Saturday, June 14, 2008

Shoutbox queries answered

13 Jun 08, 19:11
kranthi: sir, I don't understand whats the meaning of "revised growth" ---in 1st point, today blog ! can you explain me please?
can we compare earlier growth with revised growth....I mean do they have same base?

CSO (Central Statistical Organization) gets revised figures frequently. Not all the figures needed for compiling the inflation or economic growth figures are available by the time it releases the figures the first time. Even when it does have, the department supplying the figures keep revising them as and when they get latest data. Therefore, as and when the new figures keep coming in, it revises the compiled figures to reflect this reality. That is how/why there occurs a revision in these figures.

13 Jun 08, 16:19
zephyr: and all this while I thought Capital Account Deficit needs to be reduced... please exaplain sir...

Capital account deficit means more capital is flowing into the country. That's is usually a good thing. But then a country should be concerned when it is getting more of 'hot money' i.e., for eg., money coming in for arbitrage opportunities and not for genuine investment purposes. You can say countries will not be usually happy only with FII and Hedge fund inflows. If this is accompanied by other capital inflows for genuine industrial or manufacture build-up, it will be viewed with less suspicion.

It is current account deficit that is more worrisome for any country. That means we are consuming/importing more than what we are producing/exporting.