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?
Showing posts with label booming economy. Show all posts
Showing posts with label booming economy. Show all posts
Monday, October 10, 2011
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.
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