The blog which has topics having economic edge on contemporary policy,procedure,structural issues of Economic importance to India
Wednesday, October 26, 2011
It is Never Too Late
Many people believe that their best creative days are behind them -- that they could have accomplished great things if only they had started sooner and that they are "too old" to take on a big, hairy project.
Try to get a whiff of what some extraordinary people accomplished late in life. You may not be a Michelangelo or Stradivarius, but so what? You can still accomplish miracles. All you need to do is begin (and let go of the thought that "it's too late.")
Nothing is late to make a new beginning.
Michelangelo designed the dome in St Peter’s basilica when he was 72 years old; Frank Lloyd Wright designed Guggenheim Musuem while he was 91; Gold Meir became Prime Minister of Isreal at 72, Peter Drucker wrote the “Management Change for Turbulent Times” at 89, Gandhiji won freedom for India when he was 77; Nelson Mandela ascended the President ship of South Africa at 75(Courtesy: The Creative Age by Gane Cohen)”
“My only Love sprung from my only hate! Too early seen, unknown, known too late! Prodigious birth of Love it is to me, that I must love a loathed….” (Romeo & Juliet by William Shakespeare). Juliet is saying,” My only love springs from my only hate! I saw him too early when I didn’t know him, and now I realize who he is too late...”
We learn about ancient cultures in our History classes. Most of the old civilizations are gone. Some have left little behind except ruins and rubble. What happened? Where are the people, their music and ideas? Why are they nothing more today than a collection of stones visited by tourists, anthropologists and curious historians? The answer, of course, is not the same the world over. But Arnold Toynbee, in his work The Study of History (1987), says that the great lesson of history is this: civilizations that changed when confronted with challenges thrived. Those that did not change died. In other words, when life got hard, it killed off those who didn't make needed changes. The key to survival is often about "change."
What about us and the need to change in contemporary ages. What about all of us? It's good to accept ourselves as we are, but when an unhealthy attitude or a destructive behavior gets in the way, when we wish we could change something about ourselves, we had better change. People who embrace change thrive; those who resist it do not shine!
If you have been waiting for a propitious time to make that needed change, this may be apt moment to usher in that change. It is never too late to be the person you might have been. It's never too late to be happy. It's never too late to do something different or to do something better. It's never too late to change a habit. It's never too late to do anything that brings a sustainable change.
Begin making that necessary change today. Then tomorrow, and every tomorrow thereafter, can truly be different.
All of us feel in one way or the other that if we are given a new life, we could start fresh altogether new. “It is Too late now to alter our life Course” feel most of us who missed one or the other opportunity. A school drops out rues his decision when in his mid life he does not get good jobs. I wish I could go back to School to study, he laments. But he consoles himself saying, it is too late now. Somebody who had drinking problem wanted to conquer alcoholism and begin again. But, she was affected by an incurable disease and so he felt that “it is too late now.” When two thick friends break away, both do not take the initiative to hold out an olive branch. Then the rift becomes unrepirable. It is too late to patch up by making amends” feel both of them.
But this is escapism. It is never too late to begin anything.
It has been said that, “Nobody can go back and start a new beginning, but anyone can start today and make a new ending."
The rest of your life is not yet written - it can be whatever you want it to be
Sunday, October 23, 2011
Democracy is for the People
The Athenians, was a Country which followed the democratic norms just when the Christian era was about to commence. Periclus, was an important functionary of Athens, and under him, we had the “the age of Pericles under Athenian history was a golden age, 2000 years ago.”
Athens practiced democracy, or the form of collective decision, in the remote age of History. After the Athenias had driven out the tyrant Hippias in 510BC, they tried to work out methods to prevent the establishment of anther tyranny. Once a Year they set up an opportunity for a vote that was aimed not at electing someone, but at exiling someone. Each Athenian could write down the name of a Politician whom one felt was growing too dangerously powerful for the good of the State. If a total of 6,000 votes were cast and one man received a majority, he was forced to remain away from Athens for ten Years. It was not a disgraceful exile; his property was not confiscated, his family was not mistreated, and, when the decade was up, he was welcomed back. He understood that he had been sent away to be kept from the temptation of trying to upset the democracy.
Athenians practiced democracy, when they had no Constitution, and even perhaps a similar one to Act of Settlement of 1701. They did not have the ‘Rule of Law’ which connote that no body was above the Law. They practiced democracy, 2000 years ago in the spirit of for the People, by the People, to the People. In modern day India, a democratic Republic, with a written Constitution, and a Powerful judiciary, an active media, could not practice the perceived democracy which Athens professed and followed!
The commitment to democracy of Athens was inborn while Indian democracy is enthused. There, lies the difference. Yet, some protagonists wanting moderation in electoral reform by introducing, Recall of Elected Representative, Referendum to gauge Public opinion, have failed to perceive that we have universal adult franchise in India. Even the percentage of voting in an election is generally below the 50% of eligible voters. We can move with the times, but we cannot run ahead.
Thursday, October 20, 2011
Judicial activism and Rule of Law
Today, one of the complex causes that affect the common man is the delivery system of Justice, which if delayed is tantamount to justice denied. The judicial reforms are overdue. The one crucial aspect of judicial inter-dependence is the continuity in thought, expression, expeditious disposal of Cases.
The Supreme Court, in the Keshavanatha Bharati case, reversed the Special bench’s ruling that Chapter III or the fundamental rights are paramount, and hence, Parliament under Article 368 of the Constitution could not alter them. In the Bharati case, the Court propounded the ‘basic structure doctrine’ and ruled that any article of the Constitution which did not affect the basic structure could be amended by the Parliament, holding that there were no” implied limitations of the amending power by Parliament”. Was the fundamental Rights, inter alia, not a basic right extended to the citizen. While observing that ‘judicial review’ formed a crucial edifice of the ‘basic structure’ , the learned Judges did not look beyond time, to consider what would happen in posterity, if the state unnecessarily encroaches on the Citizen’s right? Will not habeas corpus right devalued, if fundamental rights are curtailed? Writ of Quo Warranto? Writ of mandamus? If Parliament has overwhelming 2/3rd majority, can’t there not be a arbitrary approach which results in removal of the law on Rights guaranteed , as the Parliament is empowered to change or cause amendment to any Article or clause in the Constitution. When the government subverted the judicial review by giving blanket cover to certain amendments placed in 9th Schedule, Court clearly made it known that 9th Schedule came under Judicial Review. Emergency in 1976 nullified Keshavanda Bharati judgment by inserting sub para (4) to Art 386 limiting the Court’s interference and sub clause 5 of 386 placing the sovereignty of Parliament paramount. However, a bench headed by Justice Y V Chandrachud in Minerva Mills case (1980) held clause (4) and (5) of Article 386 as invalid.
The Janata Government under Morarji Desai passed the 44th amendment, deleting the Right to Property from Art 19(l)(f) and 31 of Part III and was made into Artcile 300-C. It excluded remedy under Art 32 of the Indian Constitution, as Right to Property ceased to be a Fundamental Right.
The High Court of Madras stayed the execution of 3 convicts of late Rajiv Gandhi citing undue delay at the hands of the president for deciding their ‘mercy petitions’. The Right of clemency was vested in the President. It was subjective. However, the SC held that President could not exercise that power independently as he was always bound by the advice of the Council of Ministers.Power of granting clemency was a power vested with the President, to be used by him in discretion. The Council of Ministers come when Policy decisions are involved. After SC has confirmed a death sentence, on the basis of theory of seperation of Powers, President was the head of the three reservoirs. Hence his power was paramount. When politicians deal with this provision, discretion is not exercised, she is taking a political decision. Supreme Court need to revisit this Judgement. Various Chief justices of the Supreme Court had stated that the SC will sink under the weight of the cases pending disposal. There is a case which is more than 400 years old, stayed by the Supreme Court (Ayodhya Case). Bhopal Gas tragedy case? There was another case which was adjudicated after 40 years. The longevity of cases range from 20 years to one year. Would the action or adjudication go irrelevant because of time consumption beyond one’s reach, time and capability? Justice V R Krishna Iyer in Indira gandhi Vs Raj Narain case, reserved the judgement after hearing both the parties. Nani Palkhiwala told him that if he did not give stay immediately, there would be vaccum as the stay of the judgement of Allahabad HC expired the previous day. Justice Krishna Iyer made a revelation that if an appeal is preferred, and if stay is granted, it has restrospective effect. From the date of hearing of the case, the order becomes valid. By the same token, President's rejection of Mercy petition takes effect retrospectively but since it is execution, it is a prospective exercise that has to be under taken. The time gap is to be ignored because you cannot set a limit for clemency. It is a discretion. The most important abuse of litigation is the appeal to Supreme Court preferred by the Insurance Companies against Motor Accident Tribunal judgments to deprive paying compensation under the sly. They are held up for years in the SC.
