Forex Market—With RBI purchasing $ 400 million to control the capital inflows, it has gained mixed view across India. FDI has already bestowed us with $16 billion so far and FII with $33 Billion. No doubt that capital inflow contain our current account deficit but they do change the exchange rates. With dollar hovering around 44.2, the exporters are facing a huge trouble. With India mainly an import oriented company, it is further aggravating the trade deficit which is expected to cross $130 billion this fiscal.
Handicrafts exports grew by strong 33%. Textile owners have asked PM to intervene for the limit set of export of 55 lacs bales of cotton which can very well deprive our Nation of cotton.
Well, the reason for such strong capital inflows are the least possible interest rates in the developed markets, the corporates and citizens of whom are strongly investing in India now.
Many developing Nations like Brazil (inflows majorly in Debt), Japan etc have already started levying taxes on the inflows to ensure a proper growth. But in India ( inflows in both equity and Debts), FIN Ministry is against such taxes.
Monetary Policy- With Food inflation hovering around 8.5 % in the month of September, RBI is expected to increase the policy rate by 25 basis points on its review policy on 2nd Nov.
It has already increase 125 basis points equally in 5 gos so far this year.
Cereals- 6.24% Veg-8.03% Fruits-12.03% Milk- 23.07% Pulses- 5.07%
If we analyze these figures properly, we will get the answer as to why inspite of good monsoon season, inflation could not be controlled. Good monsoon season can only account for more cereals whose index is already under control.
FIN Min is proposing setting up of FSDC as a coordinator of the works of SEBI, IRDA, RBI, PFRDA and not as a super regulator. Pranab is proposing RBI governor as its head which is indirectly a step towards making it a monetary as well as fiscal policy controller.
Handicrafts exports grew by strong 33%. Textile owners have asked PM to intervene for the limit set of export of 55 lacs bales of cotton which can very well deprive our Nation of cotton.
Well, the reason for such strong capital inflows are the least possible interest rates in the developed markets, the corporates and citizens of whom are strongly investing in India now.
Many developing Nations like Brazil (inflows majorly in Debt), Japan etc have already started levying taxes on the inflows to ensure a proper growth. But in India ( inflows in both equity and Debts), FIN Ministry is against such taxes.
Monetary Policy- With Food inflation hovering around 8.5 % in the month of September, RBI is expected to increase the policy rate by 25 basis points on its review policy on 2nd Nov.
It has already increase 125 basis points equally in 5 gos so far this year.
Cereals- 6.24% Veg-8.03% Fruits-12.03% Milk- 23.07% Pulses- 5.07%
If we analyze these figures properly, we will get the answer as to why inspite of good monsoon season, inflation could not be controlled. Good monsoon season can only account for more cereals whose index is already under control.
FIN Min is proposing setting up of FSDC as a coordinator of the works of SEBI, IRDA, RBI, PFRDA and not as a super regulator. Pranab is proposing RBI governor as its head which is indirectly a step towards making it a monetary as well as fiscal policy controller.
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