tag:blogger.com,1999:blog-60085259670587654962024-03-09T05:49:26.099+05:30Be Attached!!!! Be Informative!!!!Upgraded and constant renewable of information is The ELIXIR OF LIFE. Common sense principle outplays all Complexities.
To Find More, Just EXPLORE.....Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.comBlogger83125tag:blogger.com,1999:blog-6008525967058765496.post-15566886259119044042020-06-20T09:27:00.002+05:302020-06-20T09:27:45.851+05:30100 Days of New Normal - The Current State<div dir="ltr" style="text-align: left;" trbidi="on">
Almost 100 days of being impacted by the Pandemic and the current state has added a "Virtual" hue in our lives almost permanently. Where on one side a person is being cautious about the protective boundary to safeguard herself and family from the impact of virus, on other side the continuous job market volatility adds on to the anxiousness in one's life. Countries are anxious and monitoring their Unlocks of Economy and gauging the preparedness for next steps. It's a very precarious state for everybody from an individual to a country and globally.<br />
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Mental wellness, physical well-being, spiritual health, Macro economy of the country, Border situations, personal economic situation (Micro-economic health), skill enhancement and the Virtual Presence on the personal devices have captured the mood and coffee/tea talks for almost 3 months now. Journey from phases of Lockdowns to Unlocks have been a roller coaster for each and every one in there own manner. Its only about striking a conversation and we can hear ones ordeal of last few months. You hear, read and see such never ending and heart wreaking chronicles are all around us, but its a <i>reality </i>(sic).<br />
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With so much around, surely we have no choice but to search for some motivation, search for acts, narration of reality or even stories which can keep one high on spirits because this journey is a long one atleast till this 'New Normal' State is settled. Motivation to get one time fits all Vaccine which fights against the Virus would be a massive morale booster for all but till the panacea is zeroed down, we have to look for determination around us.<br />
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In last 100 days, Mother Nature has shown us perspective to reside well within our limits and made us re-think on the co-existing narrative with our natural adobes. The flourishing nature around us really keeps us high spirited in these challenging times and hence it is high time for homo-sapiens to get their acts (social and economic) together have a harmonious survival ahead.<br />
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How things would turn up from now is yet to be forecasted but getting back the happiness and motivation to walk or run in this journey is surely dependent on every individual. Its critical to find little happiness around, more critical to cherish those. Rolling averages of act of kindness and cherishing & rejoicing the happiness around will surely make our current state more habitable. And this is the New Normal which should permanently settle in.</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com1tag:blogger.com,1999:blog-6008525967058765496.post-24699644842310248042018-02-18T09:31:00.000+05:302018-02-18T09:31:07.629+05:30Unbridgeable Trust Deficit – NiMo/Tax-Burden/Aadhaar<div dir="ltr" style="text-align: left;" trbidi="on">
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It’s been close to 4 years for the current government in centre and the trust bestowed by public on the ruling government which was at its peak in mid-May,14 is at the scathing low currently. Year on year promises kept on piling up and execution has always been questioned which kept the public guessing about the process of output. It all started with Demonetization, a massive blow to the middle and lower strata of the society in India, though it kept people engaged (more than MNREGA can keep people busy in a year) to remonetize of their savings. When the public was coming back to its senses post DeMo. the massive GST execution vacuum gulped the business class in it.</div>
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Even after these two domestic headwinds the expectation around Budget rose some hope in the so called salaried middle class (major contributor of Direct Tax for GOI) and even that slightest of hope or expectation was shattered. An additional percentage of Cess coupled with Long Term Capital Gain (LTCG) for domestic investors who just calibrated confidence to enter the equity market created an unprecedented abyss. The so called Medicare policy for 10 crore families of INR 5LPA/family, the announcement was done prior the contours of the program being discussed by the state governments, an equal shareholder in this massive scheme. I do not doubt the intention of the ruling government but when execution/planning failure deflates the confident planning of the government, it shatters Hope and widens the chasm.</div>
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The majority bestowed by the public of the country expected a lot more for this government but unfortunately all planning with correct intention did not prove to be an execution perfect setup. On one hand when the government tried to plug the so called opposition triggered Non Performing Assets by recapitalizing the Public Banks, they again forgot that due diligence is vital and it’s a significant step in plugging any Asset to turn non performer. And hence, we have now another Mallya as Modi-Chowksy issue to handle. When on one hand the entire country is reeling under pressure to get their Aadhaar linked to PAN and PAN linked to TAN and Aadhaar linked to Mobile and Mobile to Bank and Bank account to Aadhaar and aadhaar to Insurance and Insurance to … and it goes all over again and again, our government forgets to secure public money by securing our Banks and the processes around it. Is Aadhaar safe and secure? (That’s another topic for discussion)</div>
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With all these incidents that has impacted the lives of many (Let the ruling Government blame the opposition and vice-versa) it is not the middle, lower strata which has suffered but the elite class has also started losing that trust which was bestowed upon the majority powered ruling Seva Sangathan. With Lok sabha elections in an year or may be before I just want to wish our parties all the best and hope the #TrustDeficit starts reducing in a consistent manner so that we again get a government with Majority and not crippled with Policy paralysis or execution failures.</div>
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-91841495301828206042016-12-26T08:11:00.000+05:302016-12-26T08:11:01.414+05:302016 - An Economically Eccentric Year, leading its way to a hopefully better 2017<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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!<br />
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<li>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?</li>
<li>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.</li>
<li>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..</li>
<li>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!</li>
</ul>
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.<br />
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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.<br />
