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Startup Valuation Is Not That Important

If this title got you excited, you could be a fan of television shows, where unlimited money seems to be on offer and deals close in minutes. The real world could be different, though. Once you have a prospective investor excited about your team, your merchandise, and your business, they will invariably ask about your startup valuation? Many entrepreneurs stumble at this stage. You could either lose a deal or a sizeable chunk of your company. Many founders either give no answer or quote an excessive and indefensible number. The damage could be beyond repair becuase by this time, an investor is convinced that you don’t know what you’re talking about. Kevin Harrington, the “original” shark from Shark Tank, says

 

“Nothing turns off an investor more than when an entrepreneur comes in with a ridiculous valuation”

 

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How To Ward Off Ransomware Attacks

WannaCry ransomware requires the users to pay certain amount (~$300) in bitcoins to “unlock” the encrypted files and threatens to double the ransom in two days. If the demands are not met, the malware threatens to delete the files. Several users have already remitted thousands of dollars. While all fingers point at the U.S. security agency NSA, that debate is better left for later. This advisory post from Eurion Constellation is for individual users, as well as, home/office networks.

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Why Do You Need Market Research?

Before you pick up the telephone and start dialing arbitrary numbers or hurrying out there and informing individuals about what you would like to sell them, you must first determine who would like to be your audience. This is the segment of the total market from where you will get the major part of your sale. Having a detailed knowledge of the gaps and needs of your target market empowers you to sell the right merchandise or services to the right customers. And, this power comes from asking your customers what they want.

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Find Your Working Capital Requirement

Now that you know why working capital is critically important to keep an organization running, the next step is to estimate how much you need. Hypothetically speaking, if all transactions were in cash and done with no time lag, the working capital requirement would be zero.

To illustrate this point, let’s suppose a company buys goods for $100 from A and at the same instant sells the entire stock to B for $250. It makes a gain of $150 without holding any stock or even, needing cash because there is no time lag between the two transactions. Therefore, its working capital requirement is zero.

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Do You Really Need A Patent Lawyer?

You have an invention — something that would fill a need and make life easier. It might even make you some money, if you could get the exclusive right to manufacture it or sell the rights to it. In other words, you need a patent. But the patent attorney wants money to file a patent application for you. Must your invention go waste or should you apply for a patent yourself, without a lawyer?

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Difference Between Memorandum and Articles of Association

Unlike in case of Memorandum of Association (MOA), registration of the Articles of Association (AOA) is a non-binding requirement for a company. Section 5 of the Companies Act 2013 provides that the Articles of a company are to contain the rules and regulations for management. Accordingly, the MOA deals with the powers and limitations of the company, while the AOA deals with the powers/limitations of the management personnel. As mentioned, registration of the Articles is optional.

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What is A Memorandum of Association

The Memorandum of Association (MOA) is a registered document containing all the legal data essentially required for the incorporation of a company and available to the public. Section 4 of the Companies Act 2013 describes the 5 clauses that must be included in the document. The preparation of a Memorandum is a legal requirement for limited liability companies only.

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Fast-track Patent Registration in India

India wants to establish itself as a patent registration hub, such that the startups from anywhere can register here. Towards this end, the Government has implemented a lot of intellectual property related proposals laid out in the Startup India Action Plan (Read here). The proposals now have a concrete structure in the form of the Patent (Amendment) Rules, 2016. These Rules aim at lower costs and faster turnarounds.

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What is A Patent?

The Indian law for patents is enshrined in the Patents Act, 1970 as amended by the Patent (Amendment) Rules, 2016. So what is a patent? A patent is an exclusive monopoly given by the Government to an inventor over his creation (innovation) for a limited period of time. Innovation can be understood as a brand new item or process, which is ingenious and has commercial applicability. The ownership of a patent confers on the patentee the exclusive right to use, make or sell his/her creation for the term of the grant. Patent is a form of intellectual property and such rights are enforceable in the court of law.
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Is Silicon Valley Being Irrational About Tech Startups?

