10 reasons to worry about India and your money!!

[vivek of themavericks...remember!!]

Well guys, I am here again with yet another set of top 10 reasons. I would call this (10.4), the fourth series in the top 10 categories. I would like to remind you all that I had made it clear that none of my top 10 series would be pertaining to mundane affairs. It is purely out of what i get to listen, read and comprehend. I am not a pessimist, neither am I a hardliner. Well, let me just start off. <br><br>India has been at the center of attention ever since 1991. Several world leaders have acknowledged that we are the strongest force to reckon in the world. But, since the last one year, despite strong hopes of the \'recession\' beginning to subside, India as we know today is a soup. Here are the 10 reasons to substantiate my point purely interms of financial and ecomonical development.<br><br>(1) Standard and Poor\'s downgrading of our soverign Indian \'domestic\' currency rating - in an informal sense,the money which you hold in your pocket is \"junk\". I don`t say this... they said it. That means that the credit worthiness of Indian currency is equal to that of El-Salvador, Romania and Tunisia. That means that the govt. does not have money to repay debts to its own family members - the banks! <br>(2) Unit Trust of India - Bail out - A great case of fund (mis) management. All those schemes that were \" assured returns\" were managed so badly that the money that people like you (not me) deposited were parked in volatile equities. When they tanked, they cried to the govt. The government said \"ok... here have this Rs14,500 crores, all tax payers money... now don`t come crying again!!!\". So guys, don\'t be surprised if you get lower returns even on your fixed deposits.<br>(3) Sale sale PSU\'s PSUs... Limited stocks only... hurry - yup, that\'s what the government is yelling. As if the UTI thing was not enough, we are now trying to sell even those PSUs that are actually making more money that any Pvt sector company. Remember 200 of the total 242 central PSUs are running profitable. The icing on the sick cake is that govt wants to sell even IOL which got into the Fortune-500 list!<br>(4)Government spent over Rs. 30 crores in the developement of an indegenious battle tank \"ARJUN\" and our sweet army said... \" No thanks... we prefer the Russian T-90\"... Remember your/your dad\'s money went in it!<br>(5)Disinvestment saga - our govt had a target of Rs. 10,000 crores when this disinvestment bug bit it... it ended to selling a backery called the \"Modern Breads\" to HLL at a throwaway price, you know how much? It was equvalent of you buying petrol for Rs. 11 a litre with 25Ml oil. So expected money did not come, hence an extra surcharge in your dad\'s income tax!<br>This was just the beginning. What happened was even funnier... if you don`t think about your dad\'s money!<br>(6) The growth of GDP (no Hi-Fi this) was predicted to be 6% in March, then 5.8% in June, then 5.5% in July, then 4.8% in August and now in Sep they say, \"It would be good if it touches 4.5%.\"<br>(7)An estimated 23% of the politicians are using security cover just for the heck of it, even a fly won\'t bother to hurt them, besides they are occupying a free house, with free ISD fone with free car with free petrol with free train travel and freedom to talk nonsense... your dad\'s money goes in \'maintaining \' them.<br>(8)The horrible attack on a place of worship in Gujarat and the infiltration of militants seems as if we as a nation are getting rusted from deep within. Nothing is in order in home... and we wanna become something like Singapore. <br>(9) No serious mind to talk about these, everyone\'s busy with work (that\'s ok), but we have girls and boys who are busy worrying if Hrithik Roshan has six fingers, and if ya then what does he do with \'em??!! If this is ok, then picture this... according to a national survey conducted, 7/10 girls and boys of age 20 to 22 did not know when Gandhi was born... and to add more they said 15th August. And to add even more they said we got independence on 26 Jan 1947!! Eventually these potential NPAs would settle abroad and produce babies...<br>
(10) I am too worried...
<br><br>
The opinions expressed here are mine and I would like you all to give it a serious thought to at least few points.

[tarun]

excellent information Mr vivek. i really got a good amount of knowledge today.but what can we do , all our politicians(who can be considered as the oldest among the existing human beings) are either too busy with their medical treatments going all over the world or busy buying real estate in our country and other countries.from all the points you have put down , its looks like we have finally reached the much awaited hopeles situation.i am waiting for somebody to again invade our country and develop it. i will not mind living as a slave as long as everybody will bend their backs and work hard and have that unity.if not for the britsh people we wud have never had the railway tracks , phones , trasportation , flights etc etc.sometimes i really do not whether to be happy for this independent nation or to be sad for this extremyl corrupted nation.Tell me what do u exactly think about india. i wud surely like to know your opinion on this.

[vivek of themavericks...remember!!]

