Monday, December 26, 2016

2016 - An Economically Eccentric Year, leading its way to a hopefully better 2017

2016 - An year with many unprecedented events economically which were only supposedly thought off in the wildest of imaginations, an year which left the globe spell bounded with the results of few referendums and the events which has left the world in awe, is about to wrap it's wings and fly off into the history books for ever.

Economically, the year of 2016 will be remembered as an year which led to the foundations of many unknown and unforeseen circumstances which were only studied as an outliers but can turn out to be a reality soon. Flatter foreign economic policies, race to bigger and better nuclear counts, bolder expenditure on arms and ammunition, skipping the globally felt and palpable geographic environment effect and racing towards boasting the economic chest when monetary and financial survival is so so imperative for some.

You might be wondering why a cloud of negativity or perceived difficulty is being imagined by the author, rather the authors are considered to spread optimism and positivity in general but why I am sharing my thoughts which are serious to ponder over here? Answer to that is, We have just witnessed few events which speaks volumes of what can go against the perceived right and it can only lead to aggravated reality of difficulty!

  • BREXIT - Britain's ouster from the monetary well knit European Union clearly highlights the fundamental void in the union. Can the think tank now atleast take the note of the woes which haunts through massive piling up of debts and it's restructuring process or will they wait and watch till Greece/Spain/Italy or any other country in the economic web ponders to do a Britain?
  • TRUMP's emphatic Victory - Known to have his views on the face, whether you like it or not, be it immigration's policy or his anger towards any specific religious sect, or be it his love for Nukes and poking the second biggest economy or almost anything and every thing. Guys, lets be prepared for some roller coaster ride wrt to Foreign/Economic/Global Environment Policies and the way Emerging/ Developed economies would respond to the same.
  • MODINOMICS - Ouster of the publicly loved and meritorious head of central bank in India to the induction of a media shy lead of the Banking Regulatory body in India, the Modinomics is not easy to study and make thesis on. India's PM is known to keep cards close to his chest and his recently lead #Demonitization has left the people of the country divided in their views. People hope and wish to get securely digitized and go the digital way to contribute in the nation's growth. Many surprises yet to unfold with 2017..
  • US FED's Rate Hike - Since 2008 the normalcy has not started to set in place. US Fed is now slowly and steadily hiking the rates with employment numbers stating the recovery in the largest economy and some public spending boost with other factors which can lead the inflation to raise few notch above and reach the target of the Fed. The emerging economies and the rest of the world would need to adjust their policies accordingly. But the frequency of the rate hike, is yet again thought provoking!
Apart from the above mentioned situations, the Syria issue, EU Migratory Issues, Curbing the Terrorist outfits' menace, Venezuela inflationary woes, US-Russia collaboration, US-China treaties and it's impact. The list can go on and on but the impact of each and every above mentioned situation/pact will have it's impact felt on each and every global citizen.

Hoping that the logical end or atleast a way would be paved to have the issues talked and studied before it goes the other way round.. Alas!! Wishing the best to everyone for days to come in 2017 and hope and prayfor fantastic health (i.e. financial & physical) to all.

Sunday, November 13, 2016

Modi's Bharat has Jan's choked Dhan (#JanDhan) - Demonetization Process coupled with Execution fatigue!

72 hours since the news broke out by our Honorable PM that India's highest denomination would not be a legal tender, chaos broke out. Long queues outside teller machines and branches for depositing their cash in hand for new denominations.

Majorly, people do believe that short term inconvenience is bound to happen but in long term its a good choke for parallel economy conductors. No doubt about it. But this short term inconvenience will last for long. With more than 80% of the money circulated in the economy was in the largest two denominations (INR 500 and INR 1000) execution at the first line of conduct (Banks/Post Offices) should have been given more importance.

Heard and understood lot of views around the Black Money circulation and its impact on the economy and assistance to the bad elements of society and I do back such acts but if this inconvenience of not having money to spend on the ground prolongs, it will be a massive hit.

Black money hoarders are caught red handed and then should get penalized but public at large who assume this to be a short term choke of liquid cash should not be hit for long term.

