Interest Base Rate – much needed or undue interference

It is a welcome measure.

Earlier in Prime Lending Rate regime, the Banks had freedom to lend either below or above PLR. Now, under base rate regime, the Banks can not lend below base rate. Borrower can compare the rate that is being charged to him with the base rate, and know how bank rates his credit worthiness. Absolute transparency.

The question is, is Banking a business? Is base rate simply declaration of its cost of funds and minimum profits? Since banking is a business deals with risk always, is it not unfair to prevent it to play safe? Cant it lend funds below its cost so that it can lend some of its funds in high risk ventures? Does not it have enough flexibility to construct a portfolio which will have low risk investments to high risk?

Finally we should also understand that it is market which determines the rate of interest. Then economy, inflation so on so forth. Further, if one bank announces, then all others will follow the suit. Will it not lead to under cuts in times of insufficient credit off take?Does not it amount to interfere with one's commercial decisions?

We firmly feel that any move which will interfere with the business will ultimately fail. One should understand now that west is looking at the east and not the other way round. We need to assume leadership and not to have the mindset of the follower.

Real estate - what ever pushed up will come down

Solar City will come up at Kadri.........also at Anantpur - (Published with much fanfare)

.Metro is a reality and realtors' are ready for yet another show

......................and finally, now, Vinod agarwal is out of FABCITY(Should have been published in the same way)

That is what it is.

Schemes are being announced. Once the scheme is announced, talk about development will begin. The future potential and future habituation will be calculated. The land available verses land required will be estimated. Huge gap between demand and supply will be surprisingly discovered. Huge opportunities will be intelligently spotted. And then, my dear friends, the game begins. Once again everyone in the system perfectly plays their own part. Politicians regularly make statements, Media publishes the stories and the real speculation begins at once. The relationship between the land prices and market prices will be broken. The prices go up as long as the game continues and as long as one can fuel this speculation. At the end, what ever that goes up comes down, so are the prices. The real victim is one who is at the end of this chain and that last one will invariably, with out any doubt, be a common man.

Therefore, do we need to get satisfy ourselves that it is but for natural that what ever that goes up will come down or do we need to think further, to aspire for a transparent system, that does not allow this kind of malafide speculation and allows only that information which is essential for informed decisions. Do we need to forget what kind of anarchies that took place in the name of FABCITY and how many have enriched themselves and where they might be now. And finally, don't we need to think, about those common men who have invested their hard earnings in and around this FABCITY, under the false presumption that they made a safe and intelligent investment.

The law of nature that what ever that goes up must come down is true but it is not applicable to what ever that pushed up. Ironey is that the scheme to push is immoral and is not illegal as it stands today.

Increase of oil prices

It is economically incorrect to call it as increase. It is simply withdrawal of protection hitherto offered. The move that our government took, will allow the domestic prices to reflect international oil prices and domestic prices will, hereinafter, directly proportionate to international prices and will vary accordingly.

In other words, a common man in the twin cities will pay, to his petrol or diesel consumption, in accordance with the international market crude oil prices.

We import about 80% of our oil needs. Earlier Oil pool account, maintained by central, used to absorb these shocks and domestic prices were unaffected by International markets. When government buys oil internationally and sells domestically, any surplus, account gets credit and any deficit, account gets debited. NDA government has withdrawn it and has introduced administered price mechanism (APM).

Indian Government took advantage of low crude prices in the global markets and has decided to with draw its support to APM and to let the markets determine oil prices henceforth. However, it has simply ignored the double digit inflation and already sky rocketed prices. In any developed economy, where free pricing is prevailing, the inflation will not cross more than 3%. This increase will have cascading and spiral effect on the prices, inflation and economy as whole.

But it gives enough inflows to central to meet huge fiscal deficit, divestment of oil PSU stocks as they quote high because of the reduction of losses and some benefit to our Andhra Pradesh as it reaps some income on every drop of oil that is burnt in the state.

Government shall provide subsidy to Public Transport – Jayaprakash Narayana, Loksatta

This is the statement given by self proclaimed intellectual politician in the Andhra Pradesh. He distinguishes himself from other politicians stating that he thinks about welfare of the people and his thinking is long-term and now, he talks about populist subsidy measure, only reveals his empty ideology and lack of depth in economics. We would have been happier had he commented on the timing.