Rajan’s Power Cut, Lupin’s US Buy And Other Top India News

The long-drawn rift between the central bank and the finance ministry has just witnessed a fresh twist. The draft of the new Indian Financial Code contains a clause, which goes right into the heart of the problem between the two – interest rates. According to the IFC, the RBI governor will lose the power to veto monetary policy changes and allows the government to appoint four out of the seven members in the monetary policy panel. That’s a clear dilution of the RBI’s powers to regulate interest rates.
Differences between the central bank and the government have been long-standing, especially as one looks out for inflation control and the other for the more populist rate cuts, although relations between Governor Raghuram Rajan and Finance Minister Aurn Jaitley do seem better than their predecessors'. But, what really matters is whether the change in structure will lead to more transparency or more confusion? Most probably, it will be the latter.

Lupin has bought a New Jersey drug company called Gavis for $880 million to boost its US sales and global business. The price does seem high, if you consider that Gavis’ last reported annual sales were about $96 million, but analysts say the outlook is brighter than it appears, given the drug approvals it has received. The stock market wasn’t enthused as the acquisition may have stretched The Mumbai drug company’s coffers quite a bit.

The third of the IT giants has published its quarterly results and they are muted, at best. Infosys had a great quarter and TCS wasn’t too bad, but Wipro seems to be having trouble breaking out of the rut into which the services companies have fallen. Wipro also had a spate of top-level changes during the quarter, so the management’s assertion that things are looking up seems to have worked with the stock market as the shares ended marginally up.

The train from Spain may be coming to India. The Modi government has allowed Madrid trainmaker Talgo to test its lighter, faster trains in India. If cleared, this will cut the travel time between Delhi and Mumbai to 12 hours from 17, a big deal considering the amount of air and rail traffic between these two cities. Apparently, because of the low weight of the trains, they can run on India’s ageing tracks without a problem, giving the Railways some breathing space to replace them.

"I see a willingness to invest and improve. I don't know how long it will take. Whenever you deal with politicians, whether it is India or Spain or Italy, you have to be patient," Talgo Chief executive officer Jose Maria Oriol 

Scarred by the food regulator’s ban on its Maggi Noodles, Nestle has pro-actively withdrawn its ready-to-cook pasta Pazzta from the Indian market, saying it needs to modify the labeling to include MSG.

Diageo’s United Spirits, caught in a feud with former owner Vijay Mallya over alleged financial irregularities, has identified about 14 billion rupees worth of dues that it is now moving to recover, mostly from another Mallya group company UBHL.

Cricketer Yuvraj Singh, who has turned angel investor with his YouWeCan fund has recently invested in JetSetGo, a marketplace for private jets and helicopters.

Cover Image: Indian finance minister Arun Jaitley (R) along with Reserve Bank of India (RBI) governor Raghuram Rajan (L) addresses a press conference after a meeting with the Central Board of Directors of the Reserve Bank of India in New Delhi on August 10, 2014. 

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