There used to be a term, 'FUBAR' used by the yankees during the Vietnam war. What it basically meant was 'FU#@$d up beyond any repair'. This was essentially used for the fellow combatants if their revival was beyond reach. This shows the extent of dehumanisation & sense of hopelessness that seeped into American soldiers during that war. It sanitised the soldiers to the point where they devised their mechanisms to deal with everyday trauma.
Why do I think of this term today? well, I am at a point where i just cant decide the right term to describe the state of India. The problems are plenty and the solutions nowhere in sight. Indian Union is going through a similar state & our Vietcong is no one else but the grand old party of india, the CONgress. There are lot of erudite commentators making the case of sending current Manmohan led thug regime to ICU. I am not the one to disagree with them on the state of their health but on the prescription only.
This government/Cabinet is fit case to be sent to a mental asylum. The amount of skullduggery they have involved in can put Goebbels along with his Nazi stormtroopers to shame. No wonder Hitler saw cultural similarities with India and Indians as his blood brothers. Like the Nazi Propaganda machine, CONgress party & its loyal foot soldiers in the english media have started spinning a new story of conspiracy against the government. The ink on the last story (Greece is responsible for economic meltdown) has not even dried and they are back to old days in more than 1 ways...
1. They are back to their lying, bluffing & paranoid socialism days
2. They are back to Indira days of seeing a CIA conspiracy in everything that happened in the country.
3. The solutions that they propose or propound in through loyal foot soldiers in media, are only 2 kinds. Terrible and more terrible.
Let me talk about the economy first by looking at Q4 growth rate of 5.3% and thus the whole year of growth coming down to 6.5%. Let us jog our memories a bit back to the statements made by the 'dream team' of Manmohan singh & Pronob making tall statements during last budget speech of making a growth of 8.5%. Even this year, Pronob was making an estimate of 6.9% growth.
The most favored reason touted for this insipid performance is meltdown of greece. That is laughable to the best of my knowledge. The problem with Greece started in the month of April(mid) while we are talking about growth of Jan-March. Actually, we can thank greece for helping reduce the Import bill of Oil & electronics.
Look at the quarterly trends to see a better picture. Q1 2011-12 we grew at 8%, Q2 at 6.7%, Q3 at 6.1% and eventually landing at 5.3% for Q4. remind ourselves of the response of Govt post every qtr. "Q1 the response was, "This growth of 8% is an aberration. It's only matter of time before we hit back on 9% plus" to consolation of "We should not be skeptical to grow at 6.7% when the whole world is slowing" in Q2. We did a tad better in Q3 (in terms of statements), "We will see a pullback in the last quarter" and for the Q4 we have greece story.
Let us look at