CLSA believes that the Sensex, which is trading at a PE multiple of 13.5 times, could deliver over 15 per cent returns in the next one year.

A time to make money

Business Standard

On the 121st birth anniversary of Bhimrao Ramji Ambedkar on April 14, parties across the nation resorted to crass political pandering that smacked of rank opportunism with an eye on the dalit vote bank. Predictably, in Uttar Pradesh Mayawati &ndash; the ousted leader and the current self-proclaimed messiah of dalits &ndash; criticised the Akhilesh Yadav government for its failure to organise a memorial programme to pay tribute to Ambedkar. In Andhra Pradesh, with an eye on consolidating the dalit vote bank of Telangana, Telangana Rashtra Samithi supremo K Chandrasekhar Rao&rsquo;s daughter K Kavita went on a dharna demanding a statue of Ambedkar to be erected in the Andhra Pradesh Assembly premises.

Letters: Ambedkar: Real or manufactured? 

Markets reward consistency and predictability. And through the years, Infosys has mastered the art of managing the markets' expectations. Markets don't love growth, they love predictable growth. But Infosys has shown earnings can be volatile. In fact, it has moved away from outperformance to underperformance. Over the last several quarters, the market has been rather forgiving, even as the company has started tripping on its own growth projections.

Infosys' fall from grace

One of the worst kept secrets in government-owned Air India is the number of free upgrades that are extended to a variety of people, from MPs to their spouses and children to anyone who knows a senior official or the civil aviation minister. Now that the government has agreed to pour Rs 30,000 crore of taxpayer money into the airline over a number of years, Civil Aviation Minister Ajit Singh has decided to stop taking requests for upgrades and instructed his officials to do likewise. As a result, the number of free upgrades in the airline has dropped by a steep 75 per cent. The cynical view is that this tough decision reflects the minister&rsquo;s chances of returning to the ministry in the next elections.

Downgraded upgrades

Oil and Natural Gas Corporation&rsquo;s corporate communication department had difficulty assessing an achievement of its Chairman and Managing Director Sudhir Vasudeva. Last week, Vasudeva was appointed to the board of the United Nations Global Compact (UNGC). The company press release stated that Vasudeva is only the second leader from India to join the UNGC board. Who was the first? Before the question could be asked, a corrigendum followed clarifying that Vasudeva was, in fact, India&rsquo;s first public sector representative on this global body.

Second best

Mamata Banerjee has often unfairly been the butt of many jokes on account of her quirky English-speaking abilities, but she repeatedly and unwittingly makes a mockery of Urdu as well. In what has now become her signature style, Banerjee ends all her speeches with &ldquo;Jai Hind, Vande Mataram, Khuda Hafiz, Inshallah&rdquo; &mdash; possibly in an effort to address all the elements of her audience. But &ldquo;Inshallah&rdquo; translates to &ldquo;God willing&rdquo; and can never be used as a parting word in any culture.

Mind her language

In his article &ldquo;A new school bell rings over India&rdquo; (April 19), Ajit Balakrishnan explores how the Right to Education (RTE) Act aims to revolutionise education in India. The two most important aspects of the RTE are: (a) 25 per cent reservation for children from weaker sections of society in class I and; (b) no punishment or detention till class VIII.

Letters: Bring back the joy with RTE

Three streams of thought come to mind after reading T N Ninan&rsquo;s incisive column &ldquo;Limits of arbitrariness&rdquo; (Weekend Ruminations, April 21). First, the effect of a nation&rsquo;s economic power is mediated by its political will.

Letters: Political will

The recent comments by Chief Economic Advisor Kaushik Basu at the Carnegie Endowment in Washington, DC, were seen, implicitly, as criticism of the government in which he serves &mdash; a consequence, perhaps, of initial reports, which had led observers to believe that he said that major reform was impossible until UPA-II was replaced in 2014 by another dispensation. When taken in context, however, it appears that Prof Basu said nothing more than many in similar positions have already remarked: that political consensus for many reforms is difficult to achieve. However, the furore that followed his statement is a useful pointer to not just the stored-up frustration at UPA-II&rsquo;s policy paralysis. It also points to a deep-seated and widespread confusion as to what the code for public statements should be for members of the government.

Serving in silence

In the past few years, financial exchanges have experienced several incidents of &ldquo;flash crashes&rdquo; and a few &ldquo;flash booms&rdquo; as well. These are instances when prices shift huge amounts within seconds. They are caused when computers execute trades on massive volumes, entirely without human intervention and according to pre-programmed algorithms. The term was coined following the most notorious of flash crashes, on May 6, 2010 when the Dow Jones Industrial Average dropped nine per cent in a minute. The latest incidents occurred last Friday. Nifty futures dropped 6.7 per cent in a minute as 35,000 contracts were offered (1 contract = 50 Nifty) at a large discount. Earlier that same day, Infosys stock futures also dropped 20 per cent for an instant. On March 22, the world's most valuable company, Apple, saw an instantaneous drop of 9.5 per cent in trading on the US' BATS exchange. The stock of BATS itself has suffered twice from similar incidents.

