Impact of global slowdown in Indian Economy
We all are aware that the economy of our country is slowly collapsing due to trade deficits, adverse growth of export, devaluation of wealth especially land and buildings, the credit crunch, close down of manufacturing units, lay off and retrenchment of workers, slashes of raw material prices, lack of demand of commodities and growth of unemployment.
The global economic slowdown is bound to have adverse impact on the industry whether large, small and medium enterprises. The global crisis has a huge impact on our exports, financial markets, production and also on job market to a certain extent. The impact of slowdown in India not only adversely affect the GDP but also generate unemployment , lay off, negative growth of industry and cut down the production of manufacturing sectors due to lower demand of finished product in domestic as well as international market. As a result import of inputs is decreasing day by day due to lower demand in the wake of economic slowdown. The demand for dollars in Indian markets has eased as importers are observed demand for inputs decreased day by day due to global economic slowdown.
The rupee had depreciated near about 65.00 against one US dollar which is nearly 20% in comparison to last year data. While depreciation of currency is usually welcome by exporters, the volatile in the rupee has made them wary as many had hedge their risks at higher levels. Exporters have been selling dollars today as they fear high volatility in the foreign exchange market. But on the other hand, the currency factor also contributed to FII investment in the Indian market.
Effect of recession / slowdown already create labour turnout, unemployment, lay off, lock out, slashes of commodity/ raw material prices such as iron ore, cotton trade, PVC resins , poly propylene etc in India. Millions of people lose their jobs and 40% of units closed due to slow down. Every body’s wealth/assets will decrease over night due to crash of share market. The sentiment of people is going in bearish trend day by day and they lose their confidence in the present economic scenario and uncertainty market. Small investors wipe out due to nonproductive growth of capital market since 2010. It creates negative attitude in society which leads to adverse impact such as not to invest in new venture and share market.
WHAT REQUIRED TODAY FROM GOVT?
It is never too late, but it would require radical changes to be made and only if the government implements suitable policies and rules to control the main reasons/factors of slowdown. In this point what is required today is to take suitable supportive measures by the government like enhancement of credit and fiscal support, and specific incentives for exports that could help micro, small and medium enterprises to building their competitiveness and thereby minimizing the adverse impact.i
The main reasons of slowdown of economy are stock market crash, speculation and government policies and people bearish sentiment.
LAYMAN IDEA TO OVERCOME SLOWDOWN:
Generally investors are looking for the companies with strong balance sheets, healthy cash flows and quality management. The entire fundamental is not operating in these days because of global economic slowdown . Speculation plays an important role in these days globally. It is necessary to curb it forthwith without any further delay instead of wait & watch.
Speculation is the real crime in the country. The government must find out the ways how to control these speculations, not only in the share market but also in commodity market. Spreading the bearish sentiment among the people also create speculation in human mind. It is crime against the nation. Few speculators cannot run our economy. At present scenario it proved that they are very active and destroy every body’s peace in the country. People are financially weak day by day as inflation hits their backbone and affect economy very adversely. They forgo their expenditure on daily life and even if they desire, they are not observing the festival like before.
SAVE NATION AND SAVE PEOPLE:
The government should come out forthwith with regulatory measures and suitable credit policy to overcome the future darkness of the Indian economy. SEBI should announce new guide lines for trading to curb speculator effect in the market. SEBI should come out forthwith with a strong regulatory trading policy by protecting small as well as large investor by infusing greater transparency in the share market. It also learned that from our past experience how FII plays an important role to wipe out our growth and economy. Devaluation of Indian rupee and increase of inflation is also one factor of FII investment in capital market. FII investment is not generate employment. It is now-a-days one instrument to reduce CAD, which may create a very serious problem for Indian economy in future.
Govt. must discourage them at this point and try to boost export and curb unnecessary import.
