The cracks in the fuel price ceiling: Indian Express 29th march 2026

 

With the price for crude soaring and oil marketing companies absorbing the blow, attempts to shield consumers may be approaching their breaking point

The government has lowered the excise duty on petrol and diesel to protect the consumer as of now. It is not certain that this situation will remain. There can be further action depending on the course of the war in West Asia and the price of oil. At present, the price of fuel at the pump is unchanged for public sector companies, while one private company has announced an increase. So, for how long can the retail price be held on to?

Let us look at the structure of petrol prices in Delhi. At present, one litre of petrol costs Rs 95. Of this, the actual price charged by the oil marketing companies (OMCs) to the dealer is around two-thirds of the final price or Rs 63/litre post the excise cut. The excise component is now around 12.6 per cent — this is the amount that the government earns of Rs 11.90/litre. The dealer commission is around 4.6 per cent or Rs 4.40 per litre. And then there is the value-added tax, which is 16.2 per cent of the price. VAT, which is charged on an ad valorem basis, is one part of the price that varies across states. This explains why the price of petrol varies across states.

So far, the burden of higher oil prices is being borne by the OMCs. The 66.6 per cent share in the final price also includes a profit being earned by these companies which keeps getting reduced as the cost of crude goes up. The interesting bit is that while Brent had peaked at $118.4/barrel on March 20, the weighted average price for India is close to $150 per barrel. As of March 24, the average price was $147/barrel. The price was $ 71 on February 27, which was just before the war began. Add to this the rupee depreciation of 3.3 per cent during the period from February 27 to March 25, and the cost is up further. It can be seen from this that as long as the Centre and state’s share in the static final price remains unchanged, the same is absorbed by the OMCs.

Here, it must be pointed out that the OMCs earned a higher profit when the price of oil came down to the range of $60-70 per barrel as the consumer price was unchanged at Rs 95/litre and the excise and VAT rates remained unchanged. The government did impose a supernormal profit tax on these companies and hence the gain was apportioned between the two.

However, with the cost of crude increasing sharply, the government has to take a call on apportioning this amount. In the Union budget for FY27, it has been assumed that collections from the excise tax would be Rs 3.88 lakh crore as against Rs 3.36 lakh crore in FY26. The present reduction in excise duty would mean a decline in tax collections. A similar action could also be considered by states. The option to increase the retail price can be exercised and doing so will probably steady the fiscal maths of the government. However, it will run the risk of pushing up inflation at a time when there is already concern over the possibility of this being an El Nino this year.

On balance, it may just be a matter of time before the price matrix is revised. It does look as if the next level of intervention will be at the consumer end, if and when required.

The bulge in government holds held by RBI could be put to work: Mint 24th March 2026

 https://www.livemint.com/market/bonds/rbi-government-bonds-build-infrastructure-open-market-operations-banking-g-secs-11774163252024.html

Where is the rupee headed? Financial Express 20th March 2026

 The Iran War has evidently turned the markets upside down. What appeared to be going well for the world economy has now become an uncertain spectre. The stock market continues to display nervousness with no end in sight. But a factor which affects all countries is currency, and the rupee is once again under pressure. With the Rs 92 mark being breached, the logical question is, how much higher or lower can it go?

The answer is really a shrug because one does not know the intensity and length of the war. The rupee will be driven by two sets of factors—the fundamentals (imports, remittances, foreign portfolio investors [FPIs]) and the strength of the dollar. This is the challenge for the Reserve Bank of India (RBI) which has, so far, dexterously steered the currency away from volatility. The issue is that whenever one speaks of the rupee, it is necessary to also see how other currencies are faring. Absolute depreciation numbers do not connote much as the current spate of movements is interlinked with what happens to other currencies.

Within the fundamentals, the obvious factor pressuring the rupee is the higher cost of imports. As oil is the largest component of the basket, any increase in price gets added to the trade deficit. Products like fertilisers and chemicals also get affected indirectly, which widens the deficit. On the other hand, the increase in exports may not work out given that the direction is also to countries embroiled in the war.

As for remittance flows, there is a large expat population in the Gulf and other western countries. This segment has been a useful contributor to remittance flows that has strengthened the current account deficit even when the trade deficit was high. Remittances from this region could be around 35% of the total, which is significant, given that the country could be getting anything between $135 billion $150 billion in good times. Also the expat population in this region could tend to belong to the low-skilled labour class whose earnings are also not very high. This means that any job loss or reduction in pay can lead to a sharper fall in remittances. This contrasts with the western world, where the population tends to be in high-skill jobs.

FPIs have been quite destabilising in the last couple of years, especially at a time when the West is going in for quantitative tightening, which has lowered the quantum of investible funds. To top it all, any news on tariffs has caused the funds to shift markets, which is now exacerbated by the war. Therefore, these flows will have a bearing on the daily movement in currency.

