Indian Economy: News and Discussion (Apr 1 2011)

tejas · Post by **tejas** » 17 Jan 2012 10:02

Nothing is free of nepotism. But the US is probably as close as it gets. I am a radiologist and I can tell you the oral boards were unimaginably difficult. The failure/conditioning rate is prob. 25% and you are dealing with one of the hardest residencies to get into. So if anyone is given a free pass into residency they still have to make it thru that meat grinder at the end. Anyway this is off topic so enough from me. Cheers gakakkad.

vic · Post by **vic** » 17 Jan 2012 10:30

uskumar wrote:Inflation is at 2 year low.we can expect interest rate cuts soon

Wait for Petroleum product price hike after election months

abhischekcc · Post by **abhischekcc** » 17 Jan 2012 14:34

Inflation is low now only because it was high last year this month/week

This is a clear case of Indian politicos/babooz learning Shanghai stats (from Harvard and Aspen leadership classes)

Rahul M · Post by **Rahul M** » 17 Jan 2012 14:47

gakakkad, question for you in nukkad.

gakakkad · Post by **gakakkad** » 17 Jan 2012 19:21

tejas wrote:Nothing is free of nepotism. But the US is probably as close as it gets. I am a radiologist and I can tell you the oral boards were unimaginably difficult. The failure/conditioning rate is prob. 25% and you are dealing with one of the hardest residencies to get into. So if anyone is given a free pass into residency they still have to make it thru that meat grinder at the end. Anyway this is off topic so enough from me. Cheers gakakkad.

If you are an IMG and got radio in the US , I bow to thee.You must be worth your weight in gold. Only 30-40 foreign grads have got a radio resid in the last decade . More people have got the nobel . I wanted to apply for radio myself .I had the scores and research too.m pretty decent at physics too. But chickened out and opted for IM .

tejas · Post by **tejas** » 17 Jan 2012 19:32

Sorry gakakkad, boss, I grew up in Umrikah and attended only US schools. Foreign grads were not even allowed to apply to my residency program.

ramana · Post by **ramana** » 18 Jan 2012 02:02

Tejas, that explains your handle!!!

radiance= tejas

narmad · Post by **narmad** » 18 Jan 2012 04:23

Growth could fall to below 7%: Pranab
Press Trust Of India
New Delhi, January 17, 2012
Warning that the months ahead are difficult, finance minister Pranab Mukherjee on Tuesday said the growth rate could fall below 7% in the current financial year from 8.5% a year ago.
"...we have difficult 2 -3 months in the current fiscal. Our growth for 2011-12 may be around 7% plus or even less than that. There are also concerns about central government finances for the current fiscal", he said while speaking at the CNBC TV18 Business Leadership award function. "Going forward, I am sure RBI will take into account important concerns of balancing the targets of controlling inflation and keeping up growth and employment generation," he said.

"Adhering to the fiscal deficit target of 4.6% of GDP in 2011-12 is a major challenge," he said.
The government proposes to bring down the fiscal deficit in the current fiscal to 4.6% of the GDP from 4.7% a year ago. However, the surge in subsidy bill and poor realisation from disinvestment has made the task difficult.According to official estimates, the subsidy bill of the government is likely to exceed by about Rs 1 lakh crore during 2011-12. As far as disinvestment is concerned, the government has been able to mop up around Rs 1,100 crore only against the target of Rs 40,000 crore.

tejas · Post by **tejas** » 18 Jan 2012 06:42

Tejas, that explains your handle!!! radiance= tejas

Actually much more mundane, Ramana garu. I was SKC back in 1997 when that was allowed. Then forum members had to use whole names and my real name was taken. I moved several times and kept having to change handles. Had a Gujarati friend named Tejas so I took that ( am from AP originally came to Umrikah as a baby). I still remember when BR first formed, I would visit every day to see if there were any updates in the military sections. I thought to myself what the hell is a forum and why would anyone want to visit one! Took about a year before I finally visited it.

Man, I could not believe not only were there jingos there like me but many knew more about India's military and weapons systems than I did. I was blown away. Obviously BR forum is much more than simply military affairs which I soon found out. Now I check in several times a day no matter how busy i am---great stress relief. If BR goes down it's like a drug withdrawl for me.

