GDP Data - May 2013

Today’s GDP data of 4.8% hasn’t come as a shocker and is in line with what was expected. Our Prime minister’s dream must have shattered after he announced yesterday that the days of 8% GDP aren’t far away, during his Japan trip.

Today’s GDP data has made history as now FY13 will go down as the year the country clocked its slowest growth in a decade. Even after all this the government hasn’t learnt much. It is gripped with policy paralysis not to mention the corruption cases coming out in multitudes on a routine basis.

Inflation - Too early to flutter with it

The recent inflation data both CPI & WPI have come in the comfortable range of RBI, but there is need to exercise caution.

The basic cause of inflation in India is supply chain bottlenecks. The constraints that are in supply chain from farm to fork still persist. Though RBI has been able to claw down inflation by increasing interest rates at various occasions, but it has also curbed consumption. Consumption theory was the only USP, which was being showcased to the world that India had. To reduce inflation by reducing consumption is not the way to go forward. It shows RBI’s, the Finance Ministry’s and on the whole Indian Government’s short sightedness to tackle the issue.

BRICS – such a passé

BRICS (Brazil Russia India China & now South Africa) have been the center of attention for many years now, at times also viewed as an alternative which can turn the current worldwide recession. The “Analysts” had pegged high hopes on these nations as the next big thing and had forecasted that these nations will impel the world economy back to the growth trajectory. But it is unrealistic to expect the group can challenge the US hegemony.

One look at these nations and it’s easy to perceive that these economies, the developing economies, are the net suppliers to the world’s developed nations aka economic giants. BRICS are net providers of materials/goods to the big European nations and also to the US. E.g. Brazil provides raw material, China manufactured goods and India is seen for outsourcing hub for IT and ITES. There are only two big cities in Russia, Moscow & Saint Petersburg, which have been much publicized and showcased as symbols from developing nation. One close look and it is apparent that the entire growth in Russia is limited to the perimeters of these two cites.

Mixing Insurance with Investment!

Insurance is supposed to arrange for compensation in the event of damage to or loss of property or in case of death of someone. Insurance in no way gives your return on your investments. Then why should one mix up both investment and insurance.

Insurance should give a person peace of mind, that in case something untoward should

Insurance

Insure meaning arrange for compensation in the event of damage to or loss of (property), or injury to or the death of (someone), in exchange for etc.

Insurance essentially helps as a buffer in testing times in case of loss of property or life. Any individual should realize why & how much insurance is required basis his earning capacity and forecasted expenses. One should not just do insurance just for the sake of it.

It is a common myth that insurance is an investment product, whereas it is merely a cover to see through the expenses of the family during intricate times.

Now to extrapolate the myth further all the Insurance companies came out with swanky products like: