Seems that the government has decided on elections in May when its term ends. With oil and commodity prices rock bottom the politicians are sure of inflation falling and remaining in the comfort zone. Petrol prices have been reduced by Rs. 5 and will probably be reduced further in January to generate a feel good factor. Actually even with petrol at Rs. 55 a litre inflation had fallen from 13% to around 8% so reducing price at this point is ill judged. Instead the government should have built up an oil pool account so as to be able to absorb future shocks. Reducing prices at this time reduces government income because oil companies are state owned anyway. Meanwhile excise duties have been reduced to stimulate the domestic market. Falling income and job losses means that people are cutting back on spending which impacts indirect tax collections. Add to that the Sixth Pay Commission increases in salaries of sarkari fellows and the write off of farmers' loans worth some 700 billion rupees then we are left with severe fall in government revenues with increasing spending. This means that they intend to print more notes which will devalue the rupee and cause severe inflation in the future or they will borrow from the market causing severe liquidity crisis. Either way it seems to me that we are in for horrible times by this time next year. Please tell me that I am wrong.