Analyzing RBI’s Balance Sheet

RBI’s balance sheet for the year 2019-20 (July’19-June’20) has expanded by massive 30%, the highest in possibly over a decade. However, it hasn’t happened because it made huge profits, which, anyway, it has to pass-on to central government as dividend. And it has also not happened because it has printed more currency notes, whose share in total balance sheet has actually declined. So, how has that happened? Here is an attempt to understand that. Continue reading Analyzing RBI’s Balance Sheet

India China Trade – Time to Re-balance

The current stand-off between India and China has brought to focus huge inroads China has made into Indian economy without giving a reciprocal access.  The development has brought to the fore the need to re-look at the relationship with China and trade is an element where India must demand parity now. While the stand-off appears headed towards a resolution, it is still too early to lower guard. Here is a brief look at the details of India’s trade with China and how it has evolved over the years.

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Corporate Analysis – Reliance Industries Ltd (RIL)

Reliance Industries Ltd (RIL) has been dominating the news headlines with big ticket stake sales, right issue and so on. The company has raised close to Rs 80,000 crore from sale of stake to five different investors in addition to Rs 50,000 crore through its rights issue. The company had been doing very well in its core petrochemical businesses so far and recent developments suggest it has put forward a firm foot in its transition to a new-age company. That also coincides with sharp decline in crude prices taking the sheen away from that business. Here is a brief analysis of company’s businesses, strategy and financials. Continue reading Corporate Analysis – Reliance Industries Ltd (RIL)

Analyzing the Impact of Covid-19 on Global Debt – IMF Report

Covid-19 is not only leading to unprecedented loss of human lives, it is leading to a huge economic cost too. Governments are borrowing extraordinary amount of money to make up for the lost revenue and to provide support to individuals and corporate. As per an IMF report, the recourse would lead to sharp increase in government debt to GDP ratio. Here is a look at some of the figures. Continue reading Analyzing the Impact of Covid-19 on Global Debt – IMF Report

Revising History – Banks’ Nationalization

Nationalization of 14 banks fifty years ago has been termed as the most defining economic event by RBI; even bigger than the reforms of 1991. The event, although, had political developments of that time as trigger, did lead to complete re-orientation of Indian Banking. Here is a look at the background and the changes that the decision achieved. Continue reading Revising History – Banks’ Nationalization

Inflation Targeting – Has Monetary Policy Failed to Deliver??

The sharp increase in inflation (CPI) to 7.35% for Dec’19 has put a question mark on whether inflation targeting (IT) based monetary policy really works? While the question may be pertinent, it would actually be ridiculous to blame monetary policy for this spurt. More importantly, it is essential to deliberate on the proper indicator of inflation which monetary policy can influence. Here is a look at the dynamics of inflation and how monetary policy works. Continue reading Inflation Targeting – Has Monetary Policy Failed to Deliver??

Revisiting NBFCs (Non Banking Finance Companies)

NBFC sector has been receiving intense attention, most recently due to default by Dewan Housing finance Corporation Ltd (DHFL). The trouble which began about a year ago with the default of IL&FS has seen skeletons tumbling out of the closet. While RBI has proactively provided liquidity to the market, it has refused to bail out any specific company and rightly so. So, what are the issues involved and what is the way forward? Here is a look. Continue reading Revisiting NBFCs (Non Banking Finance Companies)

Tata Steel – Understanding the Strategic Realignment

The decision to call-off the joint venture with ThyssenKrupp is quite a setback for Tata Steel trying to reduce its global exposure. Yet, it is an interesting phase for the company with series of developments reflecting the strategy shift. The focus is shifting back to domestic production in contrasts with the global expansion undertaken during 2004-07. Here is a look at the developments and their impact on the company. Continue reading Tata Steel – Understanding the Strategic Realignment

Understanding Rural Income Pattern (Part I)

The distressful condition of poor in general and rural population in particular has become an important issue during this election and desirably so. However, while data on income level and income pattern in urban India is easier to obtain, getting the same for rural India is tougher. To address this issue, NABARD (National Bank for Agriculture & Rural Development) undertook an extensive survey, the report on which was published in Aug’18. The report gives valuable insights on income as well as borrowings level of rural households. Here is a look at the details. Continue reading Understanding Rural Income Pattern (Part I)

Wealth Inequality – Is There A Way Out??

While media continues celebrate wealth and growing number of millionaires, the income disparity across the world is getting worse. As per the Oxfam report released earlier this week, an astonishing 82% of total wealth created last year was cornered by the top 1% while the bottom half saw no increase at all. The increase, over $760 bn, was seven times what is needed to bring about 15% of the world’s population out of poverty. Here is a look at some more details from the report. Continue reading Wealth Inequality – Is There A Way Out??