Justice V R Krishna Iyer introduced what is called the ‘Public Interest Litigation’ in what was known as Ratlam Municipality case where Varachand & Others was the petitioners. Traditional rules of ‘locus standi’ were the hall mark of a right to file a writ petition. Relaxing procedural Rules, if the Society as a whole rather than a specific individual feels aggrieved, Social action litigation or Public interest litigation could be resorted to. ‘Epistolary jurisdiction’ of United States was the precedence bed rock on which Justice Krishna Iyer based his new theory, which was known as ‘Judicial activism’.
A step taken in a new direction is fraught with the danger of being a likely step in the wrong direction. Pressure on the Courts is already overloaded. The pending cases are mounting. Unfettered jurisdiction to review anything and everything is not good in a flourishing democracy like ours which has theory of separation of Powers. Under Art 32 and Art 136, a citizen can approach the Supreme Court including filing PIL if it involves fundamental rights. High Courts have wider powers that under Art 226 and 227, any question of law can be raised under a writ petition.
Court and the Judges need to make critical subjective and objective assessment of their role as torch bearers of democracy. “Reading down” action of a judge which depend upon outlook or philosophy of a Judge can change a cause and its remedy: if certain provision of Law construed in one way, consistent with the Constitution, and another renders the construction unconstitutional, the judge rules in favour of the first, which is constitutional is based on Judge’s reading of the vocabulary.
Accountability is an essential part of the Rule of Law. It has to accept checks and balances and does not have unfettered rights. Self restraint is a very important rule than an exception.
Wednesday, October 19, 2011
Supreme Court's supramacy
Two Supreme Court judgements, 1) I C Golaknath, Ors Vs State of Punjab (AIR 1967SC 1643 (1967) 2 SCJ 486)(Special bench of the Supreme Court) delivered on Feb 27,1967 with a 6:5 majority ruled that, “Parliament has no power to amend Part III of the Constitution so as to take away, abridge, curtail the Fundamental Rights. This is the pericardium of the written Indian Constitution; the 2) Keshavanda Bharati Vs State of Kerala (AIR 1973 SC 1461 (1973) 4 SCC 225) which was heard by the 13 judge bench of the Supreme Court, delivering its judgement on April 24, 1973 with 7:6 majority introduced the ‘basic structure doctrine’ by which any article of the Constitution can be amended with altering its basic structure. 6 judges held that “Article 368 does not enable Parliament to abrogate or take away fundamental rights, including the right to property, because there are in Article 368 inherent or "implied limitations" in that it does not empower Parliament to alter or destroy the "basic structure" of the Constitution.” While the other six gave unbridled power to Parliament to amend any clause in the Constitution. Now the 13th judge, “. Subject to the retention of the basic structure, the power of amendment is plenary and includes within itself the power to amend the various articles of the Constitution, including those relating to fundamental rights as well as those which may be said to relate to essential features."
Prof. Dietrich Conrad, a German jurist remarked that any amending body organized within the statutory scheme, howsoever verbally unlimited its power, cannot by its very structure change the fundamental pillars supporting its constitutional authority." Article 79(3) of the Basic Law of the Federal Republic of Germany, adopted on May 8, 1949, , bars explicitly amendments to provisions concerning the federal structure and to "the basic principles laid down in Articles 1 and 20 (on human rights and the "democratic and social" set-up).
The cardinal principle of the Constitution was to reiterate the Rule of Law as its guiding principle, for if there was no rule of Law, then there is no equality before Law. Chapter III guarantees fundamental rights. The golden triangle of Article 14, 19 and 21 is the basic feature and the touch stone of the basic structure doctrine is Art 21 read with Art 14, 19.
When the Supreme court gave unbridled power to Parliament to alter the Constitution , the Government amended Art 368 by inserting clauses (4) and (5) which proclaimed the sovereignty of parliament (5) of 386 and restricted any amendment to be questioned by any Court of Law (4 of 386). The judicial review (Article 32 and 226) which was centre piece of the Basic structure doctrine enunciated by the Judges was sought to be taken away by the 42 nd amendment during the internal emergency which was declared in 1976. Schedule 9 was blanket cover for government which again was beyond the pale of Courts. However, clause (4), (5) of Art 368 was over ruled by the bench headed by Y V Chandrachud in the Minerva Mills Case in 1980. The 44th amendment by Morarji Desai government, removed ‘Right to property’ which was a fundamental Right -19(i)(f) and Art 31 out of Part III and made as Article 300 c. This change made the citizen forfeit remedy under Art 32 as 300 A is not a fundamental right. The SC also held that 9th Schedule inclusion can come under judicial review, if need be.
The major innovations introduced by the Indian Supreme Court like the ‘basic structure doctrine’ and ‘public interest litigation’ has won kudos for it in the juristic circles. The Courts need to play an equally important role to bring down the Cases, end litigations, pronounce judgments, while upholding the Rule of Law.
Saturday, October 15, 2011
Poverty, double entendre
We always measure certain things, by fixing certain variables. The depth of the ocean, the time taken for the sun’s rays to fall on the earth, etc. What is the total height of the sky from the earth? How many stars are there in the sky? Various mathematical formulas, theories made by scientists, economists are broadly used with mathematical precision and inferences arrived at.
How will you measure Poverty? By a measurement scale? The incidence of poverty? There is also a difference between ‘Below Poverty Line and above Poverty line’. A line distinguishes them. If you get 35 marks, you pass, but if you get 34, you fail. What is the difference between Pass and Failure? Poverty is measured in terms of spending of Money. What is money? Money is what money does. That means, if you get something which has a price, you have to pay money having equal value. Money is measured by the value it fetches. The World Bank defines extreme poverty as living on less than US $ 1.25 (Purchasing Power parity) per day. Another report placed ‘moderate poverty less than $ 2 and not more than $ 5 per day’.
India’s all powerful Planning Commission which plans for the development of the Country and ear-marks segment wise budgets for Plan schemes, appointed Suresh Tendulkar Commission to redefine Poverty using socio-economic parameters so that a methodology could be devised to assist these people by providing with Food Security. This Commission came out with a Report depicting 40% of India’s population as coming within the clear definition of Poverty. It further found that 3 out of 10 in urban area and 4 out of ten in the rural area were BPL. In order to arrive at the figure, they had worked out a mathematical formula which was based on the spending level. This spending level was used as a measurement to calculate BPL and APL. In one case which was currently on before the Hon’ble Supreme Court of India, the Court asked government to distinguish BPL and APL in clear terms. The Plg Comm. Filed an affidavit in which it categorically stated that if a person spends Rs 32/- per day per person, he was Below the Poverty Line and if he spent Rs33/- he came under APL category. This was considered as a fax paus. Pandemonium greeted this, and in desperation, Government said that it did not subscribe to this arithmetic. The Plg Comm also distanced itself against the numerical it had provided saying that they calculated poverty on the basis of Tendulkar Report. Further, they clarified that Central government scheme did not confine itself to BPL, APL, but had universal applications.
The storm in the Tea Cup has not subsided. Poverty is the scale as to one who lacks a certain amount of material possession or money. Absolute Poverty or destitution refers to being unable to afford basic human needs. There is unequal distribution of wealth and welfare. Lacking a usual or socially acceptable level of resources or income as compared with others within society/country is termed as Poverty level. Low incomes and inability to acquire the basic goods and services necessary for survival and dignity is the hall mark of a huge population in a developing country. Life expectancy, decrease in child mortality rate, proportion of per capita food available, disproportionate usage against supply shrinkage causes higher incidence of poverty levels. Poverty line need to find the total cost of all essential resources than an average human adult consumption in a Year. It must be need based, record minimum expenditure needs necessary for survival and dignity. The Poverty threshold or Poverty line is the minimum level of income deemed necessary to achieve an adequate standard.
People in different circumstances- with different household size or demographic compositions or living in different places- naturally have different levels of economic welfare at the same level of income. They have different needs. A Poverty line should reflect these differences. There are a number of formulas to arrive at the Poverty line, poverty cycle, and Relative poverty. Poverty statistics is used to measure inequality rather than material deprivation or hardship.
Friday, October 14, 2011
Indian Angrazi
Language enables Communication. To be communicative implies, there is an expression of speech which says what is intended. The word "language" has two meanings: language as a general concept, and "a language" (a specific linguistic system, e.g. "French").Language may refer either to the specifically human capacity for acquiring and using complex systems of communication, or to a specific instance of such a system of complex communication . The English language has outgrown its borders, destified, that English spoken is no more British English. There is a wide chasm between prescriptivists’ who adhere to the grammer, and ‘descriptives’ who want to take the language at face value. Angrezi has undergone insouciant adaptation, like ‘chamcha’, ‘dossara’ (Murali’s armour). English words like, ‘politics’, ‘corruption’ and even, ‘my dear’ has permeated to every Indian language. What a funny language? The Computer has American spellings and words have an American flavour.
