Re: India grows faster than expected at record 9.4 percent
SOA
yeh seb toh theek hai.....
But my basic problem is- still can't dare to apply for a home loan with 13.5% interest rate, and guess I am also also a common man, don't know how many common people are still having that "purchasing power", but I remember when interest rate use to be 7.5% and we were moaning that it's too high...and many middle class families like ours are affected due to interest rate.
And those who have taken home loans some 4 years back at floating rate of around 7.5-8% are now trapped in this---just imagine their agony when their interest rate is doubled within a couple of years.
Rahi baat inflation ki, I don't think this is the right policy of RBI to increase interest every second day....pray interest rate is NOT the only way to curb inflation. Price of commodities, petroleum products etc. are also responsible for inflation.
Ok let me start with a small eg, over a period of 2001 to mid of 2006, US increased its rates from mere 1% to 5.25%, now why was that. Yes factors such a fiscal policy and monetary policy are important. But most important is the monetary policy you have to remember lots of stuff are connected to this let it bonds, stock market and foreign exchange.
Let me go further during this time in US housing market was booming, as interest rates were the lowest (same case as in india) this also made the complete market more demanding.
How does the commodity, durability market get demanding with housing comes
1) Durable products (fridge, tables, cupboards, washing machines...)
2) Other factors even commodity prices increase.
Look at the share prices of home depot inc at this point of time.
So with housing demand, everything is taken into picture at this time please also have a look at the labour market it usually increases. Believe me its a tough task to control inflation and employment at any one time.(Remember if inflation increases it effects the employment, now this will be complete economics subject)
Its the same case in india though interest rates are hiked, but demand for housing market is increasing (read the above factors which come into picture with housing)
Now get the case of RBI if inflation is not controlled , a common man for a short period of time faces difficulty but over a long run life is easy. I hope i could explain in more detail but that would make the post longer.
So with demand and shortage of supply the prices increase and inflation as an enemy comes into picture. Now understand how it effects a common man, if these prices aint controlled.
Over a period employment and inflation are polarized if not controlled and this has to be optimized.
With respect to petrol prices the india should measure WPI excluding petrol prices to get a real picture (US does the same stuff). Petrol prices cannot be controlled by the system ofcourse only inflation can be controlled.
The reasoning of queer should double up my statement, save instead of spending but as of now India is market based on consumerism.
