Separating the rhetoric from the reality of demonetisation
Now that the bullet has been bitten, the RBI needs to speed up the process of setting up the committees and identifying the first list of assets
Hopefully the government will take on board all the three suggestions rather than simply harp on rates
Are the markets cheap even at 8,300? That should be the question that should worry the markets more than the impact of AAP on the budget. The bigger worry: Are the economy's problems too intractable to be answered in one budget or even in one year?
The market and the business community will focus more on the RBI's stance in the statement and in the governor's press conference
If Modi can ensure the legal changes, then one can be bullish on public sector banks for longer term
Inflation still needs a careful eye while the industrial output is not a great picture, can't be tuned up with interest rates.
So the question is, why are we not able to export to china when we can to the US?
An ugly deficit and uncertainty on growth can have disastrous consequences on the external front
The current account deficit in the second quarter may well be zero. The year could end with a 2.5 percent CAD. The focus must now shift to the fiscal deficit.
A slower depreciation of the rupee is better way to strengthen the country's exports, lower competitive imports and give a boost to Indian industry all round. The enforced appreciation of the rupee cuts this boost to industry.
The decision to track CPI can mean a much more hawkish RBI that we are prepared for. Not only is headline CPI at 9.5%, non-food CPI has been sticky at 8.7%. So even assuming food inflation drops rapidly in the last quarter of 2013, headline CPI may remain well above 8%. In which case RBI may go for 2 more rate hikes.
The PM is said to have frowned on the RBI's recent approach to monetary policy, but his actual words do not lend themselves to this interpretation
The government's intransigence on diesel prices should therefore be highlighted by the RBI. They may still give a cut, but they must express dissatisfaction over the refusal of the government to keep its word that diesel prices will be hiked every month.
Inflation is far from weakening, but the pressure from the sovereign on a rate cut for dispelling pessimism is strong. Better a rate cut than a CRR cut.
The FM's decision to cut the withholding tax from 20 percent to 5 percent will bring in hot flows and make the country more vulnerable to external winds.
Individuals who earn Rs 100 and spend Rs 150 won't usually get even a credit card. But India's profligate government thinks it will get by.