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Hedging INR for the long-term

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Financial Express Foreign investors with long-term commitments to Indian infrastructure need the ability to hedge their currency exposure in India. The exposure can typically last for multiple decades, especially in the context of infrastructure. The recently concluded Virtual Global Investor Conference saw large global investors recommitting to their interest in investing in India for the long-term. For investors, the return they seek is dependent on the performance of underlying investment and the exchange rate of the Indian rupee. Foreign investors with long-term commitments to Indian infrastructure need the ability to hedge their currency exposure in India. The exposure can typically last for multiple decades, especially in the context of infrastructure. While, over the long-run, the Indian rupee has depreciated in small single-digit percentages (2.3% pa over the last two decades), there are years when the exchange rate has moved significantly causing a large variability in returns
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A day in the life of an Indian

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  What the numbers say—how men and women spend their day differently; and how much bijli, sadak, paani can improve productivity Here’s a question that has been of interest to me: in a country of 1.4 billion people, if only approximately 400 million are in the workforce, what is it that the remaining billion people do? We now have some answers. Time Use Survey 2019, compiled and released by the Ministry of Statistics and Planning Implementation (MOSPI) reveals interesting data about the pattern of time use by Indians. This is how the day of an “average” Indian goes. (Yes, there is no average Indian person – this is the average of the times spent across men and women in rural and urban India.) Out of the 24 hours in a day, almost exactly half is spent in “self-care and maintenance” – this leaves only 12 hours, which is typically used for these five activities: employment and related activities (2.7 hours), unpaid domestic services for household members (2.2 hours), culture, leisu
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Location: Mumbai, Maharashtra, India
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Finding investors for State debt

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Financial Express As States issue more debt, finding the investors who will subscribe to the issue will require expanding the current pool of investors and making the investment more lucrative While there have been many deliberations in these pages on the growing amount of debt that the various tiers of the government (Centre and States) will have to raise, little discussion has gone into who they will raise the funds from. It is left to the all-encompassing term: ‘market borrowing’. We deep-dive to see who constitutes this market and what policy implications arise.  Every September, the Reserve Bank of India (RBI) releases a treasure trove of data: Handbook of Statistics on the Indian Economy. While there are many aspects of interest in this data release, we will specifically focus on tables 113 and 114. The former details the “Combined Liabilities of Central and State Governments” and the latter, “Ownership of Central and State Government Securities”. These annual data releases of RB
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Location: Mumbai, Maharashtra, India
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HippoBrain conversation

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In 2015, I was summoned to the North Block from the office of the then Minister of State for Finance, Jayant Sinha. For somebody who worked in a bank, my first thought was that some hell had broken loose somewhere; I may have written something that was a slip-up or something. We ended up having a one-hour long conversation and that was it. Nothing happened; life moved on as usual. Then, in 2016, I received another call that I now think possibly changed the trajectory of my career path and maybe, even life. I was asked if I want to work with Mr Sinha as the Officer on Special Duty. After mulling over it, it was decided that I will work with him for 18-24 months—even after Mr Sinha moved from the Ministry of Finance to the Ministry of Civil Aviation.  Why? I wanted to explore the world of policy. Such opportunities are hard to come by.  Besides, it’s where I learnt two of the biggest lessons that I now see panning out around us these days, especially during the debates on the #FarmBill20
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Location: Mumbai, Maharashtra, India
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Getting the vaccine to a billion plus people

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Financial Express India can learn a lot from its experience in managing cash – getting a billion people what they need can be planned effectively A vaccine for Covid-19 is expected to come sometime over the next few months – hopefully in this year. Once a vaccine is available, getting it to India’s billion plus people is a logistical challenge with many moral and ethical questions attached. How should India plan for the vaccination program?  Before we go there, let us recognize that a few very important questions still remain to be answered. What shape and form the vaccine will be remains to be seen: it is expected that it will be intravenous and hence may require skilled or trained practitioners to administer. It is also not clear whether there will be only one vaccine or many competing ones, and how effective each might be. All of this will feed into the number of doses that might be required – whether a single shot would do or multiple jabs may be required. Hopefully, India will dev
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Location: Mumbai, Maharashtra, India
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Making the frontier sector work

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Financial Express Many of the networks of value could start to become ‘utilities’ as they become more embedded in everyday lives In the previous article , we introduced the idea of the D-sector. The three traditional sectors have a well-defined, or largely settled, understanding of the many elements that build them: (1) what resources are required, (2) employment and its regulations, (3) the path to skills, (4) how they are priced and valued, (5) taxation policies, and (6) their impact on society. We detail these below. Defining the D-sector Resources required : Five elements are required to build a sturdy ‘digital cocoon’: the ability to (1) get on a network, (2) communicate and connect, (3) add value, (4) make and receive payments and (5) access assets and liabilities. We detailed these in the earlier article. There is a role for both the public and the private sector in creating the networks. Many networks that help create value in the fourth sector are largely private today: th
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Defining the frontier sector

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Financial Express   The new normal after Covid-19 requires a re-imagining of macroeconomics: we need to start defining the contours of, and measuring, the fourth sector. (First of a two-part article) “There are three estates in Parliament but in the Reporters' Gallery yonder there sits a Fourth Estate more important far than they all. It is not a figure of speech or witty saying, it is a literal fact, very momentous to us in these times.” Edmund Burke's quote highlighted the rising of the Fourth Estate as press and media became an important pillar of the society. A similar momentous time is upon us again, courtesy the pandemic, as we recognize what brings income and wealth to the society. In an earlier article , “ Getting India digitally ready: COVID-19 pandemic highlights urgent need to build digital cocoons for the whole population ” (May 15, 2020, The Financial Express), we had looked at the importance of and need to build “digital cocoons” for a large segment of India’s p
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