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-60374115750147180962016-11-13T17:40:00.001+05:302016-11-26T14:49:42.641+05:30Modi's Bharat has Jan's choked Dhan (#JanDhan) - Demonetization Process coupled with Execution fatigue!<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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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?<br />
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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.<br />
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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.<br />
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Hope normalcy settles soon and we would have the new resources flown into the system easily and conveniently and Jan's Dhan gets unclogged.</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-22457462857328410952016-09-03T22:44:00.000+05:302016-09-03T22:47:00.553+05:30Inflation vs Growth!! Being Dovish vs being a Hawk.. Dr Patel - Yet to Unleash his Powers..<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="background-color: black;">As departing Governor of India's
central bank quoted the new/upcoming Governor of Reserve Bank of India "<span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;">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.</span><o:p></o:p></span></div>
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<span style="background-color: black;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;"><br />
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.</span><o:p></o:p></span></div>
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<span style="background-color: black;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;"><br />
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. </span><o:p></o:p></span></div>
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<span style="background-color: black;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;"><br />
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.</span><o:p></o:p></span></div>
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<span style="background-color: black;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;"><br />
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.</span><o:p></o:p></span></div>
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</span><br />
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<span style="background-color: black;">
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.</span><o:p></o:p></div>
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-16996902781256943362016-07-23T22:15:00.000+05:302016-07-23T22:16:04.725+05:30Quarter-Full of Socio-Economic Events across Globe!!<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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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.<br />
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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.<br />
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All set for the roller-coaster days ahead to come up. Brace yourself up and experience the volatility.<br />
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<b><i>"Is volatility the new Norm in the markets? Well we cant deny the fact.." </i></b><br />
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-530326918075235282016-06-25T18:15:00.001+05:302016-06-25T18:15:23.469+05:30It is not about Current or Fiscal deficit but Trust deficit which is causing Ripples across Globe!!<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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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.<br />
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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. </div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-5756319037207868752016-05-29T10:46:00.000+05:302016-05-29T10:46:14.669+05:30Modi Govt's 2 year of Intent, Development would supersede!!<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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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.<br />
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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?</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-36070686314184603622016-05-21T08:04:00.002+05:302016-05-21T08:04:28.654+05:30Human Index improvement and Ecological Well Being is essential to enjoy the Economic Advancement!!<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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<b><i>Human index improvement and ecological development is essential to enjoy the Economic Advancement.</i></b></div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-13545490994150740142016-05-14T09:34:00.001+05:302016-05-14T09:34:07.881+05:30Reform Springs sans Political Mileage<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
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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.<br />
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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.<br />
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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.<br />
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-21287291143723780542016-05-07T10:51:00.002+05:302016-05-07T10:51:43.683+05:30Democracy in Shambles - Needs Revival across Nations<div dir="ltr" style="text-align: left;" trbidi="on">
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?<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
Please Mind the Gap/Void!! </div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-39360383296346938532016-04-30T16:14:00.002+05:302016-04-30T16:14:50.613+05:30Trump or Hillary- What's in it for India?<div dir="ltr" style="text-align: left;" trbidi="on">
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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.<br />
<br />
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!! </div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com2tag:blogger.com,1999:blog-6008525967058765496.post-62442212349952535362016-04-03T09:02:00.001+05:302016-04-03T09:02:46.302+05:30Indifferent about “Nationalism” deception..<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
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!!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
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. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
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.<o:p></o:p></div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-55642297469965063642015-12-21T10:37:00.000+05:302015-12-21T10:37:15.482+05:30When our dirty & Ill - timed Internal politics supersedes the External economic push! <div dir="ltr" style="text-align: left;" trbidi="on">
Brent Crude trading at ~ $36/barrel and West Texas Intermediate at sub $35/barrel, these prices are so encouraging for country like India which imports more than 70% of its energy needs that multi-year floored crude prices would directly give the economy a great impetus. A push that would be so needed to raise our growth trajectory in 8 - 9% range. A range of growth which is achievable with little help from our internal political parties' consents. One of the reform which would steal the lime light would be the passage of GST. A standardized tax applicable on all goods and services. We have a structure ready with deliberations on. But if these deliberations are held in a manner that it blocks the logical flow of action then it's appalling. GST's implementation is doing the rounds for quiet sometime now and when finally it seems happening and the act getting enacted and formulated with all nitty gritties being discussed, National Herald happened.<br />
<br />
