Uncertain Media Future C. P. Chandrasekhar
In today’s troubled times, mega-mergers are the norm. Announcements of marriages like that between AB Inbev and SABMiller in the beer industry or Bayer and Monsanto in the agribusiness sector attract attention that soon fades, even as the difficult task of getting clearances from the regulators continues. But the just announced agreement to merge by AT&T and Time Warner, in a $85 billion deal, is likely to remain in public discussion for some time. If it does not, it should. This is a mega merger not just in any industry like the production of cigarettes or beer, but in the…
How successful is China’s Economic Rebalancing? C.P. Chandrasekhar and Jayati Ghosh
China's rapid economic growth has slowed recently - but does this reflect the desired rebalancing of the economy away from investment to consumption and wage-led growth? China_Economic_Rebalancing (Download the full text in PDF format) (This article was originally published in the Business Line on November 8, 2016.)
How is India Inc Doing? C.P. Chandrasekhar
Growth in India’s non-financial corporate sector shrank in 2015-16, after three consecutive years of “steep moderation” according to the Reserve Bank of India (RBI). In its annual study of the Performance of the Corporate Business Sector, the RBI attributes this downturn to “lacklustre demand”, echoing the sentiments of many businessmen who have been unwilling to strongly articulate this perception in the face of the hype on growth fed by schemes like “Make in India” and “Start-up India”. But, actual trends in the economy do not seem to provide much ground for satisfaction, let alone celebration. One factor that tends to…
The Hegemony of Finance C. P. Chandrasekhar
Three parallel developments that caught media attention over the last month point to the restoration of the hegemony of Finance Capital in the years since the 2008 crisis. They also reveal the likely consequences of the neoconservative backlash, led by Finance, against post-crisis financial sector reform in the US and other developed countries. One was the decision of the Financial Sector Protection Bureau (FSPB) of the US, an institution created after the 2008 crisis, to arrive at a settlement with Wells Fargo (WF) in an investigation relating to a rather shocking discovery. More than 5000 employees of the bank had,…
Housing Market Frenzy in China C. P. Chandrasekhar and Jayati Ghosh
The urban housing market in China is experiencing a bubble that is driving property prices to unbelievable levels in some of the major cities. But the divergence in recent trends in house prices suggests that this bubble may soon burst. housing_market_china (Download the full text in PDF format) (This article was originally published in the Business Line on October 11, 2016-11-03)
Agribusiness: Consolidating against the farmer C. P. Chandrasekhar
In an acceleration of a trend towards mega-mergers in the agribusiness area, German pharma and agrochemicals major Bayer has announced an all-cash $66 billion deal to take over American seed major Monsanto. To clinch the deal, Bayer raised its initial bid thrice from $122 to $128 a share, to touch a level that implies a 44 per cent premium over Monsanto’s early-May stock market price. On the surface, the deal seems to bring together firms with activities that complement each other. Monsanto is a controversial seed company producing genetically modified seeds for different crops, while Bayer is focused on agricultural…
The Pulses Conundrum C.P. Chandrasekhar and Jayati Ghosh
As inflation in the prices of pulses gives way to a price decline, a misplaced argument that the government should not regulate the private trade to curb speculation and stabilise prices is being expressed. Pulses_Conundrum (Download the full text in PDF format) (This article was originally published in the Business Line on September 26, 2016.)
Revving Up the Bond Market C. P. Chandrasekhar
In the final stretch of his tenure as Governor of the Reserve Bank of India, Raghuram Rajan chose to make one more effort at revving up India’s bond markets. A number of measures aimed at galvanizing the debt market, culled out of past studies and extended by the H.R. Khan Committee set up under Rajan, have been announced. These measures have also been welcomed by all those who see the absence of a vibrant corporate bond market as a major weakness of the Indian financial structure. The thrust of the measures is to expand the market for and increase the…
An Overburdened Instrument C. P. Chandrasekhar
On August 9, RBI Governor Raghuram Rajan released the last bi-monthly monetary policy statement that would be drafted under his leadership. No changes were made: the benchmark ‘repo’ rate was kept at 6.5 per cent, the cash reserve ratio at 4 per cent and the Statutory Liquidity Ratio at 21.5 per cent. According to the RBI, growth in this fiscal is projected at 7.6 per cent because of the beneficial effects of the good monsoon and the expansionary effects of the implementation of the 7th Pay Commissions recommendations. So growth is not an immediate problem. But, in the view of…
Unexpected Inflation C.P. Chandrasekhar and Jayati Ghosh
The return of inflation, even if moderate, at a time when India is experiencing a normal monsoon and after a long period of inflation-targeted monetary policy is surprising. Unexpected_Inflation (Download the full text in PDF format) (This article was originally published in the Business Line on August 29, 2016.)
