Tagged: Best stocks

Economy Downgrade and Downfall – Both are a foregone conclusion

Exactly a year ago ( March, 2012), i wrote about the ‘tough times’ India is likely to pass through . Read this link https://commonmansblog.com/2012/03/22/have-we-oversold-the-india-story/

Again , six months back ( 11 October , 2012 )  , i wrote that India is heading towards an economic disaster . https://commonmansblog.com/2012/10/11/india-from-emerging-to-a-submerging-economy/
After the recent budget  ,i have expressed my views clearly on the year 2013-14. So far, all predictions have stood the test of time and proved right …..
My last blog was written on 01 March 2013, https://commonmansblog.com/2013/03/01/budget-2013-14/

I am not an economist , so in case, my predictions go wrong ( so far, i have not been wrong on a single occasion ), i do have an option to take refuge in my lack of educational qualifications in the Economic theory unlike the proficient doctors of economics do at PM’s office , Planning Commission & the Finance ministry …..

My belief is that in 2013-14;

1. This Government will struggle to revive growth

2. Inflation ‘might’ ( 50 % chances ) come down a bit , as consumption story of India will go down

3. Manufacturing sector will slow down

4. Fiscal deficit will increase, and might create a balance of payments problem , or the Government will open more avenues for FDI ( or bend to the demands of the industrialists )

5. Tax collections will go down

6. Divestment target will not be met under the current situation unless some more ‘targets’ are divested

7. India might face a ‘security threat’ before the next elections

8. Investor confidence cannot be revived due to ‘Governance deficit’ and ‘Scamful’ Government at the centre .

Also, you can expect this Government to come out with injecting ‘Oxytocin’ in the economy as mentioned in my earlier blog ….. but this will be a short-term story, and will further dent the strength of the economy

Overall, not a good omen for job seekers and this nation . Hopefully, this will be the last budget for Congress

Rajendra Pratap Gupta


Today, my friend from the US send me this link http://timesofindia.indiatimes.com/business/india-business/India-headed-for-economic-doom-prominent-US-thinktank-says/articleshow/18772325.cms?. Which talks about ‘India headed for economic doom’ according to a prominent US Think Tank ….. Well, i have said that a year ago with all the supporting data…. and dwelled much more in detail
This  Government wants to spend more , earn more only on the basis of ‘Hope’, accepting a fiscal deficit of USD 75 Billion ! Which to me, appears to be a foolish and insane ! I have still not got a convincing answer about where this USD 75 Billion dollar will come from ? FDI or FII ? This country ( Economy ) is waiting not just for a downgrade , but for a downfall !
UPA – I was a classic case of the Government being ‘Exposed’ to time driven growth , and UPA – II is a unmistaken case of ‘Exposure’ of this failed , clueless & corrupt dynastic Government
We need serious action . Opposition is also on the verge of letting down this nation
Rajendra Pratap Gupta 

Has the country’s central bank ( Reserve Bank of India – RBI ) collapsed ?

On 22nd March 2012, i had written that we have ‘Oversold the India story’ https://commonmansblog.com/2012/03/ ) , and what i had predicted for the economy in the April , May and June quarter,  happened ! 

Again , on 11th October 2012, i wrote on my blog ‘How India was fast turning from a ‘Emerging economy’ to a ‘Submerging Economy’ ( web link  :  https://commonmansblog.com/2012/10/11/india-from-emerging-to-a-submerging-economy/ . Now , read the fact about our Central Bank . As i said earlier , i am not worried on the 2014 for elections , but for the economic scene that will unfold in 2013 for the average Indian middle class , we are building a disaster  & fooling ourselves ! It is a call to action !

On November 5th ,2012 ,  The Economic Times carried the report that , the country’s central bank , Reserve Bank of India ( RBI ) would run into losses if asked to pay interest on mandatory percentage of deposits banks have to park with the centre bank , called the Cash Reserve Ratio ( CRR).  The RBI has stopped paying interest on such mandatory reserves since 2007.  Finance ministry had suggested the bank to pay 7 % interest on these deposits . 

