Archive for October 28th, 2015

Theft of pulses rises.. shows efficiency in theft markets

October 28, 2015

Well efficiency is not just restricted to financial markets but in theft markets too.

As pulses prices soar across the country (Packet of pulses, the preferred Diwali gift this year), thieves have switched their choices as well. There are reports of pulses being stolen across the country – UP (whole truck is stolen), Nagpur etc.

This is a market which is banned by government but is quite rampant and efficient. As prices of certain items zooms, one sees theft of those and related items rise as well..

India moves up in doing business rankings by 4 places

October 28, 2015

Well, there is some confusion. BS reports the ranking has jumped by 12 places from 142 in 2015 to 13o in 2016.  Whereas the DB website says the rise is more modest from 134 to 130. An improvement nevertheless and welcome as well.

The rise comes from two sub-indicators- starting a business (from 164 to 155) and getting a electricty connection (from 99 to 70). The first one is really important given how pathetic the whole thing is in India. Though in electricity, I guess what matters also is whether one gets electricity as well!  Getting an easier connection alone will not help.

What is weird as that getting credit ranking has slipped from 36 to 42 despite all this noise about financial inclusion and push to ease credit delivery. Perhaps it is got more to do with the idea that overall credit conditions are tight and growth lowest in many years.

Actually, one does not know what these rankings mean other than getting some euphoria and discussion in financial media. One may not do anything and still rise in rankings if other countries have done worse and so on. Then there are also these perennial problem of dejure rankings vs. defacto ones. Frankly, it is difficult to imagine that India can grow this fast with such poor rankings. Equally difficult is to imagine that growth will jump many times if these rankings improve.

But yes it surely improves the image of the country. For all you know, improvement in rankings will actually do more justice to India’s growth rates..

Brick and mortar Indian companies competing with online counterparts..

October 28, 2015

It is nice to bring this old phrase of competition between “brick and mortar companies vs dotcom companies” back to the discussion room.

As India (and the world) tries to revive e-commerce world, the old companies are again worried. There are these usual talks of how the new online world will capture the old market players. Least do they realise, how old players can actually fight the game given their huge cash and asset base, provided they get their act right. Unlike the doctcom players which live on very low cash and asset base, the old players are much sorted.

Here is a story on how Indian biggies are competing in the renewed online space:

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Why inflation fighting is the the wrong war and inflation targeting the wrong strategy for Central Banks..

October 28, 2015

This blog keeps arguing to move towards a world with less and less of central banking. Central banks evolved in times when banking was not well really understood as a business and may be there was a case for a central bank type of an organisation. Even then the interventions of central banks had more unintended consequences. Federal Reserve was formed to resolve banking panics but played a stellar role in aggravating the same in 1929. Same is the case with central banks worldwide as we are so clearly seeing now.

As a result, one is never sure which battle the central bank should fight and whether the strategy is right. A lot hinges on these decisions given their monopoly over monetary forces. In today’s context, some say central banks should maintain their focus on inflation and inflation targeting is the only game. Whereas others say it is not the right battle and they should switch to financial stability and move away from inflation targeting.

Stephen Roach  belongs to the second camp and says they should instead focus on fin stability:

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