Here are some interesting articles:-
This Congress UPA govt has weakened, there is going to be a slowdown on liberalization, as shown by the cut motion, when they needed indirect support from the UP sucularists like the notoriously fickle Maya and the shifty Mulayam and Laloo to stay afloat. Not only that, the current events have strengthened the hands of all its allies, especially DMK.
The govt disinvestment program 2010 has all but failed its intent, as all its IPOs have been bailed out by the likes of LIC and SBI. No wonder they are going the pvt way by paying for services and promotion costs.
RBI is behind the curve on increasing rates and the Inflation fires will rage on in double digits at least until the monsoons. As it is the very high CPI inflation has spilled over to increase overall WPI inflation .
RBI, for some time now has, been giving nothing more than lip service to inflation as Fiscal policy is totally dominating the Monetary policy, and there is runaway inflation in prices of consumer goods. This can go on until the FED and other western economies keep interest rates artificially low, or until there is a huge focus on runaway inflation by the media, somewhat like the onion crises. (which i doubt).
The Greek and PIGS tailwinds are bound to increase yields worldwide and in Asia.
In any case Subbaraos hands are tied, as he cannot make the adequate interest rates increases or suck out too much liquidity, thanks to a humongous govt borrowing plan of 4.57 trillion rupees in the fiscal year 2010/11. To understand how this UPA govt has piled up debt see…
In any case , long gsec yields are going up, and there are apprehension that heavy government borrowing may dry liquidity for private firms.
FD Interest rates are bound to go up at least by the last qtr of the fiscal , faster if we have a bad monsoon.