The NorthCap University organizes academic economic fest - Arthshastra 2015

The NorthCap University recently organized its academic economic fest ‘Arthshastra 2015’ in which more than 500 economics and management students from various colleges and universities across Delhi NCR participated. The main aim of the fest was to give the students an insight into the world of economics.

It was organized by School of Management, NCU. Dr GB Singh, an independent economist and a visiting faculty member, Economics and Planning Unit, Indian Statistical Institute (ISI), Delhi Centre, graced the occasion as the Chief Guest.

The fest was also attended by Prof. Prem Vrat, Pro-Chancellor; Brig SK Sharma(Retd), Pro Vice-Chancellor; Dr Charu Shri, Head, School of Management; Dr DR Agarwal, and Mrs Archana Mehra. There were different events conducted to make students understand the concepts of economics namely Stock Fusion, a mock stock market; Seal the Deal; Idea buzz; Abhivyakti, a business board game and a quiz.

Students were invited from over 100 private as well as government colleges and universities. The winners were given cash prizes and certificate of participation to all participants.

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Stock Market Business Good for You?

Stock market business has been luring new and old investors toward the share and scrips for many decades.

Stock market in India, has been consider as equal to betting, where people do fear about losing more than the quantity of gain.

In reality, stock market is same as we have negative impression about it.

Stock market is the one kind of business, that everybody should love to do.

The first logic is that, companies are the main aspect in stock market, where they sell their stock or scrip (may not necessarily directly).

The term company is closely associated with profit or profit making in general or business sense.

If a start up company could become one successful company after listing at stock market, then the stock or scrips of the same company would be gaining much.

Ultimately, the stock holder or investors would be getting high price for the exchange of stock and dividend as decided by the board of directors of the company.

In stock market, how a lay-man would gain money?

Well, for that they need to purchase stock and do need to monitor the price of the share or stock they have purchased.

Simply, if the share is traded on higher price simply sell it, else hold it to see if it would be traded more than the value, you fixed to sell.

And if the share is losing is value in the stock market, then sell it, get your money back.

Interesting thing about stock market is that, you can suffer loss, but you are going to get back the money, and that would be the same as if you lent money to any person.

Why not invest in banks rather putting into risky stock market?

Right, this assumption is right, seldom anybody would agree to take the risk in stock market. But the fact is that, those are ready to take the risk, they win and lose in stock market.

Another factor is that, one can get more interest return for their investment in stock market, but not always.

There share in stock market are just like products, you need to keep those and trade for a profit, and loss is inevitable in business.

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Agrochemicals: The tool to increasing India's food availability

By Mr Rajesh Aggarwal,

Despite rising foodgrain production, the per capita availability of food is falling in India. How do we intend to feed the burgeoning population that is expected to keep growing roughly for the next 50 years, asks Mr. Rajesh Aggarwal, Managing Director, Insecticides India Limited

India achieved a record foodgrain production of 259.29 million tonnes in the 2011-12 crop year. The output was an increase over the previous crop year’s production of 235.88 million tons which again was a record in itself. While in the year 2012-13, the output fell slightly to 255.36 million tonnes in 2012-13 due to drought in some parts of the country, this year again expectations indicate a record breaking production.

When we read and hear the ‘record’ numbers generated each year to announce India’s foodgrain production, little do we register that even though our total foodgrain production in absolute terms is increasing, the per capita availability of food is on a steady decline.

Data from the Economic Survey shows that in 1961, the time preceding the Green Revolution, the per capita foodgrain availability in India was 468.7 grams. The population at this point of time in India was around 439.2 million. As India entered the era of the Green Revolution, the foodgrain production increased manifold. At the same time India’s population too grew rapidly. In 1991 when India had doubled its population to 846.4 million, the per capita availability of foodgrains too had increased to 510.1 grams, thanks to modern techniques of agriculture.
However, thereafter the yields started plateauing and the per capita availability of foodgrain started falling as the Indian population continued to grow, crossing the 1 billion mark. In 2011, 438.6 grams of foodgrains were available to each Indian citizen.

With a population of 1.2 billion people and growing, India as a country has the most number of mouths to feed after China. But, unlike China whose population is expected to peak over the next 10 years, India’s population is likely to keep growing well till 2060. This drives home the point that Indian agriculture sector is in urgent need to overcome plateauing yields to meet the growing demand at home.

