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Where’s the money?

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    Even if this may not have an immediate impact, as money starts flowing in the money markets again, it may help this sector in the next few months. Curbs on the real estate sector, a large element of which is infrastructure, should be removed. Effective regulation is needed, but the sector should not be starved of funds. If the RBI intervenes in the foreign exchange market, which it should ideally not do, it should sterilise its intervention fully with CRR cuts that put liquidity back into the system without waiting for the call money rate to go up. High rates, even for a few days, can upset the system again. There should be no uncertainty that in the coming days the system will have adequate liquidity.

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    LiquidityBy: sbala | 28-Oct-2008 Reply | Forward RBI rate manipulations will not in the near future bring liquidity to the market. One solution is to bring back the amnesty scheme for unaaccounted money for a period of three months with a rider that the money will be invested in shares of Public Sector Undertaking and returned to the depositors after five years as shares. This with suitable modifications can be adopted to bring in at least an amount equal to the withdrawals of the FII gamblers. Along with this, the FO, Commodity and Day trading should be banned to avoid the gambling FII returning.
    INFRASTRUCTURE DEVELOPMENT IN INDIABy: HARGOVIND SACHDEV | 27-Oct-2008 Reply | Forward The editorial dated 27-10-2008 lays the right emphasis on infrastructure development and need for liberal policies to attract investment in the sector from overseas investors.The need for ameliorating the living conditions of rural folks can be addressed by taking the infrastucture growth to rural areas where the true Indiua lives. Improvement in roads will hep two ways , one by arresting the unnecessary migration to cities and second by faster movement of farm produce to consumption centres in cities from villages.The editor's suggestion that the real estate should also be given free access to international funds needs revisiting as the same would increase the prices of real estate.
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