 Does it mean that the country’s central bank has collapsed ?  If yes , why have we not discussed this in parliament, and are looking at FDI and other ways like stake sales in PSU’s and auctions of the sovereign assets to hide this news and infuse money in the system . 

Prime Minister and Finance Minister owe and explanation to this nation on this issue .

NEW DELHI: The finance ministry has decided to review the expenditure and reserves position of the Reserve Bank of India (RBI) after the central bank indicated that it is not in position to pay interest on the reserves banks maintain with it.

A government official downplayed it as a routine review of the reporting structure and disclosure requirements of the RBI, but it comes at a time when there is already obvious tension between the finance ministry and the central bank over the conduct of monetary policy.

“It is the government which tables the annual report of RBI in Parliament, so there is nothing wrong if it (government) wants to know how RBI prepares its balance sheet. We are not questioning them or raising objections,” a ministry official said.

However, another finance ministry official admitted that the review started after the RBI had indicated that it would run into losses if asked to pay interest on mandatory percentage of deposits banks have to park with the central bank, called the cash reserve ratio (CRR). The RBI had stopped paying interest on such mandatory reserves since 2007.

The finance ministry had suggested that the RBI should pay 7% interest on these deposits, pitching it as a measure that will help lower rates even if the central bank does not ease monetary policy. It had argued that all major central banks either do not mandate a reserve ratio or pay an interest on the mandatory reserves they ask banks to set aside.

“RBI had made certain arguments. Now, we want to understand their expenditure sub heads, format of disclosures so that we both are on the same page,” the official said.

The government is studying RBI’s expenditure, revenue, contingency reserves and investments, he added. On Tuesday, the RBI dashed hopes of a rate cut, but lowered the cash reserve ratio (CRR) by 25 basis points to 4.25%.

Please check more eye-opening statistics on Indian Economy on my blog .

From January , 2013, i will be working full-time to figure out the economic model for India , that will take the country out of the current crisis

Rajendra Pratap Gupta 
Healthcare I Retail I Rural Economy I Public Policy

Right time to accept failure

Common Wealth Games – Where are we heading ? Isn’t it the right time to accept failure?

 India thought it was a great move to show off and seek the sponsorship for Common Wealth Games.  Firstly, it was a wrong decision, as we needed to spend money on accommodating the huts and slums and poor people in NCR, and not on building pools and stadiums and secondly, India is not yet ready to host such events!!

 Above all, it appointed a politician Suresh Kalmadi to Chair the same!!

 It should be wise to raise hands and accept with the Common Wealth that, we are going to mess with this mega event, and we will face a bigger insult and cause inconvenience and shame for Delhi & Delhites at the cost of immediate priorities. Time to face the moment of truth. Politicians cannot handle even politics, then why give them performance & timelines driven events. We all know the real reason why every politician wants to head the sports body!!

I think , we again took  a challenge thinking if China can host Olympics , why can’t India host the Common Wealth !! A wild dream for lethargic and corrupt politicians meddling in sports !!

 Time to wake up Dr.Singh and Suresh Kalmadi !

FDI in Retail

Dated : February 16th, 2009

Dr.Murli Manohar Joshi
Parliamentary Committee on Commerce
New Delhi

Ref : Foreign Direct Investment in Retail Sector

Dear Dr.Joshi,

I wish to draw your attention to the following for a postive consideration and further recommendations.

There has been a lot of debate about the opening of the retail sector for foreign direct investment

My view is , that the retail sector in India is a major employer and is the key to India’s youth employment and empowerment . It today comprises of about 12 million establishments . Adding to this, there are atleast 2 helpers at a retail outlet. Further , indirect employment is provided to at least 6 people

With such a massive employment potential . We must consider the following before we talk of FDI in retail sector

1. Why should foreign brands take away India’s earnings ? Land is ours, employees are ours, spending is ours , raw material is ours. Then why do we allow foreign co’s take away our earnings by just putting their brand names ?

