Political Structure The current head of the government is Prime Minister Manmohan Singh, and the head of state is President Pratibha Patil (in a ceremonial role). Currency Details The Indian Rupee is the original official currency of India. The English translation of “Rupee” is “silver,” and the name exists because it was previously a silver coin. This very fact had severe consequences in the 19th century, when the strongest economies in the world were on the gold standard. The discovery of vast quantities of silver in the U.S. and various European colonies resulted in a decline in the relative value of silver to gold. Suddenly, the standard currency of India could not buy as much from the outside world. Such circumstances led to what is now referred to as “the fall of the Rupee.” During the period 1950-1951 until mid-December 1973, India followed an exchange rate regime with the Rupee linked to the Pound Sterling, except for the devaluations in 1966 and 1971. When the Pound Sterling floated on June 23, 1972, the Rupee’s link to the British unit was maintained-thus, paralleling the Pound’s depreciation and de facto devaluation. In 1975, the Rupee’s ties to the Pound Sterling were disengaged. India established a float exchange regime, with the Rupee’s effective rate placed on a controlled, floating basis and linked to a “basket of currencies” of India’s major trading partners. More recently, the Indian Rupee has been depreciating in step formation, but roughly in line with the fall in its Purchasing Power Parity since the early 1980s. While the PPP was 15 around 1982, the actual exchange rate was 9.30 per US dollar. After the devaluation, the Rupee underwent the change from a controlled regime to a “Managed” or “Dirty” float regime, where the market supposedly determines the exchange rate. In mid 2005, the actual rate was near 43.60, and on 1 May 2012, it was at 54.50. Sovereign Ratings for India Moody’s Rating Baa3, April 2012 S&P Rating BBB+ Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets. What does it look like? Political Structure India is a federal republic with a parliamentary form of government. The Parliament consists of a bicameral national legislature, with the Rajya Sabha (Council of States) containing 250 members and the Lok Sabha (House of the People) with 545 members. India is a Union of 28 States and seven centrally administered Union Territories. Prominent Figures Chief of State President Pratibha PATIL (since 25 July 2007); Vice President Hamid ANSARI (since 11 August 2007) Head of Government Prime Minister Manmohan SINGH (since 22 May 2004) Cabinet Cabinet appointed by the president on the recommendation of the prime minister Elections president elected by an electoral college consisting of elected members of both houses of Parliament and the legislatures of the states for a five-year term (no term limits); election last held in July 2007 (next to be held in July 2012); vice president elected by both houses of Parliament for a five-year term; election last held in August 2007 (next to be held August 2012); prime minister chosen by parliamentary members of the majority party following legislative elections; election last held April – May 2009 (next to be held no later than May 2014) Election Results Pratibha PATIL elected president; percent of vote – Pratibha PATIL 65.8%, Bhairon Singh SHEKHAWAT – 34.2% Key Economic Factors Consumer Price Index: The CPI is used to measure inflation by computing changes in prices of products consumed by households. In India, prices are susceptible to rapid increases. Consumers are not immune to these price hikes, as wholesalers have a strong ability to pass the raise in price along. Gross Domestic Product: The Central Statistical Office of India recently started using data reporting standards of the International Monetary Fund (IMF), reporting the GDP in early quarters of the late 1990s. The GDP measures the total production and consumption of goods and services in India. It is necessary to look at changes in real GDP growth in India’s primary industries, which include agriculture, manufacturing, trade, hotels, transport and communication. Industrial Production: The index of Industrial Production (IIP) is a monthly composite of the value of industrial production in various sectors of industrial sectors of the economy. The current IIP includes the mining, manufacturing and electricity industries, each with different weights. The mining and utility industries in India are especially worth watching. Have additions or corrections to this material? Let us know ! Related Topics
Posted on: Mon, 02 Sep 2013 05:50:24 +0000
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