Signals point to better economic activity: Chief Economic Adviser Arvind Subramanian - The Hindu

Signals point to better economic activity: Chief Economic Adviser Arvind Subramanian - The Hindu

My VIEW:

The observation “In a sense, there are at least two manifestations of
the deflation I am talking about. One is agriculture. Prices are down. Apart
from onion prices, of course, and one or two commodities, in agriculture we do
see depressed incomes because prices are down and the monsoon is what it is.
The second thing is that when nominal GDP starts decelerating as it has, it has
implications for the fiscal as well. So, that’s another manifestation of
deflation.” may need a clarification that agricultural prices are ‘down’ at the
farm gate and not at retail outlets. The deflation the CEA is talking about
seems to be related to wholesale prices, or put bluntly the prices paid by
wholesale dealers at the farm gate. When it comes to interest rates, they are
also coming down, but there it is deposit rates which are coming down!
M G Warrier

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