Reality of stimulus package is now visible; Fiscal deficit is
increasing, trade deficit is increasing, current account deficit is increasing
and GDP is coming down, IIP figure is coming down, rating of banks is coming
down rating of country is at alarming position and so on ….
Borrowing by
government has been consistently increasing, public debt has reached to the
level of 46 lac crores i.e. around 40% of GDP. Still government is allowing one after other
subsidies to big corporate, exporters and importers.
Total subsidies, interest relief, and tax relaxation provided per year to high profile corporate comes to the tune of ten lac crores which is at least four times more than the total of subsidies provided to common men in the name of fertilizer subsidy or fuel subsidy. How can one dream of good results for common men when the present government continues such pro rich policies in the name of reformation.
I do not know whether stimulus packages announced by our government after 2008 -09 subprime crisis for Indian corporate has resulted in what it was meant for ,But I may categorically say that the medicine politicians are prescribing to cure the fiscal problems are less than what they are doing to fuel the sickness, to aggravate the crisis and to add fuel to fire of problem.
Total subsidies, interest relief, and tax relaxation provided per year to high profile corporate comes to the tune of ten lac crores which is at least four times more than the total of subsidies provided to common men in the name of fertilizer subsidy or fuel subsidy. How can one dream of good results for common men when the present government continues such pro rich policies in the name of reformation.
I do not know whether stimulus packages announced by our government after 2008 -09 subprime crisis for Indian corporate has resulted in what it was meant for ,But I may categorically say that the medicine politicians are prescribing to cure the fiscal problems are less than what they are doing to fuel the sickness, to aggravate the crisis and to add fuel to fire of problem.
Added on 01.06.2012
Indian government has lost lacs of crores of rupees due to ill-motivated
decisions taken by minister of Manmohan Singh’s cabinet and due to faulty
actions of UPA government. If one takes into account of all CAG reports of last
two three years and make a total of all losses caused by wrong policies of the
government, loss caused due to fraudulent acts of Ministers, loss caused due to
tax defaults and tax evasion, loss due to bad assets in banks, loss due to
write off of bank loans, loss due to tax concessions given to business houses
in the name of stimulus package during last three to five years, and unethical
rise in black money and exodus of Indian money into foreign banks.
It will come to billion of billion
rupees.
Now government has announced some austerity
measures to curtail expenses. It is nothing but a drop in ocean.
Billions and billions of rupees have
been lost or sacrificed to please a few thousand of business houses and now the
corrupt government is pondering over saving a few lacs of rupees on foreign
trips and conferences or a few crores of rupees by stopping employment. Pain of
poor men will become more painful whereas a few lacs of rich and elite class
families will continue to live lavishly.
India’s economic growth has been
consistently falling from quarter to quarter, rupee is weakening, fiscal
deficit is continuously increasing, inflation is going up and up, price rise is
beyond control and so on. Current Financial data indicates that cloud of crisis
is looming large on Indian economy. Crisis of economy is worse than that of
1991 when the then government led by learned Chandra Sekhar had to sell gold.
Foreign currency reserve can postpone the crisis for a few months but cannot
solve the crisis permanently.
Now the question is whether such
petty savings earned on account by forcing austerity measures will be able to
cope with the critical position of economy of the country.
The answer is simply NO.
There is proverb in Hindi "Gau
Mar ke Juta Dan" ( donating shoes after killing cows). Corrupt
ministers and politicians in general have caused unprecedented loss to the
exchequer and have themselves become billionaire during last five to ten years.
On the contrary pain of common men has reached and crosses the level of
tolerance.
Government has advised all
departments to stop fresh recruitment. It means problem of unemployment will be
aggravated and crime will rise day by day.
Can government stop price rise or
inflation or fiscal deficit by merely stopping foreign trip of ministers or by
curtailing expenses on conferences or by reduction in oil subsidy?
No,
Of course such steps should have
rather been the part of permanent policy, but these policies cannot cure the
cancer of corruption and cannot mitigate the pain of common men already caused
by faulty policies of Manmohan Singh during last two decades.
It is pity that bad policies which
have resulted in alarming sickness of economy are still considered by veteran
economists as best diagnosis to cure the sickness of economy. Government should
at least learn lesson from leaders of sixties and seventies when government
used to create job opportunities by adding more and more projects, more and
more industries, by adding educational institutes, by helping farmers to
increase agriculture output etc.
On the contrary present government
always talks of disinvestment and running their current expenses by selling
assets created by governments of sixties and seventies.
Policies of liberalization ,
privatization and globalization has simply and undoubtedly helped only a few
lacs of elite class families who have become billionaire and who figure in list
of top 500 richest families of the world.
Politicians invariably use to commit
blunder and people of India always have to suffer the pain .It is bad luck for
Indians and that in India ,politicians change the policies frequently to suit
their whims and fancies but do not change their attitude and do not change
their culture and intention. Common men are always punished for the fault of
politicians.
