Rupee Depreciation : An Analysis

Rupee Depreciation : An Analysis
The potency and strength of a country today in this globalised world displays through the health of the economy. In this context, the persistent depreciation of Rupee has sent alarming concerns regarding the financial stability of India. The fall is a result of both external and internal factors.
EXTERNAL FACTORS

1. Global economic slowdown: The sub-prime crisis of U.S.A and the consequent Eurozone crisis has severely limited the global economic growth with different countries aiming for strict fiscal measures. This has adversely affected exports from India as well as lessening of foreign investments.

2. Unstable Political situation in West Asia: The political turmoil in Syria and political instability in other oil-producing countries have increased apprehensions for oil supply and energy security.

3. Quantitative Easing by U.S.A: The measure adopted by the Federal Reserve has severely impacted the money outflow and investments to developing counties like India.

DOMESTIC FACTORS

1. Political Populism: The parochial political culture in India shows policies based on political populism rather than economic rationality. The increasing amount of subsidies has raised concerns about governments ability to bridge its ballooning fiscal deficit. The National Food Security Bill has been criticized as more of an election gimmick undermining the economic health of the society as whole.

2. Lack Of Consensus: The coalition politics has led to lack in consensus in policy-making. The frequent disruption of the Parliament has impacted the business sentiment.

3. Widening Current Account Deficit : Increased dependence on imports and moreover on non-essential items like gold have increased the demand for dollars. On the other hand, the rate of growth of exports have not been satisfactory due to infrastructural constraints, lack of proper export promotion policies, inadequate skill development etc.

4. High inflation : The consistent high CPI has led the central bank to adopt strict monetary measures which have impacted industrial growth and thereby our exports and investment inflow, further depreciating the rupee.

5. Investment in gold expecting higher returns acts as a spiral for furthering rupee depreciation
.

IMPACTS

1. Low economic growth

2. Inflation : Poorer sections are more impacted due to greater reduction in their purchasing power.

3. Rising unemployment resulting in associated socio-economic problems

4. Manufacturing industries suffer due to lesser import of capital intensive machineries

MEASURES

1. Optimal Rational Economic policies : Decision-making should not be marred by narrow parochial caste-driven or vested interests. Cooperative federalism is required to prevent policy paralysis to counteract the negative business sentiment.

2. Coordination between Monetary and Fiscal policies: RBI and GoI should work in tandem keeping in purview larger interests of the society. Aim should be reduce the fiscal deficit and control inflation along with ensuring economic growth.

3. Attracting Investments : Along with creating positive business sentiment, other advances like tax benefits etc can be given to attract investments. The NRI and Indian diaspora can be particularly targeted in this respect.

4. Export Promotion Policies required: Foreign Trade Policies target can be achieved by providing necessary infrastructural support to the export-industries. Moreover the MSME industries products should be promoted to enhance the export potential basket. Diplomacy should be used to negotiate policies at international forums like WTO,IMF etc. Technology sharing pacts with developed countries can enhance our export competitiveness at the global market.

5. Curbing import of non-essential items : Imports should be restricted only to indispensable items and reducing non-essential items like gold etc. Proper domestic savings schemes like Gold ETF etc can be promoted to reduce the over-dependence on gold import. Focus should be on import substitution and export promotion.

6. Energy Security : Bulk of Indias imports is from oil. Sufficient buffer stocks should be maintained to negate the impacts of sudden shock in oil price rise. Moreover Currency Swap Agreements as with Iran should be explored with other countries to prevent outflow of foreign exchange reserves. Oil potential at domestic level should be explored by investing in proper research and development. Shale gas and and non-renewable sources of energy exploration should be encouraged.

7. Hedging by Domestic companies: Indian companies like auto industries who import intermediate products and raw materials should go in more and more hedging.

8. International diplomacy : Last but not the least international diplomacy can help in insulating India from global turmoils.


The rupee depreciation has undoubtedly posed serious challenges to Indias economic growth. However the economic potentiality of India cannot be underestimated. A host of sound policies and global economic development along with strong leadership can boost India back on the track for 9-10 % GDP growth.


