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Indian rupee slumps as S&P warns of junk status downgrade

We need to get the govt out of business faster .. atleast one thing we already have in place, which we didn't have earlier in 1991. That the Rupee floats freely.

Hence, if anyone withdraws dollars now, he pays dearly for it. Anyone who sticks to using imported products, pays dearly for it.

Anyone who exports, gets rewarded. Anyone who remits, gets rewarded.

Market reacts quickly: doesn't need political decision to reset a "pegged" rate of currency. Imagine, if we had a rupee pegged at the level of 45 to the USD, the effect would have been a sudden decline in foreign exchange reserves (because 45 could have been defended only by spending a lot of dollars from reserves).

Now, RBI has a choice: It can intervene if it wants. RBI has a stated mandate to reduce the volatility in the rupee rate; but doesn't take a view at the level.

Market supply and demand ensures that if some rich people only want imported luxury cars, they are willing to pay at the rate of 55; not at 45. Hard working NRIs get paid their due. Encourages people to earn dollars outside.

FDI has a price advantage at this point of time.. local prices re-adjust to the new currency rate overtime. So, NRIs are making a killing buying property in India.

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What are we still missing?

Do to Diesel, what we did to USDINR .... no point subsidizing luxury cars running on diesel. But before that we need to introduce US style competition to the oil markets.

Reliance is biggie and can beat the $hit out of public sector oil companies, but it's the only one (Essar is a much smaller player and cannot compete nationally).

In fact, it is entirely possible that the competitive price of diesel is only marginally higher than the current "subsidized" price ... once competition squeezed inefficiencices out of IOC, HPCL and BPCL.

Next we need to hit the irrationality in the fertilizer markets ... subsidies must go directly to the farmer, not to middlemen.

Even the wheat and rice subsidies should go directly to those who need it. Rice sells are Rupees 2 per kg !!! and Wheat at Rs 4 per kg !!!

It's better to pay the poor people at Rs 10 per kilo for every kg of rice they are entitled to .... and free markets should sell rice at Rs. 12 per kg.

In fact, stress forces action .. even Narasimha Rao govt was a minority govt... and no could have imagined the reforms it did, while maintaining a minority govt... supported by who else.. the LEFT parties. :tup:

We should just keep our heads down and keep working .... India is one-fifth the mankind.

The fate of mankind is drastically linked to that of India. Externalities can jump up and down, blow hot and cold .... but everyone one knows... the weight India carries in terms how the world evolves in the coming years.

That is why.. India does well or bad.. it is news.
 
no, what's worrying is the S&P warning is the horn of US hedge fund selling rampage, to short Indian currencies, and short Indian equity market, I said in another post GOI need take measures ASAP to counter the attack upcoming.

I am glad you observed that too, all these genius's are debating GOI policies, what policies??
what have changed policy wise in India between 2011 and 2012.

whose who bring you up shall bring you down, thats how "who" makes his money. remember indonasia
 
20, not 2.

Do you know prices of cement, sand, bricks, tiles, sanitary? Normal toilet with basic features will fetch 1.5 Lakh+ easily.
35 Lakhs is justified after 30 years in abuse. Dont you complain about stinky smell in govt. places?

no, check the below link, it says two toilet blocks that could accommodate 20 users.
Rs 35 lakh spending: 50-yr-old toilets needed repair, says Montek Singh Ahluwalia

I just completed my house construction in Chennai with 32 lakhs which has Two 2BHK apartments and a guest room with attached bath & utility. G Floor - Parking, 2BHK(Rental purpose), F-Floor,2BHK(I just moved in), S-Floor(Guest Room with attached bath) then Water Tank.

32 Lakhs - House Construction(cement,labour hours,sand,bricks,TMT rod,etc) and also includes Interior decor First Floor(POP Ceiling in all rooms, Wood Work in Two Bedrooms, Kitchen & Hall), all Electrical equipments and installation charges, Teak wood for all windows & Doors(Artwork Teak doors for Main Doors & Bed Rooms), Compound & Gate, etc. (5 bathrooms totally)

Do you seriously think 35 lakhs needed for Toilets upgradation? :hitwall:
And you know what, they even planned smart card system to use these Toilets & security cam also for theft production,Jeezzz...:angry: How can someone justify all this?

