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Who will be the Newsmakers of 2011?

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Year 2010 has been a mixed bagger for India in terms of business, politics, economic growth, infrastructure, social media, equity markets, scams and various other aspects.

Primarily speaking, two events – one positive and one negative – that stood out in the public image during 2010 were the ‘V’-shaped recovery logged in by the industry and trade bouncing back from the 2008 slowdown and the major scams that were unearthed eroding thousands of crores of tax-payers money.

However, instead of cribbing about the unfortunate events that choked 2010, let’s discuss about the probability of events that might occur in the New Year 2011 affecting both you and me, in ways more than one.

Economy – Consolidation in the offing

The 2008 economic crisis came as a swirl wind and passed away leaving the growth prospects of the Indian economy unscathed. The domestic economy witnessed a ‘V’-shaped recovery in the latter half of 2009 and whole of 2010. The year has witnessed over 8.5% growth marking revival of the Indian economy in 2010.

However, this recovery has come at a time when major developed economies globally are still ailing under the symptoms of recession and sovereign debt crisis. The US economy is still in the doldrums with the painful grip of unemployment still not loosening its tentacles. On the other hand, the Europe’s festering debt crisis is already keeping investors on the edge well into the new year.

In today’s world of globalization, it is difficult to perceive India’s economic growth as being totally disbanded from the tumultuous events occurring in the major developed economies. Moreover, even the Indian IT-BPO industry is dependent significantly on outsourcing to the western economies. Sustaining this year’s robust growth in 2011 depends on how fast these western economies recover.

Changing Politics – All set to witness Turnaround

With Nitish Kumar’s hands down victory in recent Bihar Assembly election, there was a sharp turn from the traditional caste politics to a development-oriented agenda. Political observers attribute this game-changer victory to Bihar’s 11% GDP growth under his rule, improved administration and the break with identity politics.

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The decisive defeat which reduced Laloo Prasad’s RJD to meagre 22 seats was as a result of underlying change in voter attitude in favor of Nitish Kumar’s development works – encompassing infrastructure issues to social causes such as improving health and education services, apart from good governance practices.

The voters seem to have finally realized the power of their vote. The electorate has clearly spelled their message to the babus – you have to perform or perish, to remain in the contention. Surprisingly, this stern message has come from Bihar voters which constitute of quite a few backward caste aspirants.

Inflation and Crude – The untamed tigers

The negative markdown of the rapid economic recovery in 2010 has been the inflationary pressures triggered by supply side factors. The last month has been a witness to steep rise in the prices of food articles such as onions, tomatoes and garlic.

Rising crude prices to over $90 per barrel could only compounded the problems of RBI which had to resort to hike in policy rates as many as 6 times during the year in a bid to curb inflationary pressures. Crude trackers are already estimating the crude oil prices to move past $100 per barrel powered by decline in OECD inventories.

Crude oil prices

Going into the new year, there are no signs of cool down in the WPI index what with food inflation for the week ended December 18 touching a 10-month high of 14.44% as vegetables prices soar sky-high. Analysts estimate that going further even milk and poultry items are likely to raise their heads in a bid to exert pressure on food price inflation.

It goes without saying as to how political parties very well understand the influence of food and kerosene prices to an aam-aadmi’s budget; yet they have little control over the fluctuation and demand-supply dynamics of these basic necessity items.

Scams – More to come!

No, I am not going to speak anymore about the scams that have been unearthed so far. We have had enough of discussion on the scams that shook India. An aspect that gains significance at this juncture is the ability to look out for such scams and determine the reasons behind them.

The reason could be either of the two: A desire to live by stealing rather than working; or getting into a series of unscrupulous activities to hide a wrongful deed, like in the case of Satyam Scam. The emergence of frauds under the latter case can not be ruled out in 2011.

The reasoning being we just had a severe slowdown in 2008 which jolted the normal flow of business and trade activities in various industries spanning across banking to automobile to even construction industries. Thus, somewhere deep into the system there could be a probable Satyam-like scam that might still be brewing behind the veils and ready to explode in 2011.

Sports – More than just Cricket

In the year 2010, the Indian sporting arena has witnessed it all – from the fall of Sania Mirza to the rise of Saina Nehwal to Sachin Tendulkar’s 50th Test Century and not to mention the golden streak achieved by the Indian athletes in the Commonwealth and Asian Games.

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The year will go down as a remarkable one for the Indian sports in general as it dwelled beyond the mass-followed game of cricket. Indian sportsmen recorded some of their best performances this year in a wide range of disciplines ranging from hockey, badminton, wrestling and even gymnastics.

India ranked second in the CWG and won an unprecedented medal haul in 14 disciplines at Guangzhou which demonstrates that Indian sportspersons are not willing to stay away from the global limelight anymore. Hopefully, the good run will continue in the next year as well.

Social Media – Evolving at a breakneck Speed

Social media has emerged as the most dynamic, interactive and user-centric system to being people-centric Web version. The latest justification for this being Facebook edging past Google for the first time as the most visited site in the US for the year 2010.

The internet industry has emerged dynamically with social media inculcating a profound alteration in the way people get news and interact with each other. It also somewhat indicates that internet users are gradually moving away from the search engines and increasingly relying on the knowledge-based mantra of social media.

Google has few inroads when it comes to social networking arena. For once, Facebook has run past Google when it comes to online identity. Some tech wizards are speculating that one way Google could gain control of the situation is by acquiring the social networking site Twitter. I wonder, whether that would happen in 2011? Even if it does, Twitter won’t be available for cheap, for sure. What say?

3G Technology – Going beyond Smartphones

While low-cost smartphones was the mantra during 2010, 3G-enabled handsets is all set to be the one in 2011; what with the 3G technology ready to be rolled-out by the private telecom operators during January’ 11. Further, with the coming up of 3G, the market for smartphones will also receive a boost in demand.

What remains to be seen is how affordable are the start-up 3G connection costs to the consumers. Reliance Communications has announced the pricing for the 3G mobile broadband at Rs.100 for 100 MB to Rs.2100 for 21 GB per month. The small validity packs for prepaid will cost Rs.20 for 25 MB with 1-day validity.

Overall, if consumers are offered 3G plans which ask for less than what they pay for their fixed broadband services; it could set forth a lucrative market for the premium 3G offerings for the telcos. Telecom analysts do not expect a rate war amongst telecom operators for the 3G offerings, unlike 2G voice services.

What’s your view – who will be the biggest newsmaker in 2011?

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