5. Indian Exports and Imports

All nations in this Globalized era are dependent on each other. There are bound to import goods which are not available to them locally and to sell to earn money and meet their local demands. It is a boon to have a positive balance of trade meaning more exports than imports which our Nation is earning from outside also apart from the domestic tax receipts.

Let us analyze some data of our country,

Exports during June, 2014 were valued at US $ 26479.72 million (Rs.1,58,165.21 crore).

Imports during June, 2014 were valued at US $ 38242.96 million (Rs.2,28,427.88 crore).

Cumulative value of exports for the period April-June 2014-15 was US $ 80112.30 million (Rs 4,78,928.90 crore)

Cumulative value of imports for the period April-June 2014-15 was US $ 113196.23 million (Rs

6,76,694.53 crore)

So, The trade deficit for April-June, 2014-15 was estimated at US $ 33083.93 million.(Rs. 1,99,380.30 crore)

For 3 months of this fiscal year, We have a trade deficit of nearly 2 lakh crores. Considering, India has 123 crores people. So, Per capita, There is a balance of 1626 crores. This is considering Govt has zero earning but it earns through tax receipts. Total tax collected by Govt of India in 2013-14 is 7,42,115 crores. So, It would amount to 1,85,528 crores per quarter.

But we have already 2 lakh crores as trade deficit. As we can see, Govt is not earning enough even to pay the trade deficit. What about the money for development works, subsidies, Monthly salaries, Loan repayments? Where will come from? Get more loans from IMF or World bank? Will be sustain with this state of economics?

Let us look into what are we exporting,

For the month of June, Our Main exports have been 1. Petroleum products, 2. Engineering goods, 3. Gems and Jewelry, 4. Textiles, Drugs and Pharmaceuticals, 5. Organic and inorganic chemicals, 6. Cotton and other fabrics, 7. Rice 8. Electronic Goods, 9. Plastic and Linoleum, 10. Marine Products 11. Man made yarn/fabrics in the order of their values.

Our Main imports have been 1. Petroleum, Crude and products, 2. Gold 3. Electronic Goods, 4. Machinery, electrical and non-electrical, 5. Pearls, Precious stones, 6. Organic and Inorganic chemicals, 7. Coal, coke and briquettes, 8. Iron and steel, 9. Transport Equipment, 10. Artificial resins, plastic materials 11. Non ferrous metals in the order of their values.

Out of the 38 thousand million dollar imports, Petroleum amounts for 13 thousand million dollars. That would be 34% of our imports. Can we now imagine our dependency on Oil?

If we look at the top 10 list of exports, Not only is it saddening back visionless. Our top export is Petroleum products, Electronic Goods is at 8th position. There is no automobiles in the top ten list. Cant we manufacture transport equipment ourselves? Why do we have to import it?

We need to vitalize Manufacturing sector. Develop sophisticated goods. Export military products which earns huge. We need to end products more and more. Why do we have to import Coal when we have huge reserves of it locally available? Why do we have to import Iron and Steel when we have one of the Asia's best Iron ores available here? Can't we avert Mining mafia and use the local iron ores to manufacture more and more end products?

The crucial factors for attaining all the above concerns are scale, speed and skill. Our PM's new 3S mantra. We need to increase the scale of manufacturing and human capital utilization. Increase the speed of manufacturing. We should have the skill to develop and manufacture Worlds best goods and products.

Time is money. Time lost wont come back. May we move in right direction. All ministries should work cohesively. Involve proactively. Work with Vision. They have the right leader to co-operate and channel their energies. Hope, The current situation of trade imbalance improves in coming days.

 

4. Indian Currency and its value

From the time of civilizations, Currency has existed. From barter system to coins to currency notes. Post colonial era, Every independent nation has its own national currency. India since its independence has chosen rupee to its currency which existed during British Rule. Every nation has its own regulatory body to control its currency. We have RBI to do the same.

Why do we need currency? All transactions within a Nation will happen through currency. Soon after independence, When India was not yet dependent on foreign countries, Its currency was not evaluated against international currencies and our currency was only relevant to domestic needs. Once we started doing business with other countries, Other countries wanted our currency to be valuated against international currencies. As the globalization became increasingly prevalent, Business with other countries became inevitable. So, Our currency had to be evaluated with the world market. In the Nehru's socialism model, State controlled country's production and manufacturing which agonizingly led to Red tapism, nepotism and corruption.  Our production and manufacturing dropped. Entrepreneur's got vanished. We reached a situation where we had to devaluate our currency so that others can invest in India, provide loans and do business with us. Below is Rupee against Dollar since independence,

1947, 1$ = 1INR

1962, 1$=4.8INR

1966, 1$=6.5INR

1975, 1$=8.4INR

1985, 1$=12INR

1989, 1$=16INR

1995, 1$=35INR

1998, 1$=41INR

2004,1$=45INR

2009, 1$=48INR

2014, 1$=60INR

In 66 years, Indian Currency has been down 65 times against US Dollar. In terms of real value, From being equal at Independence, We are now 60 times down in 66 years. We can say, One time down every passing year against Dollar.