References:
1.www.thehindu.com
2. indianexpress.com
3.investopedia.com
4. NCERT


Name: Nabeel Mohammed Salim

1. Introduction-

1. Introduction-
Human being facing natural disaster from ancient time likes earthquake, flood, drought, storms snowfall, tsunamis and volcano eruption etc. Are taking examination of the patience, strength and life of human beings. Large no. civilization and culture are destroyed due to these disasters.
No doubt, development in the area of science and tech. makes human life much better but some of the discoveries are responsible for these disasters and makes life more difficult. Scientific discoveries and physical life gave the birth of environmental imbalance, so the possibilities and no. of natural disaster become maximum.
(2) Disaster According to the Disaster management act 2005 -
The means of disaster is the destruction, problems or any serious incident which happened due to natural or ethical (man-made) factor or accidently happened and which causes serious threats to the human life or drastically affects nature.
(3)Types -

1. Natural disasters earthquake, drought, flood, tsunamis, landslide, snowfall, storms, epidemics , forest fire and others like loo, cold, fog and mist etc.

2. Manmade disasters nuclear disaster, chemical mining biological cyber terrorism environmental disasters and war
(4)Global situation on disaster-
The whole world suffering from different types of disasters and loosed large no. of life and economy. Dangerous earthquake of modern age came in 1201 in Syria and Turkey causes death of 10 lakhs of people after that in China 1556 when 8.5 lakhs of people loosed their life.
In case of India in 1737 in Calcutta where 3 lakhs of people died. Russia China Syria, Iran, Japan, Italy, Morocco, Turkey, Mexico, Afghanistan, Pakistan Indonesia and Colombia are the porn countries of disaster.
In the world 10 most dangerous volcano can damage large area of earth , world climatic organisation said that Typhoon of North ocean, Hariken of Atlantic ocean and cyclone of bay of Bengal damage many countries like Bangladesh India Thailand and Indonesia.
Due to the environmental imbalance the polar ice caps are start melting due to which cities situated in coastal line are now in serious threat in the whole world climatic system get disturbed and along with natural calamities human beings are also suffering from war and terrorism like disasters.
(5)Indian Stand on Disaster- according to UNIDR in case of natural disaster, India ranks second after china. 59% part of India is earthquake porn area in which the area near Himalaya, eastern state, Gujarat and some area of Andaman and Nicobar are active area of earthquake almost 68% part of country suffering from partial or serious flood , 38% area have 750-1125 mm rain and in 33 % only 750 mm rain is found or less the western part of country always facing drought like situation every year and 4-7% crop field always face the problem of flood and get damage. in the 75% km long coastal line almost 71% almost (5300km) area is porn to earthquake.
Along with these information we can observe in the whole year different parts of India facing different types of natural calamities but the matter of fact is that large no. of poor people get affected and loosed their life.

From 1980- 2010 all natural disasters





Effects of natural calamities in India (From 1980-2010)


no. of incidents431

no. of died people143039

average death per year4614

affected individuals1521726127

average affected per year9087940

economic damage48063830$

per year economic damage1550446$









The above chart showing that how much damage caused by natural calamities caused in India and along with other developing nation India affected mostly by these incidents.
In country where informing centre or alarming centres are established are less affected by these incident for example North America saved several life from Sandy cyclone in 2012 but those countries who is less prepared or where rehabilitation programme is not good , are severely affected by natural disasters and India is one of them. According to world bank report due to the natural calamities , India have loss 2% GDP growth every economic year and other important thing is that the poor peoples are mostly affected by these calamities.
In these events UNO form UNSIDR in 2005 and HUGO process to combat the impacts of natural disasters India is one of the signatories country of this process, under this 5 general steps to minimize the impact of natural disasters

1. Political approach in this section, it is defined all government should form Act, legislation and institute to minimize the impact of disasters along with the economic support to rehabilitation programme.

2. Technological approach- use of science and technology to calculate the impact of disaster, identification and monitoring and also development of information system.

3. Social and educational approach- to increase the awareness about the calamities and to increase the social responsibilities of human beings.

4. Development approach- in each developmental process we should thinks about the effect of these development processes over nature and natural disaster.

5. Human value-during disaster what are the basic things which we have to do and how we can rehabilitate the people safely.
From August 1999 Indian government starts working on these steps at that time J.C. (former agriculture secretary) and some specialist grouped together to form Higher Committee on Disaster in the light of our constitution , this committee have rights to work at the different level of Nation , state and districts to form different programme and policies after some time the area of work of this committee increases and manmade calamities are also included.
The picture about the disaster management changed when, in Dec. 2004 Tsunamis knocks from the Indian ocean and worst affected India, our 7 state severely damaged after this big incident Indian government came on action and forms Disaster Management Act 2005 .

