Ordinance on NPAs – The Fight Continues…

The promulgation of the Ordinance yesterday for resolution of Non Performing Assets (NPAs) is another measure to tackle the crisis gripping the banking sector. Yet, the ordinance could be another dead ball and nothing that one can hope would work wonders for lack of market participants. A look at the implication of the ordinance...

Continue Reading

India’s Growth Story – Are We Better Off.. Or, Worse Off..??

United Nations Global Compact (UNGC) report, released this week, stating that richest 1% Indians own 53% of the total, second worst in terms of wealth inequality, puts again a question mark over India's developmental model. As per an IMF paper, Gini coefficient has risen sharply for the nation since 1990 despite significantly higher growth rate. So, is it is impossible to achieve both growth and lower income inequality and are the two mutually exclusive. A brief look...

Continue Reading

Understanding GST (Part I)…

The countdown to the implementation of Goods and Services Tax (GST) has begun with Bihar becoming the second state to clear State GST (SGST) bill today after Telangana. The Parliament has already passed the centre GST (CGST) and Inter-state GST (IGST) late last month. A look at the bill and various complexities attached to it..

Continue Reading

Understanding Universal Basic Income (UBI)…

The Economic Survey has floated the idea of Universal Basic Income (UBI) which essentially means transferring a certain amount of money into the account of people rather than trying to reach out to them through the welfare schemes. As per the Survey, it is an idea whose time has come for serious discussion. A look at the rationale for the scheme and various pitfalls..

Continue Reading

Understanding Shell Companies…

The recent decision of the government, with the direct involvement of the Prime Minister's Office (PMO), to crack down on shell companies brings focus on the operation of these companies. Shell companies have been in focus and subject of intense debate not just in India but globally also, especially after the leaked Panama Papers. A look at the shell companies and how they operate..

Continue Reading

Analysing India’s External Debt…

Even though rising level of forex reserves continues to get the limelight, a data not looked at adequately is the rising level of external debt. Over last ten years, India's external debt has increased by as much as three & half times, much faster than the increase in forex reserves. A look at India's external debt performance and characteristics..

Continue Reading

Understanding GAAR (General Anti-Avoidance Rules)..

Consider a situation where a foreign entity provides loan to an Indian company and receives interest which is not fixed but linked to profits. Or consider a treaty between India and country X whereby sale of shares in an Indian company held by an investor from country X shall be taxed only if the shares sold are more than 10%. The investor floats two subsidiaries and sells 9.9% shares through each of them. Are these tax mitigation, tax evasion or tax avoidance..??

Continue Reading

Monetary Policy – From “Accommodative” to “Neutral” stance..

Belying the expectations of a rate cut, the monetary policy committee (MPC) has not only decided to keep the rates unchanged in its meeting today but more importantly, has shifted its stance from "accommodative" to "neutral'. The shift marks a significant reversal of policy as it had maintained "accommodative' stance all through the year. A look at the reason for the same..

Continue Reading