When the government wanted GST so badly to make the "Make in India" campaign successful and other schemes launched by our ambitious PM a story to remember, this revelation of National Herald (NH) Scam was badly timed. Understand this, the scam has already happened, facts and figures are known, the alleged convicts are known and they are here to stay and you can get hold of them yet again but revelation in the beginning of the winter session was really pathetically timed. Why timing is critical because we have yet again lost a complete session of our Parliament which was so needed because of this NH Scam revelation.<br />
<br />
GST lost to NH Scam. We are left with 3 working days of winter session and other amendments, enactments and policies are lined up, lets see how can the government push for the same. Gandhis were summoned on 19th Dec, if they were summoned on 9th January, 2016 what could have changed? Atleast we could have saved our winter session of parliament. When the government knew that anything but GST is so desired they should have played smart.<br />
<br />
Anyways, in BJP vs Cong tussle the economy was punished and hence, we are loosing at least 4-6 months of time before we get the desired and much needed reforms to get tabled and discussed. One should realize that the external economic factors are not in anyone's hand, hence, to get their act together it is important to be prudent and get the maximum out of the external factors. With USA now in line to start exporting its Crude oil after four decades, India might again be reaping benefits in the coming months.<br />
<br />
Timing and Prudence are very critical factors that the Government should now take a note of, else we would yet again miss a growth propelling decade.</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-3693208900682001012015-08-24T00:40:00.002+05:302015-08-24T00:40:34.712+05:30Devaluation war - A 'Never Before Chance' to amend Reform Trajectory<div dir="ltr" style="text-align: left;" trbidi="on">
With gigantic pressure on Chinese counterparts to make their economy (export driven) look more robust and attractive, a plunge of more than 3% vis a vis US $ (1.9% - Chinese govts' push and remainder is markets' reaction) has taken the global economies and policy makers by surprise.<br />
<br />
Where on one side US Fed's rate hike was a talk of town, suddenly we have another mega event which has been doing some rounds now across global markets, and that is the "Currency War" which may get trickle down to a situation where economies challenge each others currencies' devaluation for no good. But what happens now? What should India do now? And, why is this a 'Never Before Chance' for a country like India?<br />
<br />
With a massive demographic advantage and with lots of push by the GOI (Govt. of India) to enable the Small and Medium enterprises to become a viable business proposition, focussing on this segment more would be of ultra importance. Just launching of schemes and formation of institutes like MUDRA would not make a massive difference but hand holding these small entrepreneurs will. India as an economy would get a much required impetus to touch that 8-10% GDP growth target YOY if and only if we can incubate these small ideas. A logjam in our Parliament would only add insult to injury. Scumming to opposition's' tactics would only drag our last chance to be a responsible superpower on this globe.<br />
<br />
Inflation; both Wholesale and Consumer Price Index are under control, crude is dripping below its lowest lows in past few weeks and being a mega importer of energy we are in a comfortable Current and Fiscal deficit conditions, hence, waging a currency war with other global currencies would not be feasible option for India. It would increase our fuel bill and dent out low deficits. Putting us in a catch 22 situation. This situation demands a more focussed domestic approach. Push GST, break the democratically hurting logjam, consensus on Land Acquisition Bill and capping the NPAs is the way we should focus more on.<br />
<br />
Chinese government's' acts /US Fed's rate hike/ drag in commodities prices can dent us and impact our economy a bit but to keep the adrenalin running we need to have a stable domestic economy and reforms' agenda running without any man-made disasters(Parliament Logjam). Investors know where to put their money (India is still the most preferred destination among the other BRICS nations) but being responsible is the call of an hour. </div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-41338062102660836202015-04-26T23:06:00.000+05:302015-04-26T23:06:34.807+05:30Volatility - An unsustainable Goliath<div dir="ltr" style="text-align: left;" trbidi="on">
Last financial year, be it from a January - December period or April - March period, was a year with great returns for investors in bourses across the globe. Indices across globe gave returns of around 15 - 40 % on an average, the best performing asset class for the investors. Metals lost sheen, crude starting plummeting ( Short Bets though minted a lot but took brokers by surprise initially) but bourses were the best return reapers for the brokers/investors.<br />
<br />
Though it seems like that bourses would yet again be the best return minting instrument but the imbibed volatility of indices makes it really tricky for a retail investor to track the markets. Algorithmic trading with massive bets makes it really intriguing for the retail investors to gauge the momentum and that is where they burn their fingers. I dont have the precise numbers right now with Retail investors'/FII's or DII's gain/loss percentage, but the implied volatility has kept the small and brittle investors on their toes.<br />
<br />
This year with Greece's oust almost inevitable, until a dramatic treaty is signed with the creditors in couple of weeks, US Fed's unavoidable interest rate hike lined up in 2-4 months, China's stability concerns, Yemen's stability and crude's supply concerns and domestic economy's reliance on global trade, it is said to be a year of big bang Volatilities.<br />
<br />
In India, the upcoming monsoon's 8-10% deficit prediction would be of a big worry as well. Where on one hand, the effects of Modi's 1 year regime is still not visible on the ground, unsustained nature's bait (unseasonal rains and recent earthquake's destruction) would add on to the already volatile markets.<br />
<br />
This year without knowing where the markets would actually move, one thing is for sure that the movements would be massive and would be unsustainable for atleast the retail investors.</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-20095367790724178242015-03-15T17:36:00.003+05:302015-03-15T17:36:58.600+05:30BUDGET 2015-16 – A mere display of Intent or enroute to Fiscal Solidarity?<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
A fortnight after the Budget 2015-16 was read out by the
Finance Minister, it can be described as a budget with an enormous display of
intent. A Budget that guides what the Indian Economy should achieve but the
concrete plan to reach that level is still imaginary (relying on the numbers
presented is debatable).</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Restricting Fiscal deficit numbers at 3.9% of GDP for
2015-16 and total stake sale in the Public Sector Enterprises at more than INR 69,000
Crores is envisaged through disinvestment. With this fiscal year’s revised
target is brought down significantly, reaching an ambitious plan for 2015-16 is
questionable.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Reduction in corporate Taxes from 30% to 25% in the coming
four fiscal years is a booster for the Private enterprises, this would lead
them to invest more in infrastructure and creating capital for future needs.