Do not mistake, “Indian Summer” has no connection with India. It refers to American dry warm weather in late autumn. ‘Faint’ is from French, feigned, simulated. Gossip is from old English god sib, God parent, sib means relative. Later the word meant ‘indulging in idle talk’. The word ‘laconic’ means austere lifestyle, from Laconians of ancient Greece. Booth capturing, propone, item girl, are slangs that have crept into English, coined as a result of many recent events. Have you heard Patel shot? It is not a cricketing shot of Patel, but a candid photograph with a person in the foreground and a place or object of interest in the background. Indigestion means bad digestion, incompetent is not competent but, invaluable is not having any value but having high value. Having tasted ‘Rasam’, the English dictionary adopted the word, “mulligatawny” (Rasam+pepper water). You say ‘housewife’ but do not say ‘househusband’. The word Emden was a new word added to the South Indian words, meant ‘big and powerful’, in Malayalam ‘thallipoli” (useless). Emden- German ship, which created devastation off Madras coast. Sustain (injuries, damages, concussions) and nourish (skin, spirituality, embryo), two similar words, one is given as synonym for the other. Sustain illusions, hope and belief, while more likely to nourish things like soil, souls or earth. Two words, Principle (basic principle of Commercial law, stick to your principles) while Principal is also known meaning most important, sum of money lent or invested, etc. depict the diversity of the language. Compliment and complement have different meanings. Kumbakonam is a sacred temple town in Tamilnadu, but adoption in English meant, decit, cheat, dubious.
Palindrome means reading the same spelling backward as well as forward. Examples civic, pop, noon, level, Madam, receiver. Malayalam, Amma and Appa are Palindromes. Homonym, one of the group of words that share the same spelling, same pronunciation but different meaning like bark(dog),bark (skin of a tree), bank(of a river), bank (eg Canara Bank), Rose(flower), Rose(rise). There are also words used as units rather than as labels like Recurring dreams, dreams recurring, or Able was I ere I saw Elba.
William Shakespeare has invented phrases like, Sweet Sorrow, “Sea Change (tempest), Salad days (Antony & Cleopatra), and ‘Milk of Human Kindness (Othello) ‘Elementary, my dear Waston’ was never used by Arthur Conon Doyle but used by P G Woodhouse as ‘Exactly, my dear Watson”. The language’s prowess is known by the number of new words added, and its active usage. Indian Angerzi is the state language.
Tuesday, October 11, 2011
Is Indian Economy going haywire?
Letter to the Finance Minister of India:
Mr Pranab Mukherjee, India’s present FM may be a trouble shooter for the Congress, and is a loyal Congressman having been the chip of the old block of its party cadres of the Indira era. He has his own disappointments in his Public life having failed to achieve his due, many a time. There is a Congress divide, internal squabbling, which has risen to commendable proportions due to the weakness of statesmanship and upmanship of many Scholars within the party who think they are full of wisdom.
When the economy is in the cross roads, when growth is going haywire, fiscal deficit is taking a turn for the worst, when liquidity is a problem forcing government to borrow atleast around Rs 62,000 Cr to offset Income: Expenditure of the budget, when headline inflation has pervaded to increases the price line, food inflation has grown without common sense, when the watch dogs have to increase interest rates 12 times in last 18 months, when the greedy oil companies have been raising the price of petrol every alternate week, making one litre priced Rs 70/- when it was Rs 45/- an year ago Planning Comm on the eve of the 12th Plan estimated that it would be adequate for an Indian to go to above poverty line if he spends Rs 32/- per day, forgetting that somebody made the calculation in 1950, and present scribbling just scribbled it. Sugar, milk, wheat, rice, vegetables, egg, tea powder etc , even if you buy 200gms, it will cost you Rs150/-The Planning Commission seems to be in a mirage, inside an air-conditioned glass house throwing stones. It is Economics of the American kind suited for safari suit clad CEOs. Too bad and very sad, indeed.
In a country of 1.2 billion, not even 10% are in the direct tax net. Very bad. When tax collectors become creative, the taxpayers become indigenously clever with inventive ways to avoid them. India’s core of taxes does not come to the exchequer. No body wants to part with their hard earned money. Large corporations dodge artfully while the less vulnerable sits in their stupour. The loop holes in Law help the evaders and the honest is prosecuted. Many of the millionaires amongst the Politicians, how much taxes are collected? Finance Minister, when wealth multiplies, the chances of getting more taxes from this tribe look much bright. Probe the income of the political class without discrimination. It will yield a rainbow.
Settlement Commission is a tool where the rich corporates get off the hook squarely, with the country being the loser. Only the salaried class, is getting his pay deducted at source (TDS), service tax is lavished on him, hike after hike, year after year, in your budget. This lot is the sheep for your butchering.
Now let us look at some ways by which you can raise the taxes without getting any fierce opposition from those who paid taxes forcefully. The Government of Bihar employed bands of singing hijras who sat outside the house of defaulters. The tax payers made no compliant. They paid up. Eunuchs demanded 4% commission for their work. The entire tax was collected. They never harassed anybody. Staged sit-ins, beat drums outside the homes of reluctant tax-payers and achieved exceptional results. Employment to hijras and money to the exchequer.
There are many in India who are offering mystical services. They cast their spells tax free. The loss to the treasury is Rs millions. Theare are many others who do such services, and whose income is in five digits- kuttichattan seva, tarot, astrologers, ink astrology, star gazing, fortune telling. There are mediums who charge Rs 15000-20,000 for a sitting to talk to the dead. There are palm leaf manuscripts called nadi astrology where they will read your life with 100% precision and accuracy at Vaideeswran Koil. All of them feel that by paying taxes what they get in return. Any quid pro quo? Striptease dancing, is an art form and a form of theatre, hence it is not Service said a foreign Court. What about reality shows shown in television? Your predecessor came out with innovative idea to increase the Post card rate to 60 paise for competitive Post cards.
Chinese authorities thought about an innovative method to collect taxes. Children of Parents who paid the highest taxes got bonus marks in the competitive exams and school public exams. In Philippines, it is a raffle. You send a valid tax receipt, it becomes an entry in the lottery. If your receipt is one of the 5 lucky ones to be picked up, you will become an instant millionaire. If you pay taxes, you get preference in admission. How many people will get into Tax net without Govt of India spending Rs 1/-.
What about our Yoga Guru Ramdas who owns an island. He is the King of the Place, and his island a soverign state where Indian government cannot put its pie on. Any island outside the international waters is not the property of GoI nor does it have jurisdiction. Tax heavens need not be Banks. It can be such islands outside the international water limit.
There are dogs, pets, and other animals, which is bequeathed wealth. But the ubiquitous taxmen touch it? Any list available?
There are atleast Persons of Indian origin and expatriates in various parts of the world. In Africa (28 lakhs Indians), Middle East (42 lakhs), Europe (17.69 lakhs), North America (51 lakhs), Africa (5.10 lakhs), etc. 40% of population in UAE is of Indian descent. The emigration rate of growth is estimated at 0.8% by UNDP. If each person is asked to pay $ 100 and given an identity card for preferential services, it would earn billions of Dollars.
Instead of the easy way of collecting higher revenue of Service Tax, petrol hike, interest rate hike, which look pedestrian, the Finance Ministry should go for innovative forms of taxation which will hurt nobody.
There are small and marginal businessmen, traders, micro units, who fall within the taxable bracket but do not take the trouble to pay because of lack of escort service. Why does not Income Tax department recruit 1000 volunteers all over India, assign them territories, and give target to them, to introduce 1,00,000 new tax payers every month. To enlarge the tax base by 12 lakhs per annum. Every canvasser will get a commission and rewards for performance. Tax audit and investigation into tax not paid but hidden should simultaneously go with prudent tax net widening. This can be done quietly with rewarding results. Finance Ministry should become innovative, pro active and project a human face.
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Monday, October 10, 2011
India Economists confused?
When you forget fundamentals, think of India’s Economy?
To dilute inflation, in the last 18 months, the Reserve Bank increased the interest rate almost a dozen times, to see the percentage of inflation growing menacingly. Monsoon was fair and timely, hence the yield would result in buffer stocks, translating into higher prices for the farmers causing deceleration in Food inflation. The Food inflation for the week ending Sept 25, 2011 was 9.41%. The headline inflation too, hovered above 9%. This is causing consternation, India’s Finance Minister bemoaned. Cereals, vegetables, are still costly.
Interest rates have been steadily going up so as to arrest inflation, which has seen volatility of the liquidity. Bank’s credit is growing in spite of re-payments. Debt portfolio has been increasing. In spite of huge repositioning of interest rates, the price rise has been increasing menacingly causing alarm bells in higher expenditure, slow down in credit availability, increase in unemployment, and slow down of economic activity, discouraged savings, leading to hardening of the currency.
Only a few days ago, Economists praised sky high Indian economic policies and reforms which they said would take India to a growth trajectory and will make it the most important emerging market. India will be an economic super power by 2050, while today’s developed economies will take a lower place in the growth table. When America and Britain were trembling with economic crisis, India managed to withstand global onslaught and came out unscathed. See India’s airports, which have international and modern ambiance. Delhi’s beauty can be compared to any capital in the world, its huge buildings, sky rappers, enchanting gardens, with historical peripherals make it a dream Capital.
