Farm Loan Waiver – Bad Politics or Good Economics..??

Farm loan waiver has again hit the headlines with recently elected chief ministers approving the scheme. The mainstream media, economists from all strata and also the RBI through its various reports seem to be severely critical of such moves which spoil the credit culture and lead to ‘crowding out’. So, are the farm loan waivers … Continue reading Farm Loan Waiver – Bad Politics or Good Economics..??

Index of Industrial Production – October ’18 Performance..

Index of Industrial Production (IIP) has recorded an increase of 8.1% for the month of Oct’18 as per the data released by MOSPI yesterday. While monthly rate may show substantial fluctuation, average growth rate for first seven months of this financial year also shows a substantial improvement. Average growth rate, which was only 5.2% till sept’18, climbs to 5.6% after including the result for Oct’18. Other that, average rate over first seven months is better than growth rate recorded in all the years since FY13. While IIP growth is important in general, it is more important since industries account for maximum number of employment and therefore, its performance is critical in generation of more employment opportunities. Here is a look at its various components and a longer term trend analysis. Continue reading Index of Industrial Production – October ’18 Performance..

Jet Airways – Can it avoid a Crash Landing..??!

Amidst the reversal for the ruling party in state elections and the surprise resignation of RBI governor, it is difficult to focus on anything else! Yet, here is an attempt to analyze the crisis being faced by Jet Airways precipitated by loss of over Rs 1,000 crore in each of two quarters of this financial year. The crisis is a cause of concern not just for the company but also all followers of aviation sector. The sector, despite being a high profile one, hasn’t been able to establish itself financially and accounts for a number of failed businesses overlast decade or so. Here is a look at its performance and comparison with another airline which is profitable.


Derivatives Market in India – An Overview (Part II)

Unlike equity market where one can buy/sell even one stock, derivatives are traded on minimum lot size basis with Rs 5 lakh as the minimum notional value.For example, in case of NIFTY futures, the current index of about 10,500 represents the notional value of one unit. With one lot comprising of 75 units,minimum exposure in NIFTY futures works out to about Rs 7.9 lakh. However, thetrader only needs to put-in the margin money, roughly around Rs 90,000 and not the entire amount.


Corporate Analysis – Tata Motors

Tata Motors recorded consolidated revenue of Rs 2.96 lakh crore in FY18 placing it is the league of biggest company in the country. However, the profits are rather unimpressive at just about Rs 9,000 crore. Standalone domestic business is going through even tougher times with the company accumulating losses of over Rs 8,000 crore during FY15-18. … Continue reading Corporate Analysis – Tata Motors

Analysing RBI’s Instruments for “Liquidity Management”

Among the points of contention between RBI and the government is market liquidity condition. While RBI says that there is enough liquidity in the market, government is not sure of that. Both have a point there. The enormity of the issue is evident from the fact that during September month alone, RBI transacted close to … Continue reading Analysing RBI’s Instruments for “Liquidity Management”

Monetary Policy – Time to Remain Cautious…

The monetary policy committee’s decision today to keep the policy rate unchanged is not surprising. It could have done nothing else. However what is surprising and somewhat concerning is its comments on possibility of a rate cut. While the comment may look fair due to lower inflation, it is actually not so because the core … Continue reading Monetary Policy – Time to Remain Cautious…