Sunday, December 28, 2025

Book review | Mumbai: A Million Islands: Financial Express 28th December 2025

 Mumbai is the financial capital of India and probably the biggest attraction for youth looking for a living. But has one stopped to study and observe the city? Delhi as a city has a lot of historical significance, which has been brought into focus extensively through literature and art. But that kind of attention is missing for Mumbai. It is here that Sidharth Bhatia makes a mark with his brilliant book, Mumbai: A Million Islands.

The ‘million islands’ suffix is interesting as this a narrative about various sights in the city. Mumbai is endless in terms of the stories that can be told, and this holds true for its culture as well. The history of the city is not just of a homogenous entity, but that of several islands which shape what the city is today.

Balancing the present with the past, the author gives the reader a feel of both simultaneously as we turn the pages. Several thought-provoking points are made by the author in the book. For instance, he starts off by talking of ‘Mumbai is upgrading’, which is something one sees in the construction work of bridges, coastal roads and metro lines all across the city, something that is a continuous process. These have been pain points for citizens who have borne the brunt for years. There is a distinct tilt towards the rich, the author conveys, as seen by the luxury residential complexes that have come up, or the ostentatious structures in Bandra Kurla Complex.

The author also talks of the evolution of areas dominated by the Muslim community and portrays their fears and inhibitions. Contrary to conventional wisdom, parents in this community want their children to get an English education, hoping for upward mobility. There has been significant ghettoisation because of the community living in the same areas for decades and which looks distinctly underdeveloped compared with other geographies. A major challenge for Muslims is to find accommodation because of the prejudices that have been ingrained among the city as a whole. And this holdsirrespective of one being a commoner or a celebrity. The author talks to people in these communities and there is some recollection of the infamous Mumbai riots, during which they were at the receiving end.

Written in a very conversational form, Bhatia explores Mumbai through chapters dedicated to its various localities. The one on south Mumbai is classic as he delves into how British presence brought about a westernised look. The area of Marine Drive and Colaba carry a lot of history, and the author particularly talks of the architecture of these places. Houses had limited spaces for lobbies and took one directly to the lift unlike what we see today where vanity precedes everything else. There is commonality in the architecture in most buildings constructed at that time which is interesting. In fact, reading the book, the reader is compelled to go to Marine Drive and see for herself this distinct trait. Similarly, when he describes the walls around these buildings as being low and how the buildings ‘talk’ to those on the road reads very poetic.

He also takes us through the historical context of some of the dining places in Mumbai and starts with their foundation in the early twentieth century and their genesis. Liquor was not permitted in those early days and one needed a permit for it. Dress codes were a norm, and these hotels could get risqué with cabarets leaving nothing to imagination.

Bhatia describes his own escapades when talking to developers who are looking to create homes for the ultra-rich, resulting in buildings scaling heights both in terms of structure and price. Several areas in Mumbai now have been converted into major construction sites not just because of the metro but also for re-construction. Yet, something seems unplanned when one looks at how focus has shifted from Nariman Point and Reclamation in south Mumbai to Bandra Kurla Complex, which today is a nightmare for everyone as entry and exit to the place are challenging. Those who depend on public transport struggle to find one, while those with their own vehicles are left frustrated in their quest to park and exit.

There are 11 chapters capturing such images of the city, and while it is evidently not comprehensive, the book does cover most of what was known as Mumbai to begin with. The chapter on ship breaking and slums takes us thorough the property of Mumbai Port Trust and its evolution or neglect. The one on ‘Mills Become Malls’ is a must read for the present generation which is only aware of the high-end premium shops with high snob value and gourmet dining, and which excludes the proletariat through their pricing. These spaces were mostly textile mills with a history. Bhatia takes us through the trade union movement in this context and the story of its annihilation.

The Hidden City’ is the last chapter which will make us think harder. Starting from RK Studios, which was earlier known for glamour, he takes us through an area called Deonar and beyond. There are 124 five-storey buildings in the area that one will not notice. It was never advertised but was constructed by the famous builders like Hiranandani and the Shahs. These were rehabilitation buildings where one resident had just 225 square feet of living space. In the author’s words, which are eloquent and soul searching: “All of these buildings look like a vertical slum, a brutalist creation like council estates elsewhere. Add to it the fact that it is in the back of beyond, and the sense of alienation and exclusion is complete.” This is very hard-hitting considering that all this re-construction is otherwise considered as upgrading the city of Mumbai!

Fiscal boost: What works, spending or tax cuts? Business Line 26th December 2025

 Whether apocryphal or true, it is said economist Arthur Laffer, while dining with some government dignitaries in a café, used a paper napkin to draw a curve which mapped lower taxes to higher growth. This became the famous Laffer Curve in supply side economics; it was believed that lower taxes make people work more which generates higher income and hence growth. Simultaneously, the tax revenue also grows. This approach was part of what became Reaganomics.

While this theory is neat, the willingness to work does not translate into more work being generated as companies do not operate this way. But if one were to look at this theory in a broader sense, lower taxes should help in augmenting spending and hence increase growth as well as taxes. This is the spirit in which the two rather important measures taken by the government on income tax and GST 2.0 can be viewed.

The income tax benefit was to release ₹1 lakh crore of income that is expected to be spent on goods and services. The ₹48,000 crore of revenue foregone by the government on GST on account of rate rationalisation is also expected to create demand as well as raise disposable income during the festival season. Thus, both these measures are growth-enhancing.

