…and the farmer killed the Goose that lay golden eggs

So the inevitable happens.  

The Oct 2011 IIP figure is not only at a 28 month low, it is also DOWN 5.1% .

Manufacturing output, which constitutes about 76% of the industrial production is DOWN 6%.

Fiscal Deficit will most certainly EXCEED 4.6% as promised in the Union Budget 2011.

This is not all, whilst the rupee is getting weaker by the day, the current account deficit is going up. Interest Rates are still giving vertigo to the industry, power is struggling with coal shortages and near-defaulting SEBs, Infrastructure disbursement is at standstill, investement is moribund in the economy and all this while inflation continues to cook a snook at the powers to be at the center, including the RBI.  

This blog continues to hold the view that the best way to deal with inflation due to inadequate supply, was to boost the supply. However, the RBI decided to kill the demand while on the other hand, the UPA govt. chose to do nothing. Time and again, the RBI statement gave a veiled cry of despair that its hawkish stance despite apparent slowdown in the economy was not met with action from the Govt. front.

Hence, while on one hand Govt. apathy allows tonnes of food grains lying in FCI godowns to rot or eaten away by rats, on the other hand middlemen and hoarders made merry while the inflation monster ravished the “Aam Admi” or the common man of India.

It is not that foreign investors are dying to get a toe hold in the country as of now. India may have been there darling with 9+% growth. But with a measly 6% GDP growth rate, it is an ugly duckling best avoided. But we continued to play dangerous politics with this one element too.

The govt. continues to do this one step forward, two step backward dance, making mockery of its credibility as it fools around with this drama of allowing and subsequent withdrawal of retail FDI proposal. Such negative acts may well be the final straw to scare away potential long term investor faster than you can say Sharad Pawar.

So we are no longer growing at the mythical 9% GDP, the fiscal situation is in a mess, policy 

paralysis nay policy rigor mortis seems complete, internal growth has taken a nosedive and now the last resort of desperate economies, of weakening currency and hoping for export led revival also seems to be lost. We already have Re at 52 to a dollar.

And so the (UPA) farmer killed the Geese laying the golden eggs....and found nothing inside.

PS: 
BTW does anybody remember that the markets went into circuits with joy as the UPA got its second term. 
Ha Ha Ha. 
Seems like aeons ago.