The IIP had been playing hide and seek for a while now and so too has inflation.We are discovering that low commodity prices and low inflation alone are no longer enough for economic revival .There must be newer theories of global trade and economics operating beyond our present Ken.
The continued plunge of crude prices ,inexplicable in itself, gives us no clue whether it would now signal global economic recovery or a downfall!.
RBI's conservatism on key rates was no different when WPI was at 18 % to the current near zero. While shibboleths of old economics need to be dared by newer apostles of global economics,there is a strong case for easing key rates towards the larger goal of boosting the manufacturing sector ,growth and job creation .Low commodity prices could be deceptive for growth. Crude at $35/40 may induce one to take his car out for a very long drive ,but only to return home and find himself ,jobless !.
The continued plunge of crude prices ,inexplicable in itself, gives us no clue whether it would now signal global economic recovery or a downfall!.
RBI's conservatism on key rates was no different when WPI was at 18 % to the current near zero. While shibboleths of old economics need to be dared by newer apostles of global economics,there is a strong case for easing key rates towards the larger goal of boosting the manufacturing sector ,growth and job creation .Low commodity prices could be deceptive for growth. Crude at $35/40 may induce one to take his car out for a very long drive ,but only to return home and find himself ,jobless !.
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