About to become the first defaulter in 20^th century, Greece had no option but to take austerity measures. However, the called out referendum resulted in ‘NO’ for such measures. Greek was in a position to be thrown out from the Eurozone. It was expected that other economies would also be affected partly adversely. The critically impacted stock market witnessed this by the downfall of the stock prices for a short period. The share market of Hong Kong, Korea, Germany, China and London lived up to the expectations. It didn’t really come as a shock. In context of India, it was expected that the currency would depreciate due to hike in interest rates and further the import prices would go up.

There has been a great uncertainty in Greece for a long time now. Before the referendum on austerity, people were also unsure if the crisis would lead to a civil war. Some said the Greek crisis is a reminiscent of the military rule of 1960s and 1970s. However, the scenario now seems to be under control after the decision made by the global markets to support Greece in extending the bailout package. For the time being the crisis for the Greece economy appears to be over but much will depend upon the implementation of various reforms, especially relating to taxation and pension issues. The deal might undergo constant changes unless the final negotiation is made. Experts have different viewpoints and it is unlikely to say something for sure. Nonetheless, Greece would maintain its integral position in Eurozone as decided, considering it beneficial for the world economy.

With Greece still struggling to deal with its situations, China is expected to be hit by a crisis soon. Fall of the China market can be attributed to ‘Margin Trading’. Even the government intervention didn’t do any better. The bursting of this bubble is expected to do more harm to commodity based economies. The commodity prices are falling and might be worse in the near future. The back to back crisis is indeed a sign of the global economy to be heading towards a serious slowdown. Also the fact that the growth of Asian economies is expected to be low is a cause of worry. Global economic recovery must be the upcoming target for each and every economy.

Click here for government certification in Accounting, Banking & Finance

The post Greece and the Rest appeared first on Vskills Blog.

Indian economy, since independence, has made progress in major economic fronts but the fact remains that all sections of the society and each individual does not have the same status, same education level or same health. With economic growth, the disparities among the haves and the have nots have risen despite the execution of some income redistribution measures of the government, also known as ‘Sharing Growth’. The experts have lately realized that the core solution to the problem is not sharing growth but ‘Inclusive Growth’.

Inclusive Growth, as the concept suggests, means growth process which involves every individual in the economy. An economy with all members participating and contributing to its progress is said to have such a growth. Unlike sharing growth, inclusive growth is a permanent relief. There are a lot of dimensions involved in the process of inclusive growth. The first and the foremost ones are improving the education level in terms of quality and quantity and the health care quality of individuals in any economy. Lowering poverty and inequality follows the trajectory. Sharing growth acts as a catalyst to bring about inclusive growth in any state. Improving business environment, regulation, public governance and transparency is another set of measures required in this context. Corruption needs to be rooted out firmly from its roots for the betterment of the economy as a whole. Reforming labor markets, introducing tertiary and financial sector reforms and increasing productivity in agriculture would enable all the sectors to progress and improve efficiency of each and every activity of the economy. Strengthening innovation would make the economy self sufficient in terms of know-how, that would accelerate the path of growth. Promoting greener growth is a way to sustain high and inclusive growth. Protecting the environment would make the economy richer.

Creating job opportunities, easing monetary policies to promote investment, financial inclusion scheme and various insurance schemes are a few steps towards inclusive growth. A cleaner India is a cherry on the cake.

Click here for government certification in Accounting, Banking & Finance

The post Inclusive Growth appeared first on Vskills Blog.

We have always talked about investment in economic terms, into bonds, shares, other financial assets etc. Lets today talk about investment in real terms; investment that always pays no matter what; investment with zero risk. Such an investment is made in knowledge which latter pays in terms of money, respect, values and a great personality.

AN INVESTMENT IN KNOWLEDGE PAYS THE BEST INTEREST. This famous quote of Benjamin Franklin in his book “The Way to Wealth” was in context  to the value of a sound financial advice – protect your money from others by converting it into knowledge. This endures and finds sustenance in every aspect of our life. It   highlights  the correlation between knowledge and its significant return on investment in one’s life.

