Do it yourself

It has been over five year since I visited a local garbage dump in West Delhi. The visit was a revelation in many respects. A casual discussion with the rag pickers exploring the heaps of stinking garbage to collect pieces of paper, plastic and metal, was quite enlightening. Out of seven people diligently scanning the dump, three were children under the age of 14, including one girl, and three were youth in the age bracket of 19-27. On being asked why they chose to do this menial, risky (health wise) and stinking job, when they have relatively decent options like pulling a cycle rickshaw or even driving an e-rickshaw, working at a nearby auto garage, cleaning cars in nearby housing societies etc., the youth politely answered, "We are doing this job for past 12-15yrs. How could we change it now." On prodding further, one of them admitted that many of their peers live on hope that "Someday they will find treasure in the garbage. More years you have put into the job, the gr...

  Deposit Rates Grow Faster than Lending Rates in December 2022 (CARE Ratings) In December 2022, the rate of increase flipped with deposit rates growing faster than lending rates on fresh loans. ·          The weighted average lending rate (WALR) on fresh rupee loans of SCBs increased by 02 bps (basis points) from 8.86% in November 2022 to 8.88% in December 2022. ·          The weighted average domestic term deposit rate (WADTDR) on outstanding rupee term deposits of SCBs increased by 16 bps from 5.62% in November 2022 to 5.78% in December 2022. ·          Private Sector Banks (PVB) and Public Sector Banks (PSB) have maintained high spreads between lending and deposit rates, with PVBs seeing higher spreads, as banks raised rates amid RBI’s tightening moves. Rate hikes and subsequent faster resets in lending rates vs. deposit rates have led to NIM expansion...

  The Reserve Bank of India (RBI) governor declared victory for its policy stance in unambiguous terms while presenting the latest monetary policy statement. He stated, as a result of various policy measures taken by RBI since April 2022 “the real policy rate has been nudged into positive territory; the banking system has moved out of the   Chakravyuh   of excess liquidity; inflation is moderating; and economic growth continues to be resilient”. MPC remains predictive – 25bps hike with stance unchanged The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) in its meeting held over the past three days decided to hike the policy repo rate by 25bps to 6.75%. The decision was taken by a majority vote with four members voting in favour and two members voting against the hike. The MPC also maintained its monetary policy stance of withdrawal of accommodation with a split vote of 4 to 2. The decision of the MPC and voting pattern is mostly in line with the consens...

Total apathy of common Indians towards intellectual property rights (IPR) of the originators is appalling. Use of pirated software, photocopied books, and spurious books sold on traffic signals and footpaths, unauthorized copies of branded clothes etc. is unapologetically common. Propriety and ethics are not taught in schools. It is common to see parents encouraging their wards to buy the “cheaper” alternative regardless of its legality and authenticity. Many cities have infamous “markets” for pirated software and duplicate merchandise. The disdain shown by a large majority of the population could easily be listed as one of the major inhibitors of faster growth in India. It discourages innovation at the domestic level; motivates the innovators to immigrate to foreign shores and register their innovations there; and adversely impacts the transfer of critical technology by the foreign innovators to their Indian collaborators and entities. If you are living in Delhi NCR region and tra...

  It’s almost a week since the union budget for FY24 was presented in the parliament. The budget documents have been analysed by a variety of experts. Most of these experts have focused their opinion on the budget as per their professional affiliations and/or ideological orientation. If I may sum up the consensus opinions, it would be as follows: ·          Development economists have criticized the budget for inadequate allocation to the social sector, especially education, health, rural welfare, MNREGA etc. ·          Market economists and strategists have commended the budget for higher allocation towards capital expenditure and commitment to fiscal discipline despite political expediency. ·          Accounting and tax professionals have spoken about the changes proposed in the tax laws to ease compliance and plug tax evasion loopholes. ·   ...

  Largely as expected; capex sustainability core focus (Phillips capital) Budget fared well across categories – prudent fiscal position, steep rise in capex allocations, continued focus on sustainability, Atmanirbhar Bharat, and social upliftment. Capex budgetary allocations have risen sharply in FY24 (up 37% vs. 23% in FY23); including IEBR, growth stands at 32%/10% in FY24/23. Incremental capex allocation in FY24 is highest for railways, roads, infra spending by states, and energy; defence and housing are muted; additional allocation of Rs 550bn has been made towards OMCs and BSNL capital infusion. Sharp drop in food and fertiliser subsidy (Rs 1.6tn) is in the expected lines. MNREGA allocations have also see a sharp decline to Rs 600bn vs. Rs 894bn in FY23RE. Fiscal deficit for FY24/23 is in line with our expectation – at 5.9%/6.4% of GDP; gross/net borrowing expectedly remains elevated at Rs 15.4tn/11.8tn, marginally higher vs. FY23. We expect this to keep yields elevated in the...

  Prologue: If you find these observations completely trivial, that is precisely the idea. The budget speech and most of the promises made thereunder sound trivial, lacking specifics. As expected, the budget speech of the finance minister, while presenting the last full budget of the union government before the next general election, sounded like an election manifesto. The finance minister counted the achievements made in the past nine years (since 2014) of her party’s government; and made many promises for the future, totally lacking on specifics. Perhaps for the first time in the history of independent India, the finance minister used “We will” and “will be” to make all the budget proposals. The general convention has been to say “I propose to” or “is proposed”. Besides, the nomenclatures of an overwhelming number of central sector schemes now use “PM” as prefix. It is obvious that the central government is too conscious to ensure that the electorate must know that the benef...