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Oil on the boil
Costly crude oil would add to the already mounting subsidy bill,
put pressure on the margins of the oil refining companies, jack up
the prices in key sectors and thwart the government’s attempts to
tame inflationary pressure.
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Play safe or else…
The Reserve Bank of India (RBI) has kicked off a debate recently, by mooting a proposal to launch India’s very own sovereign wealth fund (SWF). With this intent, RBI has joined a growing tribe of central bankers that no longer remain to be a mute spectator in the global financial market but rather participate actively in it. However, considering India’s track record with its current account deficit and volatile nature of portfolio inflows the idea seems to be a bit premature.
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Opening the can of worms
There was
huge speculation in the bond and stock market about the possibility of a CRR hike in
forthcoming review of monetary policy to be held on April 29, 2008. Now with the
CRR hike being over and done, there is a distinct possibility that the Repo rate (rate
at which RBI infuse liquidity in the system) hike might not take place though much
will depend upon the inflationary expectations.
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De-peg: to be or not to be…
Currencies of GCC countries have depreciated by more than 37 per cent in nominal terms since 2002 due to their peg to the US dollar. Now every GCC country’s think-tank is pondering over the reason to cling on to the dollar any further.
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A fiasco worth Rs.1 billion
Delhi Government comes out with one more Election-oriented dud! The BRT corridor scheme tumbles and bites Congress Government in the back as the whole experiment stays as a ‘killing’ attempt and wastage of tax payer’s billions of Rupees.
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Price shock
A sudden rise in the essential food and commodity prices in the last couple of weeks has vexed the UPA (United Progressive Alliance) government. With in the month of March, inflation shot up by 2.5 per cent. To control inflation threat, the government has reduced custom duties, provided excise relief and banned exports. However, much to the dismay of the UPA government these measures might not produce desirable results of lowering domestic prices significantly.
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Get Shorty
The Securities and Exchange Board of India (SEBI) has
given a green signal to short selling by institutional
investors (foreign as well as domestic) in Indian
bourses. But the immediate impact of these measures might not be as far reaching as
SEBI plans to kick off short selling in a controlled manner
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Going gets tough
Although experts and analysts tout that Indian economy being domestic led it is relatively insulated from the US led recession but financial liberalization has helped a great deal in maintaining an average growth rate of 9 per cent during the 3 years between 2005 and 2008.
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Robin Hood Budget!
The government has just fallen short of announcing the date of next General Election. This is the feeling one gets after the budget speech got over! The Union Budget speeches have been used as an opportunity to announce political intent but Union Budget 2008 will go down in history for its sheer populism rather than providing any direction to the economy.
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Loaded? So blow it!
From haute monde four wheeled luxuries to dreamy couture of Hermès. From plenty of swanky gadgets and gizmos to heavenly fragrances that one just hears of being worn by Hollywood superstars… all obtainable originals in the mall next door at the price very much within one’s means. 2008 brews the magical potion of these luxuries that ensnares the new fangled Indian buyer into its deadly but sweet pangs. Here’s a sinner’s diary to the luxuries to look out for this year.
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In the name of the poor
The Union Budget 2008 has been in the spotlight for political pressures than economic purpose. Riding on the crest of a buoyant economy and better tax compliance, the Finance Minister looks set to unveil his vote bank gimmick in the form of a ‘populist budget’; an age old trick in Indian politics to woo rural voters that form a major chunk of electorate.
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Primal fear
With the threat of US recession and domestic industrial slowdown running in tandem, stock market has been the prime victim. As a fall out of these events, Securities and Exchange Board of India (SEBI) might tighten regulatory norms for foreign institution investors (FIIs). Already, there are signs emerging that primary market is facing rough weather. Combination of these events might dampen the stock parices for a long time to come
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Red Riding Hoodlum
For the first time in more than 30 years of Left front rule in West Bengal the Red Bastion has been shaken from within when police fired on All India Forward Block activists - key allies to the CPM led government. A look at the Left Front structure is of interest at this stage and indications are they might separate – ideologically if not politically
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Anxiety disorder
On the face of it, in the penultimate year of UPA government’s tenure, the commerce ministry has displayed a rare political brazenness in opening up the door for foreign investment that have been missing in the case of retail and insurance sector. However, these are half-baked measures that might not push the envelope for FDI any more.
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Resorting to 'Zimbabwe Economics'
After dumping billinos off dollar in Iraq, Bush administration is working a 'fiscal stimulus' package of US$ 150 billion. You can't really make people wealthy by resorting to "Zimbabwe economics." A society grows rich by producing things…and saving money. There is no other way. Cheaper credit won't do it. More consumption won't help. Printing money - and dumping it from helicopters - is a losing proposition
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Commentaries
