Editor's Desk

Deepak Parekh, Chairman HDFC Group, highlighted some of the key challenges faced by India. Excerpts as follows,

Inflation supply-side is a problem; investment in agriculture is important; productivity is required to increase; APMC is outdated; logistics and modern retailing is one short-term measure; a farmer gets only Rs33 out of the Rs100 paid by a consumer against Rs66 in developed countries.

US$100/bbl and higher crude price—FY2011E imports bill could be as high as US$100 bn; for 9MFY11, it was US$75/bbl.

Infrastructure government spent 7.5% of GDP in FY2010; land acquisition is a big issue; 40%

Railway Budget 2011-12 was more of election budget as expected. Though planned outlay has been increase to all time high to Rs 57630 cr, clear roadmap to achieve the vision 2020 and to meet challenges of meeting requirement of emerging India were clearly missing. Another worrying news is that in our view the 2011 Railway Budget missed an opportunity to raise passenger charges to pass on rising fuel costs when growth is strong.

Rail Budget 2011-12 proposes to spend R 57630 cr during FY12 which is almost 39% higher

World Over incompetent Politicians become law makers ignoring the situation and the real state their economies are in. India is no exception and lags miles behind the ground realities. The Government unable to handle inflation due to rampant corruption and black marketing in every pocket of the society went ahead and tweaked Consumer Price Indices (CPI) itself.

The combined CPI is newer – the base year is now 2010 (vs. 1986-87 and 2001 for the existing CPI indices). It is broader – coverage

Read moreNew Consumer Price Index – Acceptable But Scope for Improvement