Flash crash fears

Finance Minister Pranab Mukherjee&rsquo;s schedule is not just hectic but also erratic &mdash; by his own admission. Recently, industry body Confederation of Indian Industry (CII) had to reschedule its annual general meeting to suit the schedule of the United Progressive Alliance&rsquo;s chief trouble-shooter and Mukherjee duly noted this. Apologising for the adjustments CII had had to make in its schedule, he explained ruefully and tellingly, &ldquo;Sometimes, I get information about an emergency meeting very late.&rdquo; Given the frequency with which UPA has been lurching from one crisis to the next, it is safe to say Mukherjee is unlikely to get notice of future emergency meetings any earlier.

Time bound

Facing widespread criticism over many tax proposals in the Budget, finance ministry officials are wondering how to best write the law so that it is clear to everyone. They have, however, now come to the conclusion that no matter how hard they try, industry will find loopholes in the law to use it in its favour. One official compared the taxman&rsquo;s predicament with demon king Hiranyakashyap who was granted the boon that he would not be killed in the day or the night, inside a house or outside, but was ultimately killed at twilight in the courtyard.

The taxman's demon

The Reserve Bank of India, following its larger-than-expected cut in the repo rate last week, is likely to exert considerable pressure on banks to cut their lending rates to stimulate growth.

StatsGuru-23-April-12

Several developments in the Supreme Court over illegal mining of iron ore in Karnataka indicate that only the first chapter of a long-running story has been brought to a satisfactory end. The whole story offers a valuable insight into practices of governance and ways of doing business in India.

Karnataka's mine politics

Chief Economic Advisor Kaushik Basu sounded a warning bell at the Carnegie Endowment in Washington, DC, last week, saying that big-ticket reforms would probably have to wait to be carried out for the next government, after general elections in 2014. Professor Basu has since rolled back that announcement a bit, saying that he does not expect all reforms to be stalled and some big reforms, indeed, could be expected in the next six months. However, as he pointed out, the goods and services tax (GST) is an example of an important reform that needs political consensus, and one that the United Progressive Alliance (UPA) government seems unable to generate any push towards. Several different factors have combined to create the policy paralysis in which India finds itself today. A timid and divided government is one of them, beset by doublespeak about the benefits of reform and assertive, anti-reform coalition allies.

Can't wait till 2014

Apropos T N Ninan's column &ldquo;Limits of arbitrariness&rdquo; (Weekend Ruminations, April 21), Vodafone&rsquo;s threat to launch arbitration proceedings against the government has created a huge controversy. The move to amend the Income-tax Act with retrospective effect is seen as an attempt to defeat the apex court&rsquo;s judgment. This may affect the country&rsquo;s image at a time when we need foreign direct investments. But there is a view that Vodafone could wait for the outcome of Parliament&rsquo;s discussions on the Budget and not blackmail the government. While it is true that people should not go for arbitration, the larger public good must also be kept in mind.

Letters: For the larger good

It&rsquo;s not just industrialists who pay the price of Mukherjee&rsquo;s role as the UPA&rsquo;s chief crisis manager, journalists found themselves at the receiving end too. Several journalists were interviewing senior bureaucrats when a phone call came through from Mukherjee. The journalists were asked to leave the room while he took the call and return when he finished. What he realised when the journalists returned was that they had left their recorder behind and it was still switched on. As a result, he made them delete the entire recording, which included the first part of the interview.

Off the record

The government hopes to spur India&rsquo;s milk production through the newly launched National Dairy Plan (NDP) and its massive investment of nearly Rs 17,300 crore. This has been provoked by a continuing escalation in dairy product prices caused by a supply deficit. Annual milk production has grown at about four per cent for several years &mdash; but demand has gone up by around seven per cent. The supply-demand mismatch has thus steadily worsened, affecting prices.

Milking progress 

The new recommendations from the Telecom Regulatory Authority of India, or Trai, on spectrum pricing have led to much public heartburn. Auction reserve prices, according to telecom operators and some observers, have been set inexplicably high, at Rs 3,622 crore per MHz for the 1800 MHz band and Rs 7,244 crore for the 900 MHz band. On worries that these would cause the business to become unviable, and phone tariffs will spike, telecom stocks have fallen for two days in a row.

The cost of auctions 

Venkat Goli&rsquo;s letter &ldquo;Ambedkar: Real or manufactured?&rdquo; (April 23) serves as an apt reminder of the fact that the Constitution is not B R Ambedkar&rsquo;s solo effort and that other eminent jurists were also involved in its drafting. However, the author&rsquo;s contention that the Constitution and, thus, Ambedkar are blamed for all that ails India is at variance with popular perception. Even today, the Constitution is widely regarded as a fine piece of legislation and is viewed as Ambedkar&rsquo;s gift to the nation. Thus, it is no surprise that Ambedkar has been elevated to a godly status by his numerous followers. Moreover, the author&rsquo;s puzzlement as to why people tend to seek a hero from within is hard to fathom: importing leaders from outside is an exception rather than the rule.

Business Standard

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