On the one side, you see the river in full flow, and on the other, India’s other face emerges. In spite of the growth of 10% higher growth, more than 40% of India’s people live on less than Rs 32/- per person per day. 1990 saw the golden year of India’s liberalization of its economy, and after 15 years later, India’s poverty percentage continues to soar. While Government has been concerned about 9% or 10% economic growth, the people of the country do not get a square meal that out of the 88 countries tabulated, India stands at the 67th Place. The Planning Commission people, who are here to change the image of India through economic planning, say that the Poverty line is capped at the expenditure of Rs 32/- per day. They say, Poverty is confined to Food alone. Food is the key detriment of Poverty definition. With a high food inflation of 9.41%, food would it include Kerosene, Oil, sugar, vegetables, tea, milk, egg, bakery items, etc. Our Harvard and London School educated men who occupy the Planning Commission know all these things. Food also would mean protein food, as infant deaths are high in India.
India’s policy has been, import food stuffs by giving them free leeway in Customs levies, allow the imported stuff to monopolize the domestic market while domestic indigenous products take their own time to increase their productivity The land is converted into non agricultural land, and all disincentives be provided to the domestic industry so that they would not venture to produce more. This has been the philosophy of the Food & Agricultural Ministry. They procure food grains at fancy prices, fix Minimum Support Price which is neither scientific nor fair, import in excess of demand by inflating the demand, and provide imported oil through Public Distribution System to benefit foreign manufacturers. The procured food stuffs were rotten and were infested by rats in the food Corporation of India. When the Court ordered its release, the Government said that they cannot provide food grains free. Even if it rots, no problem, but no distribution amongst the needy.
Unable to make both ends meet, a number of farmers committed suicide. A number of retailers and small traders who depend upon bank credit are suffering and there are number of suicide deaths causing consternation. There is an irrational increase in Petrol prices which also was raised in as many as a near dozen times. From Rs 45/ per litre increased it to Rs 70/- a litre. The oil companies contend that they are in a loss, while their fancy balance sheets show record profit made by them. They are giving flat dividends and the beaming Finance minister is shown receiving the dividend cheque which is in excess of Rs 10,000 Cr. The cries of the people are inaudible, as Oil Company executives flatten their purses by increasing their perks.
AL Basham called the nation, as ‘Wonder that is India’. The wonder has seen India shine. India going to be a economic super power by the middle of the third millennium. But the litmus test is – whether higher growth rate is it barometer of the Poor graduating to haves, and their condition of living improving to take 3 square meals a day, with Free Education, free medical aid, social security to enable them to spend their old days. Buddha envisaged a poor less society in the 3rd BC. Is it Utopia?
To dilute inflation, in the last 18 months, the Reserve Bank increased the interest rate almost a dozen times, to see the percentage of inflation growing menacingly. Monsoon was fair and timely, hence the yield would result in buffer stocks, translating into higher prices for the farmers causing deceleration in Food inflation. The Food inflation for the week ending Sept 25, 2011 was 9.41%. The headline inflation too, hovered above 9%. This is causing consternation, India’s Finance Minister bemoaned. Cereals, vegetables, are still costly.
Interest rates have been steadily going up so as to arrest inflation, which has seen volatility of the liquidity. Bank’s credit is growing in spite of re-payments. Debt portfolio has been increasing. In spite of huge repositioning of interest rates, the price rise has been increasing menacingly causing alarm bells in higher expenditure, slow down in credit availability, increase in unemployment, and slow down of economic activity, discouraged savings, leading to hardening of the currency.
Only a few days ago, Economists praised sky high Indian economic policies and reforms which they said would take India to a growth trajectory and will make it the most important emerging market. India will be an economic super power by 2050, while today’s developed economies will take a lower place in the growth table. When America and Britain were trembling with economic crisis, India managed to withstand global onslaught and came out unscathed. See India’s airports, which have international and modern ambiance. Delhi’s beauty can be compared to any capital in the world, its huge buildings, sky rappers, enchanting gardens, with historical peripherals make it a dream Capital.
On the one side, you see the river in full flow, and on the other, India’s other face emerges. In spite of the growth of 10% higher growth, more than 40% of India’s people live on less than Rs 32/- per person per day. 1990 saw the golden year of India’s liberalization of its economy, and after 15 years later, India’s poverty percentage continues to soar. While Government has been concerned about 9% or 10% economic growth, the people of the country do not get a square meal that out of the 88 countries tabulated, India stands at the 67th Place. The Planning Commission people, who are here to change the image of India through economic planning, say that the Poverty line is capped at the expenditure of Rs 32/- per day. They say, Poverty is confined to Food alone. Food is the key detriment of Poverty definition. With a high food inflation of 9.41%, food would it include Kerosene, Oil, sugar, vegetables, tea, milk, egg, bakery items, etc. Our Harvard and London School educated men who occupy the Planning Commission know all these things. Food also would mean protein food, as infant deaths are high in India.
India’s policy has been, import food stuffs by giving them free leeway in Customs levies, allow the imported stuff to monopolize the domestic market while domestic indigenous products take their own time to increase their productivity The land is converted into non agricultural land, and all disincentives be provided to the domestic industry so that they would not venture to produce more. This has been the philosophy of the Food & Agricultural Ministry. They procure food grains at fancy prices, fix Minimum Support Price which is neither scientific nor fair, import in excess of demand by inflating the demand, and provide imported oil through Public Distribution System to benefit foreign manufacturers. The procured food stuffs were rotten and were infested by rats in the food Corporation of India. When the Court ordered its release, the Government said that they cannot provide food grains free. Even if it rots, no problem, but no distribution amongst the needy.
Unable to make both ends meet, a number of farmers committed suicide. A number of retailers and small traders who depend upon bank credit are suffering and there are number of suicide deaths causing consternation. There is an irrational increase in Petrol prices which also was raised in as many as a near dozen times. From Rs 45/ per litre increased it to Rs 70/- a litre. The oil companies contend that they are in a loss, while their fancy balance sheets show record profit made by them. They are giving flat dividends and the beaming Finance minister is shown receiving the dividend cheque which is in excess of Rs 10,000 Cr. The cries of the people are inaudible, as Oil Company executives flatten their purses by increasing their perks.
AL Basham called the nation, as ‘Wonder that is India’. The wonder has seen India shine. India going to be a economic super power by the middle of the third millennium. But the litmus test is – whether higher growth rate is it barometer of the Poor graduating to haves, and their condition of living improving to take 3 square meals a day, with Free Education, free medical aid, social security to enable them to spend their old days. Buddha envisaged a poor less society in the 3rd BC. Is it Utopia?
Saturday, October 8, 2011
History is a Seven act Play?
History is the seven act play of the heroic description of the past, golden ages, of the splendid and worst times, eras of the Past. History is about War and Peace, rage and hate, prejudice and grievance, hope and despair, tyrants and saints, geographers and plunderers, good, pure and true events of People, of their religions, cultures, a sort of scoreboard of achievements. Karl Marx felt that ‘history itself was nothing but the activity of men pursuing their purposes’. Another thinker, Ralph Waldo Emerson was of the view that there is properly no history but only biography. Cicero characterized History as the witness that testified to the Passing of time as illuminating reality. Wright Morris felt that past was useless which explained why it was called past. Arnold Tony bee, was of the opinion that, “civilization was a movement and not a condition, a voyage, not a harbour”. According to him, of the 22 civilizations that have appeared in History, nine-teen of them collapsed when they reached the moral state the United States is in now.
Then is History is a back dated memories of the past clad in antiquity. A sense of the Past. There have been great Historians and thinkers like Arnold Tony bee, AL Basham, Thomas Carlyle, HG Wells, and others, who wrote capturing poignant expressions of empires, rulers and the ruled emphatically. Would anybody for that matter call Antony and Cleopatra as fiction because, William Shakespeare wrote their history in prose. Crossing the Rubicon is ascribed to Julius Ceaser (49 BC) even though there might have been many who would have crossed the Rubicon. Ceaser’s crossing the Rubicon is an historic event. Edward Clalleth Carr would like to call it as ‘hist oriography’.Is American Revolution, really a revolution or a War of independence where the England troops led by Cornwallis lost to George Washington in the Batlle of York. America became a Free Nation. If British historians had no problem with American Revolution, why did they call the 1857 up-rising as a ‘mutiny in India’ and not first war of independence. Is today’s Indian National Congress a continuation of the Indian National Congress of 1885 founded by A O Hume? Carlyle wrote The French Revolution: the History and Charles Dickens had adopted many incidents for His Tale of Two Cities from Thomas Carlyle’s book. Fidel Castro made a great speech, concluding it as, “History will absolve me”. The same History, will it absolve Mikhail Gorbachev, who was responsible for sweeping reforms in USSR, but his successor Boris Yelstein was a willing tool to the West as he dissolved the Confederation, and followed the Politics of Dismemberment. The British Empire were sun never set, adhered to the Politics of dismemberment of India into India and Pakistan. Bangladesh broke away from Pakistan, even though the majority of people professed Islam, because they wanted Sonar Bangla. Korea, Vietnam, Germany, which was balkanized, turned one. Palstine is still vulnerable.
