Reply by kamatsrinivas@hotmail.com 30th Nov 2K11
Specific to your message below the problem is that the private sector except for very few have not covered themselves with glory as far as social responsibility standards in India and the majority are mercenary in nature which is why there is an amount of mistrust in them. I am therefore for an enlightened mixed economy where we handhold the poor and lesser abled in terms of education and skills until they can walk on their own. I do not think we are ready yet and it may take another two decades for us to reach that stage primarily because we have wasted to a large extent the 64 years since Independence. These are, of course, my views and you are welcome to yours.
Response from naresh_nayak@hotmail.com 27 Nov 2K11:
It has been over 64 years time that we the taxpayers have given the poor to shape up. Teach a man to fish and he will learn fishing, teach a man to beg and he will not only beg, but also increase the size of the family since more family members = more Government support. Socialism and skewed democracy through demographics are responsible for the population boom. There is incentive for the poor and the votebank to produce more children to game the social system and votebank system.
Over the years socialism has corrupted the souls of 1 billion Indians who today believe that misery should be equally distributed, but wealth should not be unequally distributed.
Consider this, give a tax break of Rs. 20,000 crore to the Tatas in the poorest district of Jharkhand, and you will find a greenfield project come up, with skillset development and wealth creation through shareholder returns. Incomes are created because jobs are created, there is managerial efficiency of capital deployed and the village propers.
Give Rs. 20,000 crore to MREGA our rural employment scheme, and look at what happens to the funds. Or better the CWG scam. Why couldn't private parties manage the event by deploying their private capital is anybody's guess. The Government should simply have handed the project over to international event management agencies at the highest bid.
Private capital deployment is the only way out of poverty. Government can at most support in education and health. But it cannot support NREGA, Indira Kanya Vivah Yojna, or Rajiv OBC Vikas Yojana and the like. Why? Because it is MY MONEY they are spending on a worthless long term venture.
SKS Finance saw a microfinance opportunity in poverty stricken areas and move ahead when there was no regulation. The microfinance revolution created an agrobusiness revolution in the hinterland, wealth creation and a culture of repayment. Unfortunately the AP Government stopped it all by BANNING microfinance altogether.
The MFI institutions as a result have to be recapitalised and the borrowers have gone into delinquency. This was a pure market function where the Government could only enforce the law of property - you shall not bodily harm the borrower when doing fund recovery and the free market would have balanced itself out. Unfortunately our policitians love socialism and Swiss Banks because the two and two go hand in hand. A socialist fund belongs to nobody and therefore the incentive to steal simply exists.
Reply by kamatsrinivas@hotmail.com 27th Nov 2K11
What you are saying has been immortalised in training manuals where it is advised that if you give a man a fish, you wipe his hunger for just one meal but you teach him fishing then you would have tackled his hunger for his entire life. These maxims work at an individual or enterprise or community or segmented population wise but not across the broad swathe of an entire population like India. Our problems are rather massive considering the size of our population and it is not possible to tackle issues like poverty and expect magic to happen in a couple of years. Therefore it is important that we use both methods: social welfare and support measures as well as the training for work measures. As time progresses the first can be scaled down and the deprived population taught to stand on its own feet. Until then the taxpayer has to bear the burden of theses social welfare measures, in the concept that the strong because they are strong should support the weak. Our problem over the last twenty odd years has been that the political establishment has lost the will to implement these measures effectively and pull up those that are the leakages in the system in the implementation process. This is because the whole thing has got politicised and the money finally ends in the party coffers. Our economic models tend to ape the Western models while the problems are essentially native and are unique to us. Since the first reforms in the Indian economy were initiated in the early 90's, we have practiced what is called the trickle-down theory where with the emphasis on growth and therefore prosperity, it is expected that this prosperity would trickle down to the lower stratas of our society. Unfortunately if you measure this, nothing of the sort has happened and the rich-poor divide has become deeper. There are more number of people being pushed below the poverty line with rising prices and essentially all economic policies are targeted to make the rich richer. We need to create our own economic model factoring in our problem and not listen to the dictates of the Western world. I do hope you would understand. To see more of this you need to just take your car and spend a day in the nearest village to see how an average rural family makes do in today's world and listen to their problems and difficulties. Inspite of all this they continue to nurture hopes and aspirations and have still not forgotten how to smile. Adopt a village or an underprivileged group and make a difference in their lives which is what is needed.
Response from naresh_nayak@hotmail.com 26th Nov 2K11
Governor Y V Reddy is right in making the statement that Social Welfare schemes are bringing India down. India is a mixed economy with Capitalism showing more promise than the equal distribution of misery in Socialism. Social Welfare schemes are nothing but pay without work, and taxpayers have to take the burden. The more painful thing to do and the more lasting model is called Enterprise. Creating a system of enterprise which needs people and skills and will generate wealth. Taking money form the taxpayers and feeding it to the 'poor' will help the poor increase their population since more people = more subsidy, while smart entrepreneurs and capital will escape India and the middle class will grudgingly have to bear the burden.
