The oil risk — on the rise in international prices

As international oil prices head higher, India will have to brace itself for the economic risks of expensive energy. Brent crude oil futures were trading at about $70 a barrel on Friday, marking a four-year high and a price increase of close to 6% since the start of the year. The rise in international prices has been particularly sharp given that oil had been selling at below $45 in June. This is a rally of about 55% in a matter of just months. Oil price dynamics have often been explained by changes in the supply outlook influenced by the decisions of major oil producers. Oil trading at $70 should offer some respite to traditional oil producers like the OPEC members, which have suffered the onslaught of U.S. shale producers. According to the IMF, last year, for instance, Saudi Arabia would break even on its budget with oil at $70. The recent spurt in oil prices, however, seems to be more the result of a weakening of the U.S. dollar than anything else. The dollar has been gradually weakening against major global currencies since the beginning of last year. But the trend was given a new push following comments by U.S. Treasury Secretary Steven Mnuchin in favour of a weak-dollar policy. At Davos this week, Mr. Mnuchin noted that a weaker dollar would be good for American trade. However, given that the U.S. is right in the middle of a monetary tightening cycle, it is unlikely that the dollar will continue to boost oil prices, unless the Federal Reserve slows the projected pace of interest rate increases.

Consumers in India are already beginning to feel the pinch as petrol and diesel prices have hit multi-year highs. The retail selling price of both petrol and diesel in Delhi, for instance, has risen by close to ₹3 a litre since the beginning of 2018. The rise in domestic fuel prices is on expected lines given the policy of dynamic daily pricing of petrol and diesel adopted by the Centre. But as rising oil prices put pressure on domestic consumers, the government will have to desist from resorting to subsidies to ease the pain. It should work towards rationalising taxes on petrol and diesel to bring down retail prices. This will help consumers without imposing an undue burden on the oil marketing companies. An even bigger risk posed by higher oil prices is to the government’s fiscal management. With the fiscal windfall from low oil prices likely to end for now, the government should think for the long term and make crucial tweaks to its hydrocarbon exploration and licensing policy to expedite oil discovery and production. Simultaneously, it must take a leaf from China’s book and actively support Indian energy firms’ bids for overseas oilfields. Self-reliance is ultimately the best hedge.

ASEAN rising — on India-Southeast Asia cooperation

As leaders of the 10 countries of the Association of Southeast Asian Nations gathered in New Delhi this week, India’s ties with ASEAN got a dose of both symbolism and substance. The ASEAN-India Commemorative Summit, followed by their attendance at the Republic Day parade as joint chief guests, underlined the new consensus on the need for Southeast Asia and India to boost cooperation. First, as the demand for goods in Western economies comes down, the region needs to look deeper within to grow markets and increase trade. Second, continuing tensions between the “great powers” — between the U.S. and Russia, or the U.S. and China — are forcing the unaligned countries of ASEAN and India to forge a common understanding. China’s moves in particular, both its naval forays in the Indo-Pacific and its Belt and Road Initiative connectivity project, have the potential to change equations in the region. Third, as Singapore’s Prime Minister and the Chairman of ASEAN, Lee Hsien Loong, reminded the world in an editorial, and Prime Minister Narendra Modi said in his speech at the summit, India’s cultural and trade ties with Southeast Asia go back 2,000 years — and with Southeast Asia having come out of the overhang of Cold War divisions, India and ASEAN have a unique opportunity to reap the potential of their geographic proximity. The Delhi Declaration they signed articulated their urgent concerns as ASEAN and India called for measures to deepen security, economic and socio-cultural cooperation, and connectivity. These include joint mechanisms for maritime transport, trade and a “code of conduct” for the South China Sea.

But it must not be forgotten that when ASEAN-India leaders last gathered together in New Delhi in 2012 to mark the 20th anniversary of the dialogue partnership, they had made a similar commitment to trade and maritime security, and several promises are yet to be realised. With trade with ASEAN at $76 billion, India ranks lower than not just the U.S. and China, but also South Korea, Japan and Australia. The Regional Comprehensive Economic Partnership negotiations launched in 2012 have been held up, largely because of Indian concerns over unfettered access to Chinese goods and ASEAN resistance to movement of Indian services and labour. The other big unfulfilled promise is on connectivity, between ASEAN countries and India, as well as India’s connectivity through its Northeast to Myanmar and beyond. Work on the extension of the India-Myanmar-Thailand Trilateral Highway, the Kaladan multimodal highway, and Tamu-Kalay rail link to Myanmar has lagged behind deadlines. Border trade posts and infrastructure in the Northeast need much improvement to attract investment in the region. India and the ASEAN countries have much to gain from each other — but heavy-lifting is required to integrate India into the ASEAN equation. Else, shared history and culture and political leaderships in sync may only yield rousing summitry.

Retail therapy: on the IPL 2018 auction

The Indian Premier League player auction is a parallel cricketing universe with a distinct dynamic. Over the weekend at a Bengaluru hotel, the IPL’s top brass congregated with a wish-list that had no space for nostalgia. Lasith Malinga found no takers while Chris Gayle, perhaps the most explosive batsman in the history of Twenty20, was rejected twice before he got third-time lucky when Kings XI Punjab snapped up the opener at his base price of ₹2 crore. There was no respect either for doughty batting performances in Tests. South Africa’s Hashim Amla, who played his part in the recent match at Johannesburg’s Wanderers, was ignored, and Cheteshwar Pujara found no suitors in the IPL. In Twenty20’s roller-coaster ride, the attributes of patience and grit, so mandatory in Tests, have comparatively little value. The accent is on explosive batting, miserly bowling, athletic fielding and, above all, the ability to remain iceberg-cool when the fires of a nerve-racking last over are raging. The all-rounder, cricket’s version of a miracle-dispenser, remains mighty expensive. It was no surprise when England’s Ben Stokes, despite the legal issues trailing him back home following an assault incident, got the highest bid at ₹12.5 crore from Rajasthan Royals.