Look dude!,i love my nation and i hate all those who want to migrate without any cause.See, ups and downs keep happening at every level.One should have the will to do something.All these 10 points which i have suggested are not complete in itself.They are just a fragment what would a huge list.At the same time,pointing errors is easy.What i suggested is just a discription of the situtation that would lead to financial crisis.I would say,despite so many problems internaly and externaly we are doing are atleast sustaining.

[lucifer-in-disguise]

Even before i talk \'bt ur points, lemme tell you one thing which governs every thing, and that is called supply and demand factor, once these things are in place, then comes everything like management, value chain, supply chain...bla bla......, its a fact we still cannot hedge even the oil from the comodity markets, so basically our country does not have this \"supply\" factor....secondly,the divestment procedure, whether this one is profitable or not throws out signal very clearly , i.e the governemnt is there to act as a regulator and has no business to do business....n buddy, the reality is that YOU think the PSU\'s are profitable .........NO they are not, had they been profitable by now, all the co\'s would hv been sold....n going by the existing rate of divestment , it will take atleast another 250-300 years....for India to sell off everything.....so dont worry much, \'bt these things, the ppl sitting there in delhi acting as advisers to our ministers are more intelligent, and know better as to how to control.....

[Muqlis]

Dear Vivek - your messages have always been sensible and reflects spark of intellectualism. I know you are a student and it does not really matter if your postings are extracts from what you hear and read as part of your curriculum as long as they presents some knowledge. It provokes some minds to think meaningfully in useful stuff and it is better than to waste time in poor and useless topics - short hairs, bullets, etc.
There could be intellectual advisors sitting in Delhi but what we get from Delhi is nothing but SHIT always. This basically because a common man lacks knowledge. Knowledge is power and unless a common is powered with knowledge he cannot do anything other than accepting the SHIT and SUFFERRRRRRRRR. Anything that can add , no matter small or big, to the knowledge of a common man is GOOD.

[vivek..of themavericks.remember!]

yes you are correct uptill the hedging the oil ,but let me tell you apart from just hedging.I hope you have heard of the seven sisters(the western alter ego of OPEC),they once declared that the oil in arabian sea of indian waters was \" not in explorable quantities\".But for Bombay high,we would have really felt the pinch of the so called oil pool deficit.Now,most PSU\'s are profitable and there are so many who want to participate in the strategic sale.Say,HPCL,BPCL reliance wants them and so does Shell and mobil.They are damn good as far as ROI goes.Its the so called old economy PSU stocks that usually make or break the mood in the stocks.if government knows what to do(i am not saying they don`t)are senstive to political developements,so if nothing moves in new delhi,you see the number dropping in mumbai.Its has been happening and it has also happened yesterday.Theres more to it,but let me get more responses

[vivek ofthemavericks.remember!]

Thanks a lot buddy,that would keep me going.Do keepa look at my future \" top 10 series\".I plan to launch one each monday.

[luicifer-in-disguise]

vivek, one simple Q to u...........just make ur point more clear.....do you oppose the divestment procedure?if, so why???

[peeping tom]

first of all Vivek I dono whether you are a pessimist or not. If U r SO change it. Then for each and every confusion write each and every solution also.

[vivek of themavericks..remember!]

Nope,i am not opposing disinvestment.Infact my opinion is what you have already mentioned\"Govt. should stop managing and start to regulate\".Its prefect,but the fact is that most of the disinvesment corpus that would evetually come would be put to use for some internal expenditure(sources say so.not me) rather than curb the scary fiscal deficit.Now,why did standard and poors downgrade our \"domestic currency rating\"?.It has been seen as a warning for govt to get goin with the disinvestment rather than stop it.But,the issue is what would happen to the money that would be generated?.Instead of curbing the deficit,govt would spend on those priority number two issues.Picture this india\'s total fiscal deficit (central and state included) is about 8.9% of the GDP.The central(state excluded) deficit if it touches 10% of GDP,we would be in a \"Debt Trap\".Something like what argentina is in?.And when we do get into debt trap?.We would be borrowing to repay loans .We won`t have any good profitable PSU\'s to be sold!!.Then what would happen?You dad would pay surcharge after surcharge and you would probably pay Rs50 or a Ltr of petrol!.Dooms day eh!.And ofcourse we have babus with vested interests like george fernandes who talksof secularism and sides with RSS to apply brakes in disinvestment.Its a quick sand i tell u

[lucifer-in-disguise]

Govt knows this option too pretty well, repay the costly loans with cheap loans n blabla...now think this option, loans are always present,even USA has enormous loans, no body bothers about it, as they are confident \'bt it,Now a Govt for a country like India at this moment should think in the lines of creation of wealth and not saving/repaying.......now,how can wewalth be created ....with addition of new industries, when can a country have more factories, when it has infrastructure, n who can invest in infrastructure , only the GOvt.......forget all this crap man....China produces 3.5 times more electricity than INdia, n hence has the world\'s largest number of factories, n see what this govt has already done, the national high ways, n in the next 5 year plan addition of 50,000 MW power capacity, where will it get the money from????n India needs atleast another halh million MW of power, by what time can we achieve this, some body has to initiate n take broad steps......So what i mean to say is the long term implications of the govt atleast now are very good......n dont see in the short term perspective.......

