Fall in GDP: The wages of sin - S.S.Tarapore

.....The current problems of high retail inflation, low growth, a large CAD and an overvalued exchange rate of the rupee are all symptomatic of macroeconomic instability and are the wages of sin. I do not tire of repeating that if hurting the poor is a sin, the creators of inflation are the sinners of society. If the government persists with its overbearing pressure on the RBI to keep reducing interest rates and making available easy accommodation from the RBI, there will be a further resurgence of domestic inflation, a fall in savings and a widening of the CAD. Needless to say, this could very quickly end up in a serious external sector crisis, which will ultimately further reduce the growth of the economy......

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