Indo-UK News & Discussion 9th Aug 2011

hnair · Post by **hnair** » 06 Jan 2012 02:41

Sigh.... I wish to enter my profound thoughts here:

I think Spongebob's creators are deeply influenced by BJP. Have you guys seen the two superheros Mermaid Man and Barnacle Boy?

arnab · Post by **arnab** » 06 Jan 2012 05:53

JE Menon wrote:

The Resurgent India Bonds purchase thing is nice. Many Americans and Britons purchased them too.

I know of some senior RBI officials who had described the actions of purchasing RIBs as blatant profiteering masqurading as patriotism

Why would patriots require higher interest rates to invest in India?

Prem · Post by **Prem** » 06 Jan 2012 06:48

arnab wrote:
JE Menon wrote:
I know of some senior RBI officials who had described the actions of purchasing RIBs as blatant profiteering masqurading as patriotism Why would patriots require higher interest rates to invest in India?

NRi did not ask GOI to set the interest rate. AFAIk, there was no request made or delegation send to GOI for negotiation. To Give some idea , when Billions of dollars were infused by NRIs in few hours it gave pretty indication to both friendly and not so friendly countries about the perception of Indians. Some hailed it as the first time Indian feeling good and proud about their government. No sane person will invest in third world economy known for corruption, socialistic policies and subject to wordwide economic sanctions unless he or she has emotional attachment or sentimental reason. Hope this satisfy the old RBI Babbu who most probably accompanied the Gold sent to London as mortgage . The first vote of confidence was given by NRIs who walked the walk and talked the talked with their own cash. Every economic Babbu know and understand the importance of such support at crucial moment. Lets not mention the lobbying efforts done by NRIs. The most appropriate question is why did GOIs of past screwd economy so much that RG has to invite NRI Petroda and others to open their eyes to the real world economic fundamentals.

arnab · Post by **arnab** » 06 Jan 2012 06:55

Jhujar wrote: NRi did not ask GOI to set the interest rate. AFAIk, there was no request made or delegation send to GOI for negotiation. To Give some idea , when Billions of dollars were infused by NRIs in few hours it gave pretty indication to both friendly and not so friendly countries about the perception of Indians. Some hailed it as the first time Indian feeling good and proud about their government. No sane person will invest in third world economy known for corruption, socialistic policies and subject to wordwide economic sanctions unless he or she has emotional attachment or sentimental reason. Hope this satisfy the old RBI Babbu who most probably accompanied the Gold sent to London as mortgage . The first vote of confidence was given by NRIs who walked the walk and talked the talked with their own cash. Every economic Babbu know and understand the importance of such support at crucial moment. Lets not mention the lobbying efforts done by NRIs. The most appropriate question is why did GOIs of past screwd economy so much that RG has to invite NRI Petroda and others to open their eyes to the real world economic fundamentals.

Umm... RIBs were introduced after the pokhran 2 explosions. Gold mortgage was in another era. The whole point is that after PoK2, there was a wholesale withdrawal of forex from India. Patriotic NRIs would have contributed to a fair a bit of that flight. They were 'induced' to return only though higher returns offered by the RIBs. GOI does not need to 'talk' to any NRI. The voting with their feet to events is a signal of their intentions. So let us not ascribe any patriotism to a purely profit related motive wrt RIBs

Vayutuvan · Post by **Vayutuvan** » 06 Jan 2012 21:39

arnab wrote:So let us not ascribe any patriotism to a purely profit related motive wrt RIBs

The interest on RIBs was good but not that good to offset the risks. So, it is not a case of purely profit motive. At that time there were EU countries offering higher rates on long term bonds (IIRC - willing to be corrected on this).

JE Menon · Post by **JE Menon** » 06 Jan 2012 22:28

>>So, it is not a case of purely profit motive.

I agree. Not purely profit. Not purely patriotism. GoI did a good job there, and so did so many NRIs who spent money they otherwise may not have spent on giving India greater strategic autonomy.

Singha · Post by **Singha** » 07 Jan 2012 09:27

BBC

Jamaica to break links with Queen, says Prime Minister Simpson Miller

Jamaica's new Prime Minister, Portia Simpson Miller, has said she intends to make the island a republic, removing Queen Elizabeth as the head of state.

