Do it yourself

Last week we travelled through seven districts spread across all three divisions of Himachal Pradesh. In five days we drove through Sirmaur, Solan Shimla Districts (Shimla Division); Bilaspur, Hamirpur and Mandi Districts (Mandi Division) and Una district (Kangra Division). The journey was mostly through lower Himachal, except few areas of Shimla district that lie in upper Himachal. The objective was to assess the current socio-economic and political conditions of the state and sentiments of the people ahead of elections scheduled in November 2022. The following are some of the key observations made during the trip.   There are no signs of Covid-19 pandemic in the state. Masks are mostly absent from the faces of the people as well as shops. Only room service staff at expensive hotels are seen wearing masks while attending guest calls. The customary hand sanitizer bottles put up in hotel lobbies, shops and offices are mostly empty. Most of the people we spoke to remember Corona as a...

I am pleasantly surprised to see an overwhelming response to my random thoughts on geopolitics, economy, businesses and markets shared through yesterday’s post (see Market’s tryst with reality ). Even more surprising is the fact that all respondents are in agreement with my thoughts. This has happened for the first time since I started writing this blog. Some respondents have taken the discussion further and raised some issues. I find it pertinent to address these issues and offer some more random thoughts in this context. Some have asked for more examples of arch rivals burying their hatchet and coming together for a common good. There are numerous examples of such deals in corporate history. Some notable ones include BHP Billiton and Rio Tinto; Kraft Heinz, Glaxo Smithkline, Unilever; Pfizer, Allergen, Astra Zeneca and Gilead Sciences; Altria and Phillip Morris; Broadcom and Qualcom; Barclays and ABN Amro; Merril Lynch and Bank of America; Shenhua and China Guodian Corp; AB InBev...

 It was an unusually warm winter in the European continent in 1989. The western pacific was unusually warm due to El Nino conditions. Demolition of the Berlin Wall had just started. Under these settings the US President George Herbert Walker Bush and USSR General Secretary Mikhail Sergeyevich Gorbachev met at Malta, an archipelago in the central Mediterranean between Sicily and the North African coast, to discuss the end of the Cold War. The summit marked a watershed in the East West relationship. The summit was followed by formal end of cold war, completion of nuclear disarmament in pursuance of INF Treaty (1987) and dissolution of USSR in 1990-91. The apparition of the Second World War was finally liberated. The world looked forward to an era of peace, cooperation and progress ahead. The two decades that followed 1990 would see unprecedented growth in global economics. Global trade and commerce flourished. The highest number of people got elevated from poverty in the third worl...

  In the past 3months, the NITI Aayog has published two important reports regarding electric mobility in India. The first report presents a blueprint for inclusion of electric vehicles (EVs) in priority sector lending to stimulate the demand for EVs. The second report, emphasises on the need for advanced chemistry cell energy storage in India. These two are inarguably amongst the primary considerations to promote faster and wider adoption of clean fuel operated mobility solutions in the country. It is pertinent to note in this context that India has committed to the global community that by the year 2030, the share of electric vehicles in the total vehicles sold in India would be 30% (EV30@30). The key highlights of the NITI Aayog’s reports are as follows: Facilitating easy and adequate credit for EVs ·          Cumulative investment in India’s electric vehicle (EV) transition could be as large as INR 19.7 lakh crore ($US266 billion) ...

The RBI governor reportedly assured the country that “ there was no prospect of the economy falling into a stagflation vortex and retail inflation was expected to moderate going forward, notwithstanding fears of imported inflation given the massive spike in commodity prices, especially crude oil, after Russia invaded Ukraine last month.” Speaking to the elite group of industrialists and bankers, Governor Das emphasized that “ We are comfortably placed to deal with any challenges with regard to financing the current account deficit, and the RBI stands committed to deal with any challenges on this front.” In this context, I consider it pertinent to note what the industry and markets are saying about the current state of affairs of the Indian economy, particularly the inflation and demand outlook. The rating agency CRISIL notes that “Inflation based on the Consumer Price Index (CPI), or retail inflation, rose to 6.1% on-year in February compared with 6.0% in January and 5.0% a year ag...