Reproduced from our original post on LinkedIn (June 1, 2016)
Donald Trump says a lot of things, mostly crass, divisive and slighting. He has spoken once again – this time about a possible tech startup bubble, which is due to pop.
I’m talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars,so here we go again.

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How To Choose Your Business Structure

If you are looking to start a new business, making your way through the legalities is the going to be the least interesting part. Though, you’ll do well to acknowledge that they actually form an essential part of initial business planning that converts your idea into a reality.

Business FormationFor instance, legal business structure is an enabler without which business operations or growth could get into a deep freeze. Let’s say, you are setting up as an online retailer. Nearly all marketplaces will ask for your business registration before discussing anything else. Similarly, most investors, credit suppliers, and channel partners would want to see your company’s existence in government records. Not to mention, it is a prima facie indicator of the seriousness and trustworthiness of an enterprise.

The choice largely boils down to compliance burden, tax implication, and ease of operation. Following are the possible ways to get going in India:
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After The Brexit Referendum

Updated: June 27, 2016

The much speculated Grexit is no more a threat, at least for now. Instead, last Friday, June 23, 2016, the Britons did something unthinkable – the Brexit. A lot happened during the referendum campaingning – arguments, fear mongering, gossiping, and even, false promises. The results have brought in a fresh wave of shock, allegations, disillusionment, and desperation. While all this may not seem to matter now as the deal is sealed, the possibilities (read, fallout) that may become realities still command attention. Some of the notable events so far:

  • UK stands divided on voting lines
  • David Cameron quits
  • Pound tanks to a 31-year low, currently trading at 1.34 per Dollar
  • Approximately, $2 trillion wiped out from world markets
  • UK set to lose its AAA rating: S&P
  • Boris Johnson garners support for his claim to the Prime Minister’s office
  • Post results Bregret sets in
  • Over 300,000 Britons sign up for a fresh Parliamentary debate of Brexit
  • EU asks for exit process to start as early as Tuesday, June 28, 2016
  • Call for a second independence referendum in Scotland has increased; it voted 62% in favor of staying with the EU

Friday’s events not only stumped the experts worldwide, they also brought the judgement of the average English voter into question. It may be hard to imagine how the political ambitions of an unloved former London Mayor (Boris Johnson) and a repeatedly rejected Nigel Farage could blind the public to reason. Farage, the UK Independence Party chief, has a history of losing each of his attempts in the General Elections. “Google Trends” probably holds the answer. It reported a spike of 1024% in searches related to Brexit after the results were formally announced!

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Why Are Startups Losing Valuations?

There has been a barrage of not-so-good news for the startup community, with funds flow ebbing and investors toning down their expectations. Morgan Stanley Institutional Fund Trust Mid Cap Growth Portfolio, Fidelity Rutland Square Trust Strategic Advisers Growth Fund and Valic Company I Mid Cap Strategic Growth Fund have marked down the value of their investments in Flipkart. On the other side, Zomato too was marked down by HSBC. RBI Governor recently remarked, “If the only reason you are getting revenues, not profit, is because you are selling based on 50 per cent discount, it can’t be viable in the long run.”

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Oil Price Trend Update

We published an article, What Is Keeping The Oil Prices Low?  in February that highlighted the reasons behind the current downturn in crude oil prices and its impact. The following is an update on that material.
The June WTI is trading close to $48.35, while the July Brent is at $49.11, implying an improvement by about 49% from our last post. At any point in time, there is a complex dynamics behind crude oil trends that combines the impact of long and short-term factors.

The Supply Side
OPEC has released its May 2016 report and has predicted non-OPEC oil production to come down by 0.74 million barrels per day (mb/d) this year. The OPEC think-tank is exploiting its dominant market position and financial bandwidth to wait out its rivals.

