India Insight

India in 2008: The year that was

Yet another year is coming to an end and independent India’s idea of being a republic is a year older. But is it any wiser?

On many counts, 2008 was both tumultuous and memorable for India, testing its men and the manner in which they confronted the challenges.

It was a year which saw the Manmohan Singh government face some of the toughest questions in its 4-year rule.

For that matter, some of the questions were directed at the people, the polity and the nation itself, which is still on edge after horrific images of a militant rampage on Mumbai made headlines around the world in late November.

It was a promising start to the year with the economy growing at well above 8 pct and the Sensex touching a staggering 21,000 points in late January.

Play safe, stay away from stocks

mad.jpgThe world of equities seems to have opted for a bargain-basement sale. The BSE Sensex which scaled the dizzy heights of 21,000 points in January 2008 is today testing 10,000 and nobody is sure if the bottom has been found.

“Nowhere in the world are we close to a bottom. Put your money in a safe bank at 9 pct and forget about the stock market for the next two years,” Shankar Sharma, Joint Managing Director of First Global, told Reuters.

If that’s the case, one wonders if the response pattern will change to the Reuters Money question – Where do you see the Sensex by Diwali?? rtr1vg9f_comp.jpg

Fix politics before it hurts democracy

As a financial journalist, covering politics and parliamentary debate is sometimes part of my job. What I witnessed on Tuesday in parliament — wads of cash being flashed around inside the lowerhouse– is something I had never bargained for.

sg.JPGThe civil-nuclear deal with the United States will go through, and some reforms may be pushed by the government with the help of
its new allies. But politics will never be the same again, tainted by allegations of bribery and a vulgur display of money power.

Shortly after his government won a convincing victory in parliament, Prime Minister Manmohan Singh said the victory sent a message to the world that “India’s head and heart was sound and India is prepared to take its rightful place in the comity of nations.”

Whither shareholder activism?

July is the season for shareholder meetings, an annual rite of passage for Indian companies, with directors, shareholders and reporters trooping into large, badly-lit auditoriums to hear the chairman speak glowingly of the achievements of the past year, and a litany of woes from shareholders.

As a reporter who has covered many of these meetings of some of India’s largest companies, I have quickly learned that shareholders’ questions have little to do with family squabbles, succession policy, ill-advised acquisitions, or unflattering media reports.

Instead, they usually range from pleas for factory visits and bigger dividends to the quality of the snack served at the meeting. A few will ask about the cost of printing the annual report, and offer up suggestions for new advertising campaigns or congratulatory verse on the company.

Crude realities for India’s economy

sg1.JPGOnly last year Indian policymakers were showing off the strong fundamentals of the economy to the world and pressing for a seat at the high table of global fora. Everything was going well — high growth, a surging stockmarket and a lot of attention from global investors attention.

But high oil prices and rising inflation threaten to bring the India growth story to its knees. Finance Minister PalaniappanChidambaram’s speech at a meeting of oil producing and consuming nations in Jeddah on Sunday showed the cracks in India’s confidence levels.

No doubt oil prices have spiralled, threatening the economic gains made by developing countries, as Chidambaram said in his speech.

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