The Indian government's exit strategy - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

The Indian government's exit strategy

Sep 16, 2009

After injecting massive doses of liquidity in the battered financial system, the G-20 nations in a recent summit had taken a stand not to withdraw the stimulus packages unless and until sustainable signs of an economic recovery were visible. While the Indian government also introduced stimulus measures to bolster India's slowing economy, the question remains as to when it will tighten its fiscal policy. A leading business daily has indicated that the RBI may start doing that in the first half of 2010. The Indian economy is in a tricky situation. While the economy had shown signs of revival, deficient monsoon this year have tainted the overall picture.Therefore, while growth in GDP is expected to remain sub-par compared to what was expected earlier, damage to crop production mean that food prices will raise the ugly specter of inflation. Given that economic growth is high on the government's agenda, in the near term atleast, it is not expected to do much in terms of turning off the liquidity tap.

The problem, however, is higher inflation. After all, even though the WPI (broad measure of inflation) is still languishing in the red, the CPI (inflation at consumers' level) has been stubbornly strong. This means that a pickup in inflationary pressures would be a serious concern. Therefore, it is obvious that the Indian government is walking on thin ice and faces considerable uncertainty in terms of withdrawing the stimulus measures just like its peers in the developed world.

Equitymaster requests your view! Post a comment on "The Indian government's exit strategy". Click here!

  

More Views on News

Top Indian Drone Companies to Watch Out for in 2022 (Views On News)

Jan 21, 2022

Several companies are adopting drone technology for regular business operations.

Insiders are Buying into these 6 Stocks Aggressively. More Details here... (Views On News)

Jan 19, 2022

While promoter holding is an important parameter, it should not be the sole reason for buying a stock.

These Penny Stocks Started 2022 with a Bang. This is what You Need to Know... (Views On News)

Jan 19, 2022

These penny stocks are up more than 30% already since the beginning of the year.

The Glitter is Returning to Bullion (Fast Profits Daily)

Jan 27, 2022

This is why gold and silver will go up in 2022.

Freefall: Paytm, Zomato, Nykaa Shares Drop to Record Low. Is the 'Unicorn' Craze Over? (Views On News)

Jan 27, 2022

New-age Indian tech stocks suffer in the market meltdown. Are any of these stocks still in your portfolio?

More Views on News

Most Popular

These 5 Penny Stocks are Held by Rakesh Jhunjhunwala. Worth a Look? (Views On News)

Jan 18, 2022

Rakesh Jhunjhunwala is holding these penny stocks in his portfolio for several years now.

Time to Buy Energy Stocks (Fast Profits Daily)

Jan 14, 2022

Energy is a sector that looks set to take off. It's time to get in.

Tech Mahindra's CTC Acquisition: Too Expensive? (Views On News)

Jan 18, 2022

Tech Mahindra's acquisition of European IT-company fails to excite investors.

5 Hidden Tata Group Companies to Add to Your Watchlist (Views On News)

Jan 18, 2022

Here's all you need to know about these five Tata group stocks that aren't as popular as the others.

Insiders are Buying into these 6 Stocks Aggressively. More Details here... (Views On News)

Jan 19, 2022

While promoter holding is an important parameter, it should not be the sole reason for buying a stock.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Jan 27, 2022 (Close)

MARKET STATS