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India has stepped up efforts to build an interceptor missile that will track the enemy missile and destroy it inside(endo) and outside(exo) of the atmosphere of earth. India has already tested the missile twice and has reached  near completion of the project. It is being said in next few days third test of the missile will be conducted from the Wheeler Island off Orissa’s coast that will track the and destroy the incoming long range enemy missile in the outer atmosphere of the earth at the attitude of around 80-km.

India had conducted the first test of an “exo-atmospheric’ hypersonic interceptor missile in 2006 to destroy the incoming missile at the attitude of 40-50 km. It was a successful test that of the system that can be compared to Israel’s Arrow-2 BMD system. Second test of the system was conducted in December that demonstrated the capability akin to the American PAC-3 system. It was an “endo atmospheric” interceptor missile that tracked and destroyed an incoming missile enemy missile at the attitude of 15 km.

It has been told that DRDO has divided the project in phases. The third test that will be conducted in September-October will be the integrated mode of ‘exo’ and ‘endo’ interceptor missile with of capacity of intercepting the “2,000-km class targets” . It is being considered the Phase-1. DRDO will develop the system that will intercept “5000-km targets”.

DRDO chief controller for missiles, V K Saraswat, had  told TOI that the BMD system of Phase-I should be ready for deployment by 2011 or so, after several tests against a variety of missiles to ensure “a kill probability of 99.8%”. This is a very complex project as far as the variety, speed and range of the missiles is concerned.”It’s like stopping a bullet by hitting it with another bullet. Even the US is still to master it completely,” said a scientist. 

US, Russia and Israel are the only other three countries that have BMD Systems.It will give India an edge over Pakistan and China that have a wide variety of missiles.

Talks called off Talks between Anil Ambani owned Reliance Communications (RCOM) and South African Telecoms giant-MTN were called off on Friday night without reaching any agreement. Talks were aimed at merger of both of the telecom companies that could have created one of the 10 top mobile phone service provider’s powerhouses. Both of the sides in their statements have said that talks were called off because of some legal and regulatory issues.

Agreement Negotiations between both of the telecom companies had started on May 26 and were being held secretly but somehow the news spread out that Mr. Anil Ambani is going to sell his stake in Rcom to MTN following which MTN would have become the majority shareholder in the Rcom. It was also being said that Ambani would also become the chairman of the merged group. After the merger Rcom would have become a telecom company operating in about two dozen countries with its reach to around 120 million subscribers.

Battle It is being said that the result is the outcome of the wrangle between the Ambani siblings. As the talks over the deal were in process Mr. Mukesh Ambani threatened to use his right of first refusal over the shares of Rcom.When Reliance was demerged on January 2007 an agreement was signed between both of the Ambani siblings. According to which Mukesh Ambani was given the right of first refusal over the shares of Rcom. Mukesh had warned that MTN will have to face the court case that he had decided to file against Rcom for its breaching the January 12 agreement. Battle between both of the brothers worsened because of the claims and counter claims.

Issues MTN had extended the date of the talks to give more time to the Ambani brothers to resolve the dispute but nothing enthusiastic happened. According to PTI, Rcom in a statement said,” The two sides were unable to conclude the transaction due to certain regulatory issues”. Mukesh had on Thursday had started arbitrary proceedings. To avoid the court MTN decided not to go ahead with the tie-up talks. It was once again the eruption of the battle between the Ambanies that abruptly ended the negotiations between RCOM and MTN.

Inflation Rate Inflation has registered a 13-year high of 11.05 per cent growth rate on Friday. It is the direct result of rise in the prices of petrol, diesel and cooking gas. The government is in its last year of power and the elections are nearing and Inflation has added more to the problems of the government. Government had to increase the prices of petrol, diesel and cooking gas because the prices of fuel in the international market had increased a lot. The Indian oil companies were left with very low cash flows and the normal fuel supply could have been affected because of their financial problems.

WPI Government had announced the hike in the prices of petrol, diesel and cooking gas on June 4 that put the pressure on the price line pushing the inflation to the height within the week though the Wholesale Price Index for food articles had actually declined 1.1 during the week. The Commerce and Industry minister released the latest provisional inflation data in New Delhi. He said that in the first week of June WPI for light diesel oil had gone up 21 per cent, LPG had gone up 20 percent, furnace oil 15 percent petrol 11 percent and high speed diesel 10 percent.