National levelHOME MINISTERY/NODAL MINISTERY

StateDISASTER MANAGEMENT OFFICE

DistrictDISTRICT MAZISTRATE OFFICE

BlockOFFICE OF PANCHAYAT

VillageRURAL DISASTYER NMANAGEMENT COMMITTIE

Now the means of disaster management is working on those programme and policies which work before, after and during disaster, in 2005 after the formation of Disaster Management Act 05 National Disaster Management Authority is formed under the chairman ship of Prime Minster which works at different level like.

The government cant work alone in the area of disaster management so that state, district and NGOs should work at different level to minimize the effect of calamities. The government every year provide budget and different accounts are also formed like PRADHAN MANTRI RAHAT KOSH etc.
Success of any act or legislation depends upon government of centre and state both so they have to work together effectively and collectively to prevent the peoples of country from natural disaster.


(6)Challenges-

* As the government have different level activity there is need of capacity building and strengthens him to face these problems.

* We should work honestly under different Acts and legislation formed to tackle disasters.

* Finance ministry before giving any sanction to the development project have a panel to evaluate the possibilities of natural calamities but person of this panel does not have suitable eligibility.

* To minimize impact of disaster, there is need of its well understanding, but our government have not introduced him about these calamities.

* Different programmes and policies are included in 10th and 11th five year plan but not work properly.

* Human resource development is not completed with awareness.
Along with disaster management important thing is that, to live with disaster, Japanese know this very well, they know they have all around surrounded by volcano and it is porn area for earthquake but they try to live along with disaster, with happiness and morally.
So the important message is that every danger is not a disaster, but if we collect resources to tackle and escape from disaster so we can minimize the impact and harms from disaster and it will be a best management of ours.

PRIYANKA GUPTA
Books-* Dr. Surendra kataria Indian public administration
* YOJNA magazine
*Class 10th Disaster management book
* Dr. S. K. Ojha Indian Geography
Web- ndma.gov.in
Mrunal.org

Is American Imperialism crossing its limits?

World has started to force US to think that it no longer can sway international politics through the aggressive display of power. There are certain articles which are favoring to prove a fact that the developing world is no longer looking for America to nurture it.
I recently studied some of the articles including the interview of former president of Brazil Mr. Lula, Russian president Putin worrying over U. S's exceptional-ism, and current issues with India, starting from forcing India to phase out its refrigerant gases based on HFCs and igniting a debate over amendment in the Nuclear Liability Law.

Let me go one by one.

On NSA Snooping:

Brazilian former president does not hesitate to demand Obama's apology, and to ask Where is the security in the world today, with the U.S. intelligence agency NSA snooping on everything? It all came on the wake of a gentleman, a former NSA contractor, Snowden who thrilled the US by providing documents to the world, which America would have been happier to keep it a secret from the world. On the other hand Indian External affairs minister Salman Khursid was satisfied with the answer of US state secretary John Kerry's explanation of terror free world and eventually India.
When it was confirmed, US gave a excuse for having involved in snooping, to its novel duty of a guard to prevent world from terrorism. But the question is why did US not ask the world about it prior to this condemnable spy act? Did anybody ask them? Nobody asked them to do so. Nobody hired the American espionage system. But still it shows nothing but America supremacy on other countries which simply contradicts of the very concept of democracy.

On Syria war:

The same novel duty of the world police that the Americans continue to claim to have, brought Syria, on the verge of destruction and Obama, the commissioner of that police, tried to overpass the United Nations Security Council. Thanks to Russia whose advice to handle over the weapons to UN saved Syria.
But imagine if Russia wouldn't have been there to protect Syria, world would have witnessed a new war in Middle East. Putin words, We must stop using the language of force and return to the path of civilized diplomatic and political settlement," are highly acceptable. (Although there are interests of Russia, behind its extensive support to Syria, But Russia, playing a role to counter the effect of US, had been always in interest of developing countries.)
Syria did not attack US?, did Syria pose any threat to anyone related to US? No!! Than mere being the highest budget payer in UNGA and UNSC, declares US to entertain its power which encompasses over passing the Security Council. If other two nations Russia and China proposed to use the veto power, so what was wrong in it? After all being the permanent member of UNSC, they are entitled to do so. But the question is why did US try to ignore the UNSC, which itself is responsible for world's peace? And not seek any other approach which might have prevented Syrian people to become refugees because of the fear of war.