Theo_Fidel · Post by **Theo_Fidel** » 18 Jan 2012 12:08

http://online.wsj.com/article/SB1000142 ... 72530.html

Indian Rupee Hits Two-Month High

The Indian rupee Tuesday surged to its highest level against the U.S. dollar in two months, driven by capital inflows, firm local stocks and the euro.

The dollar was at 50.73 rupees late Tuesday after touching an intraday low of 50.72, a level last seen on Nov. 17. The rupee was at 51.36 late Monday.

Rahul M · Post by **Rahul M** » 18 Jan 2012 12:21

>> I thought to myself what the hell is a forum and why would anyone want to visit one! Took about a year before I finally visited it.

same here.

member_21708 · Post by **member_21708** » 18 Jan 2012 12:24

Gold, silver to become costlier, govt changes duty structure
http://www.deccanherald.com/content/219 ... -govt.html

this move is a clear warning regarding the intentions of fabian socialists, prevent the public from buying real wealth, deny them gold and silver by imposing high taxes while making them slaves by providing cheap 'credit' based on valueless fiat based paper currency. when the paper gets de-valued, hard-work and earnings of millions is wiped off and they are left with useless paper currency.

member_21708 · Post by **member_21708** » 18 Jan 2012 12:51

The secret behind Coal India's numbers
http://business-standard.com/taketwo/ne ... rs/462183/

Aditya_V · Post by **Aditya_V** » 18 Jan 2012 14:31

vikramd wrote:Gold, silver to become costlier, govt changes duty structure
http://www.deccanherald.com/content/219 ... -govt.html

this move is a clear warning regarding the intentions of fabian socialists, prevent the public from buying real wealth, deny them gold and silver by imposing high taxes while making them slaves by providing cheap 'credit' based on valueless fiat based paper currency. when the paper gets de-valued, hard-work and earnings of millions is wiped off and they are left with useless paper currency.

Boss I dont think so, its only a 2% duty instead of the earlier Ad Valorem duty of Rs. 30 per gm now one would pay Rs. 54 per gm.

member_21708 · Post by **member_21708** » 18 Jan 2012 15:56

Aditya_V wrote:
vikramd wrote:Gold, silver to become costlier, govt changes duty structure
http://www.deccanherald.com/content/219 ... -govt.html

this move is a clear warning regarding the intentions of fabian socialists, prevent the public from buying real wealth, deny them gold and silver by imposing high taxes while making them slaves by providing cheap 'credit' based on valueless fiat based paper currency. when the paper gets de-valued, hard-work and earnings of millions is wiped off and they are left with useless paper currency.
Boss I dont think so, its only a 2% duty instead of the earlier Ad Valorem duty of Rs. 30 per gm now one would pay Rs. 54 per gm.

Gold, silver import duty doubled

Gold and silver are set to cost more, with the government on Tuesday increasing the import and excise duties on these two precious metals. The new duty structure would be based on value, not a fixed rate.

The new rates (on ad valorem basis) — two per cent on 10 gm gold and six per cent on one kg silver — mean that importers will have to pay double the duty. Similarly, excise duty has been hiked to 1.5 per cent per 10 gm for gold and four per cent per kg for silver. Diamonds, too, will now attract an import duty of two per cent.

With this change, gold import duty will go up by Rs 246 at Tuesday’s price of Rs 27,291 per 10 gm (-999 purity) gold. In silver, the cost of imports will rise from Rs 1,500 to Rs 2,979 per kg, an increase of Rs 1,479 per kg at the current price of Rs 49,628 a kg.

http://business-standard.com/india/news ... ed/462182/

gakakkad · Post by **gakakkad** » 18 Jan 2012 17:02

http://business-standard.com/india/news ... rt/462156/

The Indian economy is likely to grow at eight per cent per annum between calendar years 2011 and 2013, said an United Nations report released on Tuesday.

The report, World Economic Situation and Prospects 2012, projected India’s growth at 7.6 per cent in 2011, 7.7 per cent in 2012 and 7.9 per cent in 2013.

I hope it is an under estimate as usual .

