Let me ask a question first.
What type of economic strength is preferable to India?
A) A strong Indian economy fueled by its cheap labor due to a weaker rupee against dollar, where the Indians end up working in shifts, late nights, whole nights and what not only doing low profile jobs which foreign companies want to offload to India, so that they can concentrate on high end works and become even better. For instance in IT field, providing BPO services, support and maintenance work for products
OR
B) A strong Indian economy fueled by its strong innovations and products, no matter whether the rupee is strong or weak against dollar.. where Indians work only in regular office hours of 9 to 6, developing cutting edge technologies and solutions, selling our world class products both inside and outside India. For instance in IT field, imagine operating systems, compilers, databases etc all coming out of India..
I do not deny the fact that the IT boom in India came to a large extent because of (A). Well and good, we have had the benefits of our cost being cheap in western markets due to a weak rupee against dollar.. We have had our share because of this advantage in the past 2 decades..
But at the same time doesn’t it make sense to move towards (B), instead of crying foul against rupee becoming stronger against dollar?
What a pity! Indian IT companies are feeling bad because rupee is becoming stronger against dollar! Reason, their profits will go down when the value of rupee is stronger, as every single dollar that comes into their account now means lesser rupee than earlier..(if for instance earlier they used to get 47 rupees for every dollar that comes in, but today its about 40!)
But isn’t this a matter of celebration? Our rupee is gaining importance internationally and is becoming stronger again.. How many of us know that in 1947 when India got independence 1 Rupee was 1.2 US dollars?
These Indian IT companies instead of relying on a weaker rupee for their profit should now look at coming out with innovative products and technical solutions. What have these companies done in the arena of core system products? Why don’t we have any operating systems, compilers, database systems, development platforms etc coming out of India? Why don’t we develop tools like photoshop or flash? We have talent, but they all are working in American companies on these products.. Cannot our Indian IT companies setup at least small teams to develop such products?
Instead they are planning to make their employees work on saturdays too ! So that their profits can increase due to extra hours the employees put in.. As if India doesnt have any other option other than cheap labour, workaholic labor!! Are there no brains in India who can setup companies developing products and make money just by printing out more serial numbers and burning their product DVDs?
If Indian companies continue to depend on its weak currency, then how would Indian economy survive in a world where all currencies have equal value? Survival of the fittest.. Only greater innovation can help us in that case..
We need to have knowledge and technological advantage if India wants to become a superpower, not low cost based cheap labor advantage! Let the Chinese do it..
I hope that rupee becomes more and more stronger so that Indians are forced to use their brains and come up with innovative products and next generation technologies, than to provide low end services
We need to create a situation where other countries line up to buy our F-16s, to buy our operating systems, to buy our mobile phones and I-pods, to buy our Boeing, to buy our Mercedes
A stronger rupee means we can easily afford foreign trips! This is what I wrote in one of my earlier blogs
A stronger rupee means Indians can buy things anywhere in the world on par with developed economies! We dont have to spend crores of rupees then to buy a Boeing! We don’t have to pay tens of thousands of rupees for international air travels! A stronger rupee means greater international exposure! There wont be a difference between buying a Maruti and buying a Mercedes! One can go on a trip to the Grand Canyon just like the way one goes to Ladakh or Nepal ! How do you think american citizens are able to tour all over the world? Because they earn more? No. But because their currency USD is stronger.. and this is where a strong rupee will lead us to!
I am not saying providing low end services is wrong .. It gave us a very good start in the 90s. But that should definitely not be the bread and butter fueling our economic boom indefinitely in the future.. For the simple reason that it can’t continue to do so any longer.. other low cost destinations, cheaper than India are already coming up in the world Let us move ahead become more innovative.. the journey has just started This is just the beginning of all the beginnings
yes I agree with u Gurudev, there is an exploitation of Indian brains for their economic growth in other nations (like US) both in ONSHORE and OFFSHORE, the great IIT brains are drained at ONSHORE and the some of the remaining talented, wonderful brains are drained at offshore IT companies, so u can find very few brains working for the pure Indian Companies and do their invovative work. This mainly starts at college level(all the engineering colleges in all states) all IT companies come first for the recruitment and take away the best brains first and then comes our Innovative Indian companies for taking the left over brains. So we cannot make our innovations faster and which inturn results in strenthenning the rupee very slowly. But now a days all the young people openning their eyes as they are now very much aware of what will happen when they go into an IT company and not tempted towards the IT jobs. I hope this will soon make the things work to make our rupee stronger and strongest.
Yes, its high time that we come up with innovative original ideas and creative products if we are to create a stable ever developing economy. The chinese model or the current service oriented Indian model wont sustain for long. The money India makes by servicing 10 big American clients is taken back by US by just selling CDs of software by companies like Oracle and Microsoft.
Hi Gurudev, I saw your MQ_CD article and liked it very much, thanks for this.
I just browsed through your website and realised that I know you. I have sort of replied (criticised) this article of yours in an email chain :-)
Thanks, and good going.
-SA
Great Shaju :)
Nice to meet you here. Thank you very much for commenting :)
“We need to have knowledge and technological advantage if India wants to become a superpower, not low cost based cheap labor advantage! Let the Chinese do it..”
Superb. That would be awesome if I could buy super PCs for just 10000 rupees from cyberpower.com
Very well said Ramana, I completly agree with the points put by you…but i am not yet sure that stronger rupee is completly superficial or bogus….
Many of my friends say that due to British Raj we(indians) got english and some technology and this helped us in the current scenario and slowly we are making our mark in global market, which is true….. but i ask them this is only 1 side we think of, if we had not got english and that kind of technology…may be we would have been progressed in some different better direction may be spiritual and self developed and self confident with our own thinking….
Gurudev,
The chicken or egg first is the situation while you are solving the problem between rich and poor.
I am sure, you are all going to be upset what I am going to say but truth to be told.
The “”stronger rupee”” is artificial , superficial and bogus .
Artificial ?Stronger rupee is created by off shoring. Purely off shoring nothing but off shoring and only off shoring. There is no manufacturing and no infrastructure buildup in India.. Where this ?stronger Rupee? come in the picture? They say when United States sneezes India and other countries gets cold and we all witnessed last month when US stocks were shaky Indian stock market took a dive.
The IT companies like WIPRO , Infosys, Satyam limit their growth to big cities like
Bangalore , Madras and Hyderabad. How about other cities like Madhurai, Vizag , Kochin etc.. with one billion population in India how come companies are struggling to find employees in Hyderabad and Bangalore. Some times these salaries are higher than US salaries to my amazement, while second tier cities are struggling with massive unemployment. Once the knowledge and skills are transferred to second tier cities you see the decline in salaries .in the big cities which is natural.
The value of rupee is superficial because the companies that make money they are not spending any money on infrastructure. That they left to the government .
Infrastructure costs billions of rupees and if we are serious to implement it , the wealth spreads to rural Indian population ( labor force) to build that infrastructure.
The last but not least India completely ignored the funding for research and development, where once the India was cradle for basic research, produced Noble laureates like CV Raman, Chandrasekhar and equally great scientists like Narlikar, Satyandera Nath Bose, Homi Baba,.
It is more important to all Indians to be fair to the rest of the population in rural areas and caring for old and young than ?Stronger Rupee?.
I do all these things because I love India , I want India to be righteous than rich,
I want India to be ethical than salesmanship and I want India to be more spiritual than
tall buildings.
I completely agree with you Dhanya. We need the best politicians to bridge the rich and poor divide in the system, and the best innovations from our young brains to liberate us from the risky offshoring model. Offshoring suits best for a developing economy, but as growth increases the rupee is bound to become stronger and in turn cost effective offshoring will be affected by this! So the solution is innovation and products, instead of offshoring and services.
gurudev,
I was planning to write an article on stronger rupee and was going through.. It stopped me in your article and the opinions.. I felt they are really informative. My comment is that we should not be afraid of this stronger rupee.. It is right that we might lose some of our business to China and so.. But don’t u think that those business will lack talents?. I think only the BPO and Call centers business will be a bit effected.. IT companies might lose profit but not business.. Skilled labor work will be there in India..I think should take fast steps in innovative ideas as you have mentioned. Our politicians should think about making India a super power other than opposing each and every step of development. I feel ashamed to hear politicians comments on US. India lack young brained Politicians.. We should not be slave for a weak rupee.. we should become stronger and stronger with talents as the rupee turns stronger….
gurudev,
I was planning to write an article on stronger rupee and was going through.. It stopped me in your article and the opinions.. I felt they are really informative. My comment is that we should be afraid of this stronger rupee.. It is right that we might lose some of our business to China and so.. But don’t u think that those business will lack talents?. I think only the BPO and Call centers business will be a bit effected.. IT companies might lose profit but not business.. Skilled labor work will be there in India..I think should take fast steps in innovative ideas as you have mentioned. Our politicians should think about making India a super power other than opposing each and every step of development. I feel ashamed to hear politicians comments on US. India lack young brained Politicians.. We should not be slave for a weak rupee.. we should become stronger and stronger with talents as the rupee turns stronger….
gurudev,
i had posted my comments before but made a mistake… i mean to say we should not be slave for a weak rupee.
gurudev,
i had posted my comments before but made a mistake… i mean to say we should not be slave for a weak rupee.
gurudev,
i made a mistake… i mean to say we should not be slave for aweak rupee..
gurudev,
I was planning to write an article on stronger rupee and was going through.. It stopped me in your article and the opinions.. I felt they are really informative. My comment is that we should be afraid of this stronger rupee.. It is right that we might lose some of our business to China and so.. But don’t u think that those business will lack talents?. I think only the BPO and Call centers business will be a bit effected.. IT companies might lose profit but not business.. Skilled labor work will be there in India..I think should take fast steps in innovative ideas as you have mentioned. Our politicians should think about making India a super power other than opposing each and every step of development. I feel ashamed to hear politicians comments on US. India lack young brained Politicians.. We should be slave for a weak rupee.. we should be become stronger and stronger with talents as the rupee become turns stronger….
Sumit
Even though the dollar is weakening, there are other currencies which have become still weaker!! The strength of the Indian rupee owes a lot to the growing economy, increased purchasing power and investor faith in the system.
UN is the decision making system? Its actually US on behalf of UN. UN is becoming irrelevant these days with all rubber stamp countries of US. The proposed nuclear deal is a step towards trying to include India in that list of rubber stamp nations.
Yes, we need to be more creative, be more innovative and do a mark on a macro level. Having said that, there is nothing called insignificant improvement. We have obviously achieved a lot in the last 8-10 years. Its a great going with a lot more scope available to do even better.
We need to remember that, what India is today is INSPITE of its politicians!
Hi gurudev
You are right in what you have written though only in parts…if today rs has risen to 39 levels its got nothing to do by the success of RBI or any measures taken..this has been pure dollar depriciation.
All of us wld want India to be a super power…but we need to keep few things in mind…we ain’t in g8..we aint anywhr..in the decision making team be it in UN even…unless india makes a mark in the macro scenario…micro can never get going
India is getting outsourced work from US or UK firms due to (not necessarily in order of importance):
(1) India has English language skills
(2) India has lower costs
(3) Indians have more than adequate technical education/talent that they can perform outsourced tasks
(4) Indians work hard and aim to please foreign clients
(5) Outsourced tasks are not highly risky to transfer
(6) Research and Development tasks that are transfered are under the guidance and control of foreign MNC top managements
(7) Outsourced tasks are those that are not hampered by inadequate infrastructure (especially various services, R/D, bio-tech, design services, etc.)
(8) India is a liberal, secular and open democracy, hence Westerners feel comfortable in investment and trade even though they have doubts on corruption, IP, rule of law and other issues, and
(9) NRIs working in the US/UK and Indians (from India) interacting with US/UK companies have convinced American /British managers of “”India”” (as a country) or “”Indian”” (as people/culture) brand. In short, India/Indians have created a great brand value which has increased in the last decade significantly. This is evident form pairing of India with China (India and China) as opposed to pairing of India with Pakistan
(India and Pakistan) in Western thinking. Needless to say, China also has an excellent brand name in the globalized world as a country and for its low-end-value products.
Given above advantages, India should not worry about possible shrinkage in US/UK outsourced work, as India is the most favored destination for IT (and some other) outsourced work. INR appreciation will not affect Indian IT companies as the outsourcing demand is inelastic (specially wrt India). US/UK are countries that have inelastic demand wrt many goods and services. For example, with petrol price prices 3 time higher than 2-3 years ago, the demand for petrol has not substantially decreased in the US. Hence, Indian companies should raise prices or price their products in INR.
But, I totally agree with the premise that India needs to move up to the value-added tasks, products and services through creativity and risk taking and create “”branded”” products in the select areas of fashion, jewelry, clothing, food, and of course, in India and Indians themselves (as cited above). Also, we should not forget powerful and increasingly appealing “”Bollywood”” brand.
To create branding or high-end-high-value products requires either superbly crafted product or service AND astute marketing. To this day even Japanese have not been able to match Europeans/Americans in the number of well-known brands.
To create branding and company power/reputation (or legend), we need effective leaders and risk takers like Sir Richard Branson, Steve Jobs, Bill Gates, et al.
India’s emphasis on services is a problem in this area. It is somewhat difficult to create brand name in services. Local “”powerful brands are not easily transferable internationally. It took McDonalds 35+ years to be a globalized brand. It took Coke to be 20+ years to be an international brand. It took Microsoft less than 15 years (some would say 10 years) to make “”Windows”” a powerful global brand. It took Adidas and Nike about 15 years to be global brands. It took Hyundai to be 15 years to an international brand.
While China has 55%, 35% and 10% (of GDP) in manufacturing, service and agriculture sectors. India has 27%, 51% and 22%. Thus, Indian economy is more service and agriculture oriented. Hence, it has more of a “”problem”” compared to China due to its service orientation.
The best chance for India to create a global brand is in the manufacturing sectors like auto, pharma, bio-tech, energy, or some emerging sun-rise industry like IT, telecommunications etc. in some unique technologically advanced niches (coupled with strong cross-border marketing, PR, and brand building ) which do not depend on scale (China has already ahead in appliance, PCs, electronic parts, etc) .
Sorry for the long post….
This topic is deinately interesting and educational. I compare this to formation of life it self according to science.
The dynamic conditions not dead like atmosphere produce life. Here I see that dynamism and thought provoking discussions , may be sometimes emotional, but evetually they willl set the right course for the country and the people.
I think this is the best blog on the internet if one wants to get a lateral perspective of the world we live in. Keep up the great work.
After reading the articles in your blog, I know a lot more about India and world now than ever before and can say with true pride that I am a proud Indian. Your blog articles should be made part of school and college textbooks in India.
Hi Mahmood
Nice to see you back :)
Yes at a personal level when we look from their perspective these Indians in dubai are right because they went to those far away countries many staying away from their families to make some quick money and come back to India. Now as rupee gets stronger, it means that they have to stay there for longer to earn their target money!
Looking at the national interests however in the long run, stronger rupee is good because in the days ahead people will not have to go to dubai to make money when the rupee itself is much stronger!! The current situation of some liking and some not liking the stronger rupee, happens in any transition phase when people from one side of the fence have to make a jump to the other side of the fence, because most of the people are allergic to ‘change’
However ‘change’ is the only truth, and we should always welcome positive changes with a wide open arm
It might be a bit difficult to stay up in the night and study a bit longer.. but in the long run it helps when we get good marks in the exams :)
Thanks Harsh for your comments.. yes you are right!
HI All,
Guys i was not able to check the site i was on a personal visit to Dubai,i just wanted to add something to this blog ie stronger rupee the guys working and earnign their living are curbing for the fact that indian rupee is growing stronger and they get very few rupees per dirhams i just want to make a point that we have become so selfish that we are not able to see our economy growing as it wil give the gusy out there in dubai lesser saving iam just shell shocked as what can we do or how can we become united and progress our country if we are so selfishhh iam completely broken,having said that i just want to understand from all those who visit this site and gurudev from you as well are they ie people working in dubai justified in curbing and not wanting rupee to grew stronger
Infy is now trying to take over Capgemini!! It was a rumour and nothing short of a runour!! As per Dollar Vs Rupee i agree completely with the article that indian companies must find innovative ways of increasing their topline and must stop depending on a depreciating rupee for support.
A lot of companies will have to change course to make it big in the nest decade. Infy is on the right lines as it will try to convert from a pure tech provider to a Technology Consulting firm in the next 10 yrs. BTW india does have a world class product called FINACLE (by infy again) which is a banking information system so companies have started investing in inoovative products rather than being the back office of north america!!
thats my two cents!!
It is Saahacharyam ????????
what is the word for synergy in sanskrit??
Yes Vineeth
I completely agree with you. WE have to change things. WE have to architect the future of this country and planet.
Like Gandhi said ‘Be the change you want to see in the society’!
All the best to all of us :)
Hello Gurudev & Members,
I had been an avid reader of most of the blogs posted by Gurudev..Dude,you really are kicking those grey cells out in each of us.. :-) I agree that I don’t read all the articles but I was able to easily sift through the contents and still get a gist of it.. For the last 3 months, I had been a silent reader of this particular topic.. There had been very thought provoking discussions, links on whats going to happen, whats not going to happen and so on.. there are solutions also from some members as to how India should be and what the government needs to do.. whats the reason for US $ getting weaker and why some of us dont like rupee becoming stronger (I am still puzzled to comprehend why some of the members dont want to see a stronger Indian rupee :-) )
Anyways, thats not the point what I am trying to make.. Instead of hoping for others(like governmentUS he ministers etc) to change and create the model of India(in the true sense)or say come up with innovative products( fair enough if there are talented people out there who can do that as Gurudev suggested), why cant we do things that under our control??? Like the suggestion from Mahmood…100rs by say 50 folks..5000rs is more than sufficient to meet the educational needs of 30 kids in govnmnt schools for a month..and believe me, there are many, many such kids who badly needs help,if you can provide them..
small drops of rain makes a big ocean.. its gud to go with the final dream in mind, but it all happens with the first step..To quote from my own personal experience,myself and couple of my friends(working in different IT companies) started something like this 2 years back and now we support close to 3 homes and caters to the need of 20-30 scholarship requests a month.. It wasn’t easy and there were many who were preaching high but when it came out to be actions, u couldn’t find the preachers any more..
So all that i am trying to say is instead of worrying what govrmnt can do or coming up with innovative ideas(plz dont get me wrong here,,we need to dream and have the ideas if India is going to be self depenedant.. no denial on that..but thats a long term goal.. u cant just have an innovative idea and implement it straightaway), do your part in whatever small ways you can.. Its YOU that can change the course..and when each of us are able to make that choice ..of being able to respond rather than passing the bucks… then we would see a new india coming up.. where synergy exists..
Kasi
Yes you are right.. only we need to ensure that our industries like IT sector remove their dependency on weak currency for profits and get more innovative
amreekandesi
yes a very lot optimistic expecting all Indian youth to give in their more than 100% for the cause :)
We have to use the word “”impossible”” with great caution!
Yes, the current IT model has served its purpose.. but is now about to expire, and we need a new model.. a bit more innovative this time..
Nice post. A bit too optimistic..but yea someday India will get there.
And yes, for now our IT companies need to change their focus somewhat. They cannot keep doing things the same way forever. Without innovation, the current model might not last too long.
I am excited that INR is on a steady growth for the past few months by now. It is at around 39 Rs per Dollar. I was hoping to see it go upto ~35 by this year end. Hopes still alive!
Well Done, India!
Thanks ursri for a wonderful and informative and thought provoking link.
Nice link ursri..
let us accelerate that 60 years to next 5-10 years, I am running out of patience :)
Dear Mahmood
Thank you and Gurudev for your feedbak.
I happend to watch part of CNN IBN special program on “”India and Next 60 Years”” yesterday -the 15th Aug.
Participant were Mittal, Mukesh Ambani, Azim Premji and a Central Minister(forgot the name).
Link: http://www.ibnlive.com/videos/46913/.html
Highlights
– Urban economical groth is gradually increasing but as that of rural area which constitutes highest percentage of country is just 2%.
– Agriculture is the one sector which needs attention but quite tough to implement changes.
– India is just 60 yrs young in next 60 yrs it will have a large pool of potential educated human resource also consumers.
– It was mentioned that there is a need for changing way of thinking and attitude in spite of claimed stability and growth.
– The young India needs to take opportunity of current favorable situation, take step after changed attitude in this direction.
It was summarized that ?The country should be at the world head-table in next 60 years?.
