DEPARTMENT OF ECONOMICS MOUNT CARMEL COLLEGE

 

  ‘ECO-AINTED’

Get acquainted with economics…….. Volume: 2 Rs. 6 Issue: 1

A MESSAGE FROM SR.JUANITA

                                                           

We need a new system of sustainable economics. No

economic system is sustainable unless it accommodates

the ecosystem on which it depends. Our current system -

based on the notion of perpetual economic expansion on

a finite planet is seriously flawed. We urgently need to

apply human ingenuity to the goal of using far less from

nature to meet our needs instead of exploiting nature

continuously to meet the superfluous and false "needs"

that the Corporate sector creates by using

advertisements. We need to acquire the ability to

distinguish between need & greed, by following

Gandhiji's principle of 'Simple living and High

Thinking'.

I wish the Core Team of EcoAinted every success in

their pursuits and hope that through their newsletter they

spread the message of sustainable development.

 

A MESSAGE FROM MRS. SHALINI PUJARI

“I would like to congratulate the Editorial team of

our department newsletter, ‘Eco Ainted’ for

encouraging students to submit research based

articles. This will help to infuse scientific temper

in their analysis of economic events and issues and

update their knowledge of current affairs in the

field of economics and motivate them to take up

research in a professional manner.”

Mrs. Shalini Pujari

From the Editorial Board -

Greetings Readers!

It gives us great pleasure in launching the third issue of our newsletter ECO AINTED from the Department of Economics, Mount Carmel College, Bangalore. This newsletter is a student initiative with active support from the Faculty of the Department of Economics.

We hope our tagline ‘Get Acquainted with Economics’ truly manifests itself in each one of you. Issues of our newsletter comprise articles, crossword, animation strips and we truly believe it will give you insight into the fascinating world of ECONOMICS.  

 

 

AN INTERVIEW WITH MRS. SHALINI PUJARI Mrs. Shalini Pujari has spear-headed many practical projects motivating her students to find effective solutions for various problems. One of the projects she undertook was tree-planting, which was the outcome of the tree-auction at Sankey Tank that she witnessed along with her students as part of experiential learning while sustainable development was being taught in class . The tree-auction was a wakeup call to all the citizens of Bangalore about the depleting green cover of the city. “If we are not part of the solution, we are a part of the problem”, with a firm belief in the wisdom behind these words Ms.Shalini Pujari formed a team of enthusiastic girls who truly wanted to work towards tackling this issue. They decided that for every one tree that was being felled, they would plant 10 more. “The entire project was handled in a very systematic manner by Toshita, Aparna and their team mates, from III EMS(2009 - 12). The team undertook a field survey and identified the trees that were needed by various organizations and ensured that the trees would be taken care of after planting them”, says Mrs Pujari. The tree planting project was a success. "Though we initially set out to plant over a 100 trees, within two months we planted over 60 trees. Due to constraints of time and the other commitments of our students we decided that we had done our bit. We also filmed the entire process and made a brief documentary. When this film was shown to the present final year students a new team of students under the leadership of Aditi (III PyEE) took up another project to deal with the problem of management of E-Waste. They conducted an awareness campaign on E-waste in Mantri Mall and are presently working on setting up E-waste collection points at retail outlets like Nilgiris.” Asked whether the Carmelites are eco friendly she feels that girls in Mount Carmel are quite aware regarding the environment. The campus is clean and there is a lot of greenery in college. Garbage segregation is strictly followed in the campus. Another issue which Ms Pujari considers very important is the traffic jams that plague the city and our very own Carmelites. She wishes to encourage the use of safe and convenient public transport. This will benefit students living in distant areas of the city. She quotes, "I want our students to live a sustainable lifestyle and contribute to the environment.” A former student, Nikita (III Pyes, 2009 - 12), was motivated to conduct an online transport survey, and on analyzing the 600+ sample surveys, it was found that a majority of our students want to opt for public transport, provided it is cost effective and convenient. Punctuality, reliability, regularity and accessibility will make it more popular. “If we could create a pilot project based on this, and provide these facilities, it would take us a long way in creating sustainable lifestyles for all citizens of Bangalore". Mrs. Pujari feels “We cannot leave all responsibilities on the government; there are certain things which we as citizens can do”. When asked about the voting rights awareness project conducted by a student team in the college, she stated that the survey revealed many students wanted to have a voter’s ID but thinking of the long process involved in this, most of them refrained from getting it done. “Workshops must be conducted to make the Carmelites aware about the importance of enrolling as voters.” Personally Mrs. Pujari does not believe in students joining politics. She says “what the young people in India should do is ensure that they register as voters and vote, taking care to choose the right kind of political leaders who can lead the country. If we don’t use our franchise in the right manner we don’t have any right to criticize the government. The youth form a majority of our population, so if they unite as a vote bank then big changes can be brought about in the country.”                                                                                                        Mrs. Shalini Pujari, HOD, Department of Economics.     TOSHITA, APARNA & TEAM ADITI, SHRAVANTHI & VISHAKA COLLECTION OF E-WASTE    

