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Sensex drops 400 points-Rupee to touch 63

Mumbai, Aug 19 () : Sensex dropped over 400 points. The rupee which fell to 62.78 is likely to touch 63. This has created a fear due to which Nifty fell below the key 5,400 mark- a first in 11 months.

On Friday, there was a bloodbath in the stock market as Sensex plunged along with rupee which closed at 62.03. Today too, the stock markets are in the negative with auto and banks being hit badly. In two sessions, 1000 points have been lost in the Sensex. Government bonds touched 9%. If Nifty Sensex slips further, the situation of panic could set in.

Yashwant Sinha, ex-Finance Minister felt that the policies adopted in 2009 have gradually led to this mess. The Government chose to ignore the impending crisis and now it has engulfed us.

Reacting to Chidambaram’s hope to bring CAD to 3.8% of GDP from 4.5% is not a matter to rejoice. He said that it was something to be seen in the future. He pointed out that CAD should not have been allowed to go to that level. He said that the Food Security Bill will have a dangerous impact on India’s economy. He said populism is being paid by the people.

During BJP rule, 60 million jobs were created but UPA created only 27 million. Retail inflation is 10%. The people are paying for it. This is a way of taking back what you give and create an impression that free meals are given to public.

Sinha chided the media for glorifying the Food Security Bill instead of pointing out the impact on the country’s financials. He said that like Dr Manmohan Singh faced a CAD situation before and later himself as Finance Minister, the CAD was only 2.5% of GDP then. He hoped that India does not face a downgrade. He asked as to what Dr Manmohan Singh was doing and added that he has no hopes from Mrs Sonia Gandhi in handling this crisis.