2. It is a known fact that, most of the reputed brands all across the wordl manufacture their products in India sub continent and sell across the World . The products are of highest international quality and well accepted . Why do we not sell locally and serve the local economy as well

3. It is well known that this big foreign MNC’s change the rules of the game by increasing rentals , salaries and lowering prices or even increasing them . Thereby , making it difficult for the localites to operate . We cannot regulate all this , but for sure , we can check the entry of these MNC gaints

4. What the retailers in India need is a different version of FDI – Finance from Domestic Institutions . If we get finance from domestic finance intitutions , we will be more competitive and we can grow profitably and grow even internationally . Indian products are already sold in differne parts of the world

5. I also suggest you to consider and recomend that retail be given an ‘industry status’ and there should be a separate ministry for retail and vocational training . That also takes care of re-skilling of the talent . We have a sever skill gap that needs to be immediately addressed

Hope that your good selves will consider my suggestions and incorporate with your recommendations

Looking forward to hear from you

Thanks again with high regards

Rajendra Pratap Gupta
Mobile : +91 9323109456
+91 9867300045
Email: president@countryfirst.org / mail@rajendragupta.org

Satyam Saga- Many heads may tumble. Raju’s life might be in danger

Rajendra Pratap Gupta

The satyam saga is not as simple as people believe . My personal view is, that it happened due to the political comfort Raju enjoyed with all the powers that are at play. More specifically , all the A.P. Governments be it of CBN or YSR..

I am sure that, this dirty trail will pull out many political skeletons. And if this is bound to happen, Raju’s life might be in danger . No A.P. politician would like to be named when elections are just a few weeks away. I fear that Raju might be eliminated in the name of a heart attack

The center must interrogate , investigate and keep the custody of Raju out of Andhra . But as we know, that our courageous politicians , corrupt agencies working under political influence and control, inefficient judiciary and biased press will not let the truth be out for the common man. That is what is called the CMP – Common Minimum Programme !!

Government has given mobilizing advance to Maytas infra. What steps have been taken to build safeguards for the two thousand Crores given as mobilising advance ? It is well understood that government has a cut in every such deal. Rajiv Gandhi once said that, out of every rupee meant for poor , 15 paisa reaches the poor. In ( political – business ) deals , poor are our politicians and they demand much more than 15 paisa out of every rupee in the name of the party and themselves – They have no shame – Remember Bangaru Laxman ?. How come suddenly a news paper cartoonist like Bal Thackeray and his entire clan run deals worth hundreds of Crores !! A poor man when becomes a saviour of the poor ( read politician ) suddenly becomes rich ?? I recall a quote- A Politician is one, who extracts votes and money from the rich and poor on the pretext of protecting each from the other !!

A few days back, I was talking to one of my friends who has access to the powers at the center. I was shocked to learn , that planning commission does not issue money to the states till there is a guarantee for the portion of the money being returned for fighting elections. If the grapevine is to be believed , this amount per state runs into thousand crore plus !!! That’s why when you complain about corruption , no one listens, as all the powers are deeply involved into it either at the front end or at the backend . Corruption is the politician’s only religion . Corruption is a trickling down process and is like rain water . It comes from the top and not the other way round !

While a lot of people are looking at bringing about a change in the governance of the nation . But trust me , it will not happen soon. Reason is, that there are only less than 5 percent of people who read and get frustrated about the current state of affairs ; unfortunately, they don’t even vote . So frustration alone will not change this system.. Rest 95 percent are victims and partners by force to such an ‘illegal democratic System’. The corruption is “institutionalised business” to such an extent that you and i cannot imagine as honest individuals . A Member of parliament. has to pay for becoming an M.P. then he has to collect the same money ( with returns ) from business houses, IAS & IPS officers in the name of getting things done !! A low level clerk or the hawaldaar / constable has to be pay for his posting and lucrative transfer . At the end , i and you have to pay for all this as bribe. This is my definition of the current democracy – a totally manipulated system by the politicians , for the influential at the cost of the common man.

