Volume - 1 No. -12 DEC, 20, 2010 visit us at : www.imis.ac.

in For
Private Circulation only

Editor in Chief:
DR. KISHORE C. PADHY

Inequality of Opportunity
Contributing Editor:
MR. DEBASHIS PAUL
PGDM-TERM-II
The US president during his recent visit said that India is
Published by the no longer a rising power but the country had already
Director on behalf of
Institute of risen. But In India still today only 4% of the total national
Management &
Information Science
income generated by the country is being spent for the
Swagat Vihar, Bankuala poor where as 20% of the country NI was spent for the
Bhubaneswar-751002
Orissa, India rich people of the society. According to Human
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57 Development Report 2010, India is in 119th position out of
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139 countries regarding Human Development Index.
Further according to Max-NCAER India Financial
Protection Survey, 96% of Indian households cannot
survive for more than a year on their current savings if a
major source of household income is lost. Only 24%
household owns a life insurance policy whereas 1.2% has
health insurance policy. Amidst these grim ground
realities how it is that India is perceived as an economic
super power emerging or otherwise.
China woes to speed FDI towards India

According to a study by FCCI, the recent developments that have taken

place in China — a series of strikes affecting operation of select MNCs,
subsequent wage hikes, expectation about appreciation of the yuan and
efforts to recalibrate growth strategy away from exports towards
domestic demand — could lessen its attractiveness as an investment
destination.”

Indian people 'see' inflation at 12.7%

Although the Government expects inflation to moderate to about 6 per

cent by March 2011, a survey by the Reserve Bank has found that
households expect it to be as high as 12.7 per cent by October-
December next year. Households' expectations of general price rise
were mainly influenced by movements in prices of food products.

World economy seen weak in 2011

The United Nations said it expects the world economy to grow by 3.1
percent in 2011 and 3.5 percent in 2012. That's lower than the 2010
expected growth of 3.6 percent - and far from enough to help recover
jobs lost because of the economic crisis

Euro zone: Ireland follows Greece

In the euro zone after Greece it is now Ireland’s turn. After trying to avoid
a rescue package as long as it could, Ireland finally took a loan of €85
billion from the European Union and International Monetary Fund,
accompanied by the usual conditions of fiscal compression. The root
causes to take such decisions are its bloated banking system, which
needs public support on a massive scale as to its huge exposure to
weak assets. Ireland was once called “Celtic miracle” because of it was
fastest growing economy in European Union, but now crisis took place
due to some wrong moves by the banks. A huge and wasteful
investment in the real estate sectors financed by the commercial banks
who in return borrowing money from non residents and in the capital
markets; the banks aggregate assets are increased to much more than
country’s nominal GDP (250%), today acres of commercial and
commercial properties are lying vacant. This led the govt. to guarantee
all liabilities of Irish banks. Due to this problem economy shrank by 11%
in 2009 and now the govt. was forced to take the humiliating loan from
IMF and EU.

Hero and Honda

Japanese auto giant Honda has reached an agreement to dissolve their

26-year old joint venture, Hero Honda, with the Hero Group by selling its
entire stake in the India's largest two-wheeler maker.

Honda Motor Co is expected to sell its entire 26 per cent stake in Hero
Honda to its partner Munjals-promoted Hero Group and would earn USD
1.2 billion from the sale.

Sebi to link brokers to Asba, reduce IPO time

The Securities and Exchange Board of India (Sebi) is quickly moving

towards its goal of compressing the initial public offering (IPO) period
from 12 days to seven days. The market regulator plans to integrate
brokers with online Asba – Application Supported by Blocked Amount –
software provided by stock exchanges. Industry players say
modifications are being made to ensure an exponential rise in the reach
of Asba, vital to speeding up application and refund processes in IPOs.

India, France aim for euro 12-bn bilateral trade by 2012

Sustaining good growth

The union finance ministry’s mid year analysis of the economy present
an upbeat view, forecasting a national income growth to 8.9%. This puts
economy well on course to IMF projections of 8.8%. Agricultural growth
at over 4% helped in boosting the overall growth. Manufacturing industry
was the best performing component with a growth of 9.8%.

China Increases Bank Reserve Ratios By 50 BPS

In order to cut the threat from inflation, China has increased bank
reserve ratio by 50 bps for the third time after November. It is basically to
check money flow and the lending power of the banks.

Malengam committee on MFI

Considering heavy interest rate charged by MFI institutions, which most

of the cases leads to bad bank loans, RBI has appointed Y.H
MALENGAM Committee for Investigation into the matter and to come up
with suggestion to control the cap on the interest amount. The
committee will give its recommendation in the month of January, 2011.

Banks raise lending rates by up to 50 basis points

Five public sector banks raised their base rate — the minimum lending
rate beyond which they can not lend — by 50 basis points, making
home and auto loans expensive for their customers.
IDBI Bank, Indian Bank, Indian Overseas Bank, Allahabad Bank and
Dena Bank all raised their base rate, after which most of the banks'
base rate have gone up to 9 per cent. Dena Bank base rate is at 8.25
per cent.