Although known, this article brings it to the fore
In India, the ego of the people in position of power and prices of food have the same problem - inflation.
A whopping Rs. 70,000 crores were spent on preparation of the Commonwealth Games only to buy riches of embarassment for the country. We were only fed with the big and hollow talks of the powers that be.
Sounds similar. Ask the country's common man. For big bytes lacking in bite, go no further than listening to the PM, FM, Fin Secy or the loud mouthed Montek Singh Ahluwalia with regard to the debilitating food price inflation in India. For how many months have they been saying that food inflation will be contained? What exactly have they done to this effect, apart from banking on good monsoon and the base effect? ZILCH.
Food inflation advanced to 15.46 per cent in the week ended September 11, as cost of cereals, select vegetables and milk rose due to supply disruptions caused by unusually heavy rains in many parts of the country. Week on week, food inflation climbed 0.36 percentage points from 15.10 per cent on September 4.
So far normal monsoon was expected to lead to good khariff crops and hence moderation of price. With my worst fears coming true (I have been constantly questioning the normality of monsoon, what with several droughts and flood affected states), the immedaite respite is not visible. Now people are talking of the effects of normal monsoon on Rabi crops. If we have leaders and policymakers like these, who needs Pakistan.
Flirting with 20,000 and threatening to touch its all time high - I am talking of the Sensex. Not the Sen Sex (of Raima fame). A la Mallika, our Sensex is swayed by the money of foreign variety (read FII, who are big net buyers), not the domestic ones (read DII, who are net sellers). Allured by the sensuality of a momentum driven Sensex, the foreigners have loosened their purse strings while the poor desis are counting their wounds.
Beauty they say lie in the eyes of the beholder. But what if the beauty is skin deep? The kind of returns expected from the market (a P/E close to 24) calls for a double digit growth of Indian GDP. But there are enough internal pulls and pressures that would restrict the growth to below 10%. Then, there are beasts lurking around. Beasts that can mutate into even dangerous forms as foreclosures rise, growth stalls around the globe etc. When the backyard catches fire, the flirtation will end. Ergo, the foreigners will turn back.
We are passing through exciting times and deep bruises are par for the course.
The recession is over, proclaims NBER. A bikini of a statistics really. Household welath still down by $12 trillion, estimated foreclosures close to 7 million, pompous US consumers conspicuous by their absence, as savings head up so does unemployment. Whose recession is it anyway?