If the production does not match the rate of increase of our population, the per capita availability of foodgrain will further decline. It is interesting to note that total per capita foodgrain consumption in the US is over five times that of an average Indian.

Right up to the mid 1960s when India witnessed a major food crisis and famine, requiring massive food aid and shipments from abroad, Indian farmers battled erratic rainfall, crop failures and low yields. However, with the introduction of intensive farming to increase production per unit of land, the agricultural yields increased and food could be made available to the Indian plate. The results were revolutionary.

Yet, over four decades after the agriculture boom, Indian food production needs another revival. We are adding to our population every day but our land area is not increasing. The increasing population of India (already 16 per cent of the world lives in India which has 2 per cent of the total landmass of the world) is limiting the availability of per capital cultivable land. Need to expand residential spaces as well as building infrastructure projects has also put pressure on agricultural land. In such a scenario, how will we ensure that in the next 50 years, our food production remains sufficient to feed the increasing population of the country?

The answer again lies in increasing yield per unit of land through increased and judicious use of agro chemicals.

Indian farmers are among the leading producers of wheat, rice, fruit, sugarcane, groundnut and tobacco. They are also the world’s largest producers of pulses, jute, tea and cauliflower. However, there is still immense potential to increase the total production if they judiciously and intelligently use agro chemicals to augment their production.

Despite being the fourth largest producer of agrochemicals globally, after the United States, Japan and China, the usage of insecticides in India stands is actually very low, in fact, the one of the lowest in the world at just 0.58 kg per hectare against 4.5 kg per hectare in the US and 10.8 kg per hectare in Japan. The world’s average pesticide consumption is 3 kg/ha.

Some of the reasons for low consumption in India are low purchasing power of farmers, lack of awareness among farmers, limited reach and lower accessibility of products. Effort is required in this area so that we are able to increase our production per unit of land and ensure the per capita availability of food doesn’t fall.

The use of agro chemicals is an important element in agriculture. For farmers, it is very crucial to take care of the health of their crops and protect them against the menace of pest attacks. Akin to the need of medical intervention like vaccination and antibiotics in human beings, is the need for agro chemicals to protect crops.

The market size of Indian agro- chemicals industry is expected to more than double to USD 5 billion by 2017 on rising agri production and increasing awareness among farmers. This is a positive sign. In India, per capita pesticide consumption is less than 500 gm per hectare, which is far below the world average of about 3 kg per hectare. This needs to increase to keep up with our rising food requirements.

Technological advancements in the field of agrochemicals over the years have allowed farmers to increase crop yields, better protect their crops from pest and weed attacks and equip their crops to better fight against environmental factors. Food production has benefited from constant advancements in agricultural technologies. Tools such as herbicides, insecticides, and fungicides help reduce crop losses and increase yields.

Make no mistake, agriculture continues to be the backbone of Indian economy, it employs 58 % of the total workforce, and accounts for a major share of exports. With sufficient production, it plays a crucial role in ensuring that as a country we are self sufficient in feeding our people. And agrochemicals remain a key to the success of Indian agriculture.

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Economist Intelligence Unit Survey – More Retailers Using Analytics, but Barriers to Effective Use Remain

A new survey by The Economist Intelligence Unit finds that nearly all respondents’ businesses have seen a positive economic return from investment in data analysis for the strategy area. Also, the single biggest barrier to retailers making effective use of data is figuring out what is useful amidst the overload—a problem cited by half of the respondents. These are among some of the major findings of The Data Storm: Retail and the Big Data Revolution, a new report from the Economist Intelligence Unit, commissioned by Wipro Ltd. (NYSE:WIT), a leading global Information Technology, Consulting and Outsourcing company.

The report based on a survey of C suite executives from the retail sector in North America and Europe examines how retailers are reacting to, and how leaders are benefiting from, increasing volumes of data. It examines the role of data in customer experience, the benefits it is delivering in omni-channel commerce and corporate strategy and the regulatory challenges facing retailers, as they accrue greater and greater quantities of information.

Seventy-eight percent of all respondents’ businesses have seen a positive economic return from investment in data analysis for the strategy area. However, only 46 percent are confident that their firm’s analytical abilities are keeping up with data volumes. Tied for the second-biggest barrier to using large volumes of data is concern over whether doing so would really help improve decisions (32 percent). Nevertheless, respondents all say their firms are prioritizing data collection, but still only 36 percent of respondents believe that they have a well-defined policy for analysing the most valuable information.