                                           

STUDENTS ACHIEVEMENTS

The students of Economics, Mount Carmel College Bangalore, have done us proud every year by winning the

title of ‘The Young Economist’, at the National level Competition held by Christ University, Bangalore.

This year, Ms. Roshni Khincha, a student of the third year B.Sc stream pursuing Economics, Mathematics &

Statistics as her subjects, was awarded the ‘Runners – up title’, for the topic – ‘The Analysis of determinants of

Current Inflation in India’.

'INTERNATIONAL ECONOMICS’

EUROPEAN DEBT CRISIS The European debt crisis is the shorthand term for Europe’s struggle to pay the debt it has built up. Five of the region’s countries –

Greece, Portugal, Ireland, Italy, and Spain are in immediate danger of a possible default. The crisis began after the U.S financial crisis

2008-2009 which exposed the unsustainable fiscal policies of countries in Europe and around the globe. Its effects were first seen in

Greece. The European Union tried to bail out the troubled economies and the European Financial Stability Facility (EFSF) was created to

provide emergency lending to countries in financial difficulty. The European Central Bank (ECB) made 639 billion in credit available to

the troubled banks at ultra-low rates.

The investors’ reaction to any bad news emerging from Europe was swift: sell anything risky, and buy government bonds of the largest,

most financially sound countries. Europe remains in turmoil. Greece's exit from the euro appears inevitable. In addition, over 50 percent

of investors surveyed by Bloomberg News predict an exit of a euro member at some point in 2012. Instability continues to affect the rest

of Europe as well. Spain, for its part, faces 25% unemployment with no clear path to growth. European policymakers - who already lack

unity - face a difficult choice: keep the currency union together, with all of the challenges that would entail, or allow Greece (and

possibly Spain and/or Italy) to exit, a path that would likely lead to financial market chaos. As a result, the chance of a further economic

shock to the region - and the world economy as a whole - is still a significant possibility and will likely remain so for several years.

Vaidurya.D III PYEE

 

If an

exchange

between

two

parties is

voluntary,

it wil l not

take place

unless

both

bel ieve

they wil l

benefit

from it .

Most

economic

fal lacies

der ive

from the

neglect of

this

s imple

insight,

from the

tendency

to assume

that there

is a f ixed

pie that

one party

can only

gain at

the

expense of

another .

THE DIPPING YUAN- CHINA’S ULTIMATE

TEST? The ups and downs of the Yuan depreciation scales

One of the few major emerging market currencies that has managed

to retain its lower value against the strengthening US dollar, China’s

Yuan is being tested in the wake of the deepening Euro crisis and

years of heavy pressure from the US to appreciate the yuan with

respect to the dollar to balance bilateral and global trade.

The Yuan fell against the dollar on Wednesday May 30th, hitting a

fresh 2012 low, as the dollar index skyrocketed to its highest level

since September 2010 in Asian trade amid lingering uncertainties

over political and economic troubles in the euro zone.

