ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by K S Chalapati RaoSubscribe to K S Chalapati Rao

India's Current Account Deficit

India's current account deficit has widened in recent years primarily because of the steep increase in the deficit on the merchandise trade account. While imports have grown with the surge in gold imports, export performance has been indifferent despite the fact that India has formalised several free trade agreements. Policymakers will have to move away from a reliance on ad hoc solutions and find ways to address the infi rmities in the domestic economy.

Vaulting over India's Retail FDI Policy Wall

Multi-brand retail was opened to foreign participation in September 2012, but even earlier some Indian and foreign companies had used a maze of relationships between themselves and their subsidiaries to bypass the restrictions. An analysis of the Bharti-Walmart venture.

Foreign Direct Investment Caps in India and Corporate Control Mechanisms

While India has generally been following an open door policy in foreign direct investment, a few areas are still subject to caps on fdi. The need to retain a degree of control over the operations of the investee companies in Indian hands is one of the justifications for the caps. In early 2010, the government specified the methodology for calculating indirect foreign equity in order to remove ambiguities in calculating the extent of fdi in a company. This paper argues that the percentage of shares or proportion of directors on the board does not necessarily represent the extent of control and therefore more direct intervention would be required if the policy objectives are to be achieved.

Ensuring Minimum Public Holding in Listed Companies

There have been long drawn-out offi cial attempts to ensure a minimum public shareholding in listed companies. The latest attempt, announced in June 2010, made the 25% limit mandatory for all companies. The limit for public sector enterprises was, however, lowered to 10% in August. This note argues that if the policy challenges identifi ed in the fi nance ministry's discussion paper of January 2008 are to be addressed, the issues of defi nition of the public, the maximum desirable promoter shareholding and identifi cation of promoter group's control should be taken up seriously.

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