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Why Are Some Startups Wary Of Equity Venture Capital

On an average, out of every 10 startups 1 will be truly successful; 3 will completely fail; and the rest will tide along till they too collapse, or get taken over. The reasons could be numerous, ranging from weaker domain expertise to lack of planning. However, limited access to required funds still poses the biggest challenge for a budding enterprise. Once the seed capital (mostly supplied by entrepreneur’s own savings or by friends or family) runs out, the need to arrange alternative means to remain afloat becomes an imperative.


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10 Tax Announcements All Startups Should Know

Startups and MSMEs have caught the Government’s attention as potential sources of economic growth and employment generation in India. The Prime Minister rolled out Startup India Action Plan in January this year, indicating that the Government is serious towards creating an enabling environment for this sector.

Eurion Constellation published an article series on some of its key announcements:

The current year’s budget has made its recommendations and some implementation deadlines have passed. So, now is the time to evaluate whether the startup sector is really on the path to the promised land. In this series, we will cover the important new announcements and concrete policy steps taken, beginning with tax sops.

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Budget 2016 Rationalizes Presumptive Tax Provisions

One of of the key challenges faced by the Government today is increasing the ease of doing business in India that will provide impetus to self-employment and instill confidence among the investor community. Presumptive taxation is one such provision in the Income Tax Act. If you are a startup, micro or small enterprise you might want to consider it.

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Did Budget 2016 Snub Indian Taxpayers?

Budget 2016 has left behind a trail of disgruntled taxpayers with some strong pressure for rollback, particularly in case of EPF taxation. The measure in itself may not be “anti-people”, but the lack of clarity in budget speech definitely led to some misinterpretation and the Government had to clarify. Read details about why taxpayers are unhappy about certain proposals and what is the Government’s rationale behind them.Our pre-budget poll revealed a clear inclination towards change in tax slabs and increase in the exemption limit u/s 80C. However, none found way to the Finance Bill 2016.

 

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How is Oil Price Really Determined?

Throughout the history, oil prices have had a roller-coaster ride and the trends do not make sense all the time. The current downturn has once again brought into focus the complex dynamics behind this crucial commodity.
This article covers the very starting point in this story – the determinants of
oil price. The rate of crude oil is impacted by the demand-supply dynamics, but contrary to popular belief, it is primarily set by the derivatives market.


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What Budget 2016 Might Bring For Startups and SMEs

The Union Budget 2016 is expected to have a big focus on developing entrepreneurial ventures and supporting the existing micro, small and medium enterprises (MSMEs). The Government shares the industry’s view that this segment will drive the future economic growth in a big way and generate employment opportunities. Some of the key demands of the industry are around tax reforms, infrastructure and regulatory simplification.

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Startup India Action Plan: Procurement Norms and Exit Provisions

Through its draft Startup India Action Plan, the Government has indicated its commitment towards a conducive ecosystem for startups. Continued from our previous post in this series, the new norms for eligible enterprises are as follows:

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Startup India Action Plan: Intellectual Property Rights Support

Acknowledging the legal and infrastructural hurdles faced by startups, the Modi Government has announced some key initiatives through its flagship Startup India Action Plan. The proposed regulatory simplification for new ventures eligible under the Plan are:

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What Is Keeping The Oil Prices Low?

While the last two years altogether have been a volatile period for oil prices globally, they have been in a free fall since the last quarter of 2015. Benchmark Brent closed at $33.10, while WTI closed at $32.30 on last Wednesday, January 27. The prices have fallen by about 70% from June 2014 peak prices. [May 2016 Update: July Brent is trading at $49.35, while June WTI is at $48.30. Read our update synopsis] Interestingly though, the supply side players do not appear to be relenting anytime sooner. In fact, analysts expect that the production is going to increase in near term, pushing the prices down even further. So, what is really going on with the oil industry?

