The ongoing trends in the economy in the country, makes the common man sit over anxious moments and ponder over whether we are going through another cycle of recession. The Rupee surge against the dollar, the shrunk in the industrial output, increasing bank interest rate on the borrower, no FDI due to the opposition protest, FII pulling back funds, the share market facing weird downwards trends... to name a few. All these things keep one in a gloomy mood over the economy, because every small decline has a huge and immediate impact on the public. Like even before the officially fuel price increases the fuel stations put up the `No stock’ boards. The Reserve Bank of India (RBI) has hiked interest rates 13 times since March 2010 to tame inflation however, headline inflation has been above the 9% mark since December last year.
Finance Minister Pranab Mukherjee today said that there is no policy paralysis within the government. "There is a perception that there is a paralysis in the decision making process. I would like to submit- not so. In the last couple of months, we have not only taken initiative but finalized policies. Recession in Europe is staring at out face. India has capacity, resilience to overcome economic crisis. We have the resilience and the economy has the capacity. But partition politics does not help economy," ascertained the FM.
Industrial output shrunk by 5.1% in October, mainly on account of the sharp contraction in the manufacturing and dismal performance of the capital goods sector. The current decline is the worst since March 2009 in the midst of the global slowdown. India’s economy grew by 6.9% in July-September 2011, the slowest rate of expansion in nine quarters.
On the other hand the share market is neither better. The markets traded flat in late-noon trades with the BSE Sensex at 15,914, up 43 points and the Nifty at 4,773, up eight points. In the morning the Sensex opened in the red owing to negative global cues and touched the intra-day low of 15,771. Experts feel the selling pressure is extreme, and I believe that the probability becomes very high for a breakdown. The global picture is also not helping the case for our markets.
Most or all of the above trends, only show the lack of solution power by the ruling government which is ever under pressure from coalitions. As the Finance Minister said today, `Running a coalition is not a very easy job. NDA had to suffer- the government lost its majority by one vote.’ The government has let loose the mad elephant and if it does not control the tempered pachyderm then the economy is in for a bigger toss. The rich enjoy the benefits from the power managers and the poor get the benefits from the power wielders, but only the middle class becomes powerless.
