Archives: All articles

The United States-led war on Iraq is certain to hurt India's economic interests. Higher prices of crude oil and petroleum products would stoke inflationary fires. Civil aviation, shipping, tourism, inward remittances and exports are also going to be affected. That the war would have an adverse impact on India is beyond doubt. What is not clear is the precise extent of the impact. A lot depends on the levels at which international crude oil prices stabilize in the coming months. If world crude...

There is considerable euphoria in certain circles about the impending introduction of value added tax -- a move described by Finance Minister Jaswant Singh in his Budget speech as 'a historic reform of our domestic trade tax system' that would take place 'in the highest tradition of cooperative federalism.' There are obvious advantages of a VAT system vis-à-vis what is commonly called a cascading type tax or CTT system, but the transition from a CTT regime to a VAT regime is fraught with hazards...

Why was the high-profile Pramod Mahajan 'demoted'? Did this development have something to do with a controversial investment made by a central public sector undertaking in a multi-purpose irrigation project being executed by a Maharashtra government company? Mahajan may believe he has not been demoted, but many think otherwise. He believes he was moved from the post of minister for communications, information technology and parliamentary affairs and made general secretary of the Bharatiya Janata...

Who claims to be concerned about the small investor? Answer: Everyone. The truth: No one gives a damn. Every now and then, at seminars and conferences, politicians, bureaucrats and even corporate captains pay lip service to the cause of the proverbial small investor. Every now and then, Union ministers, members of Parliament, spokespersons of apex chambers of commerce and industry associations, not to mention representatives of regulatory bodies, wax eloquent about how the country's stock...

Imagine the controlling interest in a fertilizer corporation in which public funds in excess of Rs 670 crore (Rs 6.7 billion) have been invested being sold to a private company for barely Rs 15 lakh (Rs 1.5 million)! Sounds improbable? Well, not really. This is exactly what has happened in the case of Paradeep Phosphates Limited, a former public sector undertaking located in Orissa's port town by the same name. The sequence of events following the privatisation of this company has placed Union...

How strong is the nexus between big business and politics? Was India's largest private corporate group responsible for the federal government withdrawing its nominee from the country's largest state-owned mutual funds organisation? To be more specific, was the Ambani-family controlled Reliance group responsible for the Union finance ministry's decision to withdraw its nominee from Unit Trust of India's board of trustees? A former head of UTI thinks so, but a panel of 30 lawmakers has sidestepped...

A battle royal has broken out to control the management of Larsen & Toubro, one of India's largest engineering and construction companies with more than 25,000 employees and an annual turnover in excess of Rs 8,350 crore (Rs 83.50 billion). The tussle relates to control over the company's cement manufacturing facilities. The outcome of the conflict could have far-reaching consequences for the country's corporate sector by determining the course and the ground-rules of future takeover attempts...

It has become fashionable in certain circles to deride anything and everything that pertains to India's public sector. When there is something positive to be said about a public sector undertaking, such news tends to be relegated to the background. The recent experience of the Hyderabad-based Electronics Corporation of India Limited shatters quite a few myths about the so-called slothful and inefficient manner in which PSUs are supposed to function. After earning profits for six years in a row...

Faced with mounting reserves of hard currency, the Reserve Bank of India has taken a few tentative steps towards capital account convertibility. On the first day of November, the country's central bank and apex monetary authority allowed resident Indians to maintain bank accounts in foreign currency under certain conditions. The new facility, known as the Resident Foreign Currency (Domestic) account, would be in the form of a current account with a bank that is also a licensed dealer in foreign...

Who controls the management of India's largest cement manufacturing corporate entity, ACC Limited (formerly Associated Cement Companies)? This question was given a new twist on Friday, October 25. On that day, the Securities Appellate Tribunal directed the watchdog of the country's capital markets, the Securities and Exchange Board of India, to examine whether the Gujarat Ambuja group had gained management control over ACC after a controversial acquisition of 14.45 per cent of the company's...