Abandoned gold loans are India's "jingle mail"

Glitter mail

Reuters

The myth that Indians' love for gold is driven by tradition rather than financial self-interest has been dashed

Abandoned gold loans are India's 'jingle mail'

Business Standard

Faulty transmission

Southeast Asia is wrong to neglect inflation risk

Signalling mistake

Much good cholesterol in India's spending plan

Preventative care

When Palaniappan Chidambaram returned to the Indian finance ministry last summer, he was widely expected to do something to help the economy recover from its recent bad past of slow growth, high Budget and current-account deficits, stubborn inflation, elevated interest rates and inadequate investment. In Thursday's Budget he has lived up to most of those expectations.Although next year's elections put a limit on how much the Indian government can control its spending, Chidambaram has gone slow in expanding subsidies. For instance, he has allocated just a fifth as much as proponents of the yet-to-be-passed food security bill wanted. Politics might yet force a larger handout later this year, but at least he's resisting fiscal suicide.The welfare state can only be expanded safely after the government's near-complete capture of household financial savings has ended. Only then will the private sector be able to borrow at viable interest rates, allowing growth to revive. The finance minister

Stern Budget will help India shrug off bad past

Southeast Asiaâ€™s growth could lead to credit curbs

A leveraged boom

Bad loans and poorly capitalised banks are prolonging the five-year credit slowdown, which the Budget must fix

Andy Mukherjee: A Budget for banks

Interview questions for the new BOJ chief

Yes, prime minister

Singapore&rsquo;s audacious proposal to squeeze 30 per cent more residents on a tiny island between now and 2030 is fraught with political risks for the ruling party. Voters won&rsquo;t like it. But it&rsquo;s prudent economics.

A city upsized

India&rsquo;s latest interest rate cut won&rsquo;t revive growth. The central bank&rsquo;s quarter-percentage point reduction in the policy rate, to 7.75 per cent, is just as futile as the last one almost a year ago. GDP will pick up when New Delhi curbs its own profligacy and improves the investment climate. The February budget may be the current government&rsquo;s last chance to do both.

Monetary placebo

The Shinzo Abe era will herald a spectacular decline in the yen. The promise by Japan&rsquo;s newly elected prime minister to end the country&rsquo;s chronic deflation spells curtains for the half-hearted quantitative easing that has been the Bank of Japan&rsquo;s hallmark for more than a decade. At some point in 2013, one US dollar will buy 100 yen or more.

Big fall

After more than a decade of feigning helplessness against falling prices, the Bank of Japan has finally signed up for combat duty.

Aiming higher

The Bank of Japan is about to unveil its new identity. Under intense pressure from new Prime Minister Shinzo Abe, the central bank is preparing to reinvent itself as a no-holds-barred monetary warrior. Whether the BoJ can slip convincingly into the role of a deflation-slaying Ninja will depend a lot on its battle plan.

Plan of attack

Asia&rsquo;s economic policy makers have a new worry: the cheap yen. The city-state unveiled higher stamp duties and new property lending limits on the same day that Japanese Prime Minister Shinzo Abe launched his $117 billion fiscal stimulus programme. The timing may be a coincidence, but there is little doubt that the Singapore&rsquo;s policy makers, and their counterparts in rest of Asia, are beginning to view Japan&rsquo;s sliding currency as a potentially destabilising influence.

Return of yen carry

Indian regulators have come up with a novel solution to the problem of failed initial public offerings: give small investors who lose money a refund. The proposal would appear to undermine the basic idea that common shares represent ownership rights &ndash; and risks. But unless company owners face consequences for ultra-aggressive pricing, they won&rsquo;t stop abusing their information advantage &ndash; and the market for IPOs will remain moribund.

Safety net

Japan&rsquo;s new prime minister has thrown the country&rsquo;s central bank a $117 billion challenge.

Throwing down the gauntlet

India&rsquo;s politics is about to take a sinister turn. The coming year may be the last one of relative stability for the country.

Centre cannot hold

Narendra Modi&rsquo;s resounding election victory in the western Indian state of Gujarat has made Indian businessmen optimistic. Many see his win, the third in a row, as a sign that the centre-right leader with a reputation for effective administration could be ruling the nation in 2014. But a chequered past, an autocratic personality and the peculiarities of India&rsquo;s coalition politics make Modi less than a shoo-in.

Not ready for Modi

India is crying out for corporate bonds. The country&rsquo;s bank-dominated financial system is not well suited to fund the $1 trillion infrastructure investment targeted by the government under its current Five-Year Plan. Corporate bonds could be a helpful alternative, but the authorities are stifling the development of a genuine debt market.

Andy Mukherjee: Why India needs corporate bonds

Instead of worrying about imported gold, FM should broaden the tax base to dispel concerns about govt-driven inflation

Andy Mukherjee

Andy Mukherjee

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