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Startup India Action Plan: Simplified Legal Compliance

Speaking of startups, the Finance Minister said, “The more the sector becomes unregulated, the better it will be. One of the reasons why India became an important IT hub was because we had no laws governing it. The entire Startup India campaign is intended to create a supporting system.”

The Startup India Action Plan has tried to simplify the cumbersome and expensive laws that have long been blamed for adversely impacting the entrepreneurial initiative in the country, focusing on three key areas –
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Startup India Action Plan: Eligibility

It may be too early to comment upon how Startup India Action Plan will be put into practice – administratively and legally – but it is certainly a bold step forward in developing entrepreneurial initiative in India. That said, it is not free from contentious issues. With the Plan clearly underlining the Government’s inclination towards promoting technology and IP, other businesses may feel left out. There can be new or improved offerings, particularly in the services sector, that are not essentially technologically backed. Perhaps the Budget will throw more light on the subject of inclusivity. It will be an imperative to ensure that the proposed Inter-Ministerial Board does not become an enabler for red-tape the Government is so keen to curb. Broadly, eligible enterprises should meet the following conditions:          
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Will the Euro Survive the European Crisis?

It was in 1999 that 17 member nations from the European Union came together to form a powerful economic alliance, known as the Eurozone. The Maastricht Treaty of 1992 laid down stringent criteria to gain a membership in the alliance. Euro became the face of this congregation, standing in direct competition with the strongest currencies, US Dollar and British Pound. Today, years of rampant violation of the fundamental philosophy of the Eurozone and glaring financial realities threaten the very existence of this economic force.

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Startup Funding In India: Overview

Brimming with young energy, India presently is a fertile ground of opportunities for the businesses of all sizes. In the startup space, market trends project eCommerce, logistics, IT, and the hospitality sectors as the game changers. As they become stronger, the demand for resources – human, capital, and liquid – is also increasing. The share of these sectors in increasing in the GDP and are currently offering improved employment opportunities. A convincing present and the promising 5-year economic outlooks are pulling in huge venture capital (VC) funding from within the India and outside. In 2014, the country with $4.6 billion in its booty is the third highest venture capital funding destination after the US ($58.9bn) and China ($8.9bn). Bangalore topped the national chart claiming over 50% ($2.6bn) of the total funding, followed by NCR and Mumbai.

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Mobile Phones Market: Nokia Banking on Windows 8 and Asha

In February last year, Nokia (NOK) made a late but wise decision of phasing out its proprietary Symbian OS in favor of Microsoft’s Windows Phone OS. With the coming together of the two struggling giants, a third force has begun creating its place in the smartphones market. Till now, Google’s Android and Apple’s iOS have been the dominant players. However, the market remains heavily skewed in favor of Google.

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EURO Remains Strong on Expectations of Positive News from Greece

Updated October 15, 2012

On Monday, EURUSD closed at 1.2949, 0.03% lower than Friday. Euro continues the uptrend from its support level of around 1.2100 in late July. Greek 10-year yields touched a new low since its last debt restructuring in March this year, falling 47 basis points to 17.58%. The good news is that Greece may not fall through the cracks after all. The latest reassurance comes from the German Finance Minister Wolfgang Schaeuble, who categorically said, “I think, it will not happen that there will be a state bankrupt in Greece.”

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Indian Union Budget 2012: The Impact on Common Taxpayer