There we are ideas coming closer to reality i completely agree with ursri and dev regarding we should not allow them poor to become lazy instead we can offer interest free loans,regarding politics if we try to bash the politicians for not doing anything we are only doing good to them and it wil not effect them can any one let us know how can we go along with providing interest free loans once we accumulate money from the youth of india,and i firmly believe if educated youth start looking towards politics as career im sure it would have a larger impact in building a superpower india , initiative already taken by Times of India as they are searching for leaders from all over india.
I agree with ursri.
Mahmood has a good intention of building a stronger India, but we need to build stronger Indians for that first.
Mahmoon my suggestion is that instead of donating the money to poor, what we should do is give this money as interest free loan to the poor, so that they can set up their own small businesses and then return it back once they are self sufficient. And then the same money can then be used to help other poor family to become self sufficient, etc
But see how governments are behaving stupidly.
The current Tamilnadu government is a dumb one, I sometimes feel how on earth can such people win the elections, while actually these candidates should be losing their deposits!
What a crappy stupid thing of saying we will gift a television to all poor houses if we win, a cheap electoral gimmick.
Government is not a charity organization. Its aim should be to make people self reliant, not make them dependent forever on the government. What about fridge? bike? car? AC, washing machine? etc
The government should instead be creating programmes and improving social health where poor people of tamilnadu will become econonomically strong and will have the buying power to buy a television on their own with their own earned money.
Stupid government and a stupid finance minister called Chidambram who supported this bribe for votes.
Dear Mahmood
It is noteworthy that you have mentioned how to help the needy by curbing the excessive luxuries. Should we allow the person to depend on such contribution and become lazy? there are expcetions for totally handicapped /young/old/challenged ppl.
I have been inspired by many of my frnds. They made me think and work on my own to achieve my goals. Yes initial support is required. But how long can any one depend on others. It is important to wake the ppl to become independent and should be able to inspire other to follow same right path.
I think you agree with me
Posted a reply to your article at http://krishami.blogspot.com/2007/08/rising-rupee-dollar-ratio.html. I had got it in email through a friend.
Mahmood
I am really very happy to see your response and willingness to get things into practical mode. 100 rupees per person is a lot of money, even if it is contributed to only by those Indians in IT industry!
But then our real problem today is not money.. its ideas.. innovative ideas.. expertise.. the need to think big, aim high, dream the impossible.. a quest to achieve.. to realize our own true potential
For ex see http://hitxp.wordpress.com/2007/08/11/moser-baer-another-indian-success-story
I request every individual Indian who wants to make India a great power, to excel to the top and be the #1 in his/her field.. it might be IT or biotechnology or singing or dance or music or athletics or teaching or agriculture or whatever your field is.. Aim at becoming the #1 in that.. Dream and realize the impossible..
Hi All,
I am back i am very thankful to guru for creating such a important and valuable blog and now when the youth of india have together on one platform discussing stronger rupee stronger India , I think its time to come out with ideas and lets c if we can make it to a end product i have seen so many times you saying we have to come with innovative ideas ie we have just identified the problem so now if we all can come together and discuss what all innovation can we do no matter in which field it can be in agriculture, IT, Infrastructure etc IM NOT much in to economics but lets try to analyse how the stronger rupee will affect the mass and how they can benefit from these as its the responsibility of youth like us to take initiative to eradicate poverty though its a tough task but still we possess the largest of biggest pardon me for the grammar youth generation though this is sidetracking from the main point but im sure its worth given a try.from my point of view if everymonth we can contribute say 100 rs thats cost of a biryani and accumulate it and create a fund for the poor and professionaly managed im sure it would make a difference in the lives of few people as i belive development should be of people along with the economy,and i put my view in front of everyone i truly belive in the power of 100 ie 100 rs per month from every youth wil make a difference but the problem is managing and seeing that the money is used for rite purpose.
Muneer
Yes, thats what exactly I have been saying for the nth time again, if you have read the comments..
I didnt say make rupee exchange rate stronger and India will become strong.. if you read the article in detail…
I said create a environment where the Indian economy is INDEPENDENT of the rupee exchange rate, which means come with innovative products.. just like the way Japan is.. for Japan it doenst matter whether Yen is strong or weak, and thats purely because of their innovation and products.. people buy Sony products across the world no matter how costly they are..
We need to come up with similar innovativeness, than relying on a weak currency and cheap labour for our exports.. already rupee is becoming stronger due to our growing economy.. and once we have our own global product brands and free ourselves from the cheap exports.. rupee will automatically become even more stronger..
Also Inside Japan the inflation is not as high as India.. so you cant compare India and Japan in that aspect.. A stronger rupee would mean cheaper imports and bring down inflation in the imported goods section..
Take the case of Japan,which is one of the developed countries in Asia.
1 Indian Rs = 2.89894 Japanese Yen (Courtesy http://www.xe.com)
This means that , Indian Rupees is stronger compared to the Japanese Yen?
But, Does is it mean that innovative products , technical solutions & next generation technologies are not coming out from Japan?
Does it mean that , the Japanese can’t afford Foreign trips & expensive cars?
The fact being the opposite, we need to think differently.
What went wrong in the recent history was the loss of pride of Indianness, thanks to the western style of education which started showing everything that is west as being great and innovative and scientific and everything that is Indian as being backward and obsolete and unscientific, hiding the innovation and talent of ancient India…
Most Indians today dont even know about the glorious past of India.. I am talking about pre-colonial, pre-british India…
And this is because very rarely does our syllabus cover these things in great detail.. In science we read more of modern western innovations and industrial revolution than about ancient Indian science… A true education system should present both the extremes in great detail to the students to create an unbiased opinion in them as they grow…
In history, today children in India read more about world wars, colonialism and cold war than about the ancient Indian heritage and achievements… How many of the topics discussed about ancient India in my blog articles can one see in the school textbooks today in India??
When there is a lack of information about the greatness of ancient India.. the pride about one’s own culture and heritage would be lost.. which is what the british wanted when they introduced english education in India…
Once there is not much a student knows about his own country or heritage, and when western science and culture is highlighted, west looks more attractive.. a sense of his own country being great will be lost..
I was lucky in this aspect that I got a great schooling at home, what I consider to be the true education.. about the glorious past of ancient India.. its rich culture and scientific values.. etc which makes me really proud of being an Indian… and this pride inspires me to build an even more glorious future India… and which is why I have been writing as many things as I know and trying to tell all the Indians how great our country really is..
I am sorry to say this.. but most youth in India today really have absolutely no Idea about how great India is.. because most of their knowledge, even among those who read a lot is based on the works of colonial historians who have twisted history left and right.. Initial works of Max muller are just an example of that.. the way McCauley wanted to EDUCATE Indians about the greatness of west and the inferiority of Indian culture..
I will give you another example.. the pyramids of Egypt are being researched so much… volumes have been written on them.. every week there is one or other program on the discovery and NG channels about the pyramids…
There are thousands of material to be researched and analyzed in India.. But is it being done?? Look at the status of our ancient monuments.. except a handful of them, rest all are ignored.. I dont consider Taj Mahal to be the greatest wonder in India.. Look at the Brihadeshwara temple.. teh ajanta ellora cave temples.. the Hampi ruins..
What about the Iron pillar of delhi.. see http://hitxp.wordpress.com/2007/03/15/iron-pillar-great-ancient-indian-metallurgy/
Why are not we doing researches on the saraswati valley civilization? About ancient texts like Vimana shastra, vedic math.. the hidden knowledge in the vedas… the puranas..
All because we lack a sense of pride about our culture.. inspite of thousands of heritage sites in front of us, we still ignore them and prefer to look outside India..
If one really starts looking with an open eye, India can be easily converted into the world’s largest tourist destination…
Indian culture and heritage can attract largest number of historians and archaeologists to do research…
Physicists like Oppenheimer have found descriptions of nuclear weapons in Mahabharatha and we even today tend to push off it as a mythology.. when a text contains 50 generations of successive kings.. described in detail about the names, kingdoms, relations between them, etc when the war material has been described in so detail and depth.. where each and every event has been described accurately using planetary and star positions.. what makes one think that it is mythology and not history??
Why arent we conducting research on these subjects in a large scale effort? Try to map things and unearth the truth..
On the contrary I was surprised to see in the west.. even if their history is not really that old.. the way they preserve buildings that are just 100-200 years old was amazing.. the way they investigate into any small mystery.. for instance I read recently on how people are investigating on a 200 year old wall in one of the buildings of America where 8-10 bricks were positioned in a different manner than the other bricks on the wall!!!
All this requires a basic sense of awareness and pride about our own heritage.. See how the youth today are happy going to pubs bars and discos..
When we know for sure that we used to walk one day.. we can be confident that we can run today.. its very important to know and preserve our true history, science and culture..
I mean there are a lot more things in that.. but thanks to globalisation and internet today… atleast those Indians who are really interested and informed and intelligent..
we have greater chances of building a strong developed nation…
So my effort here is to spread the knowledge and information as much as possible.. the words for those who yet don’t know.. as a preface for the deeds that are to follow..
Coming Soon
The Rise of India…
to extend further with simple eg : most of the people other than india (% wise) eat meat and what not…what is it in them that makes them feel so cool or dont feel ashamed of cutting animals whereas we feel the gilt or dislike…why there thinking is different than us…I dont want to say if there thinking or our thinking is right or wrong…just i feel theres something that they take very casually and we dont…i feel there GOD must not be telling them to eat non-veg.
thanks for the explanation :)
My point in writing above was that I think we also have the same kind of attitude or behaviour as the west people, but what has lacked in us (may be in the past) by which we have reached the stage that we are in right now..remember we were the richest country by all factors….
Why we were always conqured / ruled by someone…there must be something which is why we indians are somewhat reluctant to take risks ( except for few exceptions )..I was actually trying to think the impossible…as where something went wrong in the past….
Sainath
I am in complete agreement with your views.. you are absolutely right…
Since you said that you were trying to see what is the difference between Indians and the nations that are developed… I was just trying to give a part of my view on that about how attitude matters, passion for what we do, thinking big, etc..
Oh Yes, my real name is Gurudev, which is why I have a photo of mine in the blog here :)
Cheers
Guru
@ Gurudev
I didn’t understand if you were annoyed by something I wrote…since unable to understand if you are trying to tell me something or speaking your mind…..or you are trying to tell me about the line “”path is unknown yet””…..I didn’t understand if you agreed to my views or not?
PV and Dev,
very well said..
the journey has just started.. a long way to go..
we will definitely get there as long as our sight is bang on target..
