• Research Summary

• Book Review

COVER STORY

PSU Disinvestment : India's Mission Possible!

-- Amit Singh Sisodiya and Ramana Pemmaraju

India's ambitious plan to raise Rs 40,000 cr in minority stake sale proceeds in the state-owned firms through IPO/FPO route seems to be on track.

COVER STORY

Disinvestment Program : A Big Thumbs-Up

-- Reena Srivastava, Sumit Kukreja

Disinvestment is important not just to bridge the gaping hole in the economy created by the stimulus packages but also to lead to significant re-rating of PSU companies.

BANKING

Inclusive Growth : Role of Financial Sector

-- K C Chakrabarty

Financial inclusion is no longer a policy choice but a policy compulsion today. The key for this is establishing an appropriate business delivery model through the involvement of all stakeholders to make financial inclusion a reality.

BANKING

Basel III Norms : Implications on Banking System

-- S S N Murthy, Bhaskar Sharma

Basel III guidelines are bold, innovative and have been well drafted. The standards will be implemented gradually and the impact will also be monitored by the guardians of financial systems and economy.

BANKING

Risk Management : Going Beyond Compliance

-- Ashish Srivastava

While regulatory compliance can help in ascertaining the safety of the financial system, compliance alone cannot curb any likely instances of financial distress or system failures.

INTERNATIONAL FINANCE

An Economy in Slide : What's Wrong with Japan

-- Mita H Suthar

The causes behind persistent economic stagnation in Japan are manifold. They range from ageing population to global recession to competition from the emerging Asian economies. The remedy lies in boosting domestic demand and taking advantage of technological prowess that Japanese firms have enjoyed since long.

INTERNATIONAL FINANCE

Japanese Economy : The Ordeal Continues

-- N Janardhan Rao

Prime Minister Naoto Kan has warned that the debt-ridden nation could collapse as low-interest policy shift has put the economy into a debt trap. Looks like the economy is caught in a vicious cycle, as it cannot afford higher interest rates, and low interest rates are no longer stimulating the economy.

INTERNATIONAL FINANCE

China's Liquidity Management : A Juggling and Balancing Act

-- Andrew K P Leung

As the world is flooded with printed QE money, China's own liquidity management, by comparison, entails more than just job creation and economic growth. Inflation control has reached top of the agenda to forestall a ballooning asset bubble. The hungry horde of the world's top hedge funds are camped at the gate as international pressure is bearing on the Chinese yuan to appreciate so much and so quickly that it threatens its very economic and social stability. Yet with an embarrassing surplus savings invested in US treasuries, China is caught in a US Dollar trap whose exit doors, if any, may not be readily available. How China manages this juggling and balancing act of liquidity management is as intriguing as game-changing, not just for China but for the rest of the world.

CORPORATE STRATEGY

- Amit Singh Sisodiya and Ramana Pemmaraju

One of the most enduring joint ventures in India Inc.'s history is now history.

BUSINESS ENVIRONMENT

Spectrum Sale : Unraveling the 2G Scam

-- Y Bala Bharathi and G P Mrudhula

The sheer success of 3G spectrum auctions has reinforced the magnitude of the 2G scam, considered to be the biggest scam in independent India, resulting in a notional loss of several crores of rupees to the exchequer.

BUSINESS ENVIRONMENT

Convergence with IFRS : A Tax Conundrum

-- Dolphy D'Souza

IFRS is very comprehensive, complex and detailed compared to Indian GAAP. The requirements of IFRS will have a substantial impact on the profit before tax (PBT) numbers when compared to Indian GAAP accounting. The tax authorities would need to conduct a detailed study of all the issues involved, and provide comprehensive tax guidance.

BUSINESS ENVIRONMENT

India's Food Security : A Holistic Approach Needed

-- Kiran Nanda

It is estimated that food grains worth Rs 58,000 cr are rotting in FCI godowns. While India needs to create 140 million tons of extra storage capacity, proper perspective and pragmatic measures towards ushering in food security for the entire country would help create massive employment and reduce the incidence of poverty in rural areas.

BUSINESS ENVIRONMENT

Emerging Markets : Outlook 2011

-- William Gamble

A large reason for the 2008 meltdown was a lack of regulatory oversight and poor information. In the past, emerging markets were so small that distortions of information only affected local conditions. This is no longer the case. So not only is there a large potential for real problems in the coming year, these problems will not be limited to just emerging markets.

INDUSTRY

Electric Vehicles : Power Up and Get Going

-- R Venkatesan Iyengar

While the Indian Government's latest initiative of offering subsidy to electric vehicles is welcome, it alone will not make much of an impact if the government does not back it up with policy restructuring to attract greater investments in sources of power generation.

PERSPECTIVE

Saving Nano : Can Tatas Revive the Magic?

-- Amit Singh Sisodiya and Ramana Pemmaraju

Less than two years after Nano was launched amidst unprecedented media blitzkrieg, the zing appears to be fizzling out of Tatas' much hyped people's car.

APOLITICAL

Businesses : No Karnas in Navabharat

-- G R K Murty

ROUND TABLE

Raising Interest Rates: A Japanese Dilemma

-- Shin Takayam, Shanti P Chakravarty, Nobuyoshi Yamori

"Raising the interest rate would be a disaster. That is not an option. A long-term view towards structural and cultural shift is called for. What is needed is to introduce new energy in the labor market by removing barriers to immigration and improving the deployment of the female labor force.