Do it yourself

In the early hours of Wednesday, the 07 th   May 2025, Indian forces, led by the Indian air force (IAF) carried out precision strikes on nine targets in the Pakistan Occupied Jammu and Kashmir and Punjab province of Pakistan. As per the Indian authorities, the targets were terrorist camps. The strikes have been purportedly carried out in response to the killing of 25 Indian and one Nepali tourist in the Pahalgam area of Kashmir, last month. The Indian government sources confirmed that (i) the strikes were carried out from the Indian airspace and international border was not violated; and (ii) no civilian or military installations were hit during the strikes. Preceding the yesterday’s strikes, the Indian government had taken a series of economic and diplomatic measures against Pakistan for failing to prevent terrorism activities against India from its land, and providing active support to the terrorism ecosystem thriving on its land. Pakistan also retaliated with some economic and d...

Recently the Ministry of Statistics and Program Implementation, Government of India, released the results of the   Forward-Looking Survey on Private Sector CAPEX Investment Intentions , providing valuable insights into 3 year trends and future outlook private corporate sector capital expenditure plans. The good ·          The average Gross Fixed Assets (GFA) per enterprise in the private corporate sector increased from Rs. 3,151.9 crore in 2021 – 22 to Rs. 4,183.3 crore in 2023 – 24, reflecting a healthy growth of 32.7% over the two years. This implies an average capital expenditure of Rs 366cr per corporate during FY22 to FY24. The estimated provisional capital expenditure per enterprise for purchasing new assets in the year 2024–25 is Rs. 172.2 crore. ·           Overall aggregate capital expenditure of the private corporate sector increased 66.3% over the four-year period from 2021-22 to 2024-25...

Last week, two important events took place in New Delhi. First, the union cabinet decided to include collection of caste data in the periodic general census; and second, the Supreme Court annulled the acquisition of Bhushan Steel and Power Limited by JSW Steel Limited four years ago, following the proper Insolvency and Bankruptcy Code procedures. Notwithstanding the argument that inclusion of caste data in the census could be promote social equity, and the JSW-Bhushan annulment might reflect judicial efforts to uphold legal integrity, I find these two events significant for investors and businesses, as these further strengthen the perceptions of unpredictability and instability in the sphere of policy making and political process. In the recent past we have seen executive actions adding considerable unpredictability in the economic process. Demonetization of high value currency notes (2016); abandoning of Amaravati capital project and cancellation of all partially executed and unexecut...

Continuing from yesterday…( see here ) As I mentioned that the old narratives of the Smoot-Hawley Tariff Act (Tariff protection for domestic businesses), New Deal (Fiscal profligacy to stimulate economy) and Plaza Accord (fiscal and monetary manipulation by government/central banks to balance trade) do not fit the current circumstances, given the vastly different context. The efforts to fit the current U.S. President’s economic actions (and promises) related to trade, tariffs, and fiscal policy into historical molds, don’t align with today’s reality, and may be an exercise in futility. For example, consider the following: ·           In 1930, global trade was 5% of U.S. GDP, and the world economy was already in freefall post-1929 crash. In 2025, trade is a larger share of GDP (e.g., ~25% for the U.S.), but global supply chains are far more integrated, making outright trade wars costlier and less likely. Modern trade agreements (e.g., USMCA, W...

Do you recall Jack Braganza from the popular Hindi movie Bobby (1973)? The affable patriarch wore his marriage suit while visiting the house of Raj, his daughter Bobby’s lover, to discuss their marriage proposal. The suit would not fit him after so many years, but that was perhaps all he had in the name of formal attire. In the movie, this scene created a comic sense. However, in real life it is not uncommon in millions of lower middle-class Indian families. The men use their wedding attire for decades, before they get a new one made, usually for their children’s marriages. The narratives that are being built around, arguably, a blunderous act of the incumbent president of the United States (POTUS), reminded me of this movie scene. Experts are trying to use an old jacket to fit the current scenario, based on their personal perceptions and linkages. Some people, harshly critical of the POTUS, have tried to fit the 1930 trade war triggered by the Smoot-Hawley Tariff Act in 1930 – that wo...

Not long ago, history used to be mostly an academic subject. The educated elite wrote, studied, analyzed, discussed, debated, formed, and altered history as per the available scientific evidence, their perceptions and affiliations. Their perceptions were perhaps deeply influenced by the political narrative and economic concerns of the times. The common people were however mostly concerned with their cultural traditions. These traditions passed through generations, have been generally regarded as history. Popular literature and other art forms, e.g. films, theater, drama, paintings, etc. also had significant influence on the common peoples' perception about history. For common people, the valor of Rajput Kings like Prithviraj Chauhan, Maharana Pratap etc., and sacrifice of queen Padmavati are established through ballads written by poets like Chand Bardai (Prithviraj Raso) and Malik Muhammad Jayasi (Padmavat). Disregarding what academic historians had to say about these legends, peop...

The first three weeks of the FY26 have been rather dramatic for the stock markets. By the end of FY25, the benchmark Nifty 50 was down ~10% from its previous high level recorded in September 2024. Foreign investors were selling persistently. News flow from any quarter was not particularly encouraging. Investors’ sentiment was sagging. Market volumes had plunged over 30% from their 2024 highs. The rate of SIP discontinuation had increased materially, with March 2025 recording net negative addition to operative SIPs. Social media timelines of active market participants were filled with despondency. FY26 started with the declaration of trade war by the US. Markets that were already reeling under pressure plunged further, with the benchmark Nifty 50 falling another 9% in the first five trading sessions of FY26. Anecdotal evidence suggests that many traders and small investors capitulated and liquidated their positions. Several others churned their portfolios to move to defensive sectors li...

The rate of Consumer Price Inflation (CPI) in India dropped to 3.34% in the month of March; below the lower bound (4%) of the regulator’s (RBI) target band of 4% to 6%. It is definitely a significant development insofar as the monetary policy consideration, macroeconomic stability, and consumer confidence are concerned. If this trend sustains, it would pave the path for further easing in the monetary policy; improve the fiscal outlook; improve the outlook for debt and currency markets; aid corporate profitability and encourage fresh investment flows. In this sense, it is certainly good news for the investors in Indian financial markets in the near-term. However, in my view, a low inflation rate does not help a large section of the Indian population much. A low inflation rate only implies a slower rise in the price level as compared to the prices in the base period. It offers no relief to the people who are already finding the existing prices of the essential goods and services unaf...

Continuing from yesterday… Mr. Bond no longer a superstar Given my view that the yield curve is no longer a strong leading indicator, I prefer to use a mix of indicators to assess the likely direction of the markets. Mortgage rates, credit growth, credit terms, repo outstandings and the size of the central bank’s balance sheet are the most prominent ingredients in the mix I like to use. For example, in the context of the US, Mortgage rates are a close pulse on borrowing costs, consumer behavior, and economic health, less abstracted than the yield curve. In the U.S., the 30-year fixed mortgage rate tracks loosely with the 10-year Treasury yield—historically about 1.5 to 2 percentage points higher—but it’s more than just a derivative. It folds in lender risk appetite, housing market dynamics, and Fed policy fallout in a way that hits Main Street directly. Presently, mortgage rates are climbing—30-year fixed is around 6.8%, up from 6.4% in late March, shadowing that recent 10-year ...