Possibilities Rise in oil prices in the International market fueled the spiraling inflation and there is a possibility that the global commodity and crude oil prices will ease by the October month of the year. It is said that Government’s and Reserve Bank’s monetary and fiscal measures will begin to impact inflation with a lagged effect. Good monsoon predictions are also a positive sign.

Effected

Rising prices have put a disastrous effect on the living standards of middle class and the poor. It is the poor for whom the life has become more difficult. Prices not of crude oil but all the essential commodities have risen. Rise in steel and cement prices has badly affected the construction industry. Though government policies are also responsible for it, inflation is a global phenomenon and the government is trying its best to insulate the poor.

Meeting The much awaited meeting between (UPA and Left committee) was postponed and will be held on June 25.But the sources say that it is not the postponement but the cancellation as the left had never accepted the deal in the present terms and wanted the government not to pursue the deal. The meeting was called of when the left leaders learned that the Manmohan Singh government has decided to go ahead with the nuclear even without the permission of Left parties.

Left’s Opposition Prolonged discussions between the government’s main negotiator and Mr. Karat could not bear any fruit as the left leaders did not changed their stand of opposing the nuclear deal. In the past few days several rounds of talks have been held between the top left and UPA. Government had been trying to persuade its outside supporters to allow it to seal the safeguards agreement during the upcoming meeting of IAEA Board of Governors. But the Left leaders kept on consistently rejecting the plea. But the Prime minister has taken a stand to go ahead with the deal at any cost.

Relations Sources say that the government had realized that the marriage of convenience between the Congress and the Left had lost its utility and there was very little point left to prolong the alliance as it became obvious that Left is weakening in its bastion, West Bengal where it had faired badly in the Panchayat elections. Left’s continuous criticism of the government on the issues of price rise and fuel price hike had further soured the relations. As the Prime Minister has decided to go ahead with the nuclear deal in spite of the opposition of its Left allies the fate of the UPA government is also looking fraught.

Future India is a fast emerging economy that needs more energy for its consistent growth. India imports most of the fuel from outside. It is very necessary for an economy like India to be self dependent in the field of energy and India-US nuclear deal is the opportunity that cannot be missed out and it would be “unfortunate” if the agreement falls through.” Government comes and goes. Nuclear power is a requirement and assets must be created for our next generation”.

Differences Uncertainties are looming over the fate of Indo-US nuclear agreement. There are huge differences Inside India among various political parties regarding the terms of the deal. This deal is mainly opposed by the left parties who are supporting the UPA Government from outside. These parties consider that the nuclear deal is not in the interests of the country. They are strongly opposing the deal with the US arguing that it would compromise the security interests and the independent foreign policy of the country. Though the Congress led government is currently engaged in talks with their left allies to iron out the differences.

Needs There are huge demands of energy in India and it is unable to meet them. It is a rapidly growing economy and its demands of energy are increasing day by day. It fulfills its energy needs by importing from the other countries. To sustain the current economic growth rate it needs to be self dependent in the field of energy. The deal will open up new possibilities of cooperation not only with the US but with other nuclear powers also not only in the fields of nuclear technology but many others. By entering into the deal India had sought new dimensions to its relationship with US.

Views According to the left parties the Indo-US nuclear would make India a US outpost against China. This view of the left parties has been opposed by most of the Indians. It seems that they are more concerned about protecting China’s interests than India’s own national and strategic interests. It seems as if they are not worried about the rising energy needs India but are acting as if they are a political party of China. America is having strong economic ties with China as well as with India. There is not any reason that will harm China’s interests. It is necessity of the time that India’s rising energy needs should be met at early as possible.

Developments The time is running out as Bush’s presidential tenure will end very soon. It looks as if the nuclear deal is almost dead. Sovereignty of the nation can not be compromised. But India has very limited options that can meet its energy needs. Government is in a very tough condition and the whole of the world is watching the developments. Whatever decision is taken by the government it will have to remain with it and it will also become a history. How the future generations will consider it depends on them.

Naxalites Maoist Insurgency in India is increasing day by day. No day happens without violence activities conducted by Maoists. They always have made their presence felt whether it is Andhra Pradesh, Bihar, or other eastern states. The communist insurgent movement is known as Naxalites.