The conundrum here is that investments are based on how investors see markets and growth of economies. Further, currency stability is important as a declining rupee will mean lower real returns. Therefore, the end result is always uncertain. Indian markets were not the best performing ones until the war began as there was a sense that stocks were overvalued. Hence, the review of alternative markets that will be made by these investors will guide these inflows.

Normally, all these fundamental factors are represented by the change in forex reserves. Here, the economy is in a strong position as reserves are comfortable at over $700 billion covering around 11 months of imports.

Beyond fundamentals lie the external factors. Speculative forces are important here. A falling rupee will make importers rush to buy dollars, while exporters would like to hold back retracting their dollars, hoping to get more rupees once the conversion takes place. This becomes self-fulfilling and hence the RBI’s action becomes important. As a custodian of forex assets, the RBI has been stepping in often to ensure that these forces are curbed ,through the outright sale of dollars or taking forward positions, which sends strong signals to the market. The positions in the non-deliverable forward market provides good indications on this aspect.

But when it comes to what happens to the dollar, no central bank can do anything. When the dollar strengthens, there is a tendency for other currencies to weaken. The dollar index has moved closer to the 100 mark, which has automatically pulled other currencies (including the rupee) down. The trick is to ensure that the rupee remains within range and does not lose out on the depreciation, which will help retain export competitiveness without making it appear as a weak currency. Once again, it is the RBI that holds the strings.

Presently, it is hard to guess which way the dollar will go. With gasoline prices already climbing, inflation should increase in the US, causing the Fed to pause rate cuts. This means the dollar will strengthen. However, an unending war will impose more pressure on the dollar as it would not reflect well on the economy.

The rupee, though depreciating, looks satisfactory on a comparative scale. Being a country with a current account deficit means that the rupee should weaken. This is more so at a time when the capital account has been weak with negative FPIs and low, single-digit foreign direct investments, as repatriations are high. The present exchange rate of above Rs 92/$ does not look off the mark, though the indications going by the non-deliverable forward market talk of Rs 93/$ in the next couple of months. A conservative approach will be to look at a range of Rs 92-93/$ for the next month or so.

Will the new series of GDP accomplish anything? Free Press Journal 16th March 2026

 

One for the novice: Book review of Booms, Busts and Market Cycles: Book review in Financial Express 15th March 2026

 One thing that will catch the reader’s attention is the author's analysis of returns on housing compared with equities (Source: Bloomberg)

Maneesh Dangi is an office-hold name when it comes to stock markets as his views on television are closely followed by dealers in their offices. It is quite appropriate that he has written a book on how to train one’s mind to be an investor in his book Booms, Busts and Market Cycles. As the title suggests, he takes readers through all these phases with clear guidance on how to read such situations and invest smartly.

He does give a lot of advice, but the one thing that will catch the reader’s attention is his analysis of returns on housing compared with equities. It is more of a revelation. He argues that returns on housing over a long period of time are the same as equities across the world, which is around 5% in real terms. And the more important part is that the volatility in housing is just half of equities, which means it may just be a better opportunity with the risk carried being much lower. This can be a useful tip to consider when individuals are looking to diversify their portfolios to maximise returns as housing is not often treated as part of asset portfolio diversification.

Dangi also takes the reader through asset allocation, which he links with age profile as this gets linked with requirements. At age 25 one should opt for equities. When one is 45, he advises to trim exposure to equities, bringing down share to 15%. At age 65, one should be out of equities and invest only in short-term funds, that, too, only after exhausting all options open to senior citizens. This is the time to move away from markets for sure. He goes one step further and signals to high networth individuals to try out the US equity markets, along with diversified or index funds in the domestic market.

Dangi gets more eloquent when he writes about knowing the fund manager. Here his insights are very interesting. A thought which may not have occurred to the reader in the normal course is that the sum of all strategies in the market must be equal to the market return. So the question is who gives the alpha to the investor? There are mutual funds as well as DIIs and FIIs as well as the retail investors who are all in the game. The promoters interestingly hold around half of the equity across the world and are supposed to be the outperformers and rarely buy or sell as they are the ones who have skin in the game.

So who really are the gainers? Here he points out that it is not the FIIs who derive the alphas as they work based on benchmarks. It is the retail investors who hold 8-10% who contribute to the alphas in a negative way. They are the losers on the basis of which others gain. Their shortfall become the excess returns for others.

He simplifies some principles for the reader on how to choose portfolio managers. He gives tips like being wary of portfolio managers who have never struggled. Or to stay away from performance artists. Again, the chapter on interpreting markets is quite engaging as it also warns us on interpreting certain observations as a phenomenon. Often a crowded mall can make us conclude that consumption has revived and the stocks of such companies will do well. It does not work that way. He prefers to use the first derivative of change rather than absolute inflation or GDP numbers.

