Do it yourself

Last week, the National Statistical Office (NSO) released first advance estimates of the National Income for FY23. These estimates are important because the budget estimates for FY24 would be based on these estimates. The finance ministry will use these estimates to project the GDP, savings, tax revenue, expenditure and allocations for various sectors of the economy. Some key highlights of the data released by NSO could be listed as follows: FY23 real growth (2011-12 prices) GDP (at 2011-12 prices) may increase by 7% to against 8.7% in FY22. This estimate is marginally higher than the RBI’s latest estimate of 6.8%. Per capita GDP may increase by 5.8% to Rs1,13,967, in FY23, against a growth of 7.6% in FY22. Per capita private consumption may be Rs65,237, a growth of 6.6% over FY22. FY23 Nominal Growth (current prices) GDP may increase by 15.4% to US$3.3trn, against 19.5% growth in FY22. Per capita GDP may grow by 14.2% to Rs1,97,468 (US$2394), against a growth of 18.4% in FY22. Per cap...

It's less than two weeks into the new year and I have already faced multiple instances of ethical dilemma. These instances not only tested my resolve to avoid all kinds of ethical conflicts, but also raised doubts about the health of the Indian economy and sustainability of some new age business models. Let me first briefly describe some of these instances: ·           I booked a doctor consultation for my daughter through a popular healthcare service portal. The doctor insisted that in future we should book consultation directly with the clinic instead of coming through the portal. ·           I lodged a service request for our out of warranty washing machine with the concerned German Appliance company. The service engineer visited within 3hrs and repaired the fault. While leaving he handed over his private business card and requested that in future we can call him directly; and he will charge onl...

Joshimath is an important town in the Chamoli district of Uttarakhand, in the Garhwal Himalayas. It is the entry door to the sacred temple of Shri Badrinath; and also winter abode for the deity. It hosts the northern monastery (one of the four sacred Hindu monasteries established by Sri Adi Shankracharya); and a critical cantonment for the Army establishment posted to protect the northern borders with China (Tibet). It is also the gateway to famous winter sport venue Auli and several other Himalayan trekking destinations. Over the past three decades it has evolved from a sleepy mountain village that would witness some life during the six months Char Dham pilgrimage; into a busy town bustling with activity all-round the year. Recently, Joshimath has been in the news for the wrong reasons. About 20000 inhabitants of Joshimath are living in extreme fear as their homes have developed big cracks; and could collapse anytime. Besides, some important temples and other establishments have a...

Chemical Sector (SMIFS Limited) Our chemical channel checks suggest that slowdown in dyes, pigments, FMCG, etc still persist in December 22 and increasing central bank rates across countries to control inflation is weighing heavily on the demand & prices of commodities chemicals. Although commodity chemical prices are witnessing a rebound from the bottom in anticipation of strong demand in the coming months and minimal channel inventory. Despite global headwinds, India remains on a strong footing in chemicals led by increasing interest of global companies to source from India to de-risk their supply chain, increasing share of specialty chemicals in overall product mix and robust capex aligned by chemical companies to capture future growth. Since, China is relaxing its COVID curbs hence demand is expected to remain robust, although Chinese New Year which starts from 22nd January and ends on 5th Feb 23 can be a short term demand dampener. The trends are mixed and so the commo...

In the US, banking panic started at regional level in 1930, with many smaller regional banks faced crisis. However, as Great Britain decided to leave the gold standard for GBP on 21 September 1931, the panic spread throughout the country. Foreigners became concerned that the US may also follow Great Britain and end gold convertibility of USD. There was a rush to convert USD into gold. The collateral was that depositors became concerned about the safety of their money and started withdrawing currency from their accounts. A global rush to convert USD into gold and an internal rush to withdraw currency from banks drained out the banking system reserves and choked the money supply – exacerbating the deflation and propagating the great depression. There was a spate of bank failures in the US during 1931-1933. The Federal Reserve Bank of New York responded to the situation by hiking rates in October 1931, to encourage investors to deposit money in the US banks or buy US bonds. There was an i...

  The Government of India has rolled out an integrated food security scheme effective from 1 January 2023. The new scheme shall remain effective till 31 December 2023. The scheme is estimated to cost the central government rupees two trillion. Under the scheme, the government would provide 5kg food grains per person to Priority Households (PHH) beneficiaries and 35 kg per household to Antyodaya Anna Yojana (AAY) beneficiaries, free of cost. The scheme has apparently subsumed two extant food subsidy schemes of the central government, viz., (a)   Food Subsidy to Food Corporation of India (FCI) for discharge of obligations under The National Food Security Act, 2013 (NFSA). Under this scheme Under the scheme, 5 kg food grains per person is provided to Priority Households (PHH) beneficiaries and 35 kg per household to Antyodaya Anna Yojana (AAY) beneficiaries at a subsidized rate of Rs 3 per kg for rice, Rs 2 per kg for wheat, and Rs 1 per kg for coarse grain. (b) ...

Blackrock Investment Key message The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us. The new regime of greater macro and market volatility is playing out. A recession is foretold; central banks are on course to overtighten policy as they seek to tame inflation. This keeps us tactically underweight developed market (DM) equities. We expect to turn more positive on risk assets at some point in 2023 – but we are not there yet. And when we get there, we don’t see the sustained bull markets of the past. That’s why a new investment playbook is needed. Themes 1.    Pricing how much of the economic damage is already reflected in market pricing. Equity valuations don’t yet reflect the damage ahead. We will turn positive on equities when we think the damage is priced or our view of market risk sentiment changes. 2.    Rethinking bonds. We like short term government bonds and mortgage securities. Long-term government bo...

  For the stock markets, the 2023 rd   year of Christ is beginning on a cautious note. The global narrative is swinging between an orderly decline to a precipitous crash. With the last man standing Haruhiko Kuroda (BoJ Governor) falling this week, it is clear that the “crusade” against inflation will continue in 2023 - and money will be expensive and tighter. This is most likely to reflect in slower economic activities, and aggressive trade and currency conflicts. The developed markets that have thrived mostly on the steroids of cheap and easy money will show withdrawal symptoms which may include volatility, recession, protectionism, financial instability etc. The emerging markets largely dependent on exports to developed markets (commodity or merchandise) shall also suffer the collateral damage. However, the emerging market with strong domestic economies, stable fiscal conditions and stronger financial markets might find themselves in a position to take advantage of flight of...

य :  सर्वत्रानभिस्नेहस्तत्तत्प्राप्य   शुभाशुभम् ,   नाभिनन्दति   न   द्वेष्टि   तस्य   प्रज्ञा   प्रतिष्ठिता One who remains unattached under all conditions, and is neither delighted by good fortune nor dejected by tribulation, he is a sage with perfect knowledge. —Srimad Bhagawad Gita, Verse 57, Chapter 2 In the calendar year 2022, a multitude of battles were fought. These battles materially impacted the global markets and investors. Some of the important battles were — (i)    Russia-Ukraine conflict that polarized the global strategic powers, threatening to unwind the post USSR globalization of trade and commerce; (ii)   Central banks’ battle against the multi decade high inflation, that resulted from the colossal monetary easing and fiscal incentives to mitigate impact of the Covid pandemic, while keeping the economy from slipping into recession; (iii)  China’s battle against Coronavirus, that kept ...