Vodafone’s India tax victory may come with a twist 20 Jan 2012 The UK phone giant’s $2.2 bln Supreme Court win is great news for India’s battered reputation. It also bodes well for firms like AT&T, which are threatened with similar bills. But if the government now changes the law, future offshore M&A deals won’t escape tax so easily.
Essar Energy’s risks outweigh any likely rewards 20 Jan 2012 A legal defeat has hammered shares of London-listed Essar Energy, deepening losses since the 2010 IPO of the India-focused power group. Though big risks were outlined in its prospectus, and are now more realistically priced by the market, the shares are still likely to struggle.
Unravelling India, Part 3: Demography 20 Jan 2012 It’s common in India to say that, even if the country suffers from short-term political paralysis, the long-term growth prospects are great because of its burgeoning population. But is that really so?
Sahara’s judgment day beckons for 23 mln savers 19 Jan 2012 There’s a lot riding on the $5.5 bln case against India’s Sahara group which reaches the Supreme Court this week. Regardless of the outcome, the amount of cash raised and the vast number of investors involved mean confidence in India’s financial system is at stake.
Unravelling India, Part 2: Corruption 19 Jan 2012 What’s the best way for India to slay corruption: punish the culprits or make government so transparent that it is hard for bribery to find places to latch onto in the first place? The answer is both.
Ambani brothers’ mixed fortunes tell same story 18 Jan 2012 Both tales tell the same story of declining opportunities for investment in India. Mukesh may be cash rich while Anil is in stark need of funding. Some think that has the making of reconciliation. That’s unlikely. Mukesh would rather buy his own shares than those of his brother.
Unravelling India: Part 1 18 Jan 2012 India is wasting a good economic crisis. Key reforms tend to follow economic slowdowns. Not this time. Instead of springing into action, the political system is paralysed. The best it can offer are handouts and subsidies, which will further exacerbate the country’s problems.
Softly way on Indian governance may pay for T. Rowe 17 Jan 2012 T. Rowe Price of the U.S. has 26 pct of UTI, the Indian fund manager. But it can’t seem to agree with co-owners about who should run the business. New Delhi may want its say too. There’s talk of sticky rifts but the best way forward might be to embrace firm-but-quiet compromise.
India’s Reliance on Chinese cash comes with risks 17 Jan 2012 India Inc is feeling the pinch as dollar liquidity dries up. With EU banks retrenching, Asian competitors are picking up the slack. It’s nice to have options but Chinese funding is still seen as a last resort. Politically hard to swallow, it often comes with strings attached.
Gandhi-Hazare nexus important to Indian economy 27 Dec 2011 Rahul Gandhi may well succeed his mother Sonia as head of the ruling Congress party in 2012. One challenge is to claim the anti-graft message of Anna Hazare, a follower of the iconic Mahatma, before the opposition does - and harness it to help boost investment and growth.
India wages inefficient war on malnutrition 19 Dec 2011 The country still suffers from this most basic sort of poverty – 74 percent of children are anaemic. The government plans to double its food subsidies, to 2 percent of GDP. The idea is good, but such programmes should be well targeted and affordable. The new plan is neither.
Hugo Dixon: 2011, a year of Gandhian struggle 19 Dec 2011 Nonviolent conflict has enjoyed a banner year: the Arab Spring, the Occupy movements, the anti-corruption campaign in India and stirrings of protest in Russia. But for the technique to fulfil its potential, clarity of purpose, unity and nonviolent discipline are required.
India’s inflation puzzle may have unusual answer 16 Dec 2011 It’s not intuitive, but cutting rates may be the best bet in fighting rising prices. The central bank can’t really raise rates because the economy is weak, and flat rates will achieve little. Dropping them, meanwhile, could perk up the market and halt the pressure on the rupee.
India’s growth requires fundamental tax reforms 15 Dec 2011 Only 3 pct of the Indian population pays income tax and the total take, as a proportion of GDP, is well below international peers. Anti-corruption campaigners focus on riches parked offshore. But India’s economy will be threatened unless New Delhi plugs tax holes at home.
Rupee’s decline adds to India’s woes 12 Dec 2011 The rupee has fallen 17 percent this year. Self-inflicted wounds and worries about troubles elsewhere have led to a flight of the capital which India needs to fund its current account deficit. New Delhi, already in turmoil, is running out of firepower to deal with the impact.
India shuts up shop 5 Dec 2011 What seemed like a turning point last week, when the Indian government announced it would allow foreign investment in retailing, now looks to have become an embarrassing U-turn by the beleaguered Indian government. India can’t afford to continue tarnishing its brand.
BRIC success shows the power of a good idea 28 Nov 2011 Goldman’s Jim O’Neill invented the acronym for the leading emerging markets 10 years ago. What started as a good economic theme became a state of mind – the embodiment of a global power shift. So far, so good, but at least one BRIC is likely to disappoint in the next decade.
Tata keeps things in the family 23 Nov 2011 Cyrus Mistry’s appointment as Ratan Tata’s successor continues the habit of dynastic succession in Indian companies. That may not be such a bad thing. But Mistry can promote outside talent by stepping back from the chairmanships of Tata Steel and Tata Motors.
India edges open the door to more foreign capital 18 Nov 2011 There are signs that India is getting serious about allowing more international funds to flow into its economy. External pressure for reform is slowly starting to tell on New Delhi’s policy makers. But shortage of capital is the key driver.
Gloats about India’s Icarus miss the point 16 Nov 2011 For many, Vijay Mallya embodies the unsavory flamboyance of India’s newly rich. Some see the problems at the Kingfisher airline he founded as comeuppance. But though grave dangers stalk the entrepreneur, the turbulence in Mallya’s flight path is not all of his own making.