Now this has become a habit for the corporate mafia during each monetary review. Irrespective of what happens they go to RBI with their begging bowls. RBI governor somehow obliges. Give the WPI figures it is confirmed that a rate cut is given. Only the quantum is under discussion.
The stunning reversal last month caught many people off guard including mangoman :(
However mangoman does not believe rate cut is the solution for all our evils. http://www.firstpost.com/economy/6-reasons-why-subbarao-should-hold-rates-on-3-may-740455.html
Have a look at the link above which talks about the reasons to hold the rate. Nevertheless rate is going to come. Markets will move up little bit. But I just want to share few of my observations for the past week.
1. The gold rate - I have been telling the reduction in gold prices are adjusted by the corresponding increase in the volume of the gold import. So I dont think India is benefitted due to crash in gold prices. Further the gold recouped most of its losses in subsequent trading days.
2. Oil has given some advantage and government is also cleverly using the oil pricing to put pressure on RBI.
3. But food inflation is not gonna to come down. I strongly feel the CPI will continue to hover around double digits. Government can cheat people by showing WPI. RBI can also join government in this cheating act. However we are going to pay for this sin.
4. Yesterday Chidambaram reduced some tax for the interest paid to foreigners on their bond investments. What a irony. He rapes innocent citizens by reducing deposit interest rates and giving the benefit to the foreigners. Long live India.
Let us talk few more things after RBI's monetary review.
You are right in analyzing the situation. Rate cut is not the solution. For fixed income groups like retired employees rate cut is very very bad. So, there won't be any incentives for savings. Spending more is encouraged. Our country is very big and so our politicians are giving a change for the foreign corporations to rob us.
ReplyDeleteThere is no need to wait for the monetary review. Things will gradually worsen for the common people.
Now a days, it is impossible to change the minds of our politicians to lead our country in a good manner. Just for money, many ghastly things are happening in our society. Quality of life is coming down drastically. For e.g: a petrol bunk owner may adulterate petrol, a trader may sell duplicate goods, a farmer may sell pesticide infested vegetables, a trader may sell carbide sprayed mangoes, a doctor may do surgery even if it is not necessary etc. We have no capacity to change our country, but we can create and live in a good society. Mahatma Gandhi said “Be the change that you want to see in the world”.
In this world the problem is "you" only. If 5,000 people can come forward, a new society can be formed where people can live in luxuriously even with a less income of Rs: 80,000/- per month.