This choking scenario could have been avoided if the trust deficit between the Government and the Financial Institutions could have been narrowed and top brass of these institutions could have been informed about such massive operations. Their preparedness about massive drives like one which is under consideration is a concern. Infrastructure issues are plunging the confidence in masses about the handling of such events. People are absolutely fine with it, but till when? Patience is running out and Tension is widening.

Denominations' availability is also a massive concern. Headlines in news are flashing that the regulator has supplied enough INR 500 denominations in the market but its availability on the ground is questionable. INR 2000 denominations are moving in hands of public but the second readily available denomination in hand is INR 100. What about the change deficit?

People with informed resources of earning are not appreciating the mechanism. Infrastructural chaos of supplying the new resources and taking off the old ones had to be sorted. My only view- Don't take the patience of public for granted. I do also believe that the stretched hours put in by our banking officials have to be lauded enough. Their relentless efforts to cope up with the pressure is hugely commendable. But again till the time the other logistics issues are not solved they would not be able to support persistently.

Its an act at the right direction but our rural branch/post office penetration should have been taken into consideration before such massive drives. Urban people would find a way in the 50 days to get their legitimate deposits in the system but in rural India it would be task which might need more time than the announced limit of 50 days. Urging the government to look into the matter and do extend if possible the days limit for our rural community rooted deep into the geographies of our country to give them right opportunity to get their savings flown into the system. These communities would not have "E-Wallets or net banking Facilities" and would find it tough for their resources to get it deposited and then withdraw them too.

Hope normalcy settles soon and we would have the new resources flown into the system easily and conveniently and Jan's Dhan gets unclogged.

Saturday, September 3, 2016

Inflation vs Growth!! Being Dovish vs being a Hawk.. Dr Patel - Yet to Unleash his Powers..

As departing Governor of India's central bank quoted the new/upcoming Governor of Reserve Bank of India "As Urjit [Patel] keeps telling me, we are neither hawk nor dove. We are owl,”, it says it all. The person who spearheaded the committee to review the monetary policy framework in 2013 under aegis of Dr Rajan will now pave his way to the center and fight the Inflation vs Growth battle.

Expectation of the incumbent government is simple, impetus on growth is imperative but +- 2% from mid ranged 4% CPI till the next financial year is the major task of the Governor. Now it's a catchy situation because CPI is dependent on multiple factors which are not in the hands of the Governor. Good Monsoon, minimum leakages in remittances of services by the government, setting government's expectation, Industry's belief and push some natural and other man made factors' might or might not effect Dr. Patel's decision. It's yet to be seen.

Dr. Patel has not made any specific public comment as of now since joining RBI as Deputy Governor in 2013 and his style of working and leading the pack of intellectuals would be something to be looked and analysed upon yet. But being an insider for long has helped him to grow upto being the highest authority in the Bank. 

Keeping up with Government's push would be an imminent challenge for him and he would be preparing his strategy around the same. Dr. Rajan was know to comment on various other topics which were not under his preview but will Dr. Patel follow his steps of being open to ideas across spectrum or a subtle way of being at one side would be his approach. We all are waiting for October 4, 2016 for his views on the economy in his first policy meeting.

Internal factors are just one part of the issues to be dealt with but external factors too are critical, Affects of Brexit are yet to be unleashed, China's influence on the global economy is critical, US's new President and his/her effect on the trade agreements and influence has to be analysed and Arab's surge coupled with Oil's stock accumulation and price effect is important to gauge as well.

Must say, a great throne to be at but not an easy one to be at. But we wish our new RBI head all the very best!! A silent crusader is what I assume Dr Patel is, excited to watch him unleash his thought process to make our economy bigger, better and much deeper.

Saturday, July 23, 2016

Quarter-Full of Socio-Economic Events across Globe!!

Coming 90-100 days are extremely eventful socially and economically for the globe. United States of America would undergo it's Presidential election - Will Clinton get Trumped? Yet to be seen. But for sure a stand on immigration, ISIS, Russia and China's maritime is a sure shot decision which a new leader has to take.

Indian Prime Minister and his government will try and push reforms track forward (Not just FDI extension reforms) - GST is still a hope, can it be a reality? I am hopeful if our legislators take pride in taking decisions.

