infotonic

The world is changing, and changing fast. Countries from the west that dominated the global economic and financial system still do so though their dominance has reduced manifold. And when it comes to energy consumption - the driving force behind growth of economies - we have reached a very important inflection point. As per statistics released by BP, primary energy consumption in the non-OECD countries exceeded OECD consumption for the first time in 2008. OECD, or Organisation for Economic Co-operation and Development, is an international organisation of 30 countries like the US, Canada, European nations, Australia and Japan. And given the fact that these countries have seen significant slowdown in their growth rates over the past few years, the energy consumption picture was bound to change, and it did in 2008. In fact, the Asia-Pacific region accounted for 87% of the world's energy consumption growth during the year. While the Chinese consumption growth slowed for the fifth conse...

Worried over the rising import of steel products in India, the government has been mulling over increasing the import duty on steel products from the current level of 5%. Terming the duty to be ‘insufficient’, the steel industry has demanded it to be raised to 20% instead. India has become a preferred dumping destination for global steel mills due to two major factors, rise in domestic steel consumption and lower price of steel products in international markets (due to oversupply). Favouring the increase in import duties, the management of steel major, SAIL, recently gave its view stating that “If the government considers raising the protection level by raising the general import tariff, I suppose that would be welcome at this point."

India's fiscal position is weak. In simple words, it has been spending more than it receives by way of taxes and other collections. To fund this spending, the government has resorted to heavy borrowing by way of issuing bonds and populist measures like subsidies on fuel, amongst others. Despite a new government that was said to be bringing in reforms very aggressively, such populist measures are not proving that easy to do away with. If the government is to give further stimulus to the economy, it will have to borrow more, consequently not only further deteriorating its fiscal position, but also bringing in the risk of further upward pressure on interest rates which will in turn be bad for the general investment scenario in the economy. Highlighting this very predicament, credit rating agency Moody's has warned that India's fiscal position suggests caution, as the government is not in a position to offer sustained support to a weak economy. Further, most developed countries...

That Dr Doom aka Nouriel Roubini is not seeing any 'green shoots' (a metaphor used to describe initial signs of economic recovery) has been largely publicized in the media in the past few weeks. However, for the first time in many months, he has expressed his views on the Indian economy and its stock market and sadly, it does not make for a very good reading. Speaking to a leading business daily, Roubini was of the opinion that the Indian stock markets along with other emerging market equities may have run up too soon too fast and there is a potential asset bubble building here. Although he agrees that part of the reason the stocks have rallied is because of better fundamentals in these markets, he remains concerned about the easy-money situation which is pushing up asset prices sharply. Roubini also proffered his views on whether inflation because of money printing by most governments or deflation because of rising unemployment and lower consumer spending is staring us in the ...

Here's another reason why the global economic recovery may still be vulnerable after all. Money, the raw material that helps produce virtually all of the nation's goods and services is still in short supply in US, the world's largest economy. As per CNN, the 21 biggest recipient of the government's capital injection also known as TARP funding reduced their lending to American consumers and businesses by 7% in the month of April. While the banks argue that there aren't just enough people to lend to, the borrowers on the other hand argue that credit is indeed tough to come by. Whatever be the case, the one who is clearly suffering is the US economy, as slower lending and higher GDP growth do not necessarily go hand in hand.

As the day for announcing the Union Budget is approaching, there are speculations, expectations, apprehensions and hopes all around. In the pre-budget meeting with the party office-bearers, the union Finance Minister, Pranab Mukherjee was inundated with the party's wish-list as well. The demand was for an 'aam-aadmi' centric budget, focusing on four sectors – education, health, infrastructure, and agriculture. The specifics included increasing the minimum support price (MSP) for crops like sugarcane, giving income-tax reliefs to salaried class, extending benefits to senior citizens and soft-loans for minorities, increasing diesel-subsidy for farmers and fishermen. It is a welcome sign that infrastructure sector emerged as the first priority, but it is a little sad why nothing was discussed about reforms like disinvestments, amendments in SEZ bills, insurance bills and other finance sector reforms. Though, Finance Minster didn't disclose any specifics of the budget, look...

The saga continues…of warring brothers, and their confused stakeholders! I am referring to the continued rivalry between the two Ambani brothers – Anil and Mukesh. And a leading news daily (almost all papers have carried it) has rightly called the fight a 'tug-of-gas'! In simple terms, the latest battle is between the first brother asking for a higher-than-originally-agreed-upon price for the gas that he will sell to the other, and the second refuting to pay the higher amount. Now, the second brother (Anil) has got some reprieve as the Bombay High Court has asked the first brother (Mukesh) to sell gas at the originally agreed upon price, which is 44% lower than what he is asking for. This has caused a lot of uncertainty in India's nascent natural gas industry, and could potentially deliver a sharp blow to the fortunes of Mukesh-owned Reliance Industries (RIL). While RIL had gone to the court to uphold the government-approved price of US$ 4.2 per mbtu (Million British Therma...