Do it yourself

The unincorporated sector, popularly referred to as the unorganized or informal sector, – comprising millions of small manufacturers, traders, and service providers – is indubitably the backbone of India’s economy. While informal in structure, it is deeply formal in impact: generating livelihoods, fostering entrepreneurship, and contributing significantly to the country’s GDP. Recently, the National Statistics Office (NSO) has begun releasing quarterly data on this sector through QBUSE, marking a big step toward more frequent and reliable tracking. The following is a summary of the data for the first two quarters of the year 2025. The data survey highlights that despite the challenges of formalization, productivity, and sustainability, the sector is expanding. Informal enterprises are growing with rising employment, steady digital adoption, and a strong rural push, and are continuing to be a silent driver of growth. Key points ·          T...

A consistent rise in global equity prices, not accompanied by a matching earnings growth, has raised concerns about the sustainability of current valuations. In particular, the tech sector valuations in US technology have raised alarms. Several reports have highlighted that the market conditions and investors’ sentiments bear a stark resemblance to the dotcom exuberance (1999-2000) period, and as such markets may have already crossed the fairness redline and moved over to the realm of bubble.  ​ ​ In this context, I would like to draw readers’ attention towards two particular reports that I find representative of the analysis advising caution. “Dotcom on Steroids” by GQG Partners. First report, titled “Dotcom on Steroids” has been published by GQG Partners, USA. This report draws parallels between the current AI-driven tech boom and the dotcom bubble of the late 1990s, warning of similar risks ahead. The report postulates- “Today's market, particularly in the tech sector, e...

  Continuing from yesterday...( see here ) Rising uncertainties In the past one year, global economic uncertainties have intensified, contributing to a marked slowdown in growth projections—from around 3.2% in 2024 to 2.3–3.0% in 2025—amid persistent disruptions that have eroded investor confidence and trade flows. This volatility stems from a confluence of interconnected factors, including policy unpredictability, deteriorating fiscal positions worldwide, and escalating geopolitical tensions, which collectively amplify risks of financial instability and reduced productivity.  ​ ​ Economic policy uncertainty Economic policy uncertainty (EPU) in the US has surged to levels roughly double its long-term average since 2008, exacerbated by the 2024 presidential election and subsequent shifts toward looser regulation, tax cuts, and aggressive tariffs. These US-centric changes have spiked trade policy uncertainty to record highs in early 2025, prompting front-loaded imports and marke...

  The events of the past two months clearly point towards   deteriorating global growth prospects ;   rising economic uncertainties ; and   widening geopolitical and trade conflicts . Market participants ought to take note of these dark clouds gathering on the horizon. Deteriorating global growth prospects The US economy flirting with stagflation The US Federal Reserve cut its target interest rate by 25bps to 4%-4.25% last week, after a pause of nine months. The fed officials now estimate two more cuts in the next three months. The Fed decided to continue reducing its securities holdings (Treasury, agency debt, agency mortgage-backed securities) as part of its balance sheet runoff. ·           Economic growth has moderated in the first half of the year. Consumer spending is weaker; and housing remains weak. ·           Core inflation is still above the Fed target. The Fed Chairm...

Since the beginning of the year 2025, the exchange rate of India Rupee (INR) has fallen against the currencies of most of our major partners. Though, USDINR (INR vs USD) is the most keenly watched exchange rate (since a majority of our forex reserves, external debt and external trades are USD denominated), INR has depreciated most against EURO (EUR). The extent of depreciation against Japanese Yen (JPY), Chinese Yuan and British Pound (GBP) is mostly similar.  ​ ​ Notwithstanding the views of the finance minister that “INR is not weakening, but the other currencies are appreciating”, the INR depreciation is a matter of concern to a large majority of Indian investors. Since we are traditionally a current account negative economy, on the net basis, INR depreciation adversely affects the economic fundamentals. Besides, eroding the confidence in the economy, — ·          INR depreciation makes many things expensive for the Indian households...

Continuing from yesterday… ( see here ) Investors world over are currently faced by a common challenge, viz., divergence of asset prices from the underlying fundamentals. This is particularly true for the investors in equities, precious metals, and treasuries. Nonetheless, they are staying invested, or even increasing their exposure and/or leverage driven by greed or lack of alternatives. If you take a note of the macroeconomic fundamentals of the top 10 global economies, you would notice that the growth trajectory of most economies is still lower than 2019 (pre-Covid) levels. Though, the growth rate of some emerging markets, like India and Brazil has recovered to the pre-Covid level, on several other parameters like unemployment, fiscal balance etc. these economies are also still struggling to regain even the pre-Covid momentum. GDP Growth:  Most of the top 10 global economies have recovered from the 2020 contraction, but rates remain below 2019 levels in advanced economies due to...

The behavior of Global markets has always been perplexing for the participants. The past 8-9 months have been no different in that sense. Stock prices, commodities, cryptos, bonds, and precious metals have all moved higher; in many cases without a fundamental case for such an upmove. Investors who typically manage their risk through diversification, hedging and alignment of their portfolios with economic fundamentals and corporate earnings, usually underperform in this kind of market and have reasons to be disappointed. Some of them, who usually invest on borrowed conviction, surrender to the fear of missing out (FOMO) and indulge in unnecessary churning of their portfolios resulting in violation of their standard asset allocation, and accumulation of momentum assets at high prices, only to regret later. Traders, on the other hand, ought to love this kind of markets, when most asset classes are moving in one direction, with low implied volatility. Theoretically, in the current stat...

The latest Sample Registration System (SRS) report confirms what has been feared for the past few years – Indian population is peaking and Indians are getting older much ahead of the original estimates. The birth rate (number of new births in a year per 1000 population) has been declining consistently for the past many years, and the trend has accelerated post Covid (2021). The death rate (number of deaths per year for every 1000 population) has slowed down. In fact, the urban death rate has climbed after Covid. The infant mortality rate (number of new born children dying within a year, per 1000 live births) has improved materially in the past one decade, but still remains much below the global standards. Sex ratio also stays adverse for all larger states/UTs. India's total fertility rate (average number of children that are born to a woman over her lifetime), or TFR, slipped from 2.1 in 2019 to 1.9 in 2023, below the replacement level (ratio required to keep the population lev...