Expert Zone

Straight from the Specialists

A good start but we need more reforms

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

It’s been a pleasant surprise over the last week or so as the Indian government appears to have transformed itself from allegedly corrupt politicians out to sell the country’s resources (read 2G and coal mines) into a group which means serious business.

We suddenly have a string of bold, long-pending reforms, foreign institutional investors (FIIs) are queuing up to invest in India, the rupee has risen by 5 pct in three weeks and stock market sentiment has undergone a dramatic change with indexes touching a 52-week high. Add to this the open-ended funding plan announced by the U.S. Federal Reserve and you have the perfect recipe for higher fund flows into emerging markets.

With FII funds in excess of $13 bln being pumped into Indian equity markets in the nine months of 2012, indexes have risen by more than 20 pct. However, the economic and corporate sector outlook, business and consumer confidence have deteriorated during this time. With this backdrop, what does the announcement of policy reforms signify for the country’s economic outlook?

That’s the spirit, Mr Prime Minister

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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)

Manmohan Singh’s “if we have to go down, let’s go down fighting” comment is exactly the spirit which needs to be demonstrated by those in power. After all, desperate times call for desperate measures.

Some pain needed for long-term growth story

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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 senior Bush’s call for a new world order following the end of the Cold War began unravelling authoritarian regimes which formed its delivery mechanism around the world.

Rating downgrade a credible threat for India

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(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Reuters)

Indian stock markets have hardly gone anywhere since June, with the Nifty hovering in the 8-9 pct range. But the coming months may see a breakout of this range as volatility, as measured by the India VIX index, seems to be rebounding from four-year lows, after having fallen for three months in a row. A short-term break, out of the range, on the downside seems more probable.

Economic consequences of deadlock in Parliament

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

The monsoon session of Parliament has been a washout without any important business being transacted. This has been made out to be a political strategy on the part of the Bharatiya Janata Party (BJP) to force early elections. Obviously, the Congress-led coalition is unlikely to oblige. The unintended victim is the economy which has been stopped from getting back to growth.

Indian markets stuck in a rut

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

It’s now been close to four years since domestic and global financial markets have been in a state of flux, plagued by uncertainty, as a slowdown ensures that government after government revises its growth forecast downwards.

Challenging times but hopes of recovery after 2014 polls

(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)

These are possibly the most challenging times for India because, simply put, every goal post seems to be oscillating.

Why the RBI preferred an SLR cut

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

The first quarter review of monetary policy did not create any ripples. The stock market remained flat and investors and consumers showed little interest. That was because RBI Governor Duvvuri Subbarao had made enough noise earlier that the time was not right and conditions were not suitable for a rate cut.

Consequences of an export squeeze

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

In June, exports shrank more than five percent to $25 billion largely due to recessionary conditions in major importing countries such as the U.S. and the EU. Although exports are not as critical to us as they are to Singapore or China, they do count for a lot.

The growth versus inflation dilemma

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

The RBI is concerned about inflation; the finance ministry has growth as its priority. That, as RBI Governor D. Subbarao mentioned, makes the two almost look like adversaries.

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