Do it yourself

This morning I see the finance minister as CFO of a financially stressed company. She faces all the problems a highly stressed business could in bad times. For example— The business of the company has witnessed considerable slow down in past few years. The revenue has shrinked and losses have increased. The ability to modernize and expand has been constricted as stressed balance sheet and poor cash flows are hindering capital expenditure. The investors are reluctant to commit more capital as the return on past tranches of investments has been poor. The company is not able to sell non-core businesses and assets to mobilize the resources needed to sustain the ongoing capex as well as the current repayment obligations. The competitors have snatched market share with competitive pricing and better delivery. The ability to retain talent has been hampered due to a variety of constraints. The rating agencies have put the company on watch list for a possible down ...

The Union Budget in India usually has five objectives: (i)     Presenting the annual accounts of the previous year Union Government for consideration and approval of the Parliament. (ii)    Presenting the policy roadmap for the future. This usually is a political statement. (iii)   Presenting the budget of the Union government for the following year. This includes the budget for various revenue and capital expenditure of the union government, allocation of resources to states and union territories, and sources of revenue to meet the budgeted expenditure and allocations. The key monitorable in this exercise usually is the difference between the revenue and expenditure. The excess of budgeted expenditure over budgeted revenue is termed as fiscal deficit. This deficit is met by the union government through borrowings from various sources. Changes in provisions of various tax laws are also monitored closely as it impacts the...

Earlier this month, the National Institution for Transforming India (NITI Aayog) issued a discussion paper on Private Participation in Passenger Trains ( see here ). The discussion paper proposes engagement of private players for running passenger trains on 100 train routes. The routes proposed include some of the most popular routes from Delhi, Mumbai, Patna, Chennai, Hyderabad and Kolkata. The objectives of the proposal to engage private operators for running passenger train are stated as follows: Introduction of modern technology rolling stock with reduced maintenance Significantly Reduce Transit Time World Class Service – Improved User Experience Capacity Augmentation Reduce Supply Demand Deficit I would not like to delve into the mundane issue of whether this proposal is a tacit admission by the Indian Railway that it is not possible for it to provide global standard services in the present format. I want to raise a rather meaningful and certainly...

In a recently published report "India 2020 - Energy Policy Review", the International Energy Agency (IEA) highly appreciated the efforts of Indian government in achieving energy efficiency, energy security and sustainability, and robust data and policy governance. IEA also made significant recommendations for further enhancing the efforts and achieving greater results. The recommendations assume further significance as these could have material impact on the investments in the Indian energy sector. The key points highlighted in the report could be listed as follows: India vital for future of global energy market With a population of 1.4 billion and one of the world’s fastest-growing major economies, India will be vital for the future of the global energy markets. The Government of India has made impressive progress in recent years in increasing citizens’ access to electricity and clean cooking. It has also successfully implemented a range of energy mark...

In the discussions about the present market conditions and likely emerging scenarios in next few months with some seasoned investors and money managers earlier this week, an cliché but still interesting point was raised. A large majority of the participants felt that the equity markets have diverged a long way from the real economy in past couple of years; and this is matter of grave concern since this kind of divergences in the past have not ended in a pleasant market scenario. I however was on the side of small minority which felt that the market movement in the past two years has actually been in total congruence with the conditions in the real economy; and that is a cause of even more serious concern. In past couple of years while the overall economic growth has slipped, a comparatively smaller section of the economy has done extremely well. The number of billionaires in India has risen at a faster pace. The number of Unicorns (start ups ventures valued more than a...