MUMBAI ATTACK: A DOUBLE TRAUMA

As our prime minister Dr.Manmohan sigh said earlier terrorism is a crime against humanity. It is a disease wich affect the growth of human race. From a contry’s perspective it is of double effect. First upon it arises insecure feeling among people secondlyI will affect badly on the country’s economy. Days before home minister of India Mr.Shivraj Patil said that each state should set up anti terrorist groups to tackle terrorist activities in the country. The time has come to think seriously about the menace. The prevailing situation now in India is that whenever a terrorist attack happens all political parties will line up to blame the government in the centre. This is not to be done. Of course there may be faults from their side but blaming each other would not give any solution to the problem. Now the BJP leadership wants to reimpliment POTTA but the congress government in the state is against it. The are saying that the laws are sufficient to tackle terrorism. But nowadays nobody can agree with it. The serial blasts occurred in many parts of the country recently had proved that some strict laws should be needed.
After all political dramas the truth is crystal clear. India is definitely a target of terrorists. The same situation will continue as it is.

Thank God Exchanges are closed
After the attacks in Mumbai (attacks are continuing at the time of writing this article ) both the stock exchanges NSE (National stock exchange) and BSE (Bombay stock exchange) closed for Thursday. Exchanges are the very sensitive institutions in the country where even a small news is affected. If it were open definitely there will be a downward trend in the market which is already down due to global financial crisis. Yesterday (26th Nov )sensex closed 331 points up which was a great relief for the investors. Sensex also crossed the important level of 9000. But due to the panic situation arised because of the attacks the indices will go down further and would wipe out all the gains residued yesterday.
There were reports that the Great Indian bull Mr.Rakesh Jhunjhunwala said that markets should have been opened today- I disagree with him.

Double trauma for the country
Mumbai attack is a double trauma for the country as a whole which is already facing difficult financial condition. Due to the global melt down Indian stocks are badly hit. After all assurances from the ministers the situation is still bleak. Aviation industry is in big trouble. People had lost their jobs or are going to loose their jobs. Salary cut and retrenchment happens on a day today baisis. Job aspirants are sitting fingers crossed with their appointment letter with out being informed when to join.
Markets are down from it’s January peak. Investors had lost huge amount of money due to global financial turmoil. The world is in recession and no exit signal for India from the situation. People of India, as a part of an emerging economy, are suffering from the illness of financial crisis. News about Mumbai attacks came at the same time. This a double trauma for the people and for the market as well.

When we heard about Sep-11 attacks in US we thought that it will only happen in there. Then it was in UK and other developed countries. At that time we thought that terrorists will target only developed countries. But when we came across the same situation we realized that it is a global disease. But we were unfortunate that now it is happening in India in a large scale.
Some immediate steps should be taken to tackle the situation. It is the duty of political leadership to inject confidence and a sense of security among people and it is not easy. The topics which need attention are terrorism and financial crisis. Financial meltdown is a global situation and a little can be done in this regard. But as far as terrorism is concerned it is a domestic menace to a large extent.
Political machinery should work properly and effectively to control the situation. Parties should unite to manage the crisis. It is not the duty of a single party it is the duty of the country as a whole.

E-COLUMN: FINANCIAL CRISIS AND THE ROLE OF MEDIA

E-COLUMN: FINANCIAL CRISIS AND THE ROLE OF MEDIA

FINANCIAL CRISIS AND THE ROLE OF MEDIA

Sensationalism is the key word of Indian media now days. Whether it is of celebrities or of aam admi media will treat the news in a festival mood. The victims of these sensationalism will be sometimes innocent people when they found themselves as criminals (so is the influence of media in India) they can’t bear the pain. Only the fittest will survive. Role of media is very important in a democratic system. It’s considered as the fourth pillar of the democratic system. When the media frequency is high the sensibility of people to smell a crime will increase.
But what is news after that. Today news is something which provokes readership or viewer ship. In another word we can say that in India news is like a bollywood masala. When you add more and more recepies to it the visibility becomes higher. In my opinion these types of news only generate panic among people. Panic people take decisions out of their heart not out of their mind. The rational thinking will be lost.

Recent financial crisis and role of media
Presently the world is on recession. Stock markets across the world plunged. Investors and traders are selling their stocks on a loss. To a large extent I believe the situation has created by the media. When we take the case of newspapers they need huge headlines on a daily basis. Be it a brutal murder or be it an explosion or a stock market crash. They treat the story with the same mind set. In this process of sensationalism a large amount of truth will be lost.
When the media gives more space to stock market crash and less place to curative measures they give wrong message to the readers. Readers are investors and as a result of this news they will sell their stocks on a loss and will cancel their trading account. Finally the stock markets will go down further. A balanced approach is needed when media deals with such highly sensitive news. Panic creation is not the duty of the media. All News papers are now views papers. But the view they project is related with their editorial policies so they can determine their stand much before the collection of news. It is their discretion that should they stand with the negative side or the positive side of an event. Market sentiment is highly sensitive and it will react to every fraction of news events. As markets are the mirrors of the financial situation of a country when deals with financial news the media should be more and more careful. (There is a direct relation between the markets and the media, when the market is up media will get more ad revenue when the market is down their ad revenue will be less, so be careful).

