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True Indian Inflation maybe as high as 15% – sans Oil+Gas subsidies

May 27, 2008

Have you seen anywhere in the world where Inflation numbers stand revised because of data collection issues ? Welcome to India, anything is just possible here. The Indian Inflation could be as high as 15%, yes you are reading that right. Combined Oil and Gas subsidies contribute to as much as 6.9% to the Inflation.

Adding to its woes is lack of proper financial planning by the government which has landed itself in Fiscal Deficit closer to 10 per cent and Current Account Deficit closer to 3.5 per cent.

The RBI should just stop messing with CRR eye wash and start raising interest rates.For the first time in 4 years, Real Interest Rates on Bank Deposits are negative, that is interest paid is lower than annual inflation rate. However, this does not mean that you jump into stock market or start speculating, No the RAINY DAYS are here to stay. All this means, India is headed into moderated growth in FY09 and it is to be seen if SENSEX will meet its earnings target of RS 1,000 or will miss it ?

Related Reading:
How Higher Crude Oil prices is ruining India’s growth story ?

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