Is India's growth rate slowing down?

India touched GDP growth rate of 9% last financial year. It is a big achievement for the country and initially people were apprehensive of sustaining over 8% growth rate for reasonable time. For the last three years India has continued to grow at more than 8% and last year it recorded 9.3% growth. All the while people have been talking of signs of heating of the economy. This fiscal year the growth has slowed down a bit but is still above 8% level. This slowdown has been indicated by Reserve Bank of India (RBI). According to the report a slowdown in the growth of demand has led a slow down in the growth of sales in the first half of 2007-08.

According to Moody's India's growth rate will come down to 8% in 2008 due to the tighter monetary policies taken by RBI to curb inflation. Goldman Sachs has also lowered India's growth to 7.8%.

Recession in United States of America is not likely to have any significant effect on the India's GDP growth as it is mainly domestically driven growth and the fundamentals are very strong.

The growth in the industrial production numbers jumped significantly in 2006-07 which had a major contribution in the GDP growth rate. Now, since the demand had decreased because of rising interest rates the industrial production index is feeling the direct pinch and has recorded slower growth. Automobile sales has shown very little growth over last year and the housing activities have also shown a slowdown.

Though these activities appears to put a lot of pressure on growth rates and may even be successful in short run. India's story is a long term and it has just started. One can easily bet on the long term growth prospects of the country.

Tata Motors launches the People's car at dealer's price of Rs 1 lakh

Tata Nano, the name for the Tata's new Rs hundred thousand car was unveiled today in Auto Expo in New Delhi. This is by far the lowest priced car and has a price tag comparable to luxury two wheeler. At Rs. 100,000 ($2500) this will create new trend for Auto Manufacturers in developing countries. It was like a dream come true for Tata Motor's chairman Mr. Ratan Tata. He was confident that his new car will be a hit in the Indian Markets. While presenting the first glance of the much talked people's car to people Mr. Tata said:

"I observed families riding on two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family. Tata Motors’ engineers and designers gave their all for about four years to realize this goal. Today, we indeed have a People’s Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions. We are happy to present the People’s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility."

Tata Motors claims that Nano is stylish, comfortable, efficient and meets the safety and environments norms including the Euro-4 emission norms.

The car would be manufactured in Singur plant and will be launched in the second half of 2008. Tata Motors are also looking at Africa, Latin America and ASEAN countries for prospective markets for Nano.

So far the project has cost more than 1500 crore rupees (Rs.15 billion / $375 million).

Tata Motors is India's largest automobile company, with revenues of US $ 7.2 billion in 2006-2007. With over 4 million Tata vehicles plying in India, it is the leader in commercial vehicles and the second largest in passenger vehicles. It is also the world's fifth largest medium and heavy truck manufacturer and the second largest heavy bus manufacturer. For more information about Tata Motors, please visit http://www.tatamotors.com/.

Goldman Sachs & Merrill Lynch comment on recession of US economy

According to a report from Merrill Lynch, US economy is already in recession. It refers to the employment report as an confirmation of recession. The unemployment rate of 5% in December was supportive of this view. The housing market is already falling and consumer spending is also lower.

While Goldman Sachs declined the recession in the US economy, it predicted that recession is very close and US economy may see it in 2008.

Goldman Sachs beleives that the slowdown in the US economy will affect the interest rates, since Fed bank may choose the option of lowering rates from 4.25% to about 2.5%

Goldman Sachs cautioned the investors to stay away from banking and finacial sector and increase their holdings of healthcare and consumer-related stocks.

Bear Stearns CEO steps down

James E. Cayne stepped down as chief executive officer of Bear Stearns. Though retiring from the firm he will remain on the the board of directors as chairman. Alan D. Schwartz, president of Bear Stearns, will be taking over the responsibility of the chief executive officer of the fifth largest investment bank in US.

Alan D. Schwartz joined Bear Stearns in 1976. He became executive vice president and head of the Investment Banking Division in 1985, president and co-chief operating officer in June 2001 and sole president in August of 2007.

