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Column: The big bang RBI stimulus – Behind Infra Lines

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The slew of announcements by the Reserve Bank of India (RBI) to lower the repo rate, reverse repo rate, cash reserve ratio and allowing financial institutions the bandwidth to offer a three month EMI moratorium are all much needed and welcome as India grapples with an unprecedented but much-needed shut down due to the global coronavirus pandemic. The RBI stimulus has hit at the most crucial issue at hand, i.e. “lack of or in most cases absence of cashflows”. Helping individuals and businesses tide over temporary cash flow issues will be critical to ensure that as and when the economy recovers and demand picks up, businesses can move (if not bounce) back to normalcy.

The biggest challenge is the stoppage in cash movement due to the shutdown. As businesses stop selling and the wheels of the economic system stop turning one gets a chain reaction through low to no sales, thereby impacting a firm’s capacity to invest, pay back debt and pay employees. As both firms and individuals are hindered, excess liquidity in the system due to the RBI policy changes allows lenders to both ease the credit constraints as well as lower the cost of credit. Flexibility around credit repayments and a lower price of credit through greater liquidity in the financial system will boost the economy to cope with the crisis and eventually recover.

We may underscore that the issues faced by borrowers are more a liquidity issue and going forward also an issue of lagged demand growth. The coronavirus driven shutdown has led to a sudden stop in demand. A lot of even high-quality businesses may be severely constrained. The vital aspect to note is that those businesses which remain high-quality are negatively impacted by an exogenous shock that has rendered their current cashflows insufficient to cover their costs, debt servicing and employee payrolls. The RBI policy changes carefully address this “liquidity issue” that is at the forefront of the problems.

Additionally, the RBI policy changes through increasing liquidity and providing banks with the option of offering a moratorium on EMI payments, at once, recognises that while demand drop was a “jump event” with a sudden drop in demand, the recovery in demand will be more of a “trickle incremental event” once the shutdown ends, and the pandemic subsides. The increase in demand may be more gradual vis-Ã -vis a sudden drop. Policies that allow a lower cost of credit, higher availability of credit and flexibility around loan structuring will assist both lenders and borrowers better to match their credit cashflows with the business cashflows.

The RBI announcement on the targeted long term repo operation (LTRO) is one that is also vital in high volatility and low liquidity situation. The RBI’s decision to offer banks capital provided the money is invested in investment-grade corporate bonds will, to some extent, help ease the pressure on the spread widening and low liquidity seen in the corporate bond market. The LTRO announcement shows that there is a realisation that all selling in the markets isn’t necessarily a view on the fundamental value of the asset under consideration but is also driven by technical liquidity and portfolio allocation factors, especially in times of crisis. Primarily, market participants sell since they need the cash to tide over current issues as opposed to selling based on asset value. The LTRO, if used by the banks, can, to some extent, help support the corporate bond market.

At a broader level, the recent policy changes of the RBI have created a framework for releasing liquidity into the financial system to absorb the corona virus shocks better. The ability of market participants to realise that while the current problems are grave, the need to restructure credit agreements around cashflows is critical for both lenders and borrowers. The RBI policy announcements have provided the market with the tools with which to manage the cash flow mismatches to tide over current issues to some extent.

Essentially, while specific human behaviour patterns might change, people will still fly on planes, eat out at restaurants and stay at hotels. Short-term exogenous shocks, however large, won’t change the fundamental nature of businesses in the medium to long-run. The RBI through both policy and signalling has shown the will to support the markets quite actively to help move forward.

(The views expressed in this article are personal and that of the author. The author heads Development Tracks, an advisory firm. You can contact him at [email protected] or @Taponeel on Twitter)

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Was late TV actor Samir Sharma battling depression, money crisis?

Many similar poems written in Hindi and English, with pain and heartbreak as themes, can be found in his social media accounts.

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Sameer Sharma

Mumbai: Television actor Samir Sharma allegedly ended his life by committing suicide in his Mumbai apartment. The 44-year-old actor was found hanging in his kitchen on Wednesday night. The police suspect that he probably died two days ago.

Recent social media posts of the late actor raise the question if he was battling depression.

