Affluence creates jobs: the top of India's pyramid plays a vital role: MInt 11th May 2026

 https://www.livemint.com/opinion/online-views/indian-affluence-economy-wealthiest-billionaires-luxury-premium-market-job-creation-11778159088405.html#google_vignette

Banking likely to be steady in FY27 Financial Express May 7th 2026

 The banking sector fared quite creditably in FY26 notwithstanding tariff threats and war. Bank deposits grew by 13.5% and credit by 16.1%. The question now is, how will business be in FY27?

Several developments in March and April have a bearing on banking this year. The GDP growth number is the primary factor that will guide bank credit growth. While there are links with nominal GDP growth, it can be said with reasonable confidence that a double-digit growth rate looks likely more on account of a higher GDP deflator than a real GDP growth rate. The latter would slow down to 6.9%, according to the RBI. The Budget had spoken of a growth rate of 10% in nominal GDP, which could be exceeded given the higher inflation potential this year on account of both the war as well as possible monsoon effects with El Niño developments later in the year. Growth in credit could thus be more in the region of 12-14%, which is still impressive albeit lower than last year.

Growth across sectors is something to watch out for. It appears companies in the larger size bracket would come back to the investment board this year. War may create delays as there is just too much uncertainty. More important is the action that the government may take on petrol prices. Although there may not be any immediate price hike, budgetary concerns will cause a change in view at some point. This can upset the consumption story. Also, there is a possibility of rate hikes this year, which the OIS (overnight index swap) market indicates.These factors will play on the mind of companies which could be looking to invest in capital.

So, it looks like retail credit will be the driver once again, and housing and auto loans will be the focus. Gold loans may be less buoyant given that prices have come down and it is believed that the boom may be behind us. Unless there is a direct impact on job creation and therefore income, retail credit will be on the upward trajectory this year. Curiously, the threat to employment is linked more to AI and its proliferation than the war.

Other sectors like agriculture and micro, small, and medium enterprises would be on a steady path with their nature of mandated credit likely to help maintain momentum. The services segment typified by trade and non-banking financial companies would also continue to see traction. For the former, a growing economy augurs well while for the latter, funds from banks are like a raw material needed for business.

The fate of deposits is interesting. All this while, there has been considerable competition from the capital market. In a declining interest rate scenario, households in particular have tended to look for alternatives, especially in the capital market. Interestingly, while small savings offer higher returns than deposits, the shift has been marginal. It is the capital market that provides a viable alternative with returns of 10-14% depending on circumstances.

Is the capital market well-valued today? This is a call that investors have to take. The major correction seen due to the war has meant there can be a smart upside purely on the grounds of returning to a past equilibrium. That can mean Sensex crossing the 80,000-mark. This will be a consideration for those who weigh the two markets all the time. Bank deposits did gain substantially in March with an increase of Rs 10.39 lakh crore of the Rs 31.15 lakh crore witnessed during the year, which is almost a third of the incremental deposits. While a part of the increase was due to the year-end phenomenon, the war’s impact on stock markets also contributed to this migration. The Sensex fell by 11.5% in March.

It is believed that while a high deposit growth of 13.5% won’t be maintained, it would be in the region of a steady 10-12%. And if the repo rate is increased during the course of the year, it could touch the upper end of this estimate.

Therefore, banking business will be steady and should contribute well to GDP growth. Last year, growth for the component of GDP denoted under “financial, real estate, IT, dwelling” was 9.9%. It should be 9-10% if deposits and credit maintain the growth rates forecast for the year.

Banks will have two primary concerns. The first is the quality of assets. The present situation of stressed supply chains and higher cost of petro-based inputs could persist even if the war ends soon. This will impact profit and loss accounts of companies in sectors such as petrochemicals, fertilisers, paints, glass, ceramics, textiles, and auto. Smaller units are more vulnerable, so they will need close monitoring. The second is that new investment projects or expansion would be cautious in the first half of the year, which means the focus has to be on alternatives.

A related issue concerns the space of treasury income. Typically, higher interest rate regimes mean lower profits but higher margins on credit. This can be a likely scenario especially if the RBI increases rates (based on evolving conditions). At any rate, the regime of declining interest rates appears to have ended, so the possibilities of an upside in treasury income are limited. This is reflected in bond yields which have been intransigent for quite some time.

