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Dec 27, 2008

Conference On “Emerging Financial Markets”

Director of PSG Institute of Management R.Nandagopal, president of Southern India Engineering Manufacturers’ Association Jayakumar Ramdass, Associate Professor of Finance from the University of Toledo Andrew Solocha and Co-ordinator of International Centre for Finance at PSGIMS V. Srividya at the conference on Emerging Financial Markets in the city.
Increasing consumption in the domestic market, high levels of saving and robust investments demands are the three pillars of the Indian economy that are still intact, according to Jayakumar Ramdass, president of the Southern India Engineering Manufacturers’ Association. Inaugurating a conference on “Emerging Financial Markets” here recently, organised by the International Centre for Finance established at the PSG Institute of Management in association with the University of Toledo, San Diego State University and Florida International University, he said that the savings were almost 35 per cent of the GDP in the country.

The average return for capitals employed in the Indian corporate sectors was about 21 per cent.
No Indian bank had approached the apex bank for recapitalisation. These were some of the factors that indicated that the Indian economy was still doing well. World markets were in ruins today. Every day there were reports of fall in employment and bankruptcies. One prime reason for this was unrestricted consumerism. Consumers were spending without earning to the same level. For instance, in the U.S., banks were giving loans to buy houses and the terms of lending were easy. As the bubble grew, the quality of lending suffered and eventually the banks realised that the borrowers were not repaying.

Foreclosures led to prices coming down. These banks got money for the lending from their borrowings from across the globe, more from countries such as China and Japan. Emerging markets were used to describe economies of countries that were not as wealthy as the developed world. The Indian economy was projected to grow at 6.5 per cent to 7 per cent and in the current global scenario, it was expected to emerge stronger. International crude oil prices had slumped. There was a drop in metal and fertiliser prices and all these meant that the import bill for India would be lower.

In terms of structural benefits, half of Indian economy was services and rest was industry and agriculture unlike the economies of Brazil, Russia or China. Andrew Solocha, Associate Professor of Finance, University of Toledo, said the recent crisis in world financial markets underlined the inter-connectivity between the emerging market and developed markets. There were unique problems in each country and these were being studied. The conference was trying to focus on the special needs of the Indian economy. The solutions for India would be different from other countries. The outcome of the conference would be shared with academicians, practitioners and policy makers.

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