[luicifer-in-disguise]

Mr.Tarun, Britishers did not develop the railway network out of love for this country, they rather did it , so that it becomes easier for them to transport the goods.......n remember no foreign country will ever try to develop some other country which it had invaded n conquered,it is rather strange to know that a person of ur stature, thinks in these lines.......even god cannot save India......
to sum up, u believe in all those 330 million gods and britishers, and still do not have faith in yourself, then ...........i will not say ne further.....

[vivek of themavericks...remember!!]

Ok,that was nice.but let me start off from your statement of creating new industries for wealth creation.Even this needs wealth!.At the moment we need to breakout from service sector bug and try to do something great in manufacturing.Sure,its the era of customer focus and value addition in services.But at a national level only manufacturing can create the needed stand point.And i mean manufacturing of finished goods.That would boost exports and bring in Forex.RBI governor stated that we have \"comfortable\" forex reserves.This is another thing that has been puzzling me.We have \"confortable\" forex reserves and we also have profitable PSUs?then why so much of deficit?I wonder is it just notional or real.If its notional then why did S&P cut the rating and if its real then be prepared!!Regd,you point on China,its a huge country with lesser population density than ours,besides the labour is labour costs are lower than ours.So bulk of the manufacturing takes place there,hence their position is more stable then ours.We seemed to be good at back office stuff..

[vivek of themavericks...remember!!]

Hello!.its not possible for a bunch of novices to provide solutions to complex problems like these.However,indentifying the problems is by itself a substantial achivement,besides discussions on those would help anyone get a better prepective on issues.

[popesmokesdope]

woooooohoooooooo yoppiee di da loooooo...... i read the whole thing....hooooooot hooooooot .

[luicifer-in-disguise]

Thats what buddy, wealth, n it can be got only by selling off n start investing hugely in infrastructure for the moment........n regarding the service sector BUG as u say, well make hay while the sun shines, n more over this industry does not need huge investment , where as Manufacturing needs......n forget all this, India is a new born Baby, dont forget that even a once mighty power like England took no less than 100 years to completely transform itself.....things take there own time afterall....you did not start running when you were just born rt.....

[tarun]

thanks for ur comments. but ur points are not sensible at all. dont just go on criticising everybody on the board. looks like that is ur only work.

[luicifer-in-disguise]

Tarun, unfortunately, it happens most of the times, that once, when a discussion is taken in personal lines, the very essence of it is doomed....but, never mind, thanks a lot for your comments on my postings, n also, please do remember i am not here in this board to criticize someone whom i don\'t even know.

[vivek of themavericks..remember!]

Chill chill guys, sometimes arguments do get personal. Don\'t you all see in TV? Well, back to the topic. I have received emails from some of you asking for why I have been slamming the disinvestment process. I guess I have already expressed my opinion above. Just to add an extra note, a few days back the government officially closed the divestment files of IPCL and BPCL, leaving the matter to the PM and the Depy PM. These two are profit making. The problem I would like to reiterate is that the government wants to utilize the funds that would come in as an outcome of divesment as a working capital. This is what angers everyone. The latest statistics suggest a deficit of 8.6% of the GDP with total debts amounting to a whopping 80% of the GDP. The govt had good intentions towards divesment, but the fund utilisation part was bad. If this trend continues, we will be in a severe crisis. Even the markets have been fed up and have started to drop the prices of even the profit making PSUs. There\'s more to this.

[luicifer-in-disguise]

hi vivek, what is your a/s/l???n are you a student or emploee/emplyer?...i wud like to hv this very lil information \'bt you.regards

[vivek of themavericks... remember!!]

My age is 21 and location is Hyderabad!! I am a student of the Administrative Staff College of India. You may mail me at vivek@themavericks.net or thru http://www.themavericks.net. I along with 4 others are on the process of buliding a repository of articles and write-ups on business and finance, targeting MBA-Finance guys. I don`t even know if I can write all these in public boards. Anyway, I am not an employee.