Summary
Opportunity in Adversity
The intensity of government intervention in the money markets has never been this severe in the recent past-hikes in interest rates by a cumulative 3 percentage points and a slew of measures to reduce the prices of primary products. Given the extent of deregulation of the economy, there are few other controls left to tinker with. Inflation, a measure of rising consumer prices, is abating, but at a snail's pace. Not surprisingly, the government is mulling increased regulation of capital flows into the country, like external commercial borrowings by Indian companies and FII-issued Participatory Notes.See the full content of this document
Extract
Opportunity in Adversity
Rather than adopt this regressive route, the government, to begin with, ought to step back and comprehend the outlook presented by the various agencies. The worst case scenario emanates from IMF at 7.8 per cent during calendar 2008. Rather than propitiating the rain gods to deliver good monsoons and meet the RBI estimate of 8.4-8.5 per cent, the government should ag...
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