Reasons As India is developing at a very high pace Government is developing Special Economic Zones, along the lines of China’s economic Growth model. People of rural areas are directly affected with this move. As developers have tried to acquire the land aggressively, it has grown the dissatisfaction among the affected people. Whenever government tried to acquire the land people have always clashed with police. .Maoists with their agenda of fighting against exploitation and promotion of creating a classless society, have always seized upon the grievances of the directly affected people.

Base Maoists have their presence in 182 districts in 17 out of India’s 28 states. Chhattisgarh is the worst affected state as some of its parts are referred as ‘war zone’. Their support base is largely the land less laborers and marginalized tribal and lower cast people. There has been a dramatic increase in support of the Maoists in the last decade. Maoist support have got a boost after the successes of the nearly 10 years old rebellion in Nepal .They have their secret organizational structure and every activity is performed in a well planned and structured method by them.

Increased Power Their power have increased to such an extent that they never hesitate to attack the security forces. Frequency of such attacks has grown over the past two years. They attack in large numbers in a unified way. Their Attack on Jahanabad jail in Bihar, hijacking of a train in Jharkhand and assassination of MP Mahato, are some of the examples of violence activities. They are the biggest internal threat to country. They raise funds through extortion and taxation of the farmers’ output the areas where central government is absent.

Solutions This menace can be curbed if government takes some serious steps for the betterment of the poor, landless sections of the society. Widespread poverty and caste discrimination are is the main reasons that people get drawn towards the Maoist movement. Geography is the other major reason that provides them suitable situations to prosper. In order to defeat government should work for the fast development and also should win the hearts of population by providing them massive aid and relief.

Inevitable Decision United Progressive Alliance (UPA) Government on Wednesday midnight took the ‘inevitable’ decision of increasing the fuel prices. Soaring oil prices is the international oil market had put the Indian Government into a tight spot. Subsidies were increasing and the financial situation of the oil companies deteriorating day by day. Oil companies had left with a very low cash flow and an immediate decision was required to bail them out of the ‘gruesome situation’. These companies had been incurring huge losses for past several months and it was necessary to save them from being financially crunch.

No Options Though the crude oil prices had doubled since the last year, rates of diesel and petrol had remained unchanged. Because of steep increase in International oil prices government had left with no options. This was an inevitable decision that was being expected by everyone. Though the decision is unpopular but it was required to ensure the uninterrupted supply of the petroleum products.

Increasing Losses Defending the decision of his government, PM has said that to a certain limit government can keep the keep the consumer prices unaffected by the rising oil prices in the international market. If the oil companies go on incurring losses then they will be left with no money to import oil from abroad. Government had to take the tough decision as it had allocated large financial amounts for social sector programs and farming. All these programs require huge financial amounts that mostly depend on higher revenues of the Government.

Increase in Prices Government has increased the petrol prices by Rs 5, Diesel by Rs 3 and cooking gas by Rs 50 per cylinder but kerosene has been left untouched. This decision has been hailed by the Indian Industry chambers. On government’s part the custom duty has been reduced on crude oil from 5 per cent to nil, and on petrol and diesel from 7.5 per cent to 2.5 per cent.

Alternative Energy Sources Almost all political parties whether they are in opposition, Left or UPA’s allies have criticized the decision as many of them have threatened to launch national wide protests. This criticism of government is only politically motivated. Oil shocks have always slowed down the growth rate. To avoid this kind of setbacks and criticism government will have to look for the alternatives of the petroleum energy in future.

Crude oil prices in the International Market have crossed the $125 mark and have put the Indian government in a tight spot. During the time of the present government the oil prices have been kept on soaring .Now the prices of crude oil has arisen to such an extent that the Center Government cannot avoid the decision of raising the price of oil from 10 to 15 rupees per litter. On one hand the subsidies in petroleum are mounting and on the other hand if the decision is implemented then wrong political signals will go out.

During the rule of Manmohan government the prices of crude oil soared from $40 to $125 per barrel in the International Market. The government can either raise the fuel prices or can let the state-owned oil companies slide into red. Oil companies have been left with a very low cash flow if they are not bailed out of their present situation then the supply of oil will be affected and will increase the problems of the government. This became evident from Singh’s statement on tuesday when he said that, “We will not allow (government-run) oil companies to suffer, it is a big problem”. Government can not ignore the present situation as the economic situation of the state owned oil companies is worsening day by day and can lead to scarcity of petroleum products.

