Sunday, July 17, 2011
Monday, May 9, 2011
In Western countries the young population supports the old population by contribution to social security. However, because of the ‘Silver Tsunami’ in many of these countries the scheme is running into serious problems, compelling the governments to seriously think about nationalization of healthcare. Also, international tax competition that results in lowering tax on capital and increasing tax on labour creates problems for the Western countries with large welfare states.
But, in a country like India a major cohort of the population is young, and an imaginative and creative model for funding such projects by roping in the private players and effective supervision by the government could alleviate this problem of lack of funding and the consequent lack of initiatives from the private sector. The approach to this problem should aim at shifting the focus away from the state and move towards public-private-partnerships (PPPs). At the same time it should also ensure that the interest and initiative from the private players is sustained through the emerging model of ‘viability gap funding’.
Saturday, May 7, 2011
Thursday, May 5, 2011
Thursday, April 22, 2010
Wednesday, April 7, 2010
Friday, February 26, 2010
Thursday, February 25, 2010
- More advanced nations are ageing and ageing rapidly
- Economic pragmatism
Monday, January 18, 2010
Irrespective of political colour, Basu was a pragmatic adviser to his contemporaries. It would not be an overstatement to call him “The Last of the Marxists”, and confer him the status at par with Mao, Che Guevara, Simon Bolivar or Fidel Castro.
Thursday, October 15, 2009
I sense a "conflict of interest" in this issue. The panel of experts of GEAC who have approved Bt Brinjal has "at least" three members who were actively involved in developing and testing of Bt Brinjal. And who owns Bt Brinjal? Monsanto-Mahyco.
Monsanto India Limited is a subsidiary of the well known multinational in agricultural science products, especially chemicals and pesticides. Monsanto’s work in India began over 50 years ago, soon after independence. Monsanto India has been providing plantation growers with good weed control solutions and new generation herbicides, especially for farmers growing wheat, rice, and soya.
“The World According to Monsanto”, the documentary film has already nailed such lies by pointing out that India’s cotton seed market has been taken over by Monsanto to produce a virtual monopoly. There are also several anecdotes to show that farmers committed suicide in the areas where the company overran traditional agriculture.
Sunday, September 20, 2009
Dr. Prem Kumar, Director, Ludhiana Stock Exchange and an eminent industry practitioner had asked me "what is my thinking about FIIs' investment flow in Indian capital market in future". While answering his query one thing that kept coming to my mind is that the FIIs, though being a major source of liquidity in the Indian capital market, are basically speculators. Otherwise why would they repatriate their money from an economy which is fundamentally sound - a $1 trillion economy with a steady-state growth of 6.5% (when others were striving hard to show a positive figure).
Also, the Sensex is too narrow an index to reflect the actual impact. Dr. Prem Kumar suggested broadbasing of the Sensex which is highly solicited. Also, the regulatory framework should ensure that the FIIs stay invested for long-term. The FIIs comprise only about 20% of the total combined turnover of NSE and BSE, yet they are powerful enough to influence the retail investors and dance them to their tunes.
Wednesday, September 9, 2009
Tuesday, September 8, 2009
Tuesday, July 21, 2009
The total deposits raised by all commercial banks in India by end March 2009 is worth US$ 818.57 bn out of which the SBI group raised US$ 197.67 bn. In a year when growth was unimaginable SBI group has emerged victorious, despite of the gruelling slowdown.
Friday, June 26, 2009
Monday, June 22, 2009
LIC will be implementing a project called Enterprise Document Management System (EDMS), which they plan to complete by 2011. It will enable LIC to extend 'Anywhere Anytime' service. They have already launched the project in 2007 partnered with Hewlett Packard (HP). It will enable the policy holders or their nominees to pay LIC premium or claim their settlement payment from any location in India. This would indeed make lives of 230 million policy holders across the country much hassle free. Also, the digitization of record of these policy holders will ensure archival of physical records in electronic form and will eliminate risks of loss or damage to physical records due to natural and other disasters.
The second move that I was referring to, by India Post is that they are going to provide on-site ATMs for their customers. To note India Post has 155,000 locations across the country. This would be a massive value-added service to the post-office savings bank account holders. The hours of waiting in long queues at post-offices for withdrawing or depositing money can be cut down substantially. India Post had 228.9 million savings bank accounts with an aggregate outstanding amount in these accounts of US$ 457.89 million (as on March-end 2009).
Saturday, June 20, 2009
The year 2009 season has started on a bad note. The overall rainfall for the season until Jun 17 has been 45% below normal, with 28/36 meteorological divisions receiving rainfall below the long-term average. The water levels in reservoirs are at 10% of capacity (vs. norm of 14% for Jun). This is indeed an alarming situation. According to Australia’s Bureau of Meteorology, the signs of a developing El Niño, which usually lead to drought in Asia, have strengthened during the past fortnight. And if their predictions materialize in reality then we are definitely heading towards a crisis situation.
Indian agriculture is no more heavily dependent on monsoon. There has been much progress in the irrigation facility, and also the share of agriculture in GDP has declined. The share of the monsoon-dependent kharif crop has declined. Since 1987, agri output fell in only 5/8 years when monsoon rainfall was +5% below average. Also, the area under irrigation (now 43%) has been rising steadily, albeit gradually. This is a positive indication.
With agriculture now accounting for only 18% of GDP (versus 33% even in the early 1990s), the Indian economy is far more resilient to a poor monsoon season. However, a poor crop will deflate the current buoyancy in farm incomes. At a time of +10% fiscal deficits, there is little room for further fiscal support.
