Tuesday, October 25, 2011

Is this alright or is it as crazy as it sounds to me -

The Indian government expects a fiscal deficit (you know, the difference between the amount it burns and the loot it hauls in) to be Rs 412,817 crore ( I crore = 10 million). It is going to borrow Rs 470,000 crore this fiscal year, up 53,000 crore from last estimate! That sounds like a lot of money either way.

I'm not an economist. Far from it. But I became interested in this science(?) when I learnt that so much our blood, sweat and tears went into paying off the parasitic, blood sucking state. I'm still stumbling my way around the labyrinthine and tortuous jargon blocked alleyways of Economics.

So somebody tell me - why can't these professional bugs politicos live within their our means? Why do they have to spend like a senseless drunk and borrow like no tomorrow? Is this 'normal' economics? Or is it as mad as hatter?


The Economic Times-

India's widening fiscal deficit has triggered fresh worries about the possibility of a ratings downgrade of the nation by a leading ratings agency.

 Though no ratings agency has officially hinted at this outcome yet, the market is rife with speculation that India is vulnerable to a ratings downgrade amid the slowdown in the economy.

 A section of the market feels such a move could happen if the RBI raises policy rates on Tuesday for the thirteenth time since February 2010.

 Economists see fiscal deficit widening up to 5.6% of GDP in the current fiscal against government's target of 4.6%.

 Average yields on government bonds have firmed up further of late on worries about higher borrowing and rising policy rates. A ratings downgrade could trigger the next bout of correction in stocks, brokers said.

So it is mad as hatter then? 


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