A look at how monsoon affects India's economic growth: Free Press Journal: 5th May 2026

 

West Asia war impact managed well, but some concerns remain:: Business Standard 29th April 2026

 The West Asia war has been on for two months and has caused considerable disruption across the world. The question is when will it end? There is no answer here as what was expected to end in no more than a month’s time has gotten prolonged with even more uncertainty.

 At the physical level, there has been disruption in supply of goods, primarily oil related, while transport services (both sea and air) have been affected. While alternatives for the latter have been gradually mediated, the shortages in supply of oil and gas is still a major challenge. 

 

In this situation how has India done? 

The short answer is that we have done rather well given the conditions. But there are two aspects here. The first is the real economy, which has been managed astutely by the government. The second is sentiment as reflected in the market. Here the regulator, Reserve Bank of India (RBI) has been monitoring the currency and bond markets and plugged all possible volatile elements. But beyond a point, the market rules have prevailed.

At the real economy level, while sectors would be affected which in turn will affect consumption and investment, the overall edifice is resilient as seen by the RBI forecast of 6.9 per cent in gross domestic product (GDP) growth. There have been supply disruptions in the form of gas supply, which has affected fertilizers' production. Efforts are on to increase imports so that the kharif crop is protected. In fact, the supply of LPG has been handled well with rationing being initially pursued as domestic production was also increased. While the restaurant business was affected to begin with, there are signs of things going back to normal very gradually though cost increase is unavoidable. Sectors such as paints, glass, ceramics, pesticides, fertilizers, automotive among others have faced supply side challenges that are being gradually addressed. They would remain vulnerable until such time that the war is on. 

More importantly, the inflation has been kept under control as of now with the government absorbing a large part of the crude oil cost increase and protecting the consumer. This will mean a hit to the fiscal numbers, and will hence be a challenge for the government going forward. RBI's forecast of 4.6 per cent for the year does indicate that inflation will be higher, though not going out of hand. 

But in this environment, private investment is bound to turn cautious which will be the second successive year where only some sectors will see an uptick. Last year, the tariffs imposed by the US did come in the way of investment. This time it is the war. 

Unpredictable markets On the markets side, things have been more explosive. The stock market has been extremely volatile with the Sensex declining from the 80,000-plus levels. The gyrations are in response to any news on the political front and hence makes things unpredictable. The 10-year bond yield has risen from the 6.60-70 per cent range prior to the commencement of the war to 6.80-7 per cent in April. While the RBI has ensured there is surplus and comfortable liquidity the market has priced in higher borrowings of the government due to slippages in revenue (excise cut, lower profits and tax payments from OMCs) and higher subsidy on fertilizers (possibly 20 per cent higher than budgeted).  Also with higher US treasury yields, the spread of 230-250 bps is being maintained. 

On the currency side, the RBI has been nimble footed in terms of operations in the spot, forward and NDF markets as well as with fine-tuned regulation to control speculative activity. While the rupee has remained range bound with the Rs 93-94.5/$ rate being maintained, the foreign currency reserves have come down by around $ 16 bn which can be taken as the cost of forex management. 

 

A prolonged war will mean a downside to GDP growth, an upside to inflation and extremely uncertain markets. This also means that the interest rate cut cycle could well be over. 

Book review of Streetwise: Getting to and through Goldman Sachs: Financial Express 25th/26th April 2026

 Risk, Resilience, and the Wall Street Pecking Order: Lessons from Lloyd Blankfein

Goldman Sachs is one of the few investment banks that stood out at the time of the financial crisis of 2008. Much of this resilience can be attributed to Lloyd Blankfein, who was heading the bank at that time. Streetwise: Getting to and through Goldman Sachs is his story. Blankfein takes readers through the important stages of his life with a distinct sense of humour. Like when he was asked by CNBC of being worried about angry mobs storming his house, his reply was that he had a doormat.

