No, the range is because of the real economy. Remember, in all these discussions they haven’t disappeared... The L,W and V shape (of recovery). There are still...people who say it could be L or W. I would say perhaps a majority have shifted to the view that it would bottom out and not go back again (to its lows). And there are others who think there could be a double dip. So the basic uncertainty is coming from the global side. That’s the issue.
Another issue that you’ve brought up is the nature of the financial markets and how it’s all fragmented and a lot of work needs to be done. There is a strong emphasis on financial sector reforms in that chapter too.
That is an analysis of the transmission mechanism and the issue of non-integration of markets. That obviously is a medium-term concern and therefore linked to various reforms of the financial markets. And remember, to the extent that capital flows remain limited. Some of those concerns have eased a little bit, right, with some resumption of capital flows in the last couple of months...
Have the developments of the last eight weeks, especially in oil prices, made us a little more vulnerable to volatility in terms of growth?
Well, oil price remains a concern. Though some of this, which comes from my people—talk about speculation and other things—as far as the impact of all of this doesn’t make much of a difference. Only thing it can determine is the balance of whether it can be temporary or permanent, an issue that I have discussed in detail. The impact of that and the policies that should follow. The fact that it happens will obviously affect us negatively. It’s a secondary level of detail whether it’s happening because global demand has gone up or speculation in US market or less liquidity.
So as the survey points out, global growth and monsoon are the only imponderables that could take away growth in the second half?
That’s right. However it doesn’t mean that there will be negative fall in the U curve. If things don’t go well it will only mean that it will get more stretched out.
And now that you have the full year’s national accounts data, that you didn’t have last year, it’s a fair statement to make that the worst in the economy is over for now?
That’s implied in the U-shape, isn’t it? Because Q3, Q4 is over and Q1 is halfway through. It’s over, actually, but we don’t have the data.
You’ve said earlier that the welfare initiatives are presaged on your growth and tax revenues. There’s an interesting linkage.