The Small Voice

HA HA HA!!! After the unexpected 50 bps cut in the last meeting, the Finance Minister and various other political babus were almost hunkering on the RBI to cut the rates further and kick start growth. The RBI, on the other hand was in no mood to oblige, and play cover up for the fallacies of the government. Hence it did not cut interest rates in its Midterm policy review. More so, the document clearly stated that the growth slowdown had more to do with the policy paralysis and the fiscal mismanagement and profligacy than the interest rates. I believe this is the bluntest rejoinder that the RBI can give to the government to first clean up its mess and get its act together before expecting RBI to go easy on loosening the economy rates. Whatever be the policy response, if any, though the markets may have taken it negatively yesterday. However, I believe that sooner or later the investors should come back because of the following reasons: By its actions, the RBI h...

The following is my humble and (maybe) rather simplistic assessment of RBI's actions of late....You may differ, and maybe you are right :) Amidst the reigning depression and panic, all eyes are on Subbarao (the RBI Governor) & Co. today as they crank out their version and view of the economy and the policy stance going forward. But is RBI’s policy so important to the man/ woman on the street? What difference a 0.25% increase or decrease in interest rates will make to the common man? A lot, if you ask me. Basics of that, will post in a subsequent post later. However, despite our central bank being one of the best managed and best intentioned bank in the world, there are some aspects, in my view, where RBI could have acted better. First, while the move to put curbs on the Forex markets speculation via the futures contracts was much needed, it was rather late in acting. Much of the pain had already been borne by genuine producers. I think that if the RBI wou...

Today is 1 st may. Labor day. It also happens to be Maharsahtra day. Maharashtra has been the torch bearer for this country for long. Today too, it is bringing to attention, a different kind of issue. The issue of rampant regionalism which has the power to undo whatever India has achieved in the last 60 years. An issue which has and already is making the “aam aadmi” lose focus from the more critical and important issues. Today, I am sure, if people like Tilak, Sardar Patel etc. would have witnessed the state of affairs, they would have been more than worried. We have people spreading hate in this country against our own countrymen. We all know that such ideas are being used to get political mileage. But sadly, neither the common man on the streets, nor any public representative (read politicians) is able to rise out of the petty mentality to lead the people to rubbish such sentiments and instead focus on the bigger and core issues. There are BIGGER Issues facing us, ...

I came across a great blog on the telecom dispute dealt with great clarity and depth. You can read the same on http://www.neerajgutgutia.blogspot.com/. It explained Neeraj's point of view over the spectrum tussle in great detail and clarity. Though i may lack his long experience, in my view, auction of available spectrum by TRAI will be a WRONG move. Let me explain how. Govt's prime motives are (in order of priority): 1. consumers benefit with quality of service at reasonable rates 2. increasing teledensity 3. making sure market remains competitive Assuming govt decides to auction all the available spectrum. Then we will not acheive any, though the cellcos will certainly be very happy and i will sell all to buy their shares. Lets see what happens to the above objectives in their order of happening: 3. all the spectrum is gone so new players cant enter and thus existing players got legal right to squeeze customers, shoddy service 2.No effort taken to increase no of cell sites by...

Its a bit out of the usual boring stuff that i post but can't help it... HAPPY Birthday Menaka!!! Thanks for lighting up the dull and dreary evenings of legions of market followers.

So much has already been said about the pros and cons of the Tata car: NANO that more in the same vein will be mere repetition. Hence am touching the untouched topics. We did it!!! First of all, the towering but aristocratic Ratan Tata is the perfect Indian answer to the doubting thomases of the world. Osamu Suzuki’s words that the 1 Lakh car is impossible to make will continue to mock him(Suzuki) and will soon be inducted into the unofficial Hall of shame quotes amongst other legendary faux pas of history. Remarkably, what was impossible for the Japs (who are making cars for almost a century) was made possible by a Indian team who has been making cars for a mere decade now. That’s the power of conviction and the power of the young India for you. Protests of Singur displaced: Secondly, the silent protest of the well-wishers of the displaced of Singur was a jarring note in the whole episode. I believe that for one, these well-wishers should be going hammer and tongs after the g...

According to the “ International Comparison Program” of 2005, which recently published its report, the largest contributor to the world GDP is US at 23%. Next comes china with 10%, Japan with 7%, whereas India stands fifth at 4%. This GDP contribution is PPP adjusted, which means that it takes into account the latest currency movement where the USD had depreciated against ALL the major currencies of the world, and the Indian Re appreciation wasn’t an isolated event. US Recession: the impact We believe, that with 23% and more than double of its nearest competitor (China), US is too important an engine for the world to go into recession. Approx. a quarter of China’s GDP comes out of exports, and more than half of the total exports, are to the US. This means, that any slowdown in the US may immediately impact the GDP and hence the GDP growth of China too, immediately, ceteris paribus. This is just one case, and other countries like India again owe a major portion of their GDP to ...

News: " Securities and Exchange Board of India proposal to tighten the rules for purchase of shares and bonds in Indian companies through the participatory notes. At present there are 34 nos. (14 in Mar'04) FIIs / Sub-accounts issue ODIs." The SEBI move was long overdue and it is in the interest of the country that the RBI, SEBI and the Finance Ministry acts in coordination, rather than serving their own briefs and ignoring the bigger picture. Comments against the move suggest that India was blessed with the capital inflow which many an economies would have given anything to secure. Hence, it is not in the interest to stop the inflow and rather, one should welcome it. Such a move, may well end in shooing away the investor projecting India as being too arrogant. Well, taking one at a time: “ India was blessed with the capital inflow …it is not in the interest to stop the inflow and rather, one should welcome it.” In an economy, there is an intrinsic value ...

“A long, long time ago... I can still remember How that music used to make me smile. And I knew if I had my chance That I could make those people dance And, maybe, they’d be happy for a while.” Maybe not so long ago, we were in the BJP led coalition regime which had all but the very best of policies running for the corporate India . Thankfully, the saffron was stuffed where it belong to, in the puja rooms and the sadhus and politicians donned the reformist mantle, out to make the nation shine. Thus came the telecom reform (this time for the cell phone and the Reliance phone for the aam aadmi) and along with came a slew of well thought out guidelines, which till today, are the strong foundation for the sector to reach where it has today. We had the foreign money flowing in, thick and fast and suddenly, the sleepy, humdrum small towns woke up to improvements in the infrastructure drive. The trickle down effect hadn’t really started then, but the govt. from their New Delhi ...

In the slogans of politicians we might have seen the country shining and the general feeling of well being. But then the voters didn’t share the sight, lo and behold out went India’s shine of the window. But then, maybe it was not just an apparition, a sleight of hand, empty feel good of the khaddar illusionists. Maybe something was indeed changing. Slowly but surely, a silent revolution has been overtaking the country. Its glimpsed on an every day, when the average salesman tries so hard to push his wares down your throat. The local grocer starts delivering groceries at the doorstep on a mere phone call. The same kirana guy who was the hoarder-villain in the old bollywood movies has became the friendly guy to the housewives. That ennui and the inertia that had so intricately woven cobwebs around the socialist India is gone today. But that is just the tip of the main change that I see now. We Indians are a movie crazy nation. We revere our movies and they in turn, reflect our own minds...