Commentry on latest Economic Update

India Food inflation rises to nine month high of 12.21% YoY which is the biggest concerning point for all the Indians and Government in particular . Although Government has tried its best to curb inflation by hiking interest rate ( through RBI ) it is not helping or if at all it is helping it is not satisfactory . Now the Government has realised that it can not keep giving forward date assurance any more . Supply side issue is the main reason of Food Inflation in India. Higher wages is also one of the reason Government has started citing although it not seems to be true . The WPI inflation is also not cooling down since long time .


The Core sector growth hits a 31 month low in September . Core sector refers to  eight key infrastructure sectors . coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity . Fiscal deficit during.

India’s exports have registered a growth of only 10.8% during October 2011, at US $ 19.9 billion. On the other hand Imports in October 2011 stood at 39.5 Billion US$ registering a growth of 21.7%. Balance of Trade for the period was (-) 19.6 Billion US$. Cumulative Export figures for the period of April to October 2011 stood at 179.8 Billion US$ registering a growth of 46%. Imports for the same period stood at 273.5 Billion US$ registering a growth of 31%. Balance of trade for the period stood at (-) 93.7 Billion US$. This year , engineering sector has  registered the growth of 89.6 % over the last year.; petroleum & oil products, 51% ; Cotton 22% ; electronics, 50% , Readymade garments, 31% In the Forex front EU summit gives short-term respite to the Rupee. Political uncertainty takes center stage in Eurozone, weighs on Euro .