Knowledge refers to the facts, information, and skills acquired through experience or education, the theoretical or practical understanding of a subject. Education and experience complete the aspect of investment in knowledge by adding value education to one’s life. The skills acquired remain intact and pay high returns throughout one’s life.

Knowledge has power. It controls access to opportunity and advancement. Hence knowledge has to be improved, challenged, and increased constantly, or it vanishes. The more knowledge you have on a certain subject, the more equipped you are to deal with it. It acts as a ladder to attain power and success. Therefore, it is better to invest in knowledge.

Knowledge is  like Bonds, in terms of Value and unlike them, in terms of Risk. Reserve of knowledge, experience, and ability is the only real security that a person will have in this world. Knowledge is highly valued and converts into money from time to time.  Unlike the investments in bonds, investment in knowledge is risk free and ALWAYS pays.

According to The Dalai Lama,

“INVEST (Share) your knowledge.
It’s a way to achieve immortality.”

Click here for government certifications

The post Investment In Knowledge appeared first on Vskills Blog.

Greece has always been known as an advanced high income economy with high quality of life and a very high standard of living. It has been a part of Eurozone since 2001. It ranks 43^rd in terms of GDP according to the World Bank statistics in 2013. But time has changed and so has the economic atmosphere.

Euro 60 or $ 67 is the maximum daily allowance that can be withdrawn from ATMs by individuals in Greece. The Greeks are engrossed in stocking milk powder and medicines; they are not able to buy apple store apps, already hit by hiked prices, even of the necessities, they are restricted to lead life the way they previously did. The government has put capital controls. Greece, with shuttered banks and disastrous stock market, is covered with the uncertainty cloak.

The root cause behind Greece’s tumultuous situation is the way the authorities have used the funds that were made available to them. It is evident that Greeks did not put their funds in productive work that could bring prosperity to them. Though they faced large budget deficits year after year, they did not make much capital expenditure. If they had done that, they would have made money out of the efficiently used funds. Hence, the quality of deficits narrates the entire story. This would remain incomplete if it isn’t mentioned that Greeks have made expenditure, much more than their income. With more expenditure, rises the need for deficit financing or borrowing externally, which creates more liability. This is indeed a vicious circle, wherein Greece has been trapped. According to the statistics, it has borrowed roughly about 175% of its income (GDP). With such high borrowings and low income, an economic crash is an obvious situation. With these basics, one now may analyze the situation deeper and come up with various implementations, conclusions and diverse solutions.

Click here for government certification in Accounting, Banking & Finance

The post Greece: Glory of The Past appeared first on Vskills Blog.

When the Government exceeds its expenditure as compared to revenue receipts, it borrows from various sources. This borrowing is called Deficit Financing. Deficit financing is the result of unbalanced government budget. In India, the deficit financing resorts mainly to enable the government to obtain the necessary resources for the plan. Deficit financing takes places in various forms:

1. The Government draws upon the cash balances of the past.
2. The Government borrows from Central Bank against government securities.
3. The Government makes money by printing of paper currency and thus meets the expenditure over receipts.
4. The Government borrows externally.

The advanced countries consider deficit financing to be a useful instrument to increase the effective demand, whereas the underdeveloped countries take deficit financing as a mode to generate investments. Deficit financing acts as a catalyst for underdeveloped and developing countries. It not only accelerates economic growth but also helps in reconstructing the economy all over again. Deficit financing has both pros and cons in a developed nation as well as in an underdeveloped nation. Considering the underdeveloped countries, the following are few problems faced by them:

1. Growth rate of population is faster than the rate of economic growth
2. The sources of state revenue do not provide sufficient fund
3. Lack of initiative and entrepreneurial skills amongst the citizens
4. Less voluntary savings
5. Demonstration effect
6. Excess of evasion of taxes, etc.