However, recent trends in the depreciating Yuan are making

economists reconsider the currency’s projected appreciation of 2-3%

this year. This, exacerbated by the worsening global financial crisis

and slowing Chinese economy and inflation has driven investors to

the safe haven of the reigning US dollar. Yet Cao Yuanzheng, chief

economist at the People’s Bank of China (PBOC) believes that the

weakening of the Yuan and other currencies of emerging economies

is not due to depreciation but due to the rapid appreciation of the

dollar.

As China struggles with a slowing economy the PBOC has slashed

banks’ reserve ratios, injecting liquidity into the economy. Following

Chinese premier Wen Jiabao’s announcement in late 2011 that he

would allow more freedom for the Yuan to fluctuate, the PBOC is not

inclined to severely restrict the Yuan’s depreciation as a weaker Yuan

means higher exports. In addition, the Yuan’s decline is on a far

smaller scale than other emerging currencies.

The Yuan is in fact expected to appreciate as the Euro zone situation

improves and manufacturing activity is already exceeding

expectations. Many economists also believe that China’s economic

strength indicates steady long term growth, leaving no space for

major deprecation.

- Aditi Natarajan III HEP

   

 

SOVEREIGN WEALTH FUNDS A sovereign wealth fund is primarily a Government owned

investment set-up that is used for macro-economic purposes,

and is composed of financial assets in a foreign currency. As

of 2012, the estimated assets in SWFs are said to gross a

whopping $10 trillion, of which the oil and gas exporting

nations hold more than 50% of the share. These may be

classified as funds that are aimed at stabilization, savings,

long term investments, or even developmental funds.

The settings up of SWFs have paved way for a pro-active

investment set-up in the country that aims to complement

countries and their socio-economic strategies. These funds

facilitate Portfolio Management and promote Investment

Policies, thus diversifying returns for the country in terms of

long term prospects. With specific reference to the gulf

countries, SWFs have received phenomenal response over

the past few decades. Some of the most fundamental socio-

economic strategies have been driven by SWFs in the gulf

region.

Further, global SWFs set up by countries such as Norway

and Singapore are important precedents that have enabled

even emerging economies like India and China to adopt this

policy. In India, SWFs have received huge backing,

especially from the corporate sector. The primary purposes

of setting up such a fund is aimed at securing access to

natural resources and pursuing strategic opportunities

overseas.

Though recent financial crises have highlighted concerns

regarding the setting up of SWFs such as political cynicism

and extensive dependency on foreign currencies, one can

remain quite optimistic about the fact that India is slowly but

steadily recovering from the economic slowdown and may

contemplate setting up an SWF on its own in the near future.

- Jyotsna Sripada , Meghana H III EMS  

‘INDIAN ECONOMICS’  

When the Titans Clash

We Indians as well as people around the world have developed this sudden obsession of comparing India and China. Adding to this latest obsession is this article which compares the 2 economies.

The backgrounds of both the countries are more or less the same. Large population, poverty, illiteracy, unequal distribution of wealth, cultural and social hierarchy, innovations and continuing migration to urban areas characterize both the economies. So it is the economic and the political background that generally varies. Basically China is a communist state where as India is a Democracy (biggest!).

China has adopted a form of the Asian development model, invented by Japan and followed, to varying degrees, by many high-growth countries in East Asia. The model is basically built on the empirical evidence that countries capitalize on low wages to spark growth through exports and industrialize quickly with hefty amounts of investment. The government guides the whole process by employing industrial policies and directing finance to more advanced sectors.

India has adopted a consumption driven model that works in 3 aspects namely a) consumption over investment, b) services over industry, c) high tech over low skilled manufacturing. This approach has insulated the Indian economy from global downturn, showing a degree of stability that is as impressive as the rate of its economic growth.

We shall compare the 2 economies on the basis of certain parameters listed below:

1) Agriculture : The agricultural sector of China is more developed than that of India. Unlike India, where farmers still use obsolete methods of cultivation, the agricultural techniques used in China have been modernized ,leading to better quality and high yield of crops adding to its exports.

