The red herring of bank deposits being diverted to mutual funds
RBI has slowed money creation dramatically which has crimped deposit growth.
Chart of the Day: Large companies are getting stronger in Indian pharma market
Six of the top 10 companies by sales gained market share in the India pharma market in July 2024 on a moving annual turnover basis
ULI can make the credit process quicker; the tricky part is recovery
Technology platforms, as envisaged by the RBI, can smoothen the credit process and cut time delays. The difficult part is recovering the small loans
US Federal Reserve’s criticism is cheap, and it’s mostly mistaken
The central bank should get more credit for the stable prices and low unemployment it has fostered over three
War in Gaza: Is it time for Israel to break Iran’s ‘strangling loop’?
Support for Netanyahu is rising, but wars are unpredictable and rarely end as hoped
Unified Pension Scheme: Old, bad ideas in a new package
If actual market performance is short of the government’s assumption, the union budget will have to make good the shortfall to honour its commitment. That’s the risk of a guarantee which is what the 2004 pension reform bypassed. UPS effectively takes on the risk again which has to be backstopped by tax payers
The world should take notice — the rest are rising again
An emerging market revival has begun, with dramatic global implications
Chart of the Day: Kirana’s FMCG channel share is steady in 2024, so where’s the threat?
Overall market share appears stable but the real story lies in other metrics such as growth within online shopping, and the number of shopping trips and spend per trip
Haryana and Jammu & Kashmir Elections: Crucial test for BJP’s strength
The Haryana and Jammu & Kashmir elections, scheduled for September/October 2024, will be pivotal for the BJP. They will test the party's strength and influence, affecting future alliances, especially in Maharashtra. BJP faces challenges from the INDIA alliance and declining voter support, particularly in Haryana
Government dilutes NPS as political compulsions gain the upper hand
The UPS protects government employees from the vagaries of market forces, providing a solid floor to their post-retirement income
Ukraine visit notwithstanding, does India have any real influence on today’s geopolitical rivalries?
India’s ability to truly emerge as an effective interlocutor or influencer in the Russia-Ukraine crisis is highly limited. It is playing a balancing act that suits its own strategic priorities
Why India needs to establish strong indigenous e-commerce platforms
India is expected to surpass the US and become the second largest e-commerce market by 2034. However, it is fraught with serious dangers if mega entities are not regulated. The need of the hour is for India to promote its indigenous e-commerce platforms
Deposits are the focal point but it's intra-bank borrowings that need scrutiny
Credit growth outpaced deposits in 17 of the last 33 years. Lagging deposit growth therefore should not be a reason for concern. It’s greater reliance by banks on borrowings to fund incremental credit that’s causing anxiety
The Eastern Window: Complaints about floods reveal growing anti-India sentiment in Bangladesh
The recent floods gave an opportunity to anti-India forces in Bangladesh to raise a clamour. India was blamed for triggering the floods though the gushing waters killed many in India as well. The removal of the Awami League government of Sheikh Hasina has offered a golden opportunity for politicians who are unfriendly towards India
The disconnect between the reaction of Fed Funds market and US equities after Powell’s speech
While the probabilities for the Fed Funds rate have barely budged, the US equity market rallied hard after the Fed chief’s Jackson Hole speech
Have central banks pulled off a soft landing, or are they just plain lucky?
Many factors, apart from central bank actions, are responsible for the soft landing
The Reading List: August 23, 2024
Here are 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
Central banking is more than tinkering with interest rates
Central bank heavyweights are meeting now in Jackson Hole, US. One issue they should discuss, even if informally, is are their monetary policy meetings too frequent? The Fed’s eight a year forces over-allocation of resources towards monetary policy preparation. It comes at the expense of other critical functions. Four meetings a year are adequate
AI-powered coding pulls in almost $1bn of funding to claim ‘killer app’ status
Software engineering attracts investors but making money from generative artificial intelligence still eludes many
Gold and the dollar
Gold partisans argue the metal’s recent run proves that it is a great hedge against monetary and fiscal incontinence, and the accompanying inflation risks
Real Estate: A pause after breathtaking rally or a trend shift?
The long term potential of the real estate sector seems intact but the recent underperformance may reflect some caution needed for those with a shorter horizon
Paytm deal - Zomato’s ticket to entertainment
Focusing on the business opportunity and potential synergy is more productive than getting bogged down in valuation discussions, especially in new-age businesses
Why the India growth story needs more white collar jobs
Blue collar jobs are good for sustenance and basic consumption, but it is the white collar workers who end up becoming savers and discretionary spenders
Chart of the Day: Market’s steadfast faith in RBI’s forex intervention
The RBI has been the Rock of Gibraltar in the forex market for the past four years
On real rate debate, the gloves are off in the near-expiry MPC
As both Varma and Goyal argued, holding interest rates too high for too long can hurt economic growth. But Das and Patra warn that lowering the guard on inflation too early too can be a mistake.