Aditya_V · Post by **Aditya_V** » 18 Jan 2012 18:35

vikramd wrote:
Gold, silver import duty doubled
Gold and silver are set to cost more, with the government on Tuesday increasing the import and excise duties on these two precious metals. The new duty structure would be based on value, not a fixed rate.
The new rates (on ad valorem basis) — two per cent on 10 gm gold and six per cent on one kg silver — mean that importers will have to pay double the duty. Similarly, excise duty has been hiked to 1.5 per cent per 10 gm for gold and four per cent per kg for silver. Diamonds, too, will now attract an import duty of two per cent.
With this change, gold import duty will go up by Rs 246 at Tuesday’s price of Rs 27,291 per 10 gm (-999 purity) gold. In silver, the cost of imports will rise from Rs 1,500 to Rs 2,979 per kg, an increase of Rs 1,479 per kg at the current price of Rs 49,628 a kg.
http://business-standard.com/india/news ... ed/462182/

Which as my previous post said increases the price of gold at Rs. 24.6 per gm for which the Jeweler charger Rs. 2750 + wastage and making charges of Rs 300 per gm.

member_21708 · Post by **member_21708** » 18 Jan 2012 19:31

Aditya_V wrote:Which as my previous post said increases the price of gold at Rs. 24.6 per gm for which the Jeweler charger Rs. 2750 + wastage and making charges of Rs 300 per gm.

Ok man you win

vishvak · Post by **vishvak** » 18 Jan 2012 22:54

vikramd wrote:Gold, silver to become costlier, govt changes duty structure
http://www.deccanherald.com/content/219 ... -govt.html

this move is a clear warning regarding the intentions of fabian socialists, prevent the public from buying real wealth, deny them gold and silver by imposing high taxes while making them slaves by providing cheap 'credit' based on valueless fiat based paper currency. when the paper gets de-valued, hard-work and earnings of millions is wiped off and they are left with useless paper currency.

By this, can one conclude that the Govt. does expect global prices to increase because if global prices are decreasing will Govt. care if you are buying more?

Or is it the other way around?

Suraj · Post by **Suraj** » 18 Jan 2012 23:26

The gold/silver duty imposition is not even 1% rate. You can probably get a similar spread in prices at various jewelers. Therefore I'm not sure why there's an outcry about it. On the other hand, I'm not sure what the purpose of the duty is - if they wanted to throttle this part of the trade deficit (gold accounts for $30 billion or so in the annual import bill, IIRC) they would have imposed a more punitive sum. Seems like little more than typical SDRE-minded GoI skim money off the top exercise.

Aditya_V · Post by **Aditya_V** » 18 Jan 2012 23:49

Suraj-> with respect to gold Government does not have a choice, it is best put a low rate of tax and make some revenue.

If you remember from the 1950's to 1990's prior to reforms, import of gold was banned but smuggling was happening big time with customs, Politicos and smugglers making a huge fortune while GOI got no revenue. Lots of 190'2,80's films are themed around gold smuggling which was very common and lucrative. So the best GOI can do is levy a low rate of tax so that it is not lucrative to smuggle it without paying the duty.

Airavat · Post by **Airavat** » 19 Jan 2012 08:22

Weird headline in Bloomber News: "India’s Rich Halt Power Plans in Setback to Prosperity"

The article is about the rising price of coal and how it's affecting the projects of power companies. Instead of "India's rich" the headline could just have said "Indian power companies".

Suraj · Post by **Suraj** » 19 Jan 2012 23:22

Rupee is up from over Rs.53 to the dollar to almost below the Rs.50 mark now, amounting to a 7% gain so far this month after the ~18% fall in 2011 from its earlier level of approx Rs.44.5 to the dollar. I would not be surprised if it regains that level by springtime or early summer.

vina · Post by **vina** » 20 Jan 2012 06:17

Sorry gakakkad, boss, I grew up in Umrikah and attended only US schools. Foreign grads were not even allowed to apply to my residency program

Amazing. I didn't know that Radiology is such a sought after program in the US. Why is that so ?

I would have that surgical specialities like say Plastic surgery, neuro, cardio and other such "life and death" kind of programs (both surgeon and physician) would have a long line trying to kick the door in, rather than a purely "diagnostic" speciality , that is like ..Hmm , okay. Get an X-Ray done, get a CAT scan done kind of thing.

