Is India Vision 2020 achievable? India is a land of vision and great philosophers, kings and scientists led a vision for India. India Vision 2020 was a paper formulated by Technology Information forecasting and assessment Council (TIFAC) under the leadership of Dr APJ Abdul Kalam and another 500 experts. The paper focuses on the development of core economic sector:- • Agriculture and food processing • Infrastructure • Education and Health • Information Technology and communication • Critical technologies and communication The paper provides an insight about the country development with focused approach, will and determination. However, with the present economic scenario, it is difficult to achieve the same. European economy is in turmoil. Greece, Spain, Portugal and other European countries are in a danger of deep recession. US industrial growth is also in the declining stage. These factors led to fall in investor confidence. Growth in emerging markets like India and china is also showing signs of slowdown. The India GDP rate for the last quarter of 2011-2012 at 5.3% is disappointing. The balance of payment of India increased from $9 bn in 1990-91 to whopping $105 bn in 2011. The major concern is fall in the FDI due to political uncertainties and global cues. Study by London Business School A recent study by London Business School pointed out 7 reasons why India is unlikely to be a superpower. The reasons stated are:- • Challenge of the naxalites • The insidious presence of the Hindutvawadis • The degradation of once liberal and upright centre • The economic disparity between rich and poor • Instability and policy incoherence caused by multi-party coalition governments • Irregular environmental regulations • Trivialization of the media Falling GDP and GDP per capita Current economic disparity is causing social unrest. The Gdp rate, which was on the high tone of 8 to 9 % for the last 3 to 4 years, fell suddenly to 6 to7 %. The Gdp per capita also fell side by side. Depreciating INR The Indian rupee depreciated against dollar sharply by 6.86 % and it was the worst performer amongst the Asian currencies. It had lost 12 percent of its value after it has touched 43.85 in July, 2011. Rupee depreciation led to increase in cost of borrowing to corporate sector and have a severe impact on import bill. Falling Credit Rating Let’s talk about giant financial institution and rating agencies of the world like Morgan Stanley, IMF, S&P etc. Here is the glimpse of the results of our country’s financial performance:- • IMF lowered the growth forecast of India to 6.9 % from earlier 7 %. • Standard and Poor‘s degraded the outlook to negative from stable. • Standard and chartered lowered its 2012-13 GDP growth outlook for India to 6.2 % from earlier 7.1 %. • Morgan and Stanley scaled down to 5.7 % from 6.3 % in this current fiscal year. Major rating agencies also lowered the rating of Indian banks and financial institutions. Can this crisis be resolved? This is a million dollar question and the answer is yes. The current situation does not seem favorable but Indian growth story is still intact than other developing economies. So, this is the perfect time for the government to take corrective actions and show their commitment for the nation’s development. Some of the suggestions are:- • Government should focus on infrastructure sector and make attractive bond offer. • Government may consider reducing temporary imports. • Government should make political consensus healthy for the investment. • The government can make attractive investments and invite long term funds in retail sector for those states that are willing to open their gates. Effective policies and strong measures will undoubtedly go a long way in reviving the economy and directing it towards progress. With correct policy decisions, India can still achieve its vision of 2020.

Steel Secto,An overview

Steel Sector in India Indian iron and steel industry is nearly a century old with TISCO (Tata Iron and Steel Company) being the first integrated steel plant to be set up in Jamshedpur in 1907. Steel industry is the first core sector in India which is exempted from the Licensing Raj (1990-91). Since after economic liberalization in India, Steel sector grew by leaps and bounds because of development in Asian economies and perennial demand of steel from construction sector, automobile sector, aviation sector and other industrial sector. The new industrial policy of the GOI opened this sector for FDI and private investment as government exempted it from the list of industries reserved for public investment only. With the government backup, the existing units are modernizing and several green field projects are coming up in India at various locations. The steel sector has seen some the largest mergers and acquisitions which includes Tata-Corus, Arcelor- Mittal. Consumption:- Indian steel consumption i.e. at 14% is higher than world average of 6% in the last 15 years. Production and Consumption pattern in india in total finished market The steel consumption growth in the last 5 years was in the range of 9 to 13%. The per capita steel consumption is 53 kg in 2010 as compared to 35 kg in 2005. Steel Consumption intensity per capita (India) In India, the per capita crude steel consumption has increased from the last decade. It is also aligning with the per capita Gdp growth rate. With annual CAGR of 10% till 2013, the prospect seems fruitful for investing in steel sector. GDP Growth rate:- With the RBI strict policy rates and Global slowdown, inflation GDP got hit as it is now around 6.4 % to 6.7%. It is projected to grow by 7 to 8 % in the coming months. Industry Structure:- Indian iron and steel industry can be divided into two main sectors i.e. Public and Private sector. Public Sector industry includes SAIL and Vijag steel. Private sector industry includes Tata Steel, Jindal Steel, and Essar Steel. Further, based on the routes of production, the Indian steel can be divided into two types. These are integrated produces and Secondary Producers. Integrated Producers: - These are those producers who convert iron ore into steel. The three major players are SAIL, TATA Steel and RINL. Secondary Producers: - These are those producers who convert scrap and sponge iron to iron by melting. The major players are Essar Steel, Ispat Industries and Lloyd’s steel. Top 10 steel producers in the world:- Rank 2001 2010 1 Arcelor Arcelor Mittal 2 Posco Baosteel 3 Nippon Steel Posco 4 Ispat International Nippon Steel 5 Shangai Baosteel JFE 6 Corus Jiangsu Shagang 7 ThyssenKrupp Tata Steel 8 Riva U.S Steel 9 NKK An steel 10 Kawasaki Gerdau Source: - World Steel Association Production of steel:- The growth of steel was mainly comprised of expansion from 47.99 million tons per annum to 75.463 million tons per annum in 2010-2011. India is the fourth largest crude steel producer in the world. India is the largest producer of sponge iron in the world with the coal based route. After the delicensing and decontrolling in 1991 and 1992 respectively, Indian steel industry grew significantly. The pig iron production grew from 4.93 MT in 2006-07 to 5.54 in 2010-11. The sponge iron grew by 18.34 in 2006-07 to 26.71 MT in 2010-11. The total finished steel grew by 52.53 MT to 66.01 in 2010-11. Export and Import of steel An important point to be noticed regarding steel sector is that iron and steel are freely importable and freely exportable. Advance Licensing policies effectively helped the sector in free export and import. From the export and import data across the year, it can be seen that the India export import deficit is widening as the current consumption is outpacing the current production. Regulatory environment The central goal of steel industry is the creation of 110 MT of capacity and 100 MT of production by 2019-20 implying an average growth of nearly 7 percent a year. With this goal in mind, Indian ministry of steel came out with National Steel Policy, 2005. The national steel policy incorporates the creation of additional capacity, expansion of existing plants, removal of procedural-policy bottlenecks that affect the availability of production inputs, huge emphasis on research and development. The policy focuses on domestic sector. With the implementation of national steel policy, government allowed private owned and foreign investment in this sector. Government also improved intellectual property laws, deregulated pricing and distribution of steels. Government significantly reduced the custom duty payable on inputs to steel production. Global Outlook and Forays With the slowdown in global economy, Euro crisis, Slow down in US Economy, slow GDP growth of India and China, the outlook for 2012 remains cautious. Despite a good start in 2011, the global economy entered into vicious cycle of inflation and recession in the 2nd half of the year. However, with the revival of growth in India and china in the first few months of 2012, one can keep his figure crossed. .Steel demand will depend majorly on the growth aspect of BRICS Nations. According to World steel Association, in 2012, global steel consumption is estimated to increase at approximately 5.0% to reach 1.4 billion tones, after increasing at around 6.0 % in 2011. ------