On forcing India to ban HydroFluroCarbons (HFCs):

India on the other hand always enjoys bilateral relations with US, May be it has no other option. It does exactly what US wants. And US wants India to do exactly which will be in favor of US only.
Consider in one area where US exceptional-ism prevails enormously, Kyoto Protocol, that was brought together in 1997 by UNFCC to restrict more emissions of Carbon Di Oxide. As a result, this protocol demanded developed nations to cut their emissions instantly while it gave some relaxation to developing countries. Here came the problem for US and Canada. US never ratified this protocol just because countries like India were given relaxations on carbon emissions. US presidents Clinton then Bush now Obama have been very cautious to talk about this, as 51% electricity generation in US is done by coal.
But US extensively gives more attention to another protocol of same intention Montreal Protocol, which is dedicated to reduction of gases which results depletion of Ozone layer. And US wants to have these HFCs in the list of ban gases under Montreal Protocol because of HFCs later proved harmful effect to environment.


Why?Because America is ushering world regarding Montreal Protocol because of its companies which have developed new expensive alternatives to these refrigerant gases and wants to do business with India by forcing her to phase out its HFCs.

On forcing India to remove section 17(b) from Nuclear Liability Law:

What is problem for US companies, the right of recourse of the operator? It means the operator first takes his own liability to compensate the victims and after the compensations are paid, he has the right of recourse to sue the suppliers, provided he has definite proof of faulty supply [in the equipment] which has been the primary cause of the incident. The Bill establishes prompt compensation from the operator to the victim.
But this 17(b) is all causing problems with American nuclear companies, they don't want to have this section in the law why? Because here operators are NPCIL and BHAVINI , which are purely under Indian Government which are run on tax money only. And in the unfortunate event of nuclear incident, whole compensation would be paid by the Indian government, only thing that would be crippled is Indian Economy. And only thing that would have no effect on it is American companies.
It has always been in America's interest, Let it be wars in Middle East to control oil supply, Let it be insult a country's president to show supremacy on other nations(Bolivia's president plane was checked to ensure the absence of Snowden), Let it be domination of US on developing world. United States of America has enjoyed and enjoying an incredible period of time of power and wealth. But it should also keep in mind that its own private interest should not contradict with world's interest and demean US image as world's superpower.

Sachin Gupta

Arab Spring has it failed?

It all started as a wave of movements in the arab nations in december 2010. The movemnt started as rage against the goverment inactions on various issues including price rise, unemplitment, inequality, autocratic rule and so on.
The countries were the wave shattered includes Egypt Tunisia Libiya Yemen . All these countries saw violent clashes between people and government machineries . The government finally was thrown away in front the huge uprising.The flare of the uprisisng has shifted to other countries including syria bahrain Oman etc where it has been violent in its behaviour so far.
Features of Arab Spring.
Some features includes .
1. Peoples particaipation was quite large. All sections of the people especially youth participated in the demonstartions in full letter and spirit.
2. Role palayed by Social Media in bringing and maintaing the uprising was substantial.
3. Most countries were the uprising took place was either an allay of West or part of soviet Union during the cold war period.
4. All the countries were either autocratic or Monarch in nature.
5. The main demand of protesters were to initiate democracatic reforms in the state.
6. Woman participation.

Reasons for Arab Spring.
There is common similarity in the places where the uprising has erupted and that is all these countries are governed by autocrats of Monarcs.It is true that a ruler who doesnt care for his people cannot rule with his own all the time. Some of the main reasons includes
a. High level of unemployment .
B. Uneven distribution of wealth.
c. No political freedom.
D . Nepotism and kinship.
E. high burden of price rise and inflation.
F. corruption
G.Centralsed decision making with no public participation.
F. Political Powers is on captive few.

But considering all these reasons the underlying cause for such an uprisng is nothing but thae anger and mistrust amoung the people towards the administration. The people were given promises on various matters but were violated in all spheres.
Effects of Arab Spring .
The effects were quite amazing. The rulers of Countries like yemen , Tunisia Egypt Libiya were thrown out of power. The same level of protest were then blown out to other countries including syria bahrain oman etc.Though the demonstrations were not of equal color in all countries . In tunisia Yemen and upto a certain extant Egypt were peaceful but the tone at Libiya was very violent. The oil prices in the international market started shooting up like rockets.
The other west african and west asian countries started initiation of democratic process in their respective nations. Many countries including arab countries started reforms including democratic decentralization, woman participation in elections and started other reforms as well.
Arab Spring- A Failure?

