India’s benchmark equity index is nearing its all-time high and the volatile rupee is the strongest it has been against the dollar in weeks. Part of the explanation lies in exit polls released this week which suggest that the opposition Bharatiya Janata Party (BJP) may do well when results for five state elections are announced on Sunday.
But how important are these results and what can we expect from the markets in the coming months? Continue reading »
It’s official. India believes a government led by Narendra Modi, the contentious prime ministerial candidate for the opposition Bharatiya Janata Party, would be a blessing for the economy. At least, so says Goldman Sachs.
In a note to clients on Tuesday, analysts at Goldman increased their target for the Nifty index at the end of 2014 to 6,900 points. The benchmark index is currently trading around 6,240 points.
Earlier this year, Goldman had a cautious view on India. But the Nifty has gained 30 per cent since the end of August and the bank has good reason to raise its investment outlook. Continue reading »
Commentators have a long list of gripes with Indian policy makers: paralysing land laws; mixed messages on foreign direct investment; and labour laws that make barriers of exit into barriers of entry. Clearly structural reforms are needed to kickstart Asia’s third largest economy.
With elections due next year, the hope is that this is just pause mode, and a change in policy will come with a change in government. So let’s use a little history to see what we can expect in the run up to the election, with the help of a new report from Société Générale. Continue reading »
The Bharatiya Janata party (BJP), the main opposition party in India, has finally named Narendra Modi as its prime ministerial candidate for the upcoming general election – termed the greatest election in the world, involving some 780m voters.
It has been on the cards for a while now. And here are five facts that will keep you covered if and when Modi becomes dinner party conversation. Continue reading »
When we think of Groupon, the US-based daily deals website, it’s usually for cut-price getaways, budget fine dining or an affordable day of paragliding – and the sacking of its 32-year-old founder.
But what about onions? Continue reading »
Bodoland on the map?
For the last two years, India’s Congress-led government been struggling to push important economic reforms through Parliament in the face of the Hindu nationalist Bharatiya Janata Party’s tactic of determinedly disrupting the proceedings to protest against alleged corruption and other misdeeds.
But with India’s economy faltering, and the rupee hovering near lifetime lows, it was hoped that the current monsoon session of Parliament might finally get down to important legislative business that could help restore investor confidence in India’s government, economy and currency. Fat chance. Continue reading »
By Russell Holden and Randeep Grewal of Taylor Wessing LLP
It has been dubbed the world’s greatest election – a poll staggered over a month involving approximately 780m voters and 250,000 security personnel. In a year’s time, India will have voted for its 16th democratically elected government since independence from Britain. As expected, the main political parties are already jockeying for position among the considerable bank of rural class voters. However, this election campaign is showing early signs of the increased importance of the middle classes in Indian politics. Both the ruling Congress party and its main opposition, the Bharatiya Janata Party or BJP, appear to recognise that the impact of appealing to professionals and entrepreneurs through talk of improving corporate governance and pro-growth policies may be as great as the traditional focus on rural India. Continue reading »
India’s Ministry of Coal is lighting a fire under companies that are sitting on idle coal blocks as the growth of the Indian economy is choked by power shortages.
The resources were allocated on the condition that coal production begin within between 36 and 54 months, depending on the mine in question. But after repeated delays, the ministry has called time, and is threatening to take back allocated blocks. Continue reading »
Don't take my subsidy away
Struggling to bring down its fiscal deficit, India wants to stop allowing commercial ventures like movie theatres, swish office complexes, and hotels from using highly-subsidised diesel fuel to run-back up generators when the power goes out. It is also trying to wean factories, mobile phone towers, and state-run bus companies from highly subsidised fuel.
But New Delhi has discovered that a partial-phase out of subsidies – particularly targeting affluent and resourceful entrepreneurs – is more difficult than it looks. Continue reading »
Any legislation on land acquisition involves a careful balancing act, protecting landowners while encouraging development. It is an important and sensitive issue in any emerging nation.
So it is perhaps not surprising that India’s Land Acquisition, Rehabilitation and Resettlement Bill, 2011 (LARR) has faced repeated delays. Once again, an all-party meeting to discuss the bill last Thursday failed to reach consensus and another is set for March 20. Continue reading »
How do you get Reliance’s Mukesh Ambani, Rahul Bajaj of Bajaj Auto (both pictured left) and Infosys’ Kris Gopalakrishnan on the same team?
The answer, it seems, is to bring a little Washington to Delhi. The Brookings Institution, a highly-regarded think-tank, is opening an Indian affiliate, and many of India’s big names have signed up. Continue reading »
Indian retail reform finally secured parliamentary approval on Friday, with the upper house following the lower house in backing the move, which will allow foreign supermarkets into the country.
It should bode well for other imminent reforms, including insurance and pension fund liberalisation. But Prime Minister Manmohan Singh won approval only with the support of two regional parties outside his fragile coalition. As so often in India’s democracy, securing support for controversial changes requires luck and political cunning. It will be the same with future reforms. Continue reading »
The bulls now driving the Indian stock market on Thursday seized on another piece of good economic news – and pushed stocks to a new two-year peak and the rupee to its highest for a month.
Investors welcomed the vote in the lower house of parliament to approve retail reform and reports that the ruling Congress party would secure a majority to get the measure through the upper house.
Never mind that parliamentary approval isn’t strictly necessary or that the actual decisions on retail liberalisation have been devolved to the states – or that it will take years for foreign retailers to roll out stores and make a difference to the economy. The important point is that there is once again a bit of hope about investing in India. Continue reading »
It all sounds fine enough, but can he deliver? This is likely the question most Indian analysts will be mulling this week, following an intriguing speech from Prime Minister Manmohan Singh over the weekend, in which he pledged to double down on his recent plethora of reforms — giving the first outline of what amounts to a second wave of new economic measures.
Continue reading »