So, The Nehruvian socialistic model's tryst with destiny happened to be falling down every passing year. Even though, Currency evaluation is the not the only true indicator of our well being, It surely is one of the most important factor in this globalized era.

What makes Dollar so strong? Because of the oil trade monopoly. Every country needs oil which mainly comes from Middle East and other few countries. All Middle East countries except Iran in few cases tend to accept payments in Dollars. So, The transactional value of dollar in international market will hold strong unless there is a new global leader who can influence more than USA.

Shouldn't we Indians have such ambitions? There are few countries like Japan who intentionally keep their currency devaluated because they dont want to hamper their exports but how relevant is this strategy needs to be further evaluated. It mainly depends on the volume of your imports and the value of them.

In present scenario, Balance of trade, Indian earnings from foreign countries(IT services) directly affects GDP. Our GDP is our economic indicator.

What happens if our GDP falls continuously? Our Country's ratings will go down. People will stop investing in India so we would have to devaluate our currency further. It will again make poor and our costs will escalate. So GDP in turn will fall back starting a chain reaction of national crisis.

The way out of this mess is to,

1. Strengthen our currency by increasing its brand value in international market.

2. By reducing balance of trade.

3. By bringing more long term investors to India who invest in infrastructure.

4. By influencing developing nations to trade in Rupee.

5. By forming an alternative power center for countries depend on us.

It surely is not going to happen overnight given the damage that the lazy corrupt Govts of past has caused to our Country. We should however promise ourselves that we will not a wrong step here onwards. The Champion of Surplus budget is at the helm of affairs. Let's hope for meaningful days ahead. Let us contribute to it.

3. An era of Hope

             A poor family of eight living in Vadnagar, Gujarat struggling to make ends meet. One normal day, A saint visits the family begging for food. In India, We dont know if rich feeds strangers or not but poor surely will do so because they have nothing to fear and they know the pain of empty stomach. So, The saint was fed and then the Mother of the family out of her concern for 3rd child asks saint about the child's future. Interestingly, Saint predicts that her 3rd child would either become most revered saint of all time or he will reach the top of political ladder. Mother's worries increased when suddenly the child declared his wish to go to Himalayas leaving studies behind. Irrespective of persuasion, He travels to the abode of Blue Lord, roams around like a nomad, spends his teenage in the most spiritual place of Mother India.

One fine day, He comes back. As any Mother would feel, She doesnt want him to go back anywhere again. So she forcefully get him married. His priorities now change. He joins RSS. He works selflessly. His service becomes recognised. He is given higher responsibilities. He then never fails to deliver. That Strong,Dedicated Man on May 26th, 2014 becomes the Prime Minister of India. As the saint foretold long back, He reaches the top.

A Lion is constantly challenged by the horde of hyenas but never does Hyenas succeed in overthrowing its throne. Lion is borne to rule. Narendra Damodardas Modi, The Lion of Gujarat, now sits on the shoulders of billion Indians. The Era of Hope has begun.

In March 2013, Narendra Modi was appointed to the BJP Parliamentary Board, the party's highest decision-making body, and was chosen to be chairman of the party's Central Election Campaign Committee. On 10 June 2013, Modi was selected to head the poll campaign for the elections at the national level executive meeting of BJP in Goa.  In September 2013, BJP announced Modi as their prime ministerial candidate for the 2014 Lok Sabha polls.Then began the marathon of the Juggernaut.

As the Man, he is known to be, At the age of 63, He addressed 440 rallies,travelled 3 lakh kms in 25 states,held 12 rounds of 3D rallies covering 1350 locations, covered a total of almost 5800 locations. Can any Political Party get more loyal follower than him?

His oration skills mesmerized people who were depleted in all ways in the last ten years. People followed wherever he went. There were attempts to spread terror too which by God's grace didnt succeed. People stood in rain to listen to this Man of conviction, purpose and perseverance.

There was One man against the entire scourge of hate mongering intellectually challenged pseudo secular disgraceful brutes. For a change of fortune, People chose correctly this time.

Never before did BJP truly imagine of getting absolute majority on their own. BJP -282, NDA - 336, Congress - 44, UPA - 58. Rest is history.  After the forgetful decade of decay, A new era has begun. For me, This is the era of hope, We Indians have long waited for. Acche Din is our common goal. Let us work for it. Time to leave behind a Nation which our next generations will be proud of. Vande Mataram.

Date : 16th, July 2014

Place : Bangalore