Lastly even if it is assumed that
policy of reformation and that of LPG may help in curing the disease of the
country , I hope government failed to ensure that proper and adequate dose of
anti-biotic medicines are injected into the blood of sick economy .
Obviously reputed economists like
Manmohan Singh, Pranab Mukherjee , Montek Singh Ahuliwalia will do nothing but
fuel to fire by their austerity steps taken at a time when common men is
already frustrated with current government. Austerity steps announced by the
government has now made it clear that the policies announced in 1991 in the
name of reformations were not either properly executed or policies were not fit
for Indian economy .
Now at least people of India will
understand whether they committed a blinder by electing Congress Party to power
and by giving unregulated power to person like Manmohan Singh and his cabinet.
The million dollar question is why
the great economist failed to visualize the consequences of their so-called
good policies ,why did they fail to achieve their goal , why did they failed to
predict correct GDP growth, why did they fail to decouple the Indian economy
from the pain of global recession and so on.
Will they accept their moral
responsibility on growing economic sickness?
Are they not punishable for poor
performance and for cheating the common men in the name of reformation?
Top business houses or ministers or
corrupt officers will face no trouble even if their expenses are curtailed or
reduced to zero. It is only common men who will suffer by so-called harsh
measures undertaken by government in the name of curing the economy.
Does the Indian economy have a 1991 crisis feel?
The steep fall in the rupee to over 55 to the dollar, a current account deficit at 4% of GDP, stalled reforms, weak political leadership, and a limping global economy to boot, no wonder parallels are being drawn to the 1991 crisis.
But talk of 1991 may be overblown, at least for now. "We are a much better and more resilient economythan we were in 1991," says Jamal Mecklai, chief executive of Mecklai Financial, a foreign exchange risk consulting firm.
Do Numbers Tell the Story?
On the face of it, some big numbers give cause for alarm. India's current account deficit in 1991 was 3% of GDP, today it is hovering at 4%. The fiscal deficit in 1991 was almost 8% of GDP and that was just for the central government. The deficit right now is a tad lower than 6%, better than 1991 but hardly comfortable.
Nevertheless, "the current situation is much better as the economy is much more competitive now with higher growth rates," says Indranil Sengupta, chief economist, India, Bank of America Merrill Lynch. "Forex reserves are also much higher so we have a cushion." In '91, reserves covered only two weeks of imports. They can cover imports for six months now.
And as Shashanka Bhide of the National Council of Applied Economic Research points out: "In 1991, we were in a phase when we were tightening monetary policy by raising interest rates due to very high inflation, but now we have started loosening monetary policy i.e. the peak may have been passed." But it is beyond the macro numbers that the real shifts have happened. One of the biggest shifts has been in the banking system, critical to the health of the overall economy.
Better Banks
Says Sengupta: "The banking system is much bigger and stronger and the problems are more addressable." In 1991, banks were not subject to anything like the level of disclosures that are mandatory now. Even in the wider economy, there have been sharp changes. "Compared with 1991, we have much better infrastructure so we can bring about adjustments needed in the economy more efficiently," says Bhide.
Last month, in a panel discussion (attended by the prime minister, Manmohan Singh who was the finance minister in '91), RBI governor D Subbarao pointed to macro numbers which were approaching '91 levels. "That is quite a disturbing picture," he said (as quoted by Reuters). "Nevertheless, I would still argue that in 1991 an implosion was imminent, in 2012, an implosion is not."
But talk of 1991 may be overblown, at least for now. "We are a much better and more resilient economythan we were in 1991," says Jamal Mecklai, chief executive of Mecklai Financial, a foreign exchange risk consulting firm.
Do Numbers Tell the Story?
On the face of it, some big numbers give cause for alarm. India's current account deficit in 1991 was 3% of GDP, today it is hovering at 4%. The fiscal deficit in 1991 was almost 8% of GDP and that was just for the central government. The deficit right now is a tad lower than 6%, better than 1991 but hardly comfortable.
Nevertheless, "the current situation is much better as the economy is much more competitive now with higher growth rates," says Indranil Sengupta, chief economist, India, Bank of America Merrill Lynch. "Forex reserves are also much higher so we have a cushion." In '91, reserves covered only two weeks of imports. They can cover imports for six months now.
And as Shashanka Bhide of the National Council of Applied Economic Research points out: "In 1991, we were in a phase when we were tightening monetary policy by raising interest rates due to very high inflation, but now we have started loosening monetary policy i.e. the peak may have been passed." But it is beyond the macro numbers that the real shifts have happened. One of the biggest shifts has been in the banking system, critical to the health of the overall economy.
Better Banks
Says Sengupta: "The banking system is much bigger and stronger and the problems are more addressable." In 1991, banks were not subject to anything like the level of disclosures that are mandatory now. Even in the wider economy, there have been sharp changes. "Compared with 1991, we have much better infrastructure so we can bring about adjustments needed in the economy more efficiently," says Bhide.
