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Since the severe foreign exchange crisis of 1991, one word that has become familiar to every Indian household is foreign investment, or FDI. The primary role of foreign investment was to balance our balance of payments, provide additional capital to a capital-starved economy, and support the stability of our currency. The question today is whether gold could perform the same role that FDI has long been expected to play.Over the past decade, foreign investment, both direct and portfolio, has totaled approximately $400 billion. During the same period, India’s gold imports accounted for between $450 and $500 billion, forming a substantial part of the import bill. Annual gold purchases typically range between $35 and $55 billion, constituting a major share of total import expenditure, contributing heavily to the merchandise trade deficit. It is clear that the inflows from FDI almost compensate for the outflows caused by gold imports. The problem is that these purchases of gold are locked into unproductive household savings rather than being directed into the creation of productive assets.India today is the largest holder of gold. In 2019, the World Gold Council estimated that Indian households had accumulated up to 25,000 tonnes, making India the single largest gold holder in the world. Indian households collectively own significantly more gold than the combined reserves of the ten largest central banks. The value of this household gold is estimated at about $3.2 trillion, equivalent to nearly 75 per cent of India’s nominal GDP. If this stock of gold were channelled into the productive sector for capital formation, it could replace much of what FDI provides.Avoiding the nearly $500 billion outflow on gold imports over the past decade and a half would also have significantly improved India’s balance of payments, bringing it closer to equilibrium and reducing the persistent deficit. Gold imports are among the largest items in India’s import bill and have long been a major driver of the imbalance in external accounts. Official gold exports remain low atabout $10 to $15 billion, while unrecorded exports are estimated at $50 to $100 billion. The result is a gold trade deficit of around $400 billion, which has had a deep impact on India’s trade balance and foreign exchange outflows.India’s overall trade deficit over the last decade stands at about $1,700 billion. Of this, gold accounts for nearly $400 billion. If the gold trade deficit were excluded, the adjusted trade deficit would fall to roughly $1,300 billion, narrowing the gap significantly.India’s attraction to FDI stems from the promise of capital, technology, global knowledge, and foreign exchange. FDI introduces efficiency, innovation, and international benchmarks, but much of the technology can also be purchased separately. Its most important contribution has been the supply of capital and foreign exchange, both of which strengthen the balance of payments and help manage the trade deficit. Since April 2000, India has attracted about $750 billion of cumulative equity FDI, underscoring its position as an appealing investment destination. Yet, if the true strength of FDI lies in the capital it provides, India’s vast household gold holdings already represent a comparable or greater pool of wealth. The real challenge is not the absence of capital but how to unlock and channel this domestic stock into productive use. If that can be achieved, reliance on foreign inflows could be reduced and India’s own wealth could become a sustainable driver of growth.Our foreign exchange reserves include about $225 billion of US Treasuries, which generate yields ~4%. In comparison, gold, which accounts for around 10 per cent of India’s foreign exchange reserves, has delivered a ten-year compounded annual growth rate of above 12 per cent in dollar terms. While gold is undoubtedly more volatile and Treasuries provide steady liquidity and income, the higher returns on gold make a strong case for reconsidering the composition of reserves, particularly for a country like India where gold holdings are substantial.The paradox is illustrated by the record repatriation of nearly $100 billion by overseas investors in FY25, compared with ~$90 billion in the previous year. While FDI helps capital formation, a large share of the value created eventually flows back outside the country in the form of profit repatriation and dividend payments.Economic policy must evolve with the times. In 1991, India urgently needed FDI. Today, however, capital is no longer scarce. On the contrary, large amounts of capital now flow outward through overseas investments and repatriations. These trends demonstrate India’s maturity as a market. What is needed now is a creative scheme to draw out the massive reserve of gold held by Indian households and channel it into the productive economy. This would generate much-needed capital from domestic sources and ensure that the benefits remain within the country.

