Indian IT Services affected by INR appreciation

The Rupee appreciation which has inflicted the export industry from past few months and is on the verge of sweeping away some of the smaller players, is also tormenting one of the most spoken about and glamorous industries of the country – the IT industry.

The Indian IT industry, where a pay hike of 50 to 70 percent was very mundane and taken for granted on many of the occasions may not be the same again, it is getting transformed radically. A change which would affect majority of the work force in this industry and would also influence the decision of joining this industry compared to others.

This industry has been seen as one of the most rewarding sectors, however people who have been observant and have been a part of this for sometime would accept the fact that the sort of money and opportunities that were ten years back have been reducing each year and looking at the present status of rupee it can be well said that it may not improve any further, instead would deteriorate.
The rising rupee is diminishing the advantageous position of the industry as a whole. The initiative of cost cutting has already begun, which in turn translates into lay-offs for smaller firms and over utilisation of resources for bigger firms.

Everyone is feeling the pinch of sharp ascent in the rupee, however the severity of pinch is different for every individual firm.
For the top six -seven Indian players the pain is not that acute because their profit margins are way above the twenty percent range thereby the agony is less, however the firms whose profit margins were in the range of ten to twelve percent have come on their toes to fight the situation and one of the simplest weapons for them being lay offs is being utilised extremely well and cautiously.
In simple arithmetic: if the rupee moves from 45.5 to 40 it’s an appreciation of more than twelve percent, which in turn means the profit is approximately down by ten to twelve percent. This fall is not small to encounter for small firms which maybe perished with this burden.

The industry is on a turning point where suddenly the cost and resource optimisation has become the centre of attention. The companies have started focussing on lean management along with the revenues. This may also lead to consolidation in the industry which would be beneficial in the long term

US growth under pressure and Mass Selling Off

Troubled with one of the worst housing recessions and sub prime crisis, US growth is coming under pressure. The Fed lowered its benchmark interest rate by fifty basis point in mid September, to prevent the economy from plunging into recession and mitigate the outcry of massive losses and bankruptcy.

The US GDP growth has been running on consumer debt rather than on savings and the latest estimates are that the total US credit market debt is around 330% of GDP.
Due to this the American consumer is finding it difficult to maintain its earlier levels of spending/ consumption. In order to maintain the growth, credit needs to be intensified which in turn would push the economy in a deeper trouble than what it is now in.

On the surface, the world markets are getting stabilised again, however the big players are desperately trying to get rid of their mortgage obligations; similarly the US home builders are trying to dispose their properties at any available prices.
D R Horton, the second biggest US homebuilder, was unable to sell its properties, sold it for much lesser than it had initially quoted; similarly the other builders are selling homes at any price they can get.
Banks are offering discount of as much as 4 percent to sell some of the $300 billion of leveraged buyout financing they had indulged in before losses on subprime mortgages closed the market for high yield, high risk debt in July.
Investment Banks are offering finance to Vulture Funds on improved and lenient terms if they are willing to buy their (IB’s) debts. The banks have a backlog of $200 billion of LBO which they are trying to recover at discounted prices.

The Fed’s decision to lower benchmark interest rate by half percentage point has definitely assuaged the grief of the firms though is finding itself gruelling to bring the economy on a growth path again and prevent recession.

Advanced Difficulties for Fukui

Last month, the Bank of Japan, Governor, Toshishiko Fukui wanted to raise the interest rates by 0.5 percent, from the exiting rate of 0.5 percent. Fukui who is retiring in March next year is driven by the danger of leaving the borrowing costs abnormally low which will fuel risky investments leading to asset bubbles.

The credit crunch that triggered a global sell-off of the stocks last month drove the yen to its highest level in more than a year as the market turmoil prompted investors to sell risky investments funded by the carry trades (investments funded by low interest loans in Japan).
However in the last few days Investors have started returning to carry trades that capture the difference in interest rates between the countries, mainly due to the fall in Yen which gives investor’s confidence to buy riskier assets using the carry trade. Investors sold Yen and bought the higher-yielding Australian and New Zealand dollars, which rose around 3 percent against the Japanese currency.
The Bank of Japan kept its benchmark rate at 0.5 percent, the lowest among major economies which acts as a support for Carry Trade, bringing Yen back under pressure.

