Figures beg to differ.

The HSBC Purchasing Managers Index is down to 52.8 in August from 52.9 in July. This was blamed on major power cuts in August. Morgan Stanley has reduced its forecast of GDP growth to 5.3% for the current financial year from an earlier forecast of 5.8% and is warning that it could slip to 4.3% in the next fiscal year. The RBI is predicting that inflation may be 7% instead of its earlier forecast of 6.5% this year. The government blames the inflation on a weak monsoon this year which is a complete lie because inflation has been at 10% for 2 years and the monsoon, which was weak in late July and early August, has strengthened and covered the entire country. The second lie is to blame the RBI for high interest rates which, according to the government, is responsible for falling investment and slowing growth. Unfortunately for the liars figures tell a completely different story. Bank loans to buy cars has soared by 20% to more than Rs 1 trillion for the first time ever. No inhibiting effect of interest rates there. Home loans have grown at 14.8% and the total is now at Rs 4.14 trillion. However, loans for consumer durables, such as fridges and washing machines, have fallen by 29.4% to Rs 69.3 billion. One reason for this could be that people are waiting for the festive season in late October to buy new products because this is considered an auspicious time. What is puzzling is that household savings are down to 7.8% of GDP from 9.3% last year and 12.2% in 2010. Surely people should be tempted to lock in their money in long term fixed deposits to take advantage of high interest rates and delay spending on cars to when interest rates come down. The reason why people are saving less is because increased spending on basic essentials, such as food and fuel, makes it difficult to save. Ever rising prices may also be the reason why people are spending money on buying cars and gold because they are fearful of prices rising even further. The pathetic state of citizens is reflected in Bluefin Consumer Confidence Index which has fallen to a miserable 39.6% in August from 41.1 in July. Below 50 shows negative while anything higher is positive. That reflects the extreme stress on the Indian customer. The answer is obvious - maintain a high interest rate to reduce inflation and encourage savings, which will increase liquidity and allow banks to lend to businesses, and reduce taxes which will instantly reduce prices, stimulate consumer demand and stimulate growth rate. However, the government is led by the Congress which is locked in a tax and spend Socialist mindset of the 60s. This gives politicians a sense of power and the opportunity to plunder the exchequer, examples of which are in the news everyday. The most important reason probably is that the government is bankrupt and has no options left. Even foreigners have noticed that the World Famous Economist says nothing. That is because he knows nothing and it's better to keep silent and just occupy his chair. A craven, lying traitor.