It's never straight forward, is it?

The Indian economy is expected to show robust growth in GDP in the second quarter, following the 8.2% growth in the April-June quarter, wrote N Kwatra. Mint has launched a Macroeconomic Tracker that "uses 16 high-frequency indicators to gauge the health of the Indian economy. According to the latest figures, nine of the 16 indicators are in the red -- performing worse than the five year trend." On the plus side, the Purchasing Managers' Index (PMI), sales of two-wheelers, rail freight traffic and bank non-food credit are up, while consumer inflation is down, giving a fillip to outlook for jobs. Retail inflation fell to 3.31% in October from 3.70% in September, well below the target of 4% set by the government for the Reserve Bank (RBI). Indian politicians, civil servants and business fellows have a profound faith in lower than low interest rates as a solution to all economic problems, so a falling inflation should be fantastic news because it puts pressure on the RBI to reduce rates. But, there is a little problem. "Since the August policy, food inflation has surprised dramatically on the downside. Seasonal pickup in prices of vegetables and fruits in summer months was simply missing due to a combination of increased mandi arrivals, export policies and other supply management. This, coupled with a normal monsoon, has shifted RBI's food inflation projections significantly lower," said RBI Deputy Governor V Acharya. Poor people spend over 50% of their earnings on food and even then there is a vast gulf in the nutrition value of food consumed by the lowest and highest 5% of the population. Low food prices should be good news for the government because they help the poor. With 58% of our population dependent on agriculture for survival, low food prices are a disaster for our farmers who are unable to recover their costs. As of now, thousands of farmers from across the nation have collected in Delhi to demand an escape from poverty. They borrow to buy seeds, fertilizers and pesticides and when prices fall so low they cannot repay their debts and may end up as bonded labor. The main reason for low inflation is " the unprecedented deflation in agricultural commodity prices in the last four years," wrote Prof Himanshu. "One of the immediate confirmation of the severe demand deflation in rural areas is the decline in real wages which have now fallen for the last eight months." So much for the good news. On the negative side, growth in passenger vehicle sales, tractor sales and in domestic air passengers in down. The rupee is down against the dollar, rural wages have fallen 3.6% year on year, core CPI is still at 6.2%, and trade deficit and current account deficit are increasing, wrote Kwatra. General elections due in 5 months. Can our dear leader bluff his way out of this?