Did Liberty, Equality and Fraternity, the theme of the French Revolution, create stability in France after the Revolution. It required a Napoleon, who proclaimed himself as the Emperor to restore authority. Oliver Cromwell (1653-1658) ruled England as Lord Protector at the Head of the Commonwealth after beheading King Charles I in 1649. But was he not a greater autocrat than Charles?
Winston Churchill became the powerful Prime Minister of England on the resignation of Neville Chamberlin in Sept 1939. He was one of the greatest prime ministers Westminster had ever seen. Did he not lose elections to Labour enabling Clement Attlee to become Prime minister? Why did people loose faith in Churchill? Franklin Roosevelt was the President of America. But when the Second World War came to an end, it was a beaming Harry S Truman who represented America as its President. It has been said that Allies had powerful leaders like Churchill, Roosevelt, Stalin, and many others while Axis only had an Adolph Hitler. After War, Stalin who was a powerful ruler fell into infamy. Gandhiji was one of the greatest apostle of Peace yet he did not win a Nobel for Peace.
There were many who felt that China should not be awakened. Let the sleeping giant sleep. When Nixon and primarily Kissinger made the voyage to the country of Dragon, the country woke up. The Sleeping Giant woke up.
If Shakespeare’s work Ceaser and Cleopatra was the centre piece of history of the Romans in the remote days of the Christian era, likewise, Poet’s description makes up for many events re-constructed with the help of novels. Tolstoy’s War and Peace, Nehru’s Discovery of India and Glimpses of World History, whether they were plots from History or created plots for History, only researchers can pin point. Socrates was sentenced to death for asking provoking questions in pursuit of truth during the Golden age of Athens ruled by Periciles. Alexander in the remote time of History knew geography to invade India. Adi Sankara in the 8th century AD set up monasteries in different parts of India when travel was by Road, and he died when he was 32. Layfatte is said to have participated in both the French and American Revolutions. There is a Layfette square in New York. Cornwallis is said to have fought the Battle of York in New York against geogre Washington (defeated) and against Tipu Sultan in the Battle of Mangalore in 1799(won).
Samuel Johnson correctly stated that, there are in every age, new errors to be rectified and new prejudices to be opposed. Even though History may be history of men and matters, it shows precisely a different era, in different surroundings. History repeats!
Then is History is a back dated memories of the past clad in antiquity. A sense of the Past. There have been great Historians and thinkers like Arnold Tony bee, AL Basham, Thomas Carlyle, HG Wells, and others, who wrote capturing poignant expressions of empires, rulers and the ruled emphatically. Would anybody for that matter call Antony and Cleopatra as fiction because, William Shakespeare wrote their history in prose. Crossing the Rubicon is ascribed to Julius Ceaser (49 BC) even though there might have been many who would have crossed the Rubicon. Ceaser’s crossing the Rubicon is an historic event. Edward Clalleth Carr would like to call it as ‘hist oriography’.Is American Revolution, really a revolution or a War of independence where the England troops led by Cornwallis lost to George Washington in the Batlle of York. America became a Free Nation. If British historians had no problem with American Revolution, why did they call the 1857 up-rising as a ‘mutiny in India’ and not first war of independence. Is today’s Indian National Congress a continuation of the Indian National Congress of 1885 founded by A O Hume? Carlyle wrote The French Revolution: the History and Charles Dickens had adopted many incidents for His Tale of Two Cities from Thomas Carlyle’s book. Fidel Castro made a great speech, concluding it as, “History will absolve me”. The same History, will it absolve Mikhail Gorbachev, who was responsible for sweeping reforms in USSR, but his successor Boris Yelstein was a willing tool to the West as he dissolved the Confederation, and followed the Politics of Dismemberment. The British Empire were sun never set, adhered to the Politics of dismemberment of India into India and Pakistan. Bangladesh broke away from Pakistan, even though the majority of people professed Islam, because they wanted Sonar Bangla. Korea, Vietnam, Germany, which was balkanized, turned one. Palstine is still vulnerable.
Did Liberty, Equality and Fraternity, the theme of the French Revolution, create stability in France after the Revolution. It required a Napoleon, who proclaimed himself as the Emperor to restore authority. Oliver Cromwell (1653-1658) ruled England as Lord Protector at the Head of the Commonwealth after beheading King Charles I in 1649. But was he not a greater autocrat than Charles?
Winston Churchill became the powerful Prime Minister of England on the resignation of Neville Chamberlin in Sept 1939. He was one of the greatest prime ministers Westminster had ever seen. Did he not lose elections to Labour enabling Clement Attlee to become Prime minister? Why did people loose faith in Churchill? Franklin Roosevelt was the President of America. But when the Second World War came to an end, it was a beaming Harry S Truman who represented America as its President. It has been said that Allies had powerful leaders like Churchill, Roosevelt, Stalin, and many others while Axis only had an Adolph Hitler. After War, Stalin who was a powerful ruler fell into infamy. Gandhiji was one of the greatest apostle of Peace yet he did not win a Nobel for Peace.
There were many who felt that China should not be awakened. Let the sleeping giant sleep. When Nixon and primarily Kissinger made the voyage to the country of Dragon, the country woke up. The Sleeping Giant woke up.
If Shakespeare’s work Ceaser and Cleopatra was the centre piece of history of the Romans in the remote days of the Christian era, likewise, Poet’s description makes up for many events re-constructed with the help of novels. Tolstoy’s War and Peace, Nehru’s Discovery of India and Glimpses of World History, whether they were plots from History or created plots for History, only researchers can pin point. Socrates was sentenced to death for asking provoking questions in pursuit of truth during the Golden age of Athens ruled by Periciles. Alexander in the remote time of History knew geography to invade India. Adi Sankara in the 8th century AD set up monasteries in different parts of India when travel was by Road, and he died when he was 32. Layfatte is said to have participated in both the French and American Revolutions. There is a Layfette square in New York. Cornwallis is said to have fought the Battle of York in New York against geogre Washington (defeated) and against Tipu Sultan in the Battle of Mangalore in 1799(won).
Samuel Johnson correctly stated that, there are in every age, new errors to be rectified and new prejudices to be opposed. Even though History may be history of men and matters, it shows precisely a different era, in different surroundings. History repeats!
Thursday, October 6, 2011
Government Babus are still in the Colonial Past
UPA II’s most talked out mission to provide exclusive and independent Identification to every Indian was as unique as the programme to take computer literacy in every nook and corner of India through a technocrat Sam Patroda envisaged during Rajiv Gandhi’s prime Ministership. India’s technological face today is Nandan Nilekani, the most well known Indian technocrat who took Indian software to the world through the firm founded by him along with Shri Narayana Murthy from scratch known as Infosys. Naturally, his enthusiasm to do something for the Country was quiet instantaneous. He was asked to head the Unique Identification Project from inception.
A well known face in business circles and elite company, Nilekani must have thought that it was an easy task, already done, if the top layers of the Government like the Prime Minister and others persuaded him to invent a model which would take care of one document that would provide a unique identity card for every Indian. It was a far sighted step. In began Nilekani earnestly, consistently, with a purpose to turn his idea into a Product. Its introduction will have far reaching dimensions. Wide acceptability of the UID would help people to identity themselves instead of having multiple identity cards which may not have all over acceptance.
After having done the preliminary, including creating software and putting it on-line with the Computer in Yojaana Bhavan, the team led by Nilekani estimated the cost to the Government at Rs 14,841 Cr and requested for ear-marked outlay from the 12th Five Year Plan slated to commence from the sun rise of April 1, 2012. The Planning Commission who was the mother department of UIDAI was the first to create a turf War; it wanted financial control over the funding of UIDAI, and insisted on placing an Integrated Accounts department which will monitor demands and undertake implementation by routing correspondence with Planning Commission and not directly routing requests, file papers, wants to the Finance Secretary, directly. Any direct action which required speedy execution was put under a colun. Home Ministry came into the picture raising objections on the reliability of the Unique Identification Number, and insisted on cross checking for duplication as Security angle was involved. This would result in procrastination. Reserve Bank of India’s last straw that UNIDAI would not suffice as a document to open Bank accounts or verification proof has put a big question mark over the utility of the Project itself. How will the project take off, if the concerned Ministries who cannot devise its own methodology to evolve a fool-proof mechanism where to kill a project which had all the projected queries to the reservations.