Dangi prefers PMI to IIP numbers to gauge the economic environment. Markets are better indicators than macro trends. Copper tells us what is happening in China. S&P tells us on risk appetite. The dollar reflects the global mood. Most importantly, and with a bit of irony, he warns investors to be wary of policymakers because they guide people to be calm when inflation is about to rise. 

Boom, Busts and Market Cycles is a very insightful book. Written in a different style with conversations between two characters, Dangi is able to deliver some useful tips and advice on investing in a language that is easy to understand. One can start reading the book from any chapter and it is not necessary to go sequentially as these are standalone chapters.

He also gives his views on the economy, which can be contested by economists. He talks of inflation being high at 4%, which is higher than the Asian counterparts due to high public debt. Here data would show that high inflation has normally tended to go with high food prices which are driven by supply factors rather than demand. He is suspicious of household debt rising in the unsecured space, which he feels is not a good sign. Here, too, it is arguable whether it is a bad thing given that the NPL ratio is low. The counterview is that this has supported growth in consumption, which would have lagged in the absence of leverage.

Similarly, he believes our GDP growth will be 6% on a continuous basis. This may be too pessimistic of the growth story as 7-8% seems to be the path that can be achieved. In fact, this path can probably not convince investors of the continued good returns in the market. But then, it is the author’s view coming from someone who has been in the market for long to understand what works. But then he does end by saying that equity valuations are rich but lack macro support. This is definitely a book for the shelf as Dangi writes with conviction and strongly puts forward his views on the subject.

Economy may survive war supply shocks : Businessline 12th March 2026

 The current oil crisis is the fourth in the last four years. The first episode took place when Russia invaded Ukraine which saw crude price moving from around $84/barrel in February 2022 to $117 in March and remaining in a higher range till September, when it moderated to $90/barrel before reverting to around $80/barrel in December.

Therefore, the higher prices lasted for almost nine months. In this episode, Russia was a major supplier of oil (third largest with share of 10-12 per cent). With a ban being imposed on imports by the western community, supplies were disrupted.

The second was the Israel-Palestine conflict in October 2023 but its price impact lasted for just about a month. This is because no oil producing country was involved in this conflict.

Book review of World Cup fever: A footballing journey in nine tournaments : Financial Express 8th March 2026

One of the biggest sporting events will be the World Cup Football tournament to be held this year. It is probably in league with the Olympics given the scale of participation of nations, and scores over cricket, which is restricted to a handful of teams. Just what goes on behind the scenes is something one would like to know; and this is where Simon Kuper of the Financial Times does well in both narrative and style.

The book, World Cup Fever, is described quite differently. The author has followed the tournaments since 1990, not having missed a single one. He covers this period of 32 years by talking of individual matches he attended. Quite clearly, he has been maintaining a diary on what has transpired in these matches as the descriptions are vivid. He also talks of the towns and cities he visited in this process, adding glimpses of the cultures of the countries where the world cup was played.

Curiously the first five tournaments were played in the developed world while the ones that followed did not follow any such pattern and included countries like Brazil, South Africa, Qatar and Russia. And this in a way was a case of multinational capitalism invading the Global South. Or one can say there has been democratisation of the sport.

 Anyone who has followed the sport will find these narratives refreshing as one can identify with some of these matches. Now, what comes as a revelation to the reader will be the politics and money that go behind these games. It is a prestige to hold the tournament irrespective of whether the country is a soccer-playing nation or not. There is huge pressure on FIFA and there is big money involved. Large sums are transacted in the bidding process so that the clubs involved will vote for the winner. Therefore, things are not simple. Kuper takes us through all these machinations while covering individual tournaments sequentially.

Another point that emerges is the hypocrisy involved when this process is on. Countries like Russia and Qatar are known for being autocratic and regressive. Russia got the 2018 bid even after the invasion of Crimea. Such a nation should ideally have been boycotted. Russia as well as Qatar are not really soccer-playing countries but have used these world cups as a means to ‘sportswash’ their images. One did read about the labour conditions when the tournament was staged in Qatar.

Labour is virtually indentured and several people died. Yet, holding the tournament was a desperate measure used to change the country’s image. Significantly several players who had decided to wear black bands as a signal of protest before the tournament changed their minds and made it look like all was okay. The same was seen in Russia where even the public were least interested in the game, including the matches played by Russia. It was more a show of power and comradeship by President Putin. There were few signs on the roads that a big tournament was on.

Kuper also reveals that with a lot of jingoism setting in, audiences everywhere are only interested in their teams playing and winning. Hence even in a country like Brazil, people were attending matches only where their team was playing. This is a problem that has permeated all sports in the world where nationalism prevails. This is witnessed with the national anthems being played, which adds to the parochialism.

