Strange, but not funny.

"As per the First Advance Estimates of GDP released by the National Statistical Office, the economy is projected to grow at 9.2% in FY22 (2021-22)," ET. However, "There are several headwinds that we are likely to face in FY23, the most important ones being high inflation, newer strains of coronavirus, continued challenges on the consumption expenditure of households and micro, small and medium enterprises (MSMEs), unorganised sector stress and private sector investments." The solution lies in increasing capital expenditure in infrastructure, increased support to MSMEs and the unorganised sector, "Increased MGNREGA allocation" and "Cash transfers to BPL households and food security support". BPL, or 'below poverty line', has been defined as those with spending below Rs 33 per head per day in urban areas and Rs 27 per head per day in rural areas, cleartax. Unfortunately, "The government is looking to trim its overall subsidy in 2022-23, and is likely to peg food and fertiliser at about Rs 2.60 lakh crore (Rs 2.60 trillion) and Rs 90,000 crore (Rs 900 billion), respectively, in the upcoming budget, lower than the revised estimates of FY22. Total subsidy bill for the current fiscal (1 April 2021-31 March 2022) is likely to be around Rs 5.35-5.45 lakh crore and the government is keen to lower it next financial year, officials said," ET. On the positive side "because of the tremendous global demand, any exporting industry is starting to do really quite well and of course the IT industry is gangbusters at this point," said Prof Raghuram Rahan. On the other hand, "we have a real consumption problem and that is because of the lower end, the really less well-off segments have done really quite badly in this recession". Inflation is high and "consumption falling while the upper middle class is growing quite strongly means the lower middle class as well as the poor have suffered quite substantially". "India's overall macroeconomic situation is in a recovery mode but the growth is concentrated at the top end," said Prof Kaushik Basu. "Amid the rising inflationary trends, including the sharp increase in retail inflation last month," "the country is facing stagflation and 'very carefully curated policy interventions' are required to address the situation". But, "it was sad that the country's policy over the last few years has been largely focused on big business", and "the youth unemployment rate in the country touched 23 percent, among the highest globally" even before the pandemic. Fifteen years back inflation was near 10% but real growth was near 9%, so per capita income of households was growing by 7-8%, but now we have 5% inflation with falling per capita income. Grim. "Industrial growth fell to a nine-month low of 1.4% in November as festive demand fizzled out while retail inflation accelerated to a six-month high of 5.59% in December," giving the Reserve Bank (RBI) an excuse to keep interest (repo) rate at 4% where it has been stuck since May 2020, ET. The bond market is not as forgiving as hapless citizens. Auction of the new benchmark 10-year bonds failed because traders demanded a yield of 6.54%, higher than the RBI was willing to give. "The paper closed at a discount of 6.56% while that on the current 2031 jumped two basis points to 6.58%," Mint. This means that banks can borrow at 4% from the RBI but the government must pay 6.56% to borrow from the market. Strange situation. Not funny.