Saturday 21 November, 2009

Indian economy to almost equal US by 2050: study

(21-Nov-2009)

India will be the third largest economy in the world after China and United States by 2050, according to the Carnegie Endowment for International Peace, a reputed US-based foreign policy think tank.

An article titled 'The G20 in 2050', carried in the November bulletin of the institute said, "China, India, and the United States will emerge as the world's three largest economies in 2050. Their total GDP, in real US dollar terms, will be over 70 per cent more than that of the other G20 countries combined."

Other main findings say that China will become the world's largest economy in 2032, and grow to be 20 per cent larger than the United States by 2050. Over the next 40 years, nearly 60 per cent of G20 economic growth will come from Brazil, China, India, Russia, and Mexico.

Growing at a projected rate of 6.19 per cent between 2009 and 2050, India would grow most rapidly among the G-20 group of world's leading economies, the making Indian economy 97 percent as large that of the US in terms of purchasing power parity (PPP), two writers of the article said.

The article further said that in dollar terms, India's GDP is expected to increase by 16 times from the current $1.1 trillion to $17.8 trillion by 2050. ''The world's economic balance of power is shifting dramatically,'' noted the writers Uri Dadush, the director of Carnegie's international economics programme, and Bennett Stancil, a junior fellow in the programme.

But the study warns that despite impressive GDP growth in the developing world, relative per capita GDP will remain low, and wide disparity in per capita GDP among these countries will persist, the study says.

By 2050, the United States and Europe, long the traditional leaders of the global economy, will be joined in economic size by emerging markets in Asia and Latin America, they wrote.

Over the next 40 years, the G20 GDP is expected to grow at an average annual rate of 3.6 per cent, rising from $38.3 trillion in 2009 to $161.5 trillion in 2050, in real US dollar terms. Nearly 60 percent of this $123 trillion expansion will come from Brazil, Russia, India, China and Mexico (BRIC+M), Dadush and Stancil projected.

Of the G20 countries, though India is predicted to grow most rapidly, its current modest size will prevent it from surpassing either China or the United States in real US dollar terms.

A growing population - India is expected to become the world's most populous nation in 2031 - and an average exchange rate appreciation of 0.9 per cent per year will push annual GDP growth to an average of 6.2 per cent, the two experts said.

Courtsey : http://www.domain-b.com/economy/general/20091121_indian_economy_oneView.html

Monday 16 November, 2009

Life insurance penetration in India - as of Nov 2009

Life insurance penetration in India stands at about 4 per cent at present. Only 26 per cent of rural and 60 per cent of urban population have life insurance cover.

"There is a huge scope for premium expansion. Life insurance penetration is relatively low in India with premiums/GDP at 4 per cent versus 6 per cent for developed nations. India is the fourth largest life insurance market in Asia ex-Japan and has recorded high 31 per cent CAGR over the past six years in total premiums," Enam said.

Sunday 15 November, 2009

What is WPI ?

WPI is a price index representing the wholesale prices of a basket of goods. In several countries such as India it is used to measure the inflation,
the general rise in the prices of goods. It is released on a weekly basis on every Thursday to measure the change in the wholesale prices of a set of goods. As the name suggests it does not take into account the price at which consumers buy goods but on the wholesale basis. The rationale of having WPI is to know the demand and supply condition of goods included in the economy. Earlier the base year for the calculation of WPI was 1981-82. But with effect from April 1, 2000, the office of the economic adviser to the government of India, part of the ministry of commerce & industry, revised the base year to 1993-94. The WPI is based on the prices of 435 commodities.

Why is it in news?

WPI became the buzzword after the news of its replacement by a new comprehensive WPI. It is expected to be functional from the start of April 2010. For the reporting of wholesale price data of manufactured products, the government has already moved to a monthly reporting system. However, for other products — primary and fuel — the prices will be released on weekly basis. For the current index the data is sourced from around 2,000 companies, whereas, for the new index prices will be sourced from over 6,000 companies. The base year for the new index is going to be 2004-05. Also, according to the proposal, the number of products included for the calculation of WPI will increase from 435 to 1,224 as many new products such as cell phones, laptops and digital cameras will be added.

How is it different from consumer price index (CPI)?

While WPI represents the wholesale prices of goods, CPI indicates the average price paid by households for a basket of goods and services. It is also used to measure the inflation. Four kinds of CPIs are released namely CPI for urban non-manual employees, industrial workers, agricultural labourers and CPI for rural labourers. Even the wealth managers use inflation calculated based on CPI for the financial planning because CPI is based on price that consumer pay.

What’s the practice elsewhere?

Some countries such as India and Philippines use WPI to measure the inflation. They calculate inflation as percentage change in WPI for that period. Now India and the US come out with producer price index. CPI is also used in different countries, however, with different names. For instance in United Kingdom it is called retail prices index. In Canada CPI is published on a monthly basis.

Source : Economic TImes

Financial Action Task Force on Money Laundering (FATF)

The Financial Action Task Force on Money Laundering (FATF), also known by its French name Groupe d'action financière sur le blanchiment de capitaux (GAFI), is an intergovernmental organization founded in 1989 by the G7. The purpose of the FATF is to develop policies to combat money laundering and terrorist financing. The FATF Secretariat is housed at the headquarters of the OECD in Paris.

Saturday 8 September, 2007

Insurance industry Software Packages

XYCOR - Xybernet
Cogen(P&C) - CSC
CYBERLIFE - CSC
ELIXIR - MASTEK
INGENIUM - EDS

Monday 3 September, 2007

Insurer JVs in India

ICICI - Prudential (UK) life
ICICI - LOMBARD (UK) General

SBI - CARDIF SA (FR, holding compny of BNP Paribas) Life (credit insurer)

BAJAJ - ALLIANZ (GER)

TATA - AIG ( US)

HSBC - ORIENTAL BANK CANARA BANK

DABUR - AVIVA

BIRLA - SUNLIFE (CAN)

HDFC - STANDARD LIFE (UK) ( Mutual insurance co)

MAX - New York Life Insurance (US)

Kotak Mahindra - OLD Mutual Plc (south africa)

Bharati - AXA ( French)

Indian Farmers Fertilizer Co-operative Limited (IFFCO) - TOKIO (Japan)

Source - http://www.bimaonline.com/cgi-bin/insurers/allbajaj.asp