“This research shows that while retailers realize the value of maximizing their use of big data and analytics, many are still unable to utilize the data they are collecting in full,” said Srini Pallia, Senior Vice President and Global Head, RCTG (Retail, Consumer Goods, Transportation and Government) Business Unit, Wipro. “To get the full value from the data they are collecting, retailers need to explore new avenues to apply data analytics throughout the organization that will improve decision making, efficiency and interaction with customers.”

Key findings of the report include:

Marketing is still the main focus: Marketing is the most common priority for data analysis spending by retailers in recent years: 46 percent of respondents put this spend amongst their top three areas of focus. Marketing also remains one of the core areas of big data spend in future, cited by 40 percent.

Using data to improve strategy is increasingly important: For the past two years, data analysis has been used more often in marketing than in strategy, which is on par with store operations. But in the next two years, strategy is set to take the lead, with 62 percent expecting to see relevant investment in data analysis to support strategy. Some 78 percent of all respondents’ businesses have seen a positive economic return from investment in data analysis for the strategy area, the highest figure for any function or process.

Data analysis is helping drive brand loyalty, but respondents think it can do more. Sixty-four percent of respondents report increased brand loyalty as a general gain from data analysis and 52 percent say big data has enabled them to expand their sales by offering the next logical item. Yet respondents remain uncertain that they reaping the full benefit of their data. Only 30 percent are confident that big data is delivering the sales increases that they had hoped, and most respondents (52 percent) simply are not sure.

Many retailers are still at the early stages of using big data: Only 46 percent of retail CXOs are confident that their firm’s analytical abilities are keeping up with data volumes. Meanwhile just 36 percent believe that they have a well-defined policy for analysing the most valuable information and 30 percent admit that they are not consistently obtaining value from it.

Data delivers in coordinating omni-channel commerce: Over half of respondents say that big data has brought gains in multi-channel sales (54 percent) and has made multi-channel customer tracking and management more profitable (52 percent). But 38 percent agree that managing differing pricing and margin strategies over varying channels is a major headache.

Legal restrictions on data usage are a major concern: Two-thirds of retail CXOs say that they have increased the amount of stored information on individual customers in the past year; 64 percent of them cite legal problems with data collection as a major barrier in its effective use. Data protection laws are tied for the second-biggest impediment to making effective use of use of large amounts of data in strategic planning and decision making in general, cited by 32 percent.


The Data Storm: Retail and the Big Data Revolution, is available free of charge at:
http://www.wipro.com/retail-big-data-revolution/

About Wipro Ltd.

Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner's approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 61 countries. For more information, please visit www.wipro.com.

About the Economist Intelligence Unit

The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com or follow us on www.twitter.com/theeiu

The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.

Forward-looking and Cautionary Statements

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.

Media Contact Details: Vipin Nair, Wipro Limited, ,+91 (80) 39916260 , vipin.nair1@wipro.com , Subhashini Pattabhiraman, Wipro Limited, ,+91 (80) 39916558 , subhashini.pattabhiraman@wipro.com

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Inflation Indexed National Saving Securities- Cumulative (IINSS-C)

The Government of India, in consultation with Reserve Bank of India, has decided to launch Inflation Indexed National Savings Securities-Cumulative (IINSS-C) for retail investors in the second half of December 2013.

These securities are being launched in the backdrop of announcement made in the Union Budget 2013-14 to introduce instruments that will protect savings from inflation, especially the savings of the poor and middle classes.

The distribution/ sale of IINSS-C would be through banks. The eligible investors would include individuals, Hindu Undivided Family (HUF), Charitable Institutions registered under section 25 of the Indian Companies Act and Universities incorporated by Central, State or Provincial Act or declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956).

Interest rate on these securities would be linked to final combined Consumer Price Index [CPI (Base: 2010=100)]. Interest rate would comprise two parts, i.e. fixed rate (1.5% per annum) and inflation rate based on CPI and the same will be compounded in the principal on half-yearly basis and paid at the time of maturity. Early redemptions will be allowed after one year from date of issue for senior citizens (i.e. above 65 years of age) and 3 years for all others, subject to penalty charges at the rate of 50% of the last coupon payable for early redemption. Early redemptions, however, can be made only on coupon dates.

