The paradox of decentralisation in the crypto ecosystem
Crypto's promise of decentralisation has led to centralisation due to technical and human factors. Centralised intermediaries provide security, simplify usage, and help regulators, making centralisation key for mainstream adoption while ensuring consumer protection and governance
Why America’s economy is soaring ahead of its rivals
The country’s outperformance is rooted in long-term productivity growth that is the envy of the developed world. Could Trump’s policies endanger its lead?
RBI’s misdirected regulatory approach
Cracking down on NBFCs disbursing small loans on the grounds they are charging usurious rates only pushes borrowers towards informal markets where rates are higher. Instead of removing barriers towards the flow of credit to the bottom of the pyramid, there are hurdles placed in the name of systemic stability when this risk can be tackled through other means
GST’s revenue neutral rate needs to go higher
Over the years, multiple slabs and rate cuts in the name of rationalisation have made the tax structure complicated and hampered collections. It’s time for a change
Chart of the Day: Steady capacity additions to help IndiGo maintain leadership in Indian aviation market
Peer Air India group is facing longer delays in aircraft deliveries from Boeing.
A CRR cut is more probable this week than a rate cut
The RBI now has a ‘growth’ problem rather than an ‘inflation problem’. It cannot ignore the growth slowdown. At the same time, the MPC needs to time the rate cut carefully
A great moderation awaits NBFCs as funding growth from banks hits 3-year low
NBFCs are risk takers but riskier lending is under the regulatory glare now.
Why interest rates should go up, not down
Lowering rates may help consumers and companies but it will hurt savers. If inflation-adjusted returns are not lucrative enough, money will flow into riskier avenues and even out of the country
Jamaat-e-Islami's controversial legacy and its role in Bangladesh’s political landscape
Jamaat-e-Islami, involved in war crimes during Bangladesh's 1971 Liberation War, continues to influence political discourse. Despite efforts to rebrand as ‘moderate’, its refusal to apologise and links to radical groups raise concerns, challenging Bangladesh’s democratic values and sovereignty
GDP growth and inflation will trend downwards in FY25
Agricultural growth and higher government consumption spending means private consumption will support growth this fiscal. However, weak urban demand and elevated food inflation will limit its overall impact, leading to a slowdown in the pace of economic momentum. RBI may cut interest rates only towards end of the financial year
The mother of all bubbles
The US has never been so overhyped, relative to the rest of the world
With China in play, India's economic leverage on Bangladesh faces challenge
Sanghnomics: In August, violence against Hindus in Bangladesh under Muhammad Yunus' government sparked concerns in India. Despite strong economic ties, India must carefully navigate sanctions, as China's influence grows in Bangladesh
The Eastern Window: Global markets bear the brunt of overcapacity in Chinese manufacturing
The U.S. and E.U. are creating additional trade barriers for China. The move may hurt developing countries like India as China may resort to heavy dumping of goods on India and other developing countries
What were the drivers of growth in Q2?
Out of the GVA growth of 5.6 percent in Q2, the contribution of services was 4.1 percentage points. The rest of the economy contributed the balance 1.5 percentage points. That’s how lopsided growth was in Q2
Q2 miracle: when growth slumped, the unemployment rate came down
While real GDP growth fell from 6.8 percent in Q1, FY 25 to 5.4 percent in Q2, the urban unemployment rate improved from 6.6 percent to 6.4 percent, according to the quarterly PLFS survey
Did RBI’s tightening of credit regulations lead to the growth slowdown in Q2?
Growth in non-food bank credit outstanding has been slowly decelerating and it has come down from 13.6 percent in August to 11.5 percent in October and further to 11.15 percent by mid-November
Chart of the Day: What do the GDP data say about long-term structural changes in the economy?
In spite of all the efforts put into Make in India and the Production-Linked Incentive (PLI) programmes, the share of manufacturing in total GVA in the September 2024 quarter was lower than in the September 2014 quarter
Four hits and three misses in Aster DM’s merger with Quality Care
The merger will strengthen Aster’s position in Hyderabad and South India, but it also faces certain challenges.
Siddaramaiah’s political stock rises after Congress sweeps bye-elections in Karnataka
Weighed down earlier by corruption allegations, the sweep in the bypolls proved the CM is still the most popular political leader in the state. The outcome has thrown BJP and JDS into disarray. But what Karnataka needs now is a government that is sharply focused on governance
Q2 GDP growth underwhelms, but the economy has picked up in the current quarter
While Q2 growth is at a 7-quarter low, growth is likely to pick up during the second half of the fiscal year. And with inflation still much higher than the target, there is unlikely to be a shift in focus from inflation to growth during the MPC’s meeting next week
Green Finance: Addressing misconceptions and urging immediate action
Green finance is an urgent necessity, not a distant goal. Despite misconceptions, it offers substantial economic and environmental benefits. Financial institutions must embrace comprehensive ESG strategies, assess green opportunities, and collaborate to drive sustainability, ensuring long-term growth and impact
The Reading List: November 29, 2024
A look at some articles and social media gems from the world of economy, business and finance, curated by our research and opinion teams for your weekend read
Judicial independence is ultimately in the hands of judges
The rule of law is undisputedly one of the most fundamental requirements of the democratic state. And, one ingredient that is essential for enforcing the rule of law is an independent judiciary. That independence can be realised by judges and no one else. As Justice BV Nagarathna said, it’s the “personality” of judges which will determine the extent of judicial independence and autonomy
Vault matters: Generalist or a specialist - lenders’ dilemma
Until three years ago, being a specialist like a microfinance lender or catering exclusively to affordable housing or consumer loans helped, especially in raking premium valuations. Today, being a jack of all trades is helping lenders position themselves better amidst concerns emerging in various pockets of the financial services sector
India’s internal security is jeopardised by Sambhal-like incidents
The pattern leading to Sambhal warrants scrutiny, for it has the potential to irreparably degrade India’s societal ozone layer and related internal security fabric. Mohan Bhagwat’s sage counsel in June 2022 must be heeded by those entrusted with the governance of the country
