GD Topics n material for those who got and who will be getting calls

[blue_zzap]

hey guys, i hope this is the place to post this. I found something on the net that might be useful in terms of a one stop point for economy realated news. In addition to being up to date there is loads of news from other countries as well. Enough for even the greediest information junkie Here is the link: Economist.com | Country Briefings

really hope you guys find it as useful as i did..

[nitishkaul]

Some real good job there ravishin_dude! Thanks a ton!

[dvkgayatri]

thanx for da excellent stuff......

[sachin_h_agrawa]

Originally Posted by ravishin_dude

SET-3

Thanks dear for this useful stuff

[atulonweb]

Hello Guys,

There is a discussion going on Cat Fundae on the topic "Is copying western culture good for the Indian culture"

I feel that site can be very useful to you all..

You can participate inteh sicussion and see teh feedback and the final analysis of the GD everyday.


Atul

[ankit_ag123]

thanks a ton ppl

[sauravsuper]

thaaaaaaaaaaaaaaaaanks buddy..........keep up the good work..
yes,i have an important topic
SHOULD WE SCRAP FDI -FII DITINCTION.
this is one topic that is doing rounds of many business schools these days.............

[warrior]

Some of these articles might be useful

Here's the articles about the credit and monetary policy by RBI

rediff.com: Money: The Monetary and Credit Policy 2006-2007

[Cat_aryan]

Originally Posted by warrior

Some of these articles might be useful

Here's the articles about the credit and monetary policy by RBI

rediff.com: Money: The Monetary and Credit Policy 2006-2007

Great materials for GD and GK, thanks PG for providing a wonderful plateform to share what you have to get what you don't..

[arnie19]

Hi guys n gals i posting this topic 4 u people
Inflation in India

The Situation
According to DSP Merrill Lynch the inflation in India will remain above 7 per cent irrespective of apex bank the Reserve Bank of India's speculation of it remaining about 5.5 to 6 per cent range. In the month of August by the end of first week the wholesale price inflation was 7.96 per cent. This inflation was mere 3.89 per cent during the same period in the previous year.

Household communities are facing increased cost of living mainly due to price rise of essential commodities like diesel, petrol, vegetables and aviation turbine fuel. The WPI rose by 0.3 per cent to 186.6 points due to the impact of price rise of petrol (increased by 2 per cent) and diesel (increased by 5 per cent). The index was 173.4 points a year ago. According to experts this trend will remain at the same level for some more time.

Increase in the international crude oil price making the situation worse. The reason for this sustained price rise is being taken as possible terror threats to oil pipelines in the Middle East, potential disruption in exports from Russia, Nigeria and Venezuela, along with the oil cartel. The rising demand from countries like USA, China, India, etc. is also a prime reason for the increase in the price. This indirectly is affecting the prices of essential commodities due to increased transportation cost. Moreover the strike by the transporters made the situation more precarious.

Rising wholesale inflation may force manufacturers to hike prices, threatening to further choke demand and growth, already at risk from erratic monsoon rains. Industry, emerging from a three-year slowdown, is in a tight spot as rising input costs hurt profit margins but any move to raise retail prices may scare away consumers.
Delayed monsoon has added to the farm-dependent economy's woes as prices of food items have risen sharply. Most analysts have cut their growth expectations for the year to March '05 to 5.5-6.5% from pre-monsoon views of 7-8%. If the producers increase prices, it will lead to a domestic demand recession and if they don't, they will see profits dwindling. Either way the consumer is going to suffer.

In 2003, rapid economic growth after the best monsoon in decades, and historically low interest rates prompted people to spend on attractive financing schemes for consumer durables. Manufacturing contributes nearly a quarter of the country's GDP, while the services sector, which benefits from higher consumer demand, contributes almost 50%. The uneven monsoon is going to hurt farm output and will lead to a drop in income for the nearly 600 million people who live off the land. Rural purchasing power is crucial for the manufacturing sector and for overall growth.
Inflation may also eat away at demand, especially if the government is forced to take measures to curb rapidly rising prices.
















The Remedies
To check the current situation the government has come with a two-fold plan.
It has announced that it will

• Tighten the money supply
• Cut the duties on import of crude oil and steel which has seen spurt in the recent times in the international market.

It is likely that RBI will raise the repo (repurchase option) rate (the rate which banks get when they deposit excess cash with the Reserve Bank of India) and even the benchmark bank rate at which it lends to commercial banks to soak out excess money supply from the system.
Reserve Bank of India: Repo rateEuropean Central Bank: Refinance rate (currently 2 per cent)Bank of England: Repo rate (currently 4.5 per cent)USA: Primary credit rate (currently 2.5 per cent) When the demand-supply situation is considered it is always desirable to make such a market situation where demand is equal to supply. Generally demand curve for funds on a graph slopes down and the supply curve slopes up. The intersection point of these curves gives the interest rate. Whenever apex bank increases the supply of high powered money more than the required the curve shifts downward and towards right. The new intersection point of both the curves gives the new interest rate (lower than the earlier) at which market will clear. Whenever the floor rate is fixed higher than the rate at equilibrium the market witnesses the excess supply of fund which generally remains as deposits and the market remains in the speculation of fall in the floor rate. The problem with India is that here the effective rate is more than often being taken as repo rate the only key available to have a control over the inflation. So, it is the repo rate where the government should take some serious steps because the only monetary instrument that can combat with the inflation is the price of credit.



The finance ministry had announced that it would cut import duties on commodities such as petroleum crude and steel. RBI measures while curbing money supply could also signal interest rates to move up. The rising inflation also made its impact on the share market when the sensex zoomed down by about 18 points on the date of announcement of inflation situation.

The Introspection
India is also looking at new and effective methods of calculation of inflation. For this the government is planning to revamp the method for measuring inflation with the help of World Bank's technical assistance.

Moves are afoot in the government to come up with a more realistic way of measuring inflation through a Producers Price Index (PPI) that would replace Whole Price Index (WPI).

"WPI measures the prices of both inputs and outputs. The index also includes taxes paid by producers. But PPI would be based on prices of only outputs excluding intermediate costs and taxes."

At present, WPI is calculated on the basis of prices of agriculture produce at the mandi level, while manufactured product prices are taken from major markets. However, PPI would be calculated on the basis of prices of agriculture products at the farm level while it would be ex-factory prices for manufactured products. But collection of the price quotes at the producers' level every week for coming up with a point-to-point inflation would be uphill task for the government.

At the same time it is not impossible, as such method is used for drawing up the GDP deflator. The nominal value of GDP is divided by the deflator (the average inflation rate) to arrive at the real GDP. Since PPI also includes the price of services it will be more effective measure and it also filters off other costs that are added on to the products before they are bought by consumers.