Editors Column

To say that former finance minister Yashwant Sinha has opened a can of worms by penning a scathing critique of the Modi government’s economic policies will be an understatement, as the article not only exposes the ruling dispensation’s ostrich approach to problem solving but also the internal power dynamics of the Bharatiya Janata Party (BJP).

Fear hangs over Dalal Street as the long awaited flight of capital has begun. That the Indian economy’s woes were masked by a unidirectional market appears to have ended for the moment. In just two months, foreign portfolio investors have pulled out over $2.7 billion from Indian markets, the bullish sentiment has turned negative and is now bordering on restlessness.

Power for all with ‘one nation, one grid and one price’ is a powerful slogan, albeit difficult to back. Prime minister Narendra Modi’s campaign to provide electricity connection to four crore households by next year-end is a positive. After having driven the initiative to take power to over 640,000 villages, the proposal to cover four crore families is an ambitious target.

The news that the government is planning to pursue merger of various oil PSUs to boost the economy, comes as a surprise. How the merger of PSUs would push the economy is a question that does not have any easy and clear answer, probably not even with our policy makers. Nonetheless, the push for mergers bring two important issues related to oil companies.

Opening up the corporate bond market to widen and deepen the offering in Indian debt to both domestic and foreign players will be a significant reform and ensure larger integration with global peers. FPIs have been hungry for Indian debt and are waiting for the cap to be increased. Their net investment in Indian government and corporate paper has been gangbusters this calendar year.

The first step towards integration of both equities and commodities markets has been taken by market watchdog, Securities Exchange Board of India (Sebi). The latest Sebi notification issued on Thursday has allowed brokers and other intermediaries to operate under one roof and a unified licence.

Even if finance minister Arun Jaitley has made up his mind to pump the economy with a clutch of measures, he enjoys very little head room for additional spend of about $7.7 billion or Rs 50,000 crore that’s reportedly the size of the stimulus package.

Telecom regulator, Trai decision to slash the interconnect usage charges (IUC) by 57 per cent to six paise per minute on all mobile calls is a welcome move as it benefits millions of consumers. India’s sunrise sector has also proved to most litigious and once again the newbie is going to face a legal challenge from the incumbents.

De-carbonisation of Indian roads is set to trigger a big churn in the automobile industry, which is diversified and entrenched with the presence of Motown majors. But now, it is set for an overhaul.

The decision by capital market regulator, Securities and Exchange Board of India (Sebi), to suspend trading of stocks of 331 companies is being keenly watched. While the regulator is duty bound to weed out bad companies from the capital market’s eco system, any action needs two careful considerations. First, all actions should be able to stand judicial scrutiny.

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