BUSINESS
PM Modi's four castes and when I almost wrote the Budget Speech
The author came close to predicting the theme of the budget in his earlier column. Here he does a status check of his expectations, government policies and what the FM Sitharaman delved upon in her speech
BUSINESS
Union Budget 2024: What the poor, youth, farmers and women will look for
Each of these four sections are key to India’s growth prospects. The budget speech could delve into GoI’s plans for each of these groups and how they are part of the India growth story
BUSINESS
Can President Javier Milei inspire new life to Argentina's slumping economy
Given that Javier Milei suggests that he is an anarcho-capitalist, there is a lot of discussion on how he will push Argentina towards individual liberty, free markets, abolish central bank, dollarise the currency and so on
BUSINESS
Irrational exuberance and central banks
We do not know whether irrational exuberance has led to high equity or home prices in India. However, we know that psychological sentiments are fuelling the Indian stock and housing markets. Both RBI and SEBI are acting and cautioning against this exuberance
BUSINESS
RBI throws sand in the wheels of consumer credit
The RBI’s recent policies are targeted at controlling growth in specific categories of personal loans
BUSINESS
India’s NBFC sector: Connecting the last mile
The RBI has released a new annual report, called India Finance Report. This year’s theme is NBFCs, and the IFR focuses on NBFCs’ role in financial inclusion, rapid digitisation and emerging stresses in the sector
BUSINESS
US 10-year bond yields touch 5%: What got it here, what lies ahead
The fog of uncertainty continues to widen and thicken for the Indian economy. With each passing quarter the world economy is facing one shock after the other. Despite incoming domestic macroeconomic data pointing to a relatively stable domestic economy, slowing global growth and high uncertainty in financial markets will weigh heavily on India’s economic outlook
BUSINESS
RBI should allow large and profitable fintechs to become small finance banks
There is potential for high synergy between SFBs and fintechs, since they operate in the space of financial inclusion. The SFBs by virtue of a licence to run a bank have access to retail deposits which usually are a cheaper source of funds
BUSINESS
Indian bond market is coming of age
The government bond market saw a flurry of activity towards the end of September. Most important of these was the JP Morgan Chase & Co. announcement that Indian government bonds were to be included in its benchmark emerging market index
BUSINESS
Falling household financial savings will hurt investment and growth
The average growth of financial assets and liabilities in the period 2000-22 was 12.4 percent and 21.6 percent, respectively. With financial liabilities growing faster than financial assets, we are seeing a slower growth in financial savings
BUSINESS
G20: Multilateral development banks need governance reforms in addition to capital adequacy
The New Delhi declaration endorsed the roadmap for ambitious implementation which could lead to additional lending of $200 billion over the next decade. It has also called for accelerating progress towards Sustainable Development Goals
BUSINESS
PM Modi in interview to Moneycontrol rightly stated that inflation is major global concern
High inflation has become a focal point for the G20 after many years of low global inflation. The developed countries are facing the heat as their economies had already slowed before the pandemic
BUSINESS
Jackson Hole 2023: Central bankers worry about the impact of structural shifts in the global economy
Inflation still remains a concern. But now, there are bigger worries over the long-term impact of the structural shifts in the global economy
BUSINESS
Bring all RBI instruments under MPC
While the responsibility of the RBI’s monetary policy lies with its MPC, the committee’s powers are limited as most instruments are outside its remit. Apart from the MPC, RBI’s internal management and the Central Board take decisions which impact the monetary system
BUSINESS
India needs more firm growth goals as it aims to be the third-largest economy
The government should not change growth goals too often. Also, growth goals should not be based on the overall size of the economy but on growth rates
BUSINESS
Harmonising banking definitions is a key step to simplifying the regulatory system
Ambiguities can never be completely removed as there can never be a perfect system. As banking evolves, new regulations will be required, which in turn will lead to new types of complexity and ambiguities
BUSINESS
India-UAE Currency Deal: Internationalising the rupee, one step at a time
India’s policymakers are positioning the INR as an alternative currency for international transactions. They are using two strategies to further this cause
BUSINESS
Internationalising the INR will be a gradual process
One major precondition for internationalising a currency is that the economy should be international as well. India has made great progress since the opening of the economy in 1991
BUSINESS
Minimum assured returns can make defined contribution pension schemes more popular
In order to incentivise a shift from relatively risk-free defined benefit system to relatively risky defined contribution system, minimum assurance was introduced by some countries. Minimum assured return acts as insurance for pension investors
TRENDS
Was Adam Smith’s ‘invisible hand’ a precursor to Artificial Intelligence?
IMF’s Gita Gopinath, in a speech, cites that if AI leading to productivity growth, which determines the wealth of nations, would have pleased Adam Smith, AI’s potential impact of job losses and fake news deepening social divide would have deeply troubled him.
BANKS
Customer service standards at banks in need of an overhaul
The committee has recommended that the RBI move from rules-based regulation to principles-based regulation. Currently, the central bank mentions specifics about customer service, which leaves gaps.
BUSINESS
RBI must adopt well-defined and time-bound guidelines on replacing soiled notes
The withdrawal decision questions RBI’s policy on currency management once again. This is the third decision to withdraw currency notes of specific denominations in less than 10 years
BUSINESS
Libor is dead. The question remains if any lessons have been learnt from its crisis
The RBI and other market organisations have managed the transition from a Libor-based system in a fairly seamless manner. Internationally too, things have been managed well. One hopes that the financial market community has learnt lessons from the crisis
BUSINESS
ONDC has made a promising start. But, it could learn from ‘Market Design’
In many ways, ONDC is an extension of India’s highly successful public digital infrastructure programme which has enabled identities (Aadhaar), payments (UPI) and is gearing up to provide healthcare and education