It was expected. One under Secretary can torpedo the entire Scheme of the government proposes by putting many questions, or probing questions. With Right to Information Act in place, it is for anybody to get the noting to establish that Government went out of the way to placate somebody or gave extra importance to a Scheme. I was appointed as a Consultant on such terms and conditions with a Job description, and my performance was audited by an autonomous body which was under one of the Ministries at Udyog Bhavan, New Delhi. The Ministry used me at the slightest pretext, made me reply Parliamentary questions, and give inferences and ideas requests made by PMO asking the Ministry to process a request, etc. I was also responsible for preparing a Scheme, presenting it before various Ministries including Planning Commission, answered insipid queries raised by other Ministries, amend the Scheme based on norms specified by other Ministries, attend in person the Expenditure Finance Committee meeting which is exclusive to Secretary, Jt Secretary of the Ministry only, etc to argue about the Scheme authored by me . The Scheme was approved by the Cabinet Committee on Economic Affairs headed by the Prime Minister. I had brought the industry under the various Schemes of the Commerce Ministry, made their projects eligible for Duty Drawback, and got over Rs 1.5 Cr released for organizing a reverse buyer-seller meet which saw participation from 120 business visitors. Now, my job with the different ministries was appreciated and I started getting importance. After 3 ½ years, the Government asked the autonomous body as to under what authority they appointed me, and their Internal Finance department, whose officials I would have met at least 2 dozen times to answer a volley of doubts, concluded that my Contract appointment was unauthorized.
Government of India and its officials can do anything under the sun, which cannot be finite and depended upon. They quoted an irrelevant and outdated clause to refuse me fair compensation for the Job I did . When I saw the contradictions surfacing on various issues like the administrative note of Finance Ministry, affidavit of Planning Commission, many other notings by officials on files which are available on the Public domain show that intelligence and sincerity is not a virtue of the various departments of South bloc, North bloc, Krishi bhavan, Nirman Bhavan, Yojana Bhavan, Sanchar Bhavan, or any bhavans in Delhi. A man publicized to the hilt by the media, for the highly pompous schmee to make available a single identity card which would serve all purpose, should have been put to the embarrassment of this nature by the modern day babus who still live in the colonial Past. Shame indeed.
A well known face in business circles and elite company, Nilekani must have thought that it was an easy task, already done, if the top layers of the Government like the Prime Minister and others persuaded him to invent a model which would take care of one document that would provide a unique identity card for every Indian. It was a far sighted step. In began Nilekani earnestly, consistently, with a purpose to turn his idea into a Product. Its introduction will have far reaching dimensions. Wide acceptability of the UID would help people to identity themselves instead of having multiple identity cards which may not have all over acceptance.
After having done the preliminary, including creating software and putting it on-line with the Computer in Yojaana Bhavan, the team led by Nilekani estimated the cost to the Government at Rs 14,841 Cr and requested for ear-marked outlay from the 12th Five Year Plan slated to commence from the sun rise of April 1, 2012. The Planning Commission who was the mother department of UIDAI was the first to create a turf War; it wanted financial control over the funding of UIDAI, and insisted on placing an Integrated Accounts department which will monitor demands and undertake implementation by routing correspondence with Planning Commission and not directly routing requests, file papers, wants to the Finance Secretary, directly. Any direct action which required speedy execution was put under a colun. Home Ministry came into the picture raising objections on the reliability of the Unique Identification Number, and insisted on cross checking for duplication as Security angle was involved. This would result in procrastination. Reserve Bank of India’s last straw that UNIDAI would not suffice as a document to open Bank accounts or verification proof has put a big question mark over the utility of the Project itself. How will the project take off, if the concerned Ministries who cannot devise its own methodology to evolve a fool-proof mechanism where to kill a project which had all the projected queries to the reservations.
It was expected. One under Secretary can torpedo the entire Scheme of the government proposes by putting many questions, or probing questions. With Right to Information Act in place, it is for anybody to get the noting to establish that Government went out of the way to placate somebody or gave extra importance to a Scheme. I was appointed as a Consultant on such terms and conditions with a Job description, and my performance was audited by an autonomous body which was under one of the Ministries at Udyog Bhavan, New Delhi. The Ministry used me at the slightest pretext, made me reply Parliamentary questions, and give inferences and ideas requests made by PMO asking the Ministry to process a request, etc. I was also responsible for preparing a Scheme, presenting it before various Ministries including Planning Commission, answered insipid queries raised by other Ministries, amend the Scheme based on norms specified by other Ministries, attend in person the Expenditure Finance Committee meeting which is exclusive to Secretary, Jt Secretary of the Ministry only, etc to argue about the Scheme authored by me . The Scheme was approved by the Cabinet Committee on Economic Affairs headed by the Prime Minister. I had brought the industry under the various Schemes of the Commerce Ministry, made their projects eligible for Duty Drawback, and got over Rs 1.5 Cr released for organizing a reverse buyer-seller meet which saw participation from 120 business visitors. Now, my job with the different ministries was appreciated and I started getting importance. After 3 ½ years, the Government asked the autonomous body as to under what authority they appointed me, and their Internal Finance department, whose officials I would have met at least 2 dozen times to answer a volley of doubts, concluded that my Contract appointment was unauthorized.
Government of India and its officials can do anything under the sun, which cannot be finite and depended upon. They quoted an irrelevant and outdated clause to refuse me fair compensation for the Job I did . When I saw the contradictions surfacing on various issues like the administrative note of Finance Ministry, affidavit of Planning Commission, many other notings by officials on files which are available on the Public domain show that intelligence and sincerity is not a virtue of the various departments of South bloc, North bloc, Krishi bhavan, Nirman Bhavan, Yojana Bhavan, Sanchar Bhavan, or any bhavans in Delhi. A man publicized to the hilt by the media, for the highly pompous schmee to make available a single identity card which would serve all purpose, should have been put to the embarrassment of this nature by the modern day babus who still live in the colonial Past. Shame indeed.
Sunday, October 2, 2011
Poor need respectful reverence,not dull economics!
India is a beaming or booming economy, while is trying to become one of the most emerging markets of the third millennium. Do we need to get ecstatic about this development, as we graduate from the colonial territory to a booming economy?
Our pragmatic Prime Minister (late Shri Jawaharlal Nehru) believed in Planning as we embraced the USSR model for our development. Never mind, United Soviet Socialistic Republic does not exist but Russia is the super hyperbole of the algebra, geometry, trigonometry of economic thinking or practicable economic theorems of the erstwhile Soviet Union. The 5 Year Plans, a planning model to take India to the envoirons of the developed nations of the world and world markets where we want to make a distinct mark.
Let us not worry about where the Plans take us. Not of money is spent on these. It has physical and financial targets. It wants India to be a Country of milk and honey. India is a country of over 1.2 billion people, forget the dinky, and the economic scientists who voice we two which we will never accept, because our Preamble and Directive principle of state Policy does not say so. No problem, if the rich are become richer. We need more wealth. Indian millionaires will have their wealth grow by a whopping 405% over the next decade. India is expected to overtake United States in terms of highest per capita wealth among millionaires with US $ 4.25 million. India’s total millionaire households are expected to be around 0.69 million. When the Banks in India raised the interest rates, at least 12 times in the last 18 months to counter headline inflation which created inflation ballooning, and the ordinary will have to bear the high, higher and highest interest rates, our Corporates can borrow up to $ 30 billion from the External Market, and in the first six months of the current fiscal alone, the drawal was almost $20 billion and this money in valuable Foreign exchange was used to pay Rupee expenditure of these Corporate Companies, call them blue chip, navaratna, or what ever you please. We have already encashed $ 4.12 billion from the US Treasury bonds between April, May and June, 2011 and at the end of Q1, Q2 we have decided to borrow further Rs 52,500 Crs to match our income which got depleted by the small savings, expected to garner Rs 25,000 Cr, saw a withdrawal of Rs 35,000 Cr; we planned a disinvestment of Rs 40,000 Cr. But neither time nor economy is ripe enough for it, so we put the proposal on hold. The weak dollar is firming up against the Rupee, while Rupee rate has been devaluing, comfort Exporters, but weak for the Country, as BoP is rather high.
But while every sector is making growth oriented programmes, we had another sensation breaking news. It is not Sachin tendulkar’s 100 ton, but the master stroke of our thinking economists who can tinker with economics adroitly. The revelation will undoubtedly surprise the conventional economists and social scientists. India was shining when NDA stepped down and handed over power to UPAI in a golden platter. India is still shinning. The poor in India has come down and expectedly if you are spending Rs 32/- per day per individual, you are Poor. However, if you have the capability to spend Rs 33/- per day per individual, you are Above the Poverty Line. Remember, food inflation is hovering around nearly 10%, headline inflation is also inching to the mark, all vegetables, are costly like Onions, carrot, potatoes, cabbage, radish, tomatoes etc while the prices of egg, fish, meat, etc have gone up astronomically. Do not think, it is diatribe? Two chapattis (rotis) costs Rs 12/- and sabhji costs Rs 4/- making it Rs 16/-, one cup of tea costs Rs 5/-; Rice/Roti with little sabhji, Rs 15/- butter milk Rs 5/-, evening tea Rs 5/- night one roti + 1 veg dish Rs 10/- and one banana Rs 3/- ; all come to Rs 59/-. Think it is made in the house. You require choli, wood, kerosene, rice, dhal, vegetables, milk, coffe/tea powder, todar dhal, edible oil, soap for cleaning, dress, etc. We are not talking about aerated beverage, nor are we talking about soup, pickle, lazzi, diary products, LPG, Hamburg, Bread sandwich, puri masala, dosa-idli sambhar which costs near Jantar mandar (New Delhi) instant canteens Rs 25/- per plate, or thali which is a minimum Rs 40/- per plate. If cost of living had not gone up, why were Central DA’s increased based on Cost of Living Index?
