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.

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.." 

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. 

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?

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.

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.

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!!