Sainath
All that matters in life is the attitude.. the belief in self.. the enthusiasm to achieve by aiming at what others call ‘impossible’.. a look beyond one’s self, towards your society and country… and more than anything else, the passion for what you do…
There are countries like japan which import almost everything in the world for their basic necessities.. it is almost like a floating factory.. and yet see the heights they have reached.. reason?? attitude…
What is the amount of natural resources they have??
You will get a good example of Japanese attitude when you read Akio Morita, the founder of Sony in the book “”Made in Japan””, a wonderful book for enterpreuners
Countries like America are relatively very new compared to India.. just about 200-250 years old.. and yet see what they have achieved..
for instance, American attitude towards success could be found in the book ‘At Any Cost’, the book that talks about Jack Welch, the person who made GE what it is today.. another wonderful book for enterpreuners
Even in India we have a similar example.. Dhirubhai Ambani.. Tata… we need many more of them.. with a much more variety.. thats all!
Hi Gurudev,
I was looking for something, since the thought that how the people in west are happier and have easy life than india, was going in my mind from some time. What they have (or think) in them that we indians don’t have and also about the rupee appreciation…..and came accross this blog of yours…..
The first thing came to mind when I read was
“”Speaks mind out, but the path is yet unkown “”.
I would like to add on india being stronger if we are self sufficient by an example of our Music and Bollywood..
We are self sufficient in these areas and dont depend on west for the knowledge hence we are amongst the Top in these areas in the world….similar thing is required in other areas…which i am sure slowly and steady younger generation will make way to…but sincere respected teachers and sincere respecting students are required like the old days….
I have also read other articles on your site..and are good.
Your site is really good knwoledge source…thanks for that.
Hope to see more and more information on your site and hope you dont get borred on reading and providing information.
I am also some what surprised on your name Gurudev..is this real name or given to you :)
Thanks and Regards,
Sainath
I saw this hoarding on western express highway (mumbai) by one of the local newspapers displaying ..
“”Sensex crossed 15,000 points ..
When will 230 million indians cross poverty line ..?””
That really touched me .. We have one section of the society becoming richer and one going poorer .. This imbalance will not help India . We need equality in terms of standard of life, infrastructure, financial security ..etc for everyone. I remember one of the article by GD on Pharma cos, .. and how they are minting money… Just the other I got to know that nearly 2% of india’s population goes below poverty line every year due to medical expenses incurred .. I am just wondering what is the percentage of people losing life due to no medical security.
I know its a journey .. a long journey ..but we will make it there some day .. Jai Hind.
My 2 cents on the topic:
If India doesn’t use the new found wealth in improving it’s infrastructure & in spurring innovation, that time won’t be far away when there will be countries able to provide the same off shoring services at a lower cost than us. We need to be putting all the brilliant minds into moving towards being a self sustainable economy. Look at China. They’ve been investing the wealth they make in low cost manufacturing, into infrastructure, education & even buying chunks of US private equity firms.
Satish Krishna
Thanks for your comments.. I am in total agreement with what you said.. instead of adhoc development measures.. we need proper planning.. and an execution of a well laid out project structure..
where all sections of the society are made to grow simultaneously and get the benefits of the development without any divisions in the society…
What is the use of such a development which can only show as big numbers in our forex reserves where as on the other hand farmers continue to commit suicides !!!
There are no real leaders who can plan and execute the “”superpower India”” dream like a professional project… so, we, the youth of this country will do it on our own..
Oh My God!!
Andrew, now that’s a real big list :)
Thanks for searching the web on that! You have done a good research..
Well, America is a superpower not because all 300 million americans are brilliant people with original innovations.. but because of the top few hundred world class innovators from America..
Similarly to make India a superpower, the top few 100 would be enough!! Even if you exclude the above mentioned list of people from the Indian population there are still more than a billion people left in India ;)
Hey Dude,
While you are trying to build a Stronger India, see how your other fellow Indians are happily copy pasting your article as theirs!!! A simple google search for Stronger Rupee = Stronger India, gave these results to me… These are the Indians with whom you are planning to build a superpower ;) All the best
http://tides.wordpress.com/2007/08/07/stronger-rupee-stronger-india/
http://padmasrinivas.blogspot.com/2007/08/stronger-rupee-stronger-india.html
http://udhandaraman.spaces.live.com/Blog/cns!3C6D667AF4FEFE45!178.entry
http://sandipkakde.blogspot.com/2007/08/stronger-rupee-stronger-india.html
http://mybestblogs.sulekha.com/blog/post/2007/08/stronger-rupee-stronger-india.htm
http://ssunis.sulekha.com/blog/post/2007/08/stronger-rupee-stronger-india-time-to.htm
http://friend4al.sulekha.com/blog/post/2007/08/stronger-rupee-stronger-india.htm
http://harit.wordpress.com/2007/08/03/hello-world/
http://www.easybees.com/article_display.aspx?article_id=541
http://finance.currentsamachar.com/business3.php
http://www.humsurfer.com/iit-engineer-develops-glue-four-times-stronger-than-geckos-toes
http://www.bestofindya.com/news/story.php?title=Stronger_Rupee_-_Stronger_India__%AB_A_Rising_Tidehellip
http://www.thinkdigit.com/forum/showthread.php?p=569668
http://web-chutney.sulekha.com/
great blog, very thouhgt provoking, thanks all for ur contribution. thanks thatskannada.com, through which i got link to this blog.
as some body mentioned about child and milk theory we cant still depend on this low end service based economy. need move forward.
After IT we went for ITES(SORT OF DOWN GRADING, FAIR ENOUGH) we shall try moving upwards.
Is it cheap labour or weak currency which made US superpower or is it the same thing which made other euro countries inspite of being completely ravaged 2 nd world war(infact british economy was so weak b””cos war they quit us, this was one of the main reasons we got(should i say they quit) indepedence, amongst all other struggles for independence.
It is their managerial skills, ability to extract best from the great talent pool from 3rd world countries,and marketing those products devoloped by these so called talents and getting whatever price they want.
Nothing is a rocket science(those of u know who are there in these countries, about their science and maths abilities)
I work in one of these EU countries I wonder how they have achieved this devoloped country status inspite of having so much of ageold world war survivers,who work less than 40 hrs(now it is 37.5 hrs, their current target is to get it 35hrs week) a week, take off sick at their whimsies. Inspite all these things they are growing at 3% of their GDP(which is really fantastic for already devoloped economy).
If we are wondered about this we need to start observing structure of their economy, business strategies, psychological manipulations and host of other things. so that we can put stuctural and organisational changes in most of our institutions(certainly no change is needed in our institution of marriege or family value system)
We shall not blame it on corruption, though it is an hinderence, It is even higher in these countries, big economy=big money=big social problems=big corruption. better not talk about it.
coming to the point. as one of respondents pointed very fast change is always dangerous, we had better be slow.
As they say u can prediict hollywood not wall street. same applies to economics. It does not need great economic thoerist but a practical(simple) economists(see how our ullu(lullu) turned our railways in to productive one, where so many decent,educated railway ministers like T M A Pai, Dasappa and Kengal Hanumantaiah (though, i acept that, all these were very old timers) failed.
But we cant agree to this self proclaimed genieuses of IT industries to weaken our currency only for their profits sake.
Innovative People always grow out of challenges. so is greatest(maximum benefits) achievements are the product of great challenges. go ahead and do it.
Last but not the least, we are talking abt economy, innovations and infrastucture, we shall not forget investment in our social infrastucture, b””cos the benefits outwiegh investments( eg. we need study west europian economies in the past 50 years, inspite of their laid back and limited working hrs and to make matters worse their debts incurred because of wars, they are still sustaining, investment in health, envoron ment, social securities(though it is being misused to the core now a days) are few of the reasons they are still sustaining).
Such a vast discussion…so many ideas…india indeed could tread the path of innovation had there been enough left to lead them. The problem is far more deep rooted than a mere facade of appreciating rupee. The main problem is education. I dont have to write an essay here to explain the education system and lack of quality education centres in India. Let alone a handful of good institues in India (which lag way behind in global rankings). Indians are sharp and so they can perform better when they receive enough incentives to do so. Since india cannot give them sufficient incentives at the nascent stages, the cream moves abroad to countries like the US. India is seemingly incapacitated to harness itw own poential. The rich remain rich and the poor remain poor. The gap has become too vast to be bridged so easily. And its all due to lack of education in our good old India.
Let me also clarify that by education, i do not solely intend to refer to textual stuff, but mere awareness among the masses as well to do the right thing..and not fall prey to vote bank politics.
ursri
I completely agree with you.. 100% with your thoughts
A good family background is very essential for social health..
A child brought up in a joint family thinks beyond him/her for the benefit of the entire family and on similar lines for the good of the entire society
A child brought up in a small family usually ends up being self centred, egoistic.. thinking only for one’s own good..
Which is why in villages of India we can see how the whole village knows each other.. helps each other etc..
where as in the cities, people dont even know their neighbours!!
I would like to add further. I do not advocate renounced ? sage life. We do can lead luxury life being self sustained. We should be able to manage personal finance, think how it can work for us. A Book named Rich dad and poor dad by Robert K. is one such influential towards financial independence on how to afford our needs using profit rather than spending hard earned money. This gives us time to take up our interests and carry invention for right cause.
We should also have strong desire and invest some time for knowledge acquisition, service to society on periodic basis. This would make one and one?s society/environment stronger and bring harmony.
It is a wonderful experience to read through the thread. It is amazing that I am also part of such thinking.
Mr. Gurudev, the article is thought provoking. It is been circulated even in our office itseems. I came to know about the link on reading thatskannada.oneindia.com article.
I am in IT field from past 11 yrs. I have seen the family values deteriorating and current generation hardly has anything to pass on to next generation except money. So the money has become the back bone of life. It is essential but it shouldn?t be made vital element for living and winning. Dr. Abdul Kalam thinks big but never looks for his personal financial achievement if I am correct. Can we put a bench mark to our needs? Can we draw line and define what happiness is? This may answer for our apprehension what if we loose job/we are paid less?
Well, it is also mentioned about social and economical conditions to build stronger India. People may think I am of old school of thought. But I strongly believe in many of the systems like A) Joint family-for financial, emotional and moral strength and unity also a great shock obsorbers during adversities. B)varnashrama ? for equal job/labour opportunity, curb imbalance due to competitions(definitely I do not support dominance of any caste) etc?
