Monday, September 15, 2014

Unauthorized views - 100 Days of Chicanery ....

                    There is a Joke going around in the virtual social spaces that if it comes to allowing the PR machinery that catapulted Mr.Modi to be the 15th Prime Minister of this country it would have very much liked to ascribe the winning of the US open by a Japanese to the unambiguous effect of  Mr. Modi visiting that players island nation, though it seems like the Japanese weren't much impressed by our Prime Ministers effort to be a crowd pleaser which is very much underscored by the very little that Mr. Modi has been able to achieve through his recent visit to Japan and also by the very little that Japanese media had to say about Mr. Modis first ever visit to japan as Prime minister of the worlds largest democracy. But, the media over here wasted no time in placating an expansion in the industrial output in the month of June as the result of Mr. Modi becoming the prime minister giving way to a new economic theory called the "Modis effect" which defies all the logic behind the science that has formulated many postulations which remain till today as the guiding principles for all and any kind of transaction that involves the consumer, the seller and the market, and its quite interesting to note that the very same media just dint know how to react to a drop of 0.5% in the industrial output in the month after, even while the stock market's were reaching for the skies. While its no secret that it took nearly 4 months for the previous government to reign in the gold imports which was weighing heavily on its current account, one obviously would like to see people of some repute in the financial media industry to recognize this aspect of time that separates two nodes one being the policy implementation and the other being its outcome before providing their blunt views related to economic affairs.
                       In the years after 2010 that led to the showdown in which BJP emerged with a thumping majority it has to be noted that our country was running current account deficit month after month and year after year even while it sporadically managed to run balance of payment surpluses Clearly indicative of the fact that we were running capital account surplus during those periods. Recently Global financial integrity came out with a report stating that in the year 2011-12 alone around $ 85 billion of black money has moved out of the country, if one were to take this little piece of information and put it in the context of trying to understand our huge current account deficit in the same period one can safely attribute it for the most part to the over invoicing of the imports. The kind of policies that this government is spearheading is no different from the previous governments, and so will have no particular effect on the real economy so to say if substantial efforts are not made to create real jobs that are the results of capital expansion and capacity expansion leading to an increase in the over all median wages (not the average wages) across all sectors, Government has to take active interest in maintaining a balance between the farm subsidies and subsidies that are given to industries which provide the farm inputs in a way that it doesn't become detrimental to the profits that the farmers can make, Governments inability to address this issue which affects over 60 % of our population has been one of the main reasons why we have so much of farmers getting trapped themselves in debt. And one very important question that every citizen in this country needs to ask is why has this government not taken any steps to become the trustee of all the offshore Bank accounts held by Indian passport holders in the tax havens by nationalizing them, if Mr. Modi can do that he wont have to go around the world seeking economic corporation from other countries for the rest of his tenure. Government cannot keep depending on giving up its stake in public sector units to fund its deficits year after year, killing the public sector in its entirety would be detrimental to the free market economy itself which is a topic in itself to discuss about, and its a view that i have contrary to the present larger understanding which the neoliberal free market economists have been able to establish. The immediate responsibility of this government  has to be to check the rate at which the indian finacial sector has been adding bad loans to their balance sheets, and more importantly India cannot afford to be a pushover anymore, it has to protect its interest at all cost if it wants to become a vibrant manufacturing hub. 

Prasanna Kumar  

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