Those of us who think that we can change it by mere lighting a candle or filing an PIL. Just go and check how many election commissioners , retired judges that have given favourable judgements are in plum postings post retirement ? why did Chief Election Commissioner T.N.Sesan not become a Union minister and Mr.Gill become a union minister ? Why do IPS officers , Judges become governors of states after retirement ? Many such cases exists. Just peep into the past. You might have all answers. Why does the CBI need a permission from the government for prosecuting the officers or M.P.’s ? Simply to delay and bid time . Anyways, an average Indian is so lost in daily chores that he/she doesn’t have time to get ‘involved’ in ‘such issues’ . Votes that the ‘intellectuals’ like us give does not exceed 3 % .Mostly, we don’t even go to vote. Majority of the people who vote for these corrupt politicians decide not on the basis of good governance, but whether his wives get a saree and the family gets a sumptuous meal a few days till the voting day. These are the 600 million innocent and exploited people who for almost next five years after elections will go to bed empty stomach every day. They cannot practice our principles ! And the politicians don’t wish them to prosper . If these 600 million people prosper and come out of poverty, corrupt people like Lalu Yadav, Shibo Soren, Mulayam Singh , Amar Singh, Sharad Pawar and many more would not be rubbing shoulders with Sonia or Manmohan or dreaming to be union ministers !! We all know why Ashwariya got the Padmshri award ? Simply because Amar and his gang have bailed out the congress ? Rahul Gandhi and Sonia Gandhi talk about democracy in the nation . If Rahul was not Gandhi would he become the Gen.Secy of the congress so soon ? When the party itself is against democracy and decides the top posts based on sycophancy , favouritism and dictatorship how can it guarantee democracy to the nation ? Why are we getting fooled. I would go to an extent of writing that Manmohan would have been forced for the cardiac surgery . So that if by chance , Congress comes to power. On health grounds , Manmohan can be retired and Rahul can step in to lead the nation to disaster ! Anyways, the Gandhi dynasty has ruled the nation for 90 % of the time since Independence . Earlier , they can be credited with ‘license raj’ and now ‘quota raj’ . Both the steps led them to manipulate and come to power but weakened he nation and divided it . We have gone backward than becoming developed . Elections have never been fought for good governance . It has been fought to stay in power. The priorities are misplaced totally. Last five years into power they had all to develop an indigenous growth model for India . But they went on to build a dollar based economy and gave us recession to live with . What a colossal failure for Sonia , Manmohan and PC !!

Don’t expect the system to change soon . A new cult has to come up from the youth , specially women who will have to lead another mass movement to make it happen. And it cannot happen if you read this and still decide to sit back and go into thinking mode.

We must get up to action .

Rajendra Pratap Gupta
Email: mail@rajendragupta.org

Hello Mr.Manmohan & P.C.

Indian Economy is in a severe recession: Rajendra Pratap Gupta

Our Mr. Blind ( P. Chidambaram ) and Mr.Sardar ( Not Asardaar – Mr. Manmohan Singh ) have recently denied that Indian Economy is in a recession.

Except God, for everything else , i believe in data. Here is what the duo might need to relook to give up their selective blindness . Sir’s please look into the same

The Tax collections for December quarter dropped by 22 % ( According to the Economic Times dated 27th Dec 2008 )

60 % of the 8000 units into diamond polishing and cutting business went on forced holiday leaving 100,000 people without jobs . Narendra Modi has refused any package for them ( Times of India 27th Dec 2008). There is a 40 % reduction in demand according to Gems and Jewellery Promotion Council ( GJEPC). Exports account for $ 20 billion in the industry

The gross NPA’s of banks will reach 4.7 % of the total loans in FY10 from the current of 2.3 %. Credit card delinquency has gone up to as high as 14 %. Loan defaults would follow shortly and this will be a big blow to the banking / loan system. In the first half of Dec 2008, in Bangalore itself there have been defaults to the tune of Rs.80.23 crore at Corporation Bank . Out of the total home loan portfolio exposure of Rs.1000 cr , 50 % is in the IT sector. Defaults will start increase going forward. We will see the real impact in April 09.

