- India.Today.
So we`re in slowdown territory now. Growth has slipped to 6.9% and that figure includes some “creative accounting” by our government too. If India Inc is to be believed, then the government is’nt moving forward with any work. Which is French for “Government tenders have slowed down”. Which basically means that our parallel economy is also slowing down.
This “parallel economy” has been used as an answer to why India came out relatively unscathed through the subprime crisis. Mostly by folks in cities like Kolkata and Delhi. They`d know. Kolkata purveys the largest number of people to help you make your “cash” bankable while Delhi has the largest number of people who bank the cash in the first place.
When I was studying in Switzerland, I`d always boast about our GDP figures in relation to the rest of the world (ahem excluding China). As if it was the new natural rate of growth as opposed to the old natural of 4%. So if 4% was the Hindu rate of growth, 6.9% must be the Arya Samaj rate of growth. (For those who dont know – the Arya Samaj was a reformist Hindu movement)
The whole bit of the RBI killing growth by continuously raising rates is basically a polite way that industrialists use to say “ I took a call on debt being cheap forever and look what the RBI did to me.” Inflation numbers have dropped, they`d have you believe. For those amongst us who`d like a primer – Inflation is the rate of price increase. Not an index of the prices themselves.
Which means that if a kg of maida (flour) costed Rs. 100 in 2009. With the crazy inflation of 9% year on year, it costed Rs.109 in 2010 and Rs.118.81 in 2011. So now that inflation has “cooled” to “only” 6% it means that the maida will still cost Rs. 125.93. So effectively, we are celebrating the fact that something has become 25% more expensive in a span of two and a half years. And as such, the RBI should reduce the interest rates so that “growth can be stimulated”.
(Ofcourse, prices havent risen at 9% yoy, but you get the drift.)
Any how. Enough about the gaurment. (Though if most of the voices about the Jaypee group`s influence is to be believed, the Government could well be the Gaurment) 😉