Other details of the scheme would be announced by the Reserve Bank of India. The issuance of non-cumulative Inflation Indexed National Saving Securities for retail investors will be examined in due course.

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Top Five Things to Learn in Economics?

In the modern world it is very important to gauge your financial health as well as of the nation, and Economics subject has been there for centuries to understand those concepts. Being a student of economics it has been fun to know about many factors those determine the well being of economy and household budget.

Keeping the financial crisis of late everybody witnessing it is very necessary to know abut few terms of economics and their impact on your financial position. The following mentioned factors include both marco and micro economics topics. And the aim of the post is the just hint about the factors and to know further about these we recommend using best economics books.

1. Demand & Supply: It is the major factor that affects our life, the excess or less of demand has certainly impact on the price that is essential in our life. A layman also knows that the demand force in the market is related to supply side in regulating the price. And for that they no need to have degree in economics. Fish market could be the best example where one can experience the practical implementation of the demand and supply factor. Here we mentioned the fish market because of the short-term market for price mechanism.
2. Inflation: It’s a macro economical terms that is being used regularly to say that price goes up of the goods in the market. It is directly affect the health of economy and household budget. There are many types of inflation; however, a bit rise in inflation is always good for economy and household. But the scenarios like galloping or hyper inflation always a bad thing for all. 
3. Money: Everybody wants money to meet their wants. “Money is good servant but bad master” a definition there in economics. In economics, students would know about the evolution of money, which is the most interesting subject to know. The study about money is limited to economics only, but it is just like a general subject that needs no expertise. Everybody deals with money daily even every minute in their life, and their labor is being rewarded in terms of money, no matter a daily labor or CEO of a company. Money is the perfect thing that to know the value of goods and services in the market. It always draws attention of the people because it is the part and parcel of their life, without money even people afraid to imagine. 
4. Market: No need to define what a market is, people knows that a place where buyers meet sellers. Market is the most common word we use every day and all the moment. Without the word, our sentences might not complete, particularly when we are taking about purchasing goods and services. And a favorite word for the ladies since they love to shop and a family is just synonymous for presence of ladies and their shopping. No matter be the size of the market, it due posses all the qualities and characteristics of market. Students of economics study about different types of markets and the role of price mechanism in market. 
5. Human Wants: Just imagine how the world would be without wants. These are the root cause for the significant development of the world, civilization, society and technology. In economics, human wants are unlimited, a true fact. Human being wants many things but could able to satisfy few of those, in general and that is what economics also teaches us about wants. In economics students do learn about consumer behavior and utility factors related to human wants, those are pure micro economic concepts. Interesting thing about this topic is that, nobody tries cutting their wants, even a student of economics who studied and understood about human wants.

All these five things in economics are purely applicable in day-to-day life and for that there is no vast knowledge is required. The practical experience with these common factors made us successful in many ways and the study of economics has been showing the path to excel further.

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What is Economic Feasibility?

Economic feasibility means - how much technology and expertise needed will cost the organization. The system implementation will result in cost savings or not. Economic feasibility is usually the most stringent restriction imposed on the system, because the organization can not allocate an unlimited amount of funds to the project.

The maximum available amount of funds usually restricts the scope of the project. Therefore, after deciding that the system is technically feasible, the system team makes an, estimate is bound to be in accurate.

A range of 50 per cent over the estimated cost figure is acceptable. If the upper limit of the estimated cost i.e., the estimated amount +50 per cent falls within the allocated budget the system is declared as economically feasible. The economic feasibility issue of cost benefits analysis of the system.

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Budget Blues: Follow Canons of Taxation

As a student of economics, it is always fun to read about the canons of taxation in public finance.

Economists do always favor the changes of the fiscal policies and taxation in an economy to keep it fit and healthy.

India is going to witness the union budget for the fiscal year 2013-14 and the taxation is the prime concern for many in the country from individual tax payers to corporates.

There are many canons of taxation or principles of taxation in Indian economy too, alike other economies the world have.

It may be direct tax or indirect tax changes, it is sure to affect the budget of everyone in the country, and thanks to tough job to be done by the finance minister and administrative officers those always aim to minimize the burden of taxation.

When it comes to taxation in the country, the job becomes tougher for them. They need to strike a balance between the sentiments of the people using canons of taxation and fiscal consolidations.

