India added 20% of Pakistan GDP in 2 days to her economy.

[Bornubus]

I am here to discuss about issue, has no interest to get involve into a personal attack with a teenager. I just simply add you into my ignore list.

I was talking to an Indian fella in case you didn't noticed with your small eyes, my little Chinese infant son.


And i have seen your discussion abilities when last time you ran away with your tails between your legs when i started you facts.

 

[Bornubus]

Wise move, put all these potty mouth trolls in your ignore list. This is the only way to maintain some quality.

Porki a gaya Apne master Chinese ke Joote saf karne ?

 

[HariPrasad-1]

Please remove this post. Unfortunately you prove them right. This is not going to serve any purpose. Unknowingly, you are proving them right.

 

[Illusive]

Considering paki economy size, it's not that impressive.

 

[Indx TechStyle]

already design MT scale H bomb, people will say that I am a fanboy.

My point wasn't about that either.
It was regarding China diplomacy in defence & strategic issue section.

Considering paki economy size, it's not that impressive.

But adding $50+ billions in two days may be quite impressive!
:bounce:

 

[Compersion]

Would like to have a analysis on India vs PRC relative and comparative investments ... inside Pakistan and outside.

It might shock the Pakis that Indian investments are better. But what's the point now :biggrin2:

[North Korea ]

 

[Adioz]

While our idiotic print and electronic media is busy in election discussion how sicularism is in danger in Modi's victory, a highly significant economic event went almost unnoticed. In last couple of days, Rupee has appreciated by 2% against USD. While people are foolishly arguing that India shall become a 5 TR USD economy in coming 10 years, I have always maintained on various forum that you guys are taking into account only Growth rate and Ignore the currency appreciation. India Rupee is valued almost 4 time lower that its purchase power and it offers a great chance of currency appreciation. In last 2 days INR has jumped from RS 66.80 a USD to 65.43 a USD which is a jump of 2% in value against USD. We need to understand what this means for us and its consequences.

Understanding the effect on GDP.

2% appreciation in India Rupee against USD means we have added, 2% in Indian GDP in nominal term in USD. This amounts to 2.5 Tr USDx2% is 50 bn USD which is 20% of Pakistan economy. When we struggle a lot to increase growth rate by 0.5% and people speculates whether growth rate shall be 7.1% or 7.5% so that GDP may increase in volume by same percentage and we may add to GDP in our existing level of about 2.5 TR USD. This is a straight hike of 2% in GDP nominal. 2.4 TR usd economy has just grown to 2.45 TR USD economy adding 50 Bn USD in just 2 days. This means we have further widen the Gap between UK economy and Indian economy by 2% more to whom Indian economy just overtook.

External Debt:

India's external debt is about 485 bn USD in March 2016 as per RBI. This simply mean that we have reduced our Debt by 2% in rupee term. This is saving of 10 bn USD while payment in Rupee which mean that we will have to Pay Ts 65000 crore less while discharging our Debt. Appreciation of 1% in Rupee value against USD saves our Rs 30000 crore which we may use for our development.

Weapon and oil import:

Our Oil import was 64 bn USD in 2015-16. Oil prices are rising so as the consumption. Even if I assume it to be 70 bn USD in coming year, this is a reduction of RS 10000 crore in oil Import bill and we may expect that impact of rise in crude oil price will be absorbed by appreciation in Rupee value and end user will not have to pay a price increase of Rs 1.50 per USD.

For our weapon import, we have a plan to purchase 230 bn USD weapon in coming decade. This 2% appreciation will result in a saving of 4.6 BN USD which is about RS 30000 crore.

Trade deficit:

Our import is higher than the export. So Trade deficit shall narrow. We have monthly average of trade deficit between 7 to 10 BN USD. If I take it as about 100 bn USD it is a decrease in Trade deficit by 2 BN USD which is 13000 crore Rupees.

Impact on Export:

Obviously export has always a negative impact on Appreciation of any currency but India export is largely in IT and engineering sector etc which can easily absorb this rise. Some exports such as petroleum products which are linked with oil import and they can easily afford to ease the price as the input are also getting cheaper because of currency appreciation.

Raising of cost effective fund:

Recently reliance took a loan of around 700 to 800 mn USD from International market at a rate of some 2.5% interest. The greatest risk of raising fund from international market is that you will end up loosing a great amount if your currency falls. We show this happening in the case South Korea and collapsing of their economy. If Rupee starts appreciating, hedging of rupee shall be very cost effective and you can buy fund from International market at a very cheap rate which can be as low as 2% to 4%. Your servicing of debt shall be very very cheap and you can overcome the biggest factor of production which is capital in case of India.