Kuper also highlights the tournament in South Africa in 2010 where despite the so-called withdrawal of apartheid, there was clear segregation of the coloured and white population. This was not just in the social circles but also in stadiums and team compositions.

The author points an interesting aspect of the World Cup. The winner of the tournament normally has to play just seven matches and be lucky. Often the team wins by a solitary goal margin, or more often these days on penalties. Is it a fair way of adjudication on the best team playing or is it just fluke?

High Cost of a Growing Football Economy

Further, a tournament that started off with 16 teams in the Seventies increased to 32 in 1998 and will now be 48 in 2026. For 2030, the number is likely to touch 64. All this means that there are more matches with more sponsorships and more ticket sales. Add to this the telecast and broadcasting rights, and there is lots of money involved with various brands making their bids to various title sponsors.

Therefore, the World Cup is a big economy that starts at the bidding process. The country which gets this opportunity would be spending a lot on infrastructure which typically would be helping the country to grow. But the costs involved, as has been seen in countries like Brazil, have been quite high with environment and labour issues being the prime casualties. In fact, the author highlights how the world cup “became a symbol of the state’s corrupt incompetence”.

The book is enjoyable to read even for a non-soccer fan as it takes one through the various tournaments over the past three decades. One can also catch up with the Zidane incident of headbutting in the finals and what supposedly led to the rather rash impetuous action. The 2026 tournament will be in the USA and it can be a big publicity event for President Donald Trump as it would involve a number of countries in the neighbourhood participating after being at the receiving end of his economic doctrines. The author believes that world cups hence do not change the world, but only illuminate it—these words come from a diehard fan of the sport.

There's urgent need for ground rules for the healthcare sector: Free Press Journal 2nd March 2026

Why the concern over capital flows : Hindu Business Line 28th Feb 2026

 The RBI’s new regulation on ECBs (external commercial borrowings) can be read along with the message given in the Economic Survey on the rupee being under pressure in the year. This is notwithstanding an otherwise remarkable performance of the economy.

The current account deficit is very much in control even though the exporters have faced challenging times. It is the capital account that has been transformed, putting pressure on the currency. The measures announced by the RBI on the amount and tenure of borrowing will surely help companies raise more money in this market and support the capital account.

Historically the capital account was kept steady by FPI and FDI which have become more fragile. While often it is argued that we need to be more open to such investment, polices have been comprehensive; and it does look like that nothing substantive can really be done. FDI can flow into almost all sectors with limits being increased over time. The challenge is to have investors interested in the India story. It is the pull factor rather than push which matters here.

Banking question: Has the credit-deposit ratio lost its relevance? MInt 27th February 2026

 https://www.livemint.com/opinion/online-views/banks-credit-deposit-ratio-rbi-norms-loans-reserves-crr-credit-reserve-ratio-omo-11772045617758.html

Small fry, big success: A useful playbook for knowing the insides of high impact investing: Financial Express 22nd Feb 2026

 Impact investing is something that has caught on in recent times where investors look at relatively less known enterprises in the private market space that work on technology to deliver better solutions to a wider class of people.

The conventional way to look at lucrative investment is to judge the potential of a company to grow and make profits in future. The well-established companies have a track record which attracts investors. But there is another big pie waiting to be explored in the area of impact investing. This is what Mahesh Joshi talks of in his rather interesting book called HIT Investing. The acronym stands for ‘high impact through technology’.

Impact investing is something that has caught on in recent times where investors look at relatively less known enterprises in the private market space that work on technology to deliver better solutions to a wider class of people. In particular, Joshi talks of investments in ventures that affect lives of people in the lower to mid-levels where the impact is significant.

The author talks in detail of eight such ventures which have made a difference to society at large. Hence the names of Quona, Apis Partners, AC Ventures, among others, are discussed in detail, covering their history and motivations. It should be realised that impact investing does get associated with making money and hence is not to be mistaken with donations.

In the process of providing funds to these companies, which can be financial services or energy efficiency or new technologies like decarbonization, a difference is seen in outcomes that benefit society.

Psychology of investing

In brief the book gets into the psychology of such investing which involves asking three basic questions. How are they doing it? What are the techniques used and what is the secret behind their success? The book hence focuses on the challenges faced, strategies used and finally the performance. This is done separately for all the eight investors.

In the process of this discourse, Joshi does some deep-dive analysis into four critical aspects of such investing. This can be a playbook that could be followed by anyone getting into this space. In a way, this can be the four imperatives that have to be looked at for successful investing.

The first one the author talks of is origination. This means finding companies to invest in. The well-known companies are well researched as information is available to everyone in an equitable manner. But once we move from say the public to private space, access is not available to all and the challenge is to get to know this canvas, requiring a lot of research.

