dibya’s blogosphere

For its projections of US economic growth in 2009, the IMF swung from plus 0.8 percent in July to minus 0.7 percent in November! And it’s a safe bet that if the IMF were making a fresh set of projections for 2009 today, all these numbers would look even worse.

Nor does the recent “advance release” of the global outlook for 2009 by UNCTAD provide any succour. Like the IMF, the UNCTAD foresees global growth at just over 2 percent in 2009 at PPP weights and at only 1 percent at market exchange rates. The latter number means that global growth in 2009 is expected to be at only about a quarter of the pace enjoyed in 2006 and 2007.

Both institutions forecast severe damage to world trade, which is expected to expand at only 2 percent in 2009 as compared to over 9 percent in 2006 and 7 percent in 2007. For the Asian giant, China, both the IMF and UNCTAD expect growth to slow to about 8.5 percent in 2009 from the scorching 12 percent pace of 2007. Interestingly, several China-based analysts foresee much sharper deceleration.

What about India? How bad will it get for us? The official estimates of GDP growth for the first two quarters of 2008/9 stayed above 7.5 percent. However, industry-wide indications after September are uniformly gloomy.

There are reports of significant declines in output of automobiles, commercial vehicles, steel, textiles, petrochemicals, construction, real estate, finance, retail activity and many other sectors. Exports fell by 12 percent in dollar terms in October and advance information points to a similar decline in November. After September, the economy seems almost to have gone over a cliff.

When available, the official data are likely to record a sharp slowdown in the second half of the year, possibly steep enough to drag full year growth in 2008/9 to below 7 percent. What’s more, given the strongly recessionary conditions expected to prevail in the world economy in 2009, there is no prospect of a quick turnaround in India. Indeed, on a tentative basis, I would suggest that we might be lucky to achieve GDP growth of even 6 percent in 2009/10.

What about economic policy? Can we not deploy monetary, fiscal and exchange rate policies to insulate our growth momentum from adverse external conditions? The short answer is: only to a limited degree. I outlined the main arguments last fortnight (BS, November 27).

Given the continued high rate of CPI inflation through October (latest data) and, perhaps more significantly, recent pressures on the exchange rate, the present scope for further policy rate reductions appears limited. That situation might change if external imbalances improve if a falling oil import bill and slowing non-oil imports outweigh the drop in export earnings and if capital flows stabilize.

On the fiscal front, the government had pretty much exhausted the available fiscal space through its record Rs 237,000 crore (4.5 percent of GDP) supplementary demand in October. Though undertaken for quite different reasons, its timing may turn out to be quite fortunate.

It may be far more important to actually spend the already budgeted plan expenditure effectively. If international oil and fertilizer prices stay at present levels, implying low or negligible subsidy rates (looking ahead) on price-controlled domestic sales, then there may be a case for a larger stimulus next year. Much will depend on the trajectory of revenues and other expenditures in a slowing economy.

While such unprecedented monetary loosening and massive supplementary expenditures will definitely help, they will not fully neutralize the negative impact of the severe global financial and economic crisis on India’s exports, investment and consumption.

With over 60 percent of global GDP having toppled into recession, a significant deceleration of India’s economic growth is simply unavoidable. After all, we share the same planet as America, Europe and Japan (and a rapidly slowing China). In this context a 6 percent economic growth in 2009/10 will be pretty good…if we achieve it.

NEW DELHI: If Bharatiya Janata Party (BJP) leader Varun Gandhi, behind bars for alleged hate speeches, cannot contest from Pilibhit, his mother and

Maintaining that all options were open for Varun Gandhi, the sources said if all measures fail, Maneka Gandhi will contest from Pilibhit, from where she has been elected to the Lok Sabha five times, as well as from Aonla, the new constituency she shifted to.

While Varun Gandhi has been granted bail in two criminal cases, he remains behind bars as he faces charge under the stringent provisions of the NSA that allow his detention for up to a year

former minister Maneka Gandhi will fight the Lok Sabha elections from there, party sources said on Tuesday.

