Thursday, September 16, 2010

RBI raises repo and reverse repo rates.

Bogged with inflation concerns, RBI has raised its repo rate and reverse repo rates under the liquidity adjustment facility.
  • Repo rate increased by 25 basis points to 6.0%, and
  • reverse repo rate increased by 50 basis points to 5.0%
RBI says...
The measures undertaken in this review should:
- contain inflation and anchor inflationary expectations without disrupting growth.
- reduce the volatility in overnight call money rates, thereby strengthening the monetary transmission mechanism.
- continue the process of normalisation of the monetary policy instruments.
The decision was announced by the Reserve Bank of India at the Mid-Quarter Monetary Policy Review, today.

Reacting to the RBI's measures, some bankers have already said that they would have to raise their commercial lending and deposit rates.

Protectionism Round 2 - US passes 2 bills in favour of Made of America

In order to promote creation of jobs in the US, the House of Representatives has passed 2 bills that require the US Congressmen and Department of Homeland Security to only buy goods Made In America.

It seems, that the very promoters of concept of free-trade and demand-and-supply based economy have had to eat their words and move towards an "inferior" protected economy.

We hope these protectionist measure work and we see a speedy recovery of the world's largest economic power alongwith all countries of the world.

Tuesday, September 14, 2010

New WPI base prices announces

Anand Sharma, Union Minister of Commerce and Industry, announced a new serice of Wholesale Price Index (WPI), today.

He announced in New Delhi that the new series has been prepared by shifting the base year from 1993-94 to 2004-05 and added that WPI for the month of August 2010 has been released with base year 2004-05.

The policy makers expect the change in base to improve the accuracy and be more representative of the wholesale price index.

Resistance to outsourcing in the United States

In a major setback for the Indian IT industry when the US government reacted against outsourcing. The Indian IT industry has been a major provider of outsourcing services for American companies over the last decade.

Earlier in August, Ted Strickland, the Governor of Ohio state set a distrubing trend by passing and executive order to ban outsourcing of government projects and now last week Barack Obama, the President of US has indicated that he too is considering steps against the outsourcing. He said he was going to withdraw tax incentives of companies who outsource work that help create employment overseas (out of the US).

Two Union Ministers Kamalnath and Anand Sharma have reacted strongly to the developments in the field of outsourcing.

Friday, July 16, 2010

Indian Rupee gets new symbol

The Indian Rupee has got a new symbol. It has a unique and simple design due to which its origin can be attributed to both the Hindi and the English languages

It is the Hindi alphabet r - र - with a horizontal line across the upper part. Incidentally it is also English alphabet R without the stem and two horizontal lines - one at top and one across its round part

The design was submitted by D. Udaya Kumar, as an entry to a competition organized for this purpose. It was approved by the Union Cabinet of India on 15th July 2010.

Friday, July 9, 2010

India to grow by 9.4% - IMF

IMF - International Monetary Fund - predicts India to grow by 9.4% this fiscal - in a scenario where global economy is expected to grow by 4.5%, with the emerging and developing economies leading.

According to its economic outlook update 
World growth is projected at about 4½ percent in 2010 and 4¼ percent in 2011. Relative to the April 2010 World Economic Outlook (WEO), this represents an upward revision of about ½ percentage point in 2010, reflecting stronger activity during the first half of the year. The forecast for 2011 is unchanged.
The projections for China stand at 10.5% for 2010 and 9.6% in 2011, while India is forecasted to grow at 9.4% in 2010 before falling to 8.4% next year. The advanced economies are collectively expected to grow at 2.8% in 2010 before falling to 2.4% next year.

The IMF forecast said Asia’s strong recovery from the global financial crisis continued in the first half of 2010, despite renewed tension in global financial markets. Economic activity in the region has been sustained by continued buoyancy in exports and private domestic demand.

Friday, June 25, 2010

Petrol And Diesel Prices Deregulated

In what is being seen as a step in the right direction, Government of India has announced partial de-regulation of fuel prices. Petrol and Diesel prices have been been liberated.

... the Government has decided that the pricing of Petrol and Diesel both at the refinery gate and the retail level will be market-determined.


This decision coincides with the government's announcement of increasing fuel prices - Petrol +3.5/litre, Diesel +2/litre, Kerosene +3/litre and LPG +35/cylinder.

EGoM has approved the request of the Ministry of Petroleum and Natural Gas after considering it for a long time. In wake of the rampant crude price hike in the international market, the Oil Marketing Companies have under-recovered to the tune of 53000 crores.