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??

Beyond GDP – Measuring Gross Domestic Happiness..!!

The years begin with wishes for a Happy New Year but turn out to be just another year for most of the population. Indeed, the efforts of us as individuals, as society or as a nation are not even aligned towards making it so. The guiding principle remains the GDP growth which is expected to percolate and provide masses the basic needs. However, it is not so simple. The World Happiness Report for 2019 shows that despite all the progress achieved, India has slipped significantly in the happiness index between 2005-08 and 2016-18. This means even if the nation reaches the milestone of $5 trillion, it doesn’t guarantee things such as opportunity for livelihood, not just access to health, education but quality of delivery of these services, clean environment, the essence of happiness. So, where is the gap and is there a way to re-orient ourselves. Here is a look at the report and some solutions. Continue reading Beyond GDP – Measuring Gross Domestic Happiness..!!

Urban Co-operative Banks – Analyzing the Crisis…

Restriction of operations at Punjab & Maharashtra Cooperative (PMC) bank by RBI brings urban cooperative banks again into prominence and again, for a wrong reason. The governance issues cited by RBI put a serious question mark on the operations of the entire segment and necessitate an overhaul of the sector. Here is a look at the issues affecting urban cooperative banks and forward path. Continue reading Urban Co-operative Banks – Analyzing the Crisis…

Global Trade Overview

The increasing trade tension has taken its toll on the global trade as its growth fell sharply in 2018, as per the WTO report. More importantly, trade in the first quarter of 2019 has recorded a decline for the major countries as per the initial figures which means 2019, as a whole could be much worse. While the trade figure is in itself worrying, an even bigger question is whether trade is slowing down the global economy or the economic slowdown is affecting the trade. Here is a look at the details and a brief attempt to answer the last question. Continue reading Global Trade Overview

Weekly Round Up – Week 37

Major news for the week are reasonable growth in IIP, declining automobile sales, reasonable bids received by IL&FS for its road assets and sale of stake by ADAG group company. In the international news, ECB re-starts its bond buying in a sign of anticipated slowdown. Continue reading Weekly Round Up – Week 37

Housing Finance Companies (HFCs) – An Overview

Housing finance companies (HFCs) are facing increasing attention and tightening of regulations, fallout of NBFCs crisis. A turning point has been the default by DHFL, a leading HFC. The crisis being faced by the industry is unprecedented and can lead to fundamental change in their business model because of their inherent disadvantage vis-à-vis banks. But what are HFCs, how big is the industry and how are they different from NBFCs and banks? Here is a look at the same. Continue reading Housing Finance Companies (HFCs) – An Overview

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)

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..