Inspite of all efforts made by the government and inspite of Finance Minister repeatedly claiming that growth story of India is intact and totally decoupled with global crisis, all figures pertaining to current economic status of the country indicates that the economic situation is not as good as politicians claim to be. This conclusion is not only that of mine but that of economic experts which is visible in following article published in popular News Paper.
It
is undeniably a bitter truth that the medicine of reformation and medicine of
LPG (Liberalization, Privatization and Globalization) which has
been considered as panacea for all problems and all types of sickness and which
has been treated as efficiency booster for Indian growth engine has
been the real cause of all problems Indian economy is facing.
To
make is clear one may say that medicine used to cure the sickness of Indian
economy is really a poison for not only Indian economy but for common men too.
A
few thousands of people or businessmen in India might have become Billionaire
and a few lacs of them might have become millionaire due to
reformatory policies of Manmohan Singh but the economic condition of at least
110 crores of India population has deteriorated from bad to worse and moving
towards the worst. People of India might have access to mobile, TV and internet
at cheaper rate but daily use essential commodities and infrastructure is
beyond the access of common men. In reformation era begun in 1991 , lifestyle
of rich has become such as if they are in heaven but the life style of common
men has become as if they are living in Hell.
Life of common men has become
miserable, pathetic and pitiable. There is none to listen to their
problems .They cannot visualize any remedy for their troublesome
life. They cannot dream of adequate education , medical care and livelihood for
their children , they cannot afford admitting their child in good school , they
cannot dream of medical treatment in hospitals , they cannot dream of electric
power , they cannot dream of pure water and a small house to live in and they
cannot be sure of food and cloth even for survival in coming days keeping in
view the relentless price rise and inflation going beyond
control..And they have to bear with all types of tortures and troubles arising
due to pro-elite class policies of the government and they cannot dream of justice
even from police or the judiciary.
Politicians may shed a few Crocodiles
Tears on the eve of election but in fact they flourish only by extracting the
blood of common men and by enjoying the fruits meant and sanctioned in the name
of poor. Politicians become billionaire in a span of two or three after their
election to State Assemblies or Parliament but common men cannot
dream of a few thousand of rupees for their survival.
Will our government explain from the core of their
heart and tell honestly to the people of India what they have done to
raise the standard of living of common men and are they successful in this task
to any small extent?
Are our politicians still having faith in policies
of reformation to cure the failing economy, to ensure equitable distribution of
so called GDP growth, to give relief to ailing poor people and to cure the
cancer of corruption?
People should ponder over the question and answer
whether policy of reformation have proved a boon or curse for common men during
last two decades?
Every conceivable data suggests growing economic weakness
By NK Singh
http://economictimes.indiatimes.com/opinion/guest-writer/every-conceivable-data-suggests-growing-economic-weakness/articleshow/13280822.cms
It is just over 60 days since the Budget 2012 was presented to Parliament. The economic situation, even during this short period, has deteriorated further. A combination of factors, both exogenous and endogenous, has cramped the flexibility of the government. Years of high economic growth coupled with tax buoyancy in an earlier period could have been used for retiring public debt and creating fiscal space.
Instead, it was used for fiscal profligacy and financing large flagship programmes. A performance audit of these flagship programmes, whether it be NREGA or Bharat Nirman, may be a telling story. However, in a country which has limited social safety nets, the value of these programmes is important for enhancing rural purchasing power, economic growth and social cohesion.
While these new schemes were launched, others which were overlapping and outlived their utility did not shrink. The overshot subsidy bills of the government on account of food, petroleum and fertilisers also constrain action. The slowdown in growth reduces revenue buoyancy while a deteriorating investor confidence moderates inward capital flows. In more ways than one, the economy has struck a bad patch.
Over the past two months, every conceivable data suggests growing weakness with few silver linings.
The long-term savings rate has declined from 36.8% of GDP in 2007 to 31.5% in 2011. This has lowered the investment gearing ratio, making a climb back to a higher growth trajectory more difficult.
The uncorrected fiscal deficit is likely to be higher than what was projected given deceleration in growth rates, less than expected realisation from disinvestment, lower tax buoyancy and uncorrected expenditure.
The current account deficit, which now exceeds 4% of GDP, remains even more problematic. The year-on-year export figures fell from 36.4% in 2011 to minus 5.7% in 2012. To make matters worse, inflation has once again raised its ugly head, limiting flexibility of the central bank in moderating its monetary policy stance.
The exchange rate has been excessively volatile and the rupee has touched a new low in recent times. All bets are on further downward movement, which will delay the receipt of remittances and forex proceeds. Action by RBI can only be expected to contain excessive volatility, and without tangible action on the macro-economic or structural front, defending exchange rate will unduly dent reserves.
Debt-to-GDP ratio has touched 67% of GDP and internal debt constitutes 82% of the total public debt. Short-term external debt as a percentage of GDP is 22% compared to 10% in 1991. There is also a significant redemption of debt during the next 18 months that will dent reserves unless inward capital flows can be ignited quickly.
