Country Financial Market Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Inflation in India

Indian Government is trying their level best to overcome the issue of the inflation rate. Inflation rate is expected to reduce in the present financial year because of slowing down the real wage development rate in the rural areas and a control in the food price.

As per the rating agency Crisil, a slowdown in the real wage growth rate would make sure that inflation would be comparatively reduced in year 2013-2014. Furthermore it has also been estimated that the WPI inflation might turn down to 6.3% by reduction in the crude oil prices globally, incremental effect on the agricultural output and more declining of the overall core inflation.

Unemployment Rate

As per the statistical analysis of the ministry of labor and employment of India, the Sikkim ranked first at having the maximum number of unemployed people. On the other hand, Chhasttisgarh has the minimum number of without a job people in the country. The general unemployment rate in India is 4.75%. In rural areas the unemployment rate is 4.4% and 5.7% in urban areas.

Exchange Rate System

India followed the managed floating system. India has the fix its currency to the dollar at the exchange rate E₹/$ = 45.0. The Central Bank of India formally known as the Reserve Bank of India always plays a vital role to sustain this exchange rate. For this purpose, the Reserve Bank of India holds a handsome amount of dollars so that it can exchange it with rupees when necessary or even some times exchanges dollar to rupees depends upon the current circumstances. To use gold as the medium of exchange the Reserve Bank of India actually holds gold to replace with its currency.

Liquidity & creditability of the Indian currency

The liquidity managing process in India is exemplified by fast developing economy, strict policies by government and elevated interest rates therefore it is highly complex. Having a population or consumers of over 1.2 billion, India is expected to be the world biggest nation by year 2030 and may be the leading or largest economy by 2025. Supervision of liquidity in this limited environment required a personalized approach. Sometimes Reserve Bank of India tries their level best to grip the money supply or liquidity and move forward the short term interest rate. The Indian business experts say that at this occasion, India needs a credible policy to avoid the rupees decrease. Further, adding their point of view they say that the continuous depreciating value of the Indian rupee will not help the current account deficit issue (Sukhatme, 2002).

The stock and bond market of India

The Indian stock exchange is formally known as the National Stock Exchange of India. It is located in the financial capital and business hub and of India that is Mumbai. National Stock Exchange of India was formed in middle of 1990s. National Stock Exchange of India is fully equipped with the state of the art technological systems required for trading, which also includes a big screen based trading system. It is equipped with over two lack trading terminals. National Stock Exchange of India has played a vital role in modification of the Indian securities marketplace and showing the unparalleled competence, clearness and market integrity. National Stock Exchange of India has market of more than US$1.5 trillion. It has around 3,091 numbers of securities available as on June 2014. National Stock Exchange of India and the Bombay Stock Exchange are the two major stock exchanges in India.

The National Stock Exchange of India is on track by a grip of leading Indian financial organizations at the request of the Indian Government to convey clearness to the Indian marketplace, and has a diversified range of shareholders consist of local and global investor. The home investors comprises of Life Insurance Corporation of India, State Bank of India, GIC, and Infrastructure Development Finance Company as the overseas investors consist of Citigroup Strategic Holdings Limited , MS Strategic Limited, Tiger Global Five Holdings ,Citigroup Strategic Holdings Mauritius Limited, and Norwest Venture Partners. It proposes clearing, trading and the best settlement services in debt, equity and equity derivatives. It is India's major exchange, globally in money market deal, in the currency trading and the index options. Till the June 2013, National Stock Exchange of India has 1673 VSAT terminals and 2720 lease lines, broaden over more than 2000 cities across the India..............................

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