Mixed signals about India’s economy

I’m a bit confused:

RBI survey says that inflation will remain double digit for most of the year at will drop slightly at 9 per cent by the end early 2009 (Reuters reports)

Then we have the Palaniappan Chidambaram, the finance minister, telling us that interest rate will ease in the next six to 12 month, however, he does not provide any figures or substantial evidence on how this will happen.  (See Reuters report)

Then came some solid data: “India’s Exports Rise 23.5% to $14.66 Billion in June”, says Bloomberg. Now this sounds good. But if you read between the lines “the trade deficit crossed $30 billion for the
first three months of the 2008/09 fiscal year, 42 percent higher than in the previous year,” according to Reuters.

Then we find out that India is the second best place in the world to invest in after China, according to a survey by Development Counsellors International, who interviewed 281 executives.
So what does this mean?

Is India still a success story or is going through a reality check? Is it back to boom days or doomed ones again?

Well, for the time being there are more questions than answers. And stats, surveys, spin from government ministers doesn’t seem to provide any clarity to the future of the economy.

Should Pakistan receive more help from the US?

Pakistan wants its share of nuclear play: After India managed to reach an agreement with the Bush Administration over a nuclear energy deal, Yousuf Raza Gilani, Pakistan’s PM, has demanded that the US government give them the same kind of help.

Gilani met with George W. Bush this week and has made it clear that Pakistan should receive the same treatment as India.

“There should be no preferential, there should be no discrimination. And if they want to give civilian nuclear status to India, we would also expect the same for Pakistan too,” Gilani said at a press conference in Washington.

Now that sounds sensible, but the real question is: Hasn’t Pakistan already received a preferential treatment form the US since the 9/11 attacks in 2001 for its contribution to the fight on terror?

India ponders after terror attacks claimed at least 49

This morning, as usual, I went through most of India’s newspapers looking for reactions to the bloody attacks that have devastated the country over the weekend. First bangalore, India’s Silicon Valley, then Ahmedabad, one of the country’s most sensitive spots as it is polpulated by many muslim and hindu hardliners.

Of all the pieces I’ve read two striked me. Two editorials, one from the Times of India and the other from the Business Standard. They have two very different ways of approaching what occured on Friday and Saturday. The two editorials have also opposite views of the future of the nation and how it should deal with the current threat of secterian division and violence.

Here are two exerpts:

Times of India – This is about Us: India is under attack, we must stick together

It is premature to place blame for the attacks on a particular group, indigenous or otherwise. It is also pointless to replay the refrain of the blame game between state and central intelligence agencies. Terror strike after terror strike, we are fed the same story about how each failed the other. There is clearly a systemic fault in our intelligence and security administration that exposes the public to dangers that could perhaps be avoided. It is an issue that must no doubt be redressed speedily. But it must be acknowledged that securing a country as vast and densely populated as ours is no easy task.

Business Standard – Dealing with Jihadis

An effective response to such a terrorist threat must work at several levels. The first is to nab the culprits and bring them to speedy justice. The second is to improve intelligence, to penetrate the jihadi network and to intercept communications so as to prevent such attacks…

…Other steps therefore are necessary…

…One is to address the fountainhead of terrorist attacks, which is in Pakistan. That country’s attitude to India remains deeply hostile, and India does not have the capacity to strike at it in a manner that will put an end to its ever-present temptation to engage in low-grade warfare against India. Again, as Israel has discovered, hitting hard at a much weaker neighbour has limited utility if the environment is such that new recruits are willing to join the jihadi network. Pakistan has to be tackled therefore with a mixture of bilateral diplomacy and international pressure, though experience has shown that the results of these efforts will be minimal. Pakistan therefore needs to be made to understand that its hostility to India is not without costs.

Let me know what you think about these two ways of seeing the current situation. Are you more with the TOI or with BS?

It was all thanks to the stars, Stupid!

Well now it’s all clear: The Congress-led government won the confidence thanks to the stars! Late on Monday astrologer M Sivagurunathan, and several others, called the election in favour of Manmohan Singh:

“The planet Jupiter is favourably placed in Manmohan Singh’s horoscope. This will protect him against the Saturn and Mars combination, that is in the 10th cuspal point from his ascendant, because of which he is facing this situation,” he told the Times of India.

Obviously!

Winners and losers of the confidence vote

Manmohan Singh has little to rejoice about after having survived a confidence vote marred by bribery allegations inside and outside the parliament. However significant yesterday’s victory might be for the new UPA coalition, in May next year, when the government and opposition will have to face the entire nation, it will be a very different story. Then it will be harder to buy and trade votes.

What emerged quite clearly from yesterday’s parliamentary session is that the confidence vote had very little to do with the civilian nuclear deal with the US and the fate of India’s resilient people. What we witnessed in the Lok Sabha – the parliament – was a battle of egos, not of ideas. So the biggest loser in yesterday’s vote are the people.

Bombay Stock Exchange soars on UPA victory

Stocks opened sharply higher on Wednesday cheering the UPA government’s win in the confidence vote in parliament, the Economic Times reports. Investors were on a buying spree across the board. Banking stocks were in demand followed by realty and power stocks.

At 10 am, Bombay Stock Exchange’s Sensex soared to 14,739.79, up 4.5 per cent or 636 points from Tuesday’s close. National Stock Exchange’s Nifty climbed 4.28 per cent or 181.35 points to 4421.45.

Top headlines after yesterday trust vote

Hindustan Times – Shame: PM wins, but Parliament plumbs new depth

Times of India - Trust in bag, UPA to take N-deal to next level

Times of India - Cash-on-table a first in Lok Sabha history

Business Standard - Bribery drama eclipses UPA win

Mint – UPA wins, setting stage for either pay-offs or reforms

The Calcutta Telegraph – Mohan rules: the myth of a weak Prime Minister

Live Blogging: UPA wins 275 vs 256 – Singh smiles

Live Blogging: No Comment

Live blogging: Chidambaram says growth will be at 7-8%

India’s gross domestic product (GDP) growth in the fiscal year 2007/08 was close to 9.1 percent, the finance minister, Palaniappan Chidambaram, said during a parliamentary debate on Tuesday, Reuters reports.

But the real question is: how much will growth be in the next fiscal year (2008/2009)? With inflation at a 13-years record high many fear that growth will fall below seven per cent.

But Chidambaramis confident it will remain fairly high at 7-8 per cent. “This government will ensure that economy will grow at 7-8 per cent compared to an average growth of 5-6 per cent when NDA was in power,” Chidambaram said during the debate on the vote of confidence motion in Lok Sabha.