Half of rural India still lives in darkness

Most Indian investors rely a lot on the growth potential of India while making their investment decisions. And you might be no different. But what if the India growth story ends with a whimper? Well, if the country's power woes were to continue unabated, this might become a reality after all. As per a report in Mint, around 57% of rural households and 12% of urban households in India have no access to electricity. That partly explains why our per capita power consumption (700 units a year) is way below the world average (2,600 units). 
The power sector is already battling a number of serious issues that have stymied its growth. Fuel and equipment shortages are the norm. Vast tracts of land to set up the plant are hard to come by. Over that, the whole host of regulations makes the project execution very tiresome for companies. All this has resulted in the country consistently falling short on capacity addition targets. If we do not get over these issues fast, which anyways looks very bleak, the day is not far when we will rue our destinies. 

Mutual Funds are Trend Setter ?

Rs 35 bn worth of redemeptions! That is the kind of outflow that the Indian mutual fund industry witnessed in July 2010. Reasons for the same could come from several quarters. Investors being wary of yet another crash, ban on entry loads and regulatory dispute on schemes are just a few of them. But what is certain is that the industry needs to revamp its operations on an urgent basis. In a sector where size was all that mattered, huge outflows could be suicidal. Performance has been the key metric that the mutual fund regulator is emphasizing on these days. And probably that is what even the players should focus on instead of relying on distributors to popularize their schemes. 

The Great Wall of China !

Property prices in China have soared in recent times to reach unjustifiable levels. And banks have been responsible for the same as they have lent indiscriminately to the sector. So, it hardly comes as a surprise that Chinese banks have been instructed by China's banking regulator to undergo stress tests. This is for the scenario of a 60% plunge in home prices envisaged in Chinese cities where prices have jumped out of control.What happened to the property market in the US is still fresh in the minds of everybody including the Chinese. The mortgage market there collapsed and triggered the biggest global financial crisis since the Great Depression. Little surprise then that the Chinese authorities do not want to find themselves in the same boat. The Chinese government has been doing its bit to ease the housing bubble. It has taken steps such as lifting minimum mortgage rates and down payments for second homes. It has also suspended lending for third homes. This has obviously not satiated the government. And so it wants to take additional measures to prevent the kind of crisis that emanated from the US. 

4 Indian companies get higher than sovereign rating

The credit profile of the average Indian corporate has gotten better in recent times. Or so opines rating agency Standard & Poor's. According to S&P, this is on the back of higher demand for products and services stemming from good domestic macroeconomic conditions. Not to mention a gradual improvement in the global economy. In fact, it has rated four corporates above even India's sovereign rating. These four companies areReliance Industries, Wipro, TCS and Infosys Technologies. 

S&P feels that these companies would be able to service their obligations even if the sovereign comes under severe stress. In general, debt has increased for some companies but they are also expanding, while others have deleveraged debt. This has led to the overall improvement in the credit profiles of corporate India. Ratings from these agencies need to be taken with a pinch of salt. However, they do have direct implications for Indian companies. This is because it is these ratings that determine the interest rates that companies will have to pay on their borrowings.