The week has begun on a somber note. The political developments in Delhi, with the Left exiting the UPA and the Samajwadi party making an entry, will mean some changes ahead, some of them could affect business. Then, on Friday, inflation inched ever so closer to 12%. This was not as much a surprise but a confirmation that high levels of inflation won’t go away in a hurry. Indeed, if RBI’s level of 5.5% is taken as a benchmark, we have a long way to go before we can relax.
Economy+Policy
Recent Posts
India’s monsoon forecast upgraded: good for farm and economy
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The Indian weather bureau has updated its initial forecast for the Southwest Monsoon. In April 2008, the bureau had predicted that rainfall would be 99% of its long term average, plus or minus 5%. The long term average refers to a rainfall of 89 cms. The updated forecasts suggests rainfall to be near normal, and will be 100% if its long term average, plus or minus 4%.
Filed under: Agriculture, Economy+Policy, Quick News, Monsoon
Ouch! India’s Inflation index at 11.42%
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India’s wholesale price index (WPI), the widely watched inflation number, moved up a notch to 11.42%. This is a provisional number and it would be safe to assume that the actual figure would be closer to 12% (WPI for week ended April 19 was revised to 8.23% from 7.57%).
Filed under: Economy+Policy, Top News, India, Industries Number Speak, Inflation, WPI
Funds become costlier, demand will get hit
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Indian companies would have expected some action from the RBI to hike lending rates, but the pace of change must have left them worried. The RBI has hiked the repo rate –the rate at which RBI lends in the interbank market- by 50 basis points to 8.5% and has hiked the cash reserve ratio –the portion of deposits kept in reserve by banks- also by 50 basis points.
Filed under: Economy+Policy, Quick News, Credit Policy, Markets Debt & Forex Markets, RBI, Repo Rate
India’s inflation: reining in the government
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Already, inflation is resulting in the government taking steps that don’t seem logical. The Finance Minister has for long been cheering the growth story and cautioning the central bank taking any monetary steps, which might hit growth. And, he has helpfully been ‘requesting’ public sector banks not to increase interest rates, for good measure. Though the RBI is an autonomous body, the pressure on it to ignore the warning signals of rising inflation was evident.
Filed under: Economy+Policy, News Analysis, India, Inflation, Policy From the Government
India’s Budget pleases janata but investors can’t see the light still
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India’s Union Budget 2008-09 has been greeted by three successive days of stock market declines, including the day it was announced. Some of the negative sentiment is more global in nature. But the Budget proposals do not seem to have gladdened investors. It tries to give a boost to demand by giving more cash for people to spend, taking a leaf from George Bush’s largesse, including farmers whose debt has been waived.
Here’s a look at what the Budget has really done.
Filed under: Economy+Policy, News Analysis, Cenvat, Custom Duty, Policy From the Government, Union Budget
What is the problem with the Indian corporate debt market?
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Sebi too has pitched in to try and revive the corporate debt market. The lack of a vibrant secondary debt market has been one of the biggest cribs of the financial services industry. The primary market is not rocking, either. So, everyone from the finance ministry, the stock exchanges, RBI and Sebi have been putting on their thinking caps, trying to change things, over many years.
Filed under: Economy+Policy, Finance+Markets, News Analysis, Corporate Debt, RBI
Short-term profits not for insiders, Sebi proposes US-style legislation
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Sebi plans to introduce short-swing insider trading regulations in India too. The draft note put up on its website traces its origins to US securities’ law. The proposal seeks to define insiders for the purpose of this regulation.
Filed under: Economy+Policy, Top News, Insider Trading, Sebi, SEC
Lower US interest rates = Good times for India?
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The week that went by saw the Fed cut rates by 50 basis points, more than what anyone anticipated. That sparked off rejoicing in global and Indian equity markets, and the local benchmark, the BSE Sensex crossed the 16,000-mark.