ganeshran Posted April 25, 2012 Posted April 25, 2012 http://timesofindia.indiatimes.com/business/india-business/Standard-Poors-cuts-Indias-outlook-to-negative/articleshow/12863908.cms The government needs to do something about the policy paralysis because of short sighted regional parties and their own vested interests. We are at BBB- right now and another cut could be disastrous for future growth.
Clarke Posted April 25, 2012 Posted April 25, 2012 This isn't unexpected TBH. Policy making is stuck due to opposition/coalition parties as well as arrests of powerful politicians & executives. Then there's the huge import bill and domestic spending. FDI in retail was a prime case. We let food inflation go out of control and cannot let market competition solve it lest it upset the holy middlemen, the best & brightest of our society. If we can't make policy changes that affect some traders for the common good, what else can be accomplished ?
someone Posted April 26, 2012 Posted April 26, 2012 Ratings are overrated. Yes, if we are top in the ranking, suddenly it is not. Only it is overrated, when we are down. Great work.
jairamesh Posted April 26, 2012 Posted April 26, 2012 This cut is definitely not good. But at the same time S&P :hehe: These feckers haven't got anything right in it's miserable existence.
bulbul Posted April 26, 2012 Posted April 26, 2012 This isn't unexpected TBH. Policy making is stuck due to opposition/coalition parties as well as arrests of powerful politicians & executives. Then there's the huge import bill and domestic spending. FDI in retail was a prime case. We let food inflation go out of control and cannot let market competition solve it lest it upset the holy middlemen, the best & brightest of our society. If we can't make policy changes that affect some traders for the common good, what else can be accomplished ? i guess S&P warned sometime back..they even reduced US rating... as of now no impact on share market so may be this news is already factored in
ganeshran Posted April 26, 2012 Author Posted April 26, 2012 Ratings are overrated. Overrated? How exactly? These ratings determine the interest rates that firms have to pay to borrow money from abroad. Quite a few funds have minimum cut off ratings below which they dont invest money in a particular country. If anything, this cut should be a wakeup call to the Indian government to get its act together.
Sachin=GOD Posted April 26, 2012 Posted April 26, 2012 Ratings are overrated. Foreign investors don't agree with you.
Sachin=GOD Posted April 26, 2012 Posted April 26, 2012 http://timesofindia.indiatimes.com/business/india-business/Standard-Poors-cuts-Indias-outlook-to-negative/articleshow/12863908.cms The government needs to do something about the policy paralysis because of short sighted regional parties and their own vested interests. We are at BBB- right now and another cut could be disastrous for future growth. I don't expect this Govt to achieve much in the next 18 months. Then in end of 2013/start of 2014 with 6 months left for Lok Sabha 2014 we may see a few initiatives. Currently even if Congress wants to do something, it cannot because of unpredictable "allies" like DMK, TMC, NCP etc. The only saving grace seems to be the RBI Governor D. Subbarao - he is doing a pretty good job despite the policy paralysis.
ganeshran Posted April 26, 2012 Author Posted April 26, 2012 I don't expect this Govt to achieve much in the next 18 months. Then in end of 2013/start of 2014 with 6 months left for Lok Sabha 2014 we may see a few initiatives. Currently even if Congress wants to do something, it cannot because of unpredictable "allies" like DMK, TMC, NCP etc. The only saving grace seems to be the RBI Governor D. Subbarao - he is doing a pretty good job despite the policy paralysis. :agree: While regional parties ensure interests of their areas are looked after, they often act irresponsbily and in view of short term electoral gains. Populism is fine and dandy, but these parties actually end up hurting the nation in the long run by disrupting parliament for policies they dont like
jairamesh Posted April 26, 2012 Posted April 26, 2012 India is already a two speed wagon, with some states way ahead proposing, implementing and delivering. Any further cuts and many companies like Tata who relied on foreign borrowing to expand will not decide to take large scale investments. Having said that, when have any of these big Indian Conglomerates ever invested in India big-time, their pre-2008 borrowing binge was to facilitate foreign expansions.
ravishingravi Posted April 26, 2012 Posted April 26, 2012 The truth is India story may have run out of steam.
Lurker Posted April 26, 2012 Posted April 26, 2012 India is already a two speed wagon' date=' with some states way ahead proposing, implementing and [b']delivering. Any further cuts and many companies like Tata who relied on foreign borrowing to expand will not decide to take large scale investments. Having said that, when have any of these big Indian Conglomerates ever invested in India big-time, their pre-2008 borrowing binge was to facilitate foreign expansions. Tata may already feel the pinch if Infosys gets royally screwed by US Immigration, which it becomes increasingly certain. Althought TATA is lot more than TCS, there would be certainly be an impact. I wonder how much of this rating downgrade has to do with the recent Infosys fiasco.
