Archive for the ‘Country specific’ Category

What are different types of sharees?

2013/10/27

Sharee (also sari, saree) is a dress predominantly worn by Indian women. It is often difficult to classify a sharee for a foreigner. This article shows the classification.

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Why rupee always falls against dollar, pound, euro?

2013/06/26
Historically, Indian Rupee always fell against strong currencies like Dollar, Pound or Euro.

 
During mid of 2013, rupee had almost a free fall. It now equals 1 $ = 60 Rs or 1 £ = 93 Rs.
 
So why suddenly rupee fell so low?
 
One reason is better economic outlook in USA. Large scale investors are now expecting better return on their investment from USA. Thus, their funds are going towards USA and less amount is coming to India. For many day to day products, India needs foreign currency (in the form of $, £, € etc.) so less foreign currency coming to India means more demand for $ £ € to buy goods/raw materials from outer world.
 
Incidentally, weakening of rupee should make export much more attractive as same $ will now buy more Rs. However, there is a catch. To produce many of those exportable goods, businesses need to import raw materials from outside India, which requires foreign currency! Since such import is getting more expensive, resulting goods (manufactured in India) is also becoming expensive – thus eroding the benefit of weakening rupee for export.
 
Weakening rupee also sometimes prompt foreign importers (who buy exported goods from India) demanding a re-negotiation on price (as they claim weakening rupee will benefit Indian exporters also we have just seen that may be the case always).
 
Non residents Indians (NRI) are happy because if they send foreign currency to India now they will get much better return (i.e. more Rs for every $ sent). However, such fun is only possible if they don’t want to take money out of India at a later date. If NRIs send money to India and invests in a scheme in India, when they convert money later from Rs to $/£/€, chances are – due to rupee weakening even more, they will get a very poor return.
 
So, in short, weakening rupee is not a good news for investors especially those who want to invest foreign currency in India and then want to convert that to their native foreign currency once their investment is matured. If rupee falls further between the time they invested and investment matured and considering rate of return and inflation, they may even get same/lower than what they originally invested in $/£/€ terms!
 
In theory, Reserve Bank of India (RBI) can intervene by imposing a temporary limit of foreign currency going out of India but that will irk lots of common public and goes against free market economy principle (which India has adopted since 1990s).

Why most US locomotives have single cab while European ones have dual cabs?

2012/12/17

Most US locomotives have single cab. This creates a visibility problem when operating long hood forward mode (visibility is usually ok while operating short hood forward mode). However, it is quite rare for US locos to operate solo – they mostly work in pair (sometimes upto 3-4 units together as well). As a result, they rarely run as long hood forward mode in real life.

But in Europe, the overall weights of trains are lighter and thus often trains are pulled by just single locomotive. Here both forward/reverse operation is desired. Thus European locos need good visibility in both directions (otherwise they would need turntables which are now obsolete after steam loco era).

Countries which imported American locos (like common WDM style locos in India, licensed from ALCO) but often runs as single units, visibility is indeed a problem while running in long hood forward mode.

What is black money in India?

2012/08/13

Black money is a term used (predominantly in India) to indicate money which has not been declared for tax purpose.

Black money occurs in all economies but in few countries, the amount is massive.

Let us illustrate this with an example; if you pay cash to your plumber and he does not declare this in his income statement, the amount becomes a black money. In most countries, this happens in small scale transaction involving small traders. However, in many countries (especially India and surrounding countries) it happens at a mass scale.

For example, one builder sells a flat for Rupees 10 million. When a buyer is found, he offers it to sell for Rs 9 million on the condition that official transaction will be noted as Rs 7 million and then buyer will pay him Rs 2 million separately without keeping any footprint of the transaction. Thus, they will pay tax on Rs 7 million only. Buyer will accept it as he is getting a price reduction of Rs 1 million. Seller is saving on tax as he won’t declare Rs 2 million as income. So in a nutshell, the tax amount is shared between buyer and seller.