Tuesday, December 23, 2025

How Shakespeare captured this year's economic themes more than 4 centuries .....Mint 24th December 2025

 https://www.livemint.com/opinion/online-views/shakespeare-this-year-2025-economic-themes-trump-tariffs-jerome-powell-rbi-11766407836950.html

Monday, December 22, 2025

Lower repo rate link to lending: Financial Express 23rd December 2025


 

From Shock To Stability: How The World Absorbed The 2025 US Tariff Disruption: Free Press Journal: 22nd December 2025

 

In 2025, the US imposed higher tariffs, disrupting global trade like a once-in-a-lifetime shock. Despite fears of inflation, recession, and export slowdowns, countries negotiated deals with the US, and India stood firm. Inflation remained low, growth exceeded forecasts, and exports stayed resilient, showing that the world economy has largely absorbed the shock.

2025 started off on a shocking note with the economic war being evoked by the US President in the form of tariffs. It is this theme which has cast a shadow on the world economy, warring nations, central banks and governments, as all policies have paid obeisance to this major disruption. This disruption was as potent as Covid and was a once-in-a-lifetime shock, administered by the most powerful nation in the world. 

The president delivered on what he had threatened as higher tariffs were announced in April, which set a base of 10% that was much higher than the average of 3-4% average tariff that was prevalent all this time. This had led to several analyses of how things would pan out at the global as well as domestic levels. The tariffs were invoked from August onwards, and almost 5 months have passed, which makes a reality check relevant. 

First, at a purely theoretical level, one nation imposing tariffs on the rest of the world should have logically led to countervailing tariffs being imposed by the other countries. In classic game theory, such policies are pursued so that there is collaboration subsequently and an optimal solution is reached. However, this was not evident in most cases. Almost all countries went back to the table to strike deals with the USA. This involved lower tariffs for US imports as well as a promise to invest more in America. Hence, Canada, the European Union, England, South Korea, and Japan, among others, had deals. This was a victory for the USA, as it got most trading partners to lower their tariffs on imports. This is not something the WTO was able to do. 

Two countries stood out. The first is India, which has stood its position notwithstanding the additional 25% tariff being imposed. Clearly, we would like to deal with the USA on terms which are not inimical to domestic constituencies like farmers. China, on the other hand, had the muscle to impose countervailing tariffs. They were able to do it because American exporters do rely on China as a major market for their goods. 

Second was the impact of tariffs in the USA. Logically, higher tariffs, which were to average above 10% relative to 3-4% earlier, should have meant higher inflation in the USA. This was the reason why it was largely believed that the Fed would not be cutting rates, notwithstanding the pressure put on by the president. However, the Fed has cut the rates, and there could be another 2 in the offing in the next two years. The supporting factor has been inflation, which is at around 2.9%. This means that the absorption power of the system has been much better than was first imagined. This is one reason why the Fed has been able to cut the rates. This has also led to the dollar weakening instead of strengthening, which was expected when the tariffs were imposed. 

The third fear was recession in the USA. This sentiment was based on two factors. The first is that with the inflation going up, the real purchasing power would be constrained, leading to lower production. Therefore, the fear of higher unemployment was palpable. The second was that with the work visa restrictions being placed by the government, there was a feeling that there would be a paucity of labour, leading to a slowdown in the economy. However, growth is projected to be 1.9% as per the Fed and will only improve in the coming years. Therefore, a slowdown that was expected has not materialised, and the economy is doing reasonably well. The unemployment rate is below the target rate of 4.6%, and, hence, there is no real worry here. 

Fourth, India’s exports were expected to slow down on account of the US market contracting. The US is the largest export market for India, with around 16-18% being directed here. Higher tariffs were to be a negative factor for exporters, as competition from countries like Vietnam, Bangladesh, Sri Lanka, and Thailand would be able to enter the US at a lower price. However, performance of exports in the first 8 months has been marginally higher than last year at 2.7%. But interestingly, in the last 3 months, since the 50% tariff was invoked, export growth has been positive in 2 of the 3 years. This could mean that our exporters have done well to counter this wave of tariffs. Either they have negotiated with the customers in the USA or rerouted their goods through a third country. 

Fifth, with exports being impacted, the effect on the GDP was also to be there, though not very significant. The impact of a 10% drop in exports to the USA would have led to a fall in the export growth by 0.4% or so. However, data on growth in the first two quarters has been impressive, which has also called for a revision in forecasts for the year to upwards of 7%. The RBI has an estimate of 7.3%, while that of the Bank of Baroda is 7.4-7.6%. Clearly the strength of the domestic economy has contributed to the growth in the economy, supported by major affirmative action from the side of the government in the form of GST reforms. In fact, all forecasts that started off in the range of 6-6.5%, when the tariffs were announced, have been revised to 7% plus by December, which does indicate the confidence in the growth story. 

Therefore, it does appear that the world has steered through this new shock quite well, and while there are still talks of some slowdown in 2026, it would probably not be at the global level. It does look like that while countries have lowered their tariff rates, the overall path of growth is still on the path, and this major shock has been more or less absorbed. 

Wednesday, December 10, 2025

Adventure deposits: A banking idea whose time might have come: Mint 10th December 2025

 https://www.pressreader.com/india/mint-hyderabad/20251210/282145002670052