Unprecedented Move

Coal India limited ,A Maha Navratna Company, is given a presidential order to supply coal to power companies. Earlier, the company is given order by PMO office for the same. Buy, finally ,after sitting with indias top industrialists like Tata,Birla,ambanis , the government has decided that Cil will supply 80% of Coal from April. At, This is juncture ,it is necessary as the power companies are having coal shortage supply. It will help in solving the coal crisis. However, if one look from the company aspect, it is really a shame and loss of dignity that company do not enjoy its freedom -ship in the corporate world. In,todays world, it is highly appreciated that the company is independent in taling decisions, It may affect the investors also. The company has not come out with its annual financial report.

tragic india road development rereports

today, i read an article ie published in the business standard editorial page. It is about BRT(Bus rapid transit)system in india ie recently being launched in delhi under the leadership of Dr Dinesh Mohan. The overall project had made with lot of pot holes. BRt system is successfully launched in foreign countries mainly european countries. why we do not understand that it will help our own country infrastructure development. In gujrat ,it is successfully launched. Dr Mohan told that he studied the transport details of Usa,Canada,China,india. india is not in their league. We lacked from them in every aspect. Take the case of china, our neighbour, in 3 years, on road and rail transport development, they had published 1600 research papers but we ,only 17. we are having our own central railway research team,SCRA, iit,iisc ,but only 17. shame on us. how we can compete with china. They employ more than thousand researchers,analyst and engineeres for their railway progress review ,but we are in no way getting closer to them.

government borrowings

How government borrowings affect aam aadmi. For the development project and subsidies , government need money.For money,governmnet go for borrowings. The government will incrase the tax and also the base. More taxes led to less liquid money in the pocket of aam aadmi. Less money will affect their spending pattern. people will start spending less . This will lead to less consumption and less production also. It may cause slump in growth. Government fiscal policy of increasing the tax slab from 1,80,000 to 2,00,000 will however,help the indian people to have more money with them. Government also told to decrease the fiscal deficit from 5.9 % to 5.1 %. that means,less subsidy this year and more taxes .It can be seen that service tax has been raised from 10 % to 12%. the government is also considering including transfer pricing in the corporate sector. Regarding transfer pricing structure, please wait for my nest blog which i will publish soon.

financial trends in india post budget

current financial trends in india is highly volatile. Post budget 2013, the Indian service tax structure has been raised from 10 % to 12%. The budget focuses on transfer pricing and tax on mergers and acquitisions.However, the 23rd march,goldman sachs report shows some signs of recovery for indian inc and the share market will revert in the 3rd quarter. the Global market is recovering .US is recovering and european market is also recovering from greece debacle.The current indian scenario is showing signs of recovery. After 3 weeks of stocks showing downturn, the infosys and tcs showed some signs of recovery in terms of 4 to 5% . The Indian central bank also given signal of policy cuts in the recent monetary review. The government recent rajeev gandhi invetsment plans will add millions of dollar to the investors. The stable government in UP also helped the india to come up with its current debacle. Wall street is bouncing back. the overall economic view is somewhat comeing out of its nightmare .

"Occupy Movement"

lets talk about the best names that come in the mind of any finance guys: lehman brothers, morgan stanley, j p morgan chase , federal banks etc..why i told this because all these financial behemoths belong to United States. But, if one looks now at US,an important term come which recently spread like a wild fire in the country. " The occupy movement" . people are frustrated about their financial security ,for which they call 99% insecure. Unemployment,collapsed promisses of obama government,financial insecurity paves the way towards yet another financial crisis like of 2008. Occupy Movement spred like a wild fire.