Also there are exemptions being removed, but we need to wait for sometime
before we get clarity on the same.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Different governments come with different schemes and the
previously established schemes with same objective but with different names get
oblivion. An example below of an editorial says all:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i>“</i><i><span style="background: white; color: #0c0c0c; font-family: "Arial","sans-serif"; font-size: 9.0pt; line-height: 115%;">It
announces grand new schemes even as others in the same area that were announced
just last year are yet to see the light of the day. So we are to have a new
Micro Units Development and Refinance Agency Bank, with a corpus of Rs 20,000
crore, but the Rs 10,000 crore entrepreneurship fund for the same sector that
the finance minister announced in his first budget is nowhere to be seen.</span>”
– EPW Editorial from 7<sup>th</sup> March, 2015 publication.<o:p></o:p></i></div>
<div class="MsoNormal">
<i><br /></i></div>
<div class="MsoNormal">
The integrity of the numbers presented in the Budget is
always under scanner. Finance Minister believes that our country can grow at 8%
of GDP in next couple of years, I don’t think that can it be a reality with a
stalled Upper House? Can it be possible with an Ordinance route taken up by the
Government? Is it achievable when our PSBs need ~INR1.6 Lakh Crores for capitalization
to meet the Basel III standards? You can pose many other questions but the fact
of the matter is, it’s imperative to be practical. Through sentiments and
intent display an economy cannot grow. The first visible change on the ground
is raising the cap of FDI in insurance from 26% to 49%. There is nothing concrete
except it. You can ask me to be more patient and give the government some more
time but with Land Acquisition Bill stalled and all the chaos around it, I can
only be hopeful.</div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Also, hopeful on the integrity of the fiscal deficit number’s
achievement and the disinvestment target’s ambitious numbers. Let’s see where
the contours of this Budget lead us to.</div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-75089155675391474802015-01-18T10:12:00.000+05:302015-01-18T10:12:24.163+05:30Swiss National Bank's currency cap removal and It's effect on Indian Economy<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="margin-bottom: .0001pt; margin: 0in;">
Swiss
National Bank (SNB) surprised the global markets with its
1.20Franc(CHF)/Euro(EUR) exchange cap removal. No one factored in such a
surprise move and it resulted in Franc's appreciation by upto 30-35% in just
few seconds. <o:p></o:p></div>
<div style="margin: 0in 0in 0.0001pt;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
With
such drastic step taken by the SNB, in short term, it would definitely hurt
their luxurious export oriented products manufacturing as well as the tourism
industry. Rapid appreciation of currency in few hours can be detrimental to the
export driven economy with huge reliance also on the tourism front.<o:p></o:p></div>
<div style="margin: 0in 0in 0.0001pt;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
But
was this step necessary to be taken? SNB in its statement made it all crystal
clear.<o:p></o:p></div>
<div style="margin: 0in 0in 0.0001pt;">
<br /></div>
<div style="margin: 0in 0in 0.0001pt;">
<em><span style="border: none windowtext 1.0pt; color: #222222; mso-border-alt: none windowtext 0in; padding: 0in;">"The
minimum exchange rate was introduced during a period of exceptional
overvaluation of the Swiss franc and an extremely high level of uncertainty on
the financial markets. This exceptional and temporary measure protected the
Swiss economy from serious harm. While the Swiss franc is still high, the
overvaluation has decreased as a whole since the introduction of the minimum
exchange rate. The economy was able to take advantage of this phase to adjust
to the new situation. Recently, divergences between the monetary policies of
the major currency areas have increased significantly – a trend that is likely
to become even more pronounced. The euro has depreciated considerably against
the US dollar and this, in turn, has caused the Swiss franc to weaken against
the US dollar. In these circumstances, the SNB concluded that enforcing and
maintaining the minimum exchange rate for the Swiss franc against the euro is
no longer justified."</span></em> <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
The
Quantitative Easing which in next few weeks would become a reality in Europe would
further weaken the Euro and so accumulating the Euro on its ballooning balance
sheet would be more of a liability. Hence, removing the cap would be a long
term measure for sustainability.<o:p></o:p></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
What it
means for India? Structurally, India is poised for a tremendous growth
trajectory with a persistent focus on manufacturing and infrastructure. If required,
ordinance route can be used to keep up the pace for developmental reforms (though
it is debatable, as ordinances stifle the democratic structure). These factors
make India poised to receive hot money that would be disseminated by the QE in
Europe. Losing the sheen as a safe investment destination by the Swiss can be a
boon for the emerging economies, especially India which has the engines revved
up for the coming 3-4 years.<o:p></o:p></div>
<div style="margin-bottom: .0001pt; margin: 0in;">
<br /></div>
<br />
<div style="margin-bottom: .0001pt; margin: 0in;">
But with
the rosy picture comes the unenthusiastic scenario as well. The Hot Money we
are talking about is not sustainable money pouring in the economy. It can
create bubbles which in turn generates ripples in the economy that may be tremendously
harmful. This fact has been reiterated by Dr. Rajan at various platforms and
this is where the regulators and the government should focus more upon.
