It has been more then a week since we have been to the briefing for observer role, each one of us waiting eagerly for our constituency assignments. Yesterday the election commission announced list of observers for first phase. It would have been much better if the constituency allotments for all phases were out, that would have helped in planning next couple of months properly. So its waiting time.
The concern on global economic scenario continues!! You might be wondering why should I be overly concerned to make a mention in blog? Yeah I am and I will share the reasons at appropriate time. However the recession, its recovery and impact on global economies is weighing heavily on my mind. This concern is holding me back from planning for coming weeks.
The election scenario is hotting up and so is the Indian economy! Not many have idea about the growth rates though the industrial sector is showing negative growth rate for last three months. It is difficult to understand, despite all claims to such an effect, how Indian Economy will fare differently from the global economy in general and US economy in particular. The monetary policy announced so far has not really percolated downwards. Over last few months, the RBI has released over $45 billion of liquidity, but where has that money gone? The banks have not reduced lending rates. Home loan customers who took loan before the meltdown, still have to pay at 12% rates. When repo and reverse repo rates have been brought down to 6 and 4.5% respectively, why should banks continue to charge old exorbitant rates? No wonder that Banks' shares have been in demand and people are lapping it up as Banks are selfishly looking at increasing their margins. But it does not augur well for the health of the economy.
Indian economy's exposure to global economy is very limited and it is less than 15% of total GDP. But our economy is very small from global standards. So unless we act fast, unless we pass on policy initiatives downwards, we will pay a very heavy price. The statistically computed inflation has come down to zero level. Growth rates in industry and services sector are at sub zero level. Historically agricultural sector has been flat, so unless we restore the consumer spending and improve consumer confidence and eliminate the hoarding mentality, Economy will continue to be in doldrums. Only a growing economy can give smiles to the Billions.
Has any one tried to understand that how come currencies of trading partners of US started depreciating while it was US economy which was getting weaker? I will explain concept of Economic Entropy in next post.
The concern on global economic scenario continues!! You might be wondering why should I be overly concerned to make a mention in blog? Yeah I am and I will share the reasons at appropriate time. However the recession, its recovery and impact on global economies is weighing heavily on my mind. This concern is holding me back from planning for coming weeks.
The election scenario is hotting up and so is the Indian economy! Not many have idea about the growth rates though the industrial sector is showing negative growth rate for last three months. It is difficult to understand, despite all claims to such an effect, how Indian Economy will fare differently from the global economy in general and US economy in particular. The monetary policy announced so far has not really percolated downwards. Over last few months, the RBI has released over $45 billion of liquidity, but where has that money gone? The banks have not reduced lending rates. Home loan customers who took loan before the meltdown, still have to pay at 12% rates. When repo and reverse repo rates have been brought down to 6 and 4.5% respectively, why should banks continue to charge old exorbitant rates? No wonder that Banks' shares have been in demand and people are lapping it up as Banks are selfishly looking at increasing their margins. But it does not augur well for the health of the economy.
Indian economy's exposure to global economy is very limited and it is less than 15% of total GDP. But our economy is very small from global standards. So unless we act fast, unless we pass on policy initiatives downwards, we will pay a very heavy price. The statistically computed inflation has come down to zero level. Growth rates in industry and services sector are at sub zero level. Historically agricultural sector has been flat, so unless we restore the consumer spending and improve consumer confidence and eliminate the hoarding mentality, Economy will continue to be in doldrums. Only a growing economy can give smiles to the Billions.
Has any one tried to understand that how come currencies of trading partners of US started depreciating while it was US economy which was getting weaker? I will explain concept of Economic Entropy in next post.
