Grab a drink and grow your finance acumen

Recent surge in Indian equity market might have brought cheer to the jittered investors, but credit should be given to the RBI Governor ‘Urjit Patel’ for his austere move of buying back govt securities to infuse capital into parched Indian market, especially at the time when the sanctity of the central bank is being questioned by the government. Government has always been at loggerheads with central bank over economic policies, even pointed out by the last RBI Governor ‘Raghuram Rajan’. It might have turned severe this time with government threatening the autonomy of central bank leading RBI deputy governor coming forward quoting “Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite economic fire and come to rue the day they undermine an important regulatory institution.” However, the tensions seem to have eased off with markets finally gaining momentum, US waiving Iran’s sanctions and record GST collectio...

Indian Shadow Banking bust Is IL&FS, Lehman Brothers of India? What actually led to the fall of IL&FS and how it can affect the economy Depreciating rupee, plunging stock market, government bailouts and IL&FS debt crises, these past few days have been really hard for the Indian govt. It wouldn’t be wrong to say that economy is in a dangerous condition. The only plausible argument government has put by now to justify the plummeted rupee is rising oil prices. Country’s current account has taken a hit with oil prices touching $85, highest since November 2014. While this might be one of the reasons, it certainly is not the only one. In my previous article I wrote about major reasons for the fall in rupee and how government can tackle it. In this article I am going to talk about severity of the recent IL&FS crises that led to one of the biggest bailouts of financial industries. Recent strings of defaults and huge amount of NPAs have shaken the financial in...

Real reasons of rupee weakening and how Indian govt should tackle it (1 USD = 74.43 Rupees) While it’s fascinating to see how exchange rates move in tandem with macroeconomic factors, continuous decline in rupee has raised lot of eyebrows lately. Most of the media and publishing houses have attributed this to current account deficit which sits at $48.72 bn, highest since the record $88.16 bn of 2012-2013. While CAD indeed is one of the factors contributing to rupee downfall but certainly it’s not the only one. Few things that might need little consideration before coming onto any judgement: 1 . India has never had a trade surplus in merchandise in a decade, means its imports have been higher than exports with crude, gold and diamond being the major contributors. On the other hand, it has enjoyed a surplus in invisible trade (services, software) but not enough to offset merchandise deficit. 2 . Crude & Gold are traded in dollars, which means every time we imp...