Regional Media
Role of regional media’s role in the current situation is crucial. As we seen in the recent past when anything related to market happens they will give huge bold headlines saying that it is over and they will write baseless editorials about the situation. Actually they are not trying to understand the situation. They may have only superficial knowledge about the financial situation in the country so they will write out of rumors. Actually investors with experience in the stock market will not give face to these types of gas but those who are in their early stage of investment will be influenced badly by such news. The lack of subject experts is the main problem to be addressed by the regional news papers. They should also give a balanced approach to the news also.

A NEW WORLD ORDER SHOULD EMERGE

After all what is recession? It is a mix of all the worse ones we can expect or we had experienced in the past. It’s the shortage of money, food and increase in unemployment rate. When we look around we can see such types of news here and there. A large number of such news are coming from the west. But we Indians as a part of open economy are also facing similar problems. Our IT and real estate sector are the ones which are worstly hit by the recent financial crisis. Our equity market also plunged FIIs are taking back their money on a daily basis from Indian share market as a result the crisis hits our economy harder.
Recently our Finance minister Mr. P Chidambaram said that the crisis will be over with in 9 months. But recent reports say that 15 European countries are hit by the crisis. Germany , a giant announced that they are in recession. Reports say that tourism, real-estate and IT will be the major ones which may face huge trouble. Financial services sector will also be affected by the crisis. As a curative measure govt had taken so many steps including bank rate cuts. But the effect of which only lasted for few days. These measures helped the market to cross the 10,000 mark but soon it went down and now it’s at 9000.

G20 Summit and Aftermath
The G20 summit took place in Washington was a big step forward to ease the current financial crisis. Leaders of developed countries as well as developing countries participated in the summit. They discussed the present situation and said that they will take necessary steps to eliminate the crisis. There were reports that there was a difference of opinion between the US and the European union. Actually the world order now is headed by the US and European union. We can say Japan as an Asian representative. The decisions are taken by the US and EU. Like any other decisions they have to support their people. Their people means the people already living richness. Their life style is high and they have never experienced starvation as third world countries do.
As a result of the open up of the economy India is also suffering the pains of the east. But our mixed economy helped us a lot to minimize the effects of Global financial plunge. As our ministers saying, we have a well regulated system working in India. Our fundamentals are strong. To a large extent it is true. Our regulators helped us a lot to overcome the situation ( of course it is not over). We are protected, our investments are safe. (The drawback of it is when the crisis is over there will be no room for aggressive privatization in India. All the parties will object it. As a result the fund flow from abroad will decrease and it will affect the growth aspects of the country)
Our PM recently said that India will grow at a rate of 7.5% during the year. It’s a good sign compared to the current market situation. Also it reminds us about the measures should be taken to protect Indian investors. What America and other countries experienced is a lesson for us.

Emergence of a new world order
The present world order is in the favour of rich (arguably). After the second world war America became super power and the rich European nations came down to the second number. They made policies in order to increase wealth for Americans. As a result they started to explore the possibilities of Emerging economies. At the same time they as a team (consist of US and EU) eyed the oil and natural resources on Earth and through diplomatic ties and sometimes through wars they became authority of the places where there is natural wealth. When we analyze the situation we can understand that the trade agreements so far were in favour of rich people.
Emerging economies got a pie of the new order but the major portion went to the west. Globalization was a angel with bad qualities. Now the time has come. There are times when the lease will become most important. India’s domestic regulators are such kinds. The farmers the only people who can support human beings should be treated properly. A world which give China and India more powers and roles to perform. Remember one third of the world’s population is residing in this region of Earth. A Global financial regulator will not be helpful for all as the past says it will be in favour of the rich. Instead national regulators should be implemented. No country should impose their interests on other countries.
Every individual’s investments should be protected. Every country should be able to assure their people that their investments are same. Cultivation should be promoted across the globe. Thorough review of the situation is needed on a regular basis to avoid one more recession. After all world is for everyone. We all have the right to live.

THE DEPRECIATING RUPEE AND INDIAN ECONOMY

The post has been moved to the following link

http://www.pramodthomas.com/2010/01/the-depreciating-rupee-and-indian-economy/

Pls visit www.pramodthomas.com for read more articles