An excellent article on corporate bonds by Pawan Agarwal of CRISIL ratigs in mint. India’s good macro economic stability, huge demand for investment in infrastructure sector, banks NPA crisis, bankruptcy code etc will act in favor of enabling a vibrant corporate debt market. The author also points at some new measures that RBI and govt should take. Allowing repo in AA rated debt securities, promote CDS, putting restriction on concentration risk which banks can take with large borrowers, removing restrictions of pension funds on investment in SPV’s etc can further enable the cause of developing a vibrant corporate bond market.
Diesel Vehicles Ban:
A good article on the history of debate around diesel vehicles ban in India. Indian cities are rated among the some of the worst polluted cities in the world. It just shocks me to see the laxity of Indian officials with regards to environment and pollution.
Andhra Pradesh state capital – Amaravati
This article talks about a new capital city, Amaravati, being built by Andhra Pradesh state after the bifurcation of the state into Telangana and Andhra Pradesh. Government can spend as much money as it wants but for any new city to be successful a lot of factors, some of which are beyond the control of government, will have to fall in place. Infrastructure like schools, entertainment, hospitals etc follow people. Similarly, people migrate to a new place only if it has good infrastructure. This is like a chicken and egg problem. At least in the initial stages the government has to provide incentives in the form of tax rebates, access to cheap land etc to attract investments. I wonder how the government will be able to manage this especially since Hyderabad, which was the chief source of revenue of undivided Andhra Pradesh, is now part of Telangana after bifurcation. Actually Hyderabad is the chief point of contention in the entire bifurcation process.