Financial Journalism

Financial journalism class started with presentation by two students. This  week the subject of presentation was “CAN INDIA BECOME THE NEXT TRADING SUPER POWER” Simran and Pakhee were speaking for and against the motion respectively.

Simran emphasised on two main factors which can lead India as next trading super power.Begining with demographic constituent , she said dependent population of our country is decreasing fast ., most of the population is contributing to the economy ofthe country. Huge Market lures the foreign investors so gradually increase purchasing power .

Secondly she emphasises on our export of services to the world .India being a largest English speaking nation, we provide low cost effective educated people for out sourcing .

Pakhee speaking  against the motion put forward challenges which India faces in its export business.she said to become a powerful trade nation India need to check on its policies and redesign it India need to check out on its infrastructure facility. Observing  current rupee fall and inflation clouded all over the country its almost cannot stand as trade superpower of the world.

After the presentation  Mr Badrinath spoke on the new insight to trade story of India .Should India always depend only on services ?

He presented  that India  doesnot depend only on services .Our trade is dependent on services and manufacture industry.Various products which we export are:

Gems and jewelleries.

Engineering goods.

Chemicals

Pharmaceticual,[Bulk drugs ]

Leather

Textiles , cotton products

Handicraft

Electronics

While we export a number of products we import also a lot of product .india is on tenth largest importer  which is 1.6%of the world .So India need to check on its export business and further  need to pay attention on our infrastructure , Training and educating labours, improvement of handicraft packaging industry, quality improvement.

We have  growing  manufacture economy which is slow  but steady.The positive factors  favouring  our  trading system and help to become a big powerful trade centre are

Bilateral  agreement

Free trading agreement  with two dozens  countries

India is associated member of ASEAN.

G77 invited member

BRICS member

Big trading patners with UAE, Singapore.

We will be doing export business  upto 500 million dollar in 2017.

We are sixth large exporter of services  while seventh largest importer of services.

Though India has both positive and negative points  on its trade story .India need to check on its policy and free trade to become a trade power of the world.

Financial Journalism

Foreign Direct Investment: Good Experience

Automotive Sector

The advent of Foreign Direct Investment in automotive sector has brought in wider range of choices as per the purchasing power of varied consumers otherwise earlier not many automobile models were available to consumers. Also, the competition among various market players has resulted into more advanced, fuel efficient and comfortable automobiles that too with fair prices. Apart from this, the set-up of one automobile unit leads to formation of 150-200 auto ancillary industries. Thus, looking at entire gamut of Automobile Industry, FDI did help it flourish in better manner and also generated number of collateral benefits.

Foreign Direct Investment: Bad Experience

Pharmaceutical Industry

FDI experience in Pharma sector has not been favourable as the priorities of foreign pharma companies stand at variance with the needs of the country. They take over domestic companies with the intent to get control over manufacturing and price-regime of medicines. Japan’s Daiichi Sankyo taking over India’s Ranbaxy Laboratories in 2008 was the first high-profile acquisition of any Indian pharma company by multinational. India has seen plenty of acquisitions since then.

 The monopoly of foreign pharma giants in the country has resulted into essential drugs getting costlier. FDI in pharma sector actually led to healthcare cost going up instead of mitigating it.

Telecom Sector

Though one can’t deny the role foreign telcos played in India’s telecom revolution but the kind of security threats they have generated are also worth noting. If the hardware and chips manufactured abroad go into the electronic equipments, it does raise security concerns. It is being anticipated that China’s major hardware manufacturer Huawei ferrates across crucial information to Chinese Government. Now that Govt. has approved 100% FDI in telecom, it is significant that component industry and electronic chip plants are set-up in India. It has to be ensured that major portions of equipments are made up of locally manufactured components. 

There are five kinds of companies having stakes in Indian economy:

1) Public Sector Undertakings (PSUs)

2) Private Companies

3) Cooperatives

4) Foreign Companies

5) Indian companies having manufacturing base outside

Finanace Journalism

By Prof Bardrinath

 

More than 50 % of India’s Gross Domestic Product (GDP) comes from services.  Service sector provides employment. It requires lower investment and capital. It is also a source for high foreign earnings. It has led to an improvement in the standard of living. 

According to Sean Harkins, “In the 17r century Indian and China accounted for 60-70% of the world’s earnings.” Today India accounts for around 5 % of the same. 

Historically, India has been an agricultural economy. China was able to move from agricultural sector to manufacturing and that worked for their economy. However, India realized that it could not manage the manufacturing sector efficiently and focused on the service sector.

India could be the global service super power. India provides cheap and cost effective professionals to the world. By 2030, India will provide 50 % of the total services in the world. The average age of Indians would be 29 by 2020. This average and the Indian English language skills along with our demographics will be favorable for India in the global service sector industry.     

Financial Journalism (Mr. K.A. Badarinath)

The class started with a brief introduction. Professor K.A Badrinath, is the editor of Financial Chronicle and has previously worked with The Economic Times and The Pioneer. He commenced the lecture by talking about Journalism. He said that Journalism was like kite flying and required a certain realm of imagination.

 He listed down the top financial newspapers, namely, Economic Times, Financial Express, Mint, Hindu Business Line, Financial Chronicle and Business Standard. He also stated that “Reading a business paper is an art in itself”. Then he asked us to give our opinions on the state of Indian economy.

Talking about the Indian economy he stated that:

 1. The Indian economy is the ninth largest economy in the world. It’s divided between four sectors, namely, Industry, Agriculture, Export/trade, Services.

 2. It is the second largest foodgrain producer in the world.

 3. Our iron ore exports our banned. Iron ore is converted to steel and then exported to earn higher value.

4. Our net worth in terms of GDP is $1.87  trillion. Of which, 56.4% is contributed by service sector,17.4% by agricultural sector and 26.4% by the industrial sector.

5. However not even 5% of this forms the part of world trade.

6. Our GDP is the ninth largest as per the 2012 data.

7. India is the tenth largest importer and the nineteenth largest exporter in the world. Export accounts for $309 bn and import accounts for $512 bn.

8. In terms of the ease of doing business, India is on the 192^nd position which means it is very difficult to do business in India.

9. We engage in contract manufacturing. This means, our locally produced goods are further branded and sold worldwide.

10. To overcome all these problems, India first has to deal with its rural difficulties which include illiteracy, health, poverty and infrastructure.

Some of the world’s richest people live in India and own big business empires. Right now according to Corporate Social Responsibility (CSR), the Business houses ought to contribute 2% of their profits towards social upliftment. However in practice, this rarely happens.

The lecture ended on the question, whether these business houses should come up and take initiative to contribute towards India’s social sector projects?