During the rule of the Manmohan government the prices of the essential commodities have arisen a lot .Further increase in oil prices will affect the whole economy and will affect the prices of everything. Manmohan government has almost completed four years and the Lock Sabha elections will be held after one year. As the assembly elections are scheduled to be held in some states in the near future, the present situation has put the government in a very tight situation. Congress has already lost the Karnataka elections to BJP. And any decision regarding massive increase in oil prices will harm the Party’s political interests. Rising inflation will affect the lowest and middle sections of the Indian society, which will harm the possibilities of returning to power of the ruling party.

I

Indian government cannot control the international oil prices because they are decided by OPEC. Rising prices have remained the reason of the criticism for the government in the past and the further increase will become the reason of more criticism for the government. There are very limited options for the government and it will have to chose either of them whether it suits the political interests or not.

Missed Out Opportunity The nuclear deal between India and US, which could have brought both the countries very close to each other, is almost dead though some signs of hope are left yet. It was a great opportunity missed by the Indian government that could have solved its future problems related to energy requirements.

Reasons of Criticism It has been conveyed to India repeatedly by the US government through bureaucratic medium that only a green signal By India before the June end can still save the deal. From the initial stages the deal has always remained controversial .It was not being debated and criticized only by the bureaucracy and politicians but also by the public of both of the nations. It was being criticized in US by the patrons of nuclear non-proliferation. In India it was being resisted mainly by the left parties. Their view was that the deal will affect country’s sovereignty .Governments of both the countries were trying their best the reach  an agreement which was being equally opposed in both of the countries. It included a lot of efforts on both sides such as convincing the scientific community, diplomacy, and legal expertise.   

Natural Friends Both the countries are the largest democracies of the world and are fighting a war against terrorism. India’s record of non-proliferation, Democracy, and support of US war against terrorism after the 9/11 had projected it the natural ally of US. On US persuasion, India had abandoned the project of India Iran gas pipes line through Pakistan. Now the N-deal also has been left to fate because of some internal differences, has almost reached to the stage of ‘deadlock’, and thus India has lost all the limited opportunities it was offered to meet its energy requirements.

Energy Requirements India meets it energy requirements by importing 70% petroleum products from the other countries. Indian economy is growing at a great pace and its energy requirements are also increasing. Because of its limited energy resource it is dependent on the other countries .This dependency is also a threat to the sovereignty of the nation. India has never indulged in nuclear proliferation as compared to the other countries. All the deal was related to the peaceful use of nuclear energy. When everything is in the favor of both the countries then why this deal is being criticized. Reasons may be related to the countries but are much more related to the vested interests of some people who do not want to see both the nations coming closer to each other.

We no longer see a 50 or a 25 paisa coins. It is still minted by the Reserve Bank of India. Inflation has rendered these two denominations barring of any buying power.  In cities, no one accepts them.

Expenditure on households in the budget across the country has been increased due to the inflation based on the Wholesale Price Index as it has touched a 59 week high. Food items have become expensive. Primary food articles, like pulses, fruits, vegetables and spices have increased the burden on the pocket of a common man.

Increase in the prices of oil and manufactured goods also fueled inflation. Being pinched on a daily basis, common man has become more conscious about the food prices across the nation.

What doesn’t come the mind of a common man immediately is the fact that the value of savings and investments is also getting eaten by the inflation. To elaborate here; if one invests Rs. 100 for a year at a fixed rate of interest per annum. After a year if he gets Rs 110, out of which Rs 10 is the income from investment or interest. It should not be viewed as true ROI (return on investment) as it is to be calculated after deducting the inflation rate from the income. Assuming that the rate of Inflation is Rs.7 currently, the real return on income is Rs 3 only. So inflation rise should also bother you as an investor.

We cannot take banks deposits as an ideal long term investment if you are planning for your child’s education or marriage or your own retirement. As the inflation rate is at par with the rate of return on your bank savings, it becomes vital to explore the options to beat inflation and help your money grow, that too in a fashion that it should meet you future requirements.

