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..

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 Rs 14 lakh crore to maintain liquidity. But how exactly does RBI manage liquidity and how is it different from managing money supply through monetary policy. Here is an attempt to understand RBI’s liquidity management operations.
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Operationalizing Brexit – What is at Stake??

The process of withdrawal of United Kingdom from European Union has gained momentum with release of draft agreement about a week back. As per the current legal statute, UK would be out of EU on 29th March 19 and both the parties have to enter into a deal before that to avoid disruption to businesses and life, in general. Current trade between EU and UK  stands at over $500 bn of goods trade, $235 bn of services and about $1.4 trillion of EU assets being managed by UK based financial services firms. Despite the pressure on British currency, EU also has a lot to lose from the exit. While the negotiations have not been as tough as anticipated and as nerve wracking as in the case of much feared Greek exit, fingers are still crossed. Here is a look at the economic aspect of the withdrawal and why an orderly withdrawal matters. Continue reading Operationalizing Brexit – What is at Stake??

GDP, Sept 18 – Analyzing the Performance

After hitting a high of 8.2% in June 18 quarter (Q1’FY19), GDP growth has slowed to 7.1% in Sept’18 quarter (Q2’19) as per the data released by MOSPI today. GVA growth rate is also in the same line at 6.9% against 8.0% in Q1. Even though the rate has moderated over previous quarter, it is fourth quarter of 7%+ growth and gives sense of stability to the economy after going through the adjustments due to demonetization and GST. However, issues like sharp rise in crude price rise or disturbance in the financial market may keep the growth rate under check in the current quarter. In terms of absolute value, GDP at constant price is Rs 34 lakh crore and Rs 45.5 lakh crore at current prices. Continue reading GDP, Sept 18 – Analyzing the Performance

Corporate Analysis – Hindalco Industries

Hindalco Industries registered consolidated revenue of Rs 1.16 lakh crore in FY18, almost the same as L&T and Tata Steel. However, company doesn’t have as much visibility as the other two, partially due to lower profitability of the business. Its net profit for the year was about Rs 6,000 crore against as high as Rs … Continue reading Corporate Analysis – Hindalco Industries
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Inland Waterways – Tapping the potential..

The laying of foundation stone for development of another inland waterway earlier this month brought little focus on the inland waterways transportation system. With nearly 14,500 km of waterways, roughly 5 times the length from North to South, these waterways can change the landscape of goods transportation within the country. In fact, the ease of transportation and huge benefits arising out of it leaves one wondering why they have not been developed so far?? Continue reading Inland Waterways – Tapping the potential..

Tata Steel Corus buy – What went wrong…

After Struggling for about ten years with Corus, Tata Steel finally sold off a part of the business and started exploring a JV for the rest to reduce its losses. A sad event for sure, to end the audacious attempt by Mr Ratan Tata to take Tata Steel global. Continue reading Tata Steel Corus buy – What went wrong…

Budget – Revenue and Expenditure Analysis..


The Budget for year 2017-18 projects a total shortfall of Rs 5.5 lakh crore with total expenditure projected at Rs 21.5 lakh crore against receipt (excluding states’ share) of Rs 16 lakh crore . A look at the different components of the budget.
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Demonetisation – How does it affect government finances..??

While the nation adjusts to the new normal arising out of the historic demonetization and debates its merit/demerit, it also has another important fall-out. The move can lead to huge bonanza for government in the form of sharp increase in the transfer from RBI. This would be equivalent to the amount of Rs 500 and Rs 1,000 notes that does not come up for replacement. Let’s see how..

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Ken Betwa river linking – A tough, ambitious project

Ken-Betwa river linking project is an ambitious project with considerable benefits so much so that Ms Uma Bharti, Union Water Resources Minister, threatened to go on hunger strike last month if the project is not cleared soon. The project, if successfully initiated, will pave the way for taking up many more such projects, crucial to meet country’s irrigation needs and change the face of Indian agriculture.

Continue reading Ken Betwa river linking – A tough, ambitious project