Last month, in a panel discussion (attended by the prime minister, Manmohan Singh who was the finance minister in '91), RBI governor D Subbarao pointed to macro numbers which were approaching '91 levels. "That is quite a disturbing picture," he said (as quoted by Reuters). "Nevertheless, I would still argue that in 1991 an implosion was imminent, in 2012, an implosion is not."
http://economictimes.indiatimes.com/news/economy/indicators/does-the-indian-economy-have-a-1991-crisis-feel/articleshow/13530368.cms
Do We Need a Crisis?
Ironically, as many observers point out, it is this lack of a crisis that has actually reinforced policy inertia. "Governments only take action when they have their backs to the wall," says Mecklai. "We are not in that situation today."
"When we started the reform process in 1991, there was lots of enthusiasm and also external pressure and the government then was able to bring out reforms fast," says Govind Rao, director, National Institute for Public Finance and Policy. "But in the current situation, it seems that with a coalition government, it is not as easy to carry out major reforms like bringing in multibrand retail and labour market reforms
Do We Need a Crisis?
Ironically, as many observers point out, it is this lack of a crisis that has actually reinforced policy inertia. "Governments only take action when they have their backs to the wall," says Mecklai. "We are not in that situation today."
"When we started the reform process in 1991, there was lots of enthusiasm and also external pressure and the government then was able to bring out reforms fast," says Govind Rao, director, National Institute for Public Finance and Policy. "But in the current situation, it seems that with a coalition government, it is not as easy to carry out major reforms like bringing in multibrand retail and labour market reforms
MONDAY, MAY 21, 2012
Great Manmohan Singh
Manmohan Singh represents the collective wisdom of 120 crore Indians in the capacity of Prime Minister of India.
May anyone say that Mr. Singh has done justice with his post and with responsibilities entrusted to him by voters of this country and by elected MPs of various parties? He has tarnished the image of good persons like Narendra Modi or Nitish Kumar for the vested interest of his party and that too sacrificing the interest of the Nation.
Is he not questioned by common men, Team Anna, Ramdeo, Opposition parties, MPs of his own party called as Congress Party or UPA?
It will not be an exaggeration to say that MMS has committed more blunders and caused more damage than what little good things he has done for the country during his tenure as PM of the country.
He will prove to be the worst PM even if his performance is compared with that of other PMs of Congress Party, not to speak of opposition parties.
He is responsible for large scale corruption and its escalation and unprecedented rise during his rule.
His economics and his clean image has done nothing good for the country but his silence, inactivity and ineffectiveness have caused huge damaged to Indian culture, has demotivated the talented officers working in Indian administration , has broken the record of corruption by keeping mum on all evil deeds of his colleagues and it is his party who promoted the culture of flattery and bribery under the banner of Sonia or UPA using the mask of clean MMS.
Who is accountable, responsible and punishable for pitiable present fiscal ill-health of the country?
If a clerk or an officer do not execute the plan and fail to achieve the target, he or she is taken to task, who will teach the lesson to non performers like PM, FM or other ministers who promised a lot to voters but did nothing but only looted voters.If a bank does not perform as per expectation , if bad assets rises in a bank or if cases of fraud rises in any bank, junior officers are taken to task but the top ranked officers like ED or CMD who framed polices for better performance , who dictated employees to do this or not to do that , who supervised them , who monitored staff but who completely failed to curb malpractice are never taken to task. Why?
When Chadra Sekhar was PM of this country it was told that the country had to sell gold to save the image.Not after rule of Doctor MMS, Pranab, Chidambram and their colleagues the economic position of the country moving from bad to worst. Now the current government is only selling Public sector undertakings in the name of Disinvestment for survival of the government or to cope with fiscal deficit or curent account deficit or trade deficit.
Is there anyone to learn the lesson from present critical state of economy and take step to punish the real culprit.
Is there anyone to learn the lesson from present critical state of economy and take step to punish the real culprit.
Now, at least after publication of latest survey report and performance marking of UPA ministers conducted by various surveyors,
Will media and members of ruling party now stop character assassination of person like Narendra Modi or Nitish Kumar who made their respective state number one and became an example for Chief Ministers of other states to follow?
Will current government stop now exploitation of poor 110 crore people of India in the name of secularism or democracy or social welfare or reservation or minority or in the name of supremacy of Parliament?
Last but not the least , will politicians in general learn to think about nation , act for the nation and refrain from mean minded approach based on this quota or that , stop caste based decisions and adopt patriotism from the core of their heart?
Will they stop horse trading to run the government?
Will they learn to say spade a spade?
Last but not the least , will politicians in general learn to think about nation , act for the nation and refrain from mean minded approach based on this quota or that , stop caste based decisions and adopt patriotism from the core of their heart?
Will they stop horse trading to run the government?
Will they learn to say spade a spade?
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