China's south China sea conflict seems to exaggerate with China not budging an ounce on the issue, it would be interesting to see how other nations react to it. Can impact trade and create trust deficit as well.

Pakistan which is considered to be an upcoming economy but with its internal conflicts and ineffective resistance over menace outfits, it would pose a tough situation for SE Asia.

Brexit and its financial volatility in the market would pose a serious question on the readiness of the countries to protect its domestic economies from the external threats. It would as well raise concerns on the Macro-prudential policies/reforms adopted by countries.

All set for the roller-coaster days ahead to come up. Brace yourself up and experience the volatility.

"Is volatility the new Norm in the markets? Well we cant deny the fact.." 

Saturday, June 25, 2016

It is not about Current or Fiscal deficit but Trust deficit which is causing Ripples across Globe!!

Last fortnight has been really intriguing for the global economies. From dismantling of a Union to a credible central banker's exit. From a failure diplomacy of being an integral part of NSG (Nuclear Suppliers Group) to a presidential candidates consolidation. It's all happening and that is creating ripples across continents.

I foresee so many events as a tip of an iceberg of so much which is yet to be witnessed. Will others in European Union also contemplate freedom via referendum? PIGS next in the race of achieving that "Independent State" tag? Yet to be seen. Brexit (1-GB of memory lost by EU). How will EU shape up its policy after exodus of one of its major economy? Jury is out to understand the effects and affects of exodus. Financially ripples were felt across major and minor economies. Greenback gained its supremacy a tad more.

Central Banker's exit from Reserve Bank of India was a livid example of trust deficit which widened between the ruling government and the Banker. Though he achieved all the sought after targets from CAD to reigning inflation but the ecosystem around him was not fertile enough and he returned to academia. Fundamentally strong emerging India should not have let Dr Rajan go but again as it is said "It's not about personalities but institutions". We hope and wish a better banker to be crowned at the helm.

We have seen that any CAD and Fiscal deficit situation across globe can be catered with either a financial stimulus or financial tightening but the trust deficit which is being fueled by the recent acts of governments or referendums would create far more financial ripples which would be tough to aid or band-aided.

Division of thoughts is a way of expression but widening of trust because of division of thoughts would only be lethal and harm the functioning of economies in long term. Taking the people along and understanding their thoughts to frame policies is the way to go. 

Sunday, May 29, 2016

Modi Govt's 2 year of Intent, Development would supersede!!

Multiple Yojnas (Programs), last mile reach through "Mann ki Baat" - being connected to the smallest hamlet in rural India and display of intent to take the country on the path of Socio-Economic development is what the two years of the governments was all about.

One can not expect a sudden surge in the development post a regime change, but it is all about a conducive environment which is essential for a country to move forward. Work on the ground level would not have been so evident (power cuts are still incessant in many parts of the country, last mile connectivity is still a concerns) but the intent to take the country on the world's fastest growing economic speed path is evident and accorded.

More than any opposition that the current government should prepare themselves off, it is the natural events that the governments should keep a track on. No opposition party can harm the ruling party than the natural disasters that pose a threat to the government. These events pose a threat on the government's preparedness and its ability to pacify the situation to normalcy. National Disaster Management front has to be buckled up to face events like "Himachal Blaze", monsoon's preparedness, Chennai Floods and many more. These horrific events have a direct impact on the economic well being of the nation and hence its approach is talked over on various global platforms.

On one side if the government is pushing the path of development then it should also measure the acts which can drag its intent of forward push. Our reliance on environment for economic prosperity is evident but its reverse impact can be as detrimental to the economy that it can leave an irreparable damage.

Wish and hope for a healthy well being but as we all are aware things are not rosy on environment front - Hence, are we prepared?

Saturday, May 21, 2016

Human Index improvement and Ecological Well Being is essential to enjoy the Economic Advancement!!

Ecstatic with the recent state bound poll results, BJP led NDA expanded its presence in Assam and sprouted its existence in Kerela and West Bengal but on the other hand Congress is staring at a big survival question mark. What strategy to be adopted? How to adopt? Karnataka (an extremely vital state) is going to polls and is on the block. Who to lead and how to project the leader? Imminent congress leaders do believe that an introspection and surgery is essential.