Next, is assessing investment potential. This becomes a challenge as there would be limited publicly available data. Getting hold of it and doing the requisite due diligence would be the second sequential step to actually be in a position to decide whether or not to go ahead with investment.

The third step is to also assume the role in helping the investee company grow and achieve their objectives. Hence in a way it could be some kind of tacit management support to provide based on the investor’s experience in this field which can be drawn by stories in other countries.

The last is to carve out an exit route. It should be realised that the main return comes from exiting the venture once it is in a state where growth is sustainable. At times this can take time and could go on for at least 3-6 years.

Before ROI

Besides earning a return on investment, the funds need to be churned to other ventures, which would mean that the investor has to have a well-defined path to move out either through ensuring an IPO or any sale of shares. This is normally done after a critical mass of success is achieved or the main objectives are met in a well-defined time frame.

The author does, in a lighter manner, mention that the talk in this business is to have an exit plan even before investing.
Hence all the case studies analysed here clearly show how these four touchpoints have been achieved.

At the technical level he also outlines a possible template of the way in which portfolios are constructed by these investors, as evidently one should not put all eggs in one basket.

Therefore, diversification can be the key here. Also, he talks of how to assess the impact of these enterprises in terms of meeting their objectives which goes beyond just monetary returns.

The eight investors selected are fairly diverse in terms of their objectives and the stage at which they invest in the life cycle of the companies. Capria and Future Planet look at the early stage of operations, while Quona and AC ventures prefer slightly evolved ventures that have already developed a market and probably also started making a profit.

Apis and Lok Capital invest in enterprises that have already made profits or have a clear path for which capital is needed. SDCL, on the other side, which largely covers Europe and USA, focuses on ventures that drive energy efficiency.

More specific to India, Joshi talks of the success of microfinance and here he gives the example of Lok Capital which focuses largely on this sector. Lok Capital’s Fund 1 generated top quartile returns, while Fund II was in the top two decile for their respective vintages.

He argues that microfinance in our context is probably the best example of creating value in the lives of people and successful impact investing.

The author does stress the point that these impact investors are delivering market rate returns but the difference made to society is sharp. Data shows that there has been an increase in the institutions getting into this field. Also, these investors can be allocating between 5-25% of their funds as impact investment.

Logically, as more funds get allocated in this space, the returns for those who backed them early would also tend to increase. This book is quite unique as it looks at a totally different investment space which can really be inspiring. For those who would like to be associated with such investors, this book is a useful playbook.

India’s FTAs will work better than before: Financial Express 18th February 2026

 FY26 had started on a gloomy note with the US announcing its tariff policy, which was exacerbated by the imposition of additional tariffs in August. At 50%, the  tariff picture looked challenging. Estimates varied on its effect on exporters and the final impact on GDP growth.

Being a domestic-oriented economy, the impact on India’s GDP growth was not expected to go beyond 0.2-0.4%. In fact, by December-end, overall exports to the US saw a 9.7% growth compared with 5.7% for the same period in 2024-25—and much higher than the 2.4% witnessed at the aggregate level. How did this happen?

First, important products like pharma and mobile phone were exempted. Second, there was frontloading of exports in the earlier months. Third, some exports were re-routed through other countries. Fourth, negotiations with import partners on pricing helped maintain some of the contracts.

The free trade agreement (FTA) with the European Union (EU) and the US deal will now place export prospects on a higher trajectory, as they are our largest export destinations. Two points must be kept in mind. The first is that exporters in industries such as textiles, chemicals, leather products, marine products, and gems and jewellery would be at an advantage as these markets offer more opportunities. India will have an edge over rivals like Bangladesh and Vietnam that have a slightly higher tariff. Secondly, imports too will increase and pose competition to the domestic industry. The details thus become important because FTAs in general offer reciprocal benefits for both sides.

The US deal generates additional interest, considering President Trump has spoken about India buying oil not from Russia but from the US and Venezuela. Indian refiners need clarity because apart from Russian oil costing lower, freight costs would be higher for other alternatives. Further, since imports cannot be reduced to nil in a month but only gradually, the phasing of reduction would be pertinent.

The EU deal also demands close scrutiny as non-tariff barriers can remain a concern although tariffs have been lowered for over 95% of exported goods. For instance, the West is known to enforce rules such as phytosanitary conditions to block farm product imports from emerging markets. Similarly, environmental issues come in with certification requirements. Subjects such as carbon emissions therefore become important. The list gets longer when labour conditions are scrutinised

Thus, signing trade deals is a necessity and help in the long run, but the details matter to all exporters.

The question, then, is whether FTAs really work or not? History provides interesting clues. In the past, any kind of agreements—FTA, Comprehensive Economic Partnership Agreement, or Comprehensive Economic Co-operation Agreement—has not moved the needle significantly. For example, Singapore’s share in Indian exports came down from 5.3% in 2006 to 3% in 2024-25; in case of Japan, the share dropped from 2.1% in 2012 to 1.4%; and that of South Korea fell from 2.2% in 2009 to 1.3%.

