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Hard times for India as inflation surges again

F-16_Falcon

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Hard times for India as inflation surges again
ET Bureau, Mar 26, 2011, 06.23am IST
http://articles.timesofindia.indiat...ediate-goods-manufacturing-and-mining-sectors
After a three-week respite, food inflation is back to haunt us. Data released on Thursday show food inflation measured by wholesale prices at 10.05% for the week ended March 12, up from 9.42% the previous week.

Any hope that the spike is a one-off development and inflation will soon resume its downward trajectory is belied by two factors. One is the large-scale disruption in rail and road traffic caused by the on-going agitation by Jats seeking caste-based reservation in north India. The other is higher global commodity - especially fuel — prices.
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While the pass-through on account of higher fuel prices may not happen immediately, given impending elections in five states and the already high inflation, the impact on prices cannot be suppressed for long.

Fruit and vegetable prices usually rise in the summer months, and that does not augur well for food inflation. Inflation also seems to have spread to non-food items - non-food manufactured goods inflation increased to 6.1% year-on-year in February and the inflation number for December was revised up to 9.4%, up from 8.4% earlier, so the outlook on the inflation front is not bright.

This, perhaps, explains why the RBI has been consistently raising its projected inflation rate for end-March 2011; it is now 8%as against 7% earlier. It has also been raising interest rates, steadily if somewhat slowly. But monetary actions yield results with a lag. Moreover, the government has made its preferences clear. If there is a trade-off between growth and inflation (a debatable point), the government wants growth, even if in the process it means a new higher normal for inflation.

The moderate fiscal deficit budgeted for 2011-12 gave some momentary comfort on the demand front. But the increase in subsidies on petroleum products and fertilisers as a result of high crude prices coupled with the prospect of expenditure overshooting Budget estimates suggests the fisc is unlikely to lend a helping hand in demand-side inflation management. With the fisc unwilling to chip in and the RBI unable to do much more, where does that leave the aam aadmi? As always, at the receiving end.
 
Thank you F-16 falcon for taking care of India's important issue today.This will help Indians realize that this issue should be solve urgently.
 
Inflation is one of the most dangerous economic issues today.

The Chinese government is taking it extremely seriously, and India needs to do so as well.
 
It will be an acid test for the nation to come out of this inflation otherwise things will go wary.:angel:
 
Inflation is one of the most dangerous economic issues today.

The Chinese government is taking it extremely seriously, and India needs to do so as well.

Yes,We know :what:

---------- Post added at 12:11 AM ---------- Previous post was at 12:11 AM ----------

but indian do not understand this.

yes,our policy makers doesn't know much about economics....
our economy is in shambles :undecided:
 
yes,our policy makers doesn't know much about economics....
our economy is in shambles :undecided:

Don't sound so discouraged.
Most of all don't think of committing suicide because of that!
And don't try to become a casualty in a traffic accident because of that either.
Lastly, if any of the above happens to you ask your next-of-kin not to file a case in court; that will be the worst thing to do.

Just be cool & B+ :)
 
you are right! it's really sad to see such a high inflation rate. what's the rate of inflation in pakistan btw?? just curious!!

Inflation is well under control in Pakistan. We are self dependent country. We do not export much or import much but our economy is huge. so less inflation.
 
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Pakistan exports increased by 26.5 pc: NA told
Friday, 15 April 2011 19:47
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ISLAMABAD: Minister for Commerce Makhdoom Amin Fahim Friday apprised the National Assembly Friday that Pakistan's exports had witnessed a tremendous upsurge in 2010-11 (July-March) as these touched the figure of $17.799 billion as compared to $14.072 billion during the corresponding period of last year.

Pakistan exports increased by 26.5 pc: NA told
 

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