Mar. 18: The monsoon is still a few months away. But a different kind of deluge—bad news—dampened spirits on Dalal Street. On Tuesday the Times of India said fears of further losses to Indian banks, a slowdown in corporate growth and the fast-spreading contagion of turmoil in global financial markets took their toll on Monday.
The sensex lost 951 points to close at 14,809. This was its second steepest fall, wiping out Rs 3.2 lakh crore in investor wealth. Since January 10, when the sensex touched its peak of 21,206 points, more than Rs 25.1 lakh crore of investor wealth vanished into thin air.
Delivering a budget for the masses instead of India's classes, Finance Minister Palaniappan Chidambaram, proposed waiving loans held by small farmers (600 billion rupees) and pledged higher spending on health and education to spread the benefits of an economic boom beyond the cities to rural voters.
India has a population of 1.1 billion and 60 percent or more live and work in rural areas.Due to risks from turbulence on global financial markets and rising oil, metals, wheat and rice prices worldwide, Chidambaram said while he was confident India's economy would grow by 8.8 percent in the fiscal year ending on March 31 a fall from a scorching 9.6 percent in 2006/07, its fastest pace in 18 years.
While he vowed to keep rising inflation under check, Chidambaram increased defence spending by 10 percent in 2008/09. He also increased urban infrastructure spending to 68.7 billion rupees and Rural infrastructure spending will be 140 billion rupees further, Government spending on national highways will be 130 billion rupees.
Lalu Prasad Yadav, the Railway Minister of the reigning UPA government has done it again – with a Rs Rs 25,000 crore ($2.5 billion) cash surplus – he's made a success story of the Indian Railways . He's proved that low cost airlines are not a major threat to India's Railways.