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Jun 21, 2012

Breakingviews: Cement ruling mixes India’s business reputation

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – New Delhi has done itself a big favour imposing a record $1.1 billion price-fixing fine against 11 cement firms. In spite of all the accusations of policy paralysis and corruption within the Indian government, it is apparent that there are some bodies which continue to be respected and may be feared for their power to do the right thing. For all the criticisms recently leveled, it suggests there is an appetite for competition, and a willingness to take on vested interests.

Jun 21, 2012

Cement ruling mixes India’s business reputation

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)

By Jeff Glekin

MUMBAI, June 21 (Reuters Breakingviews) – New Delhi has done
itself a big favour imposing a record $1.1 billion price-fixing
fine against 11 cement firms. In spite of all the accusations of
policy paralysis and corruption within the Indian government, it
is apparent that there are some bodies which continue to be
respected and may be feared for their power to do the right
thing. For all the criticisms recently leveled, it suggests
there is an appetite for competition, and a willingness to take
on vested interests.

Jun 18, 2012

Breakingviews: Corporate India needs a nobler cause than Gupta

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – “Rajat Gupta is no criminal, he’s just an Indian,” said India’s Firstpost. That sentiment should rile business leaders from Mumbai to Bangalore. It was a mistake for leading industrialists – including Mukesh Ambani, the head of Reliance and Adi Godrej, the current President of the Confederation of Indian Industry – to back a campaign supporting Gupta. An open letter expressing admiration for his charity and his role in setting up the Indian School of Business looks like an apology for Gupta’s crime.

Jun 18, 2012

Corporate India needs a nobler cause than Gupta

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)

By Jeff Glekin

MUMBAI, June 18 (Reuters Breakingviews) – “Rajat Gupta is no
criminal, he’s just an Indian,” said India’s Firstpost. That
sentiment should rile business leaders from Mumbai to Bangalore.
It was a mistake for leading industrialists – including Mukesh
Ambani, the head of Reliance and Adi Godrej, the current
President of the Confederation of Indian Industry – to back a
campaign supporting Gupta. An open letter expressing admiration
for his charity and his role in setting up the Indian School of
Business looks like an apology for Gupta’s crime.

Jun 18, 2012

BREAKINGVIEWS: Congress wins mock fight; now for real one

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – India’s beleaguered government looks to have found some authority – arguably for the first time since it won the 2009 general election. The Congress party last week outfoxed its tricky coalition partners to ensure that the finance minister, Pranab Mukherjee, is the nominee and likely victor in the coming elections for the ceremonial role of president. But Sonia Gandhi’s party needs to do more that actually fires up the economy. A strong replacement for Mukherjee would show the way.

Gandhi should have put her foot down when Mamata Banerjee, the chief minister of West Bengal upon whose support Prime Minister Manmohan Singh’s government relies, refused to back changes that would have allowed foreign direct investment in retailing. Likewise when anti-corruption legislation was blocked, when fuel subsidies were protected, when rail fares were held down, and when insurance, pensions and aviation were sheltered from FDI.

Jun 15, 2012

BREAKINGVIEWS: India doesn’t yet face balance of payments crisis

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – In 1991, the loudest of wake up calls, in the form of a currency crisis, aroused India from the stupor of four decades of failed economic policies. Some hope that the decline of the rupee, which hit a record low against the dollar on May 31, and the sharp drop in the GDP growth rate, to 5.3 percent last quarter, will provide a similar jolt to get India back on the reform track. Breakingviews has run the numbers.

After coming within weeks of running out of foreign currency reserves, India changed course. Reforms driven by Prime Minister Narasimha Rao and his Finance Minister Manmohan Singh led to rapid economic growth and the accumulation of a large reserve of foreign currencies. Now the dangers are a reversal of the momentum of reform and a reversion to complacency.

Jun 12, 2012

BREAKINGVIEWS: Delhi’s game of thrones stifles progress

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – “Power resides only where men believe it resides” wrote Game of Thrones author George R.R. Martin. But right now in India there appears to be no one in power. As political machinations worthy of the popular TV show pre-occupy New Delhi, the country’s economy comes ever closer to spiralling into an unnecessary decline.

Dysfunctional politics are disastrous for a country in need of strong policies and dynamic leadership. But, as ratings agency Standard and Poor’s pointed out in a report on Monday, India has exactly that problem, starting with the tense relationship between Sonia Gandhi, the dynastically chosen head of the Congress party, and Manmohan Singh, the octogenarian prime minister. S&P warned that India might become the first BRIC country to lose its investment-grade rating.

Jun 12, 2012

Delhi’s game of thrones stifles progress

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)

By Jeff Glekin

MUMBAI, June 12 (Reuters Breakingviews) – “Power resides
only where men believe it resides” wrote Game of Thrones author
George R.R. Martin. But right now in India there appears to be
no one in power. As political machinations worthy of the popular
TV show pre-occupy New Delhi, the country’s economy comes ever
closer to spiralling into an unnecessary decline.

Jun 8, 2012

India makes small cut in capital market red tape

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)

By Jeff Glekin

MUMBAI, June 8 (Reuters Breakingviews) – India needs to roll
out the red carpet, not smother foreign investors in red tape.
That sentiment was expressed by Narendra Modi, controversial
opposition politician and chief minister of the state of
Gujarat, in India’s Economic Times this week. The government may
be listening a little. An initiative to open India’s capital
markets to more individual investors is a good incremental
improvement. But the government is dreaming to think this change
will attract $45 billion of extra capital a year.

Jun 6, 2012

BREAKINGVIEWS: Investors in Reliance Industries need more to rely on

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – Reliance Industries is underperforming. Yet the hydrocarbon-rich conglomerate, which is controlled by Mukesh Ambani, India’s richest man, also has a cash mountain of $13.8 billon which it does not seem to know how to spend.

As returns have dwindled from core businesses, the proportion of profits from its treasury operations has surged. They accounted for as much as 42 percent of the total in the March quarter, roughly triple last year’s share. Reliance is now generating more profit from cash management than from exploration, and the contribution is almost equal to gains from refining. It’s nice to have such an efficient treasury, but it raises big questions about the sustainability of the overall Reliance business model.

    • About Jeff

      "Jeff Glekin is the India columnist for Breakingviews. Jeff is a former diplomat. He spent four years in Mumbai as the Deputy Head of Mission and First Secretary Financial and Economic at the British Deputy High Commission. Before joining the diplomatic service he spent four years with HM Treasury in London. He has a BA in Philosophy, Politics and Economics from Mansfield College, Oxford University."
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