Tuesday, September 01, 2009

Statistics and Poverty

Statistics has always been a tool to measure poverty but slowly it is also being used to predict future poverty trends

Statistics form a crucial base for governments monitoring and managing economies, an imperative for efficient resource allocation and decision making in both private and public sectors.Statistics reveal differences and changes in living conditions and are needed to improve the situation of the poor.

Using sophisticated software developing nations can identify their populations’ needs and disseminate the information to appropriate government, public, private and non business organizations.

Check out one of the presentations that will give you a perspective on how statistics helps fights poverty..........................

Why does the Indian economy depend on Monsoons?

Each year, stock market analysts, CEOs, government officials and foreign investors eagerly await word on an indicator pivotal to India's economy: the forecast for the big June-September monsoon season.

Why does monsoons in India matter so much to the Indian economy?

Although India is in the news for high technology and outsourcing, about two-thirds of the country's one billion people depend on farming for a livelihood and agriculture accounts for about one-quarter of the gross domestic product.
  • A good monsoon results in growth in the farm sector which strengthens consumption in the villages while any slowdown means bad news for rural demand.

  • Only about a third of India's crops are grown on irrigated land and the rest rely on the soaking monsoon rains, which also bring relief from the scorching heat.

Rural India, where about 600 million people live, dependent on farm income, is a market with a huge potential - and appetite - for growth.Number of fast moving consumer good companies see a direct correlation between the monsoon and disposable income in the villages.

Do the monsoons matter less now since 1991?

As India embraced free market reforms in 1991, the farm sector was eclipsed by services and manufacturing as production controls and tariff barriers were removed to open the economy to global supply and demand. With vital industries such as software and pharmaceuticals powering India's growth now, investors don't have to worry as much as before whether a bad monsoon will hit village demand for motorcycles, shampoo or refrigerators.

Although monsoons impact to India's GDP is decreasing,it is still a potent force. But in past decades, economic growth fell to almost zero during a particularly bad monsoon; more recently, the growth in economic output has dipped to about 4 percent in years of bad monsoons and risen past 8 percent during particularly good years. Hopefully in the coming decades no one will be talking about the monsoons as India will be past the phase of a monsoon dependant economy.

Saturday, August 22, 2009

The Politics of Swine Flu

India has a population of approximately 1.3 billion people with the "killer virus" reportedly having claimed 51 lives so far. While each death is disturbing and tragic, a few fatalities, scattered across a country of 1.3bn people, do not amount to a pandemic.

Media has created a mass hysteria because of which the government is allocating precious resources to control the spread of a virus which, in 90% of cases, is cured without any medication at all. Schools, colleges, shopping malls and multiplexes across India's major cities have been shut down. Millions of Indians have marked India's 62nd Independence day by being at home. People have been walking with masks on the streets. Travelers coming from all over to India are being checked at airports for any flu like symptoms.

Malaria and tuberculosis in India kill thousands of people every year. AIDS is a bigger problem in India. But these diseases are more rampant in socially backward areas, a part of India which our media refuses to provide adequate coverage.

Not only India, but other emerging economies like Mexico have reacted similarly to the Swine Flu fears. In April Mexico shut down schools, museums, libraries and state-run theaters across its overcrowded capital Friday in hopes of containing a swine flu outbreak .

As countries around the media get more integrated due to globalization, this may be the norm and we are most likely going to see this kind of stance taken by countries just to prove to the others that they are taking appropriate steps to curb global diseases.I hope that the media also focuses on a country's internal health problems so that respective governments take steps to allocate similar resources.

For more details on Swine Flu in India further details can be obtained at http://www.swinefluindia.com/

Thursday, August 20, 2009

Wines in India

Not many people around the world are aware that India has a fast growing wine industry and lot of new wine drinkers.Most wine made in India is consumed there. And as wine publications, wine clubs, competitions and tasting dinners have taken hold, gradually, Indian wines with notable finesse are becoming available and appreciated.It is estimated that in the next 10 years there will be 300 million upwardly mobile Indians who can afford wine and for whom it will be a lifestyle choice.Today the country's erstwhile whiskey-drinking elite are cultivating a taste for wine.