The expectations of Bank of Japan raising interest rates are getting dampened due to the fall in core consumer prices. Japanese retail sales suffered highest decline in last two years due to the weakening of household spending. Now, if the interest rates are increased amidst this situation then the higher borrowing cost would further dampen the economy.
The main cause of concern is the fact that low interest rate shall initiate risky investments. Even if Japan raises its target rate to 1%, it would still leave borrowing cost among the worlds lowest. However the benefit of this move would be with Fukui’s successor who would have some leeway to loosen credit if necessary. With Zero interest rates, a central bank is equipped with only very limited policy tools. A central bank has to recover normal interest rates to be able to respond to the economy in a flexible manner.

“When Going Gets Tough, Tough Gets Going”

Life unfolds all sorts of challenges, obstacles, in your path each day and if you get bewildered with those, much unexpected situations which maybe difficult to handle, you are only making the situation more knotty.
If you think deep you would realise that each day with its new set of difficulties, brings in numerous unaccounted learning’s which keep adding to the existing set of tools, thereby strengthening your existing defensive system, making you immune to similar kind of situations in future.

However, it is not just difficulties that life offers; it also brings a complete set of new opportunities each day. No matter, however long and dark the night maybe, there is always a morning equally bright which unravels a complete new world each day, a day which is unique, a day that has never been earlier and a day that would never be again and it is all up to us to see the opportunities it offers and take it in our stride more confidently.

“SMILE TODAY, TOMORROW WOULD BE WORSE”
- Anonymous

Everyday you would come across people who disbelieve you, who are afraid of you, however they are strong and conscious enough not to portray their fear on you face. They try to get you down and influence you with all sorts of negativities around, its you who has to stand steadfast amidst them and prove your mettle. Let them not bother you, because as long as you believe in yourself, no matter what happens or what anyone else says and does, you would make your mark.
Let not the imbecile influence you with their short sighted and crippled thoughts, let them not inflict and plague you; -- You have come to this world with ambitions which are poles apart, an ambition to make a difference to this world, no matter however small that change maybe, a change is a change for the betterment of tomorrow.

Life can turn out to be as unpredictable and capricious as much as one can imagine, and all expectations, decisions, plans however well they may have been gauged, can falter. It is then that you need to take control of yourself and not fall apart due to the situation, only then can you make the difference, a positive difference to yourself and to the society that needs you.

Be the independent to bring the change, a change which no one has thought before, a change which can change the state of thinking of others. You be the change, you want to see in the world, give it a new shape, a new colour, a new thought, a new direction which is brightened with your verve, enthusiasm, potency, and creativity --- you can bring the about the change the world needs.

Next time when you get frustrated with the situations at hand, think about you making a difference, think about you rectifying it rather than being a mere spectator to the disorder. Be on the other side, even if you are the only one there.
So do not wait for things to happen on their own or for some one else to fix it --- make them happen.

“ALL POWER IS WITHIN YOU;
YOU CAN DO ANYTHING AND EVERYTHING, BELIEVE IN THAT.
DO NOT BELIEVE THAT YOU ARE WEAK.
STAND UP AND EXPRESS THE DIVINITY WITHIN YOU”
- Swami Vivekananda

Money Market funds infected by Subprime

Money Market funds were invented 37 years ago to offer investors better returns than bank savings account while providing higher degree of safety. The size of the money market funds as of today is around $2.5 trillion, of which most of the investments have been made in assets like US Treasury Bills, Certificate of Deposits (CDs), Short Term Commercial debts and such low risk investments.

However, due to the growing pressure of yielding higher returns to its investors, some of the largest money market funds today are parking a part of their cash into some of the riskiest debt instruments of the world: CDOs (Collateralised Debt Obligation).
CDOs are package of bonds backed with loans. However the soreness is caused by the fact that almost half of the loan belong to the subprime debt category.