With so many endless problems, no Government would like to raise its standard of living keeping its economic growth at stake. One can easily do it by raising the tax rates, channelizing the savings, etc., then probably the nation would not use deficit financing. Since, deficit financing is a sensitive tool; the state must use it wisely to uplift and develop the economy and to pull it out of depression.

Click here for government certification in Accounting, Banking & Finance

The post DEFICIT FINANCING appeared first on Vskills Blog.

The RBI Governor, Raghuram Rajan, has recently warned the global economy of falling into the clenches of ‘Great Depression’ again. While addressing the people in a conference at London Business School, he asked for a set of ‘rules of the game’, that needs to be internationally discussed since the global economy is vulnerable to the problems faced in the period of 1930s.

The root cause indicated in his speech is competitive monetary policy easing by the central banks all over the world. The policies opted are more or less similar to the ones implemented before 1930s. He believes that growth is shifting instead of being created, which might corrode the economies, warning each and every economy of the threat that is approaching and also advised them to revise the policies to limit the ‘spill over’ effects. He fears a ‘currency war’ again due to lack of coordination amongst the policies of the economies. The currencies all across the world might devalue in such a scenario, euro and yen have already been set as examples.

Coming to the problems of Great Depression in 1930s, the economy had then faced low GDPs, industrial slowdown, unemployment and economic as well as political instability. Production had dropped significantly. The circular flow of income had disrupted. Interest rates were erratic and people were afraid of taking loans. People were losing their jobs. The foreign exchange market was a disaster too. Development was negligible and there was no hope of being better.

Well, not long ago, in 2008, the world was knocked down by the global financial crisis and its effects. With this in mind, the approaching threats of Great Depression are breath taking. Not all economies have fully recovered since 2008. Such economies might face a challenge to their existence if at all a global depression arrives.

Click here for government certification in Accounting, Banking & Finance

The post Great Depression Again? appeared first on Vskills Blog.

Foreign Direct Investment plays a vital role for underdeveloped and developing nations. With increasing Globalization, FDI has also increased. The underdeveloped and the developing countries lag behind in many ways. They do not possess required level of saving and income, the capital required for investment and a force of skilled labor. The underdeveloped and the developing nations have plenty of resources but they unfortunately lag the technology to evade these resources. For the same, FDI may be considered as a tool that bridges the gap between the available resources and the required funds. Since India is a developing nation, one can find a high relevance of FDIs here.

Since 1991, the rules and regulations for FDIs are relaxed. FDI as a long term development program is not just useful for the citizens but also strengthens technology, gives an edge with respect to infrastructure, generates productivity and provides new employment opportunities. FDIs act as a catalyst for the economic development and growth of a country. It helps to achieve Self-Reliance in various sectors and an overall enhancement. Various recent policies have also emerged to boost the inflow of FDIs in India, such as: 100% FDI allowed in medical sciences, single brand retail, telecom sector, asset reconstruction companies, etc.

Since a few years, in India, a lot more changes have taken place in various arenas, FDI being one of them. Recently, the Government of India (GOI) has been discussing on a proposal to increase the FDI limit in media sector from 26% to 49%. And, GOI is expected to take more liberal steps in other sectors to increase the flow of FDI in India. GOI is trying to take the economic growth to a higher platform with the medium of FDIs. India has already marked its presence as one of the fastest growing economies of the world, and with continuum efforts it is striving to see a shining and a brighter tomorrow.

Click here for government certification in Accounting, Banking & Finance

The post Relevance Of FDI In India appeared first on Vskills Blog.

Export financing, as the name suggests, means financing the exports. It involves financial help/loan for export activities or receiving payments for the sale (exports). It revolves around the company’s credit worthiness. Due to cut throat competition, there is a greater need to finance exports to provide attractive payment policies and modes. Otherwise, the exporter may lose its customers.