These all combined together right from a family base contributed to society?s strength in turn state?s or country?s.
It is my opportunity and my passion to learn Sanskrit ? led to know from my teacher about city/town building guidelines in Vedic period. Every child of any caste trained 64 arts which includes self defence, law etc.. but they were trained by their family on their specialization. This system made India self sustained and sufficient country. That time no Europe, no US existed for our economy. Now we need to adopt these guidelines for the apply as per current situation to become self sustained and also be part of world growth.
Even Gandhiji taught us how to be self sustained eg: cloth weaving, simple living.
Interesting URL : http://en.wikipedia.org/wiki/Economic_history_of_India
Yes Praveen
you are absolutely right.. no innovation is possible without r&d.. and r&d needs funding..
I have always been wondering.. the professors in US universities get nobel prizes.. while in our Indian universities many of the profs are given notices to have at least one thesis completed so that they can continue to be called professors!!
and about the money invested in r&d by IT companies.. they are purely business minded.. not having to really invest in research.. simply continue to rely on the west for innovation and just use the products west develops to make money..
Indian companies today like Infy, wipro, TCS etc own a lot to US companies like Microsoft, Oracle, Sun etc without whose core system software, programming languages there is no way that Infy, Wipro, TCS etc would have succeeded!
Hi
One more thing I would like to add — I have studied in US for my Masters and I was amazed to see amount of money companies put in for research in various universities and that’s why we had huge labs all over — example –I think most of the universities here have nanotech labs and m not sure most of the engineers back in India know about this upcoming technology at all — so the point is right now Indian companies are just minting money on “”BODY SHOPPING”” — r they ready to put money in vaious technical universities for the research students to develop newer technologies?? or they just wanna earn in short span and not invest for the future?
I think most of the guys in this blog are in IT field so ask your company what have they done in this regards? let us all know how big is thier investment?
Guys I am not in IT at all but still I am concerned.
Regards
Praveen
Chinmay, And now after seeing your comments and my email they have added a link back to my article saying the kannada article is a translation of my article.. I am really very grateful to you Chinmay for pointing this out to me.. and for the oneindia team for responding so quickly
At the same time I feel really very sad and hurt about the direction in which some of our own people are moving into.. Probably some of the readers who commented on my above article were referring to such people(who copied my article), when they said “”India can’t innovate!””
Oh Yes, by the way, I am a Kannadiga myself.. my kannada blog is at http://somberi.wordpress.com :)
Thanks a lot for pointing out this Chinmay..
I also saw your comment there.. but then after few minutes I saw that even your comment had been deleted…
I was not able to comment either..
These are the heights..
The least I would have expected was a link back from the site…
I have sent a mail to the oneindia.in team
Hope they will take action and respond on this..
Your article has been copied by some “”writer”” and published here.. So much for the integrity of ppl..
Its in kannada tough
http://thatskannada.oneindia.in/sahitya/article/070807rupee_dollar_hegde.html
Cheers
Chin
A really wonderful link Ram.. Thanks a lot for that!
Check this article : http://www.business-standard.com/common/storypage.php?autono=293464&leftnm=4&subLeft=0&chkFlg= on the same lines ……
Shrikant
If rupee becomes stronger and if we earn less, how does it matter as long as we have inflation under control.. for that less money you can buy the same things that you bought earlier for more money when rupee was weak.. because now rupeee will be strong :)
Yes, nobody is saying we should simply appreciate rupee and make it strong or weak.. in fact the rupee slowly becoming strong is a natural byproduct of our growing economy and we should now change direction away from low cost service oriented approach and should instead move towards innovative approaches for our economy which will remove our dependency on a weak rupee for exports…
Divya
Thank you very much for your comments.. I am happy that, if not all, atleast there are many like you who agree with my views.. Not all 300 million innovate.. its the top few 100 people who innovate and are the ones who really have made America a big power..
so, as long as there are optimists like you I am not really worried about those who say that we cant innovate and should continue to depend on services
Ram
Thanks a lot for letting me know about this :)
Hey I disagree with the below opinion.
If rupee becomes even stronger, you will also start earning less. Today if you earn 20k, if rupee appreciates from 40/$ to say 20/$, your earnings will diminish. If 100 people are having jobs, with that appreciation, jobs will too diminish. To such a huge economy like India, where 30% Indians are below poverty line, it will be foolish to let rupee appreciate this early. 11% appreciation of rupee from $44 to $40 within a short span of 3 months has been an issue for exporters and the country. There needs to be a market correction as this appreciation is due to strong FII investment. A stronger Rupee does not mean a stronger India at this moment. But this is welcome. As any decision by Finance ministry to depreciate the rupee will put extra burden on importers/common man, and make exporters happy i.e. rise in prices of commodities. A Strong India will come with gradual appreciation in rupee over a period of time. This is a slow process and instead of depreciating the rupee, FM should as Laxmi Narayanan, VP NASCOM says, help industry by giving them subsidy, waivers, etc to help reduce their losses and encourage them to fight with the competition.
Hi Gurudev,
I totally agree with your thoughts..Its time we move ahead and start concentrating on product development and manufacturing sector. A country’s growth can never rely on it ‘sweak currency value..its not meant to last!! It s time we Indians realise it.. We have enough Indian brains, as of today we dont have such big opportunities to showcase our innovative talents..To do the established Indian companies should begin to come out from their comfort zone of service and take risk by investing in product development ..take calculated risk and truly provide India the edge to perform and innovate along with strengthening rupee value.. A well written blog !! Its disappointing to see Indians feel bad about their strengthin currency ..Hope we move away from the myth and realize our dream for developed Nation..
Man … U’ve just started a wild fire on the Stronger Rupee = Stronger India …. If d article was the tip of the iceberg the entire set of comments puring in are truly amazing. I’ve never had an hair rising experience while reading a BLOG, u’ve d credit for being the first ….. Way to go …
the article is in FWD mode in almost all banks now ….. used even by the wealth manager, i got your article thru HDFC bank’s RM ….
The RMs (relationship managers) of the Banks are showin it 2 their clients about Investment opportunities inside India and Y India story is still not over and will continue to remain….. This enables a gud amount of equity participation by the indian public thereby reducing the dependancy over FII’s
a sample, if 4% of indian public invest in Direct equit we dont need a single pie from FIIs …
* Direct equity (shares or thru MFs)
Nishant,
Really liked your thoughts .. the key to success is to first think and dream big as Kalam said…
Pavan
Instead of focusing on what new services India can offer to the world, concentrate on what new products India can offer to the world…
Think big buddy :)
Nice Article Really, Wanna add some thing
Stronger Rupee: Means
More foreign acquisition by INDIAN Inc.
Cheap foreign university education (technical, doctorate, managerial etc.)
Cheap imported good quality foreign goods.
Cheap health care ( as we depends upon US manufacture technology ,drugs and machineries) for some deathly ailments.
And as TAJMAHAL is now among 7 wonders so lot of foreign tourist to visit and have to purchase now relatively expensive INDIAN goods and use INDIAN costly INDIAN catering so will develop these sector with a fast rate.
Man main vijay viswaas liye
Hum sagar-math kar aayenge
Hum viswa Bharan-poshan karke
Hum punah BHARAT kehlayenge.
Pavan
Read the article and the author’s comments properly, the author is not asking to reinvent the wheel, he is giving an example that we should come up with products which have as much weightage as OS, Compilers, etc.
If you cant innovate then dont, instead slog in the services sector, there are millions of other people in this country who can, and they will…
Thought the issue of cheap labour is true. It must be accepted fact that, India till now or even now is not matured enough to capture the world market with its products. Unless all the NRIs , many IIT, IIM, Stanford passouts return back and start thier work in India, Unless the people in politics change, the best way and the only way for Indian IT industry is going in services sector. So the service sector is the best way to grow so that atleast there is a constant income. There is no point in reinventing the wheel by creating new compilers, microprocessors or OS es or iPods. They are very well established. The focus therefore should be on what new services we can offer to the world. It should not be limited to IT technology alone. It can in the form of either health, art, music, agriculture, textiles.
Oh Not again Mandar!!
I have already commented on this.. ok let me do it again :)
Will answer your questions one by one:
1) What is the co-relation between Stronger currency and ?Innovativeness??
It is actually the other way round… Innovativeness leads to stronger currency.. Innovativeness means world class products, world class products mean greater exports, greater exports at the cost we decide for these products (unlike low cost services where only exchange rate decides cost), greater exports means greater demand for Indian currency, greater demand means stronger currency, stronger currency means stronger India…
2) What is it that makes you think that weaker currency is the only reason for foreign companies to outsource backend process work to India?
Why else are they outsourcing to India? Because of love for India? Lay off in their country inspite of protests by the local people?
Weaker currency means lower maintanence rates which in turn means more profit.. If one company in a given field outsources, all others in that field also HAVE to outsource to cut down costs… else they will lose out in competition..
3) How much is the contribution made by the IT exports to GDP?
If you are thinking that I am saying that only IT exports can make India strong you are wrong. Please see my comments. I was just giving IT as an example because I work in IT. The innovation has to happen in all the fields, not just IT. I know that over 70% of Indian exports come from manufacturing sector.. 20% from agricultural sector.. but at the same time India accounts for 2.5% of world’s services, and its doubling every year.. !!
Note that IT itself is a relatively younger field, and we can as well have the advantage of the leadership here as it becomes a even more global phenomena, provided we plan it well..
4) Do you really feel that a Stronger currency will be a driving force for moving towards ?Product? based approach from ?Service? based approach? If ?yes?, why?
No, on the contrary, it will be a product based approach that will make our economy independent of the currency value.. countries will buy boeing aeroplanes from America irrespective of what american dollar value is.. and a situation like this in India will automatically create a stronger rupee…
5) What do you think will be the after-effects of Stronger rupee on Export oriented Manufacturing Sector?
Well, If the exports are depending on weak rupee and not on quality of the products.. then it is destined to be doomed…
which is why I have been saying make quality products.. Swiss watches or volvo buses, British rolls royce, american GE, Japanese Sony, German Mercedes.. all these dont depend on the weak currency for their exports..
Probably I got the title of my article wrong.. looks like some are thinking that I am suggesting directly to make rupee exchange rate stronger :)
Stronger Rupee = Stronger India actually means a innovative product based Indian economy, independent of its weak currency for its exports, will create a strong India..
