Luck is different from promise. Plain simple luck wont last for long. // What’s clear is that Modi is lucky. The dramatic improvements in inflation and related areas owe nothing to his initiatives and everything to good luck, arising from crashing global commodity prices. This year’s budget assumed that oil would average $ 110barrel, but it has actually crashed to $78barrel. This has enabled fuel prices to be slashed, taming transport costs.Falling oil prices have ensured that the balance of payments is under control, notwithstanding a surge in gold imports and the recent slowdown in exports. Finally, the oil price crash has hugely improved the fiscal position. Budgetary subsidies for oil and fertilizers have been slashed, and the finance ministry has been able to raise the excise duty on petrol and diesel, partly making up for the big shortfall in tax revenues. Even the moderation in food prices is a global outcome, not a Modi outcome. Global food prices started rising in 2004 and then skyrocketed in 2007, but have fallen sharply over the last year. The UPA government kept raising the procurement prices of grain for many years in stages after 2007, to help Indian farmers catch up with world prices, and this created a persistent upward pressure on food prices, pulling up the entire price index. Now, with global prices falling, procurement prices are being raised by less than the overall inflation rate, so food is dampening the price index instead of exacerbating it. // blogs.timesofindia.indiatimes/Swaminomics/swaminathan-s-anklesaria-aiyar-six-months-of-modi-achhe-sitare-more-than-achhe-din/
Posted on: Mon, 24 Nov 2014 05:20:02 +0000
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