This activity flourishes because of two reasons:

1. People believe by dodging tax they are helping themselves

2. In many cases the practice is so rampant that normal citizens do not dare to buck the trend because they believe law will take side of rich people only (even though when these people are actually in fault)

Some analysts estimate that the amount of black money stored by Indians in Swiss bank is over Rs 1 trillion. Indian government did not show any real interest to tackle this problem because many head honchos in political parties are benefitting from this practice by paying little tax.

Why India performs poorly in Olympics?

2012/08/12

When compared to relative population of other countries, India usually performs quite poorly in Olympics.

What is the fundamental reason for this?

This is down to cultural outlook. Parents in India encourage their children to excel in academics rather than sports. Middle class in India aspire for a well paid and secured job. If an aspirating athlete fails in India, the future is pretty bleak. Many athletes often struggle to make both ends meet because of relative poverty.

Sports require investment which is often beyond reach of ordinary citizens without any substantial grant from government. The grants from Indian government is often mediocre at best and even then it is frequently tainted with politics and regionalism. Thus main good talents are lost.

Some rich Indian kids manage to persuade their dream in sports but their numbers are very few.

This is quite contrast to China. Chinese government invest huge amount in sports and candidates ate picked for rigorous training from childhood. Of course, being a communist country, such acts of government is often considered as dictatorship. Whether is is good or bad is debatable but we can’t ignore that China achieved lot more in sports compared to India. Such practice is not possible in democratic India.

Until very recent time, Indian media glorified only cricket and largely ignored in other sports. This also discouraged lots of Indian citizens to come to sports which could have improved india’s Olympic performance.

Having said so, india’s performance in last two Olympic improved and Indian contenders now started winning individual events. So it is expected that in next few olympics India will perform much better.

Why so many empty seats in London Olympic 2012?

2012/07/30

Since Olympic is considered the greatest show on earth, it is assumed that there would be a huge demand for tickets and thus gallery will be full of sports fans.

But we can all see how many of the events in London Olympic so far have got plenty of empty seats!

How did it happen?

First let us understand how Olympic seats are sold. The seats are grouped under different categories. Roughly, there are two major categories – open to public and official allocations. Open to public is a fraction of the total seats. The rest are divided among corporate sponsors, Olympic officials, political dignitaries etc. The sponsors are officials are given a large number of free tickets (in return for their sponsorship or as perks in case of officials). These groups, theoretically, are expected to re-distribute the tickets among their own people.

Clear, this did not happen. After receiving the free tickets, the sponsors or officials often did not bother distributing them to their employees or associated. Even when they distributed, it went to people who were not that interested in the events – so never bothered to turn up in the events.

There is a demand from public that why empty seats are not filled by waiting public then and there. The Olympic organizing committee is yet to announce their plan of how to fill those seats up going forward during the rest of the Olympic session.

This incident surfaced the unethical nexus between Olympic organization committee and corporate sponsors where general public’s interest is sacrificed in favor of corporate sponsorship and officials’ personal agenda.

Why Barclays bank was fined £290 million?

2012/06/28

In June 2012, British bank Barclays was fined £290 million for trying to manipulate LIBOR  rates.

What does that mean?

Just like normal people borrow money from banks; banks themselves borrow money from other banks. They do this for various reasons but often due to cover cash flow in short duration. LIBOR is an indicator or how much one bank has to pay to another bank for borrowing money. In other words, it is a rate at which one bank pays interest to other banks. Just like a customer with good credit score gets a lower interest (as he is considered lower risk), a bank with good reputation gets lower LIBOR rate. How the banks’ credit scores are determined? It is calculated from bank’s financial numbers like how much it is actually costing them to borrow etc.

Barclays actually lied how much it is costing them to borrow. This, in turn, makes them appear lower risk to other banks compared to what might have happened if they quoted their true financial numbers. Thus, they lied to get a lower interest rate from other banks. So, if they had disclosed their true financial data, other banks could have charged more interest to lend them money. Thus investors who lent money to Barclays lost money in interest.

