Role of Sensex with respect to Food Inflation, Discuss
The role of Sensex with respect to food inflation and the question to discuss any directly proportion existed between them or not. The terminology plays a significant role in distinguishing both the roles in respective sectors of the economy. The former illustrates the performance of blue chip company shares in stock market and later one account the amount of inflation persisted in the market. The content demands to discuss any mere coincidence between two but the topic needs elaborate discussion to confound this one.
The stock market is the place where companies, stock brokers, foreign investors sell and purchase their shares based on the market position. The SENSEX refers to the name of market indices represents the value of top blue chip companies which are accounting good profits in the markets. The stock market fascinates the foreign investors to park their investment for short term purpose with high interest rate and these money is described has hot money. The money investing in stock market will not guarantee any legal responsibility in the company but this will provide an opportunity to sold when the market indices show bullish trend. The bear market indices represents the markets are dull in position and doesn't yield any profits to buyers/share holders. The stock market represent investment cycle in the stock market for examples shares, dentures, equity, bonds etc. The corporate companies which need money for their short term purpose will mainly depend on stock market only.
The later term represents the nature of inflation that persisted in the economy;
it had wide implications on the country, but especially on common man where he is unable to purchase the durable goods for daily basis. The food inflation emanates due to poor monsoon season condition, lack of supply management, availability of pesticides at affordable rates etc are the benefactors which will have drastic impact on the inflation. The causes for food inflation are discussed in elaborate manner for further understanding purpose.
In India we are mainly dependent on monsoon climate for sowing the seeds, but unfortunately we are confronted with weak monsoons due to rapid deforestation, climate change, and spur in carbon emissions etc are primordial causes for weak monsoons. Secondly availability of pesticides at affordable rates and also over using of chemicals due to this soil is deprived of its fertility. Thirdly the most vital drawback which is lagging in India is there is no proper water management for cropping purpose. The government apathy towards agriculture sector and lackadaisical in allocating sufficient amount of GDP to this irrigation sector. We are aware that India is mainly dependent on irrigation dams for agriculture and also hydroelectric purpose.
Subsequent to that squabbles in current generation and transmission due to that frequent current cuts to agriculture is another hassle. In continuation to that availability of crop loans and crop insurance are at sub-optimal level where farmers are experiencing a great discomfort to optimize this one due to collateral mortgage of land in banks. The rapid increase of deforestation for industrial development, real estate sector, infra and development projects pruned the farmers to sell their lands for the above purpose in return getting money at market rates. In addendum to that vested market middlemen, corporate houses formed has syndicate and purchasing the food grains from farmers and creating demand in the market due to that instant effect the rates will shoot up. The government functionaries should monitor the situation meticulously and should initiate stringent action over them for creating excessive demand by holding food grains in go downs.
Atlas from the above narration we couldn't confounded any correlation between the two. We perceive that these two are vital in their respective sectors and uphold their role for the growth of Indian economy.
Dwarakanadha Reddy
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