i wud first congrat and thank rediff for posting such informative news.and request them to bring us more insight into the back office of this finance ministry ,mutual funds etc.so that we do not get excited about this money game so that we do not always lose our most valued investment.
The reaction to this article can only be "My God !". How come the Left cannot be countered by these arguments. There are two good people at teeh helm - Manmohan Singh and Chidambaram. If these two persons cannot get this solved, then who else can ? I think we should clearly get this published on the front pages of the newspapers and TV News headlines. Then only the politicians will wake up
While economically weakening the whole system and obviously undesirable way of doing business, most schemes the writer has described as Ponzi Schemes could in some avatar be possibly salvaged albeit with far lower return rates. Most of the Schemes mentioned by the writer are floated/managed by the Govt. of India in some form or the other and carry a form of Sovereign rating which although not very healthy way of management atleast has the investor covered with the hope that the government will pay up. The impact of distributing the wealth of the Indian public at large to those investors who again are part of the public and part of this schemes as well is a dubious way of sustaining a bad business proposition, but still the small less investment savvy investor perhaps remains covered by the government.
My main concern is the SAHARA India Group, which I believe is the biggest Indian Ponzi scheme of them all, and when this Humpty Dumpty falls the impact will perhaps be far greated than all previous Ponzi like fiasco's in the country put together.
Why financial analysts / commentators etc, fail to write on the ills of Sahara is a mystery to me.
RE:Ponzi Schemes
by Vivek on Jan 28, 2005 01:40 PM
hi
sahara is something that amazes me as well....i think its a ponzi scheme.....but nobody seems to be writing about it....one reason which i can figure out is the fact that there is no publicly available information on sahara...plus they have very good connections as well
The schemes have a resemblance to Ponzi schemes. However the average indian does require stable return from his investment/savings.They are not ready to gamble with the stock market. What the government can do is to make the schemes run more professionally and reduce administrative expenditure in running the scheme. Reduce the interest rate if required. But assure some return. The huge expenditure on staff can be cut by computerisation.Pension funds which have now come up is a step i the right direction. Change is necessary, but it should be gradual. The average Indian is now accepting the lower levels of interest and switching over to Mutual Funds for better returns.Pension plans of Insurance companies are also being used for channelising investment.Over the long run, people will change over to a regime where returns are not assured. Proper fund management will give higher returns and give public confidence to continue such investments.