Ambar · Post by **Ambar** » 20 Jan 2012 06:20

USD index is down 3+% from its highs earlier this month. Most currency have strengthened marginally against USD including the worthless paki rupee. If oil continues to hover over $100/barrel, and if situation in Persian Gulf worsens, it may easily hit $125+. With a weak rupee, GoI will have a devil's own job of balancing its cheque book then!

tejas · Post by **tejas** » 20 Jan 2012 07:24

Vina garu, as usual money talks. Radiology is one of the highest paying specialties in medicine. It is also much more difficult than it looks. To be useful to a surgeon you must know anatomy just as well (if not better) than him. One also must have a very strong understanding of the physiology and pathology of various diseases to be good at what I do. BTW the time investment is rather large. 4 yrs college, 4 years medical school, 1 year internship, 4 years radiology residency and I did an additional 1 year fellowship in Body Imaging. Thats 14 years! CT and MRI are unbelievably useful and complicated modalities. I also do many imaging guided biopsies that are done percutaneously (thru the skin) saving people from far riskier surgery. PET scans often make essentially definitive diagnosis of tumor mets rather than invasive procedures altogether

The other reason radiology was so sought after when I was applying for residency was the good "lifestyle" it provided. That is nthing like it used to be. The call (after hours) work has become unimagiinably busy. Almost every ER visit diagnosis is now seemingly made by imaging. The proportion of inpatient diagnoses also made by imaging is exceedingly high. Reimbursement rates are getting cut every year and CT/MRI are probably down more than 50% over the last 10 years. Much of that has been made up in increased volume but can't be anymore. I work a hell of a lot harder (the stress on call is brutal as I read 200+ cases on an average Saturday on call) but make less than I made 5 years ago. The average payment for a "miss" on mammography is now $3 million. I say "miss" because the false neative rate is about 10% i.e.infiltrative tumors are not visible to the eye on the mammogram (xray). So every mammogram read is anxiety provoking. I have read over 30,000 and am still stressed when ever I read them!

gakakkad · Post by **gakakkad** » 20 Jan 2012 08:07

vina wrote:
Amazing. I didn't know that Radiology is such a sought after program in the US. Why is that so ?

I would have that surgical specialities like say Plastic surgery, neuro, cardio and other such "life and death" kind of programs (both surgeon and physician) would have a long line trying to kick the door in, rather than a purely "diagnostic" speciality , that is like ..Hmm , okay. Get an X-Ray done, get a CAT scan done kind of thing.

Even in India , rads is the top branch. In India surgery is at the bottom , these days. Probably because unlike US , there are very few 6 years integrated courses in India . So after doing 3 years of residency in surgery , one again has to sit for a ridiculously tough (and idiotic) entrance test. Economically , in private practice a radiology guy with his own imaging centre , which offers basic facilities like CT , usg and x-ray will make 1 crore plus in India. Guys with MRI and nuclear (PET) make a lot more . Interventional procedures in India are mainly done by cardiologist and vascular surgeon . Rad guy gets a very small piece of that market.(though that is partly true for US AS WELL). In US a rad guy make 300k-800k a year .

Interventional radiology does directly involve patient treatment . So there is more to the branch than simply looking at films. These days molecular imaging and NMR spectroscopy (a branch of NMR which involves detecting chemical composition in tissues , thereby studying the metabolic changes ) are developing rapidly. For instance if an HIV patient presents with a focal lesion in brain , it can be a lot of things. Like a lymphoma (a type of cancer )or a toxoplasmosis (a parasite) or a form of tuberculosis or cryptococcus (a fungus). They all look alike on the film . But lymphoma (the cancer) has higher concentrations of Choline . (a quaternary amine , part of the neurotrasmitter acetyl choline ). That can be detected by MR spectroscopy . So radiology these days is a highly complex branch that needs diverse knowledge .

Singha · Post by **Singha** » 20 Jan 2012 08:28

while I agree that these high tech tests can be a money spinner via owning a imaging center, how does a rad guy get the seed capital of crores needed to lease the property and put in the latest imported machinery from siemens/GE/philips et al ? none of these devices are chini-cloned or cheap.

if your family has the money to bootstrap you, its fine because cash flow will cover the loan smoothly, but if not then how? I understand your dad owns a hospital so this case may not apply for you.

gakakkad · Post by **gakakkad** » 20 Jan 2012 08:47

^ The trend these days is group practice . If 6-7 people combine , the per head investment is about 1 crore. Not a big amount these days . However , I do admit that the medical families , (which in some places resemble the mafia families) have too much of an oopri haath . I am aware (and even have a subconscious guilt complex sometimes) that , I have had everything served to me in a platinum spoon.

