How does this affect you?
If you are traveller, you can now take foreign tours and spend less than you expected. Your purchase power has dramatically boosted with stronger rupee.
If you are just a citizen, expect imported things to cost less and in the long run expect to save more.
If you are an investor avoid investing in any company that is exporting goods/services and doesnot have any mechanism to hedge against currency fultuations. Invest heavily in those companies, who do business locally and generate their revenues locally and who raise money abroad for further ramping/scaling up their productions and or services.
If you are a company based in India, it will now cost you less to outsource.
Like in the previous years, RBI didnot intervene and bought the dollars by releasing more Indian currency into the market. It is not doing so intentionally this time and is allowing the market to dictate the effective rate. Already there are so many industries who are crying foul for immediate RBI intervention as their margins are thinning dure to huge strength in rupee.
There may be a political decision not to intervene as this will allow the government to import goods that is costing more in the domestic market like cement. Cement industry has played hard ball with the government and did not cut prices. They have thrown age old supply/demand equation at the government and turned down their requests in bringing the prices down. Government now can import cement from neighbouring countries and sell in the domestic market.
In reality there is a supply/demand crunch in our country and government is worried about inflation and the costs the poor man has to bear. The strength in Rupee will allow the government to contain the prices and will also help them in debt servicing.

Let us see what happens in near term, but for future, the trend is likely to continue. so why stop the rupee rise?

Chandrashekhar Dasgupta, a Distinguished Fellow at TERI, writes a sensible op-ed in Business Standard on India and Climate Change.

Climate change is not a big issue in India at this point in time. The sheer size of the poverty issue overrides any other program. Combine that with the economic development policies, foreign policy (e.g. Kashmir issue), internal terrorism (e.g. the Maoists) and it is clear that climate change is not on the top of the agenda. This is rightly so.

In this op-ed, Dasgupta outlines the issue of climate change, the IPCC report, effect on India and possible policy actions.

He points out that “the wealthy, industrialised countries are responsible for causing climate change, the main victims will be the world’s poor. Developing countries are more vulnerable because they lack the financial and technological resources needed to cope with and adapt successfully to climate change”.

In this scenario, the first task of the government is adaptation and this can only be based on rapid, sustained development and poverty eradication.

Adaptation will require a wide range of responses, including a shift to drought resistant plant varieties, economical use of water resources, water conservation measures, watershed management, protection of coastlines and disaster management. Low-income countries will be unable to implement these measures on an adequate scale.

The second goal is to moderate the use of greenhouse gases through measures which will be economically beneficial and the funds are not diverted from poverty reduction and economic development needs. This is important because funds for development are scarce in India.

There are many areas where such possibilities exist. Cost-effective energy saving and energy efficiency programmes serve our development goals and also result in lowering emissions. Policies designed primarily to reduce local environmental pollution (such as the substitution of diesel by cleaner fuel in some of our major cities) can also lead to reduced greenhouse gas emissions. The promotion of nuclear, wind and solar power not only serves our energy security interests but also results in lower greenhouse gas emissions. In all these cases, measures designed primarily to promote our developmental objectives also yield important co-benefits for climate change mitigation.

Additional programs can be achieved through the Kyoto Clean Development Mechanism and Joint Implementation.

According to Dasgupta, the third leg of the strategy should concentrate on managing the rising expectations of industrialized nations to force India to cut down on its emissions.

If the demands of these developed countries are conceded, funds will be diverted from our national priority goals of development, poverty eradication and progress on local environmental issues like air and water quality. The rate of growth of the economy will be slowed down, with the result that India will remain highly vulnerable to the impacts of climate change.

To counter the argument of high greenhouse gases emitted by India due to its population he suggests a analogy based on food consumption.

This is like arguing that India should restrict its food consumption because its total calorie consumption is very large, even though the per capita intake is inadequate! India’s per capita carbon emissions are only one-eighth that of the EU and one-twentieth that of the US. The total figure is high only because India is a very large and populous country, with a population exceeding the combined total of the US, the European community, Russia and Japan.

As with everything in India, population exacerbates the climate change issue.

This Vishu, ‘The Great Indian Mutiny’ blog (www.mutiny.in) moved to a new server based in India. We also have a new look. Our wordpress hosted site, the one you are one now, will remain for reference purposes.

Please have a look at our new look and let us know what you think.

I have no love for congress but feel sorry for it, because Prime Minister Manmohan Singh has professed Rahul Gandhi to be future of UP. With the recent controversies arising out of comments related to Babri Masjid, Pakistan dismemberment future of congress looks dimm until Priyanka takes up politics.

Rahul Gandhi looks like a family man. He always projects his family for all the good work sometimes even eclipsing congress party members and Ex-PM like Narsimha Rao.

Someone rightly said that Rahul is politically immature and i believe it is too late for him to become mature and run this country or atleast congress party.
The more he speaks, the more of Rahul’s stupidity comes out in public. It looks like, he needs to sit back and seriously think about his career.

The famed German magazine Der Spiegel (The Mirror) interviews Ratan Tata (via Bainite). I was happy to see his commitment to the safety of Indian families:

Again and again here in India, I see entire families riding a single scooter: The father drives with one child standing just in front of him, and the mother sits behind with a baby on her arm. I have seen that so often… even during rainstorms or at night. And each time, I think: Oh God, can’t we do something to help these families travel more safely? So we launched this project. Our goal is to develop an inexpensive and safe vehicle.