On last Monday (July 27) Samir had shared a poem on his unverified Instagram account that reads:

“I built my pyre

And slept on it

And with my fire

It was lit

And all that was me

I burned in it

I killed my dream

To wake up from it

Now my dream is gone

And I with it

I woke up to ashes

And I was in it

I took what was left

And left it in a stream

And hoped my ashes

This time have a better dream.”

On July 20, the actor had shared a short film he made, on his unverified Facebook account. Titled “The Cut”, the effort has been described by the actor as: “A film about the psychological effects of the isolation due to the lockdown on a person living alone.”

Another poem shared by the actor on Facebook on June 8, reads:

“I breathed through you,

I lived through you,

I felt what you felt,

I dreamt what you dreamt

I forgot where I ended

I forgot where you began

I was who you were

But didn’t know who you are

And I didn’t see it coming

I just saw you going.”

Many similar poems written in Hindi and English, with pain and heartbreak as themes, can be found in his social media accounts.

Samir Sharma used to stay in a rented apartment in Malad West, which he had reportedly moved in during February this year. A social media post he shared in the first week of June indicates that he was looking for another change of residence, and was keen to move into a shared apartment.

“Looking for a shared apartment, with independent room in Malad West or Goregaon West, if anyone has a place, and is interested, pls DM me…. Thanks,” posted the actor on Facebook on June 2.

The post raises question if he was facing monetary crisis.

Dr Singh also shared that over the past few months of lockdown, “cases of depression and anxiety among people have increased and that is not only because of confinement but due to several other factors like uncertainty of the future and lack of support which is testing our coping skills”, he said, adding: “Some people are facing economic problems, too.”

Samir Sharma was a popular face on television. He has featured in daily soaps like “Kyunki Saas Bhi Kabhi Bahu Thi”, “Kahaani Ghar Ghar Kii”, “Left Right Left”, “Woh Rehne Waali Mehlon Ki” and several others. He last featured in the ongoing daily soap “Yeh Rishtey Hain Pyaar Ke”.

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5 things to know as Hiroshima marks 75th A-bomb anniversary

The city of Hiroshima in western Japan is marking the 75th anniversary of the U.S. atomic bombing

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The Atomic Bombing of Hiroshima

HIROSHIMA, Japan — The city of Hiroshima in western Japan marks the 75th anniversary of the world’s first nuclear attack on Thursday.

Three days after its Aug. 6, 1945, bombing of Hiroshima, the United States dropped a second atomic bomb on Nagasaki. Japan surrendered on Aug. 15, ending World War II and, more broadly, its aggression toward Asian neighbors that had lasted nearly half a century.

Here’s a look at that day in Hiroshima 75 years ago.

Q. Why was Hiroshima chosen as a target?

A. Hiroshima was a major Japanese military hub with factories, military bases and ammunition facilities. Historians say the United States picked it as a suitable target because of its size and landscape, and carefully avoided fire bombing the city ahead of time so American officials could accurately assess the impact of the atomic attack. The United States said the bombings hastened Japan’s surrender and prevented the need for a U.S. invasion of Japan. Some historians today say Japan was already close to surrendering, but there is still debate in the U.S.

Q. What happened in the attack?

A. At 8:15 a.m., the U.S. B-29 bomber Enola Gay dropped a 4-ton “Little Boy” uranium bomb from a height of 9,600 meters (31,500 feet) on the city center, targeting the Aioi Bridge. The bomb exploded 43 seconds later, 600 meters (2,000 feet) above the ground. Seconds after the detonation, the estimated temperature was 3,000-4,000 degrees Celsius (5,400-7,200 degrees Fahrenheit) at ground zero. Almost everything within 2 kilometers (1.2 miles) of ground zero was destroyed by the blast and heat rays. Within one hour, a “black rain” of highly radioactive particles started falling on the city, causing additional radiation exposure.

Q. How many people were killed?

A. An estimated 140,000 people, including those with radiation-related injuries and illnesses, died through Dec. 31, 1945. That was 40% of Hiroshima’s population of 350,000 before the attack. Everyone within a radius of 500 meters (1,600 feet) from ground zero died that day. To date, the total death toll, including those who died from radiation-related cancers, is about 300,000. Hiroshima today has 1.2 million residents.

