The fall in industrial production might just be down to energy/electricity shortages. I think these will be resolved with the nuclear plant that will be fully operational next year. We also approved 2.1/2.2 GW of solar last year. Solar can normally be built out in a few months. Oil prices should remain stable for the rest of the decade. There should be a huge uptick in American LNG exports by 2026 bringing down global LNG prices.
If the government was serious it would be looking at privatisation of SOEs. It's being dragging its feet with the sugar and jute mills for over 10 years. I think other than SOEs most of other government expenditure has a problem especially public schooling but that's a another can of worms. SOE privatisation should be on the agenda and the government shouldn't back away from it.
When the interest rate cap was removed towards the end of last year, one of the big banks mentioned how they can move to giving loans to farmers who normally get charged 15-25% interest rate at microfinance institutions and 30-50% in informal markets. It's possible that the reason interest rate hikes don't reduce credit growth is because formal bank credits starts moving into these microfinance and informal credit markets. That's a possibility but that needs to be confirmed with data.
The fall in industrial production might just be down to energy/electricity shortages. I think these will be resolved with the nuclear plant that will be fully operational next year. We also approved 2.1/2.2 GW of solar last year. Solar can normally be built out in a few months. Oil prices should remain stable for the rest of the decade. There should be a huge uptick in American LNG exports by 2026 bringing down global LNG prices.
If the government was serious it would be looking at privatisation of SOEs. It's being dragging its feet with the sugar and jute mills for over 10 years. I think other than SOEs most of other government expenditure has a problem especially public schooling but that's a another can of worms. SOE privatisation should be on the agenda and the government shouldn't back away from it.
India moved to an inflation targeting regime in the mid 2010s. What was their experience like and what can learn from it?
That's a good question. Will explore it in a piece.
https://www.tbsnews.net/markets/how-indias-rupee-went-most-least-volatile-asia-885271
Awesome job by the Modi government.
When the interest rate cap was removed towards the end of last year, one of the big banks mentioned how they can move to giving loans to farmers who normally get charged 15-25% interest rate at microfinance institutions and 30-50% in informal markets. It's possible that the reason interest rate hikes don't reduce credit growth is because formal bank credits starts moving into these microfinance and informal credit markets. That's a possibility but that needs to be confirmed with data.