Let’s have a look on the statistics, tax revenue as a percentage of GDP declined from 8.8 per cent in 2007-08 to 7.5 per cent in 2001-12.

Goods and Services Tax (GST) has been major concern for the economic planners while dealing with the debt consolidation, fiscal deficit and current account deficit.

Will there be rise in indirect tax in India? Will there changes in the income tax-slabs? How much I need to pay as tax? Will the EMI of home loan go up after the union budget?

There are basic questions one has in mind when the person thinks about the budget outcome. On Thursday, the budget session has been stared in Parliament with keynote address by the President of India.

Sine the economy growth rate is lowest in decade around 5 per cent and the fiscal deficit is high, it is obvious that the government would look for more adjustment in the taxes or disinvestments of PSUs.

Interestingly, the government needs to work on the framed rules or canons of taxation simultaneously working on fiscal deficit and adjusting taxation.

In the gloomy situation, there could be chances of higher taxes in India, but there might not be if the government prefers to present a popular budget as the general election will be held in 2014.

Best way to judge economy is to see the cannons on taxation used. 

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Indian Economy to Recover from Slowdown?

Indian economy will recover from the clutches of the slowdown. The GDP growth rate might project at 5.7 per cent for the fiscal year 2012-13, but it will revive its position from there, with help of some good economic reforms.

The UPA government has initiated the economic reforms, which are actually terms are 'need of the hour' and would boost the Indian economy.

Some tough decision like reducing sub-sidies on energy products would be consider to give a relief to oil companies from dipping further into losses. However, the hike in petrol or diesel prices, are going to affect the budget of common men.

The decision of such, would be against the people but necessary to keep up the growth momentum. The target set of 8 per cent growth rate for Indian economy in the 12th Five Year Plan is enough to indicate the possible economic reforms the government would consider to achieve it.

It is clear that in the year 2013, people might need to lose some extra money on their transport following further possible hike in the petrol and diesel prices.

The union budget 2013-14 will be tabled in Parliament in the month of February 2013, by the finance minister. It is speculated that the budget would  aim for clear revive of economy from the clutches of economic slowdown.

On the other hand, if the trend of populist budget follows keeping the 2014 election, then the revival of India economic growth might be in trouble. Since, India will witness its mega election battle for Lok Sabha, in 2014 general election involving huge expenditure of government fund.

And subsidies may be high to keep all sectors happy,that also would weight high on Indian economy. There are two sides of coin, one side good economic reforms and the other side is to give plenty of subsidies to back into the power gain. There are options, lets wait and watch which side of the coin will fall, after toss.

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Useful Finance and Investment words from Investopedia

I've subscribed to Investopedia Term of the Day newsletters where I get each day a word related Finance, Business, Economy or Investment. I've been reading them and it's quite helpful for me in understanding the USA stock market. Hope it will help you too. Let's have a look on some of these words [all these word explanations are extracted from Investopedia Newsletters]:

Image Credit: VigyanPrasar

Christmas Club

A short-term savings account that usually pays out the full account balance to its account holders once each year, right before Christmas. Christmas club accounts pay depositors monthly interest on their account balances and often punish early withdrawals by retracting interest earned if money is taken out before a given date.

Icahn Lift

The name given to the rise in stock price that occurs when Carl Icahn begins to purchase shares in a company. The Icahn lift occurs because of Mr. Icahn's reputation for creating value for the shareholders of the companies in which he takes an interest.

Carl Icahn is most famous for his work as an activist shareholder, but has also been referred to as a corporate raider. He purchases shares in a company that he believes is undervalued and then creates a plan to fix the problems. This usually involves spinning off profitable segments, changing management, cutting costs and buying back stock.

ARM Margin

A fixed percentage rate that is added to an index value to determine the fully indexed interest rate of an adjustable rate mortgage (ARM). The margin is constant throughout the life of the mortgage, while the index value is variable. For example, the index might be the prime rate, which varies according to market conditions, and the margin might be 2%. If the prime rate were 5% and the margin 2%, then the fully indexed interest rate would be 7%. If the prime rate rises to 6% (the margin remains constant), the fully indexed interest rate would be 8%.