Money Market funds with total assets of $300 billion have been invested in sub prime debt this year. There is danger owning even highly rated CDOs, who definitely contain subprime loans.
There are around 38.4 million money market funds in the US. People use money market both to hold savings and serve as an account to buy securities, however the prime motive of it is to maintain safety and reasonable rate of return.

Money Market Managers are required to determine that their investments are safe and have high credit ratings; however Money Market managers buy CDO commercial papers to boost returns and make their funds more attractive to investors, which in turn increase their income.


With the default growing and sub prime crisis transmitting its unhealthiness, the fund managers have found a scapegoat in the Credit Rating Companies such as S&P, Fitch, and Moody’s whose irresponsible ratings definitely cannot be overlooked, however the fund managers and the various fund houses employ some of the most perspicacious people who charge the most hefty emolument, how can they shrug their responsibilities completely on someone else’s shoulders?
Investing in firms with Price-Earnings ratio of more than 500, does not hold water even if the most premier Investment Bank of this world grades it with a “BUY” position.
Similarly lending money to poor people with a record of not paying their debts is risky, regardless of what rating a credit rating company gives on the bond issue.
This is more effective incase of money market funds, where investors treat them at par with bank savings account and the last thing they (investors) would want is their money being lost in subprime debt furor.

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Money Market fund is a mutual fund that invests solely in money market instruments. Similar to a mutual fund, it issues redeemable units to investors and must follow guidelines set out by the SEC. Money Market funds NAV (Net Asset Value) is also determined at the end of each day.
These funds have some special properties:
1) Safety: the instruments these funds invest in are by and large some of the most stable and safe investments.
2) Low initial investment: Money market instruments have large minimum purchase requirements, thereby dissuading the personal investors from buying them. However money market funds have lower minimum purchase requirements thereby easily affordable by small investors.
3) Fixed NAV: the NAV for money market funds is usually fixed at a constant value of $1 per unit, giving investors more flexibility than mutual funds.
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The Private Equity Boom has not Sedated

With the worlds largest banks participating in the LBO (Leverage Buy Out) funding, the PE (Private Equity) boom was leading the global financial liquidity. Earlier in an LBO, the buyer issued junk bonds to pay for the acquisition, however today it are the PE firms who are doing the LBO financing.

The turmoil caused by Subprime disorder, under normal circumstances should have been a ground frail enough to restrain the large PE firms from making any further investment. However some of the large PE firms like KKR and Carlyle Group are among more than 50 PE firms looking to raise atleast $52 billion LBO funds, apathetic towards the existing crunch in the credit market.
While the activity of the PE firms has slowed, they still are eager to raise fresh funds for considerable buying opportunity being created due to the price falls in the companies they buy, brought by the credit market furor.
Despite the difficulties in the credit market, the willingness to invest in buy-out funds from long-term investors, such as pension funds and insurance companies does not seem to subside.
The KKR IPO which was scheduled to raise $1.25 billion this year seems to be slightly difficult due to the mortgage crisis, which is worsened more with KKR booking losses worth $400 million in its sale of $5.1 billion in residential mortgages.

However amidst all woes, KKR is seeking to raise $10.3 billion for its new European buy-out fund. Last week, Blackstone closed the world’s largest buyout fund at $21.7 billion. Similarly, couple of days back the size of buyout fund closed by KKR was $16.5 billion.

In their quest to acquire stakes in the companies, not only have the various PE firms (especially Blackstone and KKR) been constantly raising the cost of acquisition for each other but also seem to be heading towards a self destructive mode where delivering returns to customer expectations’ would become increasingly difficult due to the very high cost of purchase.


