23.01.2008

• Turmoil in stock markets
• Looks like the fall in stock markets around the world is spreading like a contagion. Though the cut in key rates by the US Federal Reserve (a cut of 75 basis points) appears to have had a sobering effect today, it is quite likely that we will see lot of turbulence ahead in the days to come. This rate cut is the steepest by the US central bank in 23 years. Also this is the first emergency rate cut since the 9/11 terror attacks.
• Dr. Rangarajan’s forecast on our economy
• The Chairman of the Prime Minister’s Economic Advisory Council says that we can grow at 8.5% for the next five years.
• He expects that the US recession would be a milder one, something like a slowdown instead of a full-blown recession.
• In India the growth has not been consumption led, but was driven by investments. Such growth can sustain further consumption.
• It is largely the consumer durable sector in the manufacturing segment which has shown negative growth. As this segment is highly cyclical in nature, it may bottom out soon. Moreover, as and when the Sixth Pay Commission report is accepted it will also boost demand.
• In defence of the Tata Nano
• There was some criticism from NGOs and environmentalists that the car would cause lot of pollution and would clutter our roads further.
• In a very good article Kala Sridhar argues in favour of the car. Take a look at the full article here.
• Consumer disposable incomes are constantly rising, with India’s per capita gross national income rising from $460 in 2001 to nearly $820 in 2006.
• Currently India sells only 1.4 mn four-wheelers, whereas China sells 5 mn and the US sells over 10 mn four-wheelers.
• As the number of vehicles on the road increases, it is for the government to step up relevant infrastructure accordingly.
• While the country’s public revenues have grown faster than the country’s GDP, public services have not significantly improved.
• Investment on road laying and maintenance has to be increased.
• Mass transport systems have to be kept in place and well maintained.
• There is no point in blaming the Nano when our cities are quite automobile oriented as of now.
• Gordon Brown moots honour for Sachin Tendulkar
• The visiting British PM has suggested that Sachin Tendulkar’s contribution to cricket should be recognised by honouring him with Britain’s knighthood. This may however, remain unlikely.
• The reason is that India became a Republic on January 26, 1950. This meant that the British Queen is no longer the Head of State for India. From this followed the stoppage of the practice of knighting Indians.
• Some notable Indians who were knighted by the British Queen before India became a republic: Rabindranath Tagore, Sarvepalli Radhakrishnan and C.V. Raman.
• A package for farmers in the offing?
• Looks like Agriculture Minister Sharad Pawar was able to wrest a commitment from the Finance Minister about a package costing Rs. 30,000 crores covering 31 debt-prone districts of the country.
• This includes writing off bad debts arising from loans provided to farmers in those districts. Establishment of a long-term agricultural price stabilisation fund at the national level for crops prone to heavy price fluctuation. The fund is aimed at compensating farm commodity producers at times of heavy fall in prices.
• Virtualization in computing
• It allows a physical computer to house multiple ‘virtual machines’, each one acting like a separate computer with an operating system and all the software that runs on top of it.
• So far the big player in this area is VMware. But now Microsoft seems to be investing heavily in this space.
• We can expect some fireworks on this front soon.