Thursday, September 13, 2012
NEWS TODAY- DT 14-SEP-2012 - DIESEL PRICE UP - KM BIRLA ON POLICY PARALYSIS - STOCK MARKET IN GREAT MOOD
Date : 14-Sep-2012
1. DISEL /LPG PRICE GOES UP :
Government has decided to hike diesel prices by 5 Rs; and restrict subsidized LPG Cylinders to 6 per year. Beyond that, at Market Rate cylinders will be available without limit.
MY COMMENTS : No one will mind such increases if they take place in small increments and if they come when General Inflation is at LOW LEVELS. Both these conditions are not satisfied at this point of time. This increase comes at a time, when inflation is already is very High; and the increase itself is quite High. This increase in diesel price is bound to increase the level of Inflation.
Increasing Prices of sensitive, Basic commodities – is not the solution. Increasing their availability is. The Government must permit Reliance, Cairn, ONGC etc – to go for ENERGY HUNT without any restrictions. In India, forest clearances, Environmental clearances etc take AGES for almost no earthly reason. Look at the petrol / Diesel / LPG price Hikes from this angle. Why should the Poor and Middle class pay for Government’s own RED TAPE in according these clearances?
As we know - the COALGATE imbroglio is significantly vitiated by the NON-GRANT of these essential clearances to many coal Block allocated companies, which therefore could not produce coal, and therefore electricity too. Government of India must decide once for all – that for Petrol / Gas exploration and production, these clearances will be automatic. But, the exploration companies must be made to create twice the number of trees that they need to fell. They should monitor this and do it responsibly themselves. What we need in all this is not Government action to monitor it – but the creation of a strong Regulator for the Oil and Gas Industry.
2. K.M.BIRLA ON POLICY PARALYSIS :
Many Industry leaders have come out openly against the Policy Paralysis. They don’t really do it always – and in general, they also look like participants in Governmental doings and un-doings. But, the extreme Policy Paralysis of recent years has put them also in Dock. Therefore, the outcry from Industry leaders.
The one who continues not to criticise Government seems to be – RATAN TATA.
The latest to join this Critic Bandwagon is K.M.Birla. He may not specifically say so – but lack of Transparency and Red Tape are at the back of all problems in India.
Corruption is definitely at the back of Lack of Transparency. Many Coal Block allotments seem to be mired in Nepotism. And Politicians unabashedly justify their Nepotism. Political Ethics are at the LOWEST EBB. Unlike 2 G, where the Prime Minister, could justifiably blame the ALLIANCE COMPULSIONS, the game in CoalGate seems entirely at Congress Gates –as of now.
3. STOCK MARKET IN GREAT MOOD - THIS IS THE WAY
The Indian stock Market always listens to FOREIGN NEWS more intently – and not much to Indian News. The Foreign News right now is not Bad.
With all depressing News within India, this optimism in future is quite the thing needed – to keep the Investors’ health and optimism in the future. This is the way, Indian stock Market must perform - since India Growth story, in the medium / long term - is still strong.
Right now, the SENSEX today has gained a full 375.7 points (2.08%); and NIFTY has gained 117.55 points (2.16%) – despite all bad local News.
RBI’s stand on Interest Rates is really depressing from Growth view point. Yet, Banking stocks are also gaining ground – in the hope that RBI will look at IIP GROWTH numbers more closely, see the extreme damage that IIP is suffering right now – and perhaps decide to BAT FOR GROWTH soon.
Man lives on Hope. Investors live on Hope – that Government and RBI will do something – just anything - to prop up their Hope.
The latest news is August Inflation numbers are higher than July. So, given the RBI’s passionate attachment to these Inflation numbers – RBI’s support to Growth may not come too soon.
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