Medical entrepreneurship in India is in a pretty nascent state. However ,unlike US there is a lot less lobbying and government interference , not to mention far fewer lawsuits.

Singha · Post by **Singha** » 20 Jan 2012 10:05

you can maybe later in life (if you r2i and become well established) think about some charitable medical activities also. people cannot control where they are born into - rich or poor - but they can control what they do with their good fortune.

devi shetty I believe got his initial funding from his FIL and BIL who are big construction magnates. he made it count.

Murugan · Post by **Murugan** » 20 Jan 2012 11:41

This 'The Economist"'s Big Mac Index says that Indian Rupee is undervalued to the tune of 61%. And CHF is overvalued to the tune of that much. Means = INR & CHF are == in Big Mac Term !!

Majedar readings

http://timesofindia.indiatimes.com/busi ... 519567.cms

http://www.economist.com/node/21542808

The Economist’s Big Mac index is based on the theory of purchasing-power parity: that, in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. Our basket consists of one McDonald’s Big Mac, and we’ve compared it with the average price in America, $4.20. According to our burgernomics, the Swiss franc is 62% overvalued: the exchange rate that would equalise the price of a Swiss Big Mac with an American one is 1.55 francs to the dollar; the actual exchange rate is only 0.96. The cheapest burger is found in India, where it costs just $1.62. Big Macs aren’t sold in India, so we’ve taken the price of a Maharaja Mac

Aditya_V · Post by **Aditya_V** » 20 Jan 2012 16:04

Transfer all Indian accounts in swiss banks and it will equal then

Wish the world was so simple.

On anther note I think Vodafone has been exempt from TDS.

SC rules in favour of Vodafone in tax dispute

krisna · Post by **krisna** » 20 Jan 2012 19:02

http://forums.bharat-rakshak.com/viewto ... 7#p1229987
http://forums.bharat-rakshak.com/viewto ... 3#p1230003
http://forums.bharat-rakshak.com/viewto ... 6#p1230036

The basic factors underlying the choices of various specilaities are simple economics and quality of lifestyles-
1) some medical branches are highly sought after in US and some others in India with some differences-
procedures related specialities score over non procedure specialities.
punishing on calls schedules
less patient interaction or " not being in charge" of the patient. i.e become "specialists like" so you can avoid taking decisions.
The thinking is less patient interaction and not being in charge of patients helps in making more money-- IOW communication is the number one cause for lawsuits. So less interaction less lawsuits. Being specialists means delegate the responsibility of decision making to others, communication etc. So the other doc takes the brickbats.
you can see the trends in khanland in the last 20-25 years when there is increasing prominence of specilaists taking over from primary providers. It is estimated that by 65 years of age a specialist would have >4 million extra money in realtion to a primary care provider.

2) Personal interest- This will override the above.

whatever it is docs are the top earners and the hardest of the workers in khanland and elsewhere also. No second thoughts. Of course some non docs do punishing schedules but not as a whole group/profession.(relatively speaking).

would not talk more as it will be OT here.

gakakkad · Post by **gakakkad** » 21 Jan 2012 08:21

PDS inefficiency plagues poverty maths

An evaluation conducted by Targeted Public Distribution System (TPDS) under the Consumer Affairs ministry revealed that the number of bogus ration cards issued to BPL families increased from 16.3 lakh in 2008-2009 to 30.5 lakh cards in 2009-2010. The operational responsibility of TPDS includes identification of families below the poverty line and issuing of ration cards. The ministry, however, has no estimate on the actual size of bogus cards in the system.

“Bogus entries are a result of benefits in the form of subsidies and it is clear that mismanagement starts from the grass root level itself due to higher involvement of corrupt politics and politicians,” lamented Prof Radhakrishna.

svenkat · Post by **svenkat** » 22 Jan 2012 11:26

Some are claiming that the Indian coal situation is extremely bad
The future is black

http://sierraclub.typepad.com/compass/2 ... cheap.html

The skyrocketing cost of imported coal is wreaking havoc on the financial solvency of the country's coal plants.

kmkraoind · Post by **kmkraoind** » 23 Jan 2012 11:10

X-posting from PRC Economy - New Reflections : Dec 15 2011

JwalaMukhi wrote:http://www.nytimes.com/2012/01/22/busin ... class.html

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day.