Bag Man

Any person in charge of organizing, collecting and transporting money, generally in connection with illegal or illicit activities. A bag man is someone who collects and delivers money on behalf of a boss or organization. Nowadays, bag man can be used pejoratively to describe an individual who is in charge of collecting and delivering contributions to political parties or fundsgathered for political purposes.

Consumer Internet Barometer

A quarterly survey report produced by the Conference Board and TNS NFO that records, analyzes and reports on the internet usage of 10,000 U.S. households. The survey seeks to measure:

1. the importance of the internet in the daily lives of households

2. overall satisfaction of internet users

3. online purchase characteristics, times and dates

4. users' perceptions of security for online transactions and general internet usage

Trickle-Down Effect

A phenomenon where an advertisement is rapidly disseminated by word of mouth or by viral marketing. The trickle-down effect works when an ad is so compelling, either because of its uniqueness, humor, entertainment value or other outstanding trait, that people are excited to share it with their friends, family and coworkers.

Upside Gap Two Crows

A bearish market reversal signal in technical analysis. The upside gap two crows pattern is a three-day formation on candlestick charts that typically develops in the following manner:

Day 1 - A bullish day that continues the uptrend, represented by a long white candlestick, which indicates that the closing price of the index or security is well above the opening price.

Day 2 - A bearish day despite the index or security gapping higher at the open, represented by a small black or colored candlestick.

Day 3 - A second bearish day, with the index or security opening higher than the Day 2 open, but closing below the Day 2 close and above the Day 1 close. This is visually represented by a bigger black or colored candlestick that "engulfs" the Day 2 candlestick.

Turkey

Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities that realize significant losses and unsuccessful initial public offerings (IPOs) could all be called "turkeys".

Intelligent ETF

An exchange-traded fund (ETF) that employs an active investment strategy based on a broad index, such as the S&P 500 or a sector-based index. The fund may choose to exclude some stocks within the index while increasing or decreasing the percentage weighting of other stocks. Most intelligent ETFs carry higher expense ratios than standard ETFs, as well as substantially higher turnover ratios.

If you want to know more terms used in USA stock market then you can start subscribing Investopedia newsletters.

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Motivation: A Key Factor

Motivation

Motivation is the key ingredient that determines a person’s growth in professional life. A person who is self motivated, has far better chances to succeed, and climbs the career ladder fast than others in the race. A person with no dreams and goals in life and doing work just for the sake of work, and doesn’t love his work, has far less chances of growth. Everyone has a motivating factor that drives him to succeed in life. For some it is money, for some it is name and fame, for some it is love, it differs from person to person.

What is the motivating factor that drives us to work, that is the factor that is responsible for our success? But what happens usually is after some time, when we fall into a routine, we start losing interest in the work that we have started. This is the time when we have look into the reason that has motivated us to start the work. We need to contemplate, we need to get back to the roots and need to assess, as to what is it that we want from work what motivated us to take the first step towards the work or business.

When we remember this again, that key factor, that made us start our work. That is the motivating factor, that will lead us to the road of success. The performance levels of the persons who are self motivated and those who do work for the sake of work are entirely different. In each person’s life there will be some incident or person or dream that makes a person start his journey towards success in professional life, that is our motivating factor, if we constantly remember that factor, and then we will definitely succeed in professional life. Given all the amenities and a person with no motivation will achieve nothing, but a person with driving force from inside, and self motivated sky is the limit for him.

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Management Tips: Managerial Decision Making

Decision making at the level of manger, is really an art. This involves making decisions, on the individual level, without the concern of the others. There are other kinds of decisions that involve other people. So, the decision making process when it comes to managerial level, becomes very complicated.

There are kinds of decisions that need to be made on a personal level, without the concern of others. These need great competence, having correct information to come to a conclusion, and right assessment of the situation time etc, these decisions may not necessarily need others concern or opinion and are made on a individual level and are executed. Then there are other kinds of decisions that need the involvement of other people, Involvement of the people concerned with the work, their opinion etc.

These kinds of decisions can be made, by putting the problem or the situation in front of the concern persons, taking their opinion, and them with mutual concern or coming to a common conclusion decision is made, in this kind of situation no propels are there from the manager. Then there are situations where the manger thinks about the situation, or a problem assesses it, designs a set of solutions and then places the choices in front of the others to make a choice.