Loss and gain in Wall Street and other Asian market will not create panic in Indian stock market if we follow guided predetermined policy strongly in trading floor. Restriction on trading if imposed in terms of price range keeping in view the present market conditions may improve bullish sentiment and protect investors. Keeping in view the companies growth, EPS, dividend pay out and profitability position, the Government/ SEBI may evaluate and fix each and every stock price on date. Government / SEBI can fix the share/ unit price either of the one option as enumerated below:
1. Let’s think today trading price is the minimum price of a unit/share. Nobody can trade in the market below the minimum price unless and until it is re-valuated again in fortnightly /monthly. Every additional increase in price of a stock not only benefits the investor but also improve the value of the company. It grows the profit as well as marginal revenue of the stock price. Like minimum price of a stock SEBI may also fix maximum price of a stock keeping in view last trading trend and past performance in terms of profit, growth and EPS. It will protect unrealistic price rise and speculator effect in the market. A speculator is now restricted with the minimum and maximum price range of a stock( say scratch level to 40% price level) in certain period say 15 days or 30 days or 90 days.
2. On the other hand, let’s think today’s trading price is the base price of the unit/ share. SEBI may fix price range for trading say (+/-) of 25% of the base price keeping in view the company growth, EPS, dividend pay out and profitability position. If we adopt this option, a speculator is now also restricted with in the above price range. It will protect unrealistic price rise and speculator effect in the market. SEBI may revaluate the price range of the share/unit after certain period say 15 day or 30 days or 90 days.
Now question arises in our mind what benefit will it create / produce by adopting the either of the above policy? It is very easy and simple as every transaction creates marginal benefit to the investor because of scratch level / base level of share price is restricted. Small investor and individual will enter gradually in share market with selected shares by observing as they are protected in the market. Corporate Institution, Banking sector will grow by investing surplus fund in current market as they know that every transaction will create short term gain. On the other hand, one can quantify its loss in the certain period say 15 days or 30 days or 90 days within the minimum and maximum price range/ trading range as mentioned in option -II.
Share price will definite grow gradually in company having strong fundamentals. Investor will earn short term profit and again we will be going towards the boom market.On the other-hand,Finance and service sector creates employment and Govt. earned taxes through generation of profit by financial sector. In the mean time, again we evaluate the price of share after a certain period and thereafter minimum and maximum price range to be change according to the trend and growth of the company.
But on the other hand, keeping in view the positive side, announcement of revised fiscal package by the government and further measures taken by the RBI in terms of interest rate cuts are likely the boost the market sentiment.
Readers are requested to make comments and suggestions about this topic which may help to government to frame a clear cut policy and regulate it through SEBI.
The global economic slowdown is bound to have adverse impact on the industry whether large, small and medium enterprises. The global crisis has a huge impact on our exports, financial markets, production and also on job market to a certain extent. The impact of slowdown in India not only adversely affect the GDP but also generate unemployment , lay off, negative growth of industry and cut down the production of manufacturing sectors due to lower demand of finished product in domestic as well as international market. As a result import of inputs is decreasing day by day due to lower demand in the wake of economic slowdown. The demand for dollars in Indian markets has eased as importers are observed demand for inputs decreased day by day due to global economic slowdown.
The rupee had depreciated near about 65.00 against one US dollar which is nearly 20% in comparison to last year data. While depreciation of currency is usually welcome by exporters, the volatile in the rupee has made them wary as many had hedge their risks at higher levels. Exporters have been selling dollars today as they fear high volatility in the foreign exchange market. But on the other hand, the currency factor also contributed to FII investment in the Indian market.
Effect of recession / slowdown already create labour turnout, unemployment, lay off, lock out, slashes of commodity/ raw material prices such as iron ore, cotton trade, PVC resins , poly propylene etc in India. Millions of people lose their jobs and 40% of units closed due to slow down. Every body’s wealth/assets will decrease over night due to crash of share market. The sentiment of people is going in bearish trend day by day and they lose their confidence in the present economic scenario and uncertainty market. Small investors wipe out due to nonproductive growth of capital market since 2010. It creates negative attitude in society which leads to adverse impact such as not to invest in new venture and share market.
WHAT REQUIRED TODAY FROM GOVT?
It is never too late, but it would require radical changes to be made and only if the government implements suitable policies and rules to control the main reasons/factors of slowdown. In this point what is required today is to take suitable supportive measures by the government like enhancement of credit and fiscal support, and specific incentives for exports that could help micro, small and medium enterprises to building their competitiveness and thereby minimizing the adverse impact.i
The main reasons of slowdown of economy are stock market crash, speculation and government policies and people bearish sentiment.
