oppn parties Turbulence Ahead For The Economy

News Snippets

  • Coal exploration plan worth Rs 2980cr cleared by Union cabinet
  • Government ploughs in Rs 89000cr in BSNL for 4G, 5G spectrum operations
  • Stocks gain on Wednesday: Sensex adds 350 points to 63142 and Nifty 127 points to 18726
  • Wresters agitation: Sports minister assures action by June 15, wrestlers put off agitation till then
  • WTC Final: India lose the plot after putting Australia to bat as Steve Smith stands like a rock and Travis Head counter attacks to put Australia (327 for 3) in command on the first day
  • Wrestlers agitation: Bajrang Punia. Sakshi Mallik and Vinesh Phogat rejoin work in Railways, BKU pulls back but wrestlers say agitation will go on
  • UP bahubali-turned-politician gets life in 32-year-old murder case
  • India-US seal defence cooperation roadmap as Defence minister Rajnath Singh meets US Defence Secretary Lloyd Austin
  • CBI probe in the train mishap will look at error in interlocking system and probe the sabotage angle
  • Violence continues in Manipur as three persons were killed after a mob attacked an ambulance in Imphal West district
  • Karnataka cabinet is likely to discuss cow slaugther law in its next meeting
  • Rahul Gandhi woos diaspora in the US, tries to show the fight in India as between those who believe in Mahatma Gandhi and those in Nathuram Godse
  • In preparation of a shutdown, MTNL moving operations to BSNL
  • Services sector sustains growth although Services PMI slips from 62 in April to 61.2 in May
  • Stocks gain handsomely on Monday: Sensex rises 240 points to 62787 and Nifty 59 points to 18593
WTC Final: Australia take firm grip on Day1 - Travis Head (146 batting) and Steve Smith (95 batting) take them to 327 for 3 as Indian bowling falters
oppn parties
Turbulence Ahead For The Economy

By Linus Garg
First publised on 2022-05-13 02:08:30

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

 After four days of volatile trading which resulted in losses for investors, the stock markets crashed on Thursday. Sensex tumbled by 1158 points to 52930 and Nifty went down by 359 points to 15808. Investors were jittery ahead of the announcement of the CPI data and their worst fears were confirmed when the NSO reported that inflation, as measured by the consumer price index (CPI) stood at 7.8% in April, the highest in eight years.

Food and fuels prices are fuelling the inflation which, according to the Finance Ministry, is likely to stay elevated in FY22-23. The ministry said that timely action by the government and the RBI will reduce the duration of inflation. It also said that India was better placed than most nations to tide over the global economic stress and record steady growth.

During the trading hours in Indian stock markets, the US inflation figure for April was put out. It stood at 8.3% which was lower than March but still high enough to spook the market which now expects another stiff rate hike by the US Fed. Such a hike will result in another flight of funds from the Indian stock markets as FIIs will withdraw funds.
The day was also bad for the Indian rupee, which hit an all-time low of Rs 77.63 per dollar and later settled at Rs 77.5025. A falling rupee will add to inflation as fuel costs and prices of imported inputs for industry will increase leading to passing on of the costs to the consumer.

Indian economy is now entering a very turbulent phase. The cost-push inflation, along with rate hikes by the RBI and subdued consumer demand makes the picture hazy for companies. The Centre and the states should seriously think of reducing taxes on fuel as an effective short term measure to keep prices in control.