His life story is not very different from other people who made it big from rather modest beginnings. Starting from scratch, so to say, he managed a seat in Harvard from where he went on to work with J Aron, which was a commodity trading firm. His transition to Goldman Sachs happened when J Aron was acquired by GS. Blankfein describes the extremely illuminating hierarchy of prestige on Wall Street, which Goldman Sachs also followed.

Investment bankers sit highest in the food chain, followed by traders. Within traders, equity traders are higher placed than those dealing in fixed income. Within fixed income, longer duration bond traders were higher in pecking order than short-term traders dealing with the money market. But all these were more important than currency or commodity traders. Also, there was a prestige gap between traders who took risks and sales people who brought in business. It would be interesting to see if such hierarchies exist in broking houses and banks in the Indian context.

Wall Street Food Chain

Blankfein’s biggest challenge at Goldman Sachs once at the top was handling the financial crisis, which he describes as a ‘double header’. The media and regulators were worried about the existential crisis of all investment banks, as it was the order of the day for them to come tumbling down with the meltdown. This was something that was managed by the firm due to some smart thinking even before the crisis. But, more importantly, he highlights how the reputation issue was tougher. While there was admiration and awe to begin with when the firm went through the period successfully, some were aghast at the ‘how’ of it, which gave way to wild speculation.

The clue, according to him, was the conscious strategy of risk management at the time of the crisis as the company had been evaluating the mortgage values of their portfolio even before the problem came up. This was important because they were able to smell the danger before it set in. By January 2007 they were quite neutral in terms of positions on these exposures. Ironically, the author points out, that even the regulators were not aware how the defaults on subprime mortgages would have spillover effects on the AAA-rated securities. This is a lesson for any financial institution, which should be able to not just smell a crisis but be prepared for it with the risk practices in place.

Blankfein’s contribution was that he was a kind of contrarian in the way in which he operated. While GS was known to be a firm which took bold bets, his approach, given his background, was to be a worrier and not a warrior. By focusing continuously on the tail risks, he insisted on hedging all the way, which was something that helped the firm in tough times. He believed in the line: given enough time, everything will happen! Hence the department tried to account for all contingencies. This led to GS taking insurance from AIG and then further taking CDS insurance against risk of default on the part of AIG.

At a more global level, the author talks of the US economy and capitalist culture which is set around risk, resilience and recovery, helping it rebound fast successfully. This is something that is encouraged by the superstructure which actually helps to bring out the animal spirits in the entrepreneurial class. If systems are open and encourage enterprise, one can come out of a crisis and do very well.

ESG Critique

Steve Jobs did what he did after he was fired from Apple (which he rejoined); and the same holds for Jamie Dimon who had a forced exit from Citi Bank. He attributes resilience more to having better understanding of risk which is often pushed back by human nature and emotion. Interestingly, Blankfein makes a comparison between centralised decision making, as seen in China, and those based on myriads of decisions in a market economy like USA. He believes that the latter is better and makes better decisions.

China’s way of doing business in a centralised manner is not efficient and will show fissures in the longer run. There would be a large number of supporters for this view as the economy today is no longer in the same position as it was, say, a decade back. A market system identifies mistakes and forces change better. Hence the information superhighway propagated by Al Gore would have worked less efficiently in case it was governed by more of a technocratic than democratic regime.

Now, the author takes a rather provocative view towards the end in his ruminations where he openly talks against the language of stake holding as it muddies the water around the respective responsibilities of government, corporations and nonprofit sector. He believes that the fad for ESG investing, which puts the largest asset managers in the position of pushing for various kinds of policies, seems to be misguided.

It is, in his view, asking finance to step in because politics does not produce the desired outcomes. He is all for taxing and regulating oil extraction. But asking Exxon to justify their existence by building windmills is not in order. This is a powerful and bold message, which few corporates are willing to speak about, however much they might feel strongly about it. This view will find a lot of support for sure.

Streetwise is not a book which teaches CEOs how to do business, though there are valuable tips to be taken for sure. He does believe that his approach was more of partnership with colleagues which involved cajoling, socialising and sharing information. Sounds the right way to go given that today’s generation deserves more understanding to get the best out of them.

