Reason 2 : Fuels the rate cut hype created by corporate biz

In Feb 2013, there was an unsual hype created by India Inc for rate cut. RBI governor Subbarao was under immense pressure to cut the rate.

All the media houses were flashing headlines to support the voices and disguised concerns raised by business houses and lobbyists.

But the governor said - It is the silent millions of poor squeezed by soaring prices who were the driving force behind the Reserve Bank of India's decision to keep interest rates high, People who are worried about economic growth are typically quite articulate, that they have a platform to express their concerns". 

Once again the news media failed to represent the silent population and served their main customers i.e advertisers and shareholders.

Rate cut and Inflation explained:-

Rate cut means that India Inc can borrow money at less rates. This means more liquidity. More money in market means high inflation.  

Rate increased => Low Liquidity => Low Inflation

Rate cut => High Liquidity => High Inflation.

As a common man, even I was looking forward for the rate cut so that my month EMIs decrease. But I was unable to perceive that the amount I would save on EMI might be lesser than the amount lost due to inflation ( daily expenses). 

Disclaimer :  I the author of the content that can be found here within can assure you, the reader that any of the opinions expressed here are my own and are a result of the way in which my highly disorganized and somewhat disfunctional mind interprets a particular situation and or concept.

Reason 1 : Blackout on MVAT issue and advisories

After builders lost their case with sales tax depot, letters were dispatched to their customers to cough up the VAT amount.

This was a very wide topic and a large base of middle class home buyers were impacted. There was a lot of confusion around the judgement ( from common man perspective) and lot of speculation of who is going to pay VAT and how much.

The calculation of VAT  or VAT issue in itself is a separate topic, but how the media blacked out the advisories or guidelines or any other news that would have benefitted or soothed the common buyer was very noticeable.

All articles related to VAT that used to figure in the news were the statements and warnings from builders and developers to customers (asking them to cough up VAT as soon as possible or be ready of litigations).

For some home owners, who purchased a resale property ( and thus not liable to pay VAT), the warning were to trace the owners from whom the purchased the flats.

I truly hope that real estate regulation bill passes as soon as possible and an appellate body is formed. I wouldn't blame the developers or home buyers or anybody else. But all that was apparent from the whole episode was way news media behaved.

If you felt the same, please share your experience by replying to the comments below.


Disclaimer :  I the author of the content that can be found here within can assure you, the reader that any of the opinions expressed here are my own and are a result of the way in which my highly disorganized and somewhat disfunctional mind interprets a particular situation and or concept.