Oravel Stays Limited, the parent company of Oyo, announced its rebrand to PRISM on Sunday. The company said the new corporate brand name reflects its 'expanded' global portfolio and 'long-term' vision.The company said the Oyo brand will continue to serve as the recognisable, consumer-facing identity for budget travel. PRISM, in turn, assumes the role of the parent company brand that spans technology solutions, premium hospitality, extended-stay residences, celebration venues, and experiential living concepts, besides its core of budget hospitality.Founded in 2012 by Ritesh Agarwal, Oyo began as a budget travel-tech brand, standardising and organising small hotels using technology. The company said it has expanded well beyond its Indian budget hotel mainstay into multiple countries, premium hotels, vacation homes and more.The company said it has scaled into a 'diversified global travel-tech, hospitality and living ecosystem' serving more than 100 million customers across 35+ countries.The group's portfolio today spans hotels under brands such as Oyo, Motel 6, Townhouse, Sunday and Palette. In the vacation homes segment, it operates brands such as Belvilla, DanCenter, CheckMyGuest and Studio Prestige. The extended-stay category is represented by Studio 6, acquired through G6 Hospitality in the U.S. Additionally, the portfolio encompasses workspaces and celebration spaces, offered through Innov8 and Weddingz.in. The group also offers hospitality technology solutions, including AI-driven partner tools and data science platforms.“The transition to PRISM marks the establishment of a future-ready corporate architecture designed to align our expanding portfolio with our long-term vision,” said Ritesh Agarwal, founder and group CEO, PRISM. “PRISM is powered by a strong technology engine, deeper investment in data science and AI, and a commitment to helping our partners grow profitably while delighting customers worldwide," he added.

The combined market valuation of seven of the top-10 most valued firms jumped Rs 1,06,250.95 crore last week, with Bajaj Finance and Reliance Industries emerging as the biggest gainers, in line with an optimistic trend in equities. Last week, the BSE benchmark jumped 901.11 points, or 1.12 per cent, and the Nifty climbed 314.15 points, or 1.28 per cent. From the top-10 pack, Reliance Industries, HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India, Bajaj Finance and LIC were the winners, while TCS, Infosys and Hindustan Unilever face erosion from their market valuation last week. The valuation of Bajaj Finance surged Rs 37,960.96 crore to Rs 5,83,451.27 crore. Reliance Industries added Rs 23,343.51 crore to Rs 18,59,767.71 crore. The market capitalisation (mcap) of HDFC Bank jumped Rs 17,580.42 crore to Rs 14,78,444.32 crore and that of Life Insurance Corporation of India (LIC) climbed Rs 15,559.49 crore to Rs 5,54,607.42 crore. State Bank of India's mcap rallied by Rs 4,246.09 crore to Rs 7,44,864.69 crore and that of Bharti Airtel edged higher by Rs 4,134.02 crore to Rs 10,81,347.25 crore. ICICI Bank's valuation went up by Rs 3,426.46 crore to Rs 10,01,717.42 crore. However, the market valuation of Tata Consultancy Services (TCS) tanked by Rs 13,007.02 crore to Rs 11,02,955.89 crore. The mcap of Infosys eroded by Rs 10,427.47 crore to Rs 6,00,036.47 crore and that of Hindustan Unilever declined by Rs 6,296.91 crore to Rs 6,18,694.37 crore. Reliance Industries remained the most-valued firm followed by HDFC Bank, TCS, Bharti Airtel, ICICI Bank, State Bank of India, Hindustan Unilever, Infosys, Bajaj Finance and LIC. PTI

Tesla Inc.’s latest Master Plan is too vague to be an actual plan. The real details have dropped soon after in the form of a proxy statement. This is largely an extended argument for a new, roughly trillion-dollar compensation plan for Chief Executive Elon Musk. It serves to both embellish Tesla’s latest pitch and remind everyone, even if unintentionally, of the company’s hollow governance.Over the past two years, Tesla’s core electric vehicle business has flipped from growth to decline, amid setbacks such as the Cybertruck flop and the politicization of the brand, both of which Musk owns. During that time, however, the board has appeared to mostly engage itself in restoring a multi-billion-dollar compensation package for Musk that was agreed in 2018 but struck down by a Delaware court over conflicts of interest and disclosure issues.The board pushed shareholders to revalidate the compensation package — which the Delaware court effectively ruled as irrelevant — and switch Tesla’s incorporation to Texas. It has since granted Musk an “interim” award of restricted stock units, currently worth about $32 billion, that will vest if the company’s appeal in Delaware fails and he sticks around for another two years. It now proposes a new set of multi-tranche stock payments that mimic Musk’s 2018 package but at vastly higher thresholds, since Tesla is already valued at more than $1 trillion. The new targets task Musk with growing Tesla’s market cap to $8.5 trillion — roughly double that of the world’s most valuable company today, Nvidia Corp. — over a period of up to 10 years, along with various profit and operational targets. These include getting adjusted Ebitda up to $400 billion, or 26 times the trailing 12-month figure, and delivering set numbers of products, such as a million robots and operating robotaxis.Regardless of future achievement, the whole package, today, helps Tesla in one crucial respect: Reinforcing the shift in its narrative away from EVs toward autonomous driving, artificial intelligence and robotics. The latter have total addressable markets which are, at this point, limited only by the imagination. Recall that, for all the thrills and spills, Tesla’s stock price today is only 29% higher than where it was three years ago, less than half the gain of the S&P 500 Index. But even this lackluster performance is owed to sheer belief: Tesla’s forward earnings multiple has tripled. The master plan tees up the pay package and the pay package lends the master plan a certain narrative ballast. 123743196There is a legitimate argument to be made that the enormous increase in Tesla’s market cap since 2018 means it is unfair that Musk lost out on the tens of billions approved back then. It is, equally, overstating things to say that he hasn’t been compensated for his efforts given that he owns 12.4% of the company, and that’s after he already sold $39 billion worth around the period when he bought Twitter Inc. and before including the new interim award. The proxy shows that, as of late August, Musk had $79 billion worth of Tesla shares pledged as collateral for personal loans which (a) rather cuts against this post he made on X in July, and (b) suggests he isn’t exactly scrambling to find jet-fuel money at the end of each month.Above all, though, the fairness argument obscures the fact that the 2018 package was struck down because of a failure by the board. And while this latest pay package will doubtless pass muster if challenged in Texas, it also advertises the board’s continuing deficiencies.This is the most telling passage in the entire proxy:During negotiations, Mr. Musk reiterated that, if he were to remain at Tesla, it was a critical consideration that he have at least a 25% voting interest in Tesla and that he receive assurances that he would be compensated for his past services in accordance with the 2018 CEO Performance Award. Mr. Musk also raised the possibility that he may pursue other interests that may afford him greater influence if he did not receive such assurances.Nice stock price tied to faith in the genius of one man you’ve got there; be a shame if he left. On one level, this is absolutely correct: Tesla is priced at more than $1 trillion because of belief in Musk, not an objective assessment of its declining profits. Yet other bits of the proxy highlight the potential costs and absurdities of this effective hostage situation.The most glaring is that Musk has already pursued other interests, notably in the founding of his private artificial intelligence empire, xAI. Even better, there’s another resolution on the docket seeking authorization for Tesla to invest some unspecified amount in xAI. This has been raised by an individual investor declaring a stake equivalent to “at least” roughly 0.000000002% of Tesla’s shares and the board makes no recommendation either way. Musk has, however, pressed publicly for this highly dubious injection of cash into a personal venture whose bonds currently trade at a junky yield of 12.7%.Perhaps the most comedic aspect, however, concerns Musk’s eventual replacement. Tesla has been a listed company for 15 years and while the proxy maintains that the board regularly reviews succession planning, a long-running exodus of senior executives and the new trillion-dollar package to keep Musk around rather suggest those reviews are wanting. The bonus here is that one of the conditions of Musk’s new compensation package is that, in order to be able to vote the shares awarded in the final two tranches, he must develop a succession “framework” of his own. Will the board reviews continue regardless? Of course, by then, Tesla would be worth at least $7.5 trillion, so who cares I guess