2) IT/BPO sector: One of the sectors where India has an advantage over China is the IT/BPO industry. India's earnings from the BPO sector in 2010 was $49.7 billion while China earned $35.76 billion.

3) Infrastructure : Compared to India, China has a much well-developed infrastructure. Some of the important factors that have created a stark difference between the economies of the two countries are manpower and labor development, water management, health care facilities and services, communication, civic amenities and so on.

4) Liberalisation : India was a little slow in embracing globalization and market economics. While India's liberalization policies started in the 1990s, China welcomed foreign direct investment and private investment in the mid 1980s. This made a significant change in its economy and the GDP increased considerably.  

5) Managerial Abilities/ Company development : This is one of the fields where India has an upper hand. Indians are better at managerial abilities and starting new businesses compared to their Chinese counterparts.   Comparisons are odious and so is competition. It is better if both countries co – operate for their mutual benefit.                                                                                                                Anshuma Chandak III EMS

India Today

The Indian economy has seen a tumultuous change over the last 21 years. Concepts that were previously unheard of took center stage, impacting every corner of the country in one way or another. As a part of the Indian Economics paper, students of III EMS researched various aspects and schemes in our economy, to understand where we really stand today. First, we consider agro-based industries. They contribute to enhancing the quality of, and the demand for, farm products. They have the potential to provide employment for the rural population in farming and in non-farm activities such as handling, packaging, processing, transporting and marketing of food and other agricultural products. Even now, they face constraints such as lack of adequate quality control & testing, inefficient supply chain, seasonality of raw material, high costs and cultural preference of fresh food. The airlines industry has made news lately, thanks to Kingfisher’s financial troubles. Having analyzed the two major players in the airline industry, Kingfisher Airlines is deep in the red while there is multi-fold growth opportunity for Jet Airways. Giving the management a second chance is often a good idea, but Kingfisher has already exhausted this option. On the other hand, the 3rdquarter financial performance of Jet Airways India shows the company's operations are rapidly improving. The momentum is likely to sustain in the next 3 quarters as well, given its cost rationalization in the past and the upward trend in passenger traffic. Indian Automobile industry has a lot of scope for both 2- and 4- wheelers due to development in infrastructure of the country. India has the largest 3-wheeler market in the world and also the 2nd largest 2-wheeler market in the world. According to the ISO, the PCI and national income are increasing, showing rising potential to buy vehicles. The growth rate of this industry is so high that by 2016, it will be the 7thlargest in the world. The financial market has been fraught with scams in the recent years. This has led to unhealthy practices and corruption. So, it is desirable to strengthen the integration of financial markets to reap the positive benefits of it. But, since the degree of integration is dependent on policy and institutional infrastructure, the ongoing financial reform program needs to be accelerated to further deepen the degree of convergence between the overseas and domestic markets.

 

