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.)
Care Work as the Work of the Future C.P. Chandrasekhar and Jayati Ghosh
As technological change threatens many different kinds of jobs, the significance of direct face-to-face interaction required in much care work means that it is unlikely to be as adversely affected. What does this mean for the future requirements of care workers? Future_Care_Work (Download the full text in PDF format) (This article was originally published in the Business Line on August 15, 2016.)
Dangerous Embrace: India and International Finance Capital C. P. Chandrasekhar
Financial liberalization, aimed in the first instance at attracting foreign finance capital to India, is the centrepiece of the neoliberal growth strategy India chose to adopt 25 years back. That was indeed a dramatic change. In 1947, controls on and regulation of foreign investment were seen as prerequisites for ensuring autonomy from predatory foreign capital, and strengthening the political freedom that had been won. Since 1991, however, economic success has been measured by neoliberal advocates by the confidence that foreign investors have in the Indian economy, reflected in the volume of cross-border inflows of foreign capital, especially foreign finance capital.…
The Return to Retail Lending C.P. Chandrasekhar and Jayati Ghosh
After having retreated from retail lending in the years since 2005-06, banks burdened by NPAs in areas like infrastructure seem to be returning to the retail market. How far can this go? Retail_Lending (Download the full text in PDF format) (This article was originally published in the Business Line on August 1, 2016.)
The Post-1991 Growth Story C. P. Chandrasekhar
July 1991 is widely seen as a watershed month in Indian economic policy making. That was when the Indian government openly declared that it was unwinding the interventionist regime which had been in place since Independence, involving controls on economic agents, regulation of markets, a large public sector and an a priori plan as to how economic resources should be allocated. In the period to follow, policy, it was then argued, would dismantle this excessively interventionist framework, and establish and support a system driven by private initiative and relatively unfettered markets, with minimal regulation and control. The State was to…
The Business of Wilful Default C. P. Chandrasekhar
In the fourth round of what has become a periodic exercise, the All India Bank Employees Association (AIBEA), the “oldest and largest” trade union in the industry, has released a list of 5,610 wilful defaulters on debt they owe commercial banks. In the AIBEA’s view the failure to reduce, let alone prevent, such defaults is badly damaging bank balance sheets. The fact that attempts at recovery have also been tardy and quite unsuccessful is not helping either. The official listing of suit-filed accounts of wilful defaulters disseminated through the Credit Information Bureau (India) Ltd, reports 6,081 cases involving loans totaling…
