India has already entered a recession . It is how we define it , how we see it and when we accept it. It is a matter of choice and nothing else. We must accept the harsh reality about the state of Indian economy. Industrial production has slowed down, unemployment is increasing, rather retrenchment is happening at a hectic pace, consumer sentiment is negative, stock markets are crashing and moreover, the government has put the economy on the ventilator by dong repo rate cuts etc.
All this clearly indicates that India has entered a phase of recession. The earliet we accept and start working , the better prepared we will be to survive the same
email me @: mail@rajendragupta.org cell: 09323109456 / 9867300045
Tuesday, October 21, 2008
Sunday, October 19, 2008
US Economy and India - Main Culprits
A lot of people have been saying various things on decoupling of the Indian economy and USA economy. Here is what we need to understand
1. When India choose to be a part of the global economy and shared the fruits of the so called globalization, how it can avoid sharing the spoils of globalization ???
2.Indian problem: First let us understand why India's problems started. A good 20 years back India started opting for being a part of the global economy. Some so called 'Learned Men like Man Mohan Singh , Montek singh and P.Chidambaram' started talking of a double digit growth for the Indian economy. The immediate results ; few 'sensible' businessmen and a few 'learned' journalists started talking about the future companies like infrastructure , communications , IT , Retail blah...blah blah.. Investments started coming from abroad, Finally the economy was liberalised as we call it . But it was actually 'exposed to external risks' and not 'liberalised' as you might see ahead . All companies wanted to strike immediate gold.
Investments started and competition heated up. Suddenly India became a heated topic of discussion. While the initial euphoria created , growth zoomed some of the industries and companies . Indian economy started shining on the stock exchange. Outsourcing grew, salaries of millions for freshers from IT was not a joke anymore. Valuations of company was in multiple of projected earnings ( what a stupid thing !!). All was like a castle being built in the sky..........too highhhhhhh.
Suddenly, retail competition came and real estate became 'Unreal estate', Freshers in call centers were getting 15-20000 Rs. per month, Credit card money came in as a new income and with that also came in recovery agents , NPA on credit cards increased. Youngsters started earning easily and splurging the money or buying a dream house at the 'ripe' age of 25. All looked too good to believe initially. Many believed that India had come of age ......after the so called 60 years of freedom.
Today, as we look back......Following lessons to learn.
All that unrealistic valuations are a thing of the past as they had no fundamentals . The million dollar salaries paid to achieve those fictitious market shares ( based on the 'crap & bull shit' reports presented by the 'great' global consulting companies )are no where in sight & so are the jobs. Credit cards defaults are really hit a high and is a vicious cycle which caught a lot of youngsters.
I don't think that the retail business will also be helpful to most of the people in the middle & long run. Just imaging that salaries go up by 20 % every year, rentals go up by 5 -10 % every year, product range goes up every year, marketing cost goes up due to enhanced competition , margins go down due to increased competition and to attract the customer on the pretext ' every day low prices or cheapest on earth' , plus there is a cash burnout for the 'fantastic' growth in the number of new stores . In such a scenario , you cannot expect the retail story to last long. Already many have used a word ' rationalize' the retail strategy . But the fact is, that it is not 'Rationalize' but 'realise' the erroneous path that the retailers had taken.
Losses are humongous.
Adding to the pain, was the sudden jump in the fuel prices, America's slow growth and an overall negative sentiment .
India's pain originates from the optimism of the so called 'double digit growth' and a 'Robust economy' as quoted often by the triumvurate of Manmohan singh, P.Chidambaram and Montek' They are the real culprits for the mess that we are facing today.............Rest time will tell.
Also , equally responsible are the 'irresponsible' negative sentiments aired by everyone who is getting a chance to show his face on the TV Channels. The only statements that resonates my ears is, 'The worst is yet to come'. May God punish those 'idiots'. They don't give us the guidance to avoid the same or the possible opportunities that we might lose !
Wait for my next blog . Rajendra Pratap Gupta
1. When India choose to be a part of the global economy and shared the fruits of the so called globalization, how it can avoid sharing the spoils of globalization ???