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PE funds raise money from rich investors who are willing to play with high risk for a fixed period. Followed by which they buyout undervalued public companies and take them private. Over the next 4 to 6 years, these funds work to unlock the value in these companies by cutting cost and improving operations.
The restructured companies are then sold or publicly listed again, and the funds return their capital with profits to their original investors.
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What worries South East Asia

Emerging markets are especially more sensitive during times of doubt & uncertainty because of their higher risk profiles and hence the large sell-off being initiated is not really a surprise.
The Emerging Asian economy is hugely dependent on exports for its income, and to mention the fact that US is one of the largest market for them is clichéd.
Direct exposure to subprime crisis is not the big concern for these economies because the exposure what they have is negligible compared to other economies. South Korea’s banks, for example have announced a mere $567 million of aggregate exposure to credit derivatives.
Instead the fear is that credit crunch which is already affecting the US growth prospects would soon trickle down to other economies, in turn diminishing the demand for Asian goods drastically. In Thailand for example, export contributes to around 74 percent of its GDP.

The upheaval in currency markets is drawing particular attention because, if it intensifies, it can shatter the expectations of manufacturers and exporters, even in countries such as Japan where companies have been predicting their earnings on conservative foreign exchange forecasts.
The Yen strengthened to as much as Y115.71 against the dollar on Thursday, August 16, its highest level since March. A stronger Yen decreases the value of Japanese exporter’s dollar denominated sales when converted back into local currency.
Incase of Indonesia, the currency has fallen to its lowest level against US Dollar since June last year and hence the central bank has promised to intervene to prevent any further drop in the Rupiah (Indonesian Currency).

In the longer run, any currency advantage for Asian exporters would be offset by the impact on the US economy and lower demand there for their goods. A lot would depend on whether intra-regional trade holds up, but a slowing US economy would affect that as well. And the fact that nearly two-thirds of exports still ends up in the US, European Union and Japan makes it more poignant.

Affect on China & India as of now (During the Sub Prime Crisis)

China
China seems to be much more stable and least affected by the sub prime crisis, compared to other economies. There has been much lesser sell-offs in China as compared to other low-income countries around the region.
Even if China sees a slowdown in its export markets, its strong fiscal position and profuse domestic liquidity would help it overcome the situation.
China has always invested all its money in US treasury. In the short term, keeping Renminbi low by buying US Dollars is good for the economy because it helps to boost the export. However, the export earnings get converted to US dollars and spent on US Securities leading to a virtual cycle. This diminishes the purchasing power of China, leading to a lower standard of living.
After the last crisis in 1998, the Chinese government started spending massively on infrastructure which helped China become export oriented and facilitated labour intensive industries. (US is China’s major export partner)
The low purchasing power of China has resulted in a mountain of cash and bulk of this wealth is denominated in US dollar, a weakening currency. If this wealth which is dollar denominated is sold for renminbi, it would appreciate the Chinese currency and thereby make it less competitive towards export in the international market. This disables China from spending its own money.
The Chinese wealth which is accumulated in US dollars is depreciating too fast for it to be accumulated, however the Chinese government has been excessively dependent on export and to let it go is not easy for them.

At some stage the leaders would be forced to invest more domestically and have stronger domestic market, which would appreciate the renminbi and thereby improve the purchasing power of China.
If also a part of forex reserves is converted into renminbi and used on the two under funded areas: health and education, it would in the long term have immense beneficial effect on the economy. This would reduce the tendency to save and kindle consumption.
It would also help them in importing their essential needs from other countries due to the increased purchasing power.

India
Incase of sharp risk aversion in the global financial markets, India tends to be more vulnerable than other Asian economies due to the large FII influx in the country.
Just 18 percent of the $98 billion of capital invested in India over the past four years has been in the form of long-term FDI, leaving it more exposed than other emerging economies where FDI accounts for about 75 percent of the total capital invested.
Atop this, similar to other western countries, Indian banks too have been undermining the risk associated with the credit making it more susceptible to the sell-offs.
Outflow of funds from India will help in the fall of rupee which would be of some relief to the exporters who are suffering from the sharp appreciation of rupee, which has led to the steep downfall in India’s export growth, now running at its lowest levels since 2003.
It would also assuage the US-centric IT companies, who have suffered from the pangs of recent rupee surge.

