Inept politicians spell doom for Indian economy

.......Tensions between mandarins in New Delhi and a hawkish central bank are also adding to the investor unease. While the finance ministry wants the Reserve Bank of India to cut interest rates and help spur investment and consumer spending, the central bank is not willing to play ball with inflation remaining already high. Instead, the RBI has been urging the government to fix its finances such as the fiscal deficit which hit 5.9 per cent of GDP in 2011-12 and could well overshoot this year with the sharp slowdown in growth denting revenue collections. “The task for the government is to generate supply so that we produce more and that will bring down inflationary pressures,” RBI Governor D. Subbarao said in a speech at an event in Thiruvananthapuram in southern Kerala state. “The task for the RBI is to restrain demand.”......

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