Finance Minister Pranab Mukherjee indeed had a tough job doing the balancing act between macro economic factors and interests of the masses. However, Budget 2012 has come up particularly hard-hitting for the common man. While overall prices are likely to go up, tax reliefs are not as expected. The incremental cash outflow on account of a blanket hike of 2% in Service Tax and Excise is likely to more than offset the small incremental savings from revised income tax slabs for most income brackets. It is interesting to note that the FM has completely failed to address rising prices and has instead presented an inflationary budget.
Mukherjee has rolled forward the deadline for implementation of the Direct Tax Code indefinitely, but has promised an early implementation. Citing the delay in DTC recommendations by the Parliamentary Standing Committee, he expressed his inability to incorporate the recommendations in the Union Budget. Against earlier estimates of a basic exemption limit of Rs. 2.5-3 lakhs, the FM has made a token increase to Rs. 2 lakhs, benefits for senior citizens remaining untouched. The distinction between male and female taxpayers below 60 years of age has been removed. These taxpayers have been clubbed under the ‘general’ category. The proposed income tax slabs under Budget 2012 are as follows:
General taxpayers below 60 years
0 – Rs. 2,00,000
Nil
2,00,001 – 5,00,000
10%
5,00,001 – 10,00,000
20%
10,00,001 and above
30%
Senior Citizens above 60 years but less than 80 years
0 – Rs. 2,50,000
Nil
2,50,001 – 5,00,000
10%
5,00,001 – 10,00,000
20%
10,00,001 and above
30%
Very Senior Citizens above 80 years
0 – Rs. 5,00,000
Nil
5,00,001 – 10,00,000
20%
10,00,001 and above
30%

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9 Ways To Invest In Silver

Throughout the history, silver has closely followed gold in terms of popularity. It has never lost its sheen even after its discontinuance as a currency standard across various nations. Times of economic uncertainty and rising demand have been the key drivers of its price, more in present times than ever before. Once again the advantages of silver investing outweigh its disadvantages. If you look at silver as a safe investment, you have several options to consider:

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Why Invest in Silver?

Similar to gold, silver is a precious metal that finds great use as a safe investment to hedge against inflation and economic turmoil. Silver is often known as the poor man’s gold. You can invest in bullion coins just like gold and in multiple other ways. Know that you have found a winner in silver. But before you plunge in, take a few minutes to evaluate the advantages and disadvantages of silver investing:Also Read: A quick look at why gold is a great investment!


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Guarding Against Credit Card Fraud

Even though credit cards offer extraordinary advantages for the buyers, making it possible to ‘buy now and pay later,’ they might not come without any downsides. The same quality of simplicity that they provide, also tends to expose them to various kinds of frauds and high volume scams. Knowing the challenges facing your credit card is the initial step in the direction of safe-guarding yourself from a financial complication. A few basic checks can furthermore ensure that your credit card account is safe and sound.

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The Earthquake In Japan Brings A Tsunami Of Troubles

On March 11, 2011, Japan was torn in, what may be termed as one of the worst earthquakes of all times. The following 10-meter high tsunami flattened the entire Pacific cost of the country, sweeping away ships, vehicles, people, and homes alike. Though the early warning systems did prevent some loss of life, the death toll has already crossed 10,000, thousands are still missing, and millions have lost their homes. The earthquake, measuring 8.9 on the Richter scale, has shifted the landmass by almost 8 feet and is believed to have affected the earth’s axis. Read about the likely financial impact here.

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Indian Union Budget 2011: Tax Provisions

Union Budget 2011 was being approached by much curiosity and anxiety. FM Pranab Mukherjee presented the Budget for FY 2011-12 in the Parliament earlier today. As the provisions were rolled out, the Bill turned out to be a mixed bag. The FM had a tough task of balancing the conflicting goals of lower taxation, lower inflation, growth impetus, and budget deficit. Some of the major changes were proposed in the fiscal provisions, as highlighted below.
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What Does the Egypt Crisis Mean to the World Economy?

The anti-Mubarak stir in Egypt has proved to be more potential that previously imagined. With Mubarak finally reeling under the pressure to step down after a prolonged state of denial and no definite Government system yet in place, the fate of Egypt has become somewhat more precarious than before. At the heart of the protests was the rampant corruption under the 30-year old Hosni Mubarak regime, which pushed the nation back in terms of economic prosperity.

Where does Egypt stand?

