Mumbai: Rarely does a central bank feel happy when its prediction goes wrong, but the latest release of wholesale price inflation data, on 15 April, was such an occasion for the Reserve Bank of India (RBI). The data showed that the genie of wholesale inflation had finally been bottled in India, Asia’s third largest economy, and it may remain so at least for the time being with global commodity prices increasingly moving south. Wholesale price inflation dropped to a 40-month low of 5.
Nobody knows who the smoking community in West Bengal is blaming more—chief minister Mamata Banerjee or Sudipta Sen, chairman and managing director of the Saradha Group. Banerjee on Wednesday imposed a 10 percentage point hike in value-added tax on tobacco products to raise Rs.500 crore for rescuing thousands of people who have lost money following the collapse of the Saradha Group.
West Bengal chief minister Mamata Banerjee said on Monday, “What has gone, has gone,” dashing the hopes of thousands of depositors who are on the verge of losing money kept with the Saradha Group. Sudipta Sen, the chairman and managing director of the group, was arrested on Tuesday. Why did the group fail? The causes of failure are not new.
India’s apex court has once again expressed its unhappiness with Subrata Roy’s Sahara India Pariwar, a Lucknow-based conglomerate that has at least 4,100 establishments in its fold and Rs.1.18 trillion in assets spread across real estate, infrastructure, media, hospitality, sports and finance.
At least a dozen Indian companies have been working overtime on their strategies to enter the banking sector which Reserve Bank of India (RBI) is opening up for private entities after a gap of a decade. In the first round, 10 private banks were given licences in 1993-94 and another two were allowed entry in 2003-04 but never ever was an industrial house allowed to start a bank. In fact, India nationalized its banking industry, run by industrial houses, in two phases in 1969 and 1980.
India’s wholesale price inflation dropped to 5.96% in March from 6.84% in February, at least 30 basis points (bps) below market estimates, fuelling widespread expectations of a rate cut in the first week of May when the Reserve Bank of India (RBI) announces its annual monetary policy for fiscal 2014.
India’s finance minister P. Chidambaram wants banks to chase affluent promoters of sick companies who have a high-flying lifestyle and yet aren’t willing to clear banks’ dues. He hasn’t cited any instance, but the obvious provocation for his outbursts against rogue promoters seems to be loan default by grounded Kingfisher Airlines Ltd.
Finance minister P. Chidambaram means business. On Monday, after holding a three-hour meeting with senior bankers and corporate chiefs at Taj Mahal Hotel in Mumbai, he rushed to the airport to catch a flight to Chennai and spent two-and-a-half hours in the evening at Adyar Gate Hotel in Alwarpet, Chennai with another set of industrialists and bankers to sort out the mess and look for answers to one critical question: why are projects not taking off? What are the key issues responsible for vitiating the investment climate in Asia’s third largest economy.