In her inaugural address, Ms Simpson Miller said the time had come for Jamaica to break with the British monarchy and have its own president.

The announcement comes ahead of celebrations to mark 50 years of Jamaican independence from Britain.

The Queen's grandson, Prince Harry, is due to the visit the island this year.

"I love the Queen, she is a beautiful lady, and apart from being a beautiful lady she is a wise lady and a wonderful lady," Ms Simpson Miller said after swearing the oath of office.

"But I think time come".

"As we celebrate our achievements as an independent nation, we now need to complete the circle of independence," the prime minister added.

In response, a Buckingham Palace spokesman said "the issue of the Jamaican head of state was entirely a matter for the Jamaican government and people".

Ms Simpson Miller, 66, became prime minister for the second time after her People's National Party won a big election victory on 29 December.

Her inaugural address mostly focused on her plans to revive Jamaica's economy.

The Caribbean island has widespread poverty, high unemployment and huge debts.

Ms Simpson Miller is not the first Jamaican leader to promise to move towards a republic.

In the early 1990s, then-Prime Minister PJ Patterson also said it was time for the island to have its own head of state, and set 2007 as the deadline.

chetak · Post by **chetak** » 07 Jan 2012 13:54

This hirsute poser is more shallow than I originally thought he was.

'By endorsing Gita, Gandhi condoned violence'

"Gandhiji's over-all attack on Arjuna's reluctance to kill is which I think is not proper.... argument that killing does not matter because you are duty-bound to do it is a highly dangerous argument," Desai said.

vishvak · Post by **vishvak** » 07 Jan 2012 17:28

chetak wrote:This hirsute poser is more shallow than I originally thought he was.

'By endorsing Gita, Gandhi condoned violence'

"Gandhiji's over-all attack on Arjuna's reluctance to kill is which I think is not proper.... argument that killing does not matter because you are duty-bound to do it is a highly dangerous argument," Desai said.

My 2 cents here:
From the above link:

"Gandhiji's over-all attack on Arjuna's reluctance to kill is which I think is not proper.... argument that killing does not matter because you are duty-bound to do it is a highly dangerous argument,"
..
"But at the same time, it's very condoning, very admitting of gross macro examples of violence," Desai said, adding that in the second World War, 25 million people died, including six million in the holocaust, ordered by Hitler.

Basically such statements are made as excuse to ignore ill effects of world wars on India, such as artificial famines, and so on. Once a holocaust & world wars are put in the same boat as Gita, how can Hindus point out that the Lord M.Desai has ignored to add those who died because of artificial famines in the above count of 25 million people during ww2 as 'dead'?

He is an educated fellow afterall!

Rahul M · Post by **Rahul M** » 07 Jan 2012 17:38

'lard' meghnad desai at it again ?

arnab · Post by **arnab** » 09 Jan 2012 04:30

matrimc wrote:
The interest on RIBs was good but not that good to offset the risks. So, it is not a case of purely profit motive. At that time there were EU countries offering higher rates on long term bonds (IIRC - willing to be corrected on this).

That is incorrect sir. Indian credit rating even today is barely above 'investment' grade. At the time it was in 'junk' territory. So there is no way on earth that Europe was offering higher returns. IIRC, the RIBs were foreign denominated and the rate of return depended on the country of purchase. It was deliberately designed to offer higher returns than the home country for NRIs. So, if you purchased in the US - RIBs were offering 7.75 % (over 9.5 % return if you include the fact that they were tax free). If you purchased them in the UK - RIBs would give you 8% (over 10% in real terms because tax free).

Small wonder NRIs were taking advantage of this arbitrage by borrowing in their home country and investing in RIBs.

p.s - if you really lower the bar, I would agree that it was not purely a 'profit' motive - because paki bonds were offering even higher returns at the time

Prem · Post by **Prem** » 09 Jan 2012 05:19

GOI should have just borrowed from internal sources in 1998 . Did we not see long lines of patriotic people in front of State banks depositing Gold etc in GOI coffer to stop the Dhoti shiver in Delhi?

