Now Chidu himself says India has high CAD and Inflation

by rawemotions Fri Nov 29, 2013 1:17 pm

http://www.firstpost.com/economy/upa-is-paying-a-political-price-for-high-inflation-says-chidambaram-1257927.html

Apparently now UPA is realizing that giving away things free to target Vote Banks without figuring out revenue is bad economics.

Perhaps folks in this forum who claimed Indian economy was doing very good and it has great statistics, should start arguing with the Indian FM. He obviously forgot to mention about the anemic job (minus MNREGA) growth in his list.

BTW there is also a report that UPA/Central government has agreed for a peace clause with WTO, where the subsidies they are giving under Food Security Bill will be stopped after 4 years (other developing countries were asking for Cool

, unless WTO agrees to a new framework that allows such subsidies for all countries.

This has been opposed by NDA on the principle that it is an intrusion of WTO into India's policy making abilities and sets up a wrong precedent. But the centre just ignore them. The other parties are busy building fronts so that they can be a 'B' team of the congress or form a government that can be supported by Congress.

Now why would UPA agree for 4? Any future government would have to provide the subsidies, but in the last year of the next government, it will be forced to stop providing the subsidies, making them hugely unpopular in an election year. Effectively, this is a new form of poison pill, where they are setting up a future government of failure, and forcing them to take an unpopular decision on WTO dictats. Interestingly I do not see any debate on this issue, in the media. The government will have to order elections one year before the end of its tenure to avoid this issue and thus will have less time to implement its policies or less time for any of its new policites to work. Offcourse, if UPA comes back to power, their policies are already in place for the past 10 years, and they will continue to tom tom them, so 4 or 5 does not matter. Things are not looking good.

Excerpts
Consumer inflation in India is entrenched due to high food and fuel prices, and monetary policy has little impact in curbing these prices, Chidambaram said. “I have been advised that inflation has got entrenched and monetary policy does not have any or has very little impact on food prices and fuel prices,” Chidambaram said.
:
“Demand (for food and fuel) is being stoked by the fact that we have high fiscal deficit and that fiscal deficit was not contained for a fairly long period, I think over a period of two years,” Chidambaram said.

by Guest Fri Nov 29, 2013 1:34 pm

how did we miss the mgnrega scam? i think it got lost somewhere in the 2G, coal and mining scams.

Now Chidu himself says India has high CAD and Inflation

Now Chidu himself says India has high CAD and Inflation

Re: Now Chidu himself says India has high CAD and Inflation