India Infoline Weekly Newsletter

As expected, the Indian market went into consolidation mode with the Large-Cap stocks moderating after a sharp spike in the last few sessions

Anna Hazare starts hunger stir against corruption The war against corruption in public life gathered steam with renowned social activist and Gandhian Anna Hazare entering the fourth day of fast-unto-death in the national capital. Hazare is pressing for a more stringent and comprehensive Lokpal Bill that will confer wider powers to Ombudsman to stamp out corruption from top to bottom. "This is a fight for ridding our India of corruption. I am ready to die for the nation," Hazare said. Launching his campaign from Raj Ghat on April 5, Hazare said that he will not rest till the UPA Government agrees to form a joint committee comprising 50% officials and the remaining citizens and intellectuals to draft the Jan Lokpal Bill. "If the Government alone drafts this bill, it will be autocratic not democratic, there will be discrepancies," Hazare said. The third round of talks between the Government and the Anna Hazare's representatives - Swami Agnivesh and Arvind Kejriwal - will take place on Friday. Two rounds of talks on Thursday failed to yield any result. At the same time, the Government agreed to form a joint committee to draft a new Lokpal Bill. It is also believed to have agreed that the committee would have an equal number of representatives from the Government and civil society. However, there is no clarity as to whether an official notification has to be issued on the formation of the committee. The Government has not agreed to the demand that Hazare be made the chairman of the joint committee. The Lokpal Bill is likely to be introduced in the Monsoon session of parliament.

High inflation may hurt investments and growth: Subir Gokarn

Stubbornly high inflation would weaken incentives for investments in India and hurt the country's economic growth, two of India's top policymakers warned. One of them was the Reserve Bank of India's (RBI) Deputy Governor Subir Gokarn while the other was Chairman of the Prime Minister’s economic advisory panel (PMEAC), Dr. C. Rangarajan. The central bank's monetary tightening was aimed at preventing a spiraling of risk emerging from elevated levels of inflation, Gokarn told a meeting organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in Mumbai. Gokarn said also that the global macroeconomic situation was somewhat hostile now.

Headline inflation has remained above 8% since February 2010. Benchmark WPI inflation stood at 8.31% in February. The RBI has hiked its short-term policy rates - repo and reverse repo - eight times since March 2010. The RBI has also raised its inflation projection to 8% for March-end against 7% estimated earlier.

Meanwhile, the PMEAC wants the Government to utilise all available policy options to bring down inflation to an acceptable level of 4-5%, Dr. Rangarajan said. “We must use all our policy instruments to bring down the current inflation and re-anchor the inflationary expectations to the four-or-five per cent comfort zone,” he said. Dr. Rangarajan also said that an environment of reasonable price stability is considered conducive to economic growth. He added that inflation is expected to come down in the coming weeks. He said that such a situation warrants monetary policy action pertaining to liquidity and interest rates.