Bankura, March 26: Policemen today did aerial surveys of Maoist-infested Bankura and Purulia districts three days after a similar exercise in West Midnapore.

In Lalgarh, West Midnapore, restive tribals have said they would not security forces to be deployed in the area for elections. The tribal resistance group, the People’s Committee Against Police Atrocities, threatened to boycott the Lok Sabha elections if police are deployed.

Today, top police officers met the district officials in Purulia and Bankura to assess how many policemen and central forces would be needed for the polls. Bhupinder Singh, the director-general of police (coordination), who is looking after poll arrangements in the state, said: “Forces will be deployed well in advance. Patrolling will be carried out in the sensitive areas.”

NAPIER (AP): Gautam Gambhir batted nearly 11 hours for 137 and V.V.S. Laxman made a stylish 124 not out as India batted through the final day to reach 476 for four and draw the second cricket test against New Zealand, consolidating a 1-0 series lead.

Gambhir batted 17 minutes less than 11 hours to secure the match for India on Monday, sharing partnerships of 133 for the second wicket with Rahul Dravid (62), 97 with Sachin Tendulkar (64) and 96 with Laxman.

He was out in the 160th over of the innings, when India was 356 for four, leading by 42 runs overall after following on 314 behind on the first innings. India was out for 305 in its first innings, replying to New Zealand’s 619 for nine declared.

So . . . have “you” ever been to Afghanistan? That’s a real nice ice-breaker when meeting new people. I mean, how many people, aside from Afghanis, charity workers, US soldiers, and journalists, would frequent Kabul, Afghanistan? But Kabul was our home for almost 4 years. I was glad I was young enough not to understand all the politics, and was totally oblivious to the potential danger which was posed due to the guerilla warfare back then. This again, was way back when the Soviets were occupying Afghanistan, and the mujahadeens were trying to oust them. This was before the Talibans took over. Kabul was relatively safe back then. Relatively safe meaning, there were the occasional rockets flying over head, spontaneous shoot outs, and even car bombings. But in my childish world, I was blissfully unaware of all this violence and danger (not until towards the end of our stay there).

And it was sad to leave Kabul . . . and sadder still to see the deterioration of this beloved place which was just like home to us. Towards the end we “had” to leave. The violence, and war was escalating, and staying was no longer an option. It was awful to see news reports of the decimated state of Kabul post-9/11. I often tried to recognize the places when Kabul was shown on TV. . . but it was no longer recognizable. Besides, my memories are the one’s I want to treasure with me. I want to remember the Kabul where I spent a couple of years of my childhood

The United States said on Monday it had found an encouraging symmetry of views with its NATO and EU allies after outlining a strategy review meant to end a stalemate in Afghanistan.

The issue has flared again, with Afghan officials launching an investigation into a new U.S. military operation in Kunduz which killed five Afghans that police officials said were civilians, but U.S. forces insisted were militants.

 BJP’s Prime Ministerial candidate L K Advani today came out in support of Varun Gandhi, under fire for his alleged hate speeches, and said it was the opposition which had made him a “poster boy”.

He accused the Election Commission of exceeding its brief by suggesting BJP should not field him as a candidate in the election.

“We did not make Varun Gandhi a poster boy. It is the others who give publicity. Most of the time, our opponents have made him a poster boy,” Advani told PTI.

Advani attacked the Election Commission’s suggestion that Gandhi should not be given nomination by BJP as the poll panel had found him guilty of making inflammatory speeches in his constituency Pilibhit.

“The case of Varun Gandhi got wide publicity as the Election Commission did something unprecedented. I was surprised. I support Varun because EC has done an illegal thing as the charge against him has not been proved,” Advani said.

Without naming actor Sanjay Dutt, who is set to contest from Lucknow as Samajwadi Party candidate, he said “one who has been convicted is contesting from Lucknow but the Election Commission has not said anything.” Advani addressed election meetings for BJP candidates in Padrauna and Maharajganj areas of Uttar Pradesh.

Some of the locals raised slogans of “Varun Gandhi zindabad” during Advani’s speech.