India Economic Strategy Essay

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Introduction As the world embraces countries with fast growing economies, India, despite having most of their people living below poverty line and not having much effect from their economic incline, is not being left behind. A challenge, laid on the table for Indian Government to lead the country to economic success across all its people with poverty inclining to limitless ceiling if their growing population it not being set to slow down. “It’s a complex situation for the Reserve Bank. Though a weak rupee and continuing inflation limit its headroom, the central bank will reduce borrowing costs since the industrial sector has slowed sharply” – (Brinda Jagirdar, State Bank of India) This assignment will analyze the attached newspaper article, taken from Singapore’s “The Business Times”, Friday, 15th June 2012, “India’s inflation in May exceeds estimates as rate decision looms” by Bloomberg. What we will be discussing in this assignment and how they are linked to one another (Whether they are in lined or contradict one another): 1) Wholesale-price Index (From attached newspaper article) 2) Interest Rate / Borrowing Cost (From attached newspaper article) 3) Lender’s Required Reserve Ratio (From attached newspaper article) 4) Trade Deficit (From attached newspaper article) 5) Issuance bonds/notes from state-run borrower (From other newspaper article) 6) Discount Rate (Repurchasing rate) 7) Foreign Currency Exchange Rates (From other newspaper article) 8) Conclusion Page 1 of 8 Wholesale-price Index From the newspaper article, it is said by India’s Ministry of Commerce and Industry that its wholesale-price index rose 7.55% in May 2012 which is an incline of 7.23% from April 2012. Bloomberg survey suggests it was 7.5%. This increase may suggest that India is practicing an expansionary policy after their economic weakened to a near decade low last quarter as mentioned

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