Food prices have hit a 10-year-high as supply shortages due to poor monsoon and floods in some parts finally bit hard, forcing a worried government to announce a step-up in imports and strengthening expectations of RBI tightening policy to stop a breakout of inflation in the wider economy. Prices of potato, other vegetables and pulses drove inflation to 19.95% in the year to December 5, surging from 19% in the...

For about a week after the Dubai crisis broke, international financial markets chose to ignore it. Stock-markets climbed, commodity prices rose and the dollar continued to be beaten down. It is not too difficult to explain this initial indifference. For one, the magnitude of the Dubai crisis appeared piffling, at first glance, compared to the “subprime” crisis or the meltdown following “Lehman’s bust”. When global banks had run up losses...

India needs to initiate a number of steps to manage the emerging situation.  After three consecutive good years, agricultural production has faltered in the last two years. There was a fall in production to the tune of 1.6 per cent in 2008-2009 compared to the previous year. This year, again, agricultural production is likely to be down by 2 per cent or more. The deceleration in the growth of foodgrain...

Momentum suggests 9 per cent for the full year The overall Index of Industrial Production (IIP), which includes the three components of manufacturing, mining and electricity, grew at a pace of 10.3 per cent during October. This is lower than what was expected, but higher than the 9.1 per cent for September. With this, the April to October growth rose to 7.1 per cent, up from 6.5 per cent in the...

India needs to strengthen and liberalise its regulatory framework and invest more in infrastructure in order to attract increased foreign direct investment (FDI), according to a new OECD report. The OECD’s Investment Policy Review of India says India has designed policies to encourage investment as part of market-oriented reforms since 1991 that have paved the way for improved prosperity. “Restrictions on large-scale investment have been greatly relaxed. Many sectors formerly reserved to the...