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Thursday, May 28, 1998

	Kick-starting the economy with budget Yashwant Sinha has to deal with a troubled economy -- one experiencing a lower than expected industrial, investment and export growth and a higher than expected fiscal deficit of 6.1%. Chidambaram's dream budget which was expected to revive the economy in 1997, failed to do so. In fact, the condition of the industrial sector can at best be described as a slowdown and at worst a recession.		Time to stand firm The European Union's hypocritical demand asking India to sign the Comprehensive Test Ban Treaty and respect other international non-proliferation agreements needs to be resolutely rejected. Quite apart from the fact that the EU resolution takes no note of India's security concerns, the "sign-CTBT-or-else" ultimatum is unworthy of the democracies that constitute the Union.
	Prioritising data The revision in the Index of Industrial Production, by including 191 more items and changing the base year from 1980-81 to 1993-94 is welcome, albeit long-overdue. What is expected from bodies such as Central Statistical Organisation is timely and accurate data, which can then be used as the basis for decisions on economic policy.		The genuine oil conundrum The last one month has seen the overcrowded lubricant manufacturers getting locked in a new fight to control market shares. The bitterness of the fight has already dragged a couple of players to court. Last week, Castrol Ltd dragged Delhi-based Sunstar Lubricants Ltd to the Monopolies & Restrictive Trade Practices Commission.

E Merck gets the OTC touch
The best thing that could have happened to the E Merck stock is a shift to the specified list on the BSE. The result: Liquidity on the counter has improved drastically, touching an all time high level. Not only this, the stock has also shown a smart appreciation.

The Index
Miller & Modigliani, in their award-winning thesis, had stated that in the absence of transaction cost, and other ineffiencies in the market, the capital structure is irrelevant to the value of the firm. Nevertheless, critics including Arvind Pande, the chairman of SAIL, have been toying with the idea of playing around with the capital structure to improve SAIL's performance.