Whither the Economy
A look back at the government’s report card for the last fiscal ending March 2001 shows that the final deficit figure for 2000-01 has overshot the revised estimates by just Rs 2,397 crore, not withstanding a hefty Rs 9,210 crore shortfall in tax revenues. This has been due to a major expenditure compression by the government.

Gold poised for short-term rise
After a dull year for gold in 2000, the chances of something more exciting happening in the market have increased because of the radical change that is now taking place in the financial and economic environment. The probability of gold moving out of the narrow $256-273 trading range experienced in the first quarter of 2001 has certainly grown.

Interest rate alert
Another bank rate cut of 50 bps seems to be in the offing, as per a report by I-Sec by the end of the current quarter. The downward trend in inflation, weakening demand position, sluggish pace of non-oil imports, stable to lower oil prices and fed cuts are the reasons cited

Economics of Operation Tehelka.com
The total West-End operation expense could be somewhere between 7-8 lakhs. What is the return? A stunning coverage of a start-up project called Tehelka.com by media for 24 hours, at-least for a period of 10 days, with an excellent top-of-the-mind awareness. Smart economics ain't it?

If Small Savings rates were freed ?
While the ball has been set rolling by a cut in small saving rates, a total freeing of rates perhaps would be a drastic measure. However, doing away the tax related incentives on these schemes would signal a move in the right direction of aligning Indian economy with the rest of the world

Will Euro dominate the US$ ?
The EU will remain one of the largest exporting zones in the world. This will boost the euro as an international invoicing currency and means of payment. However, the preference of the EU's main trading partners will shift to the euro when exchange rate variations are expected to be limited

Mera Bharat Mahaan !!
A recent study by the Institute on Taxation and Economic Policy (ITEP) on the 250 biggest corporations in the US found that they paid an average of just 20.1% taxes on their profits from 1996-98, nearly half of the rate of 35% required by federal law. Is India better off then?

Rupee's Next Destination
Sustaining the nominal exchange rate above the value expected by the market requires high interest rates to prevent capital from flowing out of the country. Over time this harms domestic investment, output and productivity and creates a vicious cycle of rising costs

Why the US Slowdown will Impact India
Greater globalization means greater dependence and exposure to the Wild west. We in India, will definitely need to be prepared for some fall out of the US slowdown and fine-tune our corporate and export strategies as the picture develops. When Uncle Sam sneezes, India will catch a cold

What to Expect from Budget 2001
The Finance Minister (FM) has another tough task on his hands this year. He has to present a growth oriented budget which will make industry and the foreign investors believe that India is serious about its role in the global economy and is doing the right things to align itself with the world economy

US Fed Cut - Not an Hour Late
The US Fed decision to cut interest rates by 50 basis points to 6% and follow it up by another 25 basis point cut came at the right time. This spurted the Nasdaq by 14%(up 325 points), the biggest gain on a single day in the history of Nasdaq. More cuts are likely to soften slowdown fears

SBI encore of Resurgent Bonds
State Bank of India is in the foreign currency deposit market again, but the question is what to do with the proceeds. Infrastructure projects are hard to come by and anyway the long gestation will lead to a maturity mismatch for SBI. Is the IMD actually a wise decision

Falling rupee, dearer oil
The double whammy of falling rupee and the rising oil pool deficit has put the Indian government in a quick fix situation. If oil prices rise, the rupee falls due to dearer imports. What are the options before the government with respect to hiking the domestic prices of oil in this scenario...........more

Why is the rupee falling
The rupee created history recently when it breached the 46 mark, which brings us to the question, why is the rupee falling. In a nutshell it is being driven more by the imbalances in demand and supply. But on the positive side it has made the Indian economy more attractive ..........more

Inflation fires burning
The recent rise in global oil prices to beyond $32/barrel has once again raised the monster of inflation in India. With government borrowings going berserk and oil prices showing no signs of relenting is India headed for another prolonged period of inflation. Don't rule it out ..........more

Will Resurgent Bonds work ?
Circa 1998. Government of India capitalizes on global slowdown and its first RIB issue is a thundering success. The question is whether the government can once again pull of the trick. Not likely if the buoyant global economies are taken into account. RBI better watch out its purse.........more

Oil Prices : Back to the Future
The recent spurt in the oil prices is a sure indication for rise in prices in India as has been evinced by the rate of inflation. But can this oil price rise be sustained. US is unconcerned because it helps them export inflation but the Indian fiscal deficit which is largely a function of crude imports is likely to go for a toss.........more

Riding the bond market
The recent hike in the CRR rates has led to bond prices in India plummeting. What is the causal link between these two. What are the basic things that a bond investor needs to remember while investing in bonds? What strategies should bond investors follow under fluctuating interest rates.........more

Why is the rupee falling ?
The secular fall in the rupee over the past few weeks has concerned most forex watchers. Why has the government intervention into forex markets failed? Is the rupee fall caused due to import pressures or fund pressures? More importantly, at what level is the rupee going to settle...........more

RBI Walks the Tightrope
With the Indian rupee breaching the psychological barrier of Rs.45/$, the RBI's role in forex markets in the recent past increasingly comes into focus. Is the RBI's hands policy after a spurt of intervention advisable? What does the current scenario hold for the future of the rupee.......more

One up on Uplinking
The recent liberalization of uplinking policy announced by the government has come as a boon for broadcasters in India. What does this liberalization mean for Indian broadcasters? More importantly is India going to see a more liberalized air space in the coming months.......more

Government or Private Rule
The decision to privatize telecom services as also the decision to throw open submarine cable market to the private sector has far reaching implications for the telecom majors in India. What are the privatization options before the government and what is in the interest of consumers .........more

IT Bill at Last
The passage of the IT bill in parliament opens up a world of opportunities for Indian business. But the legislative wrangles and outdated laws which are out of sync with the times could be the real big challenge. Is the Indian government up to it ......more

Fed Interest Hike
The recent decision of the US Federal Reserve to raise interest rates by 50 basis points has far reaching implications for Asian markets in general and Dalal Street in general. What does it mean for Indian markets? Will it lead to a drying up of FII investments. Can markets withstand another equity shock when they are already down? Where is the sensex headed?......more

Small is Sexy
Analysis of the last quarter annual results of Indian companies clearly show that small companies have outperformed their larger counterparts. Is it just an aberration or there is more to it than meets the eye? Is it that these small companies have finally reaped the benefits of their focus ........ more

Insurance Blues
The Insurance Regulatory Development Authority (IRDA) has permitted to delink the 26% foreign equity cap from FII holding in Insurance JVs. Instead IRDA has instructed private insurers to channel 20% of their business to GIC to counter possible threats to the domestic sector. ......more

Boring Interest
Has Dr. Bimal Jalan once again ushered in lower interest rates? If you think that the 1 percent cut in the bank rate and the 1 percent in the CRR will lead to a softening of the interest rates in the economy, think again. There will be no such impact on interest rates. Here is why........ more