There were success stories with Malaysia, as the share went up from 1.3% in 2012 to 1.7%, and Mauritius (from 0.2% in 2023 to 0.5%). The post-Covid share of UAE was up from 7% to 8.4% and that of Australia from 1.5% to 2%. Post-Covid deals have been more effective, so prospects with the UK and US augur well.

The geopolitical scenario has changed and the tariff issue has made countries talk to one another more often than before. The World Trade Organization is now an acknowledged failure. But the tariff shock has led countries to sign FTAs among themselves to act as a buffer against the US backlash, which is a good development. In a way, the US president has brought countries closer to one another, which will foster higher levels of trade. More importantly, countries have begun lowering their tariff rates. Although the lower rates are restricted to those signing deals, they have fostered a culture of openness in imports and therefore trade.

On the positive side, the markets in India have reacted very well. The currency also has been a beneficiary as one of the main reasons for the rupee coming under relentless pressure was the absence of a deal with the US. Now that a formal agreement is on the anvil, the rupee has steadied and will be a comfort for the Reserve Bank which has otherwise had to deal with steadying it often.

While there have been fluctuations in the stock market, the general thrust has been positive since the India-US deal was announced. This augurs well for foreign portfolio investors. One of the reasons for their muted activity in the Indian market was the uncertainty surrounding the deal. Now, hopefully it will be business as usual.

FTAs between countries and blocs will be the new normal in the coming years, galvanised by the US action on tariffs. This is welcome from the point of view of fostering a new global economic order where freer trade with fewer restrictions would hold. While the fate of goods appears to be more straightforward, services is one area that has to be focused upon in future.

Trade deal signed herald a new environment for India : Free Press Journal 17th Feb 2026

 

New CPI index is less volatile, suggests prolonged pause on rates: Indian Express 17th Feb 2026

 The new CPI index with the updated basket of goods and services shows inflation at 2.8 per cent in January. While the number was expected to be in this region, the composition of the index merits attention. The weight of food items is now 36.8 per cent as against almost 46 per cent earlier. This sharp fall of almost 10 per cent is significant. But the share is still higher than that in other metrics. For instance, in the private final consumption expenditure data, the share of food and beverages is around 31 per cent in nominal terms and 28 per cent in real terms.

In the National Statistics Office’s Household Consumption Expenditure Survey for 2023-24, the share of food is 47 per cent for rural households and 39.7 per cent for urban households. If values are assigned to the free food being provided by the government, the shares go up by 0.9-1.4 per cent. In comparison, in the new index, food and beverages have a weight of 42 per cent in rural and 30 per cent in urban areas.

It is interesting to see how the weightage of the food basket in consumer price indices varies in other countries. In the US, the share of food is around 13-14 per cent. It is at similar levels in Germany. In the UK, it is lower at 11-12 per cent, while in France, it is higher at around 16 per cent. In Italy, it is closer to 18 per cent. Japan probably has the highest share among developed countries at 26 per cent. Among these high-income countries, we find a higher weightage of around 8-15 per cent for education and recreation. As India continues on its development trajectory, it should also witness a similar trend. In these countries, as food has a lower share, monetary policy is more effective as several components of household consumption like housing and automobiles have considerable weight in the price index.

In emerging markets, while the share of food is slightly higher when compared to high-income countries, it is still well below that of India. In China, it ranges between 20 and 25 per cent. It is 20-26 per cent in Brazil and 17-18 per cent in South Africa. This indicates that none of these major economies has food constituting more than 30 per cent of the price index. However, in the case of East Asian economies, the situation is slightly different and closer to India. For instance, Vietnam is close at around 34-35 per cent. But this includes takeaway food as well. Malaysia is next with a share of almost 30 per cent, followed by Indonesia at 25 per cent.

For India, the decline in the share of food in the price index does suggest it will make headline inflation less volatile as food products normally witness wide price swings. This will have implications for monetary policy. Given that core inflation has been higher so far and has greater weight in the index, we can expect a prolonged pause by the Monetary Policy Committee this year.

CRR can be used to provide liquidity Business Line February 12th 2026

 One of the expectations from the credit policy was an announcement of a calendar for open market operations. This was against the backdrop of fluctuating liquidity over the last two months or so. True, there is a surplus right now but this can change again in March when the advance tax payments have to be made. The policy has assured supply of liquidity as and when needed, which also includes situations when the government’s cash balances with the central bank increase. Such a situation may not arise as the government tends to expedite spending towards March to meet targets. The question to be addressed is: what are the options when it comes to supplying liquidity?

