Expert Zone

Straight from the Specialists

GAAR: Irrational tax laws or misplaced arrogance?

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(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)

The congratulatory press clippings proclaiming the ‘rollback’ of measures in Finance Bill 2012 have suddenly cleared the air and even the stock market cheered on Monday.

The implementation of the much riled General Anti-Avoidance Rules (GAAR) was deferred till April 2013.

The onus of proof when invoking GAAR will now be shouldered by the tax department. More importantly, it has also provided for an independent member on the GAAR board.

Hillary Clinton’s farewell visit to Delhi: from prickly estrangement to empathetic divergence

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

U.S. Secretary of State Hillary Clinton will rank as the most accomplished, poised and successful woman politician in American history. She has pierced many glass ceilings with tenacity and grace. She almost made it to the White House and future sociologists and historians will be able to more objectively assess the misogyny index that still lurks deep within American society and its relevance in the Obama-Clinton Democratic party tussle. The U.S. demonstrated in late 2008 that it had evolved to a point where it could accept a coloured President but not a woman.

Osama bin Laden’s ideology thriving a year after his death

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

One year after the elimination of al Qaeda chief Osama bin Laden by U.S. special forces in the daring Abbottabad operation of May 2, 2011, it is evident that while the terror group has been considerably weakened, it has been consolidating over the last few months and the ideology that bin Laden espoused is thriving in the Af-Pak region.

Is the economy drifting towards a crisis?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Standard & Poor’s India outlook downgrade was expected. What is disturbing — the government managed to do that in less than two years. It was in March 2010 that India was upgraded to ‘stable’ — and now it’s down to ‘negative’. It was not because the government took a wrong step but because it did not take any step at all. And if this continues, the economy will be confronted with a crisis.

India Market Weekahead – Time to “sell in May and go away”?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Markets were jolted this week by news that Standard & Poor’s cut India’s long-term rating outlook to negative from stable, citing slowing growth and a ballooning current account deficit. The negative outlook signals at least a one-in-three likelihood of the downgrade of India’s sovereign rating within the next 24 months.

The U.S. must move cautiously on Taliban reconciliation

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Obama Administration is seeking to negotiate with the Taliban as it continues a drawdown of U.S. troops in Afghanistan. Following recent setbacks for the U.S. mission in Afghanistan — including nationwide protests sparked by the accidental burning of Korans and a U.S. staff sergeant’s shooting rampage that killed 17 Afghan civilians — the Taliban suspended negotiations with the U.S. Some observers had touted the Taliban’s earlier willingness to open a political office in Qatar as a major breakthrough for a political process.

Will the rate cut boost auto sales?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Last week, the Reserve Bank of India (RBI) cut its lending rate by 50 basis points. This came as welcome relief for automakers as well as consumers since the domestic market was particularly sluggish last year, owing to high interest rates and an increase in raw material and fuel prices.

U.S.-Afghan agreement: Issues to be addressed

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The draft strategic partnership agreement between the U.S. and Kabul to address their relationship after the completion of the International Security Assistance Force (ISAF) withdrawal in 2014 has been arrived at after negotiations. The draft addresses the issues for ten years beyond 2014. A scrutiny of Afghan forces and the challenges they face highlights issues that merit inclusion in the agreement.

Investors shouldn’t read too much into repo rate cut

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The last time the Reserve Bank of India (RBI) surprised the markets was when it announced a 75 bps cut in cash reserve ration (CRR) days before its mid-quarter review of monetary policy on March 15. It did so again in its annual monetary policy meeting on April 17, with a 50 bps repo rate cut when the markets were either expecting no rate cut or a 25 bps rate cut at best.

RBI rate cut — too little, too late?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The RBI Governor cut the repo rate on April 17 quite reluctantly, even hinting there wouldn’t be another cut soon. Perhaps, he was under pressure from elsewhere, compelling him to look beyond inflation which had been his sole criterion in raising the repo rate.

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