I found his cautious optimism prudent:

We live in a highly competitive world — and we Indians have to struggle to catch up. So modesty is necessary, even if there is also a need for a certain amount of national pride. When it comes down to it, we have managed our country’s economy poorly for long enough. There is really no reason to now think that we can conquer the world.

However, I found that his views on democracy are not very different from that of his uncle, JRD Tata:

The political system of the People’s Republic of China can make things easy. Decisions are made quickly and results come quickly, too. In our democracy, on the other hand, such things are extremely difficult. We like to say that India has the advantage of being a large market. We have provinces, we have the rule of law, we have a system of justice. But those are also weaknesses when compared with China. On the other hand, one of our strengths is that we are very individualistic, and as individuals we are very creative. But that, too, is a weakness, because it keeps us from working well together. Everyone thinks only about his own profit. India has probably lost its position to China as the world’s workshop. At the same time it has the power to be ahead of China when it comes to knowledge. Not that the Chinese are far behind. They will get there. But our challenge is to invest sufficiently in education.

A pity!

Here are a couple of blogposts listing the earliest known printed books in different languages. I found the following entries for the Indian languages.

Tamil. Thampiraan vaNakkam (Goa, India: Henrique Henriques, 1578).

Bengali. Nathaniel Brassey Halhed, A Grammar of the Bengal Language (Hugli, India, 1778).

Hindi. A Grammar of the Hindoostanee Language (Calcutta, India: Chronicle Press, 1796).

Oriya. Mrtyuñjaya Bidyalankar, trans. [New Testament] (Shrirampur, India: Serampore Mission Press, 1807).

Malayalam. [New Testament] (Bombay, India: Courier Press, 1811).

Assamese. William Carey, et al., trans. [New Testament] (Shrirampur, India: Serampore Mission Press, 1813).

Telugu. Grammar of Telugu (Shrirampur, India: Serampore Mission Press, 1813).

As is clear, nearly after a century of the printing of the first English book, we see a Tamil book being printed in Goa (while the other Indian languages were printed nearly two centuries after Tamil). This accidental blessing of the printing press in Goa, and the role of missionaries in setting it up, as well as the Tamil connection is discussed in a recent article by Babu K Verghese in the Hindu:

It was Christian missionaries, who wanted to produce the Bible in the several languages of the country, who introduced printing and publishing in India. In fact, we got the first printing press as a happy accident: As early as 1542, Francis Xavier, a Spaniard, was teaching the Bible in Tharangambadi (Tranquebar), Tamil Nadu. Also, when the Viceroy of Goa, on behalf of King Joan III of Portugal, opened schools for Indians, books had to be provided. Thus, pressure was put on Portugal by Francis Xavier to dispatch printing presses to India, Ethiopia and Japan. Meanwhile, the Emperor of Abyssinia (Ethiopia) requested the king of Portugal to send a press along with the missionaries. Thus the first batch of Jesuit missionaries left for Ethiopia on March 29, 1556. En route, they arrived in Goa on September 6, 1556. But, while they were preparing to proceed to Ethiopia, news reached them that the Ethiopian Emperor was not keen to receive the missionaries. Thus, as luck would have it, the press stayed in Goa and was set up at the College of St. Paul in Goa. Today, the huge arch of the St. Paul’s College gate, restored by the Archaeological Survey of India, stands as a witness to this pioneering effort.

In this regard, I should also mention the Italian priest Veeramamunivar, who compiled several dictionaries and composed literary and grammatical works in Tamil in the early 1700s.

PS: Do not take the dates given above to be the final word on the subject; the author of the posts agrees that some of the dates are educated guesses. So, if you know that the dates are wrong, or if you know of any other Indian language and the year of first printing in the same, leave a note.

Blood bath on dalal street
As we already know, that appreciating rupee depreciates the earnings of our star companies like Infosys, TCS, wipro, Satyam etc. With Infosys earnings due on Friday the 13th, everybody is on the edge expecting Infosys to guide lower due to rising rupee. Friday the 13 is a bad number and day according Europians and also North Americans. 13 being an odd number is also a bad number according to most Indians. Will this bad omen be part of the reason for blood bath this coming friday when Infosys report their earnings?
There are several negative indicators already in the play, like rising inflation, tight monetary policy by our reserve bank, appreciating rupee etc. Already market tanked a bit when RBI raised their repo rates and CRR percentage unexpectedly. However, since then market recovered a bit, but people on the street are not convinced and are predicting that there will be a sharp pullback.
Could Infosys results be a trigger for that pullback?
Everybody is asking a bigger question. Which direction the market should go? Who and what should be the deciding factor for the market’s directionality? Most of them are just hoping that Infosys could give the market its needed direction. Down or up, only friday the 13th can tell us.
Here is what i am guessing, would happen after Infosys reports its earnings.
Competition is getting tougher and already we are seeing tightening of margins. With US slowdown and rising rupee the margin squeeze is much more stronger.
Longer term Rupee will only appreciate and Dollar has nowhere to go but depreciate. This is because of rising India and slowdown in United States. If this is any indicator than Infosys has noway but to guide lower for the year 2008 on which the market will tank.
Short term (next 6-8 months) Rupee may depericiate a bit due to RBI intervention and Infosys may guide higher based on conversion rate of RS 45 per Dollar for the year 2008. I don’t know if market will take that seriously.
Infosys and many other software firms have to come up with firm response to rising Rupee, if not, investors can safely stay away from IT companies.
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