Friday, May 16, 2008

UPA price woes mount

There seems to be no reprieve for UPA government or its 'aam admi', as Inflation rose to near 44-month high of 7.83 per cent for the week ended May 3, against 7.61 per cent in the previous week, mainly on account of rising prices of essential food items and some manufactured products. Inflation was last above this level at 7.87 per cent on September 11, 2004 as per provisional figures and 7.86 per cent for the week ended September 18, 2004, according to final figures. The WPI based index inflation stood at 5.74 per cent in the corresponding week a year ago.

Inflation is ruling above the RBI's comfort zone of 5.5% for the nineth consecutive week. The government is under pressure to contain prices ahead of state polls this year and national elections due by next year. The government has brought down Import duties on edible oil, curbed rice exports and forced steel and cement companies to cut prices. The government and the central bank have also signalled their intent to take more steps to tame inflation if needed.

During the week, prices of food articles like fruits and vegetables, spices, coffee, masoor rose, compounding worries of the government and RBI amid a slowdown in industrial growth. Among food articles, fruits and vegetables went up by 3 per cent, coffee 6 per cent, maize 4 per cent, spices and masoor by 1 per cent each. Even in manufactured category, prices of food articles like atta, coconut oil and khandsari went up.

However, prices of cement, iron and steel declined, giving some respite to the government. Prices of some industrial fuels like naphtha, furnace oil and light diesel oil also shot up.

UPA's worries persist

Irrepective of steps to control liquidity taken by the UPA government following the CRR rate change, matters seems to have worsened, as global pressure increases. This raise in inflation rates clearly suggests that the 'aam aadmi' will suffer more in terms of food prices and the amount of money they will eventually be left with will decrease comparatively.

Earlier, the Finance Minister P Chidambaram said that a 0.4% raise did not cause much of a worry for the government and assured that the steps that are being undertaken will eventually pay dividend. However, this fresh high in the rates will certainly worry the government more than ever as it looks to inch towards the double-digit mark.

Inflation rates is not only a worry in India, but in neighbouring countries as well as it is surging across the globe. These rates are precariously high, which is due to the supply constraint and increasing oil prices.

Inflation rates which continues to increase unabated proves that the UPA government are running out of ideas and have a huge problem on their hands at this point of time. It looks like the government has no option in their hands now which can curb the soaring rates.

Also adding to the worries for the UPA government is that the real economic growth rate is almost down to a percent or less, which clearly will be one of the major concerns of both the Prime Minister and Finance Minister.

"Government has mismanaged the food economy"

Expressing himself on the rising inflation rates, Former Finance Minister Yashwant Sinha said that the government's efforts is not helping the surging rates. He added, "There is absolutely no impact of the steps taken by the UPA government. The aam aadmi gets no relief again and this will continue for many months to come. I do not think there is going to be any sort of relief and the common man will have to face rising food prices."

Sinha also voiced concern over the growing concerns of the Indian economy and said, "The government looks to have lost control over the increasing rates and I am unable to understand that though India has had ample production of food grains in the previous year, they are yet not in a position to push grains into the market."

Wednesday, April 9, 2008

Olympic torch extinguished, then re-lit

The Olympic torch has been briefly extinguished by officials and put on a bus during the Paris leg of its relay amid anti-China protests, The Associated Press has reported. The incident came one day after anti-Chinese demonstrators attempts to grab the Olympic torch were foiled as it made its journey through London, making it seem more like running the gauntlet than a journey of celebration.

Thousands of French police are on duty to protect the Olympic torch after it departed from the Eiffel Tower at around 1030 GMT (0630 ET). It is then due to be carried through the boulevards of the French capital amid threats of protests.

Extremely tight security, however, could not stop determined human-rights activists in London Sunday from disrupting the torch relay several times, with UK police making more than two dozen arrests.

Paris police have conceived a security plan to keep the torch in a safe "bubble," during its 17-mile (28 km) journey, with a multi-layered protective force to surround the torch as it moves along the route.

French torchbearers will be surrounded by several hundred officers; some in riot police vehicles and on motorcycles and others on rollerblades and on foot. Chinese torch escorts will immediately surround the torchbearer, with Paris police on rollerblades moving around them. French firefighters in jogging shoes will encircle the officers on rollerblades while motorcycle police will form the outer layer of security.