Rupee is falling. So is the Sensex. Industrial growth and GDP are also following suit. It's no surprise that the famed Indian growth story is over. The only problem with our current situation is the sudden change in fortune in the past few years.
We set the ball rolling in 1991. Ever since, the growth was exemplary. It was just there. Whoever came to power at Center didn't matter. Growth had an air of inevitability about it. One factor was that the denominator was low. You add 1 to 10 and change is 10 percent. You add 1 to thousand, its minuscule.
But that doesn't explain the sudden vicissitude of fate that we are witnessing now. With the rupee below 64, the crisis is established. We are like a plane without a pilot with a cliff right up front. Correction. We do have a pilot on an OD of sleeping pills along with a cabin crew high on alcohol. We don't need an expert to clarify that we are doomed!
Now the debate as to who needs to ensconce on the pilot seat is for the janta to decide. Although, FB and Twitter hogging Gen-Y have made it seem like a battle between 2 personalities, the election battle is far from over. The economic mismanagement that we are witnessing is not just a result of policy paralysis. The deficit is as much a result of sops doled out for populist policies. Now in Indian Democratic system, sops is nothing but buying out votes in mass. Food Subsidy bills, opposition of FDI, Farm subsidy, PDS etc.are nothing but cash handed out in exchange of votes. So, in that regard, our soporific pilot and his dipsomaniac crew have done well. In fact, they may have done just enough to keep opponents out of power even if they themselves don't win.
You know your in a soup when you pin your hopes on the RBI Governor rather than Finance Minister. Raghuram Rajan is an economics Guru, no doubt, but that simply doesn't cut it. Chidambaram has been less and less available to anyone throughout the UPA regime. No comments, no statements, no TV appearances or interviews. Earlier, it was Subbarao who was left all by himself to rectify the damage done by populist fiscal policies. Now Rajan, no disrespect to his capabilities, can also do limited things and that is due to a simple reason-Monetary policies cannot outdo fiscal policies. Monetary policies can only delay the D-Day of Indian economics. At the end of the day, its fiscal policies that have to battle it out to save the nation from falling off the cliff.
May Day May Day!!
We set the ball rolling in 1991. Ever since, the growth was exemplary. It was just there. Whoever came to power at Center didn't matter. Growth had an air of inevitability about it. One factor was that the denominator was low. You add 1 to 10 and change is 10 percent. You add 1 to thousand, its minuscule.
But that doesn't explain the sudden vicissitude of fate that we are witnessing now. With the rupee below 64, the crisis is established. We are like a plane without a pilot with a cliff right up front. Correction. We do have a pilot on an OD of sleeping pills along with a cabin crew high on alcohol. We don't need an expert to clarify that we are doomed!
Now the debate as to who needs to ensconce on the pilot seat is for the janta to decide. Although, FB and Twitter hogging Gen-Y have made it seem like a battle between 2 personalities, the election battle is far from over. The economic mismanagement that we are witnessing is not just a result of policy paralysis. The deficit is as much a result of sops doled out for populist policies. Now in Indian Democratic system, sops is nothing but buying out votes in mass. Food Subsidy bills, opposition of FDI, Farm subsidy, PDS etc.are nothing but cash handed out in exchange of votes. So, in that regard, our soporific pilot and his dipsomaniac crew have done well. In fact, they may have done just enough to keep opponents out of power even if they themselves don't win.
You know your in a soup when you pin your hopes on the RBI Governor rather than Finance Minister. Raghuram Rajan is an economics Guru, no doubt, but that simply doesn't cut it. Chidambaram has been less and less available to anyone throughout the UPA regime. No comments, no statements, no TV appearances or interviews. Earlier, it was Subbarao who was left all by himself to rectify the damage done by populist fiscal policies. Now Rajan, no disrespect to his capabilities, can also do limited things and that is due to a simple reason-Monetary policies cannot outdo fiscal policies. Monetary policies can only delay the D-Day of Indian economics. At the end of the day, its fiscal policies that have to battle it out to save the nation from falling off the cliff.
May Day May Day!!
If it takes the downfall of Indian Rupee and the disaster that our economy has become to get you to writing, so be it :)good going!
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