Honchogyan

BLACK THURSDAY We remember that the allied powers won the World War - I and USA was a part of the allied powers. After World War - I there was optimism in the US economy and it was all bullish. The industries grew and there was a huge demand for white goods. People were buying more and more. It was because of the policy of USA which was “Buy now pay later” that has put a large chunk of disposable income in the hands of consumers. Since World War 1, the USA government has raised a lot of money from the citizens of USA through bonds. For reference (if you have watched the movie “Captain America-The First Avenger” in that when Steve got his powers and the colonel Chester Phillips didn’t want him to fight in the war so he started doing stage shows, he was basically trying to popularize and sell the US Bonds). As the US bonds were highly liquid and also earned a lot of interest income for the consumers, the consumers were in a habit of buying them. Since the war was ove

Did somebody see it coming? The answer to the above question lies in the history when the bubble busted and to be precise, some of the greatest economists knew but nobody listened to them. Yes, I am talking about one of the biggest financial crises. As we all know that when something is too good to be true, then it usually isn’t! In the late 1990’s, the US economy was booming. This was a period of optimism. Tech companies were in trend and everybody was investing in tech companies. And since the stocks of these tech companies got highly overvalued and the bubble busted. People started withdrawing money from stock market and since the interest rates in banks were very low, the investors were looking for an alternative to invest in. So, guess what will be the next best alternative, yes you got that right! The housing market. Now before going further I would like to ask you a question that if you want to buy a house and the banks are ready to grant you a loan without a down

The Rising trend of Inflation By Arpit Sharma We all have either heard about or been a part of the discussion which is going on in today's scenario related to the current economic slowdown. As we all know that our country is about to enter Recession and is sitting on pile of huge fiscal deficit. A lot of NBFCS are also making huge losses, GDP of India is the least in the last 11 years and now the latest problem of rising inflation has also knocked our door. Some of the country's senior citizens are dependent upon the interest on their fixed deposits as their source of income, which according to them, will fetch a satisfactory amount in the future. But they might have not taken inflation into consideration before depositing their money in a bank FD account. For instance in today's scenario the interest on fixed deposit in a bank is approximately 7" and taking into consideration today's inflation rate which is approximately 7359, the inflation will eat up t

Reforms  By Arpit Sharma Present scenario implies that India is going through an economic slowdown. Country’s GDP growth is the slowest in the last 11 years, there is a huge burden of NPA’s on the banks. India is sitting on a huge pile of Fiscal Deficit. Inflation is also high, and the trend is of smart investment and divestment. The reasons behind these problems are more or less same i.e. the structural changes which happened due to GST and demonetisation. Citizens need to understand that economic reforms take time to show its positive effects. If during 1991, our Finance Minister Dr. Manmohan Singh wouldn’t have introduced the policy of Liberalisation, Privatisation and Globalisation, wouldn’t have opened our economy for private sector to enter then our economy wouldn’t have survived and grown. In the same way GST is the need of the hour. GST in a way has brought federalism in the country. If we look at the major problems in our country like problem of roads, electric

VICES  -by Arpit Sharma Now-a-days the lives of people have become very hectic; being in the office, busy with work till late night has sacrificed their social life. This has given the birth to New-age vices. Vices differ on the basis of time, gender, profession, and the preference of pleasure. Some vices are traditional in nature like alcoholism , smoking, gambling, consumption of drugs, etc. Some of the millenials common vices are having junk food, chocolates and ice candies etc.   Unknowingly, there is a direct relationship of the vices with business i.e. if the number of vices in a person increases, his consumption also increases which actually helps lots of businesses. Most of the businesses in this world are only based on our vices. For instance, the recent tagline of the Pepsi is “THAT’S WHAT I LIKE” which conveys that the company is encouraging customers unapologetically to do what they enjoy. Now doing what a person enjoys is acceptable but

INVESTMENT AND DIVESTMENT By Arpit Sharma Unlike USA, Government in India owns and controls many sectors. Some of the companies owned by the Government are booking profits yet most of them are liability to government exchequer , moreover the profit makeing companies are also overstaffed and remains below potential compared to their private counterparts. In today’s scenario the government is sitting upon a huge growing pile of fiscal deficit and our GDP growth rate is also the lowest in the last 11 years. The government is in need of funds to invest in the priority sectors and also to reduce huge fiscal deficit. The government cannot increase the tax rate because if it does then it will make the condition of the corporates which are hardly surviving even worse. The Sudden demand of funds can only be met by smart divestment in some sectors in which the government is making losses and investing in the sectors which will help the government in boosting economic growth. A rec