Whatever the case may be, if we are concerned about India's development and is progress, results were progressive and hence keeps our growth engine intact. Opposition to GST would narrow with TMC viewing to back the indirect tax reform and support would only widen. Bankruptcy Law would start showing its effect soon and with GST on the block, monsoon session of the Parliament would be an unprecedented one.

Things do seems to be going forward for economic progression but are we heading towards an inclusive social well being as well? NO we are not. Natural calamity in the form of drought has taken a massive toll in more than 10 states. We need more than transportation of water, we need coherent discussion and laws to deal with such disasters. States have to adhere to sensitivity and look for more collaboration with the center. All parties should focus on discussion and should form a formidable act which can cater to people who need it most in these states. Any loss of days in the parliament or deadlock would only highlight the insensitivity of our legislatures.

Human index improvement and ecological development is essential to enjoy the Economic Advancement.

Saturday, May 14, 2016

Reform Springs sans Political Mileage

Last couple of weeks has been a pot boiler of events for Indians across globe, all thanks to the domestic circumstances which prevailed for quiet some time but culminated in last few weeks. Long due enactment of Bankruptcy Act (with an astonishingly majority of "Ayes" at lightening speed @ both houses) and with a failed-coup try by the central government in Uttarakhand, this fortnight culminated with lots apprehensions and curiosity.

Apprehensions because of hastiness shown by the BJP led opposition in Uttarakhand. Coup styled events led to the President's rule for some days but status-quo prevailed and state Congress leader Harish Rawat was back at the helm. This hastiness raised many eyebrows but all waited till the floor test and BJP had to retract. Yet again a humiliation in a state. Why is BJP not able to mark its presence in various states where it has emerged as a main opposition but couldn't be at the helm. Many believes that the central strategy creators for the party do not understand the ground realities and their tactics are whipped away easily. Let's hope that BJP's think tanks do realize that actions are taken on the ground and strategy formulation should inculcate the ground zero sentiments. Central Congress strategists on the other hand gave all their leeway to Rawat to react and act with freedom. The results are well known to us.

BJP led government should on the other hand be appreciated for their ability to enact the Bankruptcy law which was pending for more than 4 years at an alarming speed. This hastiness and collaboration with all other parties for its smooth enactment highlights their will and intent to move things up. Mauritius Treaty's amendments and moving towards level playing field for many foreign institutional and portfolio investors is absolutely spot on. This states and highlights India's efforts across globe to curd the Black money menace and brings under scrutiny of possible round-tipping of Indian funds.

Wish and hope that the collaborative effort of the government should also help in passing the much delayed GST act and brings in uniformity in the indirect tax structuring. The biggest and mega reforms are still not tick marked yet.

Saturday, May 7, 2016

Democracy in Shambles - Needs Revival across Nations

We all have now witnessed the infamous Turkish Parliament brawl, one parliamentarian punching the other, shouting, screaming, abuses and what not & these are the legislators who have the powers to make, amend or break the laws for the benefit of the masses in general. Ask any Indian, were the scenes of Turkey Parliament brawl amazes them? Answer would be NO. Its a deja vu for many as we have seen our legislators doing what not in parliament. But this piece is not about comparing the acts of one parliament with another, this is more about Democracy and the progressive nature  this style of ruling boasts about. Is it really reeling benefits for nations across globe?

No doubt that every one in Democracy has the right to speech, freedom of expression and various other freedoms which none autocratic nation would enjoy but when it comes to administration - Democracy is not so fulfilling for many. You have the right to select your leaders but democracy limits the execution. In India, we have been hearing about the implementation of GST (one of many enactments)for a decade now, Modi-led government has completed 2 years now but has we witnessed the universally levied tax coming to fore? We might have few acts passed in Lok Sabha but Rajya Sabha (upper house) holds the enactments (blame the minority which the ruling government has). Administrative powers of Democracy if needs to be clipped or ratified should be done. If Pro-Democracy means snarls, delays or indecisiveness then I don't think we are enjoying our Democracy.

People are questioning the odds of Donald Trump becoming the President of The USA and are also questioning the choices which the people of US are making. I believe and has full faith on the choices which the people would make but if this freedom of choice leads them to an arena of indecisiveness then they would also question their judgement.

