business

Can the Congress Govt Keep Inflation Under Wraps ?

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The inflation numbers surprised positively with the July print coming in at 6.87%. But the data were not as benign as first blush would suggest. The lagged impact on June’s sharp fall in oil prices, which has since partially reversed, was the key driver.

Core inflation (non-food manufacturing), however, picked up (5.4% y-o-y vs. 4.9% in June) and also rose in seasonally
adjusted sequential terms; 0.8% m-o-m sa (vs. 0.6% in June) and 6.9% 3m/3m saar (vs. 3.4% in June).

Non-Food Articles rose significantly to 13.1% from 6.8% YoY last month, primarily

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Can the Congress led UPA Government Deliver on the Economic Front from here On ?

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Weak fundamentals on the macro front have been exacerbated by a lack of policy decisiveness and the diminishing popularity of the incumbent UPA, as seen in recent state elections. Allegations of corruption have been negative for sentiment and investment projects. Concerns are rising that the dual leadership model of the Congress that worked well in the past may not prove very successful this time around.

With the former FM Pranab Mukherjee now contesting Presidential election, PM Manmohan Singh has taken over charge of the Finance Ministry which is in a very bad shape.

Inheriting a slowing economy with elevated inflation

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Battle of Indian Economy – Oligarchy Vs Democracy and Transparency for 2022

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When we look at the Past decade of Economic Reforms in India, we see two camps – One has politicians with a controlling and arguably, authoritarian mindset. They are backed by a growing number of promoters who cannot come to terms with the fact that the under-the-table model of doing business has become dysfunctional in India. These promoters lobby that the Comptroller Auditor General and the Competition Commission of India are neutralized as quickly as possible so that business-as-usual can resume.

On the other end of the Spectrum are a disparate group of determined individuals

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Why Indian Inflation Rises During Congress Rule ?

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The Indian National Congress headed by Mr. Rahul Gandhi suffered a miserable defeat in India’s largest electorate state of Uttar Pradesh for only one big reason – Common Man / Aam Aadmi tired of Price rise in India. We decided to collect the data of WholeSale Price Index, Food and Non-Food Inflation over the past 8 years since the Congress government has come to power in India.

As evident in the WPI Food & Noon Food Inflation Chart below from 2005 to 2012, the Government took charge when the Inflation Number was mere 2%.

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India’s GDP a Shock of Decade for already Worried Industry – Government in Denial Mode for FY 2013 GDP

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In a shocker, growth in Q4FY12 dropped to nine year low of 5.3% YoY, lower than anyone could have gauged. On hindsight, Analysts estimate at 6.1% YoY appeared rather optimistic.

Services sector that has otherwise been the key growth driver clocked 8.9% YoY growth in FY12 compared to 9.3% YoY in FY11. If the services sector fails to recover in 2012, growth prospects could get even more clouded.

Industrial growth slumped by almost half to 3.4% YoY from 7.6% earlier

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India’s current account crisis weakens Rupee

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India’s high import demand for petroleum (which is nearly price inelastic) and gold (driven by a shortage of investible asset classes in a high inflation environment) are primarily responsible for India’s burgeoning import bill. In fact, adjusting for India’s imports of Petroleum products and Gold would turn India’s current account deficit (CAD) into a hefty current account surplus.

Things Look Gloomy for FY 2013 – Despite a large merchandise import bill,

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