Just like a country’s share index is measured upon how some big businesses are doing, a country’s LIBOR rate is also a measure of how healthy its overall banking sector is. If one bank reports wrong financial figures for its own health, this will affect the overall LIBOR rate. Many financial (both business and retail) interest rates are directly dependent on LIBOR rates. So, wrong manipulation of LIBOR rate is considered a fraud.

Barclays’s traders also bribed and coaxed employees of other banks to make them submit their figures so that it looks better in Barclays favor.

The common British public demanded a full enquiry on this unfair practice as they suspect other banks might be doing this as well. However, so far current British government did not show any move to initiate such enquiry. People believe that this is because wealthy bankers pay hefty donation to political parties and thus neither Conservative nor Labour party are willing to upset their billionaire donors.

Can you use typical Hackney cab as personal transport?

2012/06/16

The London cabs are ubiquitous symbols of the city.  Most licensed cabs in London and other UK cities are of this type. Although there are few other licensed cabs which use other cars. Please note that minicabs (which must be pre-booked and can’t be hailed on road) use normal vehicles.

The way interior of these vehicles are designed it is easy to push pram/wheelchair inside. It is also specious inside to carry enough luggage to airport.

But why don’t people use it as personal car?

The first reason is the cost. Typical cost to buy these vehicles new is around £30,000 – which is quite expensive considering you can buy various luxury cars at this price. Secondly, these cars are not very comfortable for long distance travel. Seats in normal passenger cars are usually more comfortable. Thirdly, even if you buy one, you may find that many people are trying to hail you on streets assuming it is a cab!

Typically, these cabs don’t carry passengers besides driver. All 5 passengers seat behind the driver. There is a rear bench seat for 3 persons and there are 2 additional seats which are stowed away when no one is sitting on them. This explains why it is not very comfortable.

Why auto rickshaw is not used as personal transport?

2012/06/10

Auto rickshaws are ubiquitous low cost public transport in India and few other countries in SE Asia.

It is positioned in the market between two wheelers and cars. But strangely enough these vehicles are never used as personal transport! It might seem intuitive that those can afford these but not cars could be using as personal transports but that idea never caught. There is no clear explanation for this but usually it is assumed that people in India assume this as low status vehicle. One does not like to be seen driving this. Those who drive auto rickshaws for living are considered not being up to any better quality jobs (even though they earn moderate amount of money as per Indian standard).

Those who can afford cars won’t buy autos because they offer very poor ride quality, comfort and safety kits compared to proper cars. In fact, some people consider autos as worst of both worlds. They are not comfortable as cars and not cheap and agile enough like two wheelers.

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How does day light saving work?

2012/05/30

If Daylight Saving Time (DST) is not in operation, then during the middle of year (May-Aug), the Sun will rise in UK around 05:00 will set around 19:00.

If we use DST, then clock will go 1 hour forward so that it will appear that Sun rises at 06:00 and sets at 20:00.

This means, you can switch on your lights in your house after 1 hour every evening (well, sort of).

So this will give you one extra hour of daylight every day. For most people it is a benefit.

However, if you have the habit of getting up very early, then you will have to switch on the light (if you get up at 05:00, till 06:00). That means, even though we are saving day light in the evening, we are losing day light in the morning.

As most of the people do their own entertainment in the evening (after finishing off work), it is argued that DST gives more daylight to most number of people. People are expected to spend more time outdoor and likely to buy stuffs till there is light, which indicates a more active economy.

Of course, same benefit can be achieved by re-adjusting opening and closing hours of business, say 09:00-17:00 instead of 08:00-16:00.

Ok, so if day light is saved by making clock fast forward, why not observe the same time thruout the year?

This will cause problem during winter. The Sun will appear at a later time – which will force children to go to school during dark hours in early morning. In fact, this is one argument often used in favor of turning clock back during winter. As clock goes back, the evenings will become darker sooner (e.g. at 16:00 eveything becomes dark when UK follows GMT during winter). That means, all the day light hours saved during summer are lost in winter! Supporters of dual time argues that during winter no body wants to be outside anyway so no harm if it becomes dark sooner. To some extent, it is true.