The monetary policy committee’s decision to cut repo rate by 25 basis points was almost a certainty and did not come as a surprise. With inflation remaining subdued for quite some time now and growth not witnessing a pick-up, this was the most appropriate course possible. Even though the committee did not change its stance from “Neutral”, two successive rate cuts makes it more like an “accommodative” stance. Rate cut has been effected despite the fact that CPI inflation has rose to 2.6% in Feb’19 from 2.1% in Jan’19 reflects the confidence of committee is a benign inflation going forward. Barring an external shock in the form of crude price rise or food price rise, the committee seems on course for a few more rate cuts. Here is a look at the details. Continue reading Monetary Policy – Has it entered an “accommodative” phase??
The quashing of RBI’s 12th Feb circular by the Supreme Court has brought back the focus on power sector. The sector is facing the worst crisis with NPA estimated at over Rs 1 lakh crore. While the court order gives them a breather, they are not out of the woods yet. But how exactly has … Continue reading Power Sector NPAs – Analyzing the Crisis (Part I)
The survey estimates that there are about 21 crore rural households in India spread across 6.4 lakh villages. This corresponds to total rural population of over 95 crore or an urbanization level of only about 30%. Average population of a village works out to less than 1,500 (328 households) in contrast with over 10 lakh … Continue reading Understanding Rural Income Pattern (Part II)
In an important ruling, the Supreme Court has quashed RBI’s circular dealing with loan default and initiation of insolvency process. The ruling has received widespread attention as it deals with a very important and complex issue related to running of businesses. It has come as a big relief not just to specific sectors but to … Continue reading RBI’s 12th Feb Circular – Understanding the Supreme Court’s Ruling
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 … Continue reading Understanding Rural Income Pattern (Part I)
UK’s exit from EU has reached a nerve wrecking stage after EU rejected UK’s request for three month extension. The British parliament is now voting again on what sort of Brexit they want through what is being called an ‘indicative vote’. Whatever may be the outcome, the chances of having a ‘soft’ Brexit has receded … Continue reading Brexit – Understanding The Process And The Roadblocks
Share purchase agreement for 20.3% stake in Mindtree between Larsen & Toubro (L&T) and an existing investor is the beginning of an interesting takeover bid. The bid is generating lot of attention as such a hostile attempt is being made after a long time in Indian Corporate space. Interestingly, L&T itself was target of two … Continue reading Corporate Battle – Can L&T Wrest Mindtree??!
After growing its profits at almost 30% during FY14-18, Maruti Suzuki seems to have hit a speed-breaker. Profits for nine months ending Dec’18 recorded decline, although marginally at 2.3%. Sales growth has also plunged from over 16% to 8.5% indicating more serious pressure than mere input cost increase. While the automobile sector is going through … Continue reading Corporate Analysis – Maruti Suzuki
Inflation is core of any discussion on economic & policy as the core objective of a welfare nation is to devise policies which help protect the poor. This also prompts economists to strive to find as precise a measure of inflation as possible. While India still follows WPI as the benchmark for aggregate price movement, … Continue reading Producer Price Index (PPI) – Is It Better Than WPI??
While the developments in the policy front was subdued with the announcement of general elections, corporate front saw a flurry of activity. Important among them were Airtel’s rights issue to raise Rs 32,000 crore, sale of natural gas pipeline by RIL and NCLT’s directive to Essar Steel promoters. On the international front, As anticipated, British … Continue reading Weekly Round Up – Week 11