The RBI has several instruments that can be used. All of them have different objectives. The system surplus or deficit is denoted by the balances after RBI interventions through repo rate, VRR (Variable Repo Rate), SDF (Standing Deposit Facility), etc. The net outstanding amount reflects the net state of liquidity. These are the daily operations of the RBI under the liquidity framework. But there are also open market operations where government securities are bought and sold. Further, there are forex swaps which deliver similar results. The merits of each can be examined.

The first tool to be used is the overnight repo or VRR which can go up to 14 days. Their tenures provide clues on how the RBI views the liquidity position. These can be viewed as tools for temporary deficits.

will market making give India's corporate bond the fillip it long needed? Mint 11th February 2026

 https://www.livemint.com/market/bonds/budget-proposal-market-making-india-corporate-bond-government-securities-liquidity-11770638495049.html

How should India look at AI: Free Press Journal 4th February 2026

 https://www.freepressjournal.in/analysis/how-india-should-look-at-ai-opportunity-efficiency-and-the-challenge-of-inequality

One of the primary issues discussed at the 2026 World Economic Forum Annual Meeting in Davos was AI and its impact. AI is an inevitability, and while one can be slow to adopt the same, it must be accepted over time. This is more so as a start has been made in almost every industry. There are definite gains to be made by adopting AI, but concerns remain for both companies and governments.

What the WEF survey shows
A survey carried out by the WEF among economists revealed some interesting results. Around 54% of those surveyed agreed that AI will lead to displacement of existing jobs, indicating acceptance of this outcome. Around 45% believed that AI will increase profit margins of companies using more AI, which means efficiency gains are to be had. Thirty-seven per cent felt that there would be increased access to goods and services, and 30% voted in favour of the affordability of goods improving. Around 24% were concerned about increasing concentration in industry, while 21% had apprehensions about discrimination against some demographic groups. These results broadly tell us everything about the pros and cons of AI.

Efficiency gains across industries
How does it stack up in India? It is almost unequivocal that there are efficiency gains to be had across various industries. Customer service is one area across all companies which will be enhanced with the greater use of AI, as it involves creating chatbots which can address most issues that are faced by people. Almost all service sector industries have started using such tools to enhance efficiency, and it may soon obviate the need to have call centres to address issues. In fact, all businesses which face the retail customer will have to necessarily adopt AI to enhance customer experience.

Use of AI in key sectors
Let us see how it is used in different sectors. In the BFSI space, it is being used for credit evaluation, as AI can pick up all information of the company which seeks to borrow funds and can assemble the same and make predictions on the servicing of the same. With algorithms running, the right price can also be suggested. The same tools can track the company as part of the credit monitoring process and throw up signals on delinquency based on predefined indicators. Therefore, there is an end-to-end solution being provided. Further, fraud detection also becomes easier with the use of AI and hence can add a lot of value for the industry.

In the case of the IT sector, there are already several changes taking place, with the entire coding process and programming being outsourced to AI. Further, solutions offered by these companies to clients are already using AI to speed up projects with higher levels of efficiency. In retail, the entire customer relation module is being programmed through AI to ensure better delivery of products. In fact, having all data on customers frequenting a store helps to ascertain tastes and preferences, which help in stocking goods. In healthcare, the supply chain management is being provided by AI. Therefore, this is something which is inevitable in any business, and there are clear advantages of using the same.

AI in planning and strategy
AI is used progressively by companies for planning business in the future, and strategies are based on inputs provided through AI tools. It becomes easier to scout the environment, bring in global perspectives and assemble data on various aspects of business, including what the competition is doing when budgeting.

Cost and energy concerns
There is, of course, the cost of using AI, as technology is not cheap and the consumption of power has also increased commensurately. WEF reckons that by 2035, global data centre electricity use could exceed 1,200 terawatt-hours, nearly triple the 2024 levels. There is a need to align AI growth with energy system capacity and sustainability goals. But companies reckon that over time these costs would come down and finally add to the bottom line. Leaving aside these costs, how does this stack up for a country like India?

India’s labour challenge
India is a labour-surplus economy, with a very large pool of youth. The challenge is that the skill sets are still lacking, and while the numbers are large, their employability is limited. This is one reason as to why the largest employers today are logistics and construction, where few skills are required. Therefore, hiring employees with the requisite skills will be a challenge.

Job losses and reskilling
Further, there is concern about job losses. Companies using AI progressively will need to address the issue of handling existing staff, which needs to be reskilled, if possible, or let go. This is a major challenge given that the age barrier often comes in the way of reskilling. Therefore, job losses are bound to mount with progressive use of AI. While it is true that new jobs will be created as AI becomes a part of the curriculum of various courses at the university level, the existing staff would face the threat nonetheless.