I was recently in Delhi and talked to my cab driver ( he drives for a cab company at Delhi airport ). He informed me that, earlier he would earn between 15 – 22000.00 per month . Now for the last three months , his income has dropped to Rs.6000.00. He is expected to do a minimum of 52 trips a month which is getting difficult now . So he was worried.

Approx 90 % of all the commercial vehicles sold in India are via loans. Kotak Mahindra Bank has repossessed about 200 vehicles. Deepak Sachdeva , President of the Delhi Goods Transport association said that between April and December 2008 alone , close to 158000 commercial vehicles were either surrendered or repossessed due to loan defaults. According to The Mint dated Dec 26th 2008. With such an massive loss, just imagine what must be happening to the families of 158000 truck drivers, helpers , cleaners and the people associated with providing services at Dhabas and repairers for these trucks !! It is a solid loss for a small economy like India

All the businesses have cut down the expansion plans and the same will continue for the next year in my view . TATA motors have cut the production for two days a week, Cisco is on long Christmas and a new year holiday, All auto majors including Maruti is slowing or voluntarily suspending production to take care of the ‘standing or piled up’ inventories

ACC cement has already shut the production in one of the plants and slowed the same in others

I visited quite a few malls and talked to employees. At Lifestyle store at Mulund last year around this time , the 2nd floor has five counters. This year they just had one counter. The salesman when quizzed ,did accept that there is a drastic drop in customers and sales

Big Bazaar, has no different story. They were operating with two counters and not long queues which earlier operated eight counters. Big Bazaar has launched shopping schemes that is drawing customers but not much sales. The same scheme in 2007 March could have doubled the turnovers. ‘Marketing Steroids’ are not working well

The best mall in the country , Inorbit Mall employees had the same views. They were shocked at the drastic drops in customers and sales. Their wide aisles at the Hypercity had few customers.

Aditya Birla retail is likely to shut down around 100 out of 700 stores in the name of rationalization . They are doing a business of Rs. 5 per Sq. Feet and expenses of Rs.200 per Sq. Feet. It is a thumb rule, that such retail formats should not incur more than 120 per sq. Ft.

A month back when i visited the Fame Adlabs at Kharghar to watch the night show for the hit film Fashion, my wife and myself were refused tickets as we were the only two people to watch the movie and the counter girl told us that, she needed at least 5 people to start the show !! Did you expect this in good times !!

Reliance retail is no better, they have changed the strategy for the second time in the last two years and if i remain accurate in my predictions. This time again Reliance will have to redo a lot of things to avoid exiting the retail venture . All these retail majors banked on experienced retail expats . Who themselves wanted to ‘Earn while Learn in India ’ at the cost of these employers.

Some organised retailers are not even in a position to recover their expenses , losses are mounting and credit is moving at an escape velocity not imagined in 2007 !! Money is not available, as earlier even the small companies would value themselves on the lines of the listed companies . With stock market following the Wal-Mart model ( everyday low prices, even Wal street is joked and nick named as Wal-Mart street !!! ).Now there are no takers for these companies . Defaults are increasing day by day. We know the outcome.

Industrial production and growth is slowed . I believe that at this time , for most businesses , survival is the main question and not growth or profits !! . Takeovers will happen or closures. In India , bankruptcy is not practised widely. So we will see closures. The government should keep vigilant on big business houses for accounting and reporting in case they are listed, or we might see a fraud and failure like Enron or WorldCom. This is a step to avoid ‘financial terrorism’ . Some business houses ‘control’ many politicians and this is an area of big concern. We have created unequal wealth in the form of strong and gigantic business houses who are iconic Any wrong doing in such a big business houses would be like a corporate suicide and will severely impact the market scenario. I don’t rule out ‘accounting manipulations’ or ‘jugglery’ in these ‘tough times’ to keep the image and reputation intact for such big business houses.