I travelled to the Agra, Aligarh and Bareilly divisions of the state of Uttar Pradesh last week. Holi being the principal festival of these regions, it was the peak season of festivities in these areas. Since, in the past two years, the Covid pandemic impacted the festivities to a great extent; this year’s celebrations were particularly enthusiastic. A good sugarcane and bumper wheat crop added to the farmers’ delight. Poor realization for potatoes was a little dampener. The elections to the state assembly have just concluded and the new government is yet to be formed. Both the principal political parties, the BJP and SP, have performed well in the elections. So the political leaders and workers were also seen celebrating with fervor. Broadly, the aerial socio-economic view of the region appeared quite ebullient and promising. There are few observations that I would like to share with the readers. These observations are relevant for understanding some popular political narratives...

The First World War resulted in the decimation of some large empires like the Ottoman Empire, Russian Empire, and Austro-Hungarian Empire. By the end of the war, the map of Europe had changed dramatically. The communists had taken over power in Russia and neighboring smaller states to form the Union of Socialist Republics (USSR). Many other states in the Eastern Europe also saw the rise of communism. Germany and Italy fell for an ultra-nationalist (fascist) propaganda. The European imperialists like Portugal, Spain, France, Netherlands (Holland) and Britain started to lose their grip over their colonies in Asia and Africa. The Spanish Flu and the Great depression also shaped the politics of Europe in the post war period. This war also saw the emergence of the USA as a formidable global power. The Second War completed the transition to the new world order with the decline of the British Empire, division of Germany and Korea, destruction of Japan and strengthening of the USA and USSR. Th...

On the Monday, 7 th of March 2022, Nifty opened with a cut of ~380points (or 2.3%), and ended the trading session almost at the opening level. Not much new had happened over the weekend to warrant this kind of fall on Monday morning. The Russia-Ukraine conflict was intense throughout the previous week and the commodity prices were already rising. Many friends enquired what could be the reason for this sharp cut on Monday. I was not sure about it, so I started inquiring from various market participants whose numbers are stored in my phonebook. Unsurprisingly, none offered any convincing explanation. Some people however felt compelled to offer an explanation, for the fear of losing the “expert” status they enjoy in my opinion. ``The exit polls today evening may show the BJP losing UP elections”, was the most common explanation offered by the experts. When I asked, how do you know about exit polls, sitting far away from UP?, they indicated that they have “credible sources” reporting fr...

 Political state of affairs The latest round of elections concluded with results of five state assemblies announced yesterday. BJP managed to retain their power in two states - Uttar Pradesh and Uttarakhand – with a comfortable majority, though the number of seats is lower than the outgoing assemblies. In two other states – Goa and Manipur - BJP is well placed to make a government. In Punjab, Aam Aadmi Party (AAP) has wiped out the traditional parties (SAD and Congress) in one of the major upsets. Overall, the latest elections must be seen as continuation of some key political trends that started emerging in the past decade that saw emergence of BJP as a primary political party in the country and decimation of the Congress Party. BJP must be relieved after these elections that saw the entire central government, including the prime minister and home minister. Though less number of seats in Key states of UP and Punjab would mean that BJP leadership would have to remain busy till ...

 In the decade of 2000s (2001 to 2010), gold gave superlative returns. The prices of yellow metal increased 3.8x (in USD terms) for the decade. This return had however come on the back of the negative returns for two successive decades (1981-1990 and 1991-2000). In the last decade (2011-2020) the precious metal yielded a return of 39%. Traditionally it was believed that during periods of high inflation, geopolitical uncertainties, war, money debasement (due to quantitative easing or hyperinflation) etc. gold is a preferred refuge. However, this safe haven status of gold appears to have diminished in the latest episode of high global inflation, unprecedented quantitative easing, and geopolitical uncertainties. The shortages of goods and skilled workers are troubling the global economy. Unprecedented borrowing and printing of currencies by the US Federal Reserve, Bank of Japan, and European Central Bank has eroded peoples’ trust in official currencies to some extent. As per the c...

In the past two years, the quintessential argumentative Indian in me, like most of my fellow countrymen, has assumed “expert” status in many diverse fields such as Virology, Epidemiology, Medicine, Macroeconomics, Geopolitics, Defense strategy, nuclear weaponry, History etc. This is besides the Politics, Spirituality, Religion, Astrology and Memelogy (the art and science of making jokes for every important and serious issue) which have been the domains of our expertise for a long time. Recently, we have been discussing (or trying to direct, if you will) the geopolitical and war strategies of Europe. The government of India may have chosen to stay neutral in the conflict between Russia and Ukraine; but the people have taken sides. More than the countries, we are taking sides of the leaders - The Russian president Vladimir Putin and Ukrainian President Volodymyr Zelenskyy. Supporters of Putin are mostly playing the “old friendship” card. They are vehemently arguing that Russia is our...