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A Global Shift in Foreign Aid, Starting in India

Discussion in 'World Economy' started by santosh, Mar 25, 2014.

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  1. santosh

    santosh Major SENIOR MEMBER

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  2. santosh

    santosh Major SENIOR MEMBER

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    Foreign cos pulling more money out of India

    May 25 (Reuters) - Foreign direct investment, the sort of sticky long-term money India craves to fund its current account deficit and build up its infrastructure, may not be so stable after all.

    According to a Nomura report, multinational companies have been pulling money out of India at an accelerating rate, moving $10.7 billion out of the country in 2011, up from $7.2 billion in 2010 and just $3.1 billion in 2009. :ranger:

    Outward flows are bad news for a country that this week saw its rupee currency hit a new record low as investors worry about its hefty fiscal and current account shortfalls, slowing economic growth and policy gridlock.

    Still, corporate funds continue to enter India even as existing investors exit. Inbound foreign direct investment surged 88 percent to a record $36.5 billion in the fiscal year that ended in March, according to official data.

    "Global deleveraging may have forced companies to sell their Indian assets and repatriate funds to their home country," Nomura analysts wrote in the Friday note.

    "At the same time, domestic push factors such as slowing potential growth, the high cost of doing business and regulatory uncertainty have weakened the investment climate, likely causing this erosion. This is not a good sign."

    Telecoms companies Etisalat of Abu Dhabi and Bahrain Telecommunications Co are leaving India after their mobile phone licences were among those ordered cancelled by an Indian court amid a corruption probe.

    New York Life recently exited its 26 percent stake in an Indian insurance venture with Max India for $530 million, while U.S. mutual fund giant Fidelity Worldwide Investment recently struck a deal to unload its India unit to local company L&T Finance Holdings.

    Foreign companies have been increasingly frustrated by regulatory uncertainty and a lack of reforms. Rules that would allow foreign companies into the supermarket and airline industries are stalled.

    Vodafone, the world's biggest mobile carrier, has repeatedly clashed with authorities in India, which is trying to collect more than $2 billion in taxes from it through a retroactive law change, even after India's highest court ruled in the company's favour.

    Vodafone, the biggest overseas corporate investor in India, has said it will not walk away.

    The Nomura report said the services, manufacturing and real estate sectors probably saw "the maximum outflow".

    http://www.reuters.com/article/2012/05/25/india-economy-fdi-idUSL4E8GP4EG20120525

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  3. santosh

    santosh Major SENIOR MEMBER

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    Indian Economy on PPP would come closed to $11.0trillion, if we include 'undocumented' part of GDP too


    we find on PPP, Indian economy closed to $8.0trillion by end 2015, more than total of UK+Canada+Australia+Pakistan+Bangladesh+NewZealand+other Commonwealth countries...

    on PPP basis, we find Indian economy closed to $8.0trillion by end 2015...

    The World Factbook

    but it still doesn't includes the 'undocumented' part of GDP, the share of GDP of developing countries, which doesn't come in light, remains undocumented. which estimated over 30% in case of developing countries like India, Philippines, Vietnam, Thailand, China, Sri Lanka etc.

    and its not just the "non-Taxed" or "black money", but, more than half of the people of India aren't even aware that they would pay tax on the salary they earn....

    The World Factbook

    hence, i would say, by end of 2015, Indian economy would come closed to $11.0trillion on PPP term, if we consider the undocumented part of Gross Domestic Product (GDP) also.

    nowdays UK and their allies are hopeful to maintain food supply for their coming generation through India only, have bet theri every credibility to get this "Elephant", whose economy size is bigger than the total Commonwealth Economies as whole. with dreams of source of money and power from this country,only, by using Bangladeshi souls to occupy bodies of Indian govt-military-political people, including businessmen too...
    (the technologies of NASA-US, which were developed by the Indian immigrant professionals there itself, with immigrant professionals of other developing countries and Japan etc..... and this is the final outcome of these US's technologies, which is being used for every form of crimes in the countries like India... a disaster on this world as whole by UK and their allies...)
     