A Quick Run over the last few days in the world of Finance

The financial markets around the world have gone in complete chaos after the exposure of sub prime mortgage crisis and the resultant loss looming over the investment houses. This has caused panic amidst the investors who have grown nervous and don’t really know what to do with their money. This has been caused primarily because the investors bought anything and everything during the Bull Run at prices which did not reflect their true risk.

Late payments and defaults on US mortgages have reached their highest level in more than five years, prompting sharp falls in the value of mortgage-related securities and severe funding problems for lenders.
Economists predict that disorder in the financial markets has diminished the chances of recovery by the US housing sector after figures showed home construction activity fell last month to its lowest point in the decade which would prolong the housing slump.

The commodity prices led by Oil, Nickel and Copper declined on concerns of slow economic growth and demand for raw materials due to the growing losses in the credit market.

Investors are favouring Government Securities over Mortgage Backed Securities, Asset Backed Securities and also high grade corporate bonds, as they are moving towards more defensive position. The fear in the markets is making investors pile up short-term US government debt, thereby tumbling the yields on the Treasuries.
As on July 26, the Corporate and High Yield bond issuance stood at $31 billion (with 80% denominated in USD) in the first half of 2007 compared to total volume of $38 billion last year.
The ever-increasing demand for Treasuries due to the relative safety on government bonds has pushed 2 year yields to the lowest in 22 months. The yield on the 3 month T-Bill has fallen to 3.73 percent, it’s lowest since July 2005.


The situation has worsened due to the rise in Japanese Yen, where Dollar has fallen to 4 months low against Yen on growth concerns which have resulted in the discontinuation of carry trades from Japan. The more the Yen appreciates, the more the people would square off their investments which would further deteriorate the situation.
(Money borrowed in Japan where the benchmark interest rate was 0.5 percent, was being invested in economies offering higher returns, weakening the yen. New Zealand, where the key rate was 8.25 percent, had seen its currency driven to a 22 year high by the Yen Carry Trade. Thailand baht had surged to its highest since the Asian financial crisis a decade ago, as had the South Korean won.)

The turmoil in the currency markets which has led to the strengthening of the local currencies in the South East Asian economies would leave them disadvantaged against their competitors towards export. This would be further worsened by the lowered demand caused by the slowdown in the US economy.

The Fed, European Central Bank and other Central banks around the world have constantly been pumping cash to maintain the liquidity in the system. They have added more than $300 billion in their financial systems through distressed banks. (Till now US central bank has pumped in more than $76 billion to help troubled banks).
Russia’s central bank also joined the efforts to ease fears over the global liquidity crunch; by injecting $1.67bn into the country’s banking system on Thursday.
Russia was likely to withstand the turmoil in global financial markets due to the relatively low leveraging of Russian companies and also due to the high oil prices which has helped to fuel its economic boom.

The Fed Reserve has unexpectedly cut the discount rate to mitigate the damage to economy from the disorder in global credits markets. The central bank reduced the rate at which Fed makes direct loans to banks by 0.5 percentage point to 5.75 percent.

Investment Banks across the world are having real hard time trying to cope with losses due to hedge fund operations. Goldman Sachs was trying to rescue its $3 billion from one of its hedge funds which had suffered losses following slump in equity market.
JP Morgan & Chase, the biggest lender in the LBO market, is expected to lose about $1.4 billion on loans it can’t sell because of the credit crunch.
JPMC is stuck with $40.8 billion of LBO debt, while Goldman Sachs is holding $31.9 billion and Deutsche bank has $27.3 billion. JPMC and Goldman Sachs were among banks that last month failed to sell $20 billion of loans for the LBOs of UK drugstore Alliance Boots Plc and carmaker Chrysler LLC.