Streetwise: Getting to and through Goldman Sachs
Lloyd Blankfein
Orion Ignite
Pp 416, Rs 799

Are freebies really a curse? Business Line 25th April 2026

 https://www.thehindubusinessline.com/opinion/are-freebies-really-a-curse/article70902677.ece

Where will the rupee go from here? Indian Express 22nd April 2026

here is little clarity over the conflict in West Asia. Any news of escalation pushes up the cost of crude oil and puts pressure on the rupee, while signs of a truce work the other way. Therefore, volatility is likely to remain.

https://indianexpress.com/article/opinion/columns/where-will-the-rupee-go-from-here-10649042/

 

Why de-dollarization might not really work at global level: Free Press Journal 22nd April 2026

 

Inflation Expectations: What are these and do they really play a role in the Indian economy? Mint 20th April 2026

 https://www.livemint.com/opinion/online-views/inflation-expectations-indian-economy-rbi-monetary-policy-businesses-consumers-price-levels/amp-11776348299173.html

Monsoons even more important today: Financial Express 15th April 2026

 Agriculture has witnessed a decline in share in GDP by ~8% over the last two decades, mainly due to higher growth in the services sector. There have been limits to agricultural growth given the area under cultivation and the productivity levels. Yet, it is the fulcrum for overall growth prospects.

This is because it dominates in terms of employment. Thus, income generated in this sector would be critical for defining the consumption and savings patterns in the coming months. The sector is still heavily dependent on rainfall with around 55-60% of the kharif output being exposed to irrigation facilities. More importantly, the spread is uneven across crops—rice has higher access with around 70% being covered, with pulses at the other end withwn less than 30-35%, and oilseeds and cotton in the middle with around 55% and 50% respectively. The latter will be more vulnerable, as traditionally, production falls when rainfall is sub-optimal. 

Two issues have come up recently which are presently potential red flags that could be raised post June, when the monsoon arrives—the first being the possibility of El Nino or winds that typically herald a weaker monsoon. May-July would need to be monitored to keep a check, and the second half of the year could be vulnerable if this occurs. The second is the initial Skymet forecast which expects monsoon to be 94% of normal. While it is too early to get the right picture, the fact that it is lower than normal requires close monitoring. 

In fact, any forecast of the monsoon at present is just too preliminary; however, having such forecasts is necessary to prepare the farm economy. In fact, a normal monsoon is often a necessary though not sufficient condition for a good kharif crop. While the aggregate number is important for a macro picture, the spread is more important. This can be gauged from the rather diverse access to irrigation for different crops, making the spread across regions and crops vital. 

Crops grown along rivers, especially in the north, tend to be less dependent on rains. The same may hold largely for crops grown in the coastal areas as the south west monsoon winds blow across this region before moving to the interiors. Hence, shortfall in rains in states like Punjab and UP may not really matter for the rice crop. However, the interiors become vulnerable and the Deccan Plateau region is always the area of focus as crops ranging from cotton (Gujarat, Maharashtra and Telangana) to oilseeds (MP, Maharashtra, Gujarat, Tamil Nadu, and Rajasthan) and pulses (Maharashtra, Karnataka, and Rajasthan) are grown here. Further, some of these crops are grown in the rain shadow area, where weak south west monsoon winds could result in the rainfall losing intensity as they cross the mountains and move to the interiors. Here, states like Andhra Pradesh, Karnataka, Maharashtra, and parts of Gujarat and Madhya Pradesh would be affected. 

The kharif crops account for roughly 50% of overall agricultural output—they determine growth the sector accordingly. However, monsoon deficiency of any significant magnitude has a bearing on the reservoir levels. This is an important indicator of water levels required for drinking (humans and animals) besides defining prospects for the rabi crop, which though less dependent on winter rains does use the resources from these reservoirs. This does not consider other erratic conditions such as excess monsoons which has in the past affected the horticulture output in states like Maharashtra, AP, Karnataka, and Telangana, causing spikes in inflation. 

Hence, monsoon progress is carefully studied and tracked for monetary policy. Interestingly, the monsoon pattern has tended to change due to climate variations with the traditional June-September season being extended to July-October. This has been a slow process and several farmers have not yet adjusted to this transformation—thus,  the sowing pattern tends to get skewed on account of the late monsoon. It’s progress is also important as crops require different levels of precipitation at different stages of flowering. 