Tuesday, June 16, 2009
The proposed Smart City was likely to generate direct employment for 80,000 people and provide indirect employment to another 20,000 people. This is only the employment generation aspect, besides this there are other aspects like revenue generation for the state in the form of taxes, and economic growth of the state which gets adversely affected. Added to this will be a domino effect wherein other investors restrain themselves from investing in projects in Kerala.
When the Tatas pulled out of its Nano project from Singur, West Bengal the immediate loss was over Rs. 5,000 crore and the potential loss was a whopping Rs. 80,000 crores. Smart City, Dubai had urged the Kerala state government to commit at least 12% free land out of the total 346 acres of land. The Kerala government still does not have a clear-cut answer to this issue and have dilly-dallied things.
Kerala and West Bengal are two states where the communists have ruled for long tenures and had once built a strong political base. In West Bengal the current public choice is against the red-brigade, they have been badly beaten in the Panchayat (local self-governments) elections followed by the Parliament elections. The story in Kerala is also similar, and if the investor hostility continues then the communist governments in these two states would have to pack their bags soon.
Tuesday, February 24, 2009
Monday, January 12, 2009
- Booking bogus sales
- Capitalizing revenue expenses
- Insider trading & related unethical practices
- Not accounting sales returns
- Inadequate disclosure of off-balance sheet items
- Assisting the management in asset stripping
- Failing to record liabilities or suppress liabilities
Well the list on their accounting "innovation" could go on ... That is if you do not reckon shredding of documents as an expert service. It is these 'credible' professional outfits that are in India, advising the Government of India on:
- Speed and directions of reforms
- Advisor to the planning commission
- Providing expertise to the disinvestment process
- Privatization and Globalization
- Policies for inviting FDI
So if you want to innovate your accounts hire these "experts", they would do a good job for you and of course make a fortune in the bargain. If you are corporate manager, you may have personally felt bombarded, sullied, trampled over, bullied and even decried at your own office by representatives of the Big 4. Simply because they are from the Big 4. Remember, they charge you and you pay even for the time spent on abusing you!
If you are a decision maker you might have noticed subtle hints to influence your decisions. Hiring the kith and kin of the decision makers is one of their tried and trusted methods. They are experts in the art of making friends and influencing people. They are too good at Dollar Diplomacy!
Their ownership is unknown, their competency is suspect and their advice bogus. Then, why do the financial institutions, banks and the corporates in India keep them as auditors, advisors or consultants? Why are they allowed to operate in India, and hired and respected by the Government of India? WHY?
Simply because we are not aware of these firms and therefore we are silent. The need of the hour is to create public awareness.
Thursday, January 1, 2009
When World War II ended, there were 44 people paying into Social Security for every retiree. Now only three people pay in, for each person taking out, and it could be bankrupt by the year 2043. So, if Social Security doesn't benefit from boomers retiring, who does?
Tuesday, December 23, 2008
UBS' list of ‘surprises’ include:
1) Corporate default rates don’t rise significantly;
2) Oil prices fall below $20 per barrel;
3) The dollar falls to new lifetime lows;
4) Breakeven inflation rates remain near zero;
5) Global growth is negative for 2009;
6) The Fed purchases corporate credit;
7) Emerging markets regain parity valuations;
8) Equity ‘fallen angels’ soar;
9) Obama pushes for a ‘tax holiday’; and,
10) Gold goes to $300.
Perhaps next year the surprises will be somewhat more positive? Who knows! Now let us take a look at their last years' surprises (predictions) and compare their conjectures to actual outcomes.
1) Global growth surprises on the upside: Did it happen? No.
2) Oil prices: Is 50 the new 20? Did it happen? Yes.
3) The dollar appreciates: Did it happen? Yes.
4) World trade clouds: Did it happen? Sort of.
5) Developed deflation, developing inflation: Did it happen? No.
6) Financials outperform: Did it happen? No.
7) Emerging equity markets under-perform: Did it happen? Yes.
8) Japanese equities outperform: Did it happen? It depends.
9) Equity volatility settles at lower levels: Did it happen? No.
10) Chinese inflation falls sharply: Did it happen? Yes.
With a success ratio of 40% in their last year's predictions it attests that this exercise has merit. At least it can provide an avenue for 'out of the box' thinking which can aid risk management. Whether their predictions hold good or live upto its own benchmark is a question that only time can answer. Let's wait and watch!!
Sunday, December 21, 2008
In a capitalist economy, government intervention is less likely and less welcome unless there is a market failure which has far reaching effects. The fall of the Big Three would have been an imminent danger to the U.S.A's national economy. President Bush's order for an emergency bailout of the U.S auto industry offering $17.4 billion have risen mixed feelings. The autoworkers union complained the deal was too harsh on its members, while Bush's fellow Republicans in Congress said it was simply bad business to bail out yet another big industry.
To my opinion the Fed's decision is perfect as it could not afford to allow the massive auto industry to collapse when the economy is already in the middle of an economic downturn. The Big Three's fall could send the U.S economy into a deeper and longer recession. But, it is also high time for the U.S auto companies to reform bad management practices and begin the long-term restructuring to safeguard the millions of jobs it provides.
Saturday, December 13, 2008
Tuesday, December 9, 2008
High oil prices were the primary cause for economic slowdown in Japan until the third quarter. But, what is currently being observed that Japanese companies are curtailing production at an unprecedented pace as demand plunges not just in the United States and Europe but also in emerging nations that had until recently weathered the global financial storm. The situation is aggravated further by the sharp appreciation in yen.
Economists have been expecting a 0.4 percent contraction in fiscal 2008/09 but that now needs to be revised down. It's hard to see at this point how the economy will return to a recovery. The sharp fall in oil price and other commodity prices should positively impact Japanese consumption but there is still time when the positive effects are felt.