3 Ways to Improve Your Purchasing Power
Both good credit and a higher income give you more buying power and lowers the interest rate on the money you borrow. One way to increase your current income is by going back to school for more education. Improving your marketable job skills gives you more leverage if you decide to approach your boss and ask for a raise. Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal.
Arvind Subramaniam has no doubt correctly spoken of the downturn in the Indian economy, but he has not gone deeper and gone into the cause and remedy. Markandey Katju New Delhi June 19, am. But what is produced has to be sold, and how can it be sold when our people are too poor to buy?
Representational Image: iStock. The recent research paper published by the former Chief Economic Adviser to the Government of India, Arvind Subramaniam, now at Harvard University, has created quite a stir in government circles. In his paper Dr Subramaniam has said that the Indian economy did not grow at 7 per cent between and as earlier claimed by the Indian National Statistical Office but at 3. He analysed data on 17 different purchasinv indicators e.
However, without going into the details of this controversy, there is no doubt that the Indian economy is in the doldrums. Almost every businessman I spoke to said that business is bad. Purchasinb according to official figures and these may not be accurate, as Dr Subramaniam has mentioned GDP declined rapidly from 8. In recent years one has not seen such a decline in four successive quarters. Manufacturing has been particularly hard hit. Car sales were down 16 per cent in Apriland 21 per cent in May, the worst decline in powrr years.
The real estate sector is in a slump. In the power sector, 52, MW of assets are deeply loan-stressed. Government-owned State Electricity Boards SEBwhich are power generators, owe Rs 38, crore, a 60 per cent increase since last year. In addition, they owe another Rs 17, crore as regulatory purchasong, making a total debt of Rs 55, crore. In the oil sector, India imports 84 per cent of its oil requirement from abroad, much of it from Inrcease whose oil price is cheaper than from other countries.
Big infrastructure companies in power, roads, telecom, aviation etc. Domestic consumption has tanked sharply. Bellwether sectors like two-wheeler manufacturing companies showed decline of per cent in sales in March Sales of Hindustan Lever are flat.
Maruti Suzuki cut its production purchasijg 38 per cent in the three months starting February Air passenger traffic is at a record 5- year low. Among the worst hit are car and two-wheeler sales. Stockyards and dealerships are chock full of unsold cars and two wheelers. According to the Economic Times, current inventories arecars and 3 million two-wheelers. Seven of the top auto makers have shut down their factories, and many car showrooms across the country have closed down, while others like Mahindra and Maruti Suzuki are either observing no production days, or about to observe them.
Investors want safety of their investments. But a large part of private investment in India has been laid increae waste. A large number of plants do not have gas, and many have not got a power purchase agreement PPA since the cash-strapped SEBs are reluctant to sign them.
Without a PPA the investment is dead. President Trump has written to Congress that India will lose preferential trade terms with US under the GSP programme, saying India had failed to assure the US it would provide equitable and reasonable access to Indian markets. All these are sound gimmicks. Who will buy these sick PSUs? Last year an attempt was made to sell 76 per cent equity of Air India but there was not a single bid.
And where will one get land except by dispossessing poor farmers? In my opinion the cause purchasinf increased production but lack of corresponding increase in the purchasing power of the Indian masses. There is no difficulty in increasing production in India since we have a huge pool of engineers, technicians, scientists and managers Indian IT engineers are largely manning Silicon Valley in California and Indian Professors are in Science, Engineering, and Maths departments of many Western Universitiesand we have immense natural resources.
So how then can the purchasing power of our masses be raised? This is the cardinal question which must be solved if our economy is to revive. In the Soviet Union industrialisation on a large scale began in when the first 5 Year Plan was adopted. The broad methodology which was then adopted was this: prices and wages were fixed by the government, and every pudchasing years or so prices of most commodities food, clothes, etc were reduced by per cent and sometimes how to increase purchasing power raised by per cent.
The result was that by state action not laissez faire the purchasing power of workers was raised purchasnig wage is relative to the price index. So even with the same wages the worker could now buy more goods. In this way the domestic market steadily expanded. Simultaneously, production was stepped up, and the increased goods could be absorbed in the domestic market. Thus the Soviet economy rapidly grew after with full employment, at a time when the Great Depression following the Wall Street Slump of resulted in huge decline in production and massive unemployment in the Western countries like USA, UK, Germany and France.
Here it may be mentioned that we must mainly rely on our domestic market if we want stability, because over-reliance on foreign markets is often precarious, how to tighten skin around stomach it may be cut off by another power, or there may be a recession in the foreign country. Today there is a world wide recession, and we will find it difficult to compete with the Chinese and others in foreign markets.
I am not saying India must follow the Soviet model. We how to claim against public liability insurance find out any other way of increasing the purchasing power of our masses. But unless we do that the economic situation will not improve, and in fact will in all probability get worse.
Purchasing power rise a must to how many cigars did winston churchill smoke a day economy. Related Latest News. Maruti Suzuki February sales rise Maruti Suzuki exports crosses 20 lakh vehicle milestone. Top Headlines. It now comprises A net incline of what are therms on my gas bill, cases recorded from the total active caseload in the last 24 hours.
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Buying & Selling Stock
Oct 29, · Raise purchasing power How do I raise the purchasing power of my citizens? I want to be in the top of the happiness ranking, but the poverty keeps in 30% Showing of 1 comments. doz. Oct 30, @ am (-) dilapidated housing. (-) income tax. . Sep 26, · Calculate the change in purchasing power by multiplying the ratio of base year CPI () to target year CPI () by For example: (/) x = %. This means that the purchasing power of dollar declined by % from the year to year Do the equivalent dollar calculation. Using margin can increase your buying power, allowing you to free up funds or trade more of your chosen stock. Keep in mind that even though your broker loaned you half of the funds, you are responsible for any potential shortfall due to a decline in position value.
Margin is generally used to leverage securities you already own to buy additional securities. Margin allows you to borrow money from your broker-dealer in order to increase your buying power. Since margin is a loan, you can think of securities you own in your cash account as the collateral for the loan.
Equity consists of cash plus the market value of securities in the account. While a margin account offers a greater range of trading strategies due to the increased leverage, it also carries more risks than a cash account. There is a possibility that you could lose more than your initial investment, including interest charges and commissions. A request for additional funds due to a drop in the value of your margin portfolio is referred to as a margin call. A margin call occurs when the value of your account drops below the minimum level established by your broker-dealer.
To resolve a margin call, you can either deposit more funds into your account or close out liquidate some positions in order to reduce your margin requirements. You are also responsible for any shortfall in the account after these sales.
By contrast, a margin account allows you to borrow half of the cost of the trade from your broker. This activity would also be subject to applicable fees, commissions, and interest. Using margin can increase your buying power, allowing you to free up funds or trade more of your chosen stock. Keep in mind that even though your broker loaned you half of the funds, you are responsible for any potential shortfall due to a decline in position value.
Furthermore, if the price of your stock falls enough, your broker will issue a margin call. Things can get interesting when you use margin to make options trades. However, using margin on options can get fairly involved and often requires a matrix like the one below to calculate the requirement:. We also include the requirement on the order ticket prior to the moment you place the trade.
Learn more about margin trading , or upgrade to a margin account. Understanding the basics of margin trading. Rules and regulations. What are the risks? Tell me more about margin calls. Using margin for stock trades. Using margin on options trades. What to read next For your consideration: Margin trading. Read this article to understand some of the pros and cons you may want to consider when trading on margin. Looking to expand your financial knowledge?