Have ever Govt paid attention to upgrade Public toilets like Railway Stations, Bus Stations, Govt banks, Govt schools where stinking is a trademark? First of all, is enough toilet provided in common public places? whether you know how they are maintaining the existing ones? :moil:
 
guys let me make one thing very clear. things are not how they look. s&p going ballistic over india in last 6 months doesnt mean everything is wrong with india. i think s&p has plotted with the govt of usa to give india some shocks. who earns the most if india opens its 500 bill doll retail market. the big american comanies would die to get into india. this is now getting very clear. indian growth dipped to 6.7% in 2009 but s&p was quiet, what happened now. it has all started since last november and when the retail issue came up.
 
What action do you count as socialist? They have been cutting on subsidies to the general public.

But India's at a stage where its dependence on FDI should be reduced and it should be surviving on its exports. Remember the net sum an investor takes away from their investment is larger than what they put in. Unless of course the investment is junk.



Is corruption any more or less than what it used to be during India's hay days? This could be the point, but I haven't heard of Manmohan Singh having super fat foreign bank accounts.


I don't know what that means. Explain.



Add computational loss to your current losses if you go that route. 2002 was 10 years ago, if NM becomes PM, you know that little tidbit would be mentioned everywhere NM goes.

As for actions counting as socialist - Food security bill which would cost govt. rs 3.5 lakh crores(70 billion dollars) came from National Advisory Council which is led by Sonia Gandhi.

As for the dependence on FDI - balance of payment this year and next need to be balanced to a certain extent by the FDI. One one side money comes in for India through remittances and exports primarily (I am not going into capital and current account details keeping the explanation simple) and money going out due to imports, primarily gold and oil. The balance of payment today is a deficit as we do more imports than exports. It will take atleast 3 years to boost the exports to even out the balance of payments. Till then, FDI is the additional resource to reduce the deficit to a certain extent. Ofcourse there is a risk here which happened with the Asian tigers in 1990s but that is a risk one need to take.

Corruption before was not to the tune of 30,000 crores(or 176,000 crores) - roughly from $6 billion - $36 by certain estimates in 2G scam. If you see the bofors scam, it was around 60 crores. But the primary impact - there are certain licenses cancelled where foreign investors are affected like Norway's Telenor and it affects the investors confidence. Manmohan himself is clean is my belief. And likewise many of the congress ministers. The corruption is due to Raja(DMK) and Sharad Pawar likes who are coalition partners.

As for Modi, he has the stain of the Gujarat riots on him. But courts are acquiting him in different allegations. And here are couple of pros for him.
1. He is investor friendly
2. If BJP comes to power, he is the best bet for secular and minorities - he is opposed to RSS and RSS opposes him at every given chance and he will keep the hindutva forces at bay. If any other BJP leader comes to power, RSS will be pulling strings - so who is the best bet here for minorities and securalists(including religious agnostic folks like me)? Ofcourse the stigma will be there on Modi but it is upto him to rise up from that. If he shows Hindutva instincts then it is sunset for him and he can't come to power again.
 
The lack of confidence in foreign investors is due to indecision of GoI on various issues.
The 2G spectrum scam is not to the tune of 6 to 36 billion, that is the amount of money govt could have made if spectrum had been auctioned. The real amount involved in scam will be much less.
 
The lack of confidence in foreign investors is due to indecision of GoI on various issues.
The 2G spectrum scam is not to the tune of 6 to 36 billion, that is the amount of money govt could have made if spectrum had been auctioned. The real amount involved in scam will be much less.

one would like to assume, the current downturn in Indian economy is a minor technical glitch, indian economies fundamentals are very strong.
 
how so mate??

Indian Economy has lots of Hidden Fundamentals, Hidden Strengths, Hidden poweress, Hidden Talents, Hidden Potential, & loads of Hidden economic cycles, these things combine makes India a potential "Greatest Incredible Super Hyper Power of the World" you guys are grossly under-estimating Indian hidden powers.


India was a Natural Greatest Super Hyper Power to begin with.
 
The lack of confidence in foreign investors is due to indecision of GoI on various issues.
The 2G spectrum scam is not to the tune of 6 to 36 billion, that is the amount of money govt could have made if spectrum had been auctioned. The real amount involved in scam will be much less.

Lack of confidence is due to various issues and one of the issues is the license cancellation for companies involved in the 2G bidding. Scam is defrauding someone - here in this case India is defrauded of between $6 and $36 billion.
 
India loses $2 billion every year to car crashes.
 
What a fantastic idea. Every time I go to UK casinos it is common to see Chinese enjoying gambling

Chinese are addicted to gambling like fish is addicted to water - i dont mind a extra partner if you like to jump in - you can own the restaurant inside the casino.
 

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