Friday, February 04, 2011

Government has no Magical Lamp

It happened one more time.

Yesterday, Finance Minister Pranab Mukharjee said, government has taken necessary steps to tame inflation, but it does not have Aladdin's Magical lamp to resolve things immediately.

  • I remember him saying the same thing in early January 2011
  • Last time, he indicated, the future course of action would be taken Reserve Bank
  • RBI in line with general perception & growth pressure raised benchmark rates to moderate 25 basis points. And this moderate hike has not helped so far to bring down the inflation (read WPI and specifically essential commodity)
  • Somehow, I think, RBI should take a preemptive steps in near future & tweak benchmark policy rates
  • Hoarding of food commodity is raging off-and-on with different items, it started with 'daal', onion, now edible oils.
  • The Indian Economy at large will have implied effect of radical changes happening in political sphere of Egypt

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