One high ranking source in RBI told me all those super secular, Congressi ,Commies in India and abroad emptied their hard currency accounts and thanks to the patriotic Indic Fundamentalist among NRIs of North America , they deposited Billions of Dollar within few hours to compesnate the loss and more. One reputable analyist remarked that it was the first time patriotic Indians felt proud of their government and wanted to send the right signal. IMHO, it was akin to Kamagatu Maru /Gadri Babbe NRIs contribution toward Indian Independence. I wont be surpised that many resident non Indians ,true to their nature ,did find ulterior ,personal motives in those dliberate acts of theirs.

arnab · Post by **arnab** » 09 Jan 2012 06:35

Jhujar wrote:
One high ranking source in RBI told me all those super secular, Congressi ,Commies in India and abroad emptied their hard currency accounts and thanks to the patriotic Indic Fundamentalist among NRIs of North America , they deposited Billions of Dollar within few hours to compesnate the loss and more.

A long-time ago when a few friends used to lament about the state of West Bengal, a few patriotic bengalis used to claim - "at least we are better than Bihar" (alas now even that is denied to us)

now by comparing the patriotism of profiteering NRIs to congressi politicians and commies - you seem to be doing the same thing.

As I said before: if you set the bar really low - everybody becomes a patriot

Sure what did the NRIs do? did they loot the country? they just wisely withdrew their money after Pok-2 and wisely (and patriotically) returned when GOI offered them higher returns. Hell they hadn't even asked them to test the bomb.

putnanja · Post by **putnanja** » 09 Jan 2012 07:55

chetak wrote:This hirsute poser is more shallow than I originally thought he was.

'By endorsing Gita, Gandhi condoned violence'

"Gandhiji's over-all attack on Arjuna's reluctance to kill is which I think is not proper.... argument that killing does not matter because you are duty-bound to do it is a highly dangerous argument," Desai said.

Unfortunately 'Lard' desai has lost it. So taking meghnad's argument further, the allied forces shouldn't have fought war with Hitler and allowed him to do what he pleases. At least that would have prevented millions of soldiers from getting killed.

Vayutuvan · Post by **Vayutuvan** » 09 Jan 2012 20:43

arnab wrote:
matrimc wrote: That is incorrect sir. Indian credit rating even today is barely above 'investment' grade. At the time it was in 'junk' territory. So there is no way on earth that Europe was offering higher returns ...
p.s - if you really lower the bar, I would agree that it was not purely a 'profit' motive - because paki bonds were offering even higher returns at the time

Arnab ji

This is OT but I want to make a few points.

1. US residents had to pay taxes on the interest once US$ denominated bonds matured, even though the interest is tax-free in India.

2. Google chacha shows some examples in Europe where 1998 long bond yields were competitive (eg. Denmark and Italy) after factoring in the risk.

3. Personally speaking I would have invested even at a couple of percentage points lower rate. This is because the amount of bile that was spewed on India on the TV here at that time without regard to the bad neighborhood India lives in. The kind of painting India as a villain would have had a big negative impact on risk perception of non-PIO investors.

Let us say I disagree that it was a case of pure profiteering - at least for a significant minority.

Regards

JE Menon · Post by **JE Menon** » 09 Jan 2012 21:14

>>"Lard Meghnad"

abhishek_sharma · Post by **abhishek_sharma** » 10 Jan 2012 08:46

David Miliband Interview

chetak · Post by **chetak** » 10 Jan 2012 20:24

Gurdeep Hayer's dead body has been found at manchester. Scrolling news at NewsX

arnab · Post by **arnab** » 11 Jan 2012 04:29

matrimc wrote:
2. Google chacha shows some examples in Europe where 1998 long bond yields were competitive (eg. Denmark and Italy) after factoring in the risk.

3. Personally speaking I would have invested even at a couple of percentage points lower rate. This is because the amount of bile that was spewed on India on the TV here at that time without regard to the bad neighborhood India lives in. The kind of painting India as a villain would have had a big negative impact on risk perception of non-PIO investors.