The Mess That Our Economy Is In Or Too Many Cooks Spoil The Broth Vox Populi Issue 87 19th Nov 2K11
Our Prime Minister along with his coterie of preferred economic advisors (Rangarajan, Basu, Ahluwalia, Subba Rao & Co.)are leading this country’s economy onto a limb from which it seems that there is no likelihood of any return. These people continue to theorise which may sound very nice but in their practicals they will all get a big Zero. This fact we have seen in the manner of how the economy has been handled by them in the past two years. The PM and none of his economic group has a clue as to what is going on with the economy. Manmohan Singh crediting with opening the Indian economy and instituting the first phase of economic reforms should be viewed as the man who opened the stable door but when the horses ran away he did not know what to do. Again in Joseph Heller’s Catch 22 there is a soldier swathed completely in bandages and except for a hole where his mouth should be, he is completely covered in white. That precisely is the condition of the Indian economy with 13 interest rate changes in the last 18 months and 11 price changes for petroleum fuels in the last 15 months. If you consider each price change figuratively being applied as a band-aid on the Indian economy you can imagine the state it is in akin to the bandaged soldier as above. Another analogy which you could draw upon is the little boy who seeing a leak on Holland’s dykes tried to stem the water by putting his finger into the holes, but however much he tried each time he put his finger in the hole another hole would develop. And he had just ten fingers that he could use! This exactly is the manner in which our PM and his A-team of economists is dealing with the specter of inflation which elusively is keeping on going, up and up. From the measures being taken it is quite clear that these people do not have a clue as to what is going on with the country’s economy and they have tended to resort to bluffing time and again that ‘shortly’ things will normalize and inflation will be in control, once the supply side measures decided by the government kick in. The above comments are very much valid which you can yourself analyse from the various economists statements in the media by the PM’s A –team. The PM, Montek Singh Ahluwalia and Rangarajan have all been parroting that petroleum fuel prices should be de-controlled and they welcomed the last hike before it was finally rolled back. Have these people considered where the aam admi will get the money to pay for the fuel that he needs for his day to day activities if the prices keep going up every month or so? He is already occupied with the concerns of making both ends meet with almost everything that he and his family going up every 15 days or so. It is all right for people who ride in government cars and do not see the reality of shelling out the prices for fuel at the petrol pump but at least senior people like the above should spare a thought for the aam admi’s plight since do they not hold responsible positions and are vested with the authority to do the common good. More so Ahluwalia is wont to make irresponsible statements like saying that with petroleum fuel prices being de-controlled the government has nothing to do with it and the OMC’s should be held responsible. This cannot work in a mixed economy like India’s where the government has always played a role in fixing prices particularly for petroleum fuel and now they cannot suddenly set the price balloon free to rise as much as it can. Such irresponsible actions will only lead to the country coming to a grinding halt within the next decade. Further the same Ahluwalia has said recently that industrial production is not stagnating because of high interest rates since two years ago at the same rates growth was 9%. Now we would like him to tell us given the position that he is holding why this is happening now and was not happening two years ago and not like a politician make a sweeping statement and move on. We all know currently that credit offtakes from the banks by industry has been falling steeply, and many leading industrialists have been talking of a decision and policy paralysis in the incumbent government as far as economic matters are concerned. Then we have Ahluwalia commenting as late as yesterday (19th) that the Planning Commission was wrong on the matter of inflation and on how to handle it. This is all quite easy for these officials to say – sorry, and move on. If it was a lower level flunkey there would be a black mark on his CR or if he was in the private sector, he would be sacked. Why does Ahluwalia not get sacked? He fully deserves it since in any case the Planning Commission is non-functional, or dysfunctional at most, and all these comments coming on top of the affidavit that the poverty line is set for those who cannot spend Rs. 32 per day in urban areas and Rs. 26 in rural areas given under his call, it is not that India will miss his departure. Or send him off to pasture on an UN assignment. It is not only Ahluwalia but also Y V Reddy, the erstwhile Governor of RBI and considered quite eminent in his field, has just the other day said that the social welfare schemes are bringing the Indian economy down. These people are old with grey hairs which have grown grey while they were working in India and still they come out with such statements! India to remove poverty cannot, simple cannot, do away with any of the social welfare schemes. The important thing is that they need to be better managed so that the money allocated is not squandered as it is right now. Then we have Subba Rao, the incumbent Governor of the RBI and the principal initiator of the interest rate hikes since he has either nothing better to do or is not aware of anything better to do, commenting on the Occupy Wall Street movement in the US instead of concentrating on his job. If he continues to perform in the present way then it will not be far before we have an Occupy RBI Movement in this country and he will have to vacate his chair. We have also Kaushik Basu a lost soul who like others keeps making statements while at one time he says that nothing should be subsidized for the poor like food or fuel, he magnanimously says that health care should be free for the poor. A saving grace there! Concluding, these gentlemen including the PM who are in charge of our economy should get our of their air-conditioned ivory towers and see actually what is happening in real terms on our city’s streets and the country’s marketplaces and instead of aping Western models of economics work out a model which is truly suited for our local conditions and emerging out of our own basic needs. That exactly is the problem since by following some other’s medication, we resort to tinkering with the economy since we are not aware on how to make the foreign model work properly and end up by making a bloody mess that we have all seen over the last decade, and more so in the last two years.
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