As a manager which kind of decisions you make, depends on your relationship with the others. Then as per the organization structure, what kind of freedom and at what level it has given to its manager. Apart from all these, how much ever you may study the pros and cons of a situation and take a decision, you will only come to learn about the practical aspects and if the decision you have made is hundred percent right only after implementing.

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Economic Reforms: Where is the Need?

In the last couple of months, Govt. has taken decisions that have affected the common man in a very bad way. Govt. stating that, the money does not grow on trees, is quite astonishing. It is a fact that money does not grow on trees, and it is also a burden on the Govt. to give subsidies, in the current economic situation. But, instead of looking for the sources from where the money can be brought and looking for the faults of the Govt. Such as assigning the gas resources to the private people without first thinking of the people’s necessities and requirements. Is quiet shocking?

Whenever and where ever (in any state of the country) the natural resources are found such as, oil gas and petroleum. It is the first responsibility of the government to think of the needs of the people, especially the middle and the lower classes, and then after they have reserved the necessary resources for the needs of the people, if they have excess, they can assign to the private people. Instead of doing this, decreasing the subsidies, and increasing the prices, is not a reasonable solution, and apart from this commenting that money does not grow on tree, or where does the money will come to Govt. These are not at all reasonable comments.

The other main thing is, instead of putting the pressure on the people for income or money. The Govt. should concentrate on bringing out all the money that corrupt people have earned, especially the politicians. It is a public secret that, there are thousands of crores in the foreign banks, all corrupt money. But the Govt. is not at all bothered to take action against them; if at all there is a necessity of reforms and strict decisions to be taken it is in this place. If Govt. is serious about the income it should take immediate action to bring all the money that is there in the foreign banks, earned by corrupt people in India, and use it for the benefit of the public.

In such a case the Govt. will also have sufficient funds to take care of the needs of the public, and there will be no necessity to impose any burden on the public, or to bring foreign funds or loan from World Bank.

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Is economics almost completely determinative of political issues?

Political economy has been reflecting the activities and policies of the society as a mirror. In regard to the political system, it has been affecting the economy and economics. And the micro economics is not though touched by the political changes or issues.

Political issues in a nation are enough to affect the economy and economics too. In a macro economic system, the political decisions always affect its result. In a welfare society where the protection to industries is less and welfare majors are given more priority. Where as socioeconomic conditions are based entirely on political development and goal of the political government.

Politics is all about running government for the welfare of the state and its people. And when there will question of economics or understanding the economic condition of the state, the political decisions will be evaluated first to know the status of state.

Political issues in a state are the major factors those would bring many changes in the society. Political activities or strength of political parties make a country healthy. On the contrary, the political issues (internal) should not aim at harming the country or its administration.

Of late, the corruption has been the core issue that many governments and states have been tying to get rid off. A corruption political intervention in the government activities could damage the financial status of a state or country.

A country, which has been involving in war or civil war, might not be healthy in terms of economy. In such countries a proper and strong political movement can boost the economy from downward to upward by taking necessary actions to stop war or domestic unrest.

It sounds good to say that economics almost completely determinative of political issues.

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Does scarcity really exist?

Human wants are unlimited. There should be clear distinction between need and want in order to define scarcity. And more over it’s related to the state of mind of consumer in the behavioural economics.

In general term, scarcity exits due the law of nature and available of limited resources in the world. Wherever there is lack of goods or services, generally it is termed as scarcity. But the perfect definition of the scarcity is something different from the general usage of the term.

Since the human civilization is advanced much, the term scarcity seems not a good fit to some goods and services where substitute can takes place. Alternative to good and services can solve the question of scarcity.

In some assumptions, where there is no question of any substitute the scarcity exists. In the case of the gasoline there is few substitute option to run vehicles – electronic, solar, CNG or bio-diesel. If there any situation we face having no gasoline resources more, then we have few option left to choose among the alternatives. In this case we can see there is scarcity of gasoline.

We always try to pick the good one from the alternatives we have. As it’s a matter of choice always for the consumers. And if there scarcity, there will be no choice but to accept the situation. In the case of natural resources the scarcity is always there as we don’t know the amount of resources we have and how much time it will continue to meet our demands.

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Public Sector Policy in India

The public sector has been central to India’s industrialization within the mixed framework. The industrial policy resolution in 1956 accorded a strategic role to public enterprises. Accordingly, areas of strategic importance and core sectors were exclusively reserved for public sector enterprises.