During British colonization, wine became more and more familiar throughout India. The first vineyard was planted in Surat in 1612 by Britons, while "a number of Indian wines were exhibited and favourably received by visitors to the Great Calcutta Exhibition of 1884.
In the 19th century, with the invention of Indian pale ale, beer began to overtake wine consumption, at the same time brandy, whisky and soda, once widely accessible, were recognized as drinks of choice.

Additionally, around the 1860s, when the Schweppes company began marketing its anti-malaria tonic, gin began to gain currency as the best means for making tonic palatable.
At the beginning of twentieth century, cocktails became a fad worldwide, and even today in India, cocktails, whisky soda, rum and brandy are far, far more widely consumed than wine.

Wine was the chosen drink of the Mughal dynasty and the British helped make it popular,the industry's defining moment came in 2002 when the government eliminated restrictions on wine imports. A flood of foreign labels entered the market, and although taxes remained high, a greater range was made available to the Indian connoisseur.

The Indian White wine and Indian Red Wine

The white wine is called Chhabri and it is made predominately from Chardonnay with Ugni Blanc and Thompson Seedless blended together to round out this quite attractive wine.

The red wine is called Anarkali and it is made from mostly Cabernet Sauvignon with a touch of Bangalore Purple which increases the nose and quite firm palate. You might well think you are drinking wine made from Cabernet Franc.

List of Vineyards and Wineries in India

ND Wines - India http://www.ndwines.com/
Dajeeba - India http://www.dajeebavines.com/
Champagne Indage Limited - India http://www.indagegroup.com
Grover Vineyards - Bangalore, India http://www.grover-vineyards.com/
Coasta & Company - Goa, India http://www.costavin.com/
Sula Wines http://www.sulawines.com/
Bluestar Agro and Winery (India) Private Limited http://www.indiamart.com/blue-star/
Bliss Wines http://www.blisswines.in/

Saturday, May 16, 2009

An Important Milestone in India's Growth Story

I am glad that the UPA government has defeated the NDA and acquired close to a majority simply because it will become easier for the ruling coalition to enact its policies without the hindrances from the Left.Dr Manmohan Singh who will continue as the Prime Minister after all is the architect of Indian reforms and is well respected by much of the business community. The UPA government in its last tenure has taken a number of steps to spread the wealth around and reduce poverty whose results should be seen during the government's current tenure.

We have also said a big "No" to the politics of religion and all parties big and small must learn from this for the future that the Indian population no longer appreciates regionalism and religion based politics. All debates in the future must be on core issues and not over building a temple or a masjid(mosque).

Though this is the right step for India for the long term much of the core issues of poverty, terrorism and lack of education remain. I hope that the government formed at the center after this election will help India grow faster by enacting out the right policies.

But I also know that the UPA itself is rampant with corruption and it will be the job of the UPA leaders to root out the corruption and make the government an efficient institution that truly works for the welfare of the people.

Let hope prevail!

Monday, October 06, 2008

Why do we have an Indian Mujahideen?

Terrorism is not new to India but having home grown terrorists has taken the country by surprise. India had got used to blaming a "foreign hand" for all terrorist attacks. Now India has to face up to a brood of homegrown Islamic terrorists feeding off popular and growing Muslim resentment toward the purported injustices and atrocities of the Hindu majority.

Its time for Introspection
All the parties across the political spectrum have contributed to the situation. Congress the biggest party that claims to be secular contributes to the insecurities of the minority Muslim community to maintain an electoral base; BJP (Bhartiya Janta Party) on the other hand fans anti-Muslim sentiment for similar reasons. At the receiving end of decades of such politicking and social bias, the Muslim community — which forms 13.4% of India's population — remains impoverished and is increasingly alienated.

A commission instituted by the ruling Congress Party–led government found Muslims underrepresented in government jobs and faring badly in social indicators like household income and literacy.

Every time you have a community that has been brutalized, it is inevitable that there will be a pool of ready recruits. It is a very serious situation, which has arisen because our government has failed to accept the ground reality.A growing percentage of India's Muslim population is getting alienated.

The Indian political parties must focus on issues facing the country and India has so many of them. However seldom do we see Indian politicians give speeches on Climate Change, Homosexuality, economy, jobs or poverty. For India to be truly secular, it is very important that all the political parties stop dividing people on a communal basis or on a caste basis. I am of the opinion that India should enforce a law that any politician that attempts to divide people must be immediately arrested and must not be allowed bail. Alas in a democracy like India, I wonder even if that is ever possible!