Conclusion:

Appreciation is INR VS USD and other currency is a great development in India economy. After the appreciation of Rupee against USD in Vajpayee era, the economy was completely let down by foolish policies of congress and Chidambaram in particular. As Modi rightly said that it is Harvard VS Hard work. BJP government has set policies right. Rupees is by and large stable in 2 and half year of BJP government. Now Rupee has started appreciating. This will be a great achievement and a great boost to Indian economy and Rupee will head toward its correct value which should be around RS 20 a USD.


-HariPrasad.

Never ever ever ever should you look at currency appreciation as GDP growth. GDP is meant to be a measure of the productivity of an economy. Productivity does not increase so much overnight. So when you say that "India added 20% of Pakistan GDP in 2 days to her economy", it makes for a VERY eye catching headline. But lets not let ourselves believe that we are a larger economy than we were 2 days ago. (OTOH, we can and should let the Porkies believe exactly that. It will be good to see them shit their pants.) As far as our GDP is concerned, we need to look at our productivity with a cap on CPI, and nothing else.
This appreciation in Rupee is driven by a number of factors:-

• Inflation is low (very) ever since demonetization.
• The BJP has just won elections with a landslide in UP. This is seen as a voter's approval of Modi's policies. This is expected to give a fillip to the reform process. Investor confidence is high.
• Both of the above have lead to a major increase in foreign investors willingness to invest in Indian securities market (FII inflows).
• On Wednesday, the US federal reserve delivered another rate hike. The $ fell.

Therefore, it is a confluence of rare factors, and this thing should not settle into a trend. And since this is not a tend, any "advantage" coming out of this event is not a lasting one.

The government policy is to try and turn India into an export-led economy. This requires an under-valued Rupee.

OTOH, a strong Rupee is harmful for us today. No investor will set up shop in India if it does not have a good profit margin due to a strong Rupee. We are not trying to be a consumption based economy. We do not have the purchasing power for something like that. And our industries will not be able to cope with cheap goods inflows. Our own industries will suffer.

 

[HariPrasad-1]

Never ever ever ever should you look at currency appreciation as GDP growth. GDP is meant to be a measure of the productivity of an economy. Productivity does not increase so much overnight. So when you say that "India added 20% of Pakistan GDP in 2 days to her economy", it makes for a VERY eye catching headline. But lets not let ourselves believe that we are a larger economy than we were 2 days ago. (OTOH, we can and should let the Porkies believe exactly that. It will be good to see them shit their pants.) As far as our GDP is concerned, we need to look at our productivity with a cap on CPI, and nothing else.
This appreciation in Rupee is driven by a number of factors:-

• Inflation is low (very) ever since demonetization.
• The BJP has just won elections with a landslide in UP. This is seen as a voter's approval of Modi's policies. This is expected to give a fillip to the reform process. Investor confidence is high.
• Both of the above have lead to a major increase in foreign investors willingness to invest in Indian securities market (FII inflows).
• On Wednesday, the US federal reserve delivered another rate hike. The $ fell.

Therefore, it is a confluence of rare factors, and this thing should not settle into a trend. And since this is not a tend, any "advantage" coming out of this event is not a lasting one.

The government policy is to try and turn India into an export-led economy. This requires an under-valued Rupee.

OTOH, a strong Rupee is harmful for us today. No investor will set up shop in India if it does not have a good profit margin due to a strong Rupee. We are not trying to be a consumption based economy. We do not have the purchasing power for something like that. And our industries will not be able to cope with cheap goods inflows. Our own industries will suffer.

This is not a GDP growth in real term but valuation of GDP will increase in USD term. It will have other consequences also. This is an analysis to analyze various aspects and I have not claimed that GDP rise in USD term will bring real standard up or anything else.

 

[Indx TechStyle]

Never ever ever ever should you look at currency appreciation as GDP growth. GDP is meant to be a measure of the productivity of an economy.

Nobody said so either.

But the gap between Nominal & PPP GDP is damn high. Means there's an inflationary potential left between which can patched up for a bigger economy in MER.

Rest, get the example of East Asia.

 

[Hemu Vikram Aditya]

This would also increase the value what we have in storage .

this thing as a whole could hurt us too

 

[HariPrasad-1]

this thing as a whole could hurt us too

Every development in economy will have multiple effect and implication. If it is 100 inr vs 1 usd, our export will further increase. Can we afford it?

It is always be at a correct level which is your economic power or strength. Our economy is big and our nominal value is 4 time lower than our purchase power is unacceptable and it has a negative overall impact on our economy and so any appreciation up to 50 INR VS 1 USD is well come. We can think subsequently whether it is good or not good. At this level, there is no question of rethinking on INR appreciation.

