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Mar 16, 2012

Budget 2012: India could have its cake and eat it too

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – Finance Minister Pranab Mukherjee took the path of least resistance in his budget. The UPA government is still reeling from the loss of mid-term regional elections and the increasing fragility of its coalition. Hope that he would rein in spending on subsidies and kick-start the economic reform process now looks like wishful thinking.

His budget has set a 5.1 percent fiscal deficit target for the year ahead. But while a deficit of that size is not ideal, it’s not a big problem for India. As long as nominal GDP rises faster than the total debt, the ratio of debt to GDP will fall. India’s fiscal deficits have risen since 2008, but the key ratio of debt-drag has dropped from 69 to 64 percent. The deficit need not be New Delhi’s number one concern.

Mar 14, 2012

BREAKINGVIEWS: TCI’s Indian activism looks low risk, high reward

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – The Children’s Investment Fund (TCI) hasn’t lost its appetite for activism in emerging markets. The London-based hedge fund is threatening to sue directors of state-backed Coal India(COAL.NS: Quote, Profile, Research), saying they are supine to government meddling. Taking on the world’s largest coal miner is a long shot. But TCI has little to lose and even partial success could pay off.

New Delhi raised $3.5 billion by floating 10 percent of Coal India in 2010. It still owns the rest of the group, capitalised at $43.5 billion. TCI has 1 percent stake.

Mar 14, 2012

TCI’s Indian activism looks low risk, high reward

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

By Jeff Glekin

MUMBAI, March 14 (Reuters Breakingviews) – The Children’s
Investment Fund (TCI) hasn’t lost its appetite for activism in
emerging markets. The London-based hedge fund is threatening to
sue directors of state-backed Coal India, saying they
are supine to government meddling. Taking on the world’s largest
coal miner is a long shot. But TCI has little to lose and even
partial success could pay off.

Mar 13, 2012

Breakingviews: Big pharma needs new compact with emerging markets

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – India has joined Thailand and Brazil in granting a licence to a local generic drug maker at the expense of a global player. The likes of Bayer (BAYGn.DE: Quote, Profile, Research) may protest but a compromise — with multinationals obliged to take a price hit in return for continued patent protection — is probable.

Bayer may not lose too much sleep over losing 200 customers in India — even if they were paying a whopping $5,600 per month for its cancer treatment, Nexavar. But the precedent that India’s patent office has set in granting Natco (NATP.NS: Quote, Profile, Research), the local generic maker, the right to breach Bayer’s patent could give big pharma players a serious headache. If the ruling goes unaltered, Bayer will earn a 6 percent royalty on a drug sold for $176 a month.

Mar 13, 2012

Big pharma needs new compact with emerging markets

By Jeff Glekin

MUMBAI, March 13 (Reuters Breakingviews) – India has joined
Thailand and Brazil in granting a licence to a generic drugmaker
at the expense of a global player. The likes of Bayer will
protest but a compromise — with multinationals obliged to take
a price hit in return for continued patent protection — is
probable.

Full view will be published shortly.

CONTEXT NEWS

– Germany’s Bayer has lost a landmark ruling in India,
forcing it to grant a licence for Nexavar, its cancer treatment,
to Natco Pharma, a local generic drug producer, Reuters reported
on March 12.

Mar 12, 2012

In India the biggest surprise would be consistency

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

By Jeff Glekin

MUMBAI, March 12 (Reuters Breakingviews) – Any Indian driver
will tell you being ready to change direction is essential.
U-turns may help on India’s chaotic roads, but they’re a menace
in driving the economy. After years of policy flip-flops and
broken promises, the biggest surprise the Indian government
could now spring would be consistency.

Mar 6, 2012

Rahul Gandhi’s drubbing may be boost India needs

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

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – Rahul Gandhi’s electoral drubbing may just be the boost India needs. His Congress Party was on course for an embarrassing defeat in state elections on March 6, showing it can no longer rely on handouts and the Gandhi family magic. It could be a turning point. Fear of losing 2014′s general election might just jolt the party into action on urgently needed reforms.

Mar 2, 2012

India should hold its nerve on stock auctions

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

By Jeff Glekin

MUMBAI, March 2 (Reuters Breakingviews) – New initiatives
don’t always succeed first time. The Indian government’s auction
of 5 percent of Oil and Natural Gas Corp, the energy
group, could have flopped had it not been for last-minute
intervention from state-owned Life Insurance Company of India.
But if Delhi learns the right lessons, the auction route could
yet be an effective way of selling stakes in state-run firms.

Feb 29, 2012

India’s auction tack bodes well for privatisation

By Jeff Glekin

MUMBAI, Feb 29 (Reuters Breakingviews) – Questions remain
about retail participation and whether New Delhi is genuinely
convinced by the merits of privatisation. But the sale of shares
in the state-controlled oil and gas company by auction is a new
departure in India that promises to be effective and efficient.

Full view will be published shortly.

CONTEXT NEWS

– New Delhi is set to raise at least $2.5 billion by selling
a 5 percent stake in Oil and Natural Gas Corp (ONGC) on March 1.
The long-delayed ONGC sale, set to be the biggest equity
offering in India this year, will be done via an auction on the
stock exchange, the first to use this newly approved sales
method.

Feb 28, 2012

Breakingviews: Vedanta restructuring may need a rejig

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

By Jeff Glekin

MUMBAI (Reuters Breakingviews) – Vedanta, the India-focused FTSE 100 mining group, is simplifying itself. There are sound commercial gains to be made in the process, but doubts linger about whether the assets are being transferred at equitable values. To get the deal done, Indian investors may need a bit more of the pie.

    • 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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