Can India be energy independent?

The Indian Scenario
India is a country occupying 2% of the world's land mass and currently generating about 2% of the global electricity, mostly using low grade coal of which it has about 5% of the world reserves.

India has, however a share of 16% in the world's population. To achieve a modestly high level of economic growth, the domestic generation capacity needs to be increased at least tenfold. Even with full utilization of all existing commercially exploitable domestic hydrocarbon, hydroelectric and non-conventional resources, this level of increased generation capacity cannot be sustained for more than a few decades. For a large country like India, bulk imports of fuel or energy are neither affordable nor strategically prudent.

So what options is the Indian government looking at?

The Indian Uranium reserves, about 0.8% of the world - cannot contribute to any significant improvement in the situation if this Uranium is used on once-through basis and then disposed off as waste. However, with a carefully planned program, the available Uranium can be used to harness the energy contained in non-fissile thorium, of which India possesses about 32% of the world's reserves.
  1. The first stage of this programme involves using the indigenous uranium in Pressurised Heavy Water Reactors (PHWRs) which efficiently produce not only energy but also fissile plutonium.
  2. In the second stage, by reprocessing the spent nuclear fuel and using the recovered plutonium in Fast Breeder Reactors, the non-fissile depleted uranium and thorium can breed additional fissile nuclear fuel, plutonium and uranium-233 respectively.
  3. In the third stage thorium and uranium-233 based nuclear reactors can meet the long term Indian energy requirements.
The Indian concerns and priorities are thus quite unique. For its long term energy security India has no option but to deploy nuclear power according to a strategy precisely tuned to its needs and resources.

Solar Energy
For power hungry India, solar energy is a source that has not been adequately tapped. Rapid advances have been made and advanced solar technologies can be leveraged to power at least the remote and inaccessible parts of the country.
  • The Ministry of State for Non-conventional Energy Sources announced plans to expand government programs supporting the development and utilization of solar energy resources in 2005 and 2006.
  • Additionally, they announced that the government has established a commission for additional sources of energy to plan and oversee the implementation of programmes relating to solar energy and other renewable energy sources.
  • To popularize its usage the government has been offering rebate on electricity bills to those who install solar systems. Some banks provide soft loans to buy solar equipment.
  • There are many big names that have entered the solar industry. Tata being one of them. It sells approximately 30,000 kw of power. Tata BP Solar India Ltd claims to export approximately 60 per cent of its solar products.
Bio Fuels
The Prime Minister’s Council on Climate Change has prepared a strategy for sustainable development known as the National Action Plan on Climate Change. Like the Philippines’ bio-fuels program, which promotes plants such as jatropha, which is not a food crop and does not substitute agricultural land.
  • New Delhi is in the process of formulating a national policy on bio-fuels and the setting up of a National Bio-fuel Development Board, which will likely follow the Philippines approach.
  • Jatropha oil is produced from the seeds of the Jatropha curcas, a plant that can grow in wastelands across India. Jatropha oil is considered to be an excellent source of bio-diesel.
  • The Government of India has identified 400,000 square kilometers (98 million acres) of land where jatropha can be grown, hoping it will replace 20 percent of India’s diesel consumption by 2011
For further details on India's renewable energy initiatives you can check out http://www.newenergyindia.org

Although a number of energy initiatives are going on in India, I wonder if they will produce enough energy to make India energy independent. Given the bureaucracy in the Indian government it is highly unlikely that the Indian government's measures will alone make India energy independent. Hopefully in the next few years we will see more participation by the private sector which has the potential to revolutionize the energy production industry

Sunday, October 05, 2008

How American greed collapsed the financial system

In the USA in 1998, many people decided that real estate was very cheap. At the same time, Wall Street was making it easier for buyers to get loans.

Since most of these loans go to people wanting to buy a house, they come with higher interest rates — even if they’re disguised by low initial rates — and thus higher returns. These mortgages packaged together and bundled into investments, often known as collateralized debt obligations(CDO).

Investors then boosted their returns through leverage. For example they made a $100 million bet with only $1 million of their own money and $99 million in debt(backed by a CDO). If the value of the investment rose to just $101 million, the investors would double their money.

