Warren Buffett's big bet and more...

This bet has indeed been in existence since the 1st of January this year and is between Buffett (not his company Berkshire) and Protege (the firm and not its funds). What is however more interesting is that there is serious money at stake. As reported, each side has put up US$ 320,000 (for a total bet of US$ 640,000), which has been utilised to buy a zero-coupon Treasury bond that will be worth US$ 1 m at the bet's conclusion. That US$ 1 m will then go to charity identified by the respective betting sides. Now, do we need to say which party is taking which side?

As a matter of fact, food costs have set record highs this year, thereby triggering protests and fanning inflation around the world. Central banks, including India's, are already shifting toward tighter monetary policy and some governments are contemplating lower taxes to compensate.

Along with the surging price of oil, higher food prices and worldwide shortage of water are factors that will keep policymakers and the human race on tenterhooks in times to come, if we are not able to find solutions to ease off these pressures.

While the RBI's recent move to hike the repo rate (rate at which it lends short term money to banks) to 8% will still take time to have the desired effect on containing inflation (if it does have an effect!), the fact that rising prices shall continue to pose a headache for policymakers cannot be denied. As a matter of fact, India's inflation is currently at its highest levels since the beginning of this decade (2001) and has reached the current levels on the back of rising prices of food and fuel. Now, with the RBI slated to meet for its quarterly review of the monetary policy on July 29, expectations are rife that Dr. Reddy (the RBI Governor) shall take further steps to halt the monster's (inflation) upward march. The government's latest steps of raising export duty on iron ore and steel bars to boost domestic supplies and increasing taxes on large cars to cut fuel demand are also to be seen in this light.

With respect to India, the report talks about the government's eleventh five-year plan (2007-2012) of spending nearly US$ 500 bn in infrastructure projects. Whether this is achievable is highly question, given the government's deficit and lack of will that has impaired the country's all round development for so many years in the past. As a matter of fact, the World Bank estimates that a 1% increase in a country's infrastructure stock is associated with a 1% increase in the level of GDP. This can be true for India as well, but only if...