Currency war

There is a growing consensus  that an unspoken currency war has broken out. Countries from Australia,  Japan, China, South Korea, Singapore, Thailand, New Zealand, Israel,  Sweden, Switzerland, Denmark, Norway &  to those that are part of the European Union are now  trying to  stabilize prices or gain competitiveness, simply by  easing the monetary policies  to weaken their currencies.

Many countries, earlier  used tools like  rate cuts,  quantitative easing ( QE)  or direct interventions on the  currency markets  to export deflationary problems to others and gain growth . With out much of success,   now they seems to  apply the other  mechanism available to generate demand  is  the  monetary policy.

But this is ultimately   a zero-sum game,  as someone gains only because someone else will lose.  A weak currency might provide a short-term boost to the countries engaging in currency devaluation. However, if everyone is playing the same game,  we will end up with  more and higher FX volatility. This in turn likely exact a toll on global trade and capital flows.

Shift to new base year lifts India GDP growth in FY14 to 6.9%

India  revised its  growth rate to  6.9 %  in 2013-14, almost 50 per cent higher than the 4.7 % estimated earlier.  The growth estimate was revised on account of  a  move  to adopt 2011-12 as the base year for computation of national incomes instead of   earlier base 2004-05.

India  has decided to adopt the international practice of presenting industry-wise estimates as ‘Gross value added at basic prices’ (GVA) instead of  GDP at  factor cost. With this move, ‘GDP at market prices’ will be the basis for ascertaining GDP.

The Centre had set a fiscal deficit target of 4.1 per cent of GDP for 2014-15 and achieving this target will not be much of a challenge now since  the GDP computation concept has been changed and also given that global oil prices have plummeted.

These latest numbers are likely to give more elbow room to the Finance Minister in the upcoming Budget and one can expect  spending to go up without the government dithering from its fiscal target.

Govt of India caps prices of 52 more 'essential' drugs

In order to   further tighten   the  prices of essential medicines, the government of India  has brought 52 new drugs under its price control mechanism including some commonly used painkillers, antibiotics and few for  treatment of cancer , cardiovascular and skin diseases. 

These  additional  52 drugs join a list of nearly  earlier 400 essential medicines that have so far been placed under price control in India.  Now  more than 450 drug formulation packs are  under the price control mechanism of the National Pharmaceutical Pricing Authority (NPPA), which entails the regulator fixing ceiling and retail prices for such medicines.

"The NPPA has fixed/revised the prices in respect of 52 formulation packs both ceiling and retail price packs under DPCO, 2013," the drug pricing regulator said.

The bulk drug formulations that have been added to the controlled list include those containing Paracetamol, Glucose, Amoxycilline, Diazepam, Codeine Phosphate, Ciprofloxacin, Losartan, Diclofenac,  Atoravastatin  &   Rosurvastatin.

Earlier in September 2014, NPPA had capped the prices of 43 formulation packs including drugs such as antibiotic Ciprofloxacin, BCG vaccine and anti-diabetic Metformin.

In July 2014  also, NPPA had reduced the prices of some of the key medicines and had fixed the price of 108 non-scheduled formulation packs of 50 anti-diabetes and cardiac medicines.