Encourage Foreign Direct Investments than Foreign Institutional Investments.<o:p></o:p></div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-66913593662712822222014-12-07T19:47:00.001+05:302014-12-07T19:47:26.985+05:30Macro-prudential Policies – Need of an hour!!<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
Lessons from the recent financial crises put emphasis on the
literally adverse and chaotic situation that can arise yet again, if not paid any
attention to the cyclical irregularities that emerge in the global financial
system. It has been more than six years now and can see a light at the end of
the tunnel. United States is on a verge of recovery, unemployment rate is at
six years’ low, at around 5.8%, GDP growth is back in the rage of 2.3-3.5% QoQ.
Earnings of the people participating in the labour market are also growing a
tad and that is encouraging. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
One can take a sigh of relief that atleast we have a
recovery now(only from the largest economy’s point of view), though it was
inevitable, but are we prepared now for another global financial dent? Do we
have a cushion (in terms of stress tests undertakings, reserved capital and
equity to sustain any sort of financial aberrations) yet to sustain? Here,
Macro-prudential policies come handy. Worldwide monetary policies do provide a
direction to sustainability, in terms of coping with an unexpected event (read,
Quantitative easing) but can there be a prudential policy in place, which can
act as a bulwark for the financial system against any unprecedented crises.
This is exactly what Governor Lael Brainard (At the Hutchins Center on Fiscal
and Monetary Policy, The Brookings Institution, Washington, D.C.) reiterated in
her address on 4th December, 2014). She has also focused on the in tandem usage
of both monetary policy and macro-prudential policies for safeguarding the
globally linked financial market.<b><o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Reserve Bank of India has also accepted that it is the
Macro-prudential tools which are necessary today for keeping the financial
institutional network intact. Urjit Patel’s report also reiterates the same
view and hence stressing the importance of prudential tools. The steps taken
for these policies are charted of by the Implementation of Basel III Capital Regulations
in India. As per RBI’s notification of March,2014, the transitional period for
full implementation of Basel III Capital Regulations in India is extended upto
March 31, 2019, instead of as on March 31, 2018. This will also align full
implementation of Basel III in India closer to the internationally agreed date
of January 1, 2019. <b><o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
Indian Banks are to be capitalized with clear charted way
out for enough equity and liquidity capital essential to wither away any crises
where survival becomes essential. And to make this a reality, Central bank and
the Government need to work hand in hand. But, the way our political decision
making process is undergoing a drastic change, we hope that the new government
becomes a little prudent and start charting out plans for 2019. The political
juggernaut which is being witnessed these days in the parliament with regards
to the Hate Speech is something which is not accepted. The entire political
fraternity should take responsibility and let the nation move forward. These
small political incidents should not abandon the path for a stronger financial
stability.<b><o:p></o:p></b></div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-34915771134121040102014-11-30T09:17:00.002+05:302014-11-30T09:18:44.445+05:30Falling Oil Prices – A Blessing in Disguise, but will the trend Sustain?<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
OPEC, a group of 12 Oil producing nation did not budge to
reduce the production of crude oil touching the mark of 30 million Barrels a
day. Making it difficult for the fracking industry in the US to remain relevant
economically. This tussle between the two major oil producers of the world is
proving to be fiscally healthy for a country like India, which imports 80% of
its oil requirement.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Brent Crude and West Texas Intermediate basket humming at
around $70 and $66/barrel, makes it really “Acche Din” sort of days for huge importers
like us. It would ease our inflation, Wholesale and Consumer inflation, will
have positive impacts on our deficits (as reported in ET, dated 29<sup>th</sup>
November, 2014, Deficit hits 90% of Budget in 7 months) and will give some leg
room for the government in restricting the total deficit to 4.1% of GDP in
FY15. But is it sustainable? Will this Oil bonanza sustain?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Inflation, both WPI and CPI are easing for past 3-4 months
and touched multi years’ lows. With almost an average monsoon and drop in oil
prices in this calendar year, the first three quarters of the FY15 has been
nothing short of spectacular. Also, increasing pressure on RBI governor to
reduce the rates. But will Dr. Rajan blink? Surveys conducted in the fraternity
clearly highlights that Dr. Rajan is focusing on culling this inflation for
once and all. Urjit Patel’s committee’s recommendation of keeping the CPI tamed
at the range of 2-6% till H1, 2016, is being considered by the governor as the long
term target. So bowing down at this aberration of lower prices is something
which is not expected by the fraternity in the next Bi-monthly monetary policy
meet, scheduled on 2<sup>nd</sup> Dec, 2014.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
On the other hand, for
the majority driven ruling party, BJP, the oil slack could not be better timed.
