Historical Rise in Minimum Support Price of Indian Agricultural Products

June 19, 2017 · Author: · Category: business · Comment 

The recent months have seen a sharp decline in farm output prices on the back of increased farm output. This in turn has resulted in large-scale protests by farmers, which has forced various state governments to announce farm-loan waiver schemes. We note that the recent decline in inflation is largely due to sharp decline in prices of certain food items.

FY2007-13 saw large increases in minimum support prices (MSP) of agricultural products Minimum support prices for crop year, March fiscal year-ends, 2007-17 (Rs/100 kgs)

The Following Chart Read more

Can You Trust the National Stock Exchange of India ?

June 13, 2017 · Author: · Category: technology · Comment 

SEBI had received complaints that National Stock Exchange (NSE) co-location facility had provided unfair access to select trading members. The co-location issue relates to brokers placing their servers at the exchange’s premises during 2011-14 [No doubt it happened during the Corrupt Congress Regime], which reduces the time for an order and provides a speed advantage to these over those located away from the premises. Faster access to data feed of an exchange, even by a split second, can result in huge gains.

SEBI in its investigations found that (i) NSE’s architecture with respect to dissemination of data was prone to manipulation and market abuse; (ii) preferential access was given Read more

Economics of POS Vs ATM in India for Banks

June 10, 2017 · Author: · Category: bank · Comment 

India is still under-invested in both ATMs and POS [Credit Card Point of Sale systems]. The ATM industry, in their view, has enormous potential to grow in the medium term. This is evidenced even in countries where digital payment has shown higher acceptance rates. We have the debit card/ATM card population currently.

The economics of POS business favors issuing banks as compared to acquisition (Customer) banks. This is primarily because most of the MDR [Merchant Discount Rate] fees are taken by the issuing bank which results in a skewed investment scenario.

For example, the competition’s response to Read more

Indian Unemployment & Broken Job conundrum – Will Modi Govt Act ?

June 9, 2017 · Author: · Category: / · Comment 

India is likely to be characterised by an excess labour supply of ~70mn persons in FY20. From a sectoral perspective, even as the Agricultural and Industrial sectors deal with excess labour supply, the Services sector will be characterised by a shortage of adequately skilled workers.

Even if we assume that India’s real GDP continues to grow at a CAGR of 6.6% p.a. from FY17 until FY20, the supply of labour in India in FY20 at ~500mn persons is likely to exceed the number of jobs that the Indian economy can create at ~430mn. The mismatch Read more

Black Money crackdown set to Intensify

March 14, 2017 · Author: · Category: / · Comment 

As per state election results declared by the Election Commission on March 11, 2017 the BJP performed exceedingly well in the largest Indian state of Uttar Pradesh (UP) where it managed to capture 77% of the seats. It is worth noting that this is a historic victory as is evident from the time-series data on the seat share and vote share captured by the winning party as compared with the previous UP elections.

Policy-making in India is likely to Read more

New Income Tax Cost Inflation Index for FY 2017-18

February 23, 2017 · Author: · Category: business · 3 Comments 

The Finance minister in his Budget Speech on Feb-01-2017, revised the Cost Inflation Index used by the Indian Income Tax Department to calculate Long Term Capital Gains Tax with Indexation benefit. The revision was shift in base year from 1981 to 2001. What does this mean ? This means any “asset” as defined by the Indian Income Tax department and which comes under the purview of Long Term Capital Gain [For Example – Real Estate] and if acquired before 2001, then for the purpose of determining the Indexed Cost of Acquisition, the base year henceforth will be 2001.

Let us illustrate with an example. Suppose you bought a Plot of Land in 1980 for Rs 10,000. You plan Read more

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