Warrier's blog

OF AUCTION AND PRICES, THEN AND NOW* M G Warrier I have a special aversion to buying things which have no fixed price. Especially post-LPG (Liberalisation, Privatisation and Globalisation, circa 1991), this aversion has made my life miserable. If one has to buy things at reasonable prices, whether it is toilet soap or an air ticket, one has to be a market wizard. Like operating in the stock market, one has to select the time, day of the week, outlet and various other variables before carrying out a simple transaction. The recent controversy about sale of 2G Spectrum bandwidths gave me the comfort that whether in buying or selling, governments are also facing dilemmas similar to the one I am averse to. I am in good company! Union minister Kapil Sibal gave me a bagful of relief when he argued that if Peter has been robbed, it is for paying Paul. The telecom minister said that the losses to the exchequer were the gains of mobile users. Now I find that there are takers to this ex

Here's how the Budget 2016 will affect your personal finances - Moneylife My VIEW: With reference to “ Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable. In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1 April 2016.” This is a pathetic effort to market NPS. NPS suffers from several uncertainties and deficiencies (Ref; Chapter 10.3 of VII CPC Report) and best way to save it from causing further damage to those who have been forced to become part of the scheme is to merge NPS with the pension scheme administered by EPFO. Here, just because a scheme(NPS) has been introduced to deny the benefits of Defined Benefit Pension Scheme/s to ‘future’ employees, features of other retirement plans are

FM to Rajan: It's your turn now : Budget meets additional spending burdens while staying on the fiscal consolidation path; big push for rural India

Kamadenu: Kaliyamardhana. #krishnafortoday  : Kaliyamardhana. #krishnafortoday

Letters: Private sector, take over : Sunil Kanoria's article, 'A way to tide over the NPA problem' (February 25) suggests a standstill period of five years under strategic debt restructuring (SDR) and the creation of an India Revival Fund in line with the US Troubled Asset Relief My VIEW: The Indian banking sector is not in as bad a shape as is being made out by some analysts and external agencies. Major Indian commercial banks including SBI have been able to meet all statutory requirements. Unlike their corporate co-travellers, banks are meeting their payment obligations on due dates and in the recent past there have been no bank failures in the commercial banking sector in India. Part of credit for this should go to the vigilant regulator. This is not to argue that all is well as regards functioning of commercial banks. Many private sector banks, including the Global Trust Bank, have failed in the recent Indian banking history.  There is immediate need to restore the

RBI must redeploy its capital in state-owned banks : With the government under pressure to meet its fiscal deficit target over the medium term, the economic survey, released by the finance ministry, on Friday said the Reserve Bank of India (RBI) should My VIEW: February 28, 2016 RBI’s capital and reserves This refers to the report “RBI must redeploy its capital in state-owned banks”(The Hindu, February 27). Box 1.6 of the Economic Survey, among other things, make the following averments: “….RBI is an outlier with an equity share of about 32 per cent, second only to Norway and well above that of the U.S. Federal Reserve Bank and the Bank of England, whose ratios are less than 2 per cent. The conservative European Central Bank (ECB) and some EM central banks have much higher ratios, but even they do not approach the level of the RBI. If the RBI were to move even to the median of the sample (16 per cent), this would free up a substantial amount of capital to be deployed for

RBI must redeploy its capital in state-owned banks : With the government under pressure to meet its fiscal deficit target over the medium term, the economic survey, released by the finance ministry, on Friday said the Reserve Bank of India (RBI) should My VIEW: Copied below is Box 1.6 from   E c onomic Survey 2016 (Chapter 1  Economic Outlook, Prospects, and Policy Challenges) Box 1.6: Addressing the Twin Balance Sheet Challenge One of the most critical short-term challenges confronting the Indian economy is the twin balance sheet (TBS) problem—the impaired financial positions of the Public Sector Banks (PSBs) and some large corporate houses— what we have hitherto characterized as the ‘Balance Sheet Syndrome with Indian characteristics’. By now, it is clear that the TBS problem is the major impediment to private investment, and thereby to a full-fledged economic recovery. The problems in the banking system have been growing for some time. Stressed assets (nonperforming loans

Economic Survey 2015-16 — Two volumes : Ahead of the Union Budget, the Economic Survey on Friday termed external environment as challenging but projected a 7-7.5 per cent GDP growth rate in the next fiscal which could accelerate to eight p

Kamadenu: Govinda. Vaatsalyam series. #krishnafortoday  : Govinda. Vaatsalyam series. #krishnafortoday GOVINDA... Warrier

WEEKEND LIGHTER: FEEL HUNGER (February 27/28, 2016, No. 9/2016) Feel free to mail your views on this edition of WL to mgwarrier@gmail.com I FIRST PERSON Another view on inequality and hunger On the morning of February 24, 2016 a small shop near Bhandup Railway Station  caught fire and was gutted. I couldn’t go to the newspaper vender as smoke and fire force scared me. I missed my usual finance newspapers that morning. Any calamity is an opportunity. That gave me a chance to read “The Rhetoric Of Inequality” by former Procter & Gamble CEO Gurucharan Das published in The Times of India that day. The article gives a fair idea about how those who have never been hungry, or have forgotten the ‘hungry days’ looks at hunger. Das claims that ‘carping over inequality’ tantamount to ‘debating what was settled long ago- you don’t make the poor rich by making the rich poor’. Excerpts from the article: “I have always believed that it is none of my business how much the Ambanis e

The Global ANALYST, February 2016 The Debate Over (Public) Debt Management* M G Warrier The need of the hour is a holistic approach to management of public funds. Huge funds belonging to public are managed by GOI, state governments, RBI, banks, organisations like LIC and several PSUs. Even the entire ‘capital’ in the equity market belong to ‘public’. What needs to be ensured is having a regulatory and supervisory architecture that will ensure efficient management of all these resources. Public Debt Management in India comprise market borrowings of central and state governments and the country’s external borrowings. While Reserve Bank of India is mandated to handle central government’s market borrowings and enabled to manage public debt of state governments under mutual agreements, external borrowings are directly managed by Government of India. Present status of Public Debt Management The executive branch of the government derives the powers to borrow upon the s