  4. santosh

    santosh Major SENIOR MEMBER

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    rev10, Income-Debt-Buying Power comparison of Indians, British and Americans
    (in exchange rates terms)

    Per Capita income of US = $50,000 (around)
    Per Capita Income of UK = $38,000 (around)
    Per Capita Income of India = $2,000 (around)

    25 times difference
    .

    => Government Debt
    Government Debt per Capita in US = $18.5trillion for 310 million population = $60,000

    Government Debt per Capita in India = $1.2trillion for 1.25billion population = $1,000

    Government Debt per Capita in UK = $2.2trillion for 64million population = $34,000


    => "Total Debt" Per Capita of US = $61.0trillion for 310million population = $190,00 per person (around)

    "Total Debt" Per Capita of India = $3.0trillion for 1.25billion population = $2,500 per person (around)

    Total Debt Per Capita on UK = $12.0trillion for 64 million population = $190,000 per person (around)

    around 80 times higher


    => buying products in Market, would be around 6 to 10 times difference, as per my experience.

    flat white medium size coffee in India at 30 cents and in Sydney its $3.2 (10 times difference)

    something we usual buy, a mineral water for Rs15 (30cents) in Delhi, while it was around $2.4, the cheapest one, for a similar one liter mineral water in Sydney.....

    the cheapest Chinese take away food at $12 plus $2.0 for water, as compare to i pay around Rs90 ($1.5) a time here in Delhi

    renting flat in Sydney starts with around $350 per week, the cheapest, means around $1,500 per month, plus other charges. as compare to renting a flat in my city, Lucknow, at around Rs 15,000 a month ($300).

    parking in city, as you first drive to a shopping complex and then buy food whose prices isn't much different than India, for example. and similarly, even if you watch a movie, you pay dollar as compare to rupees in India.

    even mobile charge at around 30 paisa per minute in India, less than 0.5 cent, while its around 15 cents per minute in Australia....

    even for transportation, its around Rs 20 rupees(30 cents) in Delhi metro, as compare to minimum $3.5 one way in Perth-Sydney metro.....

    i would put "on ground" purchasing power difference at around 6 to 10 times between India and US-Aus. the prices which matters us, the prices of driving, renting, food, travelling, mobile etc.... :tup:

    hence, $2,000 'exchange rate term' per capita income of India would stand at around $14,000, using the factor of '7.0', as per its prices in US, for the what we buy-use the money on the ground, which affect the buying power of people.
    hence this way, we find per capita income of India at around $15,000, as compare to per capita income of around $50,000 and $38,000 in case of US and UK respectively....

    (considering Per Capita Income in the developing countries like India-Philippines-Vietnam etc rise by over 6%+ per year with inflation too...)

    .
    => while for the developing counties like India have their 40%+ GDP remains "undocumented", simply because they dont show their half of the salary. so even if we consider the factor just at around "5.0", GDP Per Capita of India would still come at around $15,000 on PPP, as compare to around $38,000 in UK and $50,000 in US. while high growth rate of countries like India-Philippines-Indonesia-Vietnam-China etc does promise a brighter future, while the today's OECD economies are mostly saturated, having done hefty cuts in budget expenditure since 2009 recession too, hence limited investment has further undermined the growth prospects. which would hard for them to even match with their 1.5% average growth rate of last 25years since 1991 too...

    List of countries by GDP (PPP) - Wikipedia, the free encyclopedia
    .

    => further, as discussed in the above post, the term "Total Debt" or "Overall Debt" includes Government Debt+Household Debt+Business debt, mainly....

    its a rough calculation for US-UK-India from the picture of 'The Economist' newspaper as below. an article about US's total debt, here we have.....

    Total US debt soars to nearly $60 trn, foreshadows new recession — RT USA
    .
    => the 'factored' Total Debt on major OECD economies is as below:-
     
  5. santosh

    santosh Major SENIOR MEMBER

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