World one of the most aggressive central bank on controlling inflation may sacrifice Asia’s 3rd largest economy’s growth in order to manage inflation. “High inflation negatives prospects of growth”, said RBI governor Mr. Subbarao.
The main cause of the inflationary presser is coming from the international commodity prices and these commodity prices have been quickly passed through into the entire range of domestic manufacturing goods indicating that prices of international commodity are very important. In simple words, demand has been strong enough to allow major go through of input price increases. Importantly, this is happing even as there are visible signs of moderating growth, particularly in capital goods production and investment spending, suggesting that cumulative monetary action are begging to have an impact on demand.
Commenting on the April headline inflation number as measured by the WPI declined to 8.66 % from 9% in March as the prices of food and manufactured products eased , Mr. Subbarao said, “Inflation numbers are still high and above comfort level. "For more rapidly growth, we need to manage the growth-inflation trade-off. Constant high inflation over past two of years highlights the dangers of negligence of inflation," Mr. Subbarao added.
The food habits of rural poor are also changing dramatically, because of Demonstration Effect of the LPG (Liberalization- Privatization-Globalization). Few months ago, the inflation was due to much talked supply-side constraints and higher global commodity prices. Whereas over the period of time, demand side pressures are also emerging, higher demand along with higher income is stoking inflation. As a result of this combination of high income and high demand, producers are able to pass on higher input prices to consumers in the form of higher output prices.
Now the main challenge is for the Monetary and Fiscal policy to work together to manage demand. We need to focus on the quantity and quality of the fiscal adjustment. Mr. Governor said speaking at the Indira Gandhi Institute of Development Research in Mumbai on Monday.
MoneyWorks4Me rating and ranking of funds for SIP is available to subscribers only. Moneyworks4Me is not a rating and ranking agency, however it is required that users have a way of selecting funds and building a Portfolio. The method used by it are described below to enable users to understand the logic behind the rating and ranking Subscriber will find more details on this in the various content made available from time to time. In case you need more please write to besafe@moneyworks4Me.com
MoneyWorks4Me rates and ranks mutual funds based on the following data-driven system:
Funds ranking in screeners: Performance Consistency and Quality are two parameters used for ranking funds for SIP. The ranking as follows GG, GO, GR, OG, OO, OR, RG, RO and RR.
With the same color-coded funds, the one with the higher Average 3-year rolling returns (over 5 to 10 years), the number that appears in the Performance tag, ranks higher.
Here is the summary:
The third tag Upside Potential is not relevant for SIP. It is relevant for lumpsum investments in Mutual Funds.
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