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Thursday, June 19, 2014

Batsmen fail at Mirpur again .... Iraqi internal war and soaring oil prices for India

At Mirpur the 3rd One dayer was washed out …. But before it rained, the sails of Indian boat rocked as they were humbled for the 2nd time … a batting line-up of Robin Uthappa, Ajinkya Rahane, Ambati Rayudu, Manoj Tiwary, Cheteshwar Pujara,  Suresh Raina, Wridhimann Saha, Stuart Binny stuttered at 119/9 when it rained – and that followed the earlier 105 (though successfully defended, thanks to Binny’s heroics). The Mirpur track continued to play havoc in the mind of the batsmen, but it was rain that had the final say in the series.  India had travelled with a group of in-form, if not quite experienced, batsmen but they failed for a second time in two games. Their 119 for 9 had come in 34.2 overs after the spells of rain shortened the game to 40 overs a side, with the Bangladesh pace attack dictating terms once again.

More importantly, miles away happenings in Iraq known by the Greek toponym 'Mesopotamia' (land between the rivers), home to continuous successive civilizations since the 6th millennium BC casts darks clouds Hundreds of people have been killed since the start of the militant offensive, many of them believed to be captured soldiers publicly shot by ISIS-led firing squads. Some 500,000 people have been internally displaced, according to UN estimates.  The UN said hundreds have been killed as the Sunni-led Islamists advanced into Diyala province in the east - near Iran and close to the capital - having seized Mosul and Tikrit to the north.

Forty Indian construction workers have been abducted in the Iraqi city of Mosul, which has been overrun by jihadist militants. However, no ransom demand has been received and their whereabouts are not known, officials said on Wednesday.  The Indians, mostly from Punjab and northern parts of the country, were working in Mosul for the Baghdadbased Tariq Noor Al Huda Construction Company. The Indian Embassy in Baghdad had been in touch with them earlier and advised them to remain indoors. Sources said they were abducted during an apparent attempt to flee Mosul, which was taken over by militants of Islamic State of Iraq and Greater Syria (ISIS) on June 10.

According to Daily Mail,  a serious trouble, storm for the Indian economy is brewing in West Asia.  The surge in international crude oil prices triggered by the new war in Iraq is set to blow a hole in the new government's budget plans, and slow down any attempt to revive the economy. On Wednesday, the news filtering out from Iraq put the dreaded scenario firmly on the horizon of the Narendra Modi-led National Democratic Alliance government, which is preparing to present its first Budget early next month.  Going by the report, India is the world's fourth largest consumer of oil, importing as much as 80 per cent of its crude requirements. The price of the Indian basket of crude oil imports jumped by close to $4 a barrel to touch $ 110.42 per barrel over the last week.  The rupee has also weakened vis-à-vis the dollar. This will add to the cost of imports, and every dollar increase in crude oil prices means India has to shell out an extra $1 billion to subsidise the losses of public sector oil marketing companies.

The finance minister of the last government, P. Chidambaram, provided a mere Rs 63,427 crore as the subsidy for petroleum products in his interim Budget for the financial year 2014-15. That this was way too optimistic can be gauged by the fact that total subsidy the government provided in 2012-13 on kerosene, diesel and LPG was Rs 96,880 crore.  Similarly, Chidambaram provided only Rs 67,970 crore in the interim budget for meeting the fertilizer subsidy bill of the government, which is also likely to go up.  Finance Minister Arun Jaitley will now have to face these unrealistic numbers as he wrestles with the task of keeping the nation on the path of fiscal consolidation while presenting his maiden budget.

As the turbulence in Iraq threatens to disrupt global oil markets, India has sounded suppliers in West Asia and elsewhere for buying additional crude in case supplies from Iraq are disrupted, a petroleum ministry official said. "The problem is not about arranging the quantity of crude but the price at which we will get it,'' he explained. It's not just a growing subsidy problem. Rising crude oil prices are also expected to increase the current account deficit, weaken the rupee and push up the rate of inflation which is already turning out to be a challenge for the new government. India's consumer price inflation hovered at 8.28 per cent in May and remains a concern. Wholesale price inflation accelerated to a five-month high of 6.01 per cent. The fear of rising inflation will also prevent the RBI from easing the tight money policy that tends to choke growth.

That certainly is no happy news for the Nation
With regards – S. Sampathkumar

19th June 2014.

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