Ashima Goyal (for Info only, not official)

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Ashima Goyal

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    ...The notional equity made available to banks will be used by them to buy the bonds. But it will transfer risk to the government and increase PSBs capital adequacy that had been dented by rising NPAs. Of the rest only 0.18 lakh crores will come from the budget, in line with earlier provisioning under Indradhanush, with 0.58 lakh crs to be raised from the market. In the past this has not been successful, but since the bonds will be front-loaded, PSB share prices will rise, making it easier to raise money from the market. Impact of the fiscal deficit, as well as G-sec rates is likely to be minimal. On many accounting conventions recap bonds do not add to deficits. And since they reduce risk markets will take it positively. ...

    TOI on Oct. 25, 2017, 4:33 p.m.

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    ...Active inclusion empowers by increasing rewards to work thus creating conditions for the many to contribute to and participate in growth. It suits India’s youthful demographics, growth potential, and emphasis on entrepreneurship, while redistributive strategies may continue to be necessary for persistent poverty. One attribute of poverty is being trapped in poor quality of consumption, and in goods where there is not much innovation that can create different types of potential. Normally innovation takes place in high end technologies, but we are seeing innovation in technologies that the poor can also use -such as the mobile, payments and financial inclusion. Research also finds pure income transfers need not shift the poor to dynamic technologies that show continuous improvement. But improving infrastructure and reducing their transaction costs does, since it reduces the relative prices of medium-level technologies for the poor and makes them more accessible. ...

    TOI on Jan. 21, 2017, 2:54 p.m.

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    ...A larger stock of new and small denomination notes should have been available, so as to avoid the rationing that has led to repeat queuing. More distribution outlets were also required. Supply constraints have meant higher caps are useless because banks do not have the cash to provide them, and are resorting to arbitrary rationing. Consumer spending, agricultural sowing and sale, transport and small business that are cash-dependent are the key sectors hit by demonetisation. To relieve stress, and reduce damages, in addition to use in pharmacies and government bills, government should allow old notes to be used for low value agricultural sowing and sale, transport and small business purchases until end December. Urgent measures must be taken to make new notes available for these activities. Cooperative banks must be given adequate funds with careful recording of use. ...

    TOI on Nov. 23, 2016, 3:15 p.m.

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    ...Stressed assets in India are not large compared to other countries, and are concentrated in a few firms and banks. Core asset sales should be feasible. But the problem has been allowed to fester since 2011. Low growth and high interest rates have compounded the value of debt in the absence of revenue—high growth and low interest rates have been most effective in bringing debt down through world history. The share of chronically stressed assets with interest cover of less than 1 has reached 33.5% for companies. The problem is urgent since credit growth has fallen to a historic low of less than 10%. Only retail and short-term credit show growth. Private investment is also stagnant. Growth cannot revive under these conditions. Even so, participants agreed short-run turnaround remedies exist to prepare banks to fund a new investment cycle. ...

    Live Mint on Nov. 1, 2016, 12:13 a.m.

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    ...This may be one reason for the constant criticism that there is no action—steps add up but often go unnoticed.The monetary policy committee (MPC) is touted as a major change, a departure from this trend.But it is also likely to, in practice, have considerable continuity with the earlier technical advisory committee (TAC).This allows smooth institutional evolution while making use of embedded knowledge.Continuity is a major advantage of an MPC.Overlapping members make it possible for past experience to inform the future, unlike the abrupt regime change that can happen with a new central bank governor who is the only decision maker.The Reserve Bank of India (RBI) has considerable experience with a committee advising it on monetary policy.This is likely to be used to devise procedures for the new committee.There will be similar preparation and sharing of information followed by discussion leading to a decision.Of course, there will be major changes. ...

    Live Mint on Sept. 18, 2016, 11:16 p.m.

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    ...This may be one reason for the constant criticism that there is no action—steps add up but often go unnoticed.The monetary policy committee (MPC) is touted as a major change, a departure from this trend.But it is also likely to, in practice, have considerable continuity with the earlier technical advisory committee (TAC).This allows smooth institutional evolution while making use of embedded knowledge.Continuity is a major advantage of an MPC.Overlapping members make it possible for past experience to inform the future, unlike the abrupt regime change that can happen with a new central bank governor who is the only decision maker.The Reserve Bank of India (RBI) has considerable experience with a committee advising it on monetary policy.This is likely to be used to devise procedures for the new committee.There will be similar preparation and sharing of information followed by discussion leading to a decision.Of course, there will be major changes. ...

    Live Mint on Sept. 18, 2016, 11:16 p.m.

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    ...Indian markets have shrugged off both Rexit and Brexit for now. And since markets are forward-looking it implies they do not foresee problems due to these exits in the future either. India, and its institutions, have strengthened and diversified so that they are more immune to one event or person. Development means sufficient depth to withstand shocks. The outgoing RBI governor has also contributed to building this resilience. Diversification means these are normally sufficient positives to counteract a few negatives. Soft oil prices, a pick-up in reforms, and good rains continue to put India in a sweet spot. Inflation has fallen although growth remains below capacity. Institutional investors want low deficits, low inflation and a strong currency, but they also value higher growth. They need not, therefore, be perturbed by a new governor who gives more weight to growth. Moreover, he will be doing this constrained by the inflation targeting framework. The flexible inflation targeting is an example of institutional strengthening. ...

    TOI on July 8, 2016, 12:36 p.m.