Royals and Chennai Super Kings, both coming back after a two-year suspension following spot fixing and betting allegations, struck to their usual methods. Royals remained alert to building a strong core. CSK continued its patented approach of nurturing its nucleus, as was evident in the way it retained M.S. Dhoni, Suresh Raina and Ravindra Jadeja prior to the auction, and when auctioneer Richard Madley punched his gavel, IPL’s most consistent outfit exercised its right-to-match card and snapped up another regular Dwayne Bravo. CSK was also aware of its cost dynamics and didn’t pursue R. Ashwin once he crossed the ₹4 crore mark but instead nailed Harbhajan Singh at ₹2 crore. True to its trope of bucking trends, the auction witnessed massive money chasing a left-arm fast bowler, and Jaydev Unadkat became the most expensive Indian with a ₹11.5 crore price tag from Royals. As in previous years, the latest auction gifted a bonanza to the unsung first-class cricketer. Krunal Pandya got ₹8.8 crore from Mumbai Indians, and he is yet to play for India unlike his famous sibling Hardik. Among the overseas players, it was heartening to see the price that Afghan players like Rashid Khan commanded, while Sandeep Lamichhane, picked by Delhi Daredevils, became the first Nepal cricketer to join the IPL bandwagon. The eight IPL squads have taken shape afresh and the players are laughing all the way to the bank. Whether that would translate into ideal performance will be known once the league’s eleventh edition starts in April. 

More structural reforms are needed to maximise the bank recapitalisation effort

About ₹1 lakh crore is expected to be pumped into India’s 21 public sector banks by March, which the Centre hopes will enable them to extend fresh credit lines worth over ₹5 lakh crore to spur economic activity. Of the capital injection — the first half of an ambitious ₹2.11-lakh crore recapitalisation programme for ailing public sector banks announced last October — about ₹8,100 crore is from the government’s budgetary resources. Banks are expected to tap the markets for ₹10,300 crore, while recapitalisation bonds worth ₹80,000 crore are to be issued to finance the rest. Leaving aside the market-raising efforts by banks, over half the fresh capital of over ₹52,000 crore is being directed to the 11 public sector banks that the Reserve Bank of India has placed under the prompt corrective action, or PCA, framework. The RBI deploys the PCA to monitor the operation of weaker banks more closely to encourage them to conserve capital and avoid risks. For these entities, this capital offers a fresh lease of life as it will help meet regulatory requirements under the Basel-III regime as well as cushion them to an extent from possible haircuts on stressed loans that are going through the insolvency resolution process. State Bank of India, the country’s largest, and the nine others that are out of the RBI’s PCA net will receive nearly ₹36,000 crore in order to strengthen their lending capacity.

While announcing this package, the government has described each of the banks as “an article of faith”. Its assertion that no public sector bank will fail and that depositors’ money will remain safe should allay customers’ worry about the safety of their savings under the proposed Financial Resolution and Deposit Insurance legislation. Rating agencies have given the move the thumbs up, but remain unimpressed about governance reforms packaged with it. These include tweaks to existing systems for closer monitoring of big-ticket loans, identifying niche areas where a bank has strengths, restricting corporate exposure to 25%, and a new performance management system. Actual capital inflows will depend on their performance on these fronts and their ability to meet the government’s service priorities, including smoother credit flows to small businesses. More structural reforms may well be on the anvil in the second half of this recap plan, which RBI Governor Urjit Patel had described as providing a real chance to meet the banking sector’s challenges for the first time in a decade. Yet, the absence of any reference to consolidation through mergers is glaring. Moreover, while the government has repeatedly ruled out privatisation of these banks, the only one where it intended to offload its majority stake, IDBI Bank, has got the largest allocation of ₹10,610 crore. At best, this sends out mixed signals.

Comment on forgiveness by riko Mahato

Forgiveness must come on the one who had has decided to heal.
When somebody wrong you either by accident on purpose it can be hard to get over it.
Human never be able to Reconcile with the wrongdoer.
People these days take advantages and the repeat their mistakes and then comes to ask for forgiveness.

How does one behave and forgive such people?
Forgiveness maybe the last thing on your mind when someone does something truly Aircel to you but forgiveness is not just for them.

Holding on to that emotion for too long weekends a heavy burden to carry for your life.

Forgiveness has changed my life.
Accepting apologize from the people who have destroyed me for giving people when they have not ask for it.

But this was not easy something it hurts too much.

But I still think that there is a party for giving because it help to free yourself from hot is trapping you and holding you down.

It is a reminder of God's Love and faithfulness when you treat Idol with kindness even when they do not deserve it.

And it helps you just as much if not more when you're free you heard from that bitterness and pain giving someone another chance even when it is undeserved.

In essence you forgive them for yourself not just for them.
No that forgetting someone does not make you weak but gives you strength.

Thank you so much for receiving such beautiful comment in advice from me.

Quote of Sir Riko Mahato

Life is full of sorrow.

The world is full of sadness.

You can overcome this through meditation.

Free of bondage of world.

The independence can gain through good work.

Life is combination of appearece, knowledge,pain, science, and activities.