For ordinary Indian rural folks assured income of $17 (converted @48-50 a day equals Rs. 800-900) is a good bargain. Instead of throwing money at MNERGS, GOI can spent that new money at hinterland of India to create new cities. I will take example of Rayaseema, preciously Ceded areas, that consists of Rayalaseema of AP and Bellary and Raichuar dists of KA. Most of these areas are semi-drought (except lands irrigated by TB dam). Direct all folks registered MNERGS folks to a paid, short, 1-2 months course of assembling techniques, after that they have to work in any assemble plant as an assembly worker, acting like a semi-skilled labour bank. Some might say, we can replicate the Chinese fast, alas kung fu like fast assembling work ethics, and I do not agree with that. When I was studying, I had met an poor housewife who works in her spare time rooling beedis (Indian cigarette), and damn she is pretty fast rolling a bidi, with her speedy hands she is able to stuff the tobacco and roll a bidi in a flat 3-5 second period, and I have to beg her to go slow 4-5x, so that I can just comprehend what she is doing, and she has told that she will roll anywhere 2-3 thousand beeds in her sparetime, earning Rs. 17 per every 1K of beedis that she rolls, the contractor/manufacturer provides materials to her, those days rice costed Rs. 8-15 in open market. One more aspect, and I have worked with some garment manufactures in Bellary area. They provided Rs. 12-15 as a wage to the tailors for stitching a jeans or any other pant. The owner/contractor gives the cloth that has been cut, fasteners and other button material. The tailor has to bear the costs of his own sewing machine, threads and others, and they are stitching anywhere between 18-30 pieces per day, some families have 3-4 sewing machines that all family works according to their own schedule including women of the house.

Regarding land, if we discard the vast cold deserts of China, the coastal belt of China is as densely populated as India. Thank god, at least India has fewer wastelands and have plenty of rains and continuous sunshine than any other nation on this plant. What we require is best land management, that is not infested with infection and nepotism and I have a solution for this. For factories and housing layouts, acquire x3-5 the requirement, with a promise of returning 1/2-1/3 developed land (at inflated prices) and give token price for the whole land, keep the land of core for intended purposes and give-up developed land to land owners, so that every body will happy. The grudge of land owners is that, they will get paltry amounts, while adjacent lands that comes to the core land will shoot up and they have no cake in it.

What are the main requirements of Indian folks, that they cherish as prized ones and eager to earn after fulfilling basics of food, shelter and clothing. IMO, decent health and quality education to their children. For this, govt needs to construct decent schools, colleges and hospitals, and give the management discretion to the committee, which have set up assembling plants in those areas. In one word, govt investment and private management, and provide these facilities free to the folks and to their kids who are workers of these assembling plans. Anyhow, there are huge allocations and spents every year on these items in the budget, but we need to channelize in a different way.

No doubt, the electronic assembling plant is not as stitching garments or rolling beedis, its a capital intensive. Its where govt comes in hand, it has underwrite building industrial areas, like roads, power and road connectivity, train the hoards of migrant/agricultural workers, provide centralized dormitories (the running costs will have to born by assembling factory owners with the headcount) setting of ITIs (in every taluk) for making foremans, TLs, etc. Its all possible only if we have real statesmen, but not messiahs who would love perpetual beggers in the nation.

In one gist, we have speedy, skilled labour, land, willing populace to work for a decent living, but we lack a strong leadership and will. When we get that, Bharath will raise again.

neel · Post by **neel** » 23 Jan 2012 15:26

Murugan wrote:This 'The Economist"'s Big Mac Index says that Indian Rupee is undervalued to the tune of 61%. And CHF is overvalued to the tune of that much. Means = INR & CHF are == in Big Mac Term !!

