World Of Finance

        World of Finance by M.Vijaya Sai Every Business entrepreneur would like to estimate his/her business profits from time to time and work hard to achieve those targets. Here we will learn to use a powerful tool that estimates Business profits. How a business's profits change as the sales volumes change as well as break even points. Although the  purpose of every business may be different but the success of the business is measured in terms of Profitability. The business analyst must  accesses:                            "What is the Break even point?"                              "What should be the Sales turnover for the period?"                            "How to cut down on co...

While the need for long term financing is met by the capital or financial markets , money market is a mechanism which deals with lending and borrowing of short term funds. Post reforms age in India has witnessed marvelous increase of the Indian money markets . Banks and other financial institutions have been able to meet the high opportunity of short term financial support of important sectors like the industry, services and agriculture. It performs under the regulation and control of the Reserve Bank of India (RBI). The Indian money markets have also exhibit the required maturity and flexibility over the past two decades. Decision of the government to permit the private sector banks to operate has provided much needed healthy competition in the money markets resulting in fair amount of improvement in their performance. Money markets denote inter-bank market where the banks borrow and lend between themselves to meet the short term credit and deposit needs of the econo...

        World of Finance by M.Vijaya Sai Round one in the unseemly quarrel between two financial regulators — the Securities and Exchange Board of India, or Sebi, and the Insurance Regulatory and Development Authority of India, or IRDA — on who should supervise ULIPs (unit-linked insurance plans), has gone to IRDA. The government has brokered a temporary truce, leaving the matter to be settled in court. But, for IRDA, it may turn out to be a case of winning a battle but losing the war. The debate is whether ULIPs, which are nothing but mutual fund schemes with the added protection of an insurance cover, should be regulated by Sebi or by IRDA. Sebi, the capital markets regulator, has pointed out that the attributes of ULIPs are very different from traditional insurance products, which is correct. But barring 14 insurance companies from selling ULIPs, was — to say the least — a hasty and thoughtless move on Sebi’s par...

        World of Finance by M.Vijaya Sai The India GDP statistics is a summarization of all the differential factors that forms the basic foundation of the Indian economy. The India GDP statistics is a cumulative report of the performance of all the major parameters of the Indian economy. The statistics of the India GDP clearly reveals that the rise of the India GDP after the 1990s was due to the open economy phenomenon. The paradigm shift of Indian economy from that of a closed-market to open market was during the balance-of-payments crisis in the late ‘80s. The Government of India remained flexible – it opened up the Indian markets such that private investments could easily find an entry. GDP calculated at purchaser’s price is the total value calculated by all the domestic producers, adding any product taxes and deducting the subsidies, if any (these elements are excluded from the value of the products). Due to the change in th...

        World of Finance by M.Vijaya Sai Gross Domestic Product (GDP) is the broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. The Department of Commerce releases GDP data for the U.S. economy on a quarterly basis at 8:30 am EST on the last business day of the next quarter. The components used to calculate GDP include: Personal Consumption: -- Durable goods (items expected to last more than three years) -- Nondurable goods (food and clothing) -- Services Government Expenditures: -- Defense -- Roads -- Schools Investment Spending: -- Nonresidential (spending on plants and equipment), Residential (single-family and multi-family homes) -- Business inventories Net Exports: -- Exports are added to GDP -- Imports are deducted fr...

        World of Finance by M.Vijaya Sai India has been one of the best performers in the world economy in recent years, but rapidly rising inflation and the complexities of running the world’s biggest democracy are proving challenging. Indian economy opened its doors to the global market since 1991, after the introduction of liberalization. Before 1991, the Indian economy was characterized by extensive regulation, protectionism and public owner ship, leading to pervasive corruption and slow growth. The reforms that were initiated by Prime Minister P V Narsimha Rao with his Finance Minister Manmohan Singh, did away the Licence Raj (investment, industrial and import licensing) and ended many public monopolies, allowing automatic approval of Foreign Direct Investment in many sectors. Since then India has emerged as the fastest growing economies in the world. Recent growth Trends Indian economy has grown by more than 9% for the three y...

        World of Finance by M.Vijaya Sai Banks are more familiar to people these days than food malls, shopping malls as every activity of maximum number of people is been controlled by banks. Banks play a significant role in ones life and the contribution of banks to the nation and the economy is immense. There are hundreds of things about banks which a common man does not know. One such concept is CRR. We all read in the news papers that RBI has increased the CRR limits and the interest rate will go up. But what is the correlation between CRR and the interest rates ? What is CRR? Why do they increase or decrease it? Like this, there are many questions. Here is a small article to answer all your queries relating to CRR. Cash Reserve Ratio mandates that all commercial banks maintain a certain percentage of their total demand and time liabilities with themselves or with the Reserve Bank of India (RBI). This could be in the fo...

        World of Finance by M.Vijaya Sai I covered monetary policy of a central bank (RBI in case of India). Now, I will cover another very important macroeconomics concept – Fiscal Policy. Fiscal Policy is considered to be acts of a government to influence the direction of nation’s economy by using its financial and regulatory powers. The two main important instruments of fiscal policy are government spending and taxation. These are also known as financial powers. By regulatory powers we mean the ability of government to influence or require its people to change their behavior. For example, Indian government might ask all the industries to conform to universal environmental standards to reduce global warming. Thus, we see fiscal policy is different from the other macroeconomic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and the supply of money . Stances of Fiscal Policy The...