Also, if we are blessed with Democracy then repeated pronouncements of being able to choose what one wants and what one chooses to be, is not the only pro-factor of democracy but execution of choices, enactments of fundamentally beneficial acts and progressive approach towards mass benefits is what justice, equality, freedom and being republic is all about.

Legislators should have the onus to perform and enunciate the benefits of democracy but acts of hooliganism and disorder creates an irreparable mental void for the masses and it might take decades before one starts trusting the law and legislators again.

Please Mind the Gap/Void!! 

Saturday, April 30, 2016

Trump or Hillary- What's in it for India?

People who are following the next big event which would have a global impact - selection of President of The USA (POTUS) 2016 would be keeping a close eye on the nearing finalisation of nomination of Donald trump and Hillary Clinton for the race to become the face of USA.

Lots of hue and cry, blame games are on, mud slinging and tantrums coupled with unprecedented comments and visuals are becoming the part of the mega campaigns. Worldwide people are guessing and creating an opinion on who and how would impact them. Who should be the right candidate and what changes would her or his selection mean to them.

India who would surpass China in the GDP % growth in couple of years as predicted by global financial bodies and are putting their bets on India to catapult the global growth rate, has lots of expectations from this campaign. From an IT perspective our global footprint is expanding and our resources are being given opportunities on foreign soils, can this get hit? Outsourcing issues are at the helm. US's Shale gas discovery and its unprecedented event to export the crude has crudely hit the market in terms of its value (rock bottomed)today. How will US deal with anti global terrorism acts of ISIS? Will India be benefited out of this? An extremely important question on how will we have to deal with terrorists and their lethal activities across globe. Foreign policy on US's association with Russia, Israel, North Korea and China is still not completely answered by any of the prospects.

Trump's mockery of Indian accent which has been an act of deliberations and arguments should not be judged on the way his final strategy would be framed upon. One must understand that there is a huge difference when one campaigns and when one gets elected. His harsh and critical remarks would only get subdued if he would ever get accommodated in Washington DC. On the other hand Hillary Clinton has not made any stark remarks on her foreign policy structures, she is still measuring each and every statement to its best without clarifying her thoughts and leaving the audience guessing. That's her style and one should respect that. Rallying on women power is something she enjoys and has command on but it's too quick to say anything now.

However, as of now I believe the race is still long way to go and would give each candidate a 50-50 chance of steering the way ahead. But yes, too radical and too irrational remarks would not help Donald for a long time. Mind the GAPS!! 

Sunday, April 3, 2016

Indifferent about “Nationalism” deception..

It’s been months now that in some or the other way an anti-nationalist or nationalist specific agenda has overpowered the prime time news bits and grabbed the headlines of various newspapers, journals and periodicals. Jibes by one party worker and counters by others, stalling the Parliament’s functioning, rethinking about our Constitutions’ fundamentals and its validity today and religious/caste/creed based issues are most widely discussed in forums, conclaves and confederations. Does our populations’ majority ruled middle class is actually concerned about these debates and their validity? Do these issues have any fundamental effect on their lives? Mere topics which are much talked about during their free time tea rounds with friends and families. That's it!!

 We are actually indifferent about such issues, believe it or not. Then what actually is important, what matters to us and what these political establishments should discuss to become relevant. Simple and the answer is known to all but it’s the lack of intent which is the major problem. Survival of a 5 year term with more of discussions on these sensitive cum invalid discussions and no elementary work on ground is the way a government finishes its term. And if a regulator shows any intent then opposition halts every ounce of efforts displayed by the legislature.

We are only concerned about development, upliftment of infrstructure agenda, bringing people above poverty line and making mass employment opportunities. Do we hear about such agendas on a daily basis? We would have a broad grin and laugh off. Whether you are tolerant enough or intolerant to issues, basic survival necessities is what a person needs and direly awaits for. Till the basic survival amenities are not fulfilled, these anti-national or national agendas are just discussion points. They stand no relevance for major section of our society. That is the reality and it’s relevant. Hope the political parties take a note and just not work for another term but a decade of relevance for masses.