A Babu in the railway can reserve an AC seat for his dog. Similarly, he is getting a monthly emolument to appoint a Sepoy to bear his bag. Not just these prevailing practices, but also the quality of Indian Railway’s infrastructure has not changed since the British left. Indian Railway is yet to get Independence. When the rest of the country is progressing, railway should change from the British era in every respect. On this, the proposed bullet train will be a game changer for the national carrier. A bullet train travelling at 300 km/h speed will take you from Delhi to Chennai in just six hours. Government has planned two bullet train networks- one from Mumbai to Ahm
The Cabinet Committee on Economic Affairs (CCEA) has cleared the controversial 2057 corore foreign direct investment by Abu-Dhabi based Etihad in domestic airline Jet Airways. The CCEA has approved the investment after the decisive Sebi clearance couple of days back. Etihad’s 24 percent investment was earlier objected by SEBI as the regulator found the agreement provided more than proportionate right for the foreign investor in Jet Airways. As per the SEBI’s sanction, Etihad now will not have promoter’s right with 24 per cent stake. This means Jet will continue as the promoter and control will be with it. The earlier agreement was structured on the line that wit
The first quarter data on current account of the country published by the RBI shows that the trade situation is far from improving. Current account deficit which shows the sum of goods and service trade indicate that during April-June 2013, current account deficit widened to 4.9 % of the GDP compared to 3.6 % during the last year (first quarter). A notable element of current account deterioration is the decline in exports accompanied by 4.7 percent increase in imports. The RBI data also highlighted that capital inflows improved to $21 billion compared to 16 billion during the previous year. The non-improving trade data is rising call for the government and the RBI to launch s
The rupee has spent a happy week so far amidst positive domestic and international turnarounds. So far, the national currency has made a smart come back from near to the edge of 70 per dollar to 63.4 within a week and couple of days time. A positive trade data has pulled the currency first, followed by some surprising policy indication by Dr Raghuram Rajan. An aborted Syrian intervention and softened crude prices produced relief. Weak US employment data strengthened Rupee’s confidence in the market. As per the SEBI data, one out of every five foreign investors who have flown during the last three months has returned. This is felt in the stock market even. Despite no
The government has come out with some timely export promotion measures to utilize the opportunities of a depreciated rupee. As a fresh measure, the Duty Drawback scheme is better incentivized to allow exporters to refund or claim the different taxes they have paid-excise, customs and services, in the production of the exportable commodity. As per the change, the rate for duty credit has increased and more items are included under the scheme to promote export production. According to the Ministry of Finance, the new will come into effect from September 21. The restructuring of the scheme by including more commodities and increasing the tax credit rate will reduce the prices of exp
A week ago, in the cover of declining rupee and shrinking FDI inflows, US based Mylan pharma has acquired Bangalore based Agila Specialities for a whopping figure of Rs 5158 crore. The Cabinet Committee on economic Affairs, the executive body responsible for approving FDI above Rs 1200 core has ratified the acquisition. The takeover was ratified after intense discussions within the government wings, and finally the US Company was able to complete the strategic takeover of Agila which is a specialist in vaccine and injectable-drug making. Mylan’s Agila acquisition was the last one of a serial of takeovers by foreign pharma companies in India. Increasing acquisitions in the p
A number of positive developments lead by positive trade data for August has enabled the stock market and the Rupee to make strong gains on Tuesday. The Rupee registered gains of 140 paise, while the stock market made biggest single day gain since in the last four years. Foreign investors pumped nearly 2000 crores rupees on equity and debt markets. The news of shrinking trade deficit came as good news for the second month in succession. Others, especially international developments also added to the positive momentum in the economy. The US job data has shown that unemployment is reluctant to come down there. The implication is that the Fed may slow down tapering programme
The financial market in the country may undergo severe pains in the coming days with the prospects of downgrade by prominent rating agencies. So far, the different rating institutions are waiting to assess the net result of different counter measures and follow ups made by the government and the RBI to overcome the present crisis related to capital outflows and rupee decline. Once the rating agencies starts downgrading one by one, the net impact is that the corporate fund raising overseas will become costly and foreign institutional investment into the country will worsen. Many foreign institutional investors heavily track on ratings. Altogether, downgrading may further discourag
Prime Minister Dr. Manmohan Singh has described the present crisis in the economy is bad, but is a part of the correction process. In a statement in the Parliament, he said the economy is not moving towards a 1991 type situation. Main factor that has produced the problem is the current account deficit. He expressed that the depreciated rupee will promote exports in the coming months. Dr. Singh’s observation has pulled the currency down slightly during Friday trading hours. The national currency was supported by dollar swap to PSU oil companies by the RBI in the previous day. The Prime Minister also acknowledged the role of US Fed’s tapering in triggering the cr
The government’s currency swap agreement efforts with major trading partners are implementable in the long run. Currency swap agreements enable partners to exchange local currencies at a predetermined exchange rate. But it will take time lag for currency swap agreements to be effective as it need consultation with partners. Internationally, governments are on a risk averse mode, fearing a big crisis. Hence, credible foreign exchange holding countries may not be generous to engage in bilateral currency protection measures with India seriously. There are already a large number of currency swap agreements especially those initiated by China. Beijing was always skeptical
Dictionary on Indian Economy
- Logic of withdrawing Rs 1000 and Rs 500 notes
- Why the GST reform is transformational?
- Raghuram Rajan: The Gladiator returns to Chicago
- Good intention but poor thinking - what troubles demonetization?
- India Black Money Report: CBI underestimates black money at Rs 25 lakh crore
- High interest rate rather than inflation is the macroeconomic problem for India right now
- Japan’s first trade deficit in 30 years is part of the Global Shift
- Arvind Subramanian rocks with 'Chakravyuha' in Economic Survey
- Why we need an emergency monetization plan as well?
- NREGS: give respect to the tax payer’s money