ECONOMY by VIVEK SINGH

2021-06-17 21:18:37 Open / Comment

2021-06-17 14:42:18

Open / Comment

2021-06-17 06:47:26 Source: Hindu
A very good analysis and reality of FDI inflow in India.

Following are some of the important features of FDI inflow in 2020-21:
1.Gross inflow of $81.7 billion which consists of equity inflow of $60 billion and reinvested earnings of $21.7 billion.

2.Out of the $81.7 billion foreign inflow, $27 billion earnings sent/repatriated abroad.

3.A characteristic feature of foreign capital inflow in 2020-21 is:
•Sizable repatriation of long term FDI capital
•Large inflow of speculative capital i.e. FPI/FII

4.Three Reliance group companies like Jio Platform, Reliance Retail Venture and Reliance BP Mobility getting more than 50% of the FDI.

5.Majority of the FDI is through indirect acquisition of shares held by Reliance Industries without creating any productive asset.

6.Majority of FDI (more than 80%) is in services sector and very less in non-acquisition (mere transfer of shares) manufacturing sector.

7.Highest FDI is coming from Singapore and the maximum FDI is received by the Gujarat state. Open / Comment

2021-06-16 07:09:58 The above is article from HINDU. The following are certain relevant points:

1. Yesterday the inflation data was reported. CPI for May is 6.3% and WPI for May is 12.9% which is quite high than what was expected. Now, whenever you make Fixed Deposit in bank and if the inflation is high then you demand more interest rate. In the same way when you are purchasing a (new issue) of bond then you demand more interest rate on the bond. AND in the same way if you are purchasing bond in the secondary market (which was issued earlier at a lesser interest rate because at that time the inflation was less) and inflation has increased then you DEMAND more return i.e. more yield and yield shoots up. So, in short when inflation goes up, the price of (already issued) bond comes down and the yield on bonds (traded in secondary market) goes up.

2. Rupee depreciated because of two reasons. First is inflation in domestic economy moved up and Second is the demand for dollars by importers has increased.
When inflation goes up it means Rupee looses value in terms of goods and services. When rupee looses value in terms of goods and services then Rupee looses value in terms of dollars also.

3. Higher inflation has created a dilemma for RBI whether it should focus on controlling inflation (which is the primary objective of Monetary Policy function of RBI) or it should focus on increasing economic growth because due to Covid the economic growth has come down. To control inflation RBI will have to increase REPO rate and to support economic growth RBI will have to reduce REPO rate and that is the reason for dilemma. Open / Comment

2021-06-16 06:54:22 Open / Comment

2021-06-15 19:32:08 Source: Indian Express
A good article to read on "Whether GDP is a good measure for the well being of people, should we use GDP or some other measures, what GDP captures and what is not captured by GDP".
The article is self explanatory but will try to make a video on the same.

Just for information: Informal sector activities are included in GDP calculation, may not be very accurately but based on projection (based on formal output we project the output of informal sector) we include in our official GDP figures. Open / Comment

2021-06-14 15:21:45 The answer to the above question is (d)


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2021-06-14 08:47:32 The Online ECONOMY Module Course (Pre cum Mains) is starting Today evening @6 pm
https://www.shubhraviraj.in/course-infomation/fbf22873-04cd-467a-8eb9-6100488af1dd Open / Comment

2021-06-13 19:55:02 Question of the Night

Once the countries agree to the Global Minimum Corporate Tax (let us call it “MT”) then:

(a) The countries will not be allowed to keep the tax rate below MT

(b) A country can keep the tax rate below MT but the foreign firms operating in that country will have to pay tax to the level of MT

(c) A country can keep the tax rate below MT but the foreign firms operating in that country will have to pay tax to the level of tax rate prevalent in their home country

(d) A country can keep the tax rate below MT but the foreign firms operating in that country can be asked to pay the difference of MT and the country’s tax rate to their home country Open / Comment