The key is to remove the dependency on rupee having to be weaker always..
which is what I have said throughout the article.. and it applies for all fields, not just for one particular sector like IT
Yes Rajeev, I agree with you…
IT today has enabled many of the poor families in India to become middle class and upper middle class families.. thanks to the good education the poor parents gave to their children.. I myself am an example of this transformation…
So I very much agree that software services gave a very good start to India.. but instead of relying on that for the rest of our development, we need to take it even further, by using this current economic boom as a launching pad to create a super power out of India…
Innovation is the mantra..
Hi Gurudev,
I happened to read your article in a fwded mail and I thought i will share my views with you.
(You have already got lots of replies to this article, and I am not taking pains to read all of them…so pl spare me if I am repeating any point)
Let me clarify that ‘Strong’ rupee is indeed a good ‘feeling’ for any Indian, who want to live in a DEVELOPED India. But still your views looks more prejudiced and overlooking the other side of the coin.
So before i take this discussion further…I have some basic questions for you…
1) What is the co-relation between Stronger currency and ‘Innovativeness’?
2) What is it that makes you think that weaker currency is the only reason for foreign companies to outsource backend process work to India?
3) How much is the contribution made by the IT exports to GDP?
4) Do you really feel that a Stronger currency will be a driving force for moving towards ‘Product’ based approach from ‘Service’ based approach? If ‘yes’, why?
5) What do you think will be the after-effects of Stronger rupee on Export oriented Manufacturing Sector?
I will continue with my views once I get answers to these questions.
Hi Gurudev,
Great article! I really appriciate…..
We as an IT guys and so called intellectual people of society has this responsibility to think about all the point you made in your article.Its my real personal experience and curse that even I am doing the same thing for a big shot american company and really starving hard to make their customer happy …….though after getting into IT and being a s/w developer for three years I always wanted to do something my own similarly you mentioned in your article.
We have to come up with real good concepts and products so that we could sell our own products to other countries not only selling our services what we are doing now……I completly agree with you on this that we are nothing but educated slave of super power….who do anything irrespective of his talent/education and interest to earn good money ……but this also a truth that today IT has given such economical freedom atleast some part of social group who can lead so called cool life and this all heppened becoz work outsourced from outside.
The youth today should learn to follow the footsteps of APJ Abdul Kalam, instead of dreaming about Shahrukh and Salman, if at all they really want to achieve anything worthwhile in their life..
Thanks Mahmood for your comments and views..
Yes, the dream for a strong global economy in India will definitely become a reality if we, the youth of this world’s youngest country start working towards it..
Thanks Pandian for the comments
As you said the responsibility lies on us.. WE need to make it for India.. We should be the change that we want to see in India..
Let’s move ahead..
Mahmood : Hi I totally agree that a stronger rupee against dollar would means reverse brain drain that is if rupee is on par with dollar than all the intellectuals in the field of science IT and other high end jobs would return back to India as they would be earning the same amount plus they would also be having a decent and respectable life which though few may argue but still they would not have leaved a respectable life out there on foreign land,when brain drain happens from US to back to India then its just matter of time India will attain the status of Super Power , So let the Rupee dream beginssssssssss………………………………….
Gurudev.. a marvelous blog
This blog is one of the amazing piece. with great comments
Cool..
May be this was one of the dream of APJ’s India 2020..
I believe, we were in the right way towards that..
More than Infy or TCS or Government, The Responsibility is on us. we have to believe in our talent in Indian Level.
Each and every Indian has to work towards that .. atleast in his thought…
koolGuy and Vidyanand
Let me clarify again. I am not saying that we need to simply convert the exchange rate and make rupee stronger.
The exact point I am trying to make here is:
Start manufacturing products that the rest of the world would buy irrespective of what the rupee value is. Dont depend on those services and products whose market demand depends only on a weaker rupee. So for instance, instead of software services concentrate on software products.
Software like OS, Compilers etc are just an example that I gave for IT industry. We need to do the same in all industries including agriculture, hardware, retail, etc…
koolGuy looks like a lot more worried about petroleum :)
If you can buy Mercedes at 2000 Rs how can a litre of petrol be 60 Rs? :) Petrol is an imported product and is not affected by internal inflation, it is controlled by international oil prices, so a stronger rupee means cheaper petrol as well, if Mercedes costs Rs 2000 then Petrol will be less than a rupee per litre :)
As fas as the lack of petroleum resources inside India to fuel our growth is concerned, a stronger or weaker rupee is not the solution. Alternate available fuel inside the country is the solution for that. See
http://hitxp.wordpress.com/2006/05/30/realising-the-great-indian-dream-part-i/
India has world’s second largest reserves of Thorium, building of thorium based nuclear reactors would solve our energy problem in one shot, save a gigantic spending of our GDP for petroleum imports..
The research to develop these reactors has been going on for past few decades, we need our best brains to get into this research instead of going abroad, we dont even have to depend on US or other countries for the nuclear fuel in that case. See
http://hitxp.wordpress.com/2007/05/18/nuclear-dealtotal-sellout/
Once we have a world class product based economy, the weaker or stronger rupee will be irrelavant as other countries will buy our products irrespective of the rupee value and then the rupee will become automatically stronger because of a demand for rupee and then we will automatically also have the benefits of a stronger rupee…
A stronger rupee will also stop brain drain. People go out to make quick money and then come back and settle here. A stronger rupee would mean no need to go abroad and use your skills to the benefit of other countries…
I agree with Vidyanand on the education system and the festival related holidays..
Again to comment on what Vidyanand said in the end that, “”I don?t think stronger rupee will result in (stronger India /)””
I am in no way saying that we simply do some math and bring down the exchange rate and make rupee stronger.. what I am saying is create an economy which does not depend on the rupee value and this will automatically create a stronger rupee,
If people remember the after math of 9/11 attacks, how were the lay offs and related panic in Indian IT companies then? Why were there lay offs? Because our IT companies were completely dependent on service based projects.. do we need such situation again? Next time it wont be because of 9/11, but wlil be because of even cheaper alternatives to India being available… so better make our economy independent of this service industry as soon as possible.. and lets move ahead..
@sharanya
Thanks for your comments and for the wishes :)
Cheers
Guru
This is a nice thought and agree with some points but explanation has some loop holes.
e. g. I support that
Indian companies should try to innovate and establish their product world over.
See, Microsoft, SAP, Oracle. What these companies have done. They have standardized the products which will have global business. It is really interesting to surf the internet for finding Indian products being used globally.
But I object on following cases.
Excessive work Load :
If you want to have wide scale employment we should have more work. Unfortunately our education system does not produce kind of candidates which industry requires. Because of this only few selected get high paying jobs. Of course there is cost they have to pay working on holidays (I feel extremely humiliating for employees who are offered two times day?s salary plus compensatory off for working on Indian festival. It?s like you are slave. How much more you want?). If you consider, any company which gives excellent pay and perks. Can?t they afford more workers to reduce work load on existing employees. We Indians have forgotten giving back to society. How many IT / BPO employees will be willing to teach 2-3 yrs junior to them so that they can develop them as capable employees. Won?t this help to reduce the wok load (Provided we don?t feel threatened by juniors)?
This is also flawed. IT companies will feel bad if Indian rupee is becoming stronger, as their profits will be hit be stronger currency. Lot of people mix emotions and business. When you are in business (Just turn the side of table), you would like to maximize the profits in short term as well as long term. Will anyone accept lesser salaries as you get more experienced because rupee is becoming stronger? So why shouldn?t business people be worried. Are people in living in cities happy because they can afford lot many things? No I don?t think so. Though finance minister briefs general public about inflation and measures they are taking, not all items are within reach. Take real estate, take rising fuel costs, is anybody worried about what they are contributing to long term national wealth. Forget about rising pollution and quality of breathing air, more cars on road will hit country?s exchequer badly. So it depends on way want to get developed. If we wish we should expand or quickly, we will be exhausted in long term and developed countries will move to greener pastures.
If you follow some economics, I don?t think stronger rupee will result in (stronger India /) Indian availing worldly leisure such as foreign tours and so on because not many will have even a rupee. Reason being, it is not only amount of money having in the country but the distribution of the wealth as mentioned above. I may sound very theoretical. But in a broader picture, this is true.
Regards,
-Vidyanand
very well write up… it would really open up many young brains.. gud analysis… will spead ur views as far as possible.. gud luck…
folks –
“”the point here is not about India is great or Indian Rupee is great. There is no need to be hyper reactive to the issue.
The point we are discussing here is about the fact wether the Indian Rupee appreciation is good or bad to our Indian Economy. Can strong rupee make India really strong or week at the current juncture””
Now if you agree to this then read on –
> I agree 100 % that just being a low cost center will not take us too far
> yes there is escaping from the truth – entreupreneurship is the best & only the a way a country can become self relient
> but having said that what is the state of the Manufacturing segment in the country ? how much does it contribute for our GDP ?
> Imagine when you spend 60 + Rs for fuel what’z point in having a merc or BMW or Jaguar @ 2000 bucks ? where is th adv of affordability ?
>Isn’t is strange that we are thinking of flyng to other part of globe & you are spending equal or even a higher amnt to travel internally from the metro to our own native places that too by bus forget abt the air
> by allowing the people to move from villages to Cities we are not addressing any issue rather worstening the crisis but at the same time I also say rural population should be empowered
> rather than cribbing about the s/w companies why dont the folks take the lead for the entreprenuership. The likes of Microsoft or HP or Oracle were started in garages by the dropouts
>>> Last but not least Folks – unless & until you have your basic industries like manufacturing thriving & contributing significantly to our GDP , unless & until we are self relient in context of our agriculture & basic commodities, unless we have the inflation in down, the stronger Rupee will not take us anywhere.
Just give a unbiased for all the above & if you still feel this thought is wrong you are welcome to call it like that…..
“”People always think of generalities but live in details””
BTW the days are not far away when we will start feeling the pinches of this in our wallet at the time of hikes :-)
But they can ask us to do a work of 48 hours within 24 hours .. in the name of being ‘more productive’!
Pressure, deadline, stress, tension :)
@ Kaushik
:-) Hopefully!
dont worry Kashi, they cant force us to work more than 24Hrs!!! ha! ha! ha!
You are absolutely right Kasi
“”Innovation is the Key. Not Cheap Labor””
@Rajiv
The article in the link you gave doesnt make any sense to me. The entire article assumes that dollar will continue to be strong as it is today and will continue to be a major international currency.