Let us say I disagree that it was a case of pure profiteering - at least for a significant minority.

Regards

Just quickly - google chacha is useful only if you know what you are looking for. Just by way of comparison, go to tradingeconomics.com, click on a country and search for 10 year bond yields, Then click data from 1998 onwards. You will find that for India 10 year bonds were between 11-12 % at the time (Note RIBs were 5 year foreign denominated bonds hence offered lower returns). The yields for italy and denmark were between 5 and 6 % at the time.

I'm sure there will be anecdotal evidence of individuals willing to take a financial hit for their mother country, but unfortunately in the aggregate it did not count to anything. Infact the most 'inelastic' type of forex inflow in 1998 was the remittences from the gulf countries - because the migrant workers needed to send money to their family back to India no matter what the returns were.

It is the NRIs with large disposabe incomes who were responsible for the initial outflow and then the subsequent return.

abhishek_sharma · Post by **abhishek_sharma** » 11 Jan 2012 04:33

>> It is the NRIs with large disposabe incomes who were responsible for the initial outflow

Evidence?

arnab · Post by **arnab** » 11 Jan 2012 04:39

abhishek_sharma wrote:>> It is the NRIs with large disposabe incomes who were responsible for the initial outflow

Evidence?

None specifically I'm afraid - but generally speaking, one would have to have large disposable incomes if one wanted to invest overseas, after taking care of all your domestic expenditures / savings / investments etc. Or atleast a good enough credit worthiness abroad to borrow money from banks to invest overseas. That too is dependent on your income and asset levels.

abhishek_sharma · Post by **abhishek_sharma** » 11 Jan 2012 04:41

How do you know they were NRIs (and not Americans/French/ etc) ?

arnab · Post by **arnab** » 11 Jan 2012 04:44

abhishek_sharma wrote:How do you know they were NRIs (and not Americans/French/ etc) ?

A large part of the outflows were through NRE accounts at the time. Not many foreign institutional investors in India in the 1990s.

abhishek_sharma · Post by **abhishek_sharma** » 11 Jan 2012 04:50

>> A large part of the outflows were through NRE accounts at the time.

Evidence?

arnab · Post by **arnab** » 11 Jan 2012 05:13

abhishek_sharma wrote:>> A large part of the outflows were through NRE accounts at the time.

Evidence?

I'm afraid the splits do not appear to be publicly available. But broadly the outflow was around $4 billion at the time. This was a mix of NRE withdrawl and FII withdrawl. This was then supplemented through an inflow of $4.2 billion by investment in RIBs (and I cannot give you splits of how much of the RIBs was invested by NRIs or by FIIs either). So it would cut both ways I suppose. NRIs can't claim credit for investing in RIBs if you are not taking the blame for pulling out the money at the time either

abhishek_sharma · Post by **abhishek_sharma** » 11 Jan 2012 05:16

Prem · Post by **Prem** » 11 Jan 2012 05:22

abhishek_sharma wrote:??

Abhishek ji,

Mere salle ke Salle ke Chowkidar ke Jamai ki Chauthi Bibi ke Jije ka pehla sasur working for RBI told me otherwise that GOI was happy and grateful for the Inflow and more than expected response from NRIs. ABV at his friendäs house in Nyc confirmed it when he came to attend the UN session.

arnab · Post by **arnab** » 11 Jan 2012 05:23

abhishek_sharma wrote:??

The split between NRIs and FIIs of the amount withdrawal of forex post Pok2 or the subsequent investment in RIBs is not publicly available. So there is no 'evidence' in that sense - except that entreaties had to be made to the NRI community by offering attractive returns.

abhishek_sharma · Post by **abhishek_sharma** » 11 Jan 2012 05:26

I understood what you meant. I am surprised that you claimed "A large part of the outflows were through NRE accounts at the time" without any evidence.

Prem · Post by **Prem** » 11 Jan 2012 05:28

arnab wrote:
abhishek_sharma wrote:??
The split between NRIs and FIIs of the amount withdrawal of forex post Pok2 or the subsequent investment in RIBs is not publicly available. So there is no 'evidence' in that sense - except that entreaties had to be made to the NRI community by offering attractive returns.

