Dark clouds over India… Not just the monsoon.

Dark Gloomy Clouds

Cloud of gloomy news about the Indian economy today…

Rough ride ahead for the economy

“The Indian economy has reached a stage where no macroeconomic indicator is in favour. It has large fiscal and current account deficits, a falling currency, slow growth and high inflation. To make matters worse, there is no visibility as to how we will get out of this situation. The present situation and future possibilities indicate a tough ride for the Indian economy ahead.”

S&P sees downgrade risk rising for India as debt costs climb

“Given mounting economic stress, the credit metrics of corporates are unlikely to show a significant improvement this fiscal year, analysts at India Ratings wrote in a July report. The current economic situation provides limited elbow room to RBI to cut interest rates and for the government of India to embark on large-scale policy stimulus.”

Young Indians struggling to find a suitable job

Close to 66% of Indians surveyed by the staffing firm said it was hard for workers aged 25 years and below, to find a suitable job and 79% believed these young workers accept a job below their education level. Over three-fourth (79%) of survey respondents said it was equally difficult for older workers to find a suitable job and 71% of them believed that such workers are often forced to take jobs below their education level.

 

What should we do?

Media, Ratings Agencies, Polls and opinions do not shape the future. Action does… I believe this is the time to act and invest in India:

– For farmers, the rain gods have delivered the best showers in 20 years.
– For entrepreneurs, bright young minds are eager to work with you on challenging problems.
– For investors, Indian Bank Interest Rates, Government & Corporate Bonds are at all-time high yields.

As the cliche goes, “it is darkest before the dawn”… How will we shape our future?

 

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Simple way to reduce India’s growing Trade Deficit – stop buying gold!!

As of April 2012, India’s Exports are at an all-time high of $300 Billion. But the problem is that Trade Deficit is also at an all-time high of $ 180 Billion. This is serious problem as it is threatening to undermine India’s growth.

One obvious reason for the Deficit is Rising Oil prices. From 2000 to 2012, there has been a phenomenal increase in oil prices – 1970s was the only other time when it grew more. In the current World Politics, India cannot do anything about it in the short term. In the medium to long term, India needs to invest aggressively in renewable energy sources like Solar, Wind and other alternative sources like Nuclear (if the risks can be managed carefully).

But can we do something simple in the short term to reduce this problem?

Even if you spend 10 minutes thinking about the problem and researching, one answer should be obvious. India’s completely unnecessary and frivolous gold purchases and resulting gold imports is one of the major reasons for the Trade Deficit. If we completely cut out Gold imports, the huge Trade Deficit can be brought down by 30%.

There will be many objections to such an idea:

Objection 1) Gold is the only real saving. See in difficult times, Gold value goes up.

Answer 1) But Gold’s “supposed” value is only because people think it is useful. It is practically useless. Let us spend the money on something useful – education, health, infrastructure or even basics like drainage. “Let us build Sewage Drains instead of Golden Chains“!!

 

Objection 2) But if everyone sells Gold, then value of Gold will go down causing people’s savings to go down.

Answer 2) Most people dont do anything useful with their gold savings anyway. Let them at least, invest the savings into something more useful. Even spending the money on something else and not saving is better than saving in gold. In anycase, there is enough gold in India already that even if people just continue to circulate the gold that is already in the country, there will be enough gold for a long time.

 

Objection 3) What if countries go back to the Gold standard? India can be the richest country in the World!

Answer 3) Ask any reasonable economist. The World economy is not going back to the Gold standard. No matter what happens – severe depression, recession due to natural calamity or huge war, there is no chance the world is going back to a Gold standard.

 

Can we make a pledge – to sell unnecessary gold and diamonds and not to buy any more useless jewelry. It is killing the country. It is not worth it.

Alternatives to buying gold:

– Buy a solar panel instead. It is equally shiny and will give you useful electricity during those power-cuts.

– Buy some native handicrafts – handloom, pots. It will help poor artisans and keep art alive.

– Buy better food – organic, locally grown. It will help farmers.

– Buy books, ebooks, computers, internet access. It will help you.

India’s “Deciding Decade”

Two weeks into the new ’10s decade, I happened to read this Indian Express article and its related articles on a printed special edition of the overseas version of Indian Express – about India’s Deciding Decade.

The number of people whose lives will be impacted – for better or for worse – is truly immense.

This got me thinking a lot about my own work and contribution towards the current Deciding Decade (2010 to 2020) for India as well as the broad developing world.

I plan on spending some of my time & energy on two key areas relating to this in the coming decade:
          – Improving School, University and Vocational education using technology
          – Encouraging educated youth involvement in Public service

More on specific ideas later…

The Indian Paradox: Death amidst Growth… Just like Unity in Diversity

Two news snippets from “The Hindu” on Jan 31, 2008… The headlines and abstract speak for themselves. The articles are here and here.
Two News snippets on Jan 31, 2008

Indian Ocean Concert – A Fundraiser for AID (Association for India’s Development)

I’m a volunteer for AID’s Bay Area chapter. We are organizing a fundraiser – check out more information about the band “Indian Ocean” here – http://concerts.aidindia.org/.