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Stock Summary: Nanometrics Inc

U.S. based manufacturer of advanced process control metrology systems, Nanometrics Inc. (NASDAQ: NANO) is among those small stocks that generate much investor interest. On January 14, 2010, NANO made an impressive rally, gaining almost 30% to reach $17.96, by the end of day’s trading. Volumes also moved to over 5 million.
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CWG 2010 Scam: A Time for Answers

Now, that the Commonwealth Games 2010 are over and the results pouring in, the regulators and investigation have started their probe into what can turn out to be one of India’s largest financial scams so far. The original budget for the Games was set at Rs. 3,800 crore. However, on the basis of the Joint Parliamentary Committee’s (JPC) findings, the opposition has alleged that the actual expenditure in hosting the games was to the tune of Rs. 70,000 crore! The Government has declared an expenditure of Rs. 30,000 crore, squarely blaming the escalation on ‘rising’ prices. This is especially interesting in the light of the fact that Beijing concluded the entire Olympic Games within Rs. 28,000 crore barely two years ago.

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CNG Cylinders Market Summary

The outlook for high-pressure CNG cylinders market in India is positive. With Government initiatives for facilitating the discovery & exploration of natural gas, growth of robust distribution channels, fiscal benefits to the manufacturers of cylinders, retrofitting of CNG kits, tax exemption for commercial & heavy vehicles and new licensing policy, the industry is likely to register impressive growth over the coming years.

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Economic Update 2009: Bulls vs Bears

After touching a dangerous high of 364 basis points late last year, the benchmark LIBOR-OIS spread reached to a level of 25 basis points on August 3, 2009. In layman terms, it indicates the extent of credit market rotations. The current levels are indicative of easing credit markets, which almost froze after the collapse of Lehman Brothers, and other major players on the Wall Street.

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A Quick Look At Why Gold Is A Great Investment

Updated: May 2016
Gold needs no introduction – a cherished commodity in some cultures and one of the most preferred investments, en said specially in turbulent times. If you are investing, take it as a long term value proposition, rather than a short term profit making tool. Whenever the global economy hit a roadblock, gold had witnessed a surge in demand. Over a decade spanning from May 2006 to May 2016, gold price has more than doubled from approx USD/oz 682 to USD/oz 1,302!

In the shorter term, stock markets may appear glossier with quicker returns on the back of frenzied activities during bull runs. On the flip side, the same markets can be very volatile and often ‘sentimental.’ While the matured stock markets are often said to mirror the fundamental strength of the economy, they react to news and often, half-baked information, at the blink of the eye.

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Indian Measures to Counter Economic Recession

Ever since, the first signs of the recession began showing in India, the Government has come up with various incentives, apart from measures by RBI. The Central Bank has took some steps, such as reducing the benchmark lending rate; lowering cash reserve ratio (CRR); and easing lending norms for commercial banks to provide boost to the housing sector lending. To provide a stimulus to the export sector, RBI has enhanced the credit period for exporters from 6 to 9 months. (more…)

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Subprime Crisis In A Nutshell

The US Subprime crisis (over USD 5 trillion in losses) began to reveal itself somewhere in the last quarter of 2006. It’s full impact was still anyone’s guess. However, soon it began gripping the global economy, toppling financial markets; setting off a long recession; and pushing marginal countries, like Iceland, on the verge of bankruptcy. The crisis was more a result of blind enthusiasm riding on the back of a decade long rally in the U.S. housing market from mid-1990s to 2006, and utter disregard for the fundamental business cycles.

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Impact Of Recession On Developing Countries

The recent tidings in the global market has put a question mark on the decoupling theory, which claims that a nation’s economy is not impacted by the state of other economies. The subprime crisis concerned primarily the US, but had a ripple effect on almost all of the other nations due to the interdependence and interlinking of individual economies. The Emerging Economies, though, have been robust in terms of fundamentals, were severely affected by the global meltdown. Developing nations like India, China and other Southeast Asian countries have the potential to pull out the World out of the recession, but it is expected to take longer than previously thought.

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