Race to $100 Billion!

With cross broder acquisitions becoming a norm and with domestic mergers on the foray the race is on to reach the magic figure of $ 100 billion for most of the Indian companies. But India’s biggest and most trusted company Reliance Industries stands at No.1 position with a total market value of $ 43 billion sharing the position with India’s public sector energy gaint ONGC. Bharti Airtel which is India’s No.1 telecom company takes the third spot with a market capitalisation of $ 32 billion. All these companies have still a long way to go to reach the magic figure.

So are we giving way too much attention to this topic than it requires? Maybe or maynot. But what is true is that India’s Economy has never been better and the good news is that the party has just begun. The Indian stock market has been performing extremely well and has shown signs of standing pretty tall in difficult times which is always good in the long term. What is more encouraging are the projections that some of the top financial analysts have furnished. Even the most cautious ones are quite confident that the sensex can easily soar over 40,000 mark in comfortable time. Morgan Stanley said that the sensex will cross the 50000 barrier in about 10 years from now, which sounds unbeliavable , atleast this point in time. Earning a global footprint through foreign acquisitions and domestic mergers which would eventually unlock greater value through its operations are other strong reasons for us to be optimistic. Finally other businesses that are huge and have not been listed ,like the Retail sector, when listed will only help in realising the $ 100 billlion dream faster. What is defnitely true and maybe more important than anything else for the members of India Inc., to focus on is the fact that there will be tough competition and the the only way to reach the top spot is to sustain this competition. After all its the Survival of the Fittest !

Dear ‘O’ Dear !!!

Alarm bells started ringing in within the coalition members of the UPA and the Congress party itself when the country saw a new high in the inflation rate when it rose to 6.73% for the week ended Feb 3^rd. When compared to previous high of 6.58 % seen during the week ended Jan 27^th this new high has certainly started to concern the ruling party. What is particularly disconcerting is the fact that the inflation rate with the same government a year ago was at a mere 3.98 % well under the 5-5.5% that was fixed by the RBI. The government would have to do really well to sustain the pressure for the ever rising prices. The finance minister had admitted that this was a real concern and said that the rise in prices was really affecting the common man.  The main reason is that the sudden surge in price was observed particularly in the some primary food articles and some manufactured products. This has proved that the rise in inflation when it comes to the food segment is not seasonal and the rise in prices of food commodities like milk sugar, vegetable oil was certainly making life difficult to the common man. Immediate effects were seen when the government had reduced the fuel prices, petrol and diesel by two rupees and one rupee respectively. The Prime Minister stated that this reduction in prices should have a moderating impact on bringing down the inflation as often the transportation costs will have a cascading effect on the price of the commodities. With the budget season just around the corner there is a lot of thinking for the Finance Minister to do. As far as the common man is considered its not a pleasant waiting game for him until then. !!

The Tribunal Award!

The complex and prolonged issue about sharing of the cauvery waters finally came to an end with the Cauvery Water disputes Tribunal finally coming to a unanimous decision yesterday. According to the award passed on by the tribunal there will be an equittable settlement on the sharing of the resources between the two main disputants , the states of Karnataka and Tamil Nadu. Though the initial reaction says that karnataka would be the aggrieved party there are substantial reasons for both the parties to feel good about the final award.

There is one part, Clause VII, of the settlement that may prove to be a loophole of soughts,  a means for anti social elements to take advantage and convert into a futile political agenda.  The Tribunal award says that in the event of an abnormal year where the monsoon did not contribute to the required water levels of the Cauvery Basin the allocated shares would be proportionally reduced. Considering the fact that this contentious issue has always flared up in the event of a distress year, the tribunal should have given extra attention to this fact.

Any settlement for any prolonged and complex issue can never be perfect. However under reasonable criteria , this unanimous decision should prove to be eminently implementable. The parties also should agree to work towards an amicable decision in the event of any future disputes.