Similarly the American home buyer did the same thing, by putting little money down on new houses. The Fed helped make it all possible, sharply reducing interest rates, to prevent a double-dip recession after the technology bust of 2000, and then keeping them low for several years

All these investments, of course, were highly risky. Higher returns always come with greater risk. People assumed that that the usual rules didn’t apply because home prices nationwide had never fallen before. Based on that idea, prices rose ever higher — so high, that they appeared riduclous when compared with real wages.

Then what happened....

The American home seemed so lucrative and easy money that all the banks in the global financial system ended up owning a piece of it. In a strategy to distribute risk many banks sold complex insurance policies on the mortgage debt. That meant that they would now have to pay up in case the mortgage owner defaults

If that $100 million investment I described above were to lose just $1 million of its value, the investor who put up only $1 million would lose everything.

This is the fear that is crippling the financial market these days. Banks dont seem to think they can lend to each other because no one knows how much a bank is leveraged. Uncertainity is the worst thing for markets so investors are losing confidence. This is bringing down the market.

With so many small investors invested in the market through retirement funds, brokerage accounts this is bound to effect the common man on the street. With a declining net worth and lack of credit it is difficult for the American consumer to purchase products leading to low earnings for non-financial companies.

American markets are caught in this vicious circle and rather than only blaming folks on wall street people must also realize that spending beyond your means always leads to financial trouble.

Thursday, October 02, 2008

India's Improved Foreign relations

With the nuclear deal approved in the US and India getting a NSG waiver to begin trade in nuclear material it is evident that India has much improved its relations with all the developed nations. India's relations with Pakistan has dramatically improved over the last few years. But how are its relations with countries like Afghanistan, Iraq and Iran which generally worry the developed nations around the world?

India Afghanistan relations

The government of President Hamid Karzai is currently focused on securing continued assistance for rebuilding the economy, infrastructure, and military of the country. It has continued to maintain close ties with the United States, India, Iran,the European Union, and the Islamic world.

During the U.S.-led invasion of Afghanistan in 2001, India offered intelligence and other forms of support for the Coalition forces. After the overthrow of the Taliban, India established diplomatic relations with the newly-established democratic government, provided aid and participated in the reconstruction efforts.India has provided USD 650-750 million in humanitarian and economic aid, making it the largest regional provider of aid for Afghanistan. India's support and collaboration extends to rebuilding of air links, power plants and investing in health and education sectors as well as helping to train Afghan civil servants, diplomats and police. India also seeks the development of supply lines of electricity, oil and natural gas

India Iraq Relations
The bilateral relations between the Republic of Iraq and the Republic of India have been traditionally friendly and collaborative. They advanced considerably during the rule of Saddam Hussein in Iraq in the 1990s over strategic issues, oil and commerce. Although initially disrupted during the 2003 invasion of Iraq, diplomatic and commercial ties between India and the new democratic government of Iraq have since been normalized.

India had preserved its neutrality over the U.S.-led invasion of Iraq, criticizing the lack of U.N. approval, but also hinted that it would consider sending troops to post-war Iraq to help maintain security and peace after a unanimous vote in the U.N. Security Council over the Coalition's presence and mission in Iraq.However this was ruled out after protests from public and political parties which have been opposing USA. It normalized its ties with the new democratically-elected government of Iraq in 2005, seeking to restart trade and co-operation. Indian businesses applied for contracts for reconstruction projects to the Coalition Provisional Authority, and more recently the activities of Iraqi businesses in India have been growing rapidly.

India Iran Relations
Currently, the two countries have friendly relations in many areas. There are significant trade ties, particularly in crude oil imports into India and diesel exports to Iran. Iran frequently objected to Pakistan's attempts to draft anti-India resolutions at international organizations such as the OIC. India welcomed Iran's inclusion as an observer state in the SAARC regional organization.Lucknow a city in India continues to be a major centre of Shiite culture and Persian study in the subcontinent. There are also small communities in India who trace their ancestry to Iran.

No matter what the media reports, in my opinion India has done very well to improve its relations with all countries around the world. This is an important but much overlooked aspect of globalization. Good political relations with all countries is the first step to increasing trade and India must continue on this path to further improve relations with all countries