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Old 26th August 2013, 23:34   #91
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Originally Posted by tsk1979 View Post
I am no economist, and I seriously do not understand what they say about macro economics, mini-economics, mini skirts or pants or hot pants.
Its all mumbo Jumbo.

Absolutely brilliant TSK!!!

You have summed it up so brilliantly yet with relatable measures. You sure have a way with words, thoughts, their construction and expression. Keep them coming buddy.

If i were given a choice to make a post sticky this would be it.

Thank you.
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Old 27th August 2013, 09:31   #92
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Originally Posted by Kool_Kid View Post

Recent example of corruption : I saw a news about the Delhi Chief minister planning to construct a flyover of 1.5 KM for 250 Cr. I was curious to know if the PWD would be putting gold bricks to justify that kind of investment for 1.5 KM of flyaway.
Its not only about the investment of 250cr which is really high, but also about how long the flyover will stay in perfect conditions. Most of the roads that I see, have a smooth surface for couple of years, after which we can see number of potholes. This speaks a lot in terms of where the money goes.
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Old 27th August 2013, 11:35   #93
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Default Re: The Falling Indian Rupee

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No, there will be no uprising. Traditionally, the India DNA is hard coded to believe that the Raja can live in Opulance while the populace starves. Have you heard of popular revolt against the Raja before the Britishers came?
You hit the nail on the head.
In any case the aggression, assertiveness is killed right at the home when the child question or rebels (even for right/logical cause).
By the time these children are adults, they have no guts (and hence no glory)
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Do remember the post 1977 ( Energency) people threw out the Rani . Do not underestimate the people .
So you mean people actually overthrew Indira's government when she imposed emergency? I was not born then, but I do know that she was overthrown in the elections following the recall of emergency.
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Old 27th August 2013, 11:40   #94
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Default Re: The Falling Indian Rupee

You ai'nt seen anything yet. Now with the FSA done, the crash was just a preview of things to come!

I do not understand why is India so keen on Hara Kiri.
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Old 27th August 2013, 12:21   #95
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Default Re: The Falling Indian Rupee

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Originally Posted by sgiitk View Post
You ai'nt seen anything yet. Now with the FSA done, the crash was just a preview of things to come!

I do not understand why is India so keen on Hara Kiri.
I googled a lot, but what is FSA?
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Old 27th August 2013, 12:27   #96
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Default Re: The Falling Indian Rupee

Quote:
Originally Posted by Kool_Kid View Post
Recent example of corruption : I saw a news about the Delhi Chief minister planning to construct a flyover of 1.5 KM for 250 Cr. I was curious to know if the PWD would be putting gold bricks to justify that kind of investment for 1.5 KM of flyaway.
I am not justifying them but there are a multitude of hidden costs like relocation costs for all the facilities (all the sewers / wires piping under the current road), setup of aworkshop etc etc. I wish life was so simple.

Here is an example of a really costly infrastructure! METRO!
http://www.unep.org/transport/lowcar...MRC_Tiwari.pdf

The airport metro costed 243cr/km. DMRC is 156 cr/km (but alot of it is 10+ years old).

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Originally Posted by Kool_Kid View Post
1) We are importing 80 % of current consumption, Rest 20 % is being manufactured at less 30- 35 $ per barrel. Should that not help in brining down the average rate ( 80 + 20) . It really does help but the government will never discuss it .
Two things:
a. Where did you get cost of production in India at $35/barrel? Even the cost of exploration (forget actual development) for a few like ONGC is $26/barrel. http://ibnlive.in.com/news/ongcs-pro.../286235-7.html Some may be cheaper but you forget that the NELP mechanism allows market pricing for oil. If there was no market pricing, the production would have been lower.
b. ONGC gives back most of it in upstream subsidy sharing and their net realization is always around $50/barrel of oil . So there are no "windfall" gains for ONGC atleast.

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Originally Posted by Kool_Kid View Post
2) The agreements to procure the oil are for fixed cost at minimum 6 months contract. So even if today oil was 100 $ per barrel , we are still paying 70 $ which was the agreed at the time of contract . Contrary to the popular belief we do not haggle for the price every day. ( the Government will like us to belive that we are paying today rate to justify another fuel hike)
This picture of procurement is plain wrong.
a. Discount: No one agrees to a 30% discount as you seem to be implying. Why would they?
b. Tenure: The contracts are with a short time window and are essentially a set of single digit cargoes being delivered. Here are a few sample links:
http://www.bharatpetroleum.com/YourC...sid=P000036195 - 4 cargoes in a 15 day window, with 13 day advance notice.
http://profit.ndtv.com/news/corporat...sources-302374 - one cargo, with 15 day notice.
http://newindianexpress.com/business...icle225483.ece - again a couple of weeks' notice.

Please do share a single six month tender link that was concluded 30% below market price.
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Old 27th August 2013, 12:39   #97
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Default Re: The Falling Indian Rupee

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Originally Posted by sgiitk View Post
You ai'nt seen anything yet.
.
Now that is worrying. Because, not long back, you said this:

Quote:
Originally Posted by sgiitk View Post
Heard from a source that the rupee is headed for Rs.68-70 (slowly for now) which may happen a fortnight before the elections when RBI will stop propping it up.
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I googled a lot, but what is FSA?
I believe, it is the Food security Amendment.
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Old 27th August 2013, 13:22   #98
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Default Re: The Falling Indian Rupee

I think the Food Security Bill is really going to sink us further. I am no economist so can the expert's explain why is it that the government says that the fuel subsidy which currently is about 90,000 crores is unsustainable but the same government goes and signs the deal to give food subsidy of 1,26,000 crores?! The whole phased withdrawal of LPG subsidy and diesel price hike was because the fuel subsidy was burning through our economy. Besides, shouldn't the government & opposition have debated on how they are going to raise the money and the means to implement the FSA?

