Bank Analysis – State Bank of India (Part II)

The third group of bank’s operations is international banking with global balance sheet of over Rs 4 lakh crore and net profit of Rs 1,400 crore. While the profitability looks low, it is not unique to the bank. International banking operates on rather thin margins, that being one of the reasons for global financial crisis … Continue reading Bank Analysis – State Bank of India (Part II)
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Reliance Communications – How the company failed??

Reliance Communications’ plea to NCLT (National Company Law Tribunal) to proceed with insolvency process marks the demise of another telecom company. The insolvency plea was filed against RCom by Ericson, an operational creditor, in May’18 which has also filed some more cases against the company and its chairman. While the company cannot be blamed for … Continue reading Reliance Communications – How the company failed??
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Budget – Revenue & Expenditure Analysis (Part II)

Against total receipt of Rs 20.8 lakh crore, government is projected to spend nearly Rs 27.8 lakh crore in FY20. Other than interest payments, broad areas which account for maximum expenditure are Defence, Subsidies and rural & agriculture sector. These three heads, together, account for almost Rs 9 lakh crore or one-third of government’s total budget. Here is a look at the details of various government expenses. Continue reading Budget – Revenue & Expenditure Analysis (Part II)

Insurance Industry in India – An Overview

Insurance sector in India appears to be a passive player despite sitting on a large corpus, almost one-fourth the size of the entire banking industry. A reason is that Life Insurance Corporation, the public sector insurance behemoth is not listed and therefore its financials does not receive much attention in the mainstream media. To resolve … Continue reading Insurance Industry in India – An Overview
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Monetary Policy – Is the Rate Cut Justified??

The monetary policy committee’s decision today to cut rate by 25 basis points doesn’t look surprising since CPI inflation has fallen from 3.4% in Oct’18 to as low as 2.2% in Dec’18. However, a closer analysis of different price components reveals that the committee may have taken a bait which was not called for. It would … Continue reading Monetary Policy – Is the Rate Cut Justified??
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Budget – Understanding Deficit Terminologies..

The most important and the first number economists and all analysts look at while analyzing the budget is the fiscal deficit as a percent of GDP. The figure, revised marginally up from 3.3% to 3.4% for FY19, is projected to be maintained at 3.4% for 2019-20 also. However, other than that, budget also throws up other deficit numbers such as primary deficit, revenue deficit and effective revenue deficit..! So what all are these deficits and their importance?? Here is a brief look. Continue reading Budget – Understanding Deficit Terminologies..

Budget – Revenue & Expenditure Analysis (Part I)

The Budget proposal for year 2019-20 projects total expenditure of Rs 27.8 lakh crore against receipt of Rs 20.8 lakh crore. This implies shortfall of Rs 7 lakh crore corresponding to 3.4% of GDP. For 2018-19, budget seems to have largely met its target with fiscal deficit being only marginally higher at 3.4% against projected 3.3% … Continue reading Budget – Revenue & Expenditure Analysis (Part I)
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Union Budget 2019-20 – Highlights…

The “interim” budget presented today was keenly watched to see if the government sticks to the path of fiscal prudence or makes populist announcements. The speech, while making some important and path breaking announcements, thankfully, did not go overboard with its proposals. It has proposed total expenditure of Rs 27.8 lakh crore during 2019-20, an increase of over 13.3% over revised estimates of Rs 24.6 lakh crore in 2018-19. The three most important proposals of this year’s budget are introduction of minimum income support to small/ marginal farmers, introduction of pension scheme for unorganized sector employees and introduction of the concept of “rural industrialization”. Here are the details on these and other budget proposals. Continue reading Union Budget 2019-20 – Highlights…