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Finance Minister P Chidamabram is confident that the country can achieve 8 percent growth this year. He saw no reason why it cannot be achieved since the global recession did not have a direct impact on India.
He was speaking at the inauguration of a renovated spinning mill in Tamilnadu.
Reserve Bank of India has today announced additional one per cent cut in Cash Reserve Ratio (CRR) of Banks. This is in addition to the 0.5 percent cut announced earlier. This brings the CRR to 7.5 percent.
CRR is the amount of cash that banks have to keep with the central bank.
The rising price of fuel in the international market has forced India to hike Petrol and Diesel prices by 10%. Petrol will be costly by Rs 5 per liter and Diesel by Rs 3 per liter.
The increase in petroleum prices are going to have an impact on the already high inflation rate. With rising fuel prices, the food prices are also expected to go up.
I should have been a tough decision for the government to make at a time when election is just a year away.
Renault-Nissan has announced their tie up with Indian vehicle maker Bajaj for producing world's cheapest car.
The car will be priced at Rs 1 lakh following another Indian carmaker Tata's nano priced at Rs 1 lakh ($2500).
The plant will be located in Maharashtra and is expected to begin production by 2011.
Esmark has accepted Essar Steel's offer of $17 per share.
The Reserve Bank of India (RBI) has shown its resolve in fighting the rising price.
In its Annual Policy Statement for the year 2008-09 the central bank has hiked the Cash Reserve Ratio (CRR) of banks by 25 basis points (bps). This brings the CRR to 8.25 per cent. At the same time it kept the repo rate, reverse repo rate and Bank Rate untouched at 7.75 per cent, 6 per cent and 6 percent respectively.
Highlights of the policy statement that has given high priority for price stability -
- Cash Reserve Ratio (CRR) increased to 8.25 percent
Concerns of further export bans by rice producing countries has raised the price of rice to a record new high. Rice prices has crossed $24 per 100 pounds in international markets.
Global rice price witnessed a three fold increase since the beginning of this year.
The rising price has greatly affected the poor people in developing countries like Philippines, Indonesia and Bangladesh, that imports rice in huge quantity. Even in the rich US, wholesale supermarkets like Costco and Sams club has restricted the amount of rice a customer can buy.
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Possibility of supply disruptions has raised oil prices to a record high. Prices for US light, sweet crude oil have reached $117.48.
Major causes for recent oil price hike:
- High demand from rapidly developing countries like India and China.
- Falling dollar value.
- Reluctance of oil producing countries to increase production.
- Recent militant attack on pipelines in Nigeria. This resulted in a decrease in oil production.
- A Japanese oil tanker lost thousands of gallons of fuel after it was attacked off the coast of Yemen.
If the drop in inflation is any indication, Government's tough finance measures seems to be working. Inflation has dropped by 0.27% to 7.14% for the week ending April 5, 2008. Inflation was at a peak of 7.41% the previous week.