Sachin=GOD Posted April 26, 2012 Posted April 26, 2012 The truth is India story may have run out of steam. the Indian Govt may have run out of steam but India has not run out of steam yet. Tata may already feel the pinch if Infosys gets royally screwed by US Immigration, which it becomes increasingly certain. Althought TATA is lot more than TCS, there would be certainly be an impact. I wonder how much of this rating downgrade has to do with the recent Infosys fiasco. There will be an impact on Tatas if TCS is affected but the impact won't be that big because Tata Motors and Tata Steel contribute a very large part of the revenues and profits.
ganeshran Posted April 26, 2012 Author Posted April 26, 2012 India has the fundamentals to carry on with the growth story. We have a huge english speaking population in the right demographic, ready to work for lesser pay than the west. No matter how much regulations their governments put, corporations would end up getting work done in areas where it costs them less. However ensuring close to 8% growth requires more proactive approach by the government than just sitting back and letting the private corporations do the hard work. The challenges are both short term and long term. Managing the populist moods of the allies is one of the biggest immediate challenges. Each major reform is stropped by one or other ally who is seeking to score brownie points. The long term challenges are more pressing though - our higher education system needs to be overhauled to produce more employable people. The infrastructure creation is also painfully slow
Lurker Posted April 26, 2012 Posted April 26, 2012 There will be an impact on Tatas if TCS is affected but the impact won't be that big because Tata Motors and Tata Steel contribute a very large part of the revenues and profits. Oh I dont doubt that at all. But impact on Infosys, if it happens, would be on many level. It would affects organizations like TCS and other IT giants, which would then impact say Housing and Automobile industry (IT and ITES services are big consumers of the two areas) and TATA is heavily invested in both. Its an if admittedly but keep an eye out on how Department of Homeland Security treats Infosys.
Clarke Posted April 26, 2012 Posted April 26, 2012 I don't expect this Govt to achieve much in the next 18 months. Then in end of 2013/start of 2014 with 6 months left for Lok Sabha 2014 we may see a few initiatives. Currently even if Congress wants to do something, it cannot because of unpredictable "allies" like DMK, TMC, NCP etc. The only saving grace seems to be the RBI Governor D. Subbarao - he is doing a pretty good job despite the policy paralysis. Actually the initiatives close to election time can be populist & affect ratings negatively. They could go about food security/education bill in a big way to win votes & where does the money come from ? Printing Press => Deficit + Inflation => Junk Ratings. Then there's the other aspects for instance oil prices, they never ever raise them months before an election. Which means if the global economy is recovering, there's fear of higher prices per barrel and the burden of bigger subsidies. If the recovery isn't there, its the same as present. Which isn't good they say. I'll agree about the RBI, but they're just tweaking things here and there and that's just fiscal policy. The major push has to come from the center and deals with all things that matter, from the price of foodgrains to private sector high tech investment incentives.
jairamesh Posted April 26, 2012 Posted April 26, 2012 The government of India and the people of India are literally sitting on a gold mine. India is the largest holder of unofficial gold assets. The government of India instead of putting import taxes on gold should unleash the potential of gold by monetizing gold. If India allows exchange of goods and services based on gold denominated rupee it will open up reserves of $1 trillion. Not only will GDP shoot up, but India will see huge investment from foreigners holding large gold deposits. But there is no way the mafioso of IMF, World Bank, and US Fed Reserve will allow this, as they will have to follow suit and hence loosing lever to generate cash out of thin air. Monetize gold and India's GDP will double overnight!
ganeshran Posted April 26, 2012 Author Posted April 26, 2012 The government of India and the people of India are literally sitting on a gold mine. India is the largest holder of unofficial gold assets. The government of India instead of putting import taxes on gold should unleash the potential of gold by monetizing gold. If India allows exchange of goods and services based on gold denominated rupee it will open up reserves of $1 trillion. Not only will GDP shoot up, but India will see huge investment from foreigners holding large gold deposits. But there is no way the mafioso of IMF, World Bank, and US Fed Reserve will allow this, as they will have to follow suit and hence loosing lever to generate cash out of thin air. Monetize gold and India's GDP will double overnight! I didnt get your point. What needs to be changed to implement the proposal you're suggesting?
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