I, personally, feel the government should look at skill development for it's citizen's. Guaranteeing food at absurdly subsidised rates is only going to give rise to a generation of lazy people who will feel they are to be taken care of by the government. They are going to wear their poverty as a medal! Give people skill's so they can work, earn and pay for food, shelter & clothing by themselves.

Just because the FSA is the pet project of the 'high command' doesn't mean the government will take the country to bankruptcy to satisfy her!

Last edited by amit : 27th August 2013 at 13:28.
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Old 27th August 2013, 13:22   #99
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Default Re: The Falling Indian Rupee

I believe we are into a Long time of high inflation and no value of rupee against dollar. It breached 66 today . thanks to food security Act .

Now Economist need to show us that from where do they plan to bring in money for buying food for FSA .

Won't it be better if we invest this 132 lakh crore ( most conservative estimate I found ) to start Manufacturing factories and setup industries & employ these so called Poor people and let them earn a respectable livelihood .
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Old 27th August 2013, 13:28   #100
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Default Re: The Falling Indian Rupee

Give a man a fish and he will eat for a day, teach him how to fish and he will eat for a lifetime. This is something that the UPA just does not seem to understand. I wish this money could have been spent on upgrading agricultural infra rather than throwing it away in the hope that our corrupt politicians and babudom will actually allow much of it to trickle down to those who need it the most.

God knows when we will have a government that does whats best for the country rather than pandering for votes.

Anyway, on topic, the rupee could really breach the 70 mark at this speed. And we could see interest rates start to move up again, thereby killing economic growth for the next few quarters as well.
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Old 27th August 2013, 14:50   #101
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Default Re: The Falling Indian Rupee

Rise or fall in currency rates, as is the case with any product, is dependent on demand and supply. Higher demand translates to a higher price for the product and vice versa. In the case of the raising US$ value, it is a case where demand for $ is outstripping the demand for Rs., which is due to the following factors;

1. Comment by the US Fed reserve, that Quantitative easing which was in place is to be tapered off – which translates to, there will be less $ available -> Supply of $ is to be restricted thereby increasing its value.
2. Rising inflation in richer countries (UK, Japan, US etc..) means that the central banks will soon raise the base lending rate – meaning that lending will get costlier. So investors/traders cannot borrow in Japan/UK at a lower interest rate (say 2%) and invest that in countries like India and earn a higher interest rate (currently between 7-9%).
3. India runs a current account deficit (i.e. in $ terms, we import more than we export) and our reserves hold enough $ to only take care of our 6 month import needs. Meaning that we need more money in $’s than in Rs.
4. A huge chunk of our foreign borrowings are expiring in the next 1-2years and at the shape our economy is in now, investors think we might not be able to renew most of them or will be able to do so only after paying a higher rate of interest, thereby further burdening our economy. Thereby triggering a flight of capital i.e. people selling their investments in India and converting to their base currency i.e. selling Rs and buying US$.
5. When $ value increases, it is a boon for our exporters as they’ll be able to quote a lower price (in $ terms) but still enjoy the same profit margin thus making Indian products competitive. Thus, it may be a ploy to kick-start our manufacturing and thereby the economy.

These are my thoughts and any discussion on the above is welcome.
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Old 27th August 2013, 16:29   #102
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Default Re: The Falling Indian Rupee

Guys final nail in the coffin: http://www.firstpost.com/economy/foo...e-1062841.html

Once implemented this will for sure make rupee to fall beyond 70.
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Old 27th August 2013, 17:16   #103
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Default Re: The Falling Indian Rupee

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Originally Posted by acroback View Post
I understand economics angle of current crisis.

But I fail to understand this :- How come Realty market just keeps inflating and inflating even with economy in doldrums with a weak Rupee? Why are people fueling this balloon ?
Weak Rupee makes it easier for NRI's to buy property in India. I know the prices of premium appartments in Bangalore had gone up sharply when Dollar jumped from INR 50 to INR 55. Now with Rupee hitting 65 to the Dollar, property prices have just fallen by another 20%, if you look at from the NRI's point of view.
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Old 27th August 2013, 17:25   #104
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Default Re: The Falling Indian Rupee

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Originally Posted by Santoshbhat View Post
Weak Rupee makes it easier for NRI's to buy property in India. I know the prices of premium appartments in Bangalore had gone up sharply when Dollar jumped from INR 50 to INR 55. Now with Rupee hitting 65 to the Dollar, property prices have just fallen by another 20%, if you look at from the NRI's point of view.
I think its more to do with increasing black money in the system. Here in NCR most flats built or unbuilt are lying vacant, with everything booked 100% and high prices. Its the parallel economy which keeps this afloat.
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Old 27th August 2013, 17:47   #105
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Default Re: The Falling Indian Rupee

This thread has become quite depressing in the short time it has been alive.
Rupee is now at 66!!

And I recently read this article about Nokia declaring India as "least favorable", reason being tax disputes.
http://tech2.in.com/news/general/clo...ourable/912152

Hedge fund managers "shorting India" also tells that there is hardly any investor confidence left in the market.
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