With just 3 months left for the fiscal report to be presented for FY15 and
target setting for FY16, north block should consider to make the maximum of the
plummeting oil prices (promote renewable sources of energy, this sector needs
dire attention of the government). At a time when the prices reflected at the
fuelling pumps are market driven, the retail consumers would reap benefits of
the slack. Automobile and ancillary units would also make the most of the situation
as it is expected that the demand would soar and would bolster their top line.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
All in all, drop in oil basket is a huge positive for the
country but in order to have a sustained impact, it is important for the
government to bolster policies for renewable sources of energy. Reliance on non-renewable energy should be reduced (atleast a committee formation with recommendation on reliance should be reduced to 70-75% of our total requirement is desirable). A 5-year course for reduction in reliance is imperative. Use the drastic
deduction in the fuel imports for giving incentives to the public for using
constant source of energy.</div>
<br />
<div class="MsoNormal">
Look at the positives and contribute in low carbon emission efforts.
Tap this time and take some swift action PM Modi. It can’t get better for
energy reforms. </div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-55031819434391357432014-09-20T17:43:00.000+05:302014-09-20T17:48:56.693+05:30The Tale of 3 Central Banks!<div dir="ltr" style="text-align: left;" trbidi="on">
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Central
banks around the world are going through a phase which need maneuvering every
time in order to sustain the drastic domestic headwinds and the harsh external
shocks. Across the globe, there are two such central banks which are closely
watched always and have given clues of what is about to come in couple of
weeks. These references of what is about to come acts as a cushion for the rest
of the world to get its financial act together and sustain the changes with
ease. However, for last couple of months there have been some changes which has
raised eyebrows of economists around the globe and made them think on their
toes to counter the unprecedented events from two major developed nations.<o:p></o:p><u1:p></u1:p></div>
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<br /></div>
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On one
hand, Federal Reserve is pondering over the much debated issue of "When to
move up from Zero-Lower Bound?" with the final taper act in couple of
months and on other hand the lack of take-up for the TLTROs (<b>Targeted Long Term Refinancing Operations</b><b> </b>- under
which banks could disburse loans at an interest rate of 0.15% for four
years provided they increased lending to businesses or households) will force
the ECB into more drastic action, including buying government bonds under a
quantitative easing programme. The actions of major developed economies have
forced the developing economies to keep a hawk-eye on the easy money flowing in
their countries and their after effects. Reserve Bank of India led by Dr.
Raghuram Rajan has reiterated the effects of saturation of the present easy
money from the economy. It’s depreciating effect on the currency and the bubble
creation in Real Estate and Stock Market (with many believing that markets
are way over their sustained fundamentals).<o:p></o:p><u1:p></u1:p></div>
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<br /></div>
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In this
case foreign investors’ flight for safety would pressurize the currency and
when ECB's easy money flowing into the economy would soon become a reality,
focusing on the fundamentals for an emerging economy would be the survival
mantra. It is a mantra that can help us tackle the external headwinds with
enough ammunition. Easing Consumer Price Index at <b>sub 7.7% levels</b>, with our crude basket <b>at</b><b> sub $100/barrel levels</b> and with monsoon deficit receding at <b>present 10%</b><b> from</b> a scary 20 plus percentage a month back coupled with
pro-reforms action taken by the majority backed governments highlights are
strong fundamentals and preparedness to face the external economic pressure
with much confidence.<o:p></o:p><u1:p></u1:p></div>
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<br /></div>
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Though as
of now the Indian economy has sustained the taper effect quiet comfortably, I
am still curious about the after effects of, A) "<b>Flight for Safety</b>" on the domestic economy with interest rates
being raised from the Zero Bound level and B) <b>Europe’s easy money</b> pouring into the emerging economies.<o:p></o:p></div>
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-57986111926510911822014-08-24T15:03:00.002+05:302014-08-24T15:03:51.031+05:30Productivity over Commission<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: 'Times New Roman', serif; text-align: left;">The recent
announcement made by Prime Minister Narendra Modi regarding the dissolution of “Planning
Commission” acted as a catalyst in making the discussion and debates possible
to ponder about relevant existence of the institution.</span></div>
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<span style="font-family: "Times New Roman","serif";">A think
tank which was structured to guide the way for government in policy formulation
and push reforms, slowly but steadily lost its sheen in this ultra-fast paced
world, in terms of economic and technological changes. There have been
questioned raised about its relevance in today’s time and so any major shuffle
in the commission’s structure was jinxed by political procrastination but the
majority backed <i>Prime Sevak</i> bit the bullet and scrapped the commission.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif";"><br /></span></div>
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<span style="font-family: "Times New Roman","serif";">What did
the commission fail to acknowledge that it became redundant? What did it ignore
and why? <i>Author Shankkar Aiyar</i> hits the nail with his explanation “Centre