What if dollar falls against euro? Euro becomes a stronger currency? What will you do with the billions of dollar reserves? The article you gave also assumes that Indians CANNOT do anything great and will always HAVE TO RELY ON EXPORTS BASED ON A WEAK RUPEE! If that is what our economic approach is then we may as well forget becoming a true superpower in the future. All folks, get back to do all kinds of work offshored to India from doing the homeworks of American kids to ordering monthly groceries to american homes to paying their bills online every month and what not..
In that case it you will find most Indians sleeping during the day, already many are doing it :)
And yes, since it is a weaker rupee, forget about foreign trips, only some IT guys can go onsite with the company’s money, unlike America where even a hotel waiter takes his family on a foreign trip every year!
Oops, I forgot to mention one point!
When INR to $ conversion grew from ~45 to ~40 now, these IT companies are planning to ask their employees to work on Saturdays.
I can’t wait to know, what is gonna happen when the conversion rate grows from the now ~40 to say ~30. Sunday’s too! Fine, accepted.
And when it goes from ~30 to say ~15 (Oh my God, all my days are full, what should I do now?).
Innovation is the Key. Not Cheap Labor. Cheap Labor brought us here (totally agree) but we can’t continue with it.
You know that, a baby grows by taking only milk in his early days. He takes a risk after some time by eating some food. Even still, he continues growing. He doesn’t continue to live only with milk. It then just becomes an additional supplement. Hope this makes some sense here!
I Love You India, Grow Grow and Grow!
Now, I am earning in $’s but still I feel very proud even after the fact that, my savings in INR are getting reduced.
What I honestly feel is, these IT companies have introduced us to the lusty world of MAYA (hefty packages). It is all Illusion out there. Be Careful!
I completely agree with Kasi. What really matters is a strong INR.. and Indian INR is getting stronger because of a growing Indian economy. The Chinese currency is artificially maintained to be weaker by the Chinese government to make its export Cheaper, other wise who will buy low quality Chinese products?
I myself have tried 10-15 low cost Chinese products from the market and all have become useless within months of buying them.. the products include electronic stuff like cheap FM radios, walkmans, alarm bells etc
KoolGuy
Chinese Population = 1 billion +
Indian Population = 1 billion +
Poor in China = 800 million +
Poor in India = 350 million +
Chinese Forex Reserve = 1 trillion USD +
Indian Forex Reserve = 200 billion USD +
Tomorrow even if there is further decrease in dollar value due to weakening US dollar
Loss in Chinese Forex reserve = 5 x Loss in Indian Forex reserve
Chinese people cannot vote
Indian people can vote
A villager in China can never have a city life of China, he cannot simply migrate to a Chinese city !
A villager in India does not need anybody’s permission to move to an Indian city !
In the Transparency International?s Corruption Index,
China is at position 71
India is at Position 74
So both countries have almost same amount of corruption
But the difference is
India has free press and media which can expose corruption
China does NOT have free press and media
India – people can protest against the government policies
China – people cannot protest against the government policies
India has alternate political parties and leaders to choose
China has no other political party except the communist party and people DONT HAVE A CHOICE
India has freedom of Information, the internet is not filtered, there is the Right to Information Act
China has not freedom of Information, even in the Internet government decides what you can and what you cannot read, all internet content which is anti-chinese and anti-communist is blocked! Pages containing the word ‘Tianenmen’ are blocked! There is no Right to Information in China!
In the Future:
Chinese people cannot afford foreign trips due to weak Chinese currency (artificially maintained to be weaker against USD by the Chinese govt)
Indian people can afford foreign trips due to strong Indian rupee, which is controlled by the market trends
What you see as great Chinese infrastructure is only urban areas like Beijing and Shanghai. Have you seen rural China?? Look at http://chinaview.wordpress.com
@ Gurudev,
Thanks for visiting my site :-)
@ KoolGuy
First of all, I would like to know, where did you read that Dollar is getting wekaer. Dollar was but now, it had started picking up.
And, as I beleive from places where I have read, INR is getting stronger.
Also, as Gurudev mentioned earlier, this is not about which currency is getting stronger or weaker. It is all about, the advantages of a stronger INR in the LONG-RUN.
Mr koolGuy
What are you trying to say finally? That India cannot become a superpower? Indians cannot innovate? Rupee is not stronger only dollar is weaker??
You are only talking about the problem like all others, you dont have a solution.
Do you know why China has good infrastruture in its cities? because people from villagers are never allowed to enter their cities. There is no population influx problem into cities of China. India allows people from rural areas to migrate into cities. YOu want Indians to deny those rights to its rural people?
Do you know how the people in rural China live? As Gurudev has said in one of his posts India has 350 million poor people while China has 800 million. What about this Mr?
Read this interesting article:
Indian Rupee should go back to Rs 45/USD
http://diggindianews.com/IndiaNewsPolitics/Indian_Rupee_should_go_back_to_Rs_45USD/
Mr. Gurudev,
gong by your own argument it is the trade/deal/infrastructure development etc etc … of rupee/India against the dollar which made the Rupee stronger.Lets buy this argument for the time being & think of the following
Do you know how much of FDI India has attracted against China ?
where does India stand against China in the infrastructure development ?
any thought of the amount of reforms, developments china is undergoing vis a vis India ?
now think of what currency is stronger against whom ? What we are seeing today in market is a artificially created & temperory stuff ….
what we are seeing today is because of the magnitude of dollar inflow our companies have created due to the so called aquisitions & mergers.
It is all becaus of the careless govt which has made this market so volatile without any regulations etc….
koolGuy
The gaga is not about Indian rupee becoming stronger.
If you look at the subject it is about that, we NEED a stronger rupee for a better Indian economy in the future.
It is about the reluctance of current Indian IT companies who are only depending on a weaker rupee for their practice.
It is about the NEED to create innovative products, remove dependency on exchange rates and to build a strong international currency out of Indian rupee.
Everybody knows that Indian rupee is becoming strong because all these days it was held artificially at a weaker level against dollar. Dollar really did not deserve to be so strong. Which is why today when the true value of dollar is slowly coming out, rupee is automatically becoming stronger.
By the way how does it matter if it were because of weaker dollar or stronger rupee, either way the effect is same, rupee is becoming stronger! Indian rupee is also becoming strong because of more inflow of dollar into India, due to the growing Indian economy, which is what exposed the true value of Indian rupee. Indian rupee became stronger because dollar became weak, true, but why did dollar become weak? because growing Indian economy EXPOSED the true value of dollar!
What you are talking about RBI etc is internal to India which is called inflation. What has it got to do with external exchange rates? Inflation is due to the failure of the finance ministry of India to control commodity rates inside India.
If tomorrow external rupee becomes same as dollar i.e 1 rupee = 1 dollar, and our internal inflation continues to be like today then cost of living in India will become more than living in US!! So it has NOTHING to do with exchange rates. Even with this inflation within India see how the cost of imported goods is coming down and that is due to a stronger rupee!!
A currency raises or weakens against other currencies depending on how much it is being traded against that other currency, which is why you are not seeing much surge against Euro for rupee. How much of Indian rupee is traded against Euro?? How much of Indian rupee is traded against dollar?? Most of the Indian rupee is traded against dollar nor Euro…
Moerover Euro is becoming strong due to the economic growth of Eurozone countries. Even when Euro is becoming strong, their exports have increased, which is what I want even India to do, not depend on weak currency for exports, depend on innovativeness of our products..
Tomorrow if rupee becomes stronger against Euro also, then you cant come and ask why Indian rupee is not surging against Dirham :) Got it what I mean? It all depends on where the majority of trade lies. Raise against one currency doesnt mean a proportional raise against all other currencies.
Every body here is going ga ga over the Indian Rupee becoming strong… but I say it is the other way US dollar is becoming weaker.
If the Indian Rupee were to be stronger than why are facing such a steep inflation that RBI has to intervene & control it ?
If the Indian Rupee were to ben stronger then why are we facing such a steep increase in the price of the commondities ?
If the Indian Rupee were to ben stronger then why aren’t we seeing it surge against the other currencies like euro ?
Can somebody answer this ?
Yes, I again agree with you..
more earnings.. but even more stress and tensions people have in the Indian urban society today..
There is a competition to earn more than to achieve more..
I laugh at the stress and tension built up in these people when I see them unnecessarily honking in the traffic signals of Bangalore, I pity them, how stressed out they might be :)
There is no time for the husband and wife to spend with each other.. especially if both are working… I know practical cases where the husband and wife talk to each other properly only during the weekends.. husband works in day shifts and wife in the night shifts !! Is is really required? At the cost of what?
If a married couple can’t even talk properly to each other, then where does the understanding, love, caring come from? A simple silly argument is enough to end a relationship between two stranger hearts living under one roof.
People don’t spend time with their new born babies!
Newly married couple dont have enough time to spend with each other! No time for parents, friends, for the country, for the society, for life on earth, for nature…
Without realizing that those days are not going to ever come back again.
And how does most of the youth waste their time? Drinking and dancing in the pubs in the weekend! Look at their eating habits, junk food, junk body, then trying to do workouts, no time, but no physical activity either, even from ground floor to first floor they use lifts!
They need a break, to sit back, relax, think and introspect! Profit should never be measured by what you gain.. It should be measured as, what you gain minus what you lost to gain it, then decide whether it is really worth it :)
Indian youth definitely need a guidance, After all India is the world’s youngest country with over 70% of its 1 billion population being below the age of 35..
Well Gurudev I am in one of the top notch telecom comp in US which i think has it’s call centre in India — I am working for US comp solely — but again the point i raised in my discussion is not just the rupee vs $$ but culture wise what are these IT companies doing to our society which i was proud of when i was quite young. Now a days see the number of divorcee cases increase up i m preety sure something is realted to all this crap of working long hrs in office giving a hit to normal personal lifes. what do you think?
@Praveen
I completely agree with you Praveen.. India youth are spending all their energy in doing offshored work, for the time being including me…
While it is no denying that offshoring has given us a good start and the economy is booming.. it is stupid to think that this alone will get us to a superpower or best economy status… the companies that are offshoring to India are gaining more than the Indian companies themselves.. so the countries that offshore to India are still ahead of us in terms of money.. and also in terms of innovation because offshoring causes job loss and unemployment in the source countries, and the youth there in turn finally end up doing only the high end non offshored job available there and hence those countries finally end up doing things more productive and innovative than us.. simple survival of the fittest
And we in India with short sightedness are only concentrating on maintaining a weaker rupee..
