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What is the real reason behind the present rise in prices?

Akhilesh Bhargava

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Considering the constant hike in prices, is the hike in the interest rates in response to the surging consumer inflation or are there other factors involved? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

Business Tit-Bits

Will PM Modi empty the Treasury?

Akhilesh Bhargava

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It is widely believed that the primary reason that the BJP lost out on the three crucial states of Rajasthan, Madhya Pradesh and Chhattisgarh is because of the massive farm loan waivers announced by the opposition and the direct benefits accruing to the farmers as a result. Now, with general elections approaching, the BJP is also set to play the same game and promise farm loan waivers and other direct benefits to the ailing agrarian sector. Such benefits are expected to be to the tune of a whopping Rs 1 lakh crore and will come at the cost of fiscal deficit target being breached which was suppose to be 3.3% of GDP. The sources of these benefits are said to dividend from the RBI and raising loans from PSUs. The BJP is even said to make promises which may be fulfilled by the next government that comes to power after elections, thereby leaving an empty treasury for them.

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Business Tit-Bits

Siphoning of Sun Pharma Funds

Akhilesh Bhargava

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The importance of whistleblowers has been increasing recently in corporate India. Taking the example of Chanda Kochhar and how powerful and influential she was and the fact that she was brought down by a whistleblower, we can get a glimpse as to their importance. Another example is Dilip Shanghvi, MD of Sun Pharma. He was thought to have a squeaky clean reputation until the recent letter by a whistleblower revealed transactions involving a conflict of interest, related party transactions, auditors being compromised and other charges against him, his brother in law and his company. Related party transactions to the tune of Rs 5800 crore have been alleged. What Independent Directors, Auditors and Rating Agencies failed to point out, the whistleblower letter did. FIIs and DIIs are pulling out of the company and the price of the stock is plummeting in response to this.

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Business Tit-Bits

The Burden of Infrastructure NPAs

Akhilesh Bhargava

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As the country is the midst of an NPA crisis, we find that resolution are hard to come by. The only resolutions are from the Steel and Metal sector. The sector which forms the crux of the NPA crisis in India is the Infrastructure sector which accounts for roughly 25% of total NPAs. Infact, so serious are the NPAs in this sector that 1/4th of loans given turn bad and total around 2.5 lakh crore Rs. Loans given in the period 2009 to 2012 were found to be the worst. Infrastructure loans include loans given for construction of roads, bridges, highways, ports and power sector loans. Corruption, government not living up to its end of the deal and banks rushing to give loans without going through boanfides of the firm are the main reasons. The infrastructure sector bad loan problem has turned into a chronic one and no resolution worth talking about has taken place.

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