Life's Fun and Silence

                                                       RBI has been conducting consumer confidence survey and publishes results on consumer perception  about the prevailing economic conditions in the country(Current Situation Index -CSI). RBI expects the survey to provide evidence of consumer confidence and a predictor of consumer spending. They expect economic agents that influence aggregate supply – manufacturers; retailers; investors; builders; government agencies - rely on measures of consumer confidence to make an assessment of consumption expenditure which, in turn, forms their production decisions. The indicators are expected to  also provide useful insights to wielders of monetary and fiscal policies who have to make decisions on modulating aggregate demand in the economy around the path of productive capacity in the e...

RBI on 4 th Oct 2017 released a report of the Internal Study Group, to Review the Working of the Marginal Cost of Funds Based Lending Rate System (MCLR). This rate is applicable to borrowers when they apply for loan. RBI through the banking system (I will call them - Rest of Banks (ROB)) manages the transmission of interest rate policy. The Executive summary started off with a very damning note on monetary policy transmission by the banks (under “Key findings”). The extract below is an indication that the committee was categorical in ascribing malafide intention, and was short of using the word “cheating”, in the manner in which, the Banks avoided policy rates transmission, to its respective customers. Extract from report -Key findings  “Analysis conducted by the Study Group suggests that banks deviated in an ad hoc manner from the specified methodologies for calculating the base rate and the MCLR, to either inflate the base rate or prevent the base rate from fal...

Corporate governance is again in the news, for all the wrong (?) reasons, with the saga of Infosys transiting from the owner’s hands to “Board of Directors or professional management’s hands, struggling to reach cruise mode. It is now a topic for discussion everywhere, from news-papers, TV channels, social media, conference halls, restaurants and airport lounges. Everyone has her/his opinion on the subject and yours truly also believes in the right to opine on this subject. While the recent cases of Tata’s and Infosys are a matter of discussion and gossip, there are many more such cases happening around us that are not reported, discussed or even identified. But these high profile cases do bring our attention to the “very present problem” that corporate world is facing and continues its struggle in addressing them, in a manner that is satisfactory. Some research, analysis, case studies and few discussion in the TV channels is what I foresee seeing as an aftermath of any s...