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.

Indian Education scene – 3 big changes in 2010

I had blogged earlier about the importance of the current “Deciding Decade” for India’s future. I’ve been looking into small ways that I can personally help in improving Education in India – been prototyping online virtual learning site with Moodle, etc.

Recently there have been 3 big education policy changes that could have far-reaching (+ve or -ve) impact going forward:
       1) Right to Education (RTE)
                  – I was initially sceptical that this is one more “right” that might not get fulfilled. But on closer look some of the provisions might have a huge impact – like 25% reservation of seats in ALL private schools, definition of standards for 1:30 teacher:student ratios and the massive sums allocated for states to implement RTE.
       2) Foreign Universities Bill
                  – This is another controversial bill that allows universities from around the world to setup campuses in India. Ex: Virginia tech setting up campus in Chennai.
       3) Common Syllabus (New in Tamil Nadu)
                  – While this is only in TN, there are rumblings about a common syllabus throughout India. This kind of change can make it easy for the country to develop a common infrastructure to train teachers, to provide online educational resources for children, etc.

While we cannot immediately tell whether these large changes will be positive or negative, one thing is clear. The education scene in India will be quite different in the coming decades.

Letter to a US Citizen on the eve of your historic election

Dear Friend,

Tomorrow you are going to vote in a historic US election to continue the great tradition of Democracy.

Any way you vote, you are going to make history. Either by electing a woman to vice-presidency or by electing a black man to presidency.

As you vote in the next US election, remember you are still part of a bigger neighbourhood.

Today more than ever, we are tied closer together in everything we do.

Your child plays with a toy made by a young girl in China. Sugar on your table came from cane cut by a young man in Brazil.

Your car is powered by oil dug out from a well in Saudi Arabia by a middle-aged man from Indonesia.

You work for a European company that makes electronics that go into
Korean phones sold in India – and that pays for your bills for gasoline, sugar and toys.

When your city (No! our city) was burning after 9/11, we all watched in
horror and cried with you. We all joined you and went to war against terrorists.

When your soldiers treated prisoners in Abu Ghraib, Iraq filthily, we
all watched in shame and cursed you. We all tried to stay away from you.

When your hero (No! our hero) Phelps won 8 gold medals, we all watched
in awe and cheered with you. We all joined in the Olympic celebrations.

So, when you vote tomorrow, remember that we are all watching anxiously, just like you.

We share your concerns about our interdependent future – about the
slowing global economy, about global warming, about world peace – about
the only Earth we all have to share.

So, when you vote tomorrow, ignore petty politics about pigs and lipstick.

We all know you can rise beyond prejudices and narrow fundamentalist beliefs. Think
about the bigger issues that will affect your grandchildren – and ours.

Any way you vote, you are going to make history !!

But if you vote for party politics and “USA-alone-matters” politicians, we will be quite sorry for you.

Vote for a stronger and stable economy. Vote for a just and peaceful world. And we will cheer for you.

May God bless the world and everyone in it !

Your loving neighbour.

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

Grassroots Citizen activism in India…

Some examples that I believe will eventually bubble into the political movement that I envisioned in my previous blog:

http://vijaysblog.wordpress.com/category/politics/

www.siruthuli.org/

Next phase in Indian Politics…

The next phase in Indian Politics is going to see the entry of young, educated, middle class Indians entering active politics. This is different from before.

Either the very richest “dynasties” came to power because of their connections or their privilege to focus on social problems as opposed to being bothered by the daily chores of life. Examples include the Gandhis, Scindias, Chidambaram, etc.

On the other hand, the “lowest class” (economically) of people came to power because they were oppressed for long periods of time and they struggled against this oppression. Capturing political power was a great way to improve their lot. Examples include Karunanidhi, Laloo Prasad Yadav, etc.

But going forward, young, educated, middle class is going to be the face of Indian Politics. Why ? Because the middle class is numerous in number and is becoming a strong political force, though they dont see themselves as such at present. At present, they are quite apathetic about politics instead focusing on their normal lives, savings, childrens education, future planning, etc. But a reasonable number of them are going past those issues already and are beginning to think of the environment or situation around them and about improving them.

They are going global and are able to see how their country could ideally be and are beginning to form a vision… This vision will translate to action. And political action is going to be one of the forces that will make this happen. Some examples of this are already visible – read about Lok Paritran, Lok Satta, etc.

It is going to be interesting…