Archive for the ‘economy’ Category

Brown and white onions

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Are you one of those who miss the onion salad whenever they go to a restaurant? Well then we are of the same kind. I love to have onion salad along with my meals. But due to the recent price hikes, most of the food outlets have stopped providing onions. And its effect on the household kitchen has been devastating.

What puzzle me is that last time I saw anything in the news about onions was the farmers committing suicide due to the extremely low prices. That was couple of months back. And now the situation has changed  a lot. Such a drastic change is hardly seen in economic history.  But one thing is for sure that this is not a natural occurrence. There is involvement of hoarding and black marketing behind all this. It is pretty much evident from events.

The sad part is that knowing all this, the government is unable to check the price hike. Even the hoarders have not been traced yet. The government has shown a great deal of inefficiency in this matter. Public welfare has been completely neglected; and the same old worn out strategies of controlling the price rise are brought into use. For how long can curbing of imports save the nation from these economic complexities. The government has always been coming up with lame excuses and groundless claims of being in control of the situation. No strict action has been taken so far to check the hoarding of Onions in the country. And who is to be blamed for the arise of these days? Why did the black marketers gain this courage to create such a mass level crisis in the economy? The obvious answer is the negligence or say the  least bothered attitude of the government.

The case of Onions is not the only one of its kind. India has been facing similar problems with many other essential commodities. Petroleum and cooking gas/LPG has been witnessing similar price hikes over the past few years. While the people have been regularly compromising with their food, the government seems to be taking this case very casually.

Its high time before some important new economic strategies ae formed and brought into application. Its said that a certain percentage of inflation is the sign of a developing economy. But the price rise has been very drastic and certainly not in the favour of the economy. Well it is time to think out of the box. The traditional economic theories seem to provide only a temporary solution to the problems of such a vast and diverse economy.

When you look deeper into any economic problems in the society, you will see that the problem is far away from the laws of economics. No economic factor gives a rise to such problems. On further investigation you it becomes clear that corruption and other breach of law has a greater role in the problem rather than  normal economic reason. For instance,  in this case it is quiet clear that hoarding of Onions is done for increasing its market value. Had government taken notice to this earlier when the farmers were struggling to get the fair return, such a situation could have been easily avoided. Moreover how is it possible to hide such a huge stock without anyone else knowing about it? Corruption comes in here.  Corruption is as good as suicide. It’s all around us. From a watchman to the higher officials. We are all involved in it in  some or the other way. And I think it is one of the most difficult things to be checked so far, though not impossible.

So far we have discussed few of the reasons that leads inflation. But what is the point of discussing it.. I mean are you actually going to take any action or is just another topic to talk about while sipping your tea. Think over it.

So guys if you want things to right again, better get started now.

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If yet your blood does not rage, then it is water that flows in your veins. For what is the flesh of youth, if it is not of service to the motherland – Chandrashekhar Azad

 

if these lines do not stir your soul then you have probably lost all your faith towards your motherland. I know that India is a free country now guys but these lines were not written just to gain independence right?

these lines represent the spirit of those who dreamed of a country much different from what it is now. mere independence was not their goal. doing good for their people whom they considered as their own brothers and sisters was their passion.

One individual may die for an idea; but that idea will, after his death, incarnate itself in a thousand lives. That is how the wheel of evolution moves on and the ideas and dreams of one nation are bequeathed to the next – Netaji Subhash Chandra Bose

India is free and so are Indians( what people think nowadays). but take a deep breath and look around you. do you see what the great freedom fighters of India wanted their future to see? your silence itself speaks for you dear. the war is still on. our country is still suffering, the people are still facing a hard time earning enough to live a decent life.

no free education for all, food shortage, spread of diseases and so on….. the list is endless…

India does not lack in resources of any sort. we have enough deposits of minerals, a huge supply of labor, plenty of land, leading entrepreneurs, good engineers, doctors, scientists, economists and …… (can’t mention everything guys). then why are we still lagging behind? where have we gone wrong?

the thing is that there are a lot of enemies of our country and specially our economy. they are amongst us and we don’t even realize it. through my next few posts i want to bring in to focus few of the major and minor problems which are harming our economy. these are internal as well as external threats to our country.

Apparently, I’ve acted like a terrorist. But I’m not a terrorist. – Bhagat Singh

together we have to reawaken the spirit of those passionate lovers who accepted death with a broad smile on their faces for our motherland.


Sexual harassment

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first of all i apologize to all my readers for the delay in this post. i was really busy with my college assignments.

now coming straight to the point, i want you to take a look at the recent cases of sexual harassment in the corporate sectors. the hewlett packard‘s former ceo mark hurd and David Davidar are few of the latest cases to name. but mind you i am not talking about sexual harassment of women, i want to focus on the differences within the corporate sector based on sex.

men( and that too straight) seem to have an upper hand in this respect. on the other hand women seem to be the most exploited followed by bisexuals and homosexuals.

the major problem is definitely of sexual harassment. the women workforce has been offended quiet often. and even worse is the lack of awareness of dealing with such problems. there is no immediate action taking body currently in the country. most of the times the offended just either submit to the demands or awitch the job instead of taking an action.

the case of sexual harassment also extends towards gays and bisexuals. the are not treated with respect and sometimes omitted from the priorities while assigning work. women are still considered as homemakers and not made for official work purposes.

demanding of sexual favors and explicit sexual remarks continue to

next is the lack of attention towards women issues like pregnancy leaves etc. only a handful of organisations have such facilities.

what even worsens the matter is the lack of attention paid towards these issues. according to a recent issue of business today, only 15% of all senior management positions in corporate india are held by women. that puts India in the bottom five globally. this is very shameful figure specially in the nation of honorable Indira Gandhi and Sarojini Naidu.

what can be done?

well so far nothing has been done for any such problems and the issue is so far unnoticed. there is no special cell in organisations to register complains about sexual bias and harassment. no strict actions are taken until one knocks the doors of the court. however there are upcoming laws to regarding sexual harassment,  the other important factors affecting the sexual minorities still remain untouched.

no matter what steps are taken, until the testosterone filled environment understands the gravity of the issue, things might not change at all.