Inequality and MSMEs
The second major issue which also comes out in the survey is that of inequality. While large firms will be able to invest and leverage the use of AI, the same will not be possible for the MSMEs, given their limited financial strength. This will further exacerbate the wedge between the two, and there is the possibility of being out-competed in the industry.

On the issue of inequality, it is accepted that those with requisite skills will find takers quite easily, which will also go with much higher remuneration than the conventional roles. It is already seen that the IT sector offers the highest remuneration to engineers compared with any other industry. The same will happen when it comes to the use of AI, as all industries will require these skill sets to design their framework for their operations, which can stretch from manufacturing to customer service.

What do the budget numbers say? Forbes Feb 2nd 2026

 

https://www.forbesindia.com/article/upfront/column/what-do-the-budget-numbers-say/2990998/1

Union Budget 2026 is centered around debt discipline, new sectors, and domestic capabilities in the context of high borrowings and an uncertain global economy

The budget has been drawn up quite cogently, covering all possible aspects in the fiscal space, giving incentives where required, while following the path of prudence. Two things stand out. The first relates to the data points, which raise six interesting issues that will have implications in the medium term. The second is the foresight shown in terms of focusing on emerging sectors, which makes the Budget contemporary in the context of the emerging reality.

First, when the budgetary numbers are examined closely, several issues arise in the context of fiscal consolidation. True, there is a determination to bring the ratio of debt to GDP to 50 percent by 2030. For this, the fiscal deficit ratio has to be lowered, probably to 3 percent eventually, to reach this target. For FY27, the Budget manages things well, with the fiscal deficit ratio being at 4.3 percent, which, however, is only marginally lower than the 4.4 percent of FY26. It must be pointed out that this number would be subject to change when the new GDP series is released, which can have a different number as the denominator when the FY26 figure is revealed.

The number which stands out is the gross borrowing programme of ₹17.2 lakh crore, which is very high, though the net borrowing programme has been pegged at ₹11.7 lakh crore, which is on par with last year. The clue is in the repayments of ₹5.5 lakh crore. This number will continue to be high and will climb as debt taken in the past starts maturing. This means that the market has to be prepared for this tendency and, hence, even low fiscal deficit ratios will result in higher absolute numbers, which have to be financed through market borrowings and other sources like small savings. Therefore, this will be a new normal, and the market should ideally look at the net number to get a realistic picture.

Another number which stands out is the miscellaneous receipts of ₹80,000 crore. This will include both disinvestment and asset monetisation, though in the recent past the focus has been on the latter. But this will be the way forward for the government, and this has also been subtly mentioned in the budget, that assets of public sector units will be put to better use. This will, for sure, be a significant contributor to budgets in the future too and will be reflective of the prevalent ideology.

The third number which stands out is the non-tax revenue component of dividends from banks, FIs and the RBI. Last year, the number was ₹3.04 lakh crore, and it will be ₹3.16 lakh crore in FY27. The contribution of the RBI to this component was very high last year, at above ₹2.6 lakh crore. This indicates that even in FY27, a similar contribution from the RBI would be expected and, going forward, could also become an important component of the budget.

Fourth, on the expenditure side, the interest payments outgo is significant at ₹14.0 lakh crore, compared with ₹12.74 lakh crore last year. This increase is of nearly 10 percent. The broader issue is that progressively, as deficits are incurred, the interest component will increase. Presently, it constitutes 24 percent of the overall Budget of ₹53.5 lakh crore. This is something that future budgets will have to keep in mind, as it does put constraints on other expenditure, since this cannot be compromised. In fact, this can be linked to the overall borrowing of the government, where higher borrowing will lead to higher interest costs too.

Fifth, the budget has increased the STT on both futures and options. But the budget does not see revenue coming down, which means that overall trading will not really decline but continue to be buoyant. Hence, this can be read more as a measure to curtail retail participation than to impose a cost on the long-term investor.

Sixth, the GST collections this year will be subdued, with the compensation cess being withdrawn. This will again be something that will be part of the future budgeting process. Growth in collections will be more contingent on buoyancy in consumption. This is a result of lower GST rates, which have affected revenue in FY26 too, which came in lower by ₹52,000 crore. The ramifications will also be for states when they draw up their budgets, as the two move together.

The other highlight of the budget is the futuristic view taken when focusing on sectors. Quite appropriately, the Budget has looked at rare earths, data centres and waterways. With the global environment changing, there is a need to become more self-sufficient in certain areas, and this is where the rare earths push fits in. Data centres become important when we talk of GCCs (global capability centres), as there are inherent advantages for India which have to be leveraged. The focus on inland waterways is significant, as this potential has not quite been acted upon in the past and, by doing so, can help not just to utilise this resource but also foster the logistics sector.

Hence, this budget has far-reaching announcements, even though there is not much done on the taxation front. However, as explained here, drawing up future budgets will be interesting, given the fiscal targets that have to be achieved.