Govt in form with reform; RBI action awaited

FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. Only in growth, reform, and change, paradoxically enough, is true security to be found.- Anne Lindbergh A government synonymous with policy paralysis has suddenly shifted gears. FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. The Fed’s stimulus announcement of course cheered world markets last week which are adding to the positive mood. ECB president Mario Draghi’s plan for unlimited, but conditional, bond purchases of troubled euro area countries brought in cheer. The question back home is whether the RBI Governor will do the needful to give further momentum. The inflation worry of course has just got worse. Dr. Subbarao won’t keep us guessing for long as the Reserve Bank will announce the mid-quarter monetary policy review this morning. Hopes are running high that the Fed's latest round of stimulus will drive down interest rates and encourage spending by U.S. consumers and businesses. Trend in FII flows: The FIIs were net buyers of Rs. 28.33bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of Rs.6.88bn, as per the provisional figures released by the NSE. Global Data Watch today: Japan Respect for the Aged Day Bank Holiday, Australia New Motor Vehicle Sales (Aug), China FDI – (Aug), EU Current Account (Jul), Italy Global Trade Balance (Jul), Italy Trade Balance EU (Jul), EU Trade Balance (Jul), US NY Empire State Manufacturing Index (Sep). In other news in the media, Disinvestment in four PSUs — Nalco, MMTC, Hindustan Copper and Oil India — was also okayed by the Union Cabinet. (BS) Full Planning Commission chaired by Prime Minister Manmohan Singh on Saturday approved 12th Five Year Plan (2012-17) document that proposes to lower annual average economic growth rate target during the period to 8.2% from 9% envisaged earlier in view of fragile recovery. (BL) Finance Minister said subsidies in 2012-13 would be around 2.4% of the GDP), against the Budget estimate of 1.9%. (BS)