Investment in stocks is the best possible option according to majority of financial planners. Investment should be in blue chip companies. Looking back at the results of past 3 years, these stocks have returned over 25% beating inflation, which stayed on an average of 5-6%. For those who want minimum risks, equity based mutual funds are best options. Investing in gold would be another better option.

Securities and Exchange Board of India (SEBI) is planning to amend the guidelines for new fund offerings (NFO) of mutual funds.

The plan is to draft a proposal suggesting the offer document should have to be bifurcated. The first part would deal with the funds’ investment philosophy and the pattern of the fund. The second part would have additional information which would include the details of the asset management company and the trust. It would also define the duties and obligations.

It has been observed that investors find it difficult to read and understand bulky offer documents filed by mutual funds for new fund offerings. It has been decided to make them simpler and leaner which would be easy to understand for investors and also it would be less time consuming. There are many other benefits like it would reduce the size of the offer document and will make it a lot more user friendly.

Experts for the mutual fund industry welcome this proposal. The basic information related to investment, objective, philosophy and risks involved in the fund would be given to the investor before investing and the same would be in much more precise manner. It would help investor understand the fund as to what the fund is all about and what are the risks involved in it. It also would help save time in reading the whole offer document.

The regulator is also working to simplify the Initial public offering documents as well so that fund raising and investments across asset classes should be simpler and faster. The regulator is also about to propose fast track issuance of debt instruments by the listed companies. It is also planning to cut the filing fee for mutual funds to 0.005% of the amount raised in the new fund offering which would be subject to a minimum of Rs 1 lakh and a maximum of Rs 50 Lakhs. Adding to this SEBI has also planned to slash the registration fees payable by mutual funds from Rs 50 Lakhs to Rs 25 Lakhs.

Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani’s wife Tina Ambani donated Rs 5 crores to Mukesh Gandhi, Co- founder and Director- Finance MAS FINANCIAL SERVICES LIMITED (MFSL). An organisation in retail financing which marked entry of R-ADAG into the Indian micro financing world. With a vision to provide finance to the grass root level they would serve the rural and semi-urban areas.

Group has committed to play a serious role in bringing standard and value to the lives of the aged and the underprivileged in India. This would be an extra mile walked by the group in that direction. This cheque of Rs  5 crores is to be given away in the form of loan though at the a competitive interest rates as compared  to what is offered by the banks, but importantly, it would be given to the organizations like MFSL which would be an  added avenue to raise resources. R-ADAG financial services company RELIANCE CAPITAL LIMITED (RCL), is already working in collaboration with a Gujarat based group VARDAN TRUST, which could be seen as its vehicle for a national rollout of its attempt in the field of micro financing in the country.

This is not just one odd big Indian Inc looking to spread its share in this field. You may also hear the names of Mukesh Ambani, Sunil Mittal (Airtel) and few others going to enter in the field. This could be sensed by some aggressive recruiting and benchmarking salaries. The hiring of Brahmanand Hegde from ICICI by the Temasek’s Fullerton makes it quite evident the way big players find micro financing an area of opportunity. This is a welcome development as the borrowers can have a greater choice. With the rise in the competition, better rate of interest would lure the mushroom growth of Indian middle class who want to add a class to their lifestyle. Be it a loan for the vehicle, studies abroad, foreign tour or housing the areas which are neglected by the banks now a days on the bases of remoteness will also have access and credit available at their disposal (of course on repayment basis).

It is worth mentioning here that there is no threat to the existing players as many of them have made the system and streamlined it. They also have loyal borrowers provided if treated well.

The major challenge the Government o f India is facing today is the inflation. Though the growing economy of the country has withstood higher rates of inflation in the past and anything like 7.5% is not a great trouble if it did not precipitate even a higher rate of inflation tomorrow.  Most importantly, there is no time for pulling each other’s leg as to who is responsible for this situation and who must accept the blame as is the situation in the political arena of the country.

The economic growth of the country and the welfare of common man have to suffer heavily if the situation remains the same. This crisis may turn uncontrollable if appropriate measures are not taken that too in timely fashion. RBI other than the measures like controlling liquidity and suppressing demand should look how to raise the confidence of the investor and reverse the expectations about continuing inflation.

