Category: RBI

Kapil Sibal earned the sobriquet of “Zero Sibal” for saying on National TV that there were no losses due to the 2G spectrum sale by Raja.

Now RBI Governor Subbarao is following Zero Sibal’s footsteps

When asked about the issue of loss incurred by not auctioning the spectrum, Subbarao – who was Finance Secretary between April 30, 2007 and September 4, 2008- is learnt to have said that while there was no loss to the exchequer, even if there was, it was only notional in nature. He said there was no monetary loss in actual terms. “Much depends on perception,” he is learnt to have told the JPC.-from the BS

RBI has come out with its annual Handbook of Statistics on the Indian Economy 2011-12.As usual, it is a treasure chest of useful information and stats.

One of the most interesting stat is the components of money stock.The stats indicate that the M3 indicator increased by the following rates:

2008-09:18.75%

2009-10: 16.84%

2010-11:16.09%

2011-12:13.14%

There is considerable research which indicates that M3 indicator is a good predictor of medium term inflation.As Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon”.

So whether RBI cuts rates tomorrow or not, be prepared for elevated levels of inflation.