Any decision related to export financing is crucial and therefore it is advisable to take into consideration some key determinants. The need for financing is important since it decides its significance in day to day activities of the company and also its sales. Where the funds are used the most must be watched closely so as to make it cost effective and profitable. The duration of the loan depends on how quickly the payment is made and the source of financing. Since every method of export financing has its own costs and benefits, the exporter must weigh both simultaneously to minimize cost and maximize benefit. Higher the risk involved in the transaction, greater is the cost of financing it and therefore, the exporter needs to look out for risk free transactions yet profitable. Decisions related financing also comes to rescue when there are huge amount of commodity to be exported or less working capital available at hand that might affect the day to day functions.

Sources of export financing are many. Any local commercial bank, local Department of Commerce Export Assistance Center, Small Business Administration office, the highly recognized Export-Import Bank and the state export promotion or export finance office. Before choosing the source, the exporter must pay attention to the terms of loan, interest rate, rate of return, risk involved in the transaction, etc. Such decisions are highly crucial and trace the path of success or failure for the company.

Click here for government certification in Accounting, Banking & Finance

The post Export Financing appeared first on Vskills Blog.

The recently signed Motor Vehicle Agreement among the four nations BBIN, namely Bhutan, Bangladesh, India and Nepal, is a diluted version of the original MVA under SAARC that could not be negotiated due to resistance from Pakistan. The agreement aims at smooth movement of people, goods and services. The connectivity among the nations of South Asia would be stronger and beneficial. Asian Development Bank (ADB) provides financial help for the implementation of the Agreement.

According to MVA, the states are required to bear most of the costs related to its implementation. With high risks come great benefits. The transportation cost in the nations would reduce due to efficient and regular checks by the authority, transparency in the transportation rules and understandability of each other’s motor vehicle acts. With greater emphasis on comparative advantage, the pact is expected to facilitate greater trade and economic exchanges, develop transport and transit facilities and reduce economic and political barriers. It would strengthen South Asia, as a region, due to strong and supportive international relations. Not just that, some reports reveal that transforming transport corridors into economic ones would improve trade with rest of the world by 30%. Economies are interrelated and so are the benefits. A pact binding a few states is believed to even benefit others.

The pact very well declares its own rules and regulations. Authorized corridors/routes, obtaining permits, issuing diving license and all other technical work is under progress. Movement of the cargo would take a longer time for implementation. The government also hopes that the BBIN MVA would be transformed to the original SAARC MVA after the next SAARC Summit. The implementation may be delayed, but its advantages won’t.

Click here for government certification in Accounting, Banking & Finance

The post Economics behind BBIN MVA appeared first on Vskills Blog.

Petrol price went up by 64 paisa while the price of diesel fell by around Rs. 1.35 a litre. In Delhi, the prices of petrol and diesel, with effect from June 16, are expected to remain at Rs. 66.93 and Rs. 50.93 respectively. Price of petrol has been raised by the fuel retailers following the two consecutive increases since May. On the other hand, diesel prices have shown a downward trend.

The hike in petrol and cut in diesel prices can be contributed to fluctuating global oil prices and foreign exchange rates. The increase in price of petrol and downward movement in the diesel price internationally, along with the depreciation of Indian rupee has accounted for such a change. Also, the prices may vary within the country at different places. The consecutive hikes in petrol price have washed away more than one-third gains made by the rational consumers due to fall in global prices in August. In case of diesel, the fall in price has restored the loss suffered in May.

The prices are expected to be unstable in the future too. The fluctuations in the prices in international oil market and Indian Rupee-US Dollar exchange rate would continue to be the determining factor of the prices of petrol and diesel in the local market. The local fuel retailers would closely watch out for such amendments and in the future too, the local prices would reflect any such change. Consumers are not expected to be at relief due to high instability in the market and volatile prices.

Click here for government certification in Accounting, Banking & Finance

The post Petrol and Diesel Prices appeared first on Vskills Blog.