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Created by : Rashmi Chawla, Cust. Service Manager, Leading Bank  | 06 29 2010 07:01:52 +0000
Industry : Equity Research/AnalyticsFunctional Area : Equities(Markets)
Activity:  163 views;  last activity : 07 06 2010 20:18:09 +0000

On Sunday, Manmohan singh's style in the G20 summit was unassuming, suave, gentle but firm, uncompromising and self-assured to the point of being brash. In essence, the Indian leader told the rest of the world to follow India’s example when it comes to economic policy.

He urged industrial countries not to exit fiscal stimulus either in a hurry or altogether, because, at the present moment, “we have a much greater risk of deflation than of inflation”. Contractionary policies, if followed by many industrialized countries simultaneously, could provoke a double-dip recession. He said that the markets may well be reassured by credible steps by major industrialized countries, which impact the fiscal deficit significantly over time, even if the immediate impact is more limited

So users, Should industrial nations continue with economic stimulus measures?

 
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The Private Sector in the USA, in Europen countries and other likes was "absolute" strong so far .. actually they used to govorn the Managers of the Govt. in their respective teritory.

They never have seen "control" though did not hesitate to destroy the fundamental economy. The CEOs and high officials used to take away hefty salary and bonous etc at the cost of the future of the Cos.

The Board members ( naturally the Big shareholders ) used to keep silence though thay knew well what is happening inside. Their 'papers' were becoming costly ... ( later, in opportune moment they will sell these stocks to unknowing people outside ... and that happened )

When Lehman brothers fell in first such incident like a sandCastle, things started coming out ... the toxic assets or say the impaired assets story came to lime light ( popular as Subprime ) .. that thimgs inside are hollow.

Average eight banks/ Insurance Co per week started to fall  ... the glory of Pvt. Sector ... fell on the streets, people jobless as large scale 'pink slips' are issued, production in factories haulted, not so rich people were being deprived of health-care facilities.

Global market/s started to fall bringing in the worst recession, continueing till now. USA Govt, first eversince,  came out with packages with Taxpayers' Money called " Bail Out" for the Banks etc. to save the nation from crisis.

After passage of some months, the Cos who had availed bail out fund, are wanting to come out of "control" , Taxpayers are unhappy as once they were looted ( by mis-deeds of Cos ) and now their money is being used for welfare of those culprits.

Govt. and Law-makers are in a 'fix' ... are in pressure from both side - want 2come out ... !

Our Prime Minister, though may not hesitate to hike fuel price several times in a year in his own country, a proponent of "Free Economy,

" wants a cautious approach by the G-20 Nations ... he advocates "control" till things improves . Warns :  Demons may come out again 2destabilize the world economy again.

after all, He has the experiences of "Mixed Economy" of India  ... !

 


By ASOKE KUSARI, Domestic Private Banking-Executive/Manager, A large leading PSU Bank - India  06 29 2010 18:49:56 +0000
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yes of course Globalization lead this...............
By Chandra Prakash Agrawal, Sr. software Engineer, Capgemini  | 07 06 2010 07:15:30 +0000
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Yes, current global financial crisis gave the signal for same. Economies are not  balanced till now. Stimulus measures are required to overcome the situation otherwise double dip recession problem will be faced by many industrial countries...


By Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  | 06 29 2010 17:57:06 +0000
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I agree with this statement. Developing countries need to rebalance their strategies to rely less upon exports and more upon domestic demand. Persevere with implementing financial sector reforms to support rapid and inclusive growth in the real economy, and also to increase systemic stability in the financial sector. We are giving a strong push to investment in infrastructure, relying on private-public partnership as much as possible to reduce the burden on scarce public resources. Because of this Industrial nations should continue with economic stimulus measures.


By Rashmi Chawla, Cust. Service Manager, Leading Bank  | 06 29 2010 07:01:52 +0000
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I really support the Asoke Kusaris argument. The opinion expressed by him is true and correct. All the stimulus is enjoyed by the companies not the real consumer/citizen.  It is the citizen, the end user should take care by appropriate policies not the big giant.  

India survived in recession because of its conservatism in approach as a developing economy but not through govt. fiscal policies.  The simple life led by the most of indian citizens have contributed much from escaping us from recession.  

Really consumers never enjoyed any stimulus. when excise duty on non electric water filters has been reduced to 8% the Hindustan lever pureit has transferred the balance to their profit margin but not reduced the price.  In USA petrol per litre is Rs.30/-  in India it is Rs. 57/- (includes 33/- as taxes)  For corporates/traders there are many escapes in IT act for paying less tax, for individuals it is Nil. 

The Stimulus to corporates should be in form of reforms, in accounting, controlling the resources, identifying the losses in before and accurate provisioning there of.  The stimulus should be in bringing macro economic reforms by identifying the supply demand gap on real time basis, controlling the inflation/deflation conditions, allocation and production of resources.   

If govt. is keen to give bail out packages to corporates for short term recovery, it should be refundable along with simple interest. At last any economy will be perfect only when the end user is concerned for.


By manikanta raj, Deputy Manager Finance, project financing, leading Financing company  | 07 06 2010 06:00:17 +0000
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I really support Mr. Kusari. Talking about India.....

Stimulus for what, taking hefty salaries ? Or passing the load to the end users / consumers?

Did consumers really enjoyed the stimulus ?

Excise Duty reduction of 6% from 14 % to 8 % in automotive did really made consumers purchase ? Is Nano is having the 1 lac price tag ?

All the stimulus is enjoyed by the organisation but not the end user. Hence hefty salary. Only the economy and money market sentiment improved domestically.

Actually Indian organisation don`t want the stimulus right now. Stimulus and subsidy need in neccessities like Gas, Petroleum, Education as well as bank consumer interest rates.

Stimulus need only in FDI investments as wells as Export promotions in manufacturing segment.

We dont need any stimulus in domestic market. Even the capital market will be hardly affected long term bias.


By Jyoti CHETANI, Freelancer, Equity Research/Analytics  | 06 29 2010 18:23:27 +0000
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