Reddy’s prescription for the credit fever

“If I aim for high growth and high inflation, I am sunk. I will not be politically in trouble if my growth rate slows down to 8.5 to 8 per cent. I will be in greater trouble if my Inflation rises to 6 per cent this year.” finance minister P Chidambaram at Davos on January 25.

Four days later, RBI governor Y V Reddy effectively told Chidambaram: “I won’t let you sink.” By doing nothing in the third quarter review of annual monetary policy for 2007-08, Reddy has changed RBI’s currency, from economics to politics. In a country that’s barely begun to understand the macroeconomic, strategic, financial and, of course, political implications of growth, Reddy’s prescription this quarter is once again yesterday’s pill.

Story in The Indian Express, January 29, 2008

Faith and market

After five hectic days of going under the news and into the minds and acts of investors as they negotiated a 4,000 point fall in the Sensex followed by a 2,000 point recovery last week, the one thing I’m completely convinced about is that finally faith moves not only mountains, but everything in the esoteric, real and financial worlds. Of the esoteric we know enough, for faith is the currency through which we transact with the other side, using the instrument of prayer. But led by statements like ‘I’ve lost faith in the market’, last week opened up a whole new world of faith investigations for me.

Opinion in The Indian Express, January 27, 2008

Fallen, not broken

Seven trading days ago, on January 10, I got an SMS from a colleague who has an equity exposure that would have the Left parties deliver benign smiles of approval. “Should,” she asked, “I buy this stock (a global pharmaceutical major)?” My answer: No. Not because this person, in her twenties, doesn’t need the equity exposure --- she does --- but because I didn’t want to be the shoulder over which she would fire her first speculative shot. As I walked into office later in the day, I told our resident stocks expert that the market will fall.

Opinion in The Indian Express, January 21, 2008

Nano is beautiful

It’s a small car that’s carrying a big burden. As Ratan Tata announced and unveiled a concept that the world’s business press had been waiting for, global automakers had been afraid of, and governments in three continents had been inviting, he was, for a change, batting on the front foot. An aggression unseen so far in his generally humble and soft demeanour could be felt in his still humble and soft words. Over breakfast, speaking on behalf of Nano, his four-year, Rs 1 lakh dream, it wasn’t a defensive Tata any more. With less than three hours’ sleep behind him, it was an unusually forceful Tata.

Opinion in The Indian Express, January 11, 2008

Spiral of violence

If he hits you once, hit him twice. Hit him so hard he doesn’t get up. Hit to hurt. These were my words of advice to my gentle, eight-year-old nephew — who, if he progresses the way he is, may turn into a spiritual guru. He had been regularly bringing back bruises from school. Two boys were delivering them. This was my third or fourth such lecture. Earlier, I had told him to handle the attacks himself, then talk to the teachers, and so on. Didn’t work and that, in turn, brought out the hidden violence and impatience within me. His answer silenced me for good, and has since turned me into a family joke: “But mamoo, first he’ll hit me, then I’ll hit him, then he’ll hit me, then I’ll hit him. Then what?” It also accorded him a premature sainthood --- we’re waiting for him to start preaching!

Opinion in The Indian Express, December 17, 2007

Minding our business

Beyond markets, capital and labour; beyond history, culture and attitude; beyond politics, policies and regulation; for global investors to look at any country for doing business, there is one absolute that overrides all other organisation of infrastructural relativities: speed. Doing business --- from setting it up to closing it down and everything in between --- is all about conforming to global benchmarks of efficiency, costs and justice, at a pace that doesn’t lock resources.

Opinion in The Indian Express, December 11, 2007

What state govts can learn from de Soto and a market fundamentalist

If capitalism has to work in developing economies, including India, it has to become more inclusive, it has to understand and deliver property rights to more people. That’s what Peruvian economist Hernando de Soto, adviser to 40 governments, told me last week as we discussed the future of capitalism in India. For this, he said, governments need to first study the laws that govern property rights and then change them so as to reflect their country-specific realities. The conversion of squatter rights to legal ones, for instance.

Opinion in The Indian Express, October 29, 2007