While the Planning apparatus has worked out Rs 32/- as BPL, and Rs 33/- APL, it condensed the household as Four, which would entail an expenditure for 4, in a urban area, at Rs 32x4=Rs 128/= and expenses in a month of 30 days will be 128x30x12= Rs 46,080/- per annum, and for APL Rs 47,520/-. If limiting the spending of BPL @ Rs 32/- per person, and four to form a family, the calculation looks unrealistic. It is a most unscientific an explanation ever, when the country’s Rupee has lost its purchasing power by 80-85%.
National Sample Survey Organization (Base: Mixed Recall period consumption) arrived at the number of BPL between 6.5 Cr and 8.07 Cr, and on socio economic parameters, the figures went up from 62.5 million to 107 million. Four out of ten in the rural areas and 3 out of ten in the urban area fell under the BPL. (Suresh Tendulkar) The figures provided by NCAER/Plg Commission/State Statistics did not match. Sexana Panel suggested a new methodology for arriving at the no of BPL.
With Plg Commission determination of rate of spending as criteria for BPL, what is the cost of one square meal, which Food Security Programme is going to offer. Cost to the Government is not the standard but the cost of one square meal/a day is what should be worked out. Will this dole obliterate poverty?
The betterment of economy does not mean a higher growth of GDP alone while the majority of the Poor among the weak economic downtrodden does not get a square meal a day, and have to depend upon contaminated water to drink. The squalor of the poor needs a dressing up. Not the figures.
Our pragmatic Prime Minister (late Shri Jawaharlal Nehru) believed in Planning as we embraced the USSR model for our development. Never mind, United Soviet Socialistic Republic does not exist but Russia is the super hyperbole of the algebra, geometry, trigonometry of economic thinking or practicable economic theorems of the erstwhile Soviet Union. The 5 Year Plans, a planning model to take India to the envoirons of the developed nations of the world and world markets where we want to make a distinct mark.
Let us not worry about where the Plans take us. Not of money is spent on these. It has physical and financial targets. It wants India to be a Country of milk and honey. India is a country of over 1.2 billion people, forget the dinky, and the economic scientists who voice we two which we will never accept, because our Preamble and Directive principle of state Policy does not say so. No problem, if the rich are become richer. We need more wealth. Indian millionaires will have their wealth grow by a whopping 405% over the next decade. India is expected to overtake United States in terms of highest per capita wealth among millionaires with US $ 4.25 million. India’s total millionaire households are expected to be around 0.69 million. When the Banks in India raised the interest rates, at least 12 times in the last 18 months to counter headline inflation which created inflation ballooning, and the ordinary will have to bear the high, higher and highest interest rates, our Corporates can borrow up to $ 30 billion from the External Market, and in the first six months of the current fiscal alone, the drawal was almost $20 billion and this money in valuable Foreign exchange was used to pay Rupee expenditure of these Corporate Companies, call them blue chip, navaratna, or what ever you please. We have already encashed $ 4.12 billion from the US Treasury bonds between April, May and June, 2011 and at the end of Q1, Q2 we have decided to borrow further Rs 52,500 Crs to match our income which got depleted by the small savings, expected to garner Rs 25,000 Cr, saw a withdrawal of Rs 35,000 Cr; we planned a disinvestment of Rs 40,000 Cr. But neither time nor economy is ripe enough for it, so we put the proposal on hold. The weak dollar is firming up against the Rupee, while Rupee rate has been devaluing, comfort Exporters, but weak for the Country, as BoP is rather high.
But while every sector is making growth oriented programmes, we had another sensation breaking news. It is not Sachin tendulkar’s 100 ton, but the master stroke of our thinking economists who can tinker with economics adroitly. The revelation will undoubtedly surprise the conventional economists and social scientists. India was shining when NDA stepped down and handed over power to UPAI in a golden platter. India is still shinning. The poor in India has come down and expectedly if you are spending Rs 32/- per day per individual, you are Poor. However, if you have the capability to spend Rs 33/- per day per individual, you are Above the Poverty Line. Remember, food inflation is hovering around nearly 10%, headline inflation is also inching to the mark, all vegetables, are costly like Onions, carrot, potatoes, cabbage, radish, tomatoes etc while the prices of egg, fish, meat, etc have gone up astronomically. Do not think, it is diatribe? Two chapattis (rotis) costs Rs 12/- and sabhji costs Rs 4/- making it Rs 16/-, one cup of tea costs Rs 5/-; Rice/Roti with little sabhji, Rs 15/- butter milk Rs 5/-, evening tea Rs 5/- night one roti + 1 veg dish Rs 10/- and one banana Rs 3/- ; all come to Rs 59/-. Think it is made in the house. You require choli, wood, kerosene, rice, dhal, vegetables, milk, coffe/tea powder, todar dhal, edible oil, soap for cleaning, dress, etc. We are not talking about aerated beverage, nor are we talking about soup, pickle, lazzi, diary products, LPG, Hamburg, Bread sandwich, puri masala, dosa-idli sambhar which costs near Jantar mandar (New Delhi) instant canteens Rs 25/- per plate, or thali which is a minimum Rs 40/- per plate. If cost of living had not gone up, why were Central DA’s increased based on Cost of Living Index?
While the Planning apparatus has worked out Rs 32/- as BPL, and Rs 33/- APL, it condensed the household as Four, which would entail an expenditure for 4, in a urban area, at Rs 32x4=Rs 128/= and expenses in a month of 30 days will be 128x30x12= Rs 46,080/- per annum, and for APL Rs 47,520/-. If limiting the spending of BPL @ Rs 32/- per person, and four to form a family, the calculation looks unrealistic. It is a most unscientific an explanation ever, when the country’s Rupee has lost its purchasing power by 80-85%.
National Sample Survey Organization (Base: Mixed Recall period consumption) arrived at the number of BPL between 6.5 Cr and 8.07 Cr, and on socio economic parameters, the figures went up from 62.5 million to 107 million. Four out of ten in the rural areas and 3 out of ten in the urban area fell under the BPL. (Suresh Tendulkar) The figures provided by NCAER/Plg Commission/State Statistics did not match. Sexana Panel suggested a new methodology for arriving at the no of BPL.
With Plg Commission determination of rate of spending as criteria for BPL, what is the cost of one square meal, which Food Security Programme is going to offer. Cost to the Government is not the standard but the cost of one square meal/a day is what should be worked out. Will this dole obliterate poverty?
The betterment of economy does not mean a higher growth of GDP alone while the majority of the Poor among the weak economic downtrodden does not get a square meal a day, and have to depend upon contaminated water to drink. The squalor of the poor needs a dressing up. Not the figures.
Saturday, October 1, 2011
Need to tackle headline inflation
We see the inflation is growing at a geometrical pace, with growth rate plummeting giv9ng rise to the suspicion Indian economy would hit double-dip in a matter of months. The Food price inflation @ 9.13%, fuel price index @ 14.69%, Primary articles index @ 11.43%, with a dozen times alteration of interest rates in 18 months to combat head line inflation which hovered around 9.78%, the highest in the calendar year has turned our 11th Plan projection at the terminal year coming down disastrously to 7.2 to 7.5%. The headline inflation is twice the Central Bank’s comfort level. RBI has reached the tip end of its tightening cycle. Yet it has not been able to combat inflation. Slow growth continues. Unused capacity is around 50% which may go up. Government inertia in tackling economic issues on a war footing has taken a beat seat with the Government at the receiving end and all the energy is spent on salvaging the lost credibility. Dr Manmohan Singh was an outstanding Finance Minister of India, because he took decisive decision producing crucial results which shut the mouths of his critics. Today, he follows the policy of Narasihma Rao that taking “no important decisive action appropriately will solve the problem automatically”. 2 G no decision, CWG delayed action, Cash-for-vote-scam wavering decision, 2G letter of Finance Minister reviewing the process of 2 G licensing, he did not see the letter.
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energy,
Finance,
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fuel,
headline,
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India needs to edit its Economic philosophy & thought
India is dithering. India’s dream growth is a saga of the Past. We are the fastest emerging economy of the World is a myth rather than a reality. Most of the people who follow the economic situation in the Country are very well aware that the Government, due to alarming expenditure and reduced income, may have to resort to borrowing which will result in fiscal deficit going up. This has been voiced by Shri C Rangarajan, PM’s Economic advisor.