London experienced the biggest one day loss in past four years, ignited by selling on Wall Street amidst fear of US slowdown, plummeting FTSE by 250 points, which is more than 4 percent decline.
Investors have been fleeing Asian and European stocks, pushing the markets in red.
Amid this crisis the Bombay Stock Exchange Sensex nosedived by 642.70 points (more than 4%) – the largest single day fall in over 4 months. The FIIs (mainly Hedge Funds) had sold around Rs 3100 crore on Thursday – the highest single day sales by foreign funds as of date.
South Korean, Taiwanese and Indonesian markets also closed 5 to 7% lower.
However bankers and investors in Asia have been quite confident about the resilience of the region from the current mess due to the strong fundamentals and limited overall exposure to US sub prime mortgage market. Therefore there is little sign that this trouble would cause a great slowdown in the emerging markets.

INDIA Shining

It’s been a long and cumbersome journey for one of the world’s largest democracy to cover the span of sixty odd years past its independence since 1947. It grew at an average rate of 3.5 percent from 1950 to 1980, at 6 percent in 1980s and 1990s, around 8 percent after that and at slightly more than 9 percent in the past two years.

Today it is on the verge of becoming the key drivers of the World economy, surpassing the most dominant and unswerving countries of this world.
It’s become a country which cannot go unnoticed, no matter which forum it is.
• It is the 4th largest economy in the world (on the basis of purchase power)
• It has the 12th largest consumer market in the world, forecasted to become the 5th largest by 2025
• The Indian IT-ITES industry is expected to cross $50 billion this fiscal
• It is the fastest growing Mobile Telephony market in the world, with about 6 million monthly additions to the subscriber base
• It has the worlds sixth largest crude oil refining capacity – 2.56 million barrels per day; 3% of the world’s capacity
• Its forex reserves are $214 billion which is equivalent to a years import which was equivalent to a days import in 1991
• It is the youngest country in the world with more than half population (54 percent) 24 years of age and below
• The Market Cap of the Stock Exchange is around INR 34,000 billion (i.e. around 96% of GDP). Bombay Stock Exchange had 7,707 scrips as on June 2007
• SMEs (Small and Medium Enterprise) today have 40% share in industrial output and contribute to 35% of direct exports and 45% of overall exports. India has 3 million plus SME units
• India’s gross national savings rate stands at 32.4% as against 12.9% of US

The fact that India is growing at an excitably fast speed cannot be disputed, however similarly is the rift between the “have’s and have not’s” mounting. The rich are getting richer much faster than the poor.
India needs a growth which is Inclusive and Holistic.
There is one strata of the society which has cars, computers, washing machines, pays through credit cards, and travels by planes; possess all means required for hedonistic living completely oblivious to the contrarian equivalents who struggle hard each day to sustain their existence.
• 60 percent of the people in India belong to the underprivileged category
• India’s population would reach 1.35 billion by 2025
• 65 percent of the labour force is not even matriculate
• Half of children below 5, suffer from malnourishment
• Agriculture contributes less than 25% to GDP which is expected to become 10% by 2015, however more than 60% of the labour force remains dependent on it.
• Out of 100 million children ( in the age group of 6 to 14) worldwide who do not go to school, 20 million live in India


Rural India has a population of 700 million spread across 600,000 villages and hence they contain a mass which cannot be ignored or neglected if we want the absolute development and progress of this country.
Despite the bulk of the population being dependent on agriculture, the production/ output received is overly meager. Last year India had to import 72 lakh tonnes of wheat at very high price.
To boost agriculture we need to get large investments in rural and backward areas and create means for successful agriculture which is not only about farming but also about food processing and its storage. This would also require to be supported by proper channels of water supply with water management methods and irrigation amenities to prevent the farmers from relying on rain for their crops. We need to replace our olden methods of cultivation with technologically advanced methods which would boost the production.
For this the government needs to have more proactive Micro Finance Institutions who would help the farmers for their financial needs through low cost credit.
The levels of ground water is declining by 5 percent every year in the North Western states of Punjab, Haryana, Western UP, parts of Maharashtra and Gujarat and if it is not tackled immediately and pondered upon it may exacerbate the already existing woes of the farmers.
In a situation like this what is needed is superior water management, because we face floods in large parts of the country and then face water scarcity after some time. We need more dams and reservoirs which can hold water for the period when required and can be effectively used.


