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Madan Sabnavis

Articles By Madan Sabnavis

355 Articles

Book Review: The Power of Not Thinking by Simon Roberts

An argument for embodied experience and how our body uses information effectively

One of the features of embodied knowledge that the author has outlined is ‘practice’. This can be seen in how Roger Federer plays his shots not by the book but body (Reuters Image)

Economics Nobel winners Paul Milgrom and Robert Wilson: Designing the right auction to solve conundrums

The major challenge is to eschew the winner’s curse, and here the laureates argue that the best way out is to place bids below their estimate of the common value

One may recollect that the controversies around the irregularities in sale of coal blocks or spectrum in India had moved the needle to having more transparent auctions.

Loan repayment moratorium: Govt paying ‘interest on interest’ is good

The lockdown affected many businesses in ways that made servicing debt difficult; so, this is a good proposal. Interest subvention for those that made timely payments avoids skewing the playing field and preempts any moral ha

The new scheme covers the interest on interest, and not the principal or the interest. Hence, it is of a much smaller scale.

Shape of recovery does not matter

U-shaped or V-shaped or W-shaped recovery is nothing but an optical delight. FY21 will be the one where there was economic destruction, FY22 an apology for a recovery, and we may have to look for real growth only in FY23, ass

The farm reforms must be celebrated

The three agri-reforms that have been brought about will be quite positive for the agri-economy, and assurance that the MSP-based procurement system won’t be withdrawn. Of course, if the system works well for farmers, the g

Book review: The shackles of liberalism

Pankaj Mishra writes how tenets of a western world are promoting unequal societies and economies

A file photo of people carrying a banner reading ‘Empower The Future’ during a demonstration in London. Policies in the so-called free enterprise economies are always skewed towards capitalists, the author says bloomberg

Reviving growth: India’s not well placed in the global context

A fiscal stimulus can be considered as being expedient under present conditions as there is no other way out. Growth is something outside our control today, which also means that employment will be a challenge for the rest of

Even when looked at in terms of growth on quarter-on-quarter basis, the picture is the same, with Indian growth declining by 69.4% and Peru’s by 72.4%.

Advantages of enlarging the balance-sheet of RBI

The advantage for the government when there is RBI intervention is two-fold. First, there is direct absorption of the debt by RBI, which won’t affect the market as the supply of paper remains unchanged. Therefore, there is

Saving India’s Banks: Creating a framework for restructuring bank loans

Restructuring will mean a loss for banks; so, the government would have to contribute with targetted interest subvention. This cost should be shared between the two

It is just deferring the problem as money not paid is default, whichever way one looks at it.

What the India Inc salary cuts could mean

The salary-cuts, amidst the economic pain of the pandemic, have significant implications for the banking sector and NBFCs, Apart from Household consumption

Overdraft: Former RBI Governor Urjit Patel raises red flags as he pinpoints those to blame for NPA

Urjit Patel’s book is refreshingly different and quite hard-hitting, as he debates issues as both a former RBI governor and a critic. Showing a great deal of maturity, he focuses only on issues and not persons.

A file photo of Urjit Patel. In the book, he debates issues as both a former RBI governor and a critic (Bloomberg)

Stimulating the economy: Is direct financing by RBI an option?

RBI doing 'quantitative easing' by buying corporate paper may not quite work out.

A Wall Street View of Rural India: A book provides a reality check on rural India’s growth story

Another revelation by Sahgal pertains to the extended leverage of this sector and the loan waivers, which are politically motivated.

A file photo of a farmer ploughing his field near Hajipur, Bihar (Bloomberg Image)

Takeaways from RBI’s financial stability report on moratorium

The moratorium has been extended by another three months and, hence, a clear picture, on whether these accounts will remain standard or not, will emerge only towards the end of the year

Book Review — Sway: Unravelling Unconscious Bias

Such biases are quite strong and also manifest in terms of conscious bias against a race or community and become all-pervasive.

A file photo of women clad in burqas in the Charminar area of Hyderabad (Bloomberg)

RBI rate cut: The outlook on inflation makes a strong case for a pause by MPC

The outlook on inflation makes a strong case for pause in the accommodative stance the MPC has taken of late. While SMEs and other business still need access to easier credit, perhaps waiting till the revival happens before c

Basic problems, such as of labour and logistics, remain, while liquidity has been more than addressed by the central bank.

Tackling China: Emotional rhetoric gaining in decibel in India, but any kind of stringent action doesn’t seem feasible

China can do the same for our exports, but given that we imported around $65 bn and exported around $16-17 bn on an annual basis in FY20, this may not matter in net terms.

However, for India substituting goods worth $65 bn with equivalents could mean ending up with a higher import bill, which translates to higher prices.

India Still a Shackled Giant: Unbiased diagnosis of various problems plaguing India’s economy

A book presents an unbiased diagnosis of the various problems plaguing the country’s economy and some bitter pills as possible cures

A file photo of a protest by PMC Bank account holders outside the RBI office in Mumbai (Express Photo)

Will expanded RBI oversight change cooperative banking?

It has often been alleged that some co-operative banks have political clout. it will be interesting to see how the new structures change the way business is done.

From the point of view of RBI, the challenge would be to regulate and supervise these 1,500-odd banks with the same rigour as is accorded to the commercial banks.

Covid-19: If data collection is incomplete, no point disseminating it as it can only mislead

Coincidentally, RBI has taken the tone of doing everything for growth and hence the inflation number may not matter in the broader scheme of things for the MPC.

He also hoped that the cooperation between the two countries during the COVID-19 pandemic would continue in areas of building infrastructure, increasing bilateral investments, and generating jobs.

Why RBI’s new draft frameworks are path-breaking for banking sector

Draft frameworks on securitisation of standard assets and sale of loans are path-breaking for the banking sector.

Rs 20 lakh crore Covid-19 relief package: Missing demand

The package has a large role for RBI, with 40% of the amount mentioned being provided as liquidity by the central bank.

The advantage this time is the government’s assertion that Rs 3 lakh crore of SME loans will be guaranteed by the sovereign—this should enable banks to lend, though the fine print on this is yet to be revealed.

Book Review: Stop Reading the News – A Manifesto for a Happier, Calmer and Wiser Life

A cautionary note on the heavy deluge of unnecessary knowledge that surrounds us.

Job cuts, zero production activity due to lockdown: What the Centre must do now

A fully Keynesian approach will need to be taken by the government. People are losing jobs and production activity has come to a standstill due to the lockdown.

GDP, gdp growth, q4 gdp growth rate, core industries, fiscal deficit

What the COVID-19 numbers tell us

The next seven days for India will be crucial, and it is absolutely necessary to keep testing more and more people who show symptoms—for only then can we know whether it has spread or is under control

There would be many who got away and then spread it to others, which is something no one is sure of. (Illustration by Rohnit Phore)

Book Review: ‘Too Small to Fail’ by R James Breiding

A thought-provoking book on why smaller nations have better economies while larger countries lag behind

The author talks of Denmark which addressed the issue of environment by decongesting Copenhagen, which now has the largest number of cycles on the road

Challenges for the financial system

Increased borrowing by the government will lead to more spending, ultimately translating into higher inflation

RBI has already opened its armoury through LTROs at a time when there was surplus liquidity to quell interest rates.
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