The first cause which is constrained supply, which actually is controlling liquidity and managing the demand side, would definitely bring the prices down. This may also result in growth of output and employment. The RBI’s attempt to squeeze liquidity is a step in right direction. Rise in the CRR RATIO (cash reserve ratio) may affect the profitability of the banks where cash would have no returns. If your aim is to reduce expenditure, preferred option would be increase in the rate of interest; however, there should be policies to neutralize its effect on the increased inflow of foreign capital. The appreciation of rupee would cut down exports which in turn would result into downsizing and rising interest rates if RBI would not interfere to buy up dollars.

There is another policy which is often preferred over others- to control inflow of foreign funds. This can be done by either imposing a Tobin-type tax where taxes should be raised on short term capital gains. In financial management it is an art to fine tune the reducing of liquidity with no or minimal possible cost of output and employment. 

In a country like India where economy is globalised, there should be a mechanism in existence which could protect against the sudden increase in the cost of essential goods and it should be regarded as indispensible component of public policy.

 Inflation has led to payment pressure which in turn has increased debt burden. People have to now cut their expenditures in different areas rather in some instances, to manage their position with the available funds; some have changed lifestyles as well. Credit counseling, thought not very popular is the need of hour to handle situation in a profitable manner.

If an individual has taken or is planning to take a debt burden, the process of explaining the impact of this burden is called Credit counseling. An individual is also explained the ways to address the debt burden and is showed a path to come out of it.  Regular interaction to understand an individual’s position and to gain his confidence to assure the required steps are taken is the key to the success of credit counseling. 

Debt, asking for regular service, is always a problem if it is unmanageable. In tough financial state, it often becomes hard to cope with the interest and repayments. Restructuring or changing of debt is required in such situations, to ensure the funds being placed and employed effectively. It also means starting a new debt to close the existing one.

Spending everything what is earned often makes financial state extremely tight as there is no margin for error if budget is planned in such a way. There is no backup in case something goes wrong. This results into postponing or sacrificing planned requirements to meet the contingency need. It is always wise to keep a margin in the budget for any immediate requirements. 

The position varies from individual to individual according to the circumstances that affect him/her, thus every case in credit counseling is unique and is seen in different light altogether. Proper understanding of the situation, helps in extending a helping hand to an individual to set things right and to get back on the track of financial adequacy.

Listing of real estate companies has brought a turnaround in the business and towards the perception about the sector. It has, for the first time highlighted the challenges the sector is facing. The urban planning is one of the major concerns this sector has to deal with. Economic growth forcing infrastructural development is an imperative. Reforms are required in Land acquisition because of saturation of good land bank in metros.

Real estate finance growth is for sure in terms of public and private equity and debt. High net worth individuals, mutual funds, close ended and PE funds, leads the markets currently in private equity space. Entry of global players in collaboration with national players in the industry may result in landscape change. Success in the emerging market bet on emerging trends and defining strategies accordingly.Urbanization today is driven by educated, professional workforce joined by rise in the middle class with higher disposable income, which is favouring the Indian developers. This would be the prime factor for a boom in the sector in year 2008. With nearly double digit growth in its GDP, India has an edge over other developing countries. All we need now is flexible government policies and reforms in the sector to offer an affordable housing in the country.

With a growth of over 8% in the last two years and an anticipated growth of over 7% in the coming 5 years, India being world’s fourth largest economy promises the demand of real estate outdistance the supply of real estate in all the major economic hubs of the country. There is a paradigm shift in terms of growth in real estate in metro cities. This boom would continue to gallop the Tier II and Tier III cities also, which would make them first preference of the realty players.

Over 150 million sq. ft space would be required by IT & ITeS by the end of 2010. With retail industry getting organized an additional 220 million sq. ft space would be required by then. Looking at the promising opportunities in the sectors international players and foreign direct investments inflow has been estimated over US $6 billion.

Developers are no more local players now, rather called as Pan India players, they have operations in all infrastructure verticals which has made Indian real estate sector one of the fastest growing sectors.  Construction and facility management put together with real estate makes this sector the second largest employment generator in the country which has linked more than 250 adjuvant industries like cement, brick and steel through back and forth links. Though there is an acute shortage of technical manpower in this sector, a unit increase in the sector has a multiplier effect and the capacity to generate five times higher incomes.