Special Economic Zones are areas where market-driven capitalist policies are implemented to entice foreign businesses to invest in a country. Of the two most popular SEZs- Kandla SEZ (1st in India) and APSEZ (best private SEZ) it was found that the private SEZs are doing much better than their government counterparts. They have better facilities and are larger in size. Compared to China, India clearly lags behind, mainly due to the small size of the SEZs set up in India. Insurance in India is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, India's life insurance market has grown at more than 40% annually and as Indians become more familiar with different insurance products, this growth can only increase, with the period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry. India’s gross external debt as on 31st December 2011 was $289.7 billion (estimated). Growing Indian economy has led to widening of current account deficit as imports of both oil and non-oil have risen. Despite dramatic rise in software exports, current account deficits have remained elevated; boosting exports and looking for more stable longer term foreign inflows have been suggested as ways to alleviate concerns on current account deficit. Without a more stable source of capital inflows, Rupee is expected to remain highly volatile. It appears that the government would focus on tax reforms and better targeting of social expenditures to achieve fiscal consolidation while maintaining inclusive growth. The Indian retail sector accounts for 22% of the country's GDP and contributes to 8% of the total employment. India is among the most attractive investment propositions for global retailers and according to the Global Retail Development Index 2012, India ranks 5th among the top 30 emerging markets for retail. By 2015, more than 300 million shoppers are likely to patronize organized retail chains. While foreign direct investment policies in India have improved post independence, there is still scope for improvement. Recently, the Government of India allowed 100% FDI in single brand retail and 51% in multi brand retail, but the issue is still under debate. The political parties do not want to suffer from a ruling such as this even though the decision is good for the consumers. Indian markets are taking a dynamic role in the transmutation through IDRs. India has enough depth in its security markets to attract sizeable investor interest for IDRs, but there are still substantial hindrances to their growth in India. SEBI decided to reserve almost 30 % issues for retail investors, catching the attention of global giants. The concept of raising capital through the Depository Receipts is not novel to Indian companies. Several Indian companies viz., Rediff, Infosys have tapped overseas pool of capital by listing ADRs/ GDRs of their companies on overseas stock exchanges. With the introduction of the IDR regime, not only is there an additional avenue for foreign companies to raise capital in India, but also, an additional flexible route for Indian investors to invest in global corporations in an easy manner. With the ambit of eligible investors being expanded to include foreign investors as eligible investors to subscribe to IDRs, one can expect a surge in popularity of IDRs as a route for foreign companies reaching out to India as a destination for raising capital. Indian IT sector’s derives approximately 61% revenue from the US based clients. The revenue contribution from US clients to the top 5 Indian IT companies (who account for 46% of the IT industry’s revenues) is approximately 58%. In the face of the volatility in economic environment and currency, 2011 recorded steady growth for the technology and related services sector, with worldwide spending exceeding USD 1.7 trillion, a growth of 5.4% over 2010. The textile industry in India has made little attempt to forge partnerships – in equity, technology and distribution in overseas markets. The newer nuances of global apparel trade demand joint control of brand positioning, distributing and quality assurance systems. The government also needs to make policy changes like de-reserving the small-scale sector so that it can achieve economies of scale and adopt a synergistic approach so that India conquers the world market. Tourism in India is an experience of a lifetime owing to the rich culture and diversity. It plays a key role in the economic development - India earns the 2nd largest forex due to this industry. However, India has not made it to the top destinations because of lack of marketing, advertising, lopsided economic development and poverty. A few reforms that the Ministry of Tourism, Govt. of India is looking at is better and improvised publishing, advertisement, providing skill management, easy visa availability, poverty alleviation and lastly knowledge transfer. Coal is one of the world’s most important sources of energy, fuelling almost 40% of electricity worldwide. Coal will continue to play a key role in the world’s energy mix, with demand in certain regions set to grow rapidly. While there has been allocation of coalmines to private players (leading to the Coalgate Scam), in India, the key player continues to be Coal India Limited, a PSU. Just a year ago, India’s government expected double-digit growth in fiscal 2012, just as it experienced even during the worst of the Great Recession. Now, it’s forecasting only 6.8% growth — and even that may be too optimistic. High inflation, high interest rates, and a poor monsoon season, coupled with a political crisis that has brought the government to a standstill, have caused business, consumer, and investor confidence to plunge. There remains a need for efficient ground level implementation of policy decisions and the need of a long-term outlook to resolve economic challenges. India’s competitive edge in services may only remain for a short period in the future and newer engines of growth need to be discovered. An effective manufacturing policy that is integrated into the rural framework can go a long way in bridging the rural urban divide and unite the economy to grow inclusively as one. The key of Direct Tax Code, proposed to be implemented in April 2014 is to improve the efficiency and equity of Indian tax system by eliminating distortions in the tax structure, introducing moderate levels of taxation and expanding the tax base. The proposed Direct Tax Code 2010 seeks to address the issues relating to tax avoidance and evasion by bringing in General Anti-Avoidance Rules (GAAR) in addition to various transaction-specific Special Anti-Avoidance provisions. Implementation of GAAR has been proposed for April 2016. Public-private partnerships are increasingly seen as playing a critical role in improving the performance of health systems worldwide, by bringing together the best characteristics of the public and private sectors to improve efficiency, quality, innovation, and health impact of both private and public systems. While the provision of health is widely recognized as the responsibility of government, private capital and expertise are increasingly viewed as welcome sources to induce efficiency and innovation. As PPPs move from financing infrastructure to managing care delivery, there is an opportunity to reduce overall cost of healthcare. If partnerships are to be effective in addressing the issues of poverty reduction and equity, quality improvement, and cost containment, considerable work will need to be done to develop the accountability and transparency, the legal and regulatory framework, and the mutual trust that is necessary for partnerships to succeed.