 

[Indx TechStyle]

this thing as a whole could hurt us too

Possibly because Indians have habit of getting things in so cheap.
For short term only, nominal GDP is direct way of power projection.

 

[no smoking]

We did not need Russian help to extend it. This is just a formal announcement of increase in range. It had 600 KM range right from the beginning. You must know that any missiles range can not be doubled in few days after announcement of intention of increase in range. Brahmos has 600 KM range was told by none other than DRDO ex chief Vijay kumar saraswat.

Well, for Brahmos, you can double the range from 300km to 600km in a few days because Russians original version P800 Yahont has been able to fly that range for decades:
https://en.wikipedia.org/wiki/P-800_Oniks.

With some simple adjustments, certainly Russians can make Brahmos fly 600km overnight.

It is a different matter that It was not pointed out by any media. Saraswat also told that Agni 5's range is much higher. If you want it to strike 6000 kM, it will strike 6000 KM, If you want 7000 KM , It will go 7000 KM and whatever range want. He said that. It was also gone unnoticed by media.

Technically, the same can be said for any missile in the world. By reducing the weight of warhead, you can significantly increase the range of missile. So, what he said is simply meaningless truth.

So do not come here and teach me that with the Russian help, the rane was increased by 50% in couple of month and 100%+ range increase is planned in 6 month. Nobody can do that. If it is possible why do not you guys do that?

Well, let's see what DRDO Chief S Christopher says about this

http://economictimes.indiatimes.com...e-brahmos-next-month/articleshow/57162589.cms

Quote:"
The new variant could be ready within three years with the two sides working jointly on the project. "The range of 450 km was possible even earlier but we were under MTCR restrictions. We are also working on a Brahmos version 2 that can go to 800-850 km. These are the two initial benefits of the MTCR," Christopher said. "

If India can do it alone, why wait until MTCR? Why Christopher says that the extended range is the benefit of MTCR?

 

[no smoking]

It is always be at a correct level which is your economic power or strength. Our economy is big and our nominal value is 4 time lower than our purchase power is unacceptable and it has a negative overall impact on our economy and so any appreciation up to 50 INR VS 1 USD is well come. We can think subsequently whether it is good or not good. At this level, there is no question of rethinking on INR appreciation.

Simply putting this way, PPP is the measure of quantity of a nation's economic activities while real GDP is the measure of quality of a nation's economy. So, the gap between the GDP and PPP is simply reflecting the gap between the quality of your production and that of US production. It is simply a fact, not bad, not good.

Appreciation of local currency is not a necessarily good movement unless it is a result of economic improvement. But the sharp appreciation like what we witnessed on Rupee in the last couple of days is definitely a bad thing. If this kind of sharp appreciation continue for another month or year, that will be a disaster for any economy.

For the case of India, so far, we haven't find any sign that this appreciation is the result of Modi government new policy. In other words, there is no other economical signs to support this appreciation. It is more likely the natural result of the depreciation of other currencies. How it will affect India economy is still a question (although I think most of economists will be alarmed), it is simply too early to celebrate it yet.

 

[Indx TechStyle]

a nation's economic activities while real GDP is the measure of quality of a nation's economy.

Appreciation of local currency is not a necessarily good movement unless it is a result of economic improvement. But the sharp appreciation like what we witnessed on Rupee in the last couple of days is definitely a bad thing. If this kind of sharp appreciation continue for another month or year, that will be a disaster for any economy.

You are too stupid to explain that the gap between nominal & PPP is one of largest in India, still increasing, which was actual disaster as lot of inflationary potential is wasted.

The gap between India's both GDPs had to come down one day, sooner or later.

So, the gap between the GDP and PPP is simply reflecting the gap between the quality of your production and that of US production. It is simply a fact, not bad, not good.

Completely wrong!

It depends upon the cost of living which is accompanied by currency value internationally and inflation domestically.

Otherwise, let's believe that Bangladesh has better technical quality than Iran & Pakistan?

For the case of India, so far, we haven't find any sign that this appreciation is the result of Modi government new policy.

When we said it was result of their policy? It was result of BJP itself, it's victory in UP.

BJP has a strong image of a capitalist right wing party. It's success is directly proportional to confidence in Indian market.

Whenever BJP wins, stock skyrockets.:biggrin2:

In other words, there is no other economical signs to support this appreciation.

1. Currency appreciation needs more exports.
2. While a healthy economy for "safe currency appreciation" needs high manufacturing growth rate.