India

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the commonwealth games was like a shining ray in a dark night for the tourism and hospitality industry which has already suffered a lot due to recession.  the owners of big and small hotels had expected a huge inflow of foreign tourists during this period. the main tourist locations around Delhi are

  • Agra and Fatehpurskri
  • Amritsar
  • Rajasthan
  • Haridwar
  • Shimla/Kullu/Manali

the small and big names of the hospitality industry have done great preparations for the event. increase in the number of rooms, up gradation of facilities, new cuisines are to name a few.

but will the tourists come to visit India as expected?

so far the things are not going good. although the tourists have started to come, the numbers are very disappointing for the industry. seeing the conditions so far, it is difficult to say that the expectations will be met.

what are the reasons for the reduced international traffic?

well there are many. first of all the delay in the preparation of the games village and the venues of the events have disappointed the public and sent a very bad(and wrong) message to the world about our infrastructural abilities.

secondly our country’s past is full of terrorist attacks and the incompetency of the government and the security forces to deal with such matters. the recent mumbai blasts could be taken for an example where 10 armed terrorists entered the commercial capital of India without any resistance. tell me who would like to risk his/her life for visiting India when there are so many other safe places to go.

even the media to some extent can be blamed for highlighting the drawbacks of the city and its preparations and a very little emphasis on the positive aspects. the hype on spread of dengue and spine flu has spoiled the mood of the players as well as the visitors. this has reduced the enthusiasm in the people. the level of excitement present six months back is missing. the people of delhi are moving out on vacations and are showing little interest in the games.

when the people of India are not willing to see the games then it is unlikely that many foreigners would come for the same. India is known for its hospitality, and i hope that many tourist get a taste of the real India. my best wishes are with Delhi.

Reserve Bank of India Headquarter in Mumbai

Reserve Bank of India Headquarter in Mumbai

the reserve bank of India has increased the repo and reverse repo rates.the repo rate has been hiked by 25 bps and the reverse repo has been increased by 50 bps.the new repo rate is 6% and the reverse repo is 5%. this decision of the RBI has invited a lot of criticism as well as appreciation.

let me first explain the meaning of repo. repo is the rate (of interest) at which the central bank (RBI) funds the other commercial banks of the country. the commercial banks borrow money from the central bank for their operations. for this they have to pay an interest to the RBI. similarly the RBI may also borrow money from the commercial banks. the rate at which the RBI takes the money is called the reverse repo. you must know hat reo is also called as bank rate. now the question arises is what is BPS? BPS stands for basic point system. it is used for denoting changes in interest rates etc.

what is the value of 1 bps?

1 bps is equal to 1/100 of 1%

i.e. 100bps is equal to 1%change.

so when we say that repo rate has been increased by 25bps, it means 0.25%. similrly the reverse repo has gone up by 50 bps or 0.50%.

now that you understand the meaning of repo and reverse repo, you should also know what it it used for and why is it so important that it shows up in the news headlines. bank rate (or repo) is an important tool for credit control. credit control means the amount of money supply in the economy. in other words it is the amount of money with the people in the economy. whenever the money in hands of the people has to be checked or lowered, the repo is increased and vice versa.

how does repo control money supply?

the mechanism of repo is easy to understand. when the central bank increases the repo, the commercial banks would have to pay more interest for the borrowed money. thus to make up with the increased interest burden, they would charge their customers with a higher amount of interest on loans issued to them. it means the banks would grant loans at a higher rate of interest to avoid losses. consequently the customers would borrow less amount of money. thus the amount of money flowing in the economy would decrease.

on the other hand, if repo is reduced then the loans would become cheaper for the people. they would be ale to afford more borrowings due to the reduced interest rates. thus the money supply in the economy will increase.

why is credit control important?

well to understand this first you need to know about inflation and its threats to our economy social welfare. gradual rise in the prices of goods and services over a period of time is called inflation. there are various debates related to inflation. some economist say that inflation to some extent is essential to the economic growth of a country. i wont be discussing the details of inflation. what we need to know that excess inflation is bad for the economy. when the prises of goods (specially the essential commodities) rise a lot over a period of time the people face various problems. there is shortage of goods in the market and symbolizes low supply in the economy. in short high inflation rate is not the characteristic of a healthy economy.

inflation occurs when there is a lot of demand in the market and not enough supply to cope with it. when people have a lot of money with them, the spend more th usual. thus the demand in the market rises. the supply however takes time to increase and might not respond well to the sudden change in demand. as a result a shortage or gap is created in the market. and due to this shortge the prices of goods go up. this goes on over a period of time causing inflation.

so when the RBI (which is responsible fro checking inflation) in the economy reduces the money supply in the economy, people demand less. the overall demand comes down to meet the supply in the market. thus a balance strikes between the demand and supply. this causes the prises to come down and stabilize. thus inflation is checked.

what does RBI’s recent decision imply?

the hike in repo and reverse repo rate implies that from now onwards loans will be more expensive. there will be reuction in consumption by the people. this is expexted to control inflation to some extent as it remains the major cause for such a decision.

i hope that now you have a better understanding of repo and its impact on our economy….