Majedar readings

http://timesofindia.indiatimes.com/busi ... 519567.cms

http://www.economist.com/node/21542808

The Economist’s Big Mac index is based on the theory of purchasing-power parity: that, in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. Our basket consists of one McDonald’s Big Mac, and we’ve compared it with the average price in America, $4.20. According to our burgernomics, the Swiss franc is 62% overvalued: the exchange rate that would equalise the price of a Swiss Big Mac with an American one is 1.55 francs to the dollar; the actual exchange rate is only 0.96. The cheapest burger is found in India, where it costs just $1.62. Big Macs aren’t sold in India, so we’ve taken the price of a Maharaja Mac

The trouble with reporting both the overvalued and undervalued currencies with respect to the dollar is that one does not properly appreciate the undervaluation. That the frank is 62% overvalued means everything in Switzerland costs 1.62x more than in the US. That the rupee is 62% undervalued means everything in the US costs 2.59x more than in India (i.e. that the conversion rate at PPP should be 20INR = 1USD). This is actually in reasonable agreement with the IMF's most recent assessment of the PPP conversion rate. Since the USD averages 3% inflation and the INR averages ~6%, assuming that RBI keeps devaluing the INR to keep the exchange rate under Rs 42/USD means that we can expect convergence in domestic prices in 30 years. If RBI stops messing with the exchange rate, we could see the rupee climb at a real rate of 10% per year (as was approximately the case for at least the 5 years before the slump in FII from Europe caused that 17% drop) and see domestic prices converge in 10 years.

member_21708 · Post by **member_21708** » 23 Jan 2012 23:39

Vipul wrote:Panic and chill in the air as TDR-TB claims 3 of 12 lives.

Some patients with XDR-TB responding to treatment: Team

The team of expert doctors sent by the Central government for inspection in the city, after 12 cases of Total Drug Resistant Tuberculosis (TDR-TB) were detected, said on Wednesday that the detected strain of TB was more than Extensively Drug Resistant (XDR) TB.

“But it cannot be called TDR. It is extra-XDR TB,” S.K. Jindal, member of the team, told journalists here, while adding that there was no need to press the panic button. The patients would not be kept in isolation.

The members of the Central team said the present phenomenon was a continuation of the XDR phenomenon. “There is no such situation of TDR [Total Drug Resistance]. It is not accepted anywhere internationally, neither does the World Health Organisation say that. One or the other drug will work,” Ashok Kumar, who led the Central team of expert doctors, said.

http://www.thehindu.com/news/national/a ... 811865.ece

Yogi_G · Post by **Yogi_G** » 24 Jan 2012 18:55

I dont remember correctly but was the basket of items used to compute the inflation updated recently? I remember the older one had scooters and typewriters, has it been updated? if it is still the older one the RBI has gone ahead and eased repo and reverse repo based on the decrease in inflation?

Suraj · Post by **Suraj** » 24 Jan 2012 22:49

You're referring to the IIP basket. It was updated to a 2004-05 base year, but the exercise appears to have been at least half-hearted. The inflation measure was updated to the same base year subsequently, from the prior 1993-94 base year. Even 2004 is pretty ancient now - some sectors have developed significantly in that time, telecom being a notable one.

RBI cuts CRR by 50bps

The Reserve Bank of India (RBI) took the half way route today by keeping key policy rates unchanged, but cut the cash reserve ratio (CRR) by 50 basis points to 5.5%. The move will inject primary liquidity of Rs 32,000 crore in the banking system. The CRR cut is effective from the fortnight beginning January 28, 2012.

The central bank kept repo rate unchanged for the second time in as many months as it sees upside risks to inflation from global crude oil prices, lingering impact of rupee depreciation.

"In reducing the CRR, RBI has attempted to address the structural pressures on liquidity in a way that is not inconsistent with the prevailing monetary stance. In the two previous guidance, it was indicated that the cycle of rate increases had peaked and further actions were likely to reverse the cycle," the RBI said in its third quarter review of annual monetary policy for 2011-12.

"The persistence of tight liquidity conditions could disrupt credit flow and further exacerbate growth risks. In this context, the CRR is the most effective instrument for permanent liquidity injections over a sustained period of time. The reduction can also be viewed as a reinforcement of the guidance that future rate actions will be towards lowering them," it added.

The central bank lowered its credit growth expectation to 16% for 2011-12 from 18% earlier.

RBI also reduced its gross domestic product growth (GDP) forecast for the current financial year to 7% from 7.6% earlier but retained its inflation outlook at 7% by March-end.