The over-burdened interest rates which have halted manufacturing activity because of high borrowing; its costs both in the government and private sector will go up, banks which are dealing bond portfolios will suffer because of higher yields, and banks will be constrained to release more liquidity into the system which will stoke inflation. Government's disinvestment programme (Rs 40,000 Cr) is blank. Small savings against estimated Rs 24,000 Cr sees dip by Rs 35,000 Cr, and the diff in borrowing estimated at Rs 1.67 lakhs in the budget will go up to Rs 2.2 lakh.
In order to placate the Corporate lobby, government has eased the External Commercial Borrowing limits and enhanced it to US $ 30 billion against $ 20 billion, while in the first 6 months, Corporates borrowed $ 20 billion which was pushed into the Indian liquidity for dealing in Rupee transactions. During March 2011 to May 2011, the Government withdrew US $ 4.2 billion which reduced India's exposure in US Treasury bonds to $ 37.8 billion (from $ 41 billion). Where did it go?
The fiscal deficit is predicted to be 5.5% by experts, but a conservative estimate puts it at 7-7.2%. In the first five months’ of the current fiscal, the fiscal deficit has overshot by 66.3% making it vulnerable to cross the budgeted 4.2%. Software industry, whose dependence on the American market is formidable, is in a shock. The promoters of India’s top software company have retired or resigned to move to greener pastures. Why? Only book orders continue to be executed with no firm new orders being registered. The same thing is expected of new economy sectors. The export blitz reported was US $ 252 billion in 2010-11 and the Commerce Ministry is hopeful of touching $ 450 billion by 2013-14 given the grim conditions of world order. The Foreign Exchange Reserves and External debt in Q1 showed 100:79.6 with external debt at 317 billion and FER being $ 312.707 as on Sept 23, 2011. Short term debt, external commercial borrowing and surge in import could expand the short fall unwieldy.
There was a North-South divide. As trade flows in the developing countries have emerged to grow at a faster pace, south- south trade equations have undergone vast changes in the external and domestic landscape. According to a transcript, the Indian domestic market has been vastly under the grip of China, as its bi-lateral trade as well as through dumping it has increased its presence considerably in the Indian peninsula. China and India are likely to be economic movers, it has been claimed, but instead it seems BRCC (Brazil, Russia, China and China) instead of the oft-quoted BRIC (Brazil, Russia, India and China). Domestic market is heavily dependent on unscrupulous imports (including in food) and Indian domestic market seems to be driven and covered well by the Chinese Dragon while India’s nimble elephant slowly limbs.
Has India’s dream growth ended as predicted by noted economist Shri Jha in his column in some newspapers? Question becomes strident as economy is sliding towards its worst curve. Awkward BoP position would deface the effaced growth which from double digits is slipping to 7.5%. The Path drivers and Path finders are at the cross roads leading them to no highway except to the alleys. Long term vision has become bleak while long term drive seems to be unexpectedly slow and off the mark.
Reserve Bank of India and the Planning Commission has no clue to rid headline inflation which is about to cross double-digits. Food inflation is on the threshold of double digits. Manufacturing output is very low, as Credit has become costly, inputs unavailable with idle capacity hovering around 55%. Government and the Economic divisions which drive Indian economy seem to be insensitive to people’s problems. Otherwise planning commission would not fix Rs 32/day as bench-mark to determine Poverty. The Opposition parties seem to be more political and instead should concentrate on evolution of an economic alternative that will fix the screws of the Indian economy instead of politicking 100% of their time. The ruling party has become a theorizing party, with the Great past as its halo, instead of cleaning up the mess in the present and planning for the future. The Opposition seems no better. Economic Boom, Zoom and Doom can trigger a Great Depression from which India might not be able to come out and leverage as the other developing countries can strike us hard with our poor population growing menacingly without any contraction. We have to sort out the rudimentary, basic, structural economic issues more prudently. We need to set a target for growth and we need to achieve them. After spending Crores of Rupees, if we devise explanations to justify the shortfalls and pitfalls, India just cannot afford such a situation.
India had deep rooted scientific past and sensible economic theories which had made it a most sought out country, going by its trade and economic past. Space-time continuum was enunciated by Albert Einstein in 1905 while some sacred religious texts in Sanskrit talked about the same theory two hundred years’ ago! We have enough literature on modern Economics given to us by the great sages of India which can be followed instead of abstract copying of Western theories of Economies.
The over-burdened interest rates which have halted manufacturing activity because of high borrowing; its costs both in the government and private sector will go up, banks which are dealing bond portfolios will suffer because of higher yields, and banks will be constrained to release more liquidity into the system which will stoke inflation. Government's disinvestment programme (Rs 40,000 Cr) is blank. Small savings against estimated Rs 24,000 Cr sees dip by Rs 35,000 Cr, and the diff in borrowing estimated at Rs 1.67 lakhs in the budget will go up to Rs 2.2 lakh.
In order to placate the Corporate lobby, government has eased the External Commercial Borrowing limits and enhanced it to US $ 30 billion against $ 20 billion, while in the first 6 months, Corporates borrowed $ 20 billion which was pushed into the Indian liquidity for dealing in Rupee transactions. During March 2011 to May 2011, the Government withdrew US $ 4.2 billion which reduced India's exposure in US Treasury bonds to $ 37.8 billion (from $ 41 billion). Where did it go?
The fiscal deficit is predicted to be 5.5% by experts, but a conservative estimate puts it at 7-7.2%. In the first five months’ of the current fiscal, the fiscal deficit has overshot by 66.3% making it vulnerable to cross the budgeted 4.2%. Software industry, whose dependence on the American market is formidable, is in a shock. The promoters of India’s top software company have retired or resigned to move to greener pastures. Why? Only book orders continue to be executed with no firm new orders being registered. The same thing is expected of new economy sectors. The export blitz reported was US $ 252 billion in 2010-11 and the Commerce Ministry is hopeful of touching $ 450 billion by 2013-14 given the grim conditions of world order. The Foreign Exchange Reserves and External debt in Q1 showed 100:79.6 with external debt at 317 billion and FER being $ 312.707 as on Sept 23, 2011. Short term debt, external commercial borrowing and surge in import could expand the short fall unwieldy.
There was a North-South divide. As trade flows in the developing countries have emerged to grow at a faster pace, south- south trade equations have undergone vast changes in the external and domestic landscape. According to a transcript, the Indian domestic market has been vastly under the grip of China, as its bi-lateral trade as well as through dumping it has increased its presence considerably in the Indian peninsula. China and India are likely to be economic movers, it has been claimed, but instead it seems BRCC (Brazil, Russia, China and China) instead of the oft-quoted BRIC (Brazil, Russia, India and China). Domestic market is heavily dependent on unscrupulous imports (including in food) and Indian domestic market seems to be driven and covered well by the Chinese Dragon while India’s nimble elephant slowly limbs.
Has India’s dream growth ended as predicted by noted economist Shri Jha in his column in some newspapers? Question becomes strident as economy is sliding towards its worst curve. Awkward BoP position would deface the effaced growth which from double digits is slipping to 7.5%. The Path drivers and Path finders are at the cross roads leading them to no highway except to the alleys. Long term vision has become bleak while long term drive seems to be unexpectedly slow and off the mark.
Reserve Bank of India and the Planning Commission has no clue to rid headline inflation which is about to cross double-digits. Food inflation is on the threshold of double digits. Manufacturing output is very low, as Credit has become costly, inputs unavailable with idle capacity hovering around 55%. Government and the Economic divisions which drive Indian economy seem to be insensitive to people’s problems. Otherwise planning commission would not fix Rs 32/day as bench-mark to determine Poverty. The Opposition parties seem to be more political and instead should concentrate on evolution of an economic alternative that will fix the screws of the Indian economy instead of politicking 100% of their time. The ruling party has become a theorizing party, with the Great past as its halo, instead of cleaning up the mess in the present and planning for the future. The Opposition seems no better. Economic Boom, Zoom and Doom can trigger a Great Depression from which India might not be able to come out and leverage as the other developing countries can strike us hard with our poor population growing menacingly without any contraction. We have to sort out the rudimentary, basic, structural economic issues more prudently. We need to set a target for growth and we need to achieve them. After spending Crores of Rupees, if we devise explanations to justify the shortfalls and pitfalls, India just cannot afford such a situation.
India had deep rooted scientific past and sensible economic theories which had made it a most sought out country, going by its trade and economic past. Space-time continuum was enunciated by Albert Einstein in 1905 while some sacred religious texts in Sanskrit talked about the same theory two hundred years’ ago! We have enough literature on modern Economics given to us by the great sages of India which can be followed instead of abstract copying of Western theories of Economies.
Labels:
budget,
credit,
debt,
dismal,
economy,
emerging,
foreign exchange,
GDP,
growth,
manufacturing
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