The freeloading press is constantly telling us how India is going to avoid recession now afflicting countries such as Britain, Japan and Singapore. We are told that our growth is going to be 6% plus and will surge once trade in the rest of the world recovers. Today's paper has big headlines saying how the Sensex has given the third best returns in the Asia Pacific region. However other news would seem to indicate that all is not great as they would have us think. The RBI governor, Mr. Subbarao has said that next fiscal, 2009-2010, will be tougher than the present one. He is unable to reduce interest rates any further because 10 year government bond yields are very high having crossed 7%. Although everyone points to the wholesale inflation index which is down to 0.27% Consumer Price Index is still high, double digits in some cases. He thinks it is a good thing because this will prevent deflation. The reason for the high bond yields is that the government will have to borrow Rs.1400 billion from April- September and Rs. 2410 billion in the nest quarter. What will happen in the next half of the year is anybody's guess. With the government sucking funds out of the market credit will remain tight and interest rates will remain high. With Europe and the USA at loggerheads about the path to recovery, with the Czech Prime Minister describing the US plan as ' the road to hell, there is no guarantee about world trade picking up in the medium term. By this time elections will be over and looks like Congress gang will be back again so who cares. Anyone for stagflation?