Only 28% of Indian population lives in towns which is expected to touch around 41 percent by 2030.
2/3rd of urban population is living in small and medium sized cities (less than 1 million population); services and infrastructure in these cities are coming under tremendous strain in terms of housing, infrastructure, transportation, sewage water and other basic services. This would result in a very large chunk of this very rapidly urbanising population to be forced to live in slums and temporary settlements.
An apartment in South Mumbai comes for around Rs 50,000 per square feet, and surprisingly has large number of takers for itself making moolah for the builders. The actual problem is of demand and supply which is pushing up the price, however this should not be interpreted as land scarcity in urban area. The trouble is we are not using land in proper way and also laws such as Rent Act are not allowing authorities to release the land thereby underutilising existing resource and shooting up price.
This problem of enormity if not dealt soon would dilapidate the entire system of these cities which are already struggling with the influx of huge population.


India is the worlds 6th largest consumer of Crude Oil after the US, China, Japan, Russia and Germany. India imports 70 percent of its crude oil needs which is expected to increase to 80 percent over the next decade.
To counter inflation and provide stability from the extremely volatile global oil prices, the government provides huge subsidies on oil which results in enormous loss for the oil companies even though the loss is soothed through the issue of Oil bonds by government.
Today Public sector Oil companies are losing Rs 5.88/lt on petrol and Rs 4.80/lt on diesel which results in a loss of Rs 90 crore per day for the Indian Oil company.
We need to restrain the usage of oil and along with that migrate to the usage of gas at slightly faster pace to shrink our dependency on oil.


India’s public debt to government revenue was 400 percent in 2004, which is about 83 percent of GDP. High government debt implies a significant interest payment which means lesser funds available for development expenditure. It also crowds out private investments because when the government borrows heavily, the private entities are unable to access credit easily or cheaply enough, which in turn impacts growth.
We need to accelerate economic growth by spending in areas of development such as infrastructure, services, education and keep the non-developmental expenses under check which leads to higher stress by raising unproductiveness and also increasing inflation.


20 percent of children not going to school worldwide belong to India.
India needs to focus on its primary education and be true and committed to its mission rather than creating a farcical situation for itself. It needs to establish more primary schools and have better facilitators/ teachers rather than the existing ones who barely turn up. The concerned authorities need to be sterner while dealing with such situations rather than be carried away for electoral reasons.


Based on the number of people finishing high school, India would need 12 to 14 million jobs a year for the next 20 years.
There is disparity in incomes and regional development. Employment in the organised sector is not growing commensurate with the rates of its growth thereby giving rise to jobless growth.
India needs to promote Small and Medium Enterprises through tax incentives and easy credit facilities which can be extremely beneficial for the overall development of the country.
Government needs to promote industries in its SEZ (Special Economic Zone) which actually provide job to the inhabitants in and around that place rather than causing mass relocation of people from other states for those jobs. Sectors like manufacturing can provide mass employment and hence they should be given priority in SEZs.


India has to eradicate poverty, corruption and bureaucracy from every corner of this country.
We need to transform and restructure our government also along with economic policies. This can only happen with the valuable effort of every individual; the minimal one can do is exercise his fundamental right to vote and elect his leaders more judiciously, unruffled by trivialities of religion and caste. Today more than half of the population does not exercise its voting right, and majority of these people not voting belong to the educated and self-sufficient lot who show their unconcern towards their fundamental right for petty reasons.
India needs a government which is sincere and committed in providing health, education and physical infrastructure to all its citizens.


India needs to cover several miles more before it can be really proud of itself.
To continue the existing growth momentum and meet the ambitious expectations of millions of eyes all around, it needs a real inclusive and holistic growth which would make it a country free from corruption, illiteracy, and poverty
It’s only then can we have a TRUE SHINING INDIA, an India which Gandhi dreamt of, Bhagat Singh and millions of unnamed freedom fighters sacrificed their life for.