2.Indian problem: First let us understand why India's problems started. A good 20 years back India started opting for being a part of the global economy. Some so called 'Learned Men like Man Mohan Singh , Montek singh and P.Chidambaram' started talking of a double digit growth for the Indian economy. The immediate results ; few 'sensible' businessmen and a few 'learned' journalists started talking about the future companies like infrastructure , communications , IT , Retail blah...blah blah.. Investments started coming from abroad, Finally the economy was liberalised as we call it . But it was actually 'exposed to external risks' and not 'liberalised' as you might see ahead . All companies wanted to strike immediate gold.
Investments started and competition heated up. Suddenly India became a heated topic of discussion. While the initial euphoria created , growth zoomed some of the industries and companies . Indian economy started shining on the stock exchange. Outsourcing grew, salaries of millions for freshers from IT was not a joke anymore. Valuations of company was in multiple of projected earnings ( what a stupid thing !!). All was like a castle being built in the sky..........too highhhhhhh.
Suddenly, retail competition came and real estate became 'Unreal estate', Freshers in call centers were getting 15-20000 Rs. per month, Credit card money came in as a new income and with that also came in recovery agents , NPA on credit cards increased. Youngsters started earning easily and splurging the money or buying a dream house at the 'ripe' age of 25. All looked too good to believe initially. Many believed that India had come of age ......after the so called 60 years of freedom.
Today, as we look back......Following lessons to learn.
All that unrealistic valuations are a thing of the past as they had no fundamentals . The million dollar salaries paid to achieve those fictitious market shares ( based on the 'crap & bull shit' reports presented by the 'great' global consulting companies )are no where in sight & so are the jobs. Credit cards defaults are really hit a high and is a vicious cycle which caught a lot of youngsters.
I don't think that the retail business will also be helpful to most of the people in the middle & long run. Just imaging that salaries go up by 20 % every year, rentals go up by 5 -10 % every year, product range goes up every year, marketing cost goes up due to enhanced competition , margins go down due to increased competition and to attract the customer on the pretext ' every day low prices or cheapest on earth' , plus there is a cash burnout for the 'fantastic' growth in the number of new stores . In such a scenario , you cannot expect the retail story to last long. Already many have used a word ' rationalize' the retail strategy . But the fact is, that it is not 'Rationalize' but 'realise' the erroneous path that the retailers had taken.
Losses are humongous.
Adding to the pain, was the sudden jump in the fuel prices, America's slow growth and an overall negative sentiment .
India's pain originates from the optimism of the so called 'double digit growth' and a 'Robust economy' as quoted often by the triumvurate of Manmohan singh, P.Chidambaram and Montek' They are the real culprits for the mess that we are facing today.............Rest time will tell.
Also , equally responsible are the 'irresponsible' negative sentiments aired by everyone who is getting a chance to show his face on the TV Channels. The only statements that resonates my ears is, 'The worst is yet to come'. May God punish those 'idiots'. They don't give us the guidance to avoid the same or the possible opportunities that we might lose !
Wait for my next blog . Rajendra Pratap Gupta
China to be the next super power
Dear Friends,
We all have been reading that America is collapsing and that the America is coming to an end in its supermacy. Well , time will tell what will happen to America and why. I believe that America's problems are due to excessive greed of Americans and thier culture to 'Consume at all costs'. Where the end justified the means so far. Americans always earn from Monday till Friday and splurge on Saturday and Sunday.Savings is not a part of American Culture. What is happening to America was destined to happen.
I must say that China has the key to America's collapse. What the west did to east , the same might get reversed. Chinese , it is believed to have lend more than a trillion dollars to American Banks . If it demands the same now . Imagine what can happen !!!
So we might see China becoming the next super power. Let's wait and watch. Rajendra Pratap Gupta
We all have been reading that America is collapsing and that the America is coming to an end in its supermacy. Well , time will tell what will happen to America and why. I believe that America's problems are due to excessive greed of Americans and thier culture to 'Consume at all costs'. Where the end justified the means so far. Americans always earn from Monday till Friday and splurge on Saturday and Sunday.Savings is not a part of American Culture. What is happening to America was destined to happen.
I must say that China has the key to America's collapse. What the west did to east , the same might get reversed. Chinese , it is believed to have lend more than a trillion dollars to American Banks . If it demands the same now . Imagine what can happen !!!
So we might see China becoming the next super power. Let's wait and watch. Rajendra Pratap Gupta
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