ECONOMY

Thinkpad: Winds Of Change

Happy Sunday!

Change was in the air this week. Certainly in New Delhi.

The cabinet reshuffle, rumored for a few weeks, came through. In the process, India got itself a jumbo cabinet with 77 ministers. This Hindustan Times article tells us it is the third-largest since 1990. If you think of a cabinet as the political version of a board room, that’s a really long table and a lot of voices and opinions. Also, that’s a lot of cups of chai to serve.

There was no change in the Finance Ministry, the Commerce Ministry, the Road and Transport Ministry. There were changes in the health, IT, aviation, and law ministries, among others.

The continuity in the Finance Ministry, in the admittedly disputable opinion of Thinkpad, is a good thing. You may disagree with the kind of economic aid that the government has provided during the Covid crisis but that was a conscious decision, taken at the highest levels. The government chose a narrow road between two cliffs – fiscal pressures and growth. It is still doing the balancing act. The direction they leaned may be debatable but you probably can’t label it as incompetence.

Alongside, an interesting change came through—the Department of Public Enterprises was transferred to the Finance Ministry. A recent series on privatisation by BloombergQuint had shown the kind of internal pushback the government had faced on the matter. To some extent, and in the case of some potential divestment candidates, the transfer may help smoothen the process.

What was the broader message behind the reorganisation of the cabinet deck?

There are many ways to look into it.

Sanjay Pugalia writes that you should think of this as the Prime Minister’s own attempt at recapitalisation and consolidation, as he tries to claw back his own political capital after the Covid mess.

Raghav Bahl writes that a less-analysed theme through the cabinet changes might have been that sacked ministers were getting unusually combative.

Back in Mumbai, it’s party time for technology and platform firms looking to tap the public markets.

Zomato put out its draft red herring prospectus this week. It’s a business built on our Friday night dine-in order so lots of interesting takeaways. For one, gross orders hit Rs 3,313 crore in the fourth quarter of FY21. We may not be able to go out, but we ain’t eating dal-sabzi on the weekend! And it works for Zomato.

Nishant Sharma has the lowdown on the Zomato business here and Sajeet Mangat picked up on some of these issues with the management in this conversation.

Zomato is probably going to be the first of a few.

Ola, Mobikwik, and Paytm, among others, are waiting in the wings. Such is the interest in late-stage, pre-IPO technology firms that Kotak Investment Advisors has raised a Rs 1,386 crore fund, which will take bets on companies just before their initial public offerings.

The party is on, the punch bowl is full and the theme is….‘Tech’no? Forgive us the PJ (as they called back in the day).

We leave you with an interesting read on cryptocurrencies. For a while, it has been believed that distrust in governments, fiat currencies was a large part of the interest in crypto. Some hard data research from the Bank of International Settlements, into socio-economic drivers of cryptocurrency investments n the U.S., suggests that’s not the case.

”Compared with the general population, U.S. cryptocurrency investors show no differences in their level of security concerns with either cash or commercial banking services,” this BIS paper, titled ‘Distrust Or Speculation’ said.

Incidentally, the research also found that men tend to invest more in cryptocurrencies than women. Wonder what that says? Women prefer to think through what they do, maybe?

Before we find ourselves in the midst of a gender war, we’ll sign off.

It’s super sports Sunday. England vs. Italy. Djokovic vs. Berrettini. Hope your favourites win.

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