The manufacturing sector continues to be in the doldrums, the service sector is subdued and a repeat of a good agricultural year is contingent on the play between El Nino and El Nina factor.
The investor sentiment remains subdued and successive downgrading of credit rating will raise the cost of borrowing, deepen scepticism and transmit negative signals to the investor community, both domestic and international.
Given these policy headwinds, what is a prescriptive way forward? Let me suggest six things that are doable in the short run.
First, restoring macro-economic credibility is central to any coherent strategy. A multi-pronged action with credible fiscal correction is inescapable. As promised in the Budget, the bullet has to be bitten even if this means taking politically difficult decisions and we know the bullets - correction of subsidies on petroleum, oil, urea; rationalisation of overlapping central schemes and credible fiscal measures along with structural reforms.
Second, postponing of GAAR was positive, but the world is yet to reconcile with the retrospective changes. Retrospective changes may be acceptable legally, but, morally, rectifying the judgement of the Supreme Courtthrough retrospective changes questions our rule of law. Investor sentiment remains frail and the anxiety unmitigated.
I would suggest constitution of an investment commission of domain experts to actively engage with the investor community, allay their fears and encourage tangible investments. Similarly, a bipartisan growth commission comprising parliamentarians can also assure investor concerns and reiterate continuity of policy. The Indian growth story must go beyond partisan politics.
Third, finance minister promised, in Washington in April 2012, legislations on banking, insurance and pension reforms. In fact, the prime minister had promised this exactly five years ago in 2007. It was, therefore, extraordinary that the Cabinet postponed these decisions even when there is a bipartisan support on many of these pending legislations. The conclusion of a policy paralysis thus gets reinforced.
Fourth, the finance minister while replying to discussions in the Rajya Sabha promised austerity. Austerity must go beyond cosmetic measures. It needs to include a revamping of government's expenditure policy, both plan and non-plan. Rationalisation of expenditure portfolio and consolidating the anti-poverty programmes have been long delayed.
The administration of subsidies by using modern technology and the benefit of the unique identification scheme need to go beyond a pilot phase to include cash transfers to better target beneficiaries and enhance the benefits of anti-poverty programmes.
Fifth, the central government has presented to Parliament a new path of fiscal consolidation. It would be fair to do so in the case of states as well, particularly those who either have ambitious development programme like Bihar or debt ridden like Bengal.
Sixth, this has been a decade of jobless growth. High rate of economic growth has not resulted in creation of net additional employment, either for mitigating other backlog or net accretion to labour force. I suggest constitution of a Cabinet committee on employment to monitor job trends and to periodically report to Parliament the extent to which growth is leading to fresh employment.
Nobody doubts that the long-term India growth story is intact. Unsatiated domestic consumption, a young population and the liberalisation that has already taken place constitute a powerful stimulus in itself. Equally, nobody doubts that our growth story has recently been dented with macro-economic weaknesses, inability to reinvigorate the pending reforms agenda and securing foreign investment in a more competitive world.
A frail US recovery and enveloping euro crisis compound our woes. That is why, unlike 1991, we do not have the advantage of a favourable external environment. Our increased global inter-dependence adds to our vulnerability. While comparison with 1991 crisis may be exaggerated, there are ominous similarities. Without tangible action, which goes beyond rhetoric or comforting words, a return to the high noon of growth will remain illusionary. The time to act is now.
he author is a JD (U) Rajya Sabha member
WEDNESDAY, MAY 16, 2012
Government’s austerity drive should not get in the way of public investment
Microfinance Bill will regulate the sector to death, to the joy of moneylenders
Bitter Truth of Our Country
http://jaindanendra.blogspot.in/2012/05/bitter-truth-of-our-country.html
Highest Priority Self, Medium is Party and Last Priority is Nation ---Why?
http://jaindanendra.blogspot.in/2012/05/highest-priority-self-medium-is-party.html
People ,Party , Politicians and Parliament
Government’s austerity drive should not get in the way of public investment
Microfinance Bill will regulate the sector to death, to the joy of moneylenders
Bitter Truth of Our Country
http://jaindanendra.blogspot.in/2012/05/bitter-truth-of-our-country.html
http://jaindanendra.blogspot.in/2012/05/highest-priority-self-medium-is-party.html
Government Has No Solution to Economic Crisis:
ReplyDeleteNice to read a column about current economic situation of common man. Unfortunately no one is there for the rescue. Our honorable finance minister & others from the cabinet ministry are either way enjoy their power, bagging thousands of crore for them & their families. Trillions of Indian black money are lying on swish-bank of these "shwadeshies", but no one to say a word.
Very bad patch of era is running now. God knows, when real independence of common "um admi" will come & when these incompetent & bullish politician been force fully leave our country.
Ospin