NEW NORMAL

 Two critical decisions came recently, one by the honorable Supreme Court and the other by the government for enhancing growth. The government took some bold decisions to tame inflation and enhance economic activity like reducing duty on petro products like petrol and diesel. Some state governments had also reduced the state VAT on the same to take off the pressure on common citizens. The government had imposed a ban on the export of wheat with riders giving only those orders to be completed which had been taken before the ban. The ban on the export of iron ore and other steel products which are the raw materials for specialty steel products for other countries. Other decisions like reducing import duty on plastic raw materials are required for major manufacturers of many products. The decision will impact inflation in the coming week. The direction required for the future expansion of economic growth is the same as that which is currently applicable. The other decision by the cour...

 Two nations are facing food problems in our neighborhoods. Our government just banned exports of wheat with immediate effect. Some time back we opened up the export of wheat.  The world is facing a huge deficit of wheat due to the Russia Ukraine war and unnatural heatwave in March and April this year. The production of wheat is barely up to last year. The food security for our own citizens will be under strain. But this year our farmers got a good price for their produce. Which will help them to meet their expenses with confidence for the next sowing season. The war has an effect on the world economy as everywhere we are seeing the inflation is above the comfort level of respective central banks. The cost of food is reaching a level that is unbearable for citizens worldwide. We have a comfortable storage level (each commodity) but the price rise is very high and spontaneous.  This is an opportunity for us to improve the level of production and its storage. Right now,...

 This week we saw the biggest fundraising by LIC of India with maximum participation of retail investors.  The best thing that happened in this is the first time 100%  anchor investment was done by an Indian entity( SBI Group ). The fundraising gave us an opportunity that was best used by all of us. It shows our confidence in our own enterprises and wealth creation for us,  this may be the first and only case in recent times, but going forward it will reduce our dependence on foreign money, so keeping the benefit within our country. The LIC is the biggest financial institution, with interest in different segments of finance like housing finance, mutual fund, and banking( IDBI Bank holding will be retained by LIC as per their statement). Nowadays retail investors are coming with maturity for holding and creating wealth for themselves. They are keeping their holding in a downward cycle too, so they are making sure of the stability of the market. Until now, domestic fun...

 So, the wait is over, and the rates hike by the RBI has just been announced. The repo rate and cash reserve ratio rates had been increased by 40 & 50 bps. The move is on the expected line, in the last two and three months banks have increased deposit rates and now MCLR  will be increased. The headline rates for home loans and other products will increase in the coming months.  As headline inflation has reached 7.5%, it is expected that it will not reduce in a short period as war is going on with no clue when it will end. Crude and other commodities are going through an upward price cycle. Global supply is getting disturbed due to war and lockdown in China. After the first lockdown in our country, we decided to make our nation self-sufficient in each aspect as our market is huge. The market is anticipating the move in the last  MPC meeting of the RBI. Now, the contrast picture is coming from our economy, the PMI index for goods and services is highest in recent t...