Is the Indian Govt. well prepared to tackle the soaring Inflation imbroglio?

[willsurelywin]

food prices will keep rising year after year since for crops u need water and water levels r depleting across the world due to global warming and glaciers r melting.

so things looks to be worsening day byu day with unplanned polulation growth

ps: can anybody confirm that it is tru that himlaya will melt by 2023 due to gloabl warming? mfrom whr will india ghet water then

[konqueror_vivek]

Originally Posted by willsurelywin

food prices will keep rising year after year since for crops u need water and water levels r depleting across the world due to global warming and glaciers r melting.

so things looks to be worsening day byu day with unplanned polulation growth

ps: can anybody confirm that it is tru that himlaya will melt by 2023 due to gloabl warming? mfrom whr will india ghet water then

How do you expect water levels to decline, if glaciers have started melting? I believe water levels will rise, and there is a official report published by European Science Journal that it is a major threat for sea-coasts in many countries!

[gantis]

Originally Posted by konqueror_vivek

How do you expect water levels to decline, if glaciers have started melting? I believe water levels will rise, and there is a official report published by European Science Journal that it is a major threat for sea-coasts in many countries!

Infact, we are drinking the same water which dianosaurs drank. Confused ...water is a renewable resource. Means we are using the same 1% of useful water on earth. But, melting of ice caps will pose a threat to the environment and disturbs the life balance seriuosly. And this has nothing to do with crop production or increase in output because of abundance of water. Cold storms will touch the Indian atmosphere becuase of the reduction of height of the Himalayas...which will worsen the situation. remember,...we are not dealing business...it's environment. And it can sometimes be a curse in the guise of blessing like the Oil prices hike mentioned by WSW

[willsurelywin]

Originally Posted by konqueror_vivek

How do you expect water levels to decline, if glaciers have started melting? I believe water levels will rise, and there is a official report published by European Science Journal that it is a major threat for sea-coasts in many countries!

well said infact their r reports that NARIMAN point will sumberge in water as early as 2025

yeah water levels will rise but in SEA level which is unfit for drinking,
but due to glaciers melting rivers will dry totally by 2025 with himalya gone

Come n we r in last stages of the 4 YUGS - its KALYUG now

eventually all things will come to an end

maybe by 2030 humans will die to no water

[konqueror_vivek]

Originally Posted by willsurelywin

well said infact their r reports that NARIMAN point will sumberge in water as early as 2025

yeah water levels will rise but in SEA level which is unfit for drinking,
but due to glaciers melting rivers will dry totally by 2025 with himalya gone

Come n we r in last stages of the 4 YUGS - its KALYUG now

eventually all things will come to an end

maybe by 2030 humans will die to no water

KALYUG ! (you made me smile)
Anyways, human civilization is close to 60,000 to 50,000 years old and we had survived all climatic conditions. I have a strong feeling that humans will survive for next 50,000 years ! {Lets not deviate from current discussion}

Meanwhile, Government of India has influenced RBI to hike Repo rate to tackle inflation - however, given the fuel price hike, a 25bps hike in repo rate will not help inflation cooling below 8.00%, but will surely suck liquidity from Capital markets. It is now even harder for banks, to run business in these conditions. I feel sorry for UPA government (or for that matter any government which ruled India in last 10 years) for not using the resources in the country optimally!

[krsh.vik]

As far as I understand, inflation is primarily coz of greater demand and insufficient supply. government instead of increasing repo rates etc., should concentrate on this main problem which will help in the longer run. Ain't it ? Also, there is huge wastage of every minute thingy in this large world We should start educating people around us about these little things and reduce the wastage.

[nishant_rungta]

LOL

Inflation is also actually due to excessive MONEY SUPPLY in the market. The demand for money is actually not that great. But there's excess money supply in the market.

What RBI aims at by increasing the repo rate is that it wants to reduce the moeny supoply. N how it does this? Let me try answering

REPO rate is the rate at which banks borrow from RBI, discounts bills etc. Reverse repo is the rate at which RBI borrows from banks. REPO stands for repurchasing rate.

By increasing the rate it would start charging higher interest rates, reduce the money availability with banks and thus banks would have less money at their disposal to continue with the lending operations. It goes in a long way to reducing inflation.

[the_egonomist]

A point here:

Vik is right in the sense that greater demand and lower supply means the existing goods are sold at inflated prices.

The greater demand arises from greater purchasing power, which in turn means more liquidity in the market.

As Nishant said, the RBI will increase lending rates to tackle the banks giving out loans. Banks will also be told to increase their loan rates and financing rates. This should discourage people to take loans.

Also, saving rates will increase thereby encouraging people to save.

Either ways, if the Government continues the way it does it stands to make a colossal loss.

Inflation is here for sometime to come. If something happens with all the outsourcing, the inflation should automatically die down.

Cheers.

[Surreptitious]

Well Well Well..What do have here...RBI is resorting to the same tactics of increasing the interest rates to tackle inflation..increasing the interest rates by 25 basis points from7.75% to 8% may just ease the pressure for the time being but in no way whatsoever will be a solution for the long term..! The mantra is Crude Oil.. Whenever we are going to see the crude oil rates dip inflation will automatically be reigned in..! But I think our Govt. is left with nothing but a Hobson's choice..! My only gripe is that I need to be paying a higher EMI for my education loan..

[konqueror_vivek]

Originally Posted by nishant_rungta

LOL

Inflation is also actually due to excessive MONEY SUPPLY in the market. The demand for money is actually not that great. But there's excess money supply in the market.

What RBI aims at by increasing the repo rate is that it wants to reduce the moeny supoply. N how it does this? Let me try answering

REPO rate is the rate at which banks borrow from RBI, discounts bills etc. Reverse repo is the rate at which RBI borrows from banks. REPO stands for repurchasing rate.

By increasing the rate it would start charging higher interest rates, reduce the money availability with banks and thus banks would have less money at their disposal to continue with the lending operations. It goes in a long way to reducing inflation.

Repo rate hike will affect the liquidity in markets in short term, however not in long term. If the Central Bank, hikes CRR then definitely it will suck liquidity from financial institutions. All those who have banking license will mandatorily increase their cash reserve with RBI.

Oil price hike has not shown big impact in inflation, I will be surprised if Oil prices hike could heat inflation more than 100bps at this stage. The primary concern remains food prices, and optimization of resources within all states. It is sorry stage when it comes to strong correlation between states in our country, because of regional politics prices are higher at once place and ~relatively~ cheaper in other. There are excise commissioners who enjoy a lavish lifestyle, while playing with tranmission of resources from one state to another.