Expert Zone

Straight from the Specialists

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 slowdown in the U.S. and EU has affected exports of most countries and pulled down growth. South Korea, which is dependent on exports to the extent of 50 percent of GDP, slowed down in the second quarter of 2012 to 0.5 percent due to a fall in exports by 0.6 percent. Our exports are 22 percent of GDP and as such the 5 percent fall would significantly damage the economy.

The U.S. economy has not stopped growing but its imports have declined $5 billion in three months since March. Apparently, a protectionist stance may have been responsible. There is not much decline in EU imports though imports from India dropped 10 percent and from China 3 percent with a step-up in imports from the U.S. and Russia.

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.

What’s right with India

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

Whenever I pick up a newspaper or a magazine — especially The Economist — I keep reading pieces about what’s wrong with India. Corruption is rampant, the infrastructure, what there is of it, is falling to bits, the government is senile and feeble and the economy is flagging — and so on. All of which may be true — but it rather depends on your perspective.

Great potential in India 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)

Reforms seem to be the flavour of the season after we relished and put aside the corruption issue.

No silver lining in this monsoon cloud

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

India’s monsoon rains have been delayed and were already 30 percent deficient by the end of June. There are doubts whether rains will pick up during the rest of the season. August and September are likely to be dry which will damage crops and reduce farm incomes.

RBI vs the govt: who will blink first?

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

At its mid-quarter monetary policy review on June 18, the Reserve Bank of India (RBI) kept its rates unchanged despite expectations of a cut. To further augment liquidity and encourage banks to increase credit flow to the export sector, the RBI has increased the limit of export credit refinance from 15 percent of outstanding export credit of banks to 50 percent, which will potentially release additional liquidity of over 300 billion rupees, equivalent to about 50 basis points reduction in the CRR.

RBI needs to take bold steps

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

Expectations of a rate cut were legitimate. But the RBI preferred to pause, not quite convinced that inflation is under control. That has been its singular target though it is dressed up to look more appealing as growth-inflation dynamics.

Is there ‘public interest’ in deferring pension bill?

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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 pension bill, first introduced in 2005, got booted out yet again; only this time in ‘public interest’.

Where will the rupee finally rest?

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

For nearly a decade, the rupee has been stable — moving in the narrow range of 44-45 to the dollar. But since August last year, the rupee began to slide and in less than six months was down 23 percent.

How do we explain India’s economic woes?

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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)

Our GDP growth rates have slid consistently quarter on quarter from 8.5 to 5.3 pct. Surely this is in keeping with a glaring trend. Therefore, this sudden surge of emotions and panic after wallowing in so such mass self-deception is surprising to say the least.

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