allocated resources, the Planning Commission monitored/regulated/directed the
deployment, and the states were tasked with implementation. The Centre had no
responsibility to deliver, the commission no power to enforce and the states
who had little say or incentive felt dumped upon. The Planning Commission
represented a multi-polar disorder in the structure of governance.</span>”<o:p></o:p></div>
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<br /></div>
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<span style="font-family: Times New Roman, serif;">More
than the Planning Commission’s execution failure it was the emergence of
Individual States as a Distinct Business Unit which marred the long term plans laid
down by the commission. From Gujarat to West Bengal and from Himachal Pradesh to
Kerala each state found its mojo back and started attracting Domestic and
International investors to invest on their land. And in the process, each state
demanded autonomy in the execution of funds and the way resources should be
utilized. The commission which laid the Five Year Plans could not accommodate these
rapid changes in their long term plans for each state. This slowly started
acting as a major glitch in the individual states’ working. Marring public
sentiment and bureaucracy delayed the investment cycles. This was for me the imperative
reason of why the Commission could not survive. When the world is changing
every year how can a too long 5 year plan mechanism work in a growing country
like ours.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif";"><br /></span></div>
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<span style="font-family: "Times New Roman","serif";">Now is
the time to look forward and yet again don’t establish another bureaucratic structure
which would hamper the states or the Center to function effectively. Rather,
this is the time to focus more on productivity of each Act or Policy which is
being framed or implemented. There is news that a similar structure of what
China has, called as “National Development and Reforms Commission” is being
envisaged in India too, having complete autonomy and constitutional authority.
But, I personally feel that again we would waste our precious time in miring
another structure in political logjam by doing the same. <o:p></o:p></span></div>
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<br />
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<span style="font-family: Times New Roman, serif;">Rather,
we should follow what Australia’s Productivity Commission does, reiterated recently by <i>Economist Ajay Shah</i>, focus more on
productivity and not forcing upon its decision on the government. Encourage discussions
within the contours of the government authorities and let the consent be
earned. Don’t constitutionalize the structure so that it doesn't get dragged
into the patchy waters of where the likes of CBI and CAG find themselves today. Don’t politicize
the new structure. Use it as a catalyst that encourages </span><b style="font-family: 'Times New Roman', serif;">Inclusive ideas for
Inclusive Growth.</b><span style="font-family: Times New Roman, serif;"><o:p></o:p></span></div>
</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com1tag:blogger.com,1999:blog-6008525967058765496.post-79692767296341087082014-05-05T01:25:00.002+05:302014-05-05T01:27:31.333+05:30Post the Unconventional Monetary Policy and its effects on India<div dir="ltr" style="text-align: left;" trbidi="on">
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Since the time recession hit the shores of
America and it repercussions spread across the globe, there has been a sudden
drop in the Short Term Interest rates level to almost zero and large scale
asset purchase became the survival plot for the mature economies.</div>
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<a href="https://www.blogger.com/null" name="_GoBack"><br /></a></div>
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Buying in long term bonds
and Mortgage Backed Securities every month has boosted in the reserves for the
banks in the industrial economies. This boost then was pushed to reap in on the
interest rate gaps of the Emerging economies and the other investment
opportunities which seemed attractive for large fund houses and banks. This
formed the backdrop of Hot Money which poured in India aggressively. Our major
indices touched all-time highs every day and gave great returns in first
quarter of 2014 calendar year.</div>
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<br /></div>
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First half of 2013
calendar year was a nightmare for a country like India. Reeling with huge
Current and Fiscal Deficits, rapid depreciation of the currency and depleting
exports all made worse for the government and the central bank. Pushing them
hard to take some serious steps before our sovereign rating gets a beating and
investors’ confidence further dwindles. Few but important policy measures
brought back the situation in control. And the investors’ confidence further
got a boost. INR appreciated deficits under control and Forex reserve has
ballooned.</div>
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<br /></div>
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In May, 2013 when the Fed
hinted about their plan to reduce the asset purchases, the markets reacted
aggressively, leading the Fed to clarify and pacify the situation. But the
reality is it has to stop one day. And with successive reduction the complete
pause in purchases of long term assets by Fed is not far away. How will the
markets react? How will India handle such a situation? Will the new government
put things in place before the fundamental scenario becomes unsustainable
again?</div>
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<br /></div>
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Presently, the influx of
external funds in indices, debt market and other assets of our country is led
by factors not controlled by the domestic economy, i.e. spillovers of
quantitative easing. There has been no major policy reform undertaken for the
investors to believe in the long run story of India. The new government will
take its position at a very critical stage of the year. When on one side USA’s
