Black money is coming out in India

It’s a sign of changing times. Delhi based business man Satish Sawhney surrendered Rs. 73 crore to Income tax department after IT officers from newly created Directorate of Criminal Investigation raided Sawhney’s bungalows. Income tax team has found that Sawhney had five foreign bank accounts – one in Zurich and one in Singapore and three in the US. On top of all these, he had 8 huge lockers in banks in Delhi. Here is the kicker… Sawhney has hidden the documents about his foreign bank accounts in his SUV under the carpet. IT team didn’t leave anything for a chance.…

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National Manufacturing and Investment Zones

India is planning to establish seven national manufacturing and investment zones (NMIZ) to promote manufacturing industries. The concept promises ease of compliance and quick access to infrastructure. Government officials hope to create 100 million jobs over the next decade and to help spur growth in Indian manufacturing sector. Currently, manufacturing only contributes 15% to 16% of Indian GDP, compared to 34% in China, 28% in South Korea and 27% in Indonesia. The goal of the new policy is to raise the share in India to 25% by 2022. It’s an open secret that India is less hospitable place for entrepreneurs…

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FDI in India doubled

Foreign direct investments (FDI) in India more than doubled from $2.21 billion in May 2010 to $4.66 billion in May 2011. There was a dramatic increase of 77% in FDI from April to May this year. More details are here. Sure, it’s a good sign for Indian economy. Unfortunately, this is also sign that real estate prices in India are not going to come down any time soon. FDIs and local real estate brokers hiked the real estate prices in the last 10 years. It appears that the trend is going to continue for the foreseeable future.

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Singapore facing its worst-ever recession

It appears that every major nation is suffering global economic slowdown. Singapore is no exception, it is facing worst ever recession. On a seasonally adjusted, annualized quarter-on-quarter basis, Singapore economy fell by 16.9 percent, after a decline of 5.1 percent in the third quarter and 5.5 percent in the second, Singapore trade ministry said. “The economy fell off the cliff in the fourth quarter,” said Song Seng Wun, a regional economist with CIMB-GK Research. According to Singapore’s finance minister Tharman Shanmugaratnam, the government will tap its official reserves for the first time to help fund a record 20.5 billion Singapore…

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Venture Capitalists await clearance to enter India

The Indian market has now become a luring bet for the foreign VC firms, who are in the queue seeking clearance from the regulators. Around 66 foreign venture capital investors, like Google holdings, GE Capital Mauritus III, Argonaut Capital and Bessemer India Capital II are put on hold to prevent them from investing in the market at a very low price. I am not sure about the rationale behind this, investors are coming to India mainly because of low price and perceived stability compared to other Asian countries. More cash inflow is good for any country especially in the current…

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Another blow to U.S. Economy

Institute for Supply Management publishes an index called PMI (manufacturing index). It fell to 38.9 in October, the lowest reading since September 1982. Any reading below 50 signals contraction. Any reading above 50 signals expansion of the economy and prospects. The index had been hovering near what economists call “the boom-bust” line for most of the year until its sharp fall in September brought it to the lowest level since the aftermath of the Sept. 11 attacks. U.S. is in recession. Many of us already guessed that. This report confirms our assumption very strongly.

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American Crisis and Indian Outsourcing

Finally, it hits. American economy crisis has significant impact in Indian IT industry. It’s rumored that Wipro’s chairman Azim Premji asked that toilet paper be rationed in his company’s offices. Salary hikes will be coming down in the years to come. I am not very sure about salary hikes for IT employees, but I can see that dreaded pink slips have arrived in Bangalore and other Indian metro cities. Diwali shopping is not as busy as it used to be. Many people try to take it easy and slow down the spending. I am surprised that real estate prices are…

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India to Ensure Financial Sector Stability

The key issue for India now is to ensure efficient functioning of the financial system and stability of the banking sector, and steps already taken have had a good effect, Montek Singh Ahluwalia, deputy chairman of India’s Planning Commission, said today. “Indian banks are sound, their balance sheets are sound, their exposure to problem assets is almost negligible and they are extremely well capitalised,” he mentioned to Reuters. So far, India weathered the storm. There are no major panic here except the rumors about ICICI bank. Overall, it seems like Indian finance ministry handled it extremely well.

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Economic Pearl Harbor

Warren Buffet compared current economic crisis in U.S. as “Economic Pearl Harbor”. That’s a strong statement from an investor like Mr. Buffet. He mentioned this in “The Charlie Rose Show” yesterday. “This really is an economic Pearl Harbor,” Buffett said. “That sounds melodramatic, but I’ve never used that phrase before. And this really is one.” He also said “In my adult lifetime, I don’t think I’ve ever seen people as fearful economically as they are now”. Related Link: Charlie Rose Show

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American Economy Crisis

It’s getting worse every day. Washington Mutual failed today. FDIC seized the assets of Washington Mutual and sold the banking assets to JP Morgan for $1.9 billion. U.S. Congress is still debating whether to approve the bailout. Many banks are eagerly waiting for the free money. American President Bush warned the country about recession in his prime time television address to the nation. Even if warnings of economic catastrophe aren’t enough to win approval of a controversial $700 billion Wall Street bailout, the economy is not at risk of falling into a depression, most experts think so. Many experts think…

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