All this means is that the aggregate rainfall, though a good indicator, does not tell the entire story. The arrival is important as is the progress. Next, the spread across states is important, followed by the coverage of various crops. But excess rainfall or late withdrawal can damage crops. This position is normally known by October, where other perspective come to the fore. 

The kharif crop, which is harvested from September onwards until November provides a clue on the rural income generated. While there are no official numbers on the rural economy, it is believed that roughly 50% would be coming from the farm sector. This income is important for supporting rural demand, which tends to peak in this period—the harvest cum festival season. Rural demand has supported the FMCG and consumer goods industries in the last two years when urban demand has tended to be weak. Therefore, monsoon is critical for companies planning their output as well as investment. 
The war has already led to prices of oil-related products going up, in turn possibly affecting pesticide and fertiliser prices. Here, the government can help. But when it comes to rainfall, it is beyond the purview of any authority, making the progress of monsoon even more important. 

Getting a grip on the forwards position of RBI: Business Line 11th April 2026

 

War shocks markets, exposing India's economic vulnerabilities: FPJ 8th April 2026

 

RBI Policy provides a practical picture of the road ahead amid West Asia war: Business Standard 8th April 2026

 The RBI policy comes at a time when there is uncertainty on the impact of the war on the economy. However, quite significantly, just before the policy was announced, a ceasefire was struck by the United States (US) with Iran for a fortnight. While it is still uncertain if the ceasefire will mean the end of the war soon, the RBI’s statement provides an official view of how one could look at the next 12 months.

 

The RBI was not expected to touch the repo rate, and a status quo seemed most appropriate under these conditions. The stance, too, has remained unchanged at 'neutral', which is significant because if there was a change indicating future rate action, it could have been interpreted as being hawkish. The tone is nonetheless cautious, which is the right approach given the uncertainty.

There are some signs that the war may have impacted the economy, though it is to early to tell as any data for March pertains to the year gone by that could raise red flags for the current fiscal 2026-27 (FY27). The purchasing manager's indexes (PMIs) look less impressive than in February though well above the level of 50. Goods and services tax (GST) collections were steady in March, but shortage of fuels has led to several units in the hospitality business at the micro level closing down. Petro-based industries are still nervous of their fuel supplies, which will have a bearing on performance in Q1. Air fares have gone up and several companies have announced an increase in their prices. 

Against this background (which is very early), the RBI forecasts of gross domestic product (GDP) and inflation can be seen. GDP growth for the year has been projected at 6.9 per cent with a downward bias which will be lower than that last year. Significantly growth in Q1 will be low at 6.9  per cent, followed by three sub-7 per cent growth rates that should capture the war disruption impact. 

Inflation, on the other hand, is projected to be 4.6 per cent this year. It does look like that while the war impact has been buffered in to a certain extent. The possible El Nino impact this year, though acknowledged, may not have been part of the forecasts. This is understandable as it is a theoretical possibility only today.

External account

 

The RBI does sound cautious on the external account as this will be the first point of impact. Exports are to get pressurized with the ongoing challenges on the sea routes. Imports shock is more severe as it involves both physical supplies as well as higher prices being paid for these products. 

 

While commenting on the rupee, no specific measure has been announced. This has been the practice where there is intervention whenever required and forex management is seldom a part of the policy. The same holds for liquidity where there is an implicit assurance of supplies as and when required. This is important because any intervention of the RBI in the forex market will mean withdrawal of liquidity, which is then replenished by the central bank. 

he market reaction has been largely unchanged from the time of announcement of the policy, though all the three markets started off better post the ceasefire announcement- stocks, bonds and currency (helped by unwinding of forwards positions too).  

 

Rate cuts can now be ruled out and the question will be more on when there can be a rate hike. A clearer picture will emerge over the next few months. The August policy will have more complete data points when contemplating rate action.

Interview with Mint on war impact on India: Mint 3rd April 2026

 https://www.livemint.com/money/west-asia-war-india-recession-risk-economic-slowdown-madan-sabnavis-household-budgets-job-market-inflation-interest-rate/amp-11775105443794.html

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.