Indian Economy is resistant to ongoing recession

Economic recession has effected almost all of the major economies of the world whether developed or developing, economies which don't have strong fundamentals are effected the most like the US economy(which happens to be the largest economy of the world presently). So what has made indian economy safer even in these tough times?

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According to me it's the government's hold on the economy in place and the good thing about indian government is that it takes a very conservative approach because it keeps people's interest on high priority and consider the ill effects of one economic decision rather then talking about the corresponding positives this has acted as a firewall from the ongoing economic crises which is biggest after the 1929 great depression which i read in my history book in tenth grade.

It may be noted that still in india government has a very strong hold on the economic activities ( a lot of restrictions were removed in the 90's when Manmohan singh was Finance minister under PV Narsimha Rao government) had it been still like early 90's indian economy would have been completly shielded from the crises but an economy can rise only if it takes off some of restrictions and let the business congloramates go beyond the physical boundaries and compete globally as majority of indian companies are currently doing that's very good according to me.

If Indian government had lifted all of the retrictions in 90's no doubt our economy would have been much bigger today but would have been as affected as USA presently with pink slips all around and companies following hire and fire policies huh...thank god Manmohan Singh was there to think about it at that time...really SINGH is KING!!

The point described above by me is made clear by following figures that in the month of May itself we had $2 billion of FII money into our country, this is because of the stability and strength of the Indian economy, which is reassuring to the Indian investor.

Also Read :
-Indian Elections Updates
-BRIC countries stabilising world economy
-Highest paid CEO's of world
-America's Top 20 CEO's ever list
-How Infosys managed to increase YoY profit
-Effect of Recession on Indian Economy
-Economies hit by recession


ok now i am logging off will keep you guys updated in next post coming soon

- Himanshu Sharma

Govt may remove FBT & Service tax on exporters

Removal of Fringe Benefit Tax(FBT) and service tax exemption for exporters in the Budget are under active consideration of the Finance Ministry, a highly placed official said.

Commerce Secretary Rahul Khullar today met Finance Secretary Ashok Chawla and is believed to have pressed for several fiscal incentives for exporters, who are suffering due to the ongoing recession in major markets.

India's exports have been contracting for the last seven months in a row, costing millions of jobs in labour oriented sectors like gems and jewellery and textiles, industry estimates suggest. In 2008-09, exports grew by a meager 3.4 per cent to USD 168.7 billion.

Khullar met Chawla a day after he had a meeting with a delegation of the Federation of Indian Export Organisations.

The exporters have been demanding removal of the FBT on the ground that the business promotion expenses should not be treated as fringe benefits and should not be taxed.

The other major demands, including outright removal of service tax on exporters, is also under consideration of the government, the official said.

At present exporters get reimbursement for the service tax but it involves several procedural hassles. They want total removal of this tax.

courtesy - economictimes

PM says Indian economy faced crises very well

Returning home after attending the summits of Shanghai Cooperation Organisation (SCO) and Brazil-Russia-India-China (BRIC), where the global financial crisis was the main theme, Singh said there was a need for reforming the present systems of global governance and international financial system.

He hoped the BRIC would not remain a "talk-shop" and the member countries would work together so that their voice is heard in the global arena.

"We live in times of rapid economic changes when the BRIC economies are a factor of stability and growth," Singh told accompanying journalists while returning from Yekaterinburg in Russia.

"India has borne the global economic crisis well, though we have not been unaffected," he said.

Talking about the BRIC Summit, he said the leaders discussed the need to intensify cooperation among the four nations and international economic downturn and how to prepare for the forthcoming G-8 and G-20 Summits.

INR falls 39 paise against US $

Indian rupee closed above the crucial 48 level against the dollar for the first time in five weeks in tandem with a sharp slide in local stocks, raising fears of capital outflow from equity.

Resuming lower at 47.84/85 a dollar, the domestic unit later moved in a range of 48.16 and 47.81 before ending the day at 48.13/14 against the dollar, cheaper by 39 paise from its last close of 47.74/75 a dollar.

Dealers at the Interbank Foreign Exchange (forex) market said continued capital outflows in the week weighed on rupee sentiment.

Foreign institutional investors pulled out nearly USD 193.60 million in the last two days. They were believed to be heavy sellers in equity today.

The Indian benchmark Sensex plunged by 435 points or 2.91 per cent following dramatic sell-off by foreign funds.

Meanwhile, the dollar, which was buoyant in the overseas market in the last few days, was little changed against the basket of currencies.

BRIC's maiden summit to discuss about economic crises

Leaders of Russia, China, India and Brazil will discuss the reform of international financial institutions at their debut summit on Tuesday in the Russian city of Yekaterinburg.

It said in a statement that the four countries, known by the BRIC acronym, would discuss "prospects for dialogue between the Group of Eight and traditional partners" on reform ahead of the G8 summit in Italy in early July.

BRIC countries want to increase their representation in the IMF, where the majority of quotas are currently controlled by developed nations. They are aiming for an agreement on IMF reforms by January 2011. Russia currently has 2.7 per cent of IMF votes, and is unlikely to see its quota increased even under a proposed reform. China holds 3.7 per cent, Brazil 1.4 per cent and India 1.9 per cent.

BRIC states are trying to strengthen their clout as the producers of 15 per cent of global gross domestic product by building up the grouping into a powerful world player. The Kremlin said the four will issue a communique after the summit.
The four are also among the world's seven biggest holders of international reserves. They have expressed worries about the economic stimulus programs in developed nations, fearing they may threaten their savings by driving up future inflation.
Kremlin foreign policy adviser Sergei Prikhodko said on Sunday that BRIC countries were unlikely to discuss a new reserve currency but the reform of the IMF is closely linked to the currency discussion.
China said it is willing to contribute up to $50 billion to the IMF through a purchase of IMF bonds, non-tradable securities which will likely be denominated in the IMF's Special Drawing Rights (SDRs).
Brazil and Russia said they will buy $10 billion each. The debt issue will boost the role of SDRs in international finance.
The statement said the four will also discuss a response to the economic crisis and exchange views on international policy issues, including regional crises, the fight against terrorism, energy and food security.
BRIC will also discuss further steps aimed at "strengthening collective and legal foundations in global policy." The Kremlin said the communique will "reflect common vision of the current stage of global development."

courtesy economictimes

Plan outlay may swell by Rs 1,00,000 cr in Budget

Plan expenditure may see a quantum jump of about Rs one lakh crore due to likely increased allocation for the UPA's flagship programmes such as NREGA, Bharat Nirman as well as concessional foodgrains to the poor.

This is likely to take total Plan expenditure to Rs 3.85 lakh crore against Rs 2.85 lakh crore in the interim Budget, tabled in February, sources told media.



Higher Plan expenditure may cause increase in the fiscal deficit for 2009-10 to over six per cent of gross domestic product (GDP) from 5.5 per cent projected in the interim budget.

President Pratibha Patil in her address to the joint sitting of Parliament had expressed the government's commitment to flagship schemes including the NREGA and Bharat Nirman, besides food security, among other programmes.

"Ministries have sought more allocation to implement flagship schemes, including social sector programmes and new schemes. This may result in the Plan expenditure pegged at 2.85 lakh crore during the interim budget to swell by about Rs one lakh crore," a source said.

Ministries seeking higher allocation in view of the government's commitment for flagship schemes and strengthening infrastructure include rural development, railways, power, urban development, water resources and human resource development among others, the sources said.

Sector-wise plan allocation for education may go up over Rs 15,000 crore, rural development Rs 4,000 crore, urban development about Rs 4,000 crore, power Rs 8,000 crore and health Rs 4,000 crore.