economy is improving and Fed is reducing the asset purchase and on other side
the overall global economy is coming back on track, luring the investors to
invest for long in India need some serious policy changes.</div>
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If the new government
fails to take some rapid actions and investors’ can't associate with the Indian
story then the repercussions would be unimaginable. More than relying on
external spillovers, it’s time for the economy to introspect and make necessary
domestic policy changes to enjoy the perennial external investors’ trust and
grow our domestic markets too.</div>
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-3821001516706587192014-03-03T00:18:00.001+05:302014-03-03T00:23:19.603+05:30Mt GOX’s Debacle: A definite learning<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="text-align: left;">World’s largest Bitcoin exchange’s collapse has forced
investors in this virtual currency to rethink about their investments. As per
the reports, security system of Japan’s based exchange was compromised and lakhs
of Bitcoins worth around $400 millions were lost/siphoned off.</span></div>
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<br /></div>
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It’s an eye opener for the developed and developing
economies which were balancing their act together to introduce these “cryptocurrencies”
in their economies for daily transactions. The volatility of this intangible
currency was astounding, from $30 to $260 then touching $1000 and now dropping
back to $550 within 8 months time is quiet tough for any economy to absorb.</div>
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<br /></div>
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In one of the conference, late last year, RBI Governor
Raghuram Rajan explicitly highlighted the instability of such currency a threat
for the economy. Although, never brushed away the reach-potency of such
currency in a country like India where there are about 900 million mobile
subscribers out of which 20% have internet connections on their sets but with a
tighter control over Bitcoins.</div>
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As MT GOX has started counting its days before it completely
perishes, similarly one day even Winkdex (<span style="background: white;">active
qualified U.S. dollar denominated bitcoin exchanges</span>)would
wink off completely until a tighter control is imbibed in its system.</div>
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<br /></div>
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Though one should never undermine the importance of such
virtual currency, which would certainly have the next big transactional value as
the world takes another leap virtually, a better control/regulation is
something which would make such transactions more secure, reliable and worthy. </div>
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How to regulate such currencies? What are the steps involved
in measuring inflation through these currencies? How to increase the
transactional reliability among the users? The world’s biggest economies should now take
some comprehensive steps towards dealing with such issues and making such
currencies a viable option for future transactions. </div>
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A step in this direction is a must now.</div>
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Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0tag:blogger.com,1999:blog-6008525967058765496.post-86322547810484645432013-12-22T07:48:00.002+05:302013-12-22T07:48:54.191+05:30Digesting the Bitter Taper Pill !<div dir="ltr" style="text-align: left;" trbidi="on">
Finally Fed Chairman Ben Bernanke along with his committee members decided to slow down their monthly $85 billion asset purchase programme by $10 billion to $75 billion. More than the quantum of the reduction it was the faith that Fed Chief highlighted in the economy's recovery. Lowering unemployment rate, growth in Gross Domestic Product and expected inflationary effects has been the reason behind the act.<br />
<br />
When in May Mr. Bernanke hinted about lower purchases there was a palpable negative impact on the emerging economies. Indices plummeted across the region and governments started blaming the Fed for harsh landing. Sudden sense of a pause in the flow of money in emerging economies and its impact shook the fundamentals of the region. And it seemed as if Fed was manoeuvring their economy and were not prepared for any kind of interruption.<br />
<br />
But in past 6 months emerging markets understood and realized that the economic fundamentals of the country should showcase its solidarity and be prepared for the worse as far as hot/easy money is concerned.<br />
And when finally Fed took its stand and started tapering, although in a justifiable manner, the emerging markets acted buoyantly. They were actually prepared.<br />
<br />
In India though initially markets reacted negatively and plummeted but lately bulls overshadowed the bears. More than the external factor like Tapering it was domestic inflation data, political climate of the country and the corporate sector's performance that took the driver's seat and guided the markets. Domestic issues had more impact than the International external factors. And I feel in the next six months, the domestic factors would pave way for the economy than the extraneous ones, namely:<br />
<br />
<ul style="text-align: left;">
<li>Corporate Sector's third quarter earning</li>
<li>General elections and the sentiments around it would guide the economy</li>
<li>Desperate attempts by the ruling party to revive the economy (keeping CAD in control), and</li>
<li>Central Bank's actions regarding the Financial year end Monetary Policy stance and Bank license issuances.</li>
</ul>
So keep gazing the domestic factors appropriately as more than the tapering effect it would be the above mentioned domestic issues that would pave way for the economy to moving forward. Tapering effects has been tapered away and it is the domestic events that one should observe to get nick of the economy's movement.</div>
Dhruv Choprahttp://www.blogger.com/profile/12708509211142611905noreply@blogger.com0