Bullet or pellet?

So the government has finally bitten the bullet on petroproduct prices. But is it a bullet or a pellet?
The increase still leaves a huge uncovered gap, despite duty cuts on crude and diesel. The Oil companies will still have a revenue gap of Rs 1350 billion orso. Off balance sheet of course, so nominal fiscal deficit will stay at 2.5 per cent, while the real deficit will be closer to 7% of GDP!

Inflation - why is the government in panic mode?

So, time has run out on the inflation front. The usual bureaucratic devices of 'revised' estimates, missing data, and delayed release cannot hide the real rate of inflation from that much abused animal, the common man. And we are talking official stats here. Although things have improved over the years (in the '90s, I had discovered that the government had not updated price data from insurgency-hit areas, including Kashmir, the North-East and large parts of Punjab, for years (and in case of J&K, for decades) and worse, instead of showing the data as missing, was simply using whatever numbers it had on hand!), there is still a big gap between perceived and official rates of inflation.
But the more pressing question is: why is the government in such a flap over inflation? Inflation, at 8.3%, is admittedly high, but so is the GDP growth rate. Why then the panic, with the Finance Minister and the Prime Minister appearing on national TV and assuring that nothing is wrong (always a sure sign that something really malodorous is about to hit the fan)?
What do they know that we don't?
Is it that they know the real gaps in the numbers?
Or that they have dithered too long on the oil question and the genie is now about to pop out of the bottle?
Or that largely jobless growth and high inflation are as good as an electoral death certificate?What do you think?

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