The Business Blog
Read biographyThe Business Blog is a daily business blog anchored by Firstpost senior editors. It will offer quick comments and insights into major business news developments from the pink press.
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Oil cos’ profits are largely fiction: It’s done with mirrors
By R Jagannathan Should companies be declaring profits on the basis of promises of debtors rather than the actual receipt of cash in the bank account? Accountants will, of course, say yes, for accrued income is the basis on which all balance-sheets are prepared. However, when debtors fail to pay up for months #BPCL #Cooking The Books #Corporate governance #HPCL #IOC #Oil subsidies #OMCs
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Why India Inc should not ask for the moon from govt
By R Jagannathan For the average businessman, macroeconomics is as far from being a concern as melting ice-caps. For them immediate cuts in interest rates or duty concessions (or protection) or FDI in retail seem more relevant. Expecting miracles from Manmohan Singh in two weeks is foolish without understanding what is going #India Inc #Macroeconomics #Manmohan Singh #The Butterfly Effect
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Pranab-da has left more ticking bombs for Manmohan
By R Jagannathan We know Pranab-da left a troubled legacy for Manmohan Sing to fix – including the retrospective Vodafone legislation, and the General Anti Avoidance Rules (GAAR), which have so riled investors. But did he also leave several financial time-bombs that will have to be defused? One of his last acts as #Budget Holes #EmptyCoffers #GST #Manmohan Singh #Oil subsidies #Pranab Mukherjee
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How to collect telecom’s golden eggs without killing the goose
By R Jagannathan The telecom spectrum auction hangs over the industry – and also policymakers – like some kind of Damocles’ Sword. The Telecom Regulatory Authority of India (Trai) has now dug in its heels and says its reserve price of Rs 18,000 crore plus for 5 Mhz of all-India spectrum is #SpectrumAuction #TRAI
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Subbarao opens two more fronts in battle with finmin
By R Jagannathan Reserve Bank Governor Duvvuri Subbarao does not lack for issues to take the finance ministry head on. He has strenuously opposed the ministry efforts to get interest rates down without a commitment to get the fiscal deficit under control and without significant easing in inflation rates. So far, he #D. Subbarao #finance ministry #RBI #RegulatorWatch
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Will govt miss the bus again on diesel price hike?
By R Jagannathan The word is that a diesel price hike is coming after the presidential poll on 19 July. And also, possibly, in cooking gas and kerosene. But no one’s sure. It could even happen after the vice-presidential poll, which means 7 August. One hope it doesn't end up as #oil prices #PM Manmohan Singh #Reforms
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MCX, Ajay Shah and the response to sharp criticism
By R Jagannathan How do you get justice in India? It is certainly not easy or cheap, given a decrepit legal system where delays are legendary. However, there are many ways of delivering injustice. One way is to use the legal system to go after people you want to target. And one #Ajay Shah #Defamation #MCX
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Kingfisher endgame: Mallya’s hold is now almost zero
Should we be calling Vijay Mallya the owner of sinking Kingfisher Airlines anymore? Consider the evidence to the contrary. With debt of over Rs 7,500 crore, Mallya has pledged nearly 95 percent of his shareholdings in the airline to lenders. According to Business Standard, the total current market value of #Endgame #ICICI Bank #Kingfisher #Vijay Mallya
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PM-Pranab-Sonia hiatus was key cause of policy paralysis
The distance between North and South Block—which house the offices of the PM and the finance ministry and are at a walking distance from each other—was apparently unbridgeable during must most of UPA-1 and UPA-2. This, rather than just the obduracy of the Left (during UPA-1) and Mamata Banerjee (during UPA-2), #Kaushik Basu #Manmohan Singh #P. Chidambaram #PolicyWatch #Pranab Mukherjee #Sonia Gandhi
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CAD’s bad, real bad: and external debt is looking worse
By Raghavan Jagannathan The bad news: reality has proved to be scarier than expected. The country’s current account deficit (CAD), the difference between our external earnings and expenses before capital flows, hit an unheard-of 4.5 percent of GDP in the last quarter of 2011-12 (January-March). For the year as a #CAD #ExternalDebt #Numbers #rupee-dollar