What do you mean have to be ,here is no record of NRI lobbying for reward instead all the RNIs and their foreign masters were cursing the euphoria among Indic NRIs feeling proud for the first time and their rush to deposit the hard earned money for good cause of supporting GOI.

arnab · Post by **arnab** » 11 Jan 2012 05:29

arrey jhujhar ji, why shouldn't GOI be happy? And I'm sure the NRIs were happy for the attractive returns being offered

It worked both ways. Otherwise NRIs could have flooded the country with forex through the existing mechanisms at existing rate of returns, no?

arnab · Post by **arnab** » 11 Jan 2012 05:31

abhishek_sharma wrote:I understood what you meant. I am surprised that you claimed "A large part of the outflows were through NRE accounts at the time" without any evidence.

Fair enough - I will modify that to the following line: "The outflows were due to both FIIs and the higher income NRIs withdrawing forex post pok2"

Vayutuvan · Post by **Vayutuvan** » 12 Jan 2012 01:12

arnab wrote: It is the NRIs with large disposabe incomes who were responsible for the initial outflow and then the subsequent return.

Arnab ji

Looks like I am missing something here (no surprise there as I am not an 'conomist). Why would people pull out forex which is yielding 10-12% and then re-invest at the lower rate of 7.75%?

Regards

shaunb · Post by **shaunb** » 12 Jan 2012 03:24

Did anyone notice a re-org of sections on the BBC site. South Asia is gone and now it is only Asia

hnair · Post by **hnair** » 12 Jan 2012 03:28

shaunb, IMO, it got better at the Beeb website for India - we got delinked from the rest of the South Asia.

(There is a link on the bottom bar of the top menu to us and China)

svinayak · Post by **svinayak** » 12 Jan 2012 03:32

shaunb wrote:Did anyone notice a re-org of sections on the BBC site. South Asia is gone and now it is only Asia

Clever tactic for social engineering and geo politics.
One of the reason for the category "south Asia" was that it was lagging in per capita income in the 90s and they wanted to create a different image of India.

Now this is not the case and global influence of India is rising in-spite of the BBC
Hence they have to concede

arnab · Post by **arnab** » 12 Jan 2012 04:55

matrimc wrote:
Looks like I am missing something here (no surprise there as I am not an 'conomist). Why would people pull out forex which is yielding 10-12% and then re-invest at the lower rate of 7.75%?

Regards

Sir you don't need to be a 'conomist. Basic maths will do

Suppose you are given 2 options from GOI.

Option 1: Buy GOI bonds and hold them for 10 years (like a fixed deposit) and at the end of 10 years GOI will pay you 12% interest p.a, but this income will be taxable in India.

Option 2: Buy GOI bonds and hold them for 5 years and at the end of it GOI will pay you 7.75% interest p.a and the income from this will be tax-free in India.

Which one would you choose?

Vayutuvan · Post by **Vayutuvan** » 12 Jan 2012 08:33

arnab wrote: Option 1: Buy GOI bonds and hold them for 10 years (like a fixed deposit) and at the end of 10 years GOI will pay you 12% interest p.a, but this income will be taxable in India.

Option 2: Buy GOI bonds and hold them for 5 years and at the end of it GOI will pay you 7.75% interest p.a and the income from this will be tax-free in India.

Which one would you choose?

Arnab ji

Considering US$ denominated bond holders have to pay US taxes either way (irrespective of whether the money got repatriated back to US), it depends on the tax brackets of the bond holders in India and US. That said, your point that the people doing their bit for the mother country is a small minority is well taken with the qualification that only the US bond holders did not matter as most of the mop-up was from W. Asian PIOs.

Regards

member_21708 · Post by **member_21708** » 12 Jan 2012 14:20

shaunb wrote:Did anyone notice a re-org of sections on the BBC site. South Asia is gone and now it is only Asia

Recalibrating the propaganda machine, their bosses want an Asian Union now to further their economic interests

RajeshA · Post by **RajeshA** » 12 Jan 2012 21:00

Most probably BBC is just adjusting to a dwindling budget considering how their economic health has deteriorated.