It is highly important to note that despite all these developments upto a certain extant the original spirit of the Arab Spring lost in its due passage of time. In most places the color of the movement got diluted and radical and anti social elements have the infiltrated into the movement there by leading to absolute chaos and violence. In areas like syria and libiya the terrorist outfits like the Al-queda , Al- Nursa has gone upto certain extant of capturing the land mass started sharia law in those area. All the more after the decline of these rulers civil war broke out in all these nations which ultimatly resulted in chaos and fury. People started forming groups for self interest and nations started to divide into pieces.
The role played by international forces like the NATO were like aadiing fuel to the fire.The international community In the pretext of responsibility to protect has actually made the situation more violent and out of control. US stand of War On Terroe was actually mockery and in the pretext of the leter they were adopting the neocolonisation programmes. Most nations ntentions including the americans and russians were purely economic in nature rather than any reforms.
At most times the 1973 resoltions were passed in the UN secutiyu council so that punitive measures may be initiated against the rulers of host countries which became futile in the subsequesnt days. The case we can see in libiya were no fly zone was enforced is still buring. In most days we can hear the reports of suicide bombings and firings from these nations. The role of UN has been limited upto to a greater extant in making peace and tranquility in the regions.
Egypt after the showdown.
Arab spring was its helm in egypt. All the sections from the society participated in the movement right from the youth to woman.Hosni Mubarkh could not with stand the kind of pressure the general public has made upon him. The opposition includes Mohammed El Barday former IAEA chief Muslim Brother hood under the leadership of muslim clergs and radical elements, and other ethnic tribes . Though in the beginning mosr demonstrations were of peaceful in nature , after a certain stage it lost its all its patience and got violent color.
After oveerthrowing Hozni Mubarak egypt went for an election which was participated by all walks of society . Muslim brotherhood under the leadership of Mohhamed Motsey came into power. But the history again repeated the same here also. What Morsy has promised to the egyptian people were forgotten and started to establish more stringent laws in egypt. He declared he want to build an islamic republic of egypt with an islamic constitution. This was not acceptable to most egyptians especially minorities . people agitation again started, an army coup was plotted by the army and the 1st ever democratically elected government of egypt was thrown away.
Libyan scenario.
Not much different was in libiya also. Mohammer Gadaaffi was over thrown by the people in a great fashion. Unlike other state rulers he was forced to flee underground and later on caught and killed by the radical elements. Here the International agencies including the UN and NATO played a crucial role in overthrowing the ruler. UNSC imposed no fly zone in libiya. They provided both technical and logistic support to the opposition parties. After gadaffis fall the nation went into the hand of radical and terrorist elements. The radical groups involved in libiyan revolt started moving to other nations. The effects was seen in mali were a military coup was erupted with the help of libiyan fighters. Al queda do made a strong come back to these nations and parts of the country is under them now. Civilian unrest was the result.
Unending syrian crisis.
The other important uprising was in syria where bashar al assad government was in question. Al assad was in power for more than 3 decades. The free syrian army was the major opposing group where it includes people and ethnic gorups from different parts of the coutry. The sunni shai conflict was another reason for the uprising where the population is of majority sunnis controlled by shia government.
Unlike other coutries syria is buring for the past 2 years where the opposition could not make any substantial move agianst the regime. The main reasons includes divide amoung the opposition, no consensus on international community and agencies and support from neighboring countries like lebonon and iran. . The country is now in the verge of civil war .There is complete break down of law and order, no employment, unrest and anger amoug the citizens.

Considering all these it is evident from the fact that what arab spring has started with a deep anguish against the mis- governance of the regimes has now become a state of civil war and dumped the countries to doldrums. . Even after overthrowing the autocratic rulers like Muammer Gaddaffi , Hozni Mubarak etc the situation has even worsened . Civil unrest and greater war has become ultimate rsult. Peace and tranquility has now become a far more an illusion in these countries .Hence we can very well conclude that wave which started in the for of Arab spring gas lost much relevance.

Name : SANDEEP.A

Ref : The Hindu , Foreign Policy Magazine, Loksabha channel , IDSA website.