Now,

1. India has a high trade deficit but it has world's largest Greenfield FDI which patches the deficit up and saves our currency from falling dangerously.
2. It's manufacturing growth rate is now close to double digit & exports are rising faster than imports.

So, the currency who is already backed up by FDI is obvious to go up with depleting trade deficit.

It is more likely the natural result of the depreciation of other currencies. How it will affect India economy is still a question (although I think most of economists will be alarmed), it is simply too early to celebrate it yet.

It totally depends upon the economic outlook of India's export partners, for rest of world, it's irrevalent.

India's exports are going up, others currencies are being down, a natural action.

China? Our imports from China declined by 7.5% while exports up 42%.

When China's Forex reserves are declining, India is selling them at will.
Though, I'm aware that China has been deliberately bringing it's currency down to remain competitive,
India needs a stronger currency & inflation for now to increase nominal GDP badly because it's productivity isn't as bad as nominal GDP.

Though, we are aware of drawbacks.
I bet that import duty pull down or more tax, anything.
RBI & Government won't let ₹ come below 60 anytime soon. A rapid up will be in India's interest only after 7-8 years when we start scoring surplus.


There is saying in Hindi that when one thing goes up, it comes down for sure.
Ruppee had fallen greatly between 2014 & early 2016. Come back is obvious.

@Neo may know anything else.
Thankfully there are some economic indicators in world which can't be fudged and people can't call Indian government cheating.

 

[HariPrasad-1]

real GDP is the measure of quality of a nation's economy.

This is BS. from where does the qualty come in economics? I am hearing this for the first time.

Appreciation of local currency is not a necessarily good movement unless it is a result of economic improvement. But the sharp appreciation like what we witnessed on Rupee in the last couple of days is definitely a bad thing. If this kind of sharp appreciation continue for another month or year, that will be a disaster for any economy.

As i said, our economy is highly undervalued and there is no question of thinking of pros or cons at this stage.

For the case of India, so far, we haven't find any sign that this appreciation is the result of Modi government new policy. In other words, there is no other economical signs to support this appreciation. It is more likely the natural result of the depreciation of other currencies. How it will affect India economy is still a question (although I think most of economists will be alarmed), it is simply too early to celebrate it yet.

How do you know that it is not a result of any policy? I say you once again that If USD is going down against all currencies than what you say is true. INR is up against BGP as well. So your argument fells flat and not true.

 

[Indx TechStyle]

₹ Again up 12 Paise today.
This is horriblly fast guys, I'm too scared.

Currency appreciation and internationalization indeed favour economy but this sight is rare.

Well, I know that if India wants to internationalize it's currency and bring in club of International Currencies: Dollar, Euro, Yen, Yuan & Pound,

De appreciation impacts negatively but going up at this rate,
How will it affect? Positively or negatively?

@HariPrasad-1 Please respond.

 

[HariPrasad-1]

₹ Again up 12 Paise today.
This is horriblly fast guys, I'm too scared.

Currency appreciation and internationalization indeed favour economy but this sight is rare.

Well, I know that if India wants to internationalize it's currency and bring in club of International Currencies: Dollar, Euro, Yen, Yuan & Pound,

De appreciation impacts negatively but going up at this rate,
How will it affect? Positively or negatively?

@HariPrasad-1 Please respond.

As some trolls particularly chinese were saying that it is USD which is depreciating. Infact, I studied INR VS GDP and AUD. INR has significantly risen against all these currencies. So far as impact is concern, it will be both positive as well as negative but in totality it is definitely positive.
Our currency is undervalued by 4 times simply mean that If a foreigner comes to India and buy ,say a shirt for 650 Rs or 10 USD. When we will go to US with same amount, we shall not be able to buy same shirt for 10 USD but we will have to pay 40 USD. This is the reaso why US gets rich and inspite all hard work and so many sort of manufacturing, we have remained poor. Our currency rise shall definitely help us a lot. Say if our import decreases by 10% due to currency devaluation, we shall be able to divert this fund for the welfare of our people.

Another good news I read somewhere is that solar energy is going to cost a lot less and it is going to be around RS 1 or 1.5. If this happens, our economy will fly. If you know any such news, pl send me the link or reference.
Crude oil prices decreased but major chunk of that washed away due to currency devaluation. Curreny appreciation will bring that advantage back to us.

 

[3deffect]

Here is a look at what different states have been doing to promote renewable energy generation and which offer net and gross metering.

 

[HariPrasad-1]

Here is a look at what different states have been doing to promote renewable energy generation and which offer net and gross metering.

I am more interested in tariff of solar power. when I last read it, PPP was made for Rs 3.45. This is awesome but subsequently I read somewhere that this is going to reduce to rs 1 or Rs 1.50.