 

‘FINANCIAL ECONOMICS’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Today,

there are

three kinds

of people:

the have 's ,

the have-

not 's , and

the have-

not-paid-

for-what-

they-

have 's .

~Earl

Wilson

 

 

An

economist is

an expert

who wil l

know

tomorrow

why the

things he

predicted

yesterday

didn't

happen

today.

-

Laurence J .

Peter

 

Currency Swaps ‘Minimizing Risk at a time of Economic Contagion’ In today's era of financial paralysis, elements of risk exposure, credit default and market volatility seem prevalent. Currency markets, being one of the biggest sufferers of the prevailing turmoil, have faced exchange rate fluctuations causing the depreciation of previously robust currencies. Hence, in response to increased exchange rate and interest rate risk, central banks around the world have adopted the policy of 'Currency Swapping' in order to mitigate the impact of potential investment loss. Typically a 'swap' implies an exchange, and hence a 'currency swap' implies a currency exchange which takes place between two parties that each agree to 'swap' a principle loan value with the interest rate in a particular currency in return for the same in another currency. The two pivotal aspects of a currency swap are the fixation of a future currency rate, commonly defined as a forward contract and that of the interest rates which is purely based on each party’s competitive advantage. This renders the technique a suitable hedging device and a cheap financer of debt. Emerging economies such as India have directed currency swapping towards three primary objectives- to hedge and minimize exposure to European debt, to stabilize foreign exchange reserves that have depleted due to extensive capital outflows and to boost domestic currencies. India, having recently entered into a swap agreement with Japan, aims to augment its reserves of dollars to provide for emergencies and to help appreciate the weak rupee. The growth of India’s currency swap market ensures the availability of foreign liquidity to re-balance the stumbling economy’s current account and fiscal deficits. Hence, it comes as no surprise that the country’s government retains its optimism about setting the economy’s 8 to 9% growth rate back on track Gayatri Kunte III HEP

 “Hedge funds - the future of indian investment?”

Exploring the remarkable story of Indian Hedge Funds The idea of hedging financial bets has become an attractive haven for investors. Hedging refers to the process of minimizing and diversifying risk in an investment portfolio. A hedge fund invests in a wide variety of assets that carry low risk, high absolute returns and optimized profits like government debt or short term stocks. Hedge funds are becoming significant investment prospects in developing economies like India as they are protective investment-buffers against tumultuous economic conditions currently present in the U.S. and EU. Moreover, as aggressive Indian investors enjoy larger gains, hedge funds become an inexpensive yet secure mechanism for locking up investible income. Indian hedge funds have certainly been on a ride since 2004, when there were only a handful of them throughout the country to an industry consisting of over 60 funds1 with an invested capital of US$ 3.8-4.2 billion today1. Indian hedge funds saw an astounding 100% annual increase in assets1 in the years until the 2008 recession, which led to huge capital outflows, losses and 70% drop in managed assets1. Miraculously, they recovered fast, making India the best performing region worldwide consecutively in 2009-10. The rupee having depreciated over 16%1 against the dollar in 2011 exposed hedge funds to negative returns due to foreign exchange risk. Yet the future of India’s hedge fund market seems strong as demand for secure investments is on the rise. Hence, returns on investments are likely to augment as income outflows generate larger capital inflows into the emerging Indian economy. - Gayatri Kunte & Aditi Natarajan