LAYMAN IDEA TO OVERCOME SLOWDOWN:
Generally investors are looking for the companies with strong balance sheets, healthy cash flows and quality management. The entire fundamental is not operating in these days because of global economic slowdown . Speculation plays an important role in these days globally. It is necessary to curb it forthwith without any further delay instead of wait & watch.
Speculation is the real crime in the country. The government must find out the ways how to control these speculations, not only in the share market but also in commodity market. Spreading the bearish sentiment among the people also create speculation in human mind. It is crime against the nation. Few speculators cannot run our economy. At present scenario it proved that they are very active and destroy every body’s peace in the country. People are financially weak day by day as inflation hits their backbone and affect economy very adversely. They forgo their expenditure on daily life and even if they desire, they are not observing the festival like before.
SAVE NATION AND SAVE PEOPLE:
The government should come out forthwith with regulatory measures and suitable credit policy to overcome the future darkness of the Indian economy. SEBI should announce new guide lines for trading to curb speculator effect in the market. SEBI should come out forthwith with a strong regulatory trading policy by protecting small as well as large investor by infusing greater transparency in the share market. It also learned that from our past experience how FII plays an important role to wipe out our growth and economy. Devaluation of Indian rupee and increase of inflation is also one factor of FII investment in capital market. FII investment is not generate employment. It is now-a-days one instrument to reduce CAD, which may create a very serious problem for Indian economy in future.
Govt. must discourage them at this point and try to boost export and curb unnecessary import.
Loss and gain in Wall Street and other Asian market will not create panic in Indian stock market if we follow guided predetermined policy strongly in trading floor. Restriction on trading if imposed in terms of price range keeping in view the present market conditions may improve bullish sentiment and protect investors. Keeping in view the companies growth, EPS, dividend pay out and profitability position, the Government/ SEBI may evaluate and fix each and every stock price on date. Government / SEBI can fix the share/ unit price either of the one option as enumerated below:
1. Let’s think today trading price is the minimum price of a unit/share. Nobody can trade in the market below the minimum price unless and until it is re-valuated again in fortnightly /monthly. Every additional increase in price of a stock not only benefits the investor but also improve the value of the company. It grows the profit as well as marginal revenue of the stock price. Like minimum price of a stock SEBI may also fix maximum price of a stock keeping in view last trading trend and past performance in terms of profit, growth and EPS. It will protect unrealistic price rise and speculator effect in the market. A speculator is now restricted with the minimum and maximum price range of a stock( say scratch level to 40% price level) in certain period say 15 days or 30 days or 90 days.
2. On the other hand, let’s think today’s trading price is the base price of the unit/ share. SEBI may fix price range for trading say (+/-) of 25% of the base price keeping in view the company growth, EPS, dividend pay out and profitability position. If we adopt this option, a speculator is now also restricted with in the above price range. It will protect unrealistic price rise and speculator effect in the market. SEBI may revaluate the price range of the share/unit after certain period say 15 day or 30 days or 90 days.
Now question arises in our mind what benefit will it create / produce by adopting the either of the above policy? It is very easy and simple as every transaction creates marginal benefit to the investor because of scratch level / base level of share price is restricted. Small investor and individual will enter gradually in share market with selected shares by observing as they are protected in the market. Corporate Institution, Banking sector will grow by investing surplus fund in current market as they know that every transaction will create short term gain. On the other hand, one can quantify its loss in the certain period say 15 days or 30 days or 90 days within the minimum and maximum price range/ trading range as mentioned in option -II.
Share price will definite grow gradually in company having strong fundamentals. Investor will earn short term profit and again we will be going towards the boom market.On the other-hand,Finance and service sector creates employment and Govt. earned taxes through generation of profit by financial sector. In the mean time, again we evaluate the price of share after a certain period and thereafter minimum and maximum price range to be change according to the trend and growth of the company.
But on the other hand, keeping in view the positive side, announcement of revised fiscal package by the government and further measures taken by the RBI in terms of interest rate cuts are likely the boost the market sentiment.
Readers are requested to make comments and suggestions about this topic which may help to government to frame a clear cut policy and regulate it through SEBI.
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