Even the TATA’s are not able to raise funds , the rights issue was a case in point . DLF , Unitech were rising stars in 2007 are shooting stars now. Projects are delayed and more news is to come in the times ahead.

The Dec 08 quarter results of companies will be disappointing and that will take the shine off the Indian growth and strong fundamentals story.

I urge our politicians to give up the ‘Academic definition’ of recession and accept that we are into a recession and take steps to correct the path going forward .
Let’s see the countries by their GDP and their share in the World GDP. India may not be more than a rounding error at this point !!

2006 GDP USD GDP as % of the world GDP
1.USA 13,201,819 27.3
2. Japan 4,340,133 8.9
3. Germany 2,906,681 6.0
4. China 2,668,071 5.5
5. UK 2,345,015 4.8
6. France 2,230,721 4.6
7. Italy 1,844,749 3.8
8. Canada 1,251,463 2.6
9. Spain 1,223,988 2.5
10. Brazil 1,067,962 2.2
Top Ten Total 33,080,602 68.6
World 48,244,879 100.0

Chinese Consumer spending is to reach USD 1.3 Trillion this year, France USD 1.4 trillion, US economy is USD 9.9 Trillion , India is just 660 Billion according to the Mint Dec 23 , 2008. So if the world’s biggest economies is de-growing and we are dependent on these countries. How can we say that we are not into a recession ??? Are you talking sense Mr.P.C and Mr. Singh ????. Those who buy clothes and other merchandise from US / Europe know well, that all leading brands outsource their production to India , Bangladesh and Sri Lanka . Now that the sales are down, these countries are under sever loss . USA, Japan and Europe account for 68 % of the world GDP and they are into recession. Do we need more reasons to convince ourselves that we are heading towards a more severe recession. Problem started with US , till it ends in the US the problem the world over will continue. The interest rates in USA and Japan have come close to zero. China will get into recession or pass on the pressures to countries like India via dumping cheaper goods to avoid recession. This is one area where India needs to be watchful. US recession will also pass on pressures to nations dependent on its economy

I believe that congress may take to surgical strikes to play with the public sentiment , to dodge the economic issues to come into power. Forgetting , that the parliament attacker is still alive. All these steps should have been taken when parliament was attacked . If then we did not act then, i see no reason to act except for the fact that the elections are near . The government needs to fight many forms of terrorism . i.e. Economic terrorism, militant terrorism ,healthcare terrorism ( seeing that 6000 children die every day below the age of 5 years due to disease and malnutrition ). Few reasons that India might not attack Pakistan are that , we are working with weapons which are Bofors like and secondly , our economy cannot afford to take on a full-fledged war with Pakistan, thirdly, in case we do surgical strikes , Pakistan will drop a nuclear bomb as it is not a nation that honours any pact ( All likelihood , that it will not honour its pack on this as well and quote anything stupid to justify its act.)

India needs to understand the order of world has changed with history. Earlier , the nation with a stronger military was considered stronger , then the nation which was financially stronger was stronger . Future will be for both technically and financially stronger nations . India needs to be financially and technically independent .

New year is not going to be better than 2008. So i don’t know how to wish you for 2009, but i must send my best wishes for hopeful and a pragmatic 2009 that is full of moderation in growth plans , better financial regulation , increased spending from governments , encourage and increase savings for emergencies and a more peaceful 2009

Best wishes

Rajendra Pratap Gupta
Cell : + 91- 9323109456
+ 91- 9867300045
(USA) +1515-450-6165
Skype: rajendra.india
E-Mail: mail@rajendragupta.org / rajendragupta@aol.in