At centre and state levels, the public enterprises grew dominantly in terms of units and investments. Nationalized sick units accounted for one-third of the public enterprises in due course of time. A number of public enterprises had come up in non-strategic, non-core, consumer goods and services sector. By 1993, only about 60 per cent of total investment in public enterprises was in areas originally envisaged as the “commanding heights”.

Public sector would be confined to strategic, high tech industries and essential infrastructure. In 1992, the government established a Non-statutory National Renewal Fund to provide assistance to cover the cost of retraining and redeployment of labour and also provide compensation to labour affected by the closure of unviable public sector units, etc.,

Many public sector units were brought under the MoU (Memorandum of Understanding) system, which is a performance contract, a freely negotiated document between the Government and specific public enterprise.

MoU was started in 1987-88 with public enterprises, as of now more than 100 such units are covered by MoU. In 1995-96, financial performance was accorded 60 per cent weightage in MoUs. Many areas previously reserved for the public sector have been opened up to the private sector. Although its shares has declined in the past ten years, the public sector still accounts for 25 per cent of India’s GDP, 31 per cent of capital investment and 17 percent of the final consumption expenditure in the country.

At the start of the reforms 18 important industries including iron and steel, heavy plant and machinery, telecommunications and telecom equipment, mineral oils, mining of various ores, air transport services, and electricity generation and distribution, were reserved for public sector.

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How to check Fiscal Crisis?

A fiscal crisis is generally related to the excessive growth of public expenditure. However, the size of public expenditure is not the root cause of a fiscal crisis, it is the manner of financing public expenditure that is more important.

A fiscal crisis means that the government is unable to finance its expenditure out of its income, either because it made commitments to supply public goods and services far beyond its means, or because it is unable to make people pay for the public goods and services either through taxation or through user cost.

To check fiscal crisis, governments often resort to excessive borrowing from both domestic and external sectors, but if the borrowing is excessive and beyond the norms of debt financing it may eventually lead to inflation and reduction in income, lower the amounts of public goods and services and increase unemployment, which together may lead to social and economic discontent in the economy.

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Saragent and Sims share 2011 Nobel Economics Prize

 Saragent and Sims share 2011 Nobel Economics Prize


Thomas Sargent and Christopher Sims won the 2011 Noble Economics Prize  for their contribution in macro economic analysis.

Sargent and Sims did research on the government economic policies, their impact on the economy and variation in the interest rates.

According to the Royal Swedish Academy of Sciences, the two economists have developed methods to find out the impact of variation interest rates or a tax cut on the economy or the economic growth of a country.

Sargent has developed  methods to study the changes in economic policy, which will help to study how households and firms adjust their expectations concurrently with economic developments.

Sims has developed a method -'vector auto-regression" to analyze how the economy is affected by temporary changes in economic policy and interest rate.

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Increase in Food inflation – 16.55%

It was because of high prices of pulses, vegetables and fruits, India’s food inflation rose to 16.55% . Prices of food articles rose to 16.55% for the week end May 22 as compared to the last week’s rise.

The primary article index rose to 16.89% for the week as compared to the previous week. As reported by the government the fuel price index has also increased to 14.14% for the week ended May22 as compared to 12.08% in the previous week.

Last week the Planning Commission Member Abhijit Sen said that the food inflation is expected to decline to 4 to 5 per cent by November from the current over 16% after the arrival of Karif(summer) crops. It was also predicted by the experts that food inflation will decline with the arrival of Rabi crops in April. It was reported that Prime Minister Manmohan Singh is confident regarding the decline in the overall inflation to 5-6 percent by the month of December.

Thus, the overall inflation has increased by 0.32% from 16.23% in the last week.

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Maruti sales crossed 1,00,000 units in May

India’s largest passenger car major Maruti Suzuki reported a 28 percent rise in vehicle sales for the month of may. It is India’s leading car maker whose sales in the month of May reached to 1,02,175 units. Last year in the same month Maruti Suzuki sales had reached upto 79,872 units.

It has happened for the first time that Maruti Suzuki sales has crossed 1,00,000 units. It was reported that the domestic sales increases 27.2 percent to 90,041 units this month. The exports increased by 33.5 percent to 12,134 units in comparision to the last year.

In comparision to the previous year May sales has showed a better record which will help the company to have growth in the coming festival season. They are trying their best to beat the selling of low selling months.

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