or what you would like, not what the facts scream at the face.

Again, manufacturing toys or shoes is something that can be done anywhere. A lot of manufacturing is already moving out from China to other destinations like Vietnam, something you may not be aware.

I am sure even the Zulus, Tutsis and Hutus of Africa can manufacture these goods once the factories are set up. Heck in the next 100 years even Afghans may be able to do that once they reach the levels of the Zulus or Hutus.

But I doubt they will start becoming IT pros any time soon!

 

[wangrong]

I think "I hope or I pray" would be a better word but I know you have serious issues differentiating the two.

You like to believe what you hope or what you would like, not what the facts scream at the face.

Again, manufacturing toys or shoes is something that can be done anywhere. A lot of manufacturing is already moving out from China to other destinations like Vietnam, something you may not be aware.

I am sure even the Zulus, Tutsis and Hutus of Africa can manufacture these goods once the factories are set up. Heck in the next 100 years even Afghans may be able to do that once they reach the levels of the Zulus or Hutus.

But I doubt they will start becoming IT pros any time soon!

1、Product Cost=Labor cost？

Logistics cost？

Blackout？

Industry Link？

。。。。

Any one of these factors will determine success or failure

2、India ruble devaluation

can you tell me why?

 

[Vinod2070]

I am sorry I did not understand you. Please write in clear English and in normal font.

 

[roadrunner]

^He's right. The Chinese have a much better savings characteristic than India. The meltdown isn't going to affect them as much. At 50% to India's 20%, India is in a much worse position than China versus the global meltdown. It's if you like an automatic stimulus package.

 

[Flintlock]

I think this criris will force Indian companies to develop domestic markets more and depend less on US and Europe for business.

 

[Vinod2070]

At 50% to India's 20%, India is in a much worse position than China versus the global meltdown.

India's savings rate is now close to 35 % while China's is 50% as you rightly pointed out.

India's savings rate to drop to 34%


India depends less on global markets as her domestic consumption is bigger in ratio compared to China.

China may still do better than India during these tough times but not because of the reasons that you are listing.

 

[keeninterest]

Software and service exports to grow 16-17% in 2009: Nasscom- LATEST NEWS-The Economic Times - Economic Times

4 Feb 2009, 1921 hrs IST, ET Bureau

NEW DELHI: IT-BPO industry association Nasscom on Wednesday said software and service exports will grow 16-17% in 2008-09 to $47 billion, lower than earlier estimates of $50 billion as the global economic slowdown dampened demand.

the total IT soft-ware and services revenues, including domestic revenues, are poised to grow 15.3% in FY09 to $60 billion. The total IT- BPO industry, in-cluding hardware, will be worth $71.7 billion in FY09.

Nasscom said the industry is likely to achieve its export target of $60 billion by 2010-11 as against its earlier projection that this target would be met by FY10.

Nasscom said exports would have grown about 19%, had there not been wild currency fluctuations. During the year so far, the rupee has depreciated 22% against the dollar, while the pound and euro, too, have lost value against the dollar. In rupee terms, the growth rate for total software and services revenues would be about 27% and for exports 32%.

At the end of the year 2008-09, the IT-BPO industry would employ about 2.3 million professionals directly. Mr Natarajan said the IT-BPO industry would require at least one lakh more people in 2009-10.

In the backdrop of a new administration in the US and anti-outsourcing sentiments getting stronger in the world's largest econ-omy, Nasscom president Som Mittal is expected to visit the country shortly. Mr Mittal and his team would meet policymakers, thinktanks, customers of Indian IT companies, media and analysts during the visit.

 

[keeninterest]

as a matter of fact, in rupees term if we are able to do rs8,57,500-8,82,000crs(175-180b usd) worth of exports, then that would mean a growth of something like 32-36%. i know appreciation of rupee hardly ever supports the exported products costing and pricing but it was still a point worth to ponder over.

 

[roadrunner]

India's savings rate is now close to 35 % while China's is 50% as you rightly pointed out.

India's savings rate to drop to 34%


India depends less on global markets as her domestic consumption is bigger in ratio compared to China.

China may still do better than India during these tough times but not because of the reasons that you are listing.

I listed savings and expendable exports. Let's not resort to misquoting me!

I think for those reasons alone China is better able to withstand the global effect.

A lot of the exports like jewelry and textiles just won't be wanted.

 

[Vinod2070]

I listed savings and expendable exports. Let's not resort to misquoting me!

I think for those reasons alone China is better able to withstand the global effect.

A lot of the exports like jewelry and textiles just won't be wanted.

Well, not all of them are expendable it seems. The exports may still grow to $170 billion. Not insignificant at all!

Let's see whose trade gets hit harder. Time will tell.

From your post I could only understand that you thought India's savings rate was 20%. What did you mean by the following line?

At 50% to India's 20%, India is in a much worse position than China versus the global meltdown.

 

[Energon]

^^ we shall see.

I think China is going to come out of it a bit better off.

They most probably will, but not because their export oriented products are "essential."

China will be better off because:
1. The overall size of their economy is much larger as are their coffers.
2. Their reforms and infrastructure development has been more sound, of greater scale and coming along for a much longer duration that that of India's.

And this leaves them with more options particularly in reorienting their economy inward at a faster rate.

 

[jeypore]

They most probably will, but not because their export oriented products are "essential."

China will be better off because:
1. The overall size of their economy is much larger as are their coffers.
2. Their reforms and infrastructure development has been more sound, of greater scale and coming along for a much longer duration that that of India's.

And this leaves them with more options particularly in reorienting their economy inward at a faster rate.

I disagree on that statement. If you compare disposable income on Chines, roughly the population equates to 200 million. It will be tougher for them to build internal economy, as you have suggested.