Q. What effect did radiation have?

A. Many people exposed to radiation developed symptoms such as vomiting and hair loss. Most of those with severe radiation symptoms died within three to six weeks. Others who lived beyond that developed health problems related to burns and radiation-induced cancers and other illnesses. Survivors have a higher risk of developing cataracts and cancer. About 136,700 people certified as “hibakusha,” as victims are called, under a government support program are still alive and entitled to regular free health checkups and treatment. Health monitoring of second-generation hibakusha began recently. Japan’s government provided no support for victims until a law was finally enacted in 1957 under pressure from them.

Q. What are those colorful folded paper cranes for?

A. “Origami” paper cranes can be seen throughout the city. They became a symbol of peace because of a 12-year-old bomb survivor, Sadako Sasaki, who, while battling leukemia, folded paper cranes using medicine wrappers after hearing an old Japanese story that those who fold a thousand cranes are granted one wish. Sadako developed leukemia 10 years after her exposure to radiation at age 2, and died three months after she started the project. Former U.S. President Barack Obama brought four paper cranes that he folded himself when he visited Hiroshima in May 2016, becoming the first serving American leader to visit. Obama’s cranes are now displayed at the Hiroshima Peace Memorial Museum.

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Rithambara hails Bhumi Pujan, recalls Ram temple movement

When asked about L K Advani and M M Joshi who have now taken a back seat, Rithambara said, “They lit the spark to carry the movement forward.”

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Sadhvi Rithambara

Ayodhya, Aug 4 : A day before the Bhumi Pujan by Prime Minister Narendra Modi for the Ram temple in Ayodhya on Wednesday, firebrand Hindu leader Sadhvi Rithambara expressed happiness over the event. During the Ram temple movement, her riveting speeches had a deep impact on thousands of Ram devotees. They also gave a boost to the Sri Ram Janmabhoomi movement.

In a telephonic interview with IANS Rithambara said that she could not exress her happiness over the once in a lifetime event like the Bhumi Pujan in mere words. Rithambara is elated about the resurgence of self-respect for Indian culture that has come to the fore after nearly 500 years of struggle and shared that she is brimming with pride and boundless joy.

Asked how she got involved with the Ram temple movement, she said, “The attempt by foreign invaders to destroy our culture made me angry and I joined the movement. However, my role in this movement remained small just like a squirrel. Though I was involved in the movement with utmost devotion, Ram Lalla took me towards Ayodhya and I took a resolute stand by the banks of the sacred Saryu river. I spent my youth for Ram Janmabhoomi and the Hindu culture only with the blessings of Lord Ram. I was groomed under the able leadership of Vishwa Hindu Parishad leader the late Ashok Singhal.”

Responding to a question, the Sadhvi said, “When the Ram temple movement was at its peak, there were various obstacles in the way. I spent most of my time in jungles, caves and among beggars. People were scared of sheltering us in their homes. We suffered a lot when we were struggling underground. But all the pain is forgotten on the achievement of our objective to build the Ram temple.”

Rithambara said during the Ram temple movement her speeches were recorded secretly. At that time there was such enthusiasm among the people that the Ram Mandir movement became a mass movement, it was not because of any institution or organisation and now the outcome will be witnessed on August 5.

When asked about L K Advani and M M Joshi who have now taken a back seat, Rithambara said, “They lit the spark to carry the movement forward.”

On the question of women being excluded from the Temple Trust, she said it is immaterial. “The Lord wanted us to get it done. There is no gender distinction here. The temple of God is being built, that’s what matters.”

On the question of the ‘mahurat’, she said Lord Ram’s work is always auspicious. Ramji himself has chosen his ‘mahurat’. The whole world is pleased with the construction of Lord Ram’s temple. Festivities are taking place in every house.

On the alleged caste discrimination, the Sadhvi dismissed it as a figment of the imagination, saying that a seer has no caste. A limited number of people have been invited for the Bhumi Pujan due to the corona pandemic, so it should not be taken otherwise, she added.

In response to another question, she said she did not know who all were invited. Those who are not able to be at the Bhumi Pujan, can go there any time as per their convenience.

On a Pakistani minister’s acerbic reaction to the Bhumi Pujan, she said that Pakistan should respect the sentiments of crores of Indians. This will promote harmony.

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