@Manish
WE DO NOT NEED AN ECONOMY THAT DEPENDS ON A WEAK CURRENCY
WE NEED AN ECONOMY THAT DEPENDS ON OUR STRONG INNOVATIVE PRODUCTS
IF WE OPT FOR AN ECONOMY BASED ON WEAK CURRENCY THEN FORGET BECOMING A SUPERPOWER AND CONTINUE DOING OUTSOURCED STUFF, WORK ON WEEKENDS..
It is VERY VERY GOOD thing that rupee is appreciating against dollar. It is the very sign of any growing economy that its currency gets appreciated, it is simple economics…
Even the current value of rupee is artificially maintained at a lower rate against dollar due to billions of US dollars locked up in the reserve banks of India and China..
If we continue to maintain rupee artificially as a weak currency against dollar, then it is inevitable for a economic doom..
Note that Weaker rupee also means costlier Ipods, computers, mobile phones, anything and everything that is foreign…
India currently spends about 1000 billion rupees on oil imports every year.. Can you see the amount of money we can save by a stronger rupee here? This is just an example..
We need to improve the quality of life in our country.. Make imports cheaper.. exports will be hit only if we continue to manufacture cheap products which any country can manufacture.. even if Indian rupee becomes 50 per US dollar what if tomorrow countries like China, phillippines, russia etc start doing the same work for even cheaper rate?
ARE YOU PREPARED FOR A 50% CUT IN YOUR SALARY?
So we need to instead start manufacturing innovative products which other countries CANNOT manufacture.
If the IPhone or IPod was from India, who cares about the exchange rate, weak or stronger rupee against dollar, whatever price we say people across the globe will buy it!!
Imagine India coming up with a commercial airlines manufacturing Industry.. Today only American Boeing and French Airbus do this..
If India were to manufacture F-16s.. if India had McDonald’s.. any country would buy things from us…
The bottom line is
A COUNTRY DEPENDING ON ITS INNOVATIVE TECHNOLOGICAL PRODUCT EXPORTS WILL BE A CANDIDATE FOR FUTURE SUPERPOWER STATUS
A COUNTRY WHICH DEPENDS ON ITS WEAK CURRENCY VALUE AGAINST DOLLAR CAN NEVER BECOME A SUPERPOWER
If we grow the Indian market and consumer base inside the country itself, why on earth do we need any other market? India is a population of 1 billion!! We need to look at it as a market and use that as our strong point.. Our economy should not collapse if exports stop tomorrow. 1/6 of world lives in India!! Make use of that…
Weaker rupee simply means continued neo-colonialism… just keep executing offshored works for as cheap labour as possible.. weekends, weekdays,latenights, shifts….
A superpower?? No way…
And why do we need more investments if rupee itself becomes stronger?? If 1 rupee = 1 USD who the hell in India needs dollar investments??
Appreciating of rupee is the brighter side..
A stronger rupee means you have to pay for instance 1000 rupees from Bangalore to London flight instead of 40000 rupees!!
Even waiters working in Indian hotels or the auto rickshaw drivers can then take their family on foreign trips.. that is the true brighter side.. and that is what US is today.. We need to get there.. not try to keep our rupee weaker…
@Swetha
Thanks a lot for that :)
I am praveen and studied and work in US totally for US telecomm compnay but I actually hate the fact that every other person is in IT whether he has talent or not, as they are hired just because of “”Body Shopping”” — it’s a very big irony that may be every other IT guy is facing right now like are they actually working for India cause or $$ cause for thier company!
Another point I would like to mention is alreday IT guys don’t have thier personal lifes as they work round the clock on weekdays and many times on weekends — this i think has greatly affected our culture and all young men and women are working with each other 22 hrs in a day and because of that many times some relationships are broken as and IT guy just moved on with someone in teh office!
and now more work —
here in US if i have to work on weekend for something really important that i have take the permission of my manager which he says that u don’t have to come on sat and sun no matter what so as to enjoy both ur personal and professional lives and you live — i suppose indian IT firms don’t belive in personal lifes or they do belive in that by providing everything PERSONAL in office itself! so more to think! where is Indian youth going??
There maybe some good out of the weakening dollar and the strengthening rupee…
Most foreign investors are selling their US based assets because of
* The United States is no longer seen as the only safe haven for investors
* Future trends for the American dollar look poor
This may attract more investment to India. That’s looking at the brighter side of things.
But to achieve more investments, we need an accepting culture and a much better infrastructure to counter the declining dollar.
I really do not agree with you.. we cannot expect innovation from the masses.. it?s only a few who tread this path.. IT has provided a platform for those masses. I think it?s a bad thing that the rupee is appreciating against the dollar. If you look with a wider view, then it?s not only IT which has been affected because of this. It?s the textile industry which has been worst hit.
Well Said!!!! You voiced our opinions!! I am Spreading your words ! :)
Yes you are absolutely right.. and btw your site is cool..
I completelyyyyyyyyyyy agree on this, Gurudev. IT has to become innovative atleast now. It’s a pity that they are cribbing on the growth of their country’s economy. It cleary shows how money minded these big bandwagons have become.
Why did these companies trade in dollars for the matter of fact? They should have put their brains together earlier itself and could have traded in INR. They simply traded in dollars because Dollar was growing stronger back then and from that, they milked their profits. When they had no problems gaining enormous profits(almost everytime, they crossed the expectations), can’t they bear this for a while?
If they had done their business in dollars, please let them worry about the dollar only and let them ask the US government to make the dollar stronger versus the ruppee.
Only, if they had done their market business in INR, our Government should be worried about them.
How bitter, this may look, this is the ground reality that, our IT heads were till now projecting the cheap labor thing in different packages. Now, the real challenge comes. Let them take this and I wish them All the Very Best. Infact, we are all there to support in all the way they want. Drill our brains. Push our country farther.
I have lots to write but shall put it in a blog and pass on the link. But, thanks Gurudev for such a nice blog. And congrats for the paper thing!
Thanks a lot Hiren for letting me know about the newspaper.. It was a pleasant surprise :)
You have expressed a common man’s voice here in your post.Nice Blog.
And yes CONGRATS to you, as your article published in the local Newspaper today here in Bangalore.
FYI…News Paper name “”Bangalore Mirror”” Sunday Edition
My house is an “”asset”” and even if it already exists, were it to increase in value, I can go to the bank and get a higher loan amount against the value of the house. For businesses, a higher valuation of the existing assets means that they can not only borrow more money (i.e. fund larger acquisitions) but also at lower interest rates. By not hedging effectively in the financial markets, Infosys finds that it needs to hedge via inorganic growth i.e being in the unenviable position of having to digest a monster the size of Cap Gemini.
Domestic prices (and inflation) are determined primarily by domestic supply-demand. For example, sugar is actually very cheap now because India is sitting on almost two years worth of domestic demand in sugar reserves. A rising rupee will only indirectly impact inflation because it makes imports cheaper i.e. oil and gas will become cheaper.
Hedging! A new term to me.. thanks for that info, I know a bit more than what I knew 5 minutes back :)
Yes, assets do matter.. but they already exist! But to continue the business, profit has to increase or be predictable..
Don’t you think it is pretty strange for INR that while in the global economy it is becoming stronger ( or probably it is the USD that is getting weaker!), internally we have an inflation where rupee is buying even less things than it used to earlier!
Assets and Income are two different things. While it is true that Infosys gets 70% of its income in USD, vulnerable to a rising INR, it is equally true that 70-80% of its assets are situated physically in India, denominated in INR. The value of these assets will in fact rise in US$ terms with the rise of the rupee and it is this valuation that lending agencies consider if and when Infosys were to look to debt financing for a takeover bid.
The negative impact of a rising rupee on revenue can and should be hedged away in the financial markets. For example, TCS protected its net profit margins with handsome hedging gains of Rs 107 crore, virtually offsetting the Rs 135-crore dent in revenues because of the rupee appreciation while Infosys suffered a 5.7 per cent drop in net profit because it did not hedge enough of its revenue.
To me, this indicates that Infosys top management are not financially progressive and this may hurt them down the road if they do not shape up soon.
Sanjay
Since these companies are depending on a lower rupee vs dollar value for their profits, a stronger rupee will not increase their assets in $ terms, because inside India the rupee has NOT become strong thanks to inflation, and thanks to competition, salaries are ever increasing! So, these companies will continue to show lower profit margins if they continue to depend on rupee being weaker!
When the rupee was weaker, say 1$=47 rupees, suppose the profit was 100 crores..
Now when the rupee is stronger say 1$=40 rupees, the profit goes down to say about 90 crores..
So even though the rupee is stronger, the amount of rupee available to be converted into $ is lesser!! So the overall situation in terms of foreign markets i.e $ conversion remains almost the same and at the same time internal profits expressed in terms of rupees decreases..
On the other hand, What actually gets hurt by a stronger rupee is, other cheaper outsourcing countries like malaysia, china etc attract more business than Indian ones… and hence Indian IT companies too are all set to open up their services in the cheaper desitnations, else they fear more losses!!
So my argument was these companies should start concentrating on building innovative products than to depend on currency exchange rates for their profits and to expand their businesses..
Well, Infosys has a turnover of $3.1 billion, Cap Gemini has a turnover of $10.35 billion!! Infy will have to raise money to buy CapGemini! Then even if they buy Cap Gemini, integration of its 70000 employees into Infy, with different culture in two companies, is a very big task.. Infy has always relied on Organic growth, so this deal if materializes will be a major challenge to Infy.. Hope Infy sails through this well and makes a history in Indian IT…
It is common knowledge that a rising Rupee will hurt the topline of I.T. companies but, by the same token, the value of company assets will also rise in $ terms. This will make it easier for these companies to acquire foreign assets and/ or expat talent. It is perhaps no accident that Infosys is rumored to be acquiring Capgemini of France, Tata buying Land Rover and Jaguar etc
Yes Rishil
Indian companies have to become more innovative and technology oriented while the government has to take all possible measures to convert our huge population into a vast talent pool by ensuring quality education to all children in the country…
The key challenges that India currently facing is about by an appreciating currency, upcoming taxes that is put in at the latest budget, severe manpower crunch which is already impacting the country and visa restrictions. http://askwiki.blogspot.com/2007/07/key-issues-and-challenges-for-indian.html Have tried to highlight the these issue here, hope the govenrment and the Indusries would necessary steps to resolve them.