III HEP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Town Dollar Alternatives Widely used in the early 1900s, local currencies are again being recognized as a tool for sustainable economic development. On the 29th of September, 2006, the Berkshires county region of Massachusetts introduced its own local currency known as the Berkshares. The “great economic experiment” is a tool, for empowering the community by enabling merchants and consumers to plant an alternative economic future for their communities. The currency was started as a way of figuring out how to use capital as a tool to strengthen communities. The bills were designed by John Isaacs and are printed by Excelsior Printing on special paper with incorporated security features. Berkshares are printed in the denominations of 1, 5, 10, 20 and 50 and features images of local people who originated in the state of Massachusetts. So how does this system work? Berkshares function on a local scale the say way that the national currencies function on a national scale.-building the local economy by maximising circulation of trade within a defined region. The currency gives a 5% advantage to the users as the exchange rate works at 1 Berkshare=US 95cents. The exchange of currency takes place at the various Berkshare Exchange Banks which are scattered around the county. All the people have to do is exchange Federal Dollars for the currency. Berkshares can then be used by accepting businesses to purchase goods and services from other participating economic multiplier effect and keeping value recirculating in the region. There are a total of thirteen banks that are accepting and trading in Berkshares. The currency distinguishes the local businesses that accept the currency from those that do not, building stronger relationships and a greater affinity between the business community and the citizens of a particular place. As an attempt to strengthen the local economy, the program also seeks to increase public awareness of the importance of local economies and to foster optimism for the prospect of gaining local economic self-sufficiency. It also assures that a high percentage of each dollar spent will remain circulating in the community. This creates a positive environment for new entrepreneurial ventures and promotes locally produced goods. Berkshares will not, and are not intended to replace Federal currency. Their use will help strengthening the regional economy, favouring local owned enterprises, local manufacturing, and local jobs. IT also reduces the region’s dependence on an unpredictable global economy. Now the world is watching how the community of 19000 people is surviving the global economic turmoil- by using Berkshares instead of dollars! - Deachen Angmo III HEP Nupur Dhawan

 

 

                         ‘ENVIRONMENTAL ECONOMICS’  

 

 

 

 

 

 

                                                                                                                                                                                                       

                                       

                                         ANSWERS TO THE PREVIOUS ISSUE’S  

 

   

El Nino

El Nino-Southern Oscillation (ENSO) is a climatic pattern occurring once in five years, leading to drastic changes in the weather. According to long-range forecast scientist Sivananda Pai, El Nino conditions cause warmer atmospheric temperature, reducing precipitation, that is, lower rainfall.

As recently as 2009, India experienced an El Nino, which resulted in a drought which was the worst in three decades. Rainfall fell to 23% below normal, causing a sharp increase in food prices.

This monsoon, rainfall so far seems to have been woefully inadequate. As of the 27th of June, rainfall was 18% below normal. If the lull in the monsoon continues till mid-July, the IMD foresees cause for worry. At present, the IMD believes that the rainfall deficit will soon be overcome with the advancement of monsoons. The economy, however, already seems to be facing an adverse impact. India is, at present, facing double digit protein inflation.

With current deficits in rainfall, planting of pulses, cotton, paddy and soybean has been affected. Less than average rain in parts of Maharashtra has raised worry about the cane yield, where drought has already caused some damage. Rain in the next two weeks is essential to avoid further damage, and to facilitate the sowing of the abovementioned crops. Providing some respite, recent rains in Punjab and Haryana have improved the prospect of the soybean yield. As in other areas, sustained rainfall in the next week will be crucial to the progress in planting and sowing of summer crops.

The tourism industry is said to have recorded a 30% dip in the monsoon season, due to the delayed monsoon - another impact of the El Nino. It is hoped that after a dismal start, the monsoon will pick up, and that the impact of this El Nino is curtailed.

Anjaly John, Vishaka Kalra and Aditi D

III PyEE.

 

 

 

                                                                                                                                                       

                                                                                                                                                         

 

 

The

consensus is

that the

threat to

our health

and security

comes [not

from

natural

resource

deplet ion

but rather]

from the

byproducts

of

production

and

consumption

of non-

renewable

resources . "

— Stephen

D'Esposito

 

WORD  JUMBLE