This step is looked as an aftermath of the sub-prime crisis of which Bear Stearns was also lost over billion dollars in bad debts. Since the announcement of write-offs there has been reshuffling of major positions at the affected investments banks including Citigroup, Merrill Lynch, Morgan Stanley etc.

"Founded in 1923, The Bear Stearns Companies Inc. is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The Company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. Headquartered in New York City, the Company has approximately 14,000 employees worldwide."

For additional information about Bear Stearns, please visit the firm's website at www.bearstearns.com.

Top 10 financial cities of the world

The top 10 financial hubs of the world according to a survey by Mastercard in June 2007. The ranking was based on six parameters: Financial flows, ease of doing business, economic stability, legal and political framework, volumes of business, and knowledge creation and dissemination. The ranking was given to 50 cities, the top 10 list goes like this...

Rank	City
1	London
2	New York
3	Tokyo
4	Chicago
5	Hong Kong
6	Singapore
7	Frankfurt
8	Paris
9	Seoul
10	Los Angeles

Source: City Mayors Economics

World's top paid executives

The top 10 CEOs in the world ranked on the basis of the compensation package are:

Rank	CEO's Name	Company	$ m	Age
1	Steven P Jobs	Apple	647	52
2	Ray R Irani	Occidental Petroleum	322	72
3	Barry Diller	IAC/InterActiveCorp	295	65
4	William P Foley II	Fidelity National Finl	180	62
5	Terry S Semel	Yahoo	174	64
6	Michael S Dell	Dell	153	42
7	Angelo R Mozilo	Countrywide Financial	142	68
8	Michael S Jeffries	Abercrombie & Fitch	115	62
9	Kenneth D Lewis	Bank of America	100	60
10	Henry C Duques	First Data	98	63

Source: Forbes Magazine

World's richest people

The top 10 richest people of the world according to Forbes magazine as on Mar 2007 were:

Rank	Name	Citizenship	Age	Net Worth ($bil)
1	William Gates III	United States	51	56
2	Warren Buffett	United States	76	52
3	Carlos Slim Helu	Mexico	67	49
4	Ingvar Kamprad & family	Sweden	80	33
5	Lakshmi Mittal	India	56	32
6	Sheldon Adelson	United States	73	26.5
7	Bernard Arnault	France	58	26
8	Amancio Ortega	Spain	71	24
9	Li Ka-shing	Hong Kong	78	23
10	David Thomson & family	Canada	49	22

Source: Forbes

China's bank reserve ratio may increase

According to a report by ICBC (The Industrial and Commercial Bank of China) the reserve ratio required for commercial banks can reach 15% in 2008. Currently the ratio is 13.5%, which is a ten year high. More monetary tightening is expected to follow in order to curb the inflation and deal with rising Yuan. The ratio requirement has been increase nine time in this year and has crossed the previous highs of 13% observed during mid 1998. The reserve ratio hike will suck about $25 billion from the money market and reduce the surplus liquidity.

A good analysis on the tightening measures taken by Chinese central bank and its repercussions is done Lu Jianxin and is available with Reuters.

Sensex crosses 20k and Ambani crosses Gates

Mukesh Ambani, of Reliance Industries Ltd, became the world's richest man on 29 October, overtaking Microsoft's Bill Gates and Mexican Carlos Slim Helu. The feat was achieved because of the strong rally which the stocks of Ambani's Reliance Industries has been witnessing since last month. The Reliance Industries Ltd stock has risen more than 60% in past few months and has helped Bombay Stock Exchange's 50-stock index Sensex to cross 20,000 points and take Mukesh Ambani's net worth to $63.2billion just piping Helu and Gates who are a little behind at around $62.29bn each. Ambani holds more than 50% shares of Reliance Industries.

Estimates of the wealth of the top five richest person of the world are:

Mukesh Ambani - $63.2 billion
Carlos Slim Helu - $62.3 billion
Bill Gates - $62.3 billion
Warren Buffett - $55.9 billion
Lakshmi Mittal - $50.9 billion