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Showing posts from February, 2011

Invest Here Or The French Alps: Can Union Budget 2011 Fix ?

Ms Artha Property Real Estate  Services has today advertised luxury apartments starting at  Rs 1 crore (approx $220,000) in today's newspaper. If you live in any of the four or five big cities, you must be reaching for your cheque book. I almost did. Hold on. These properties are not in Gurgaon, Noida, Bandra or Andheri. Actually, perish that thought. These  properties, we are told, happen to be  in the French Alps (Viry). Oh, that's just  10 km from Geneva.

The  luxury apartments advertised range from 470 square feet to 870 square feet + balconies. Of course, 75% finance is available (from a Swiss Bank I would think) at 3.4% interest and monthly EMIs are lower than Rs 20,000. And  Ms Artha Property promises that possession is April 2013. Now that concerns me. But site visits are promised in March, so reckon you can go see for yourself. Which is doing better than many folks I know who bought properties without seeing anything in Mumbai. And they still are'nt seeing anything…

What If Oil Hits $200

I remember asking then Finance Minister  and now Union Home Minister P Chidambaram what would happen to India's economy if oil went to $200 a barrel as was being widely predicted towards end 2008. Since it was already $147 a barrel, that figure didn't seem impossible.

Modern history  was of course kinder to us. Not only did oil prices plummet, it brought down everything with it, including the global financial system. Actually, it was the other way round but, as many would argue, though it really does not matter.

Tensions in the middle east have pushed oil prices to $106 a barrel and analysts, I read in some reports, are predicting a return to the $147 regime. Perhaps that what oil speculators are waiting for and in some ways prepared for. The modus operandi is the same, the circumstances are different. This time its Gaddafi we are worried about. Last time it was Wall Street.

Fruits Of Growth

The Government here says the  key priorities for 2011-12 are controlling inflation, protec…

What The PM Should Have Done

I read, from the weekend newspapers, that a 90-minute interaction between the prime minister and television journalists last week didn't go too well for the former. Going by reports, Prime Minister Manmohan Singh  ducked questions and was not assertive enough. Though, as has  been amply pointed out by the few who know him and many who do not, I have never known him to be assertive.

The problem lies elsewhere. When someone invites you to an interaction of this nature, you presume he or she has a message to deliver. A politician in power has the luxury, some might say, of calling you over and then responding to questions that are uppermost on the mind, your's  mostly rather than his or hers.  Of course, politicians know only too well that media tends to pounce on them on issues uppermost on their  mind - the  agenda be damned.

So, its a Catch 22 of sorts. Do you, the politician, come prepared with a  thought out,  strategically important, introductory message that allows you to se…

Indian Venture Capital: Funding The Billions

Luis Miranda, presently Chairman of IDFC Equity and Sumir Chadha, presently MD of Sequoia Capital are veteran Indian venture capitalists. Both have been around for more than a decade. Both have `discovered' and nurtured entrepreneurs in different spaces. Luis can claim some credit for the initial success of infrastructure groups like GMR and Sumir, the likes of Cafe Coffee Day, JustDial and Carzonrent..which tells you something about the diversity.

Both were part of a panel discussion I was moderating last night at the VC Circle's  Limited Partners Summit  at the JW Marriott in Mumbai. We went through a brief history of  investing, including the challenges posed by  volatile markets and staying the course. Both admitted that the learnings had been tremendous, investments had gone wrong as had, more importantly, their judgement of some of the entrepreneurs behind  the ventures. The good news was that there seemed to be more rights than wrongs.

The discussion was wide ranging but …

Financial Inclusion Begins @Home

Out of personal curiousity and professional interest, I am constantly in conversation with the banking and financial system  trying to understand how they can (and will) play a greater role in spreading financial inclusion in India. While its fairly clear that financial inclusion does not end with opening a bank account, its a very important start because close to 70% of India's population does not even have bank accounts.

The Ministry of Finance, along with the Indian Banks Association has just  launched the  Swabhimaan initiative, aimed at taking banking to some 73,000 villages having a population of 2,000 by March 2012. Electronic banking (at least technologically) is now  accessible by most people in and parts of India. Combine this with the mobility of identity through the Unique Identitification Authority of India (UIDAIs) Aadhaar project and  someone who has been out of the system for all his or her life will now become part of it. And there are other benefits, like subsidy …

China Beats India On Black Money And Yet..

An economist from Washington-based think tank Global Financial Integrity (GFI) quoted in the Business Standard today says India lost $213 billion in illegal flow of money out of the country between 1948 and 2008. That would presently be worth $462 billion, assuming standard rates of return - all money should earn returns, shouldn't it  ? The other oft-quoted figure for black money stashed overseas  is $1.4 trillion.

The economist, Dev Kar, has an interesting point. He says that faster rates of growth in the post reform period have not been inclusive in that the income distribution is more skewed today, which in turn has driven illicit flows from the country. Thus, the result does not hold in the pre-reform period when growth rates were low and income distribution was more equitable.

This is an interesting point. And not surprising in some ways. All you have to look at China which has grown at 10% or thereabouts for some 30 years ! And leads the league tables for illicit outflows. Th…

China Railway Comes Closer, To India

Three months ago, I argued in an article that China's railway lines were inching towards the Indian border. The argument was of course based on reports of China's own plans to expand its railway network in the Tibet.

I also argued that towns like Tibetan towns like Nyangtri  (Nyingchi)  - which will eventually link to Lhasa - already boasted  swank airports. So, infrastructure investment had already flowed liberally into the region. The  railway line was following the initial thrust, not preceding, as would historically have been the case.

The Indian Express today reports with greater finality that China is to extend its Tibet railway network into the Chumbi valley area, next to Sikkim and the Siliguri corridor. The newspaper says the  China's Railway Ministry latest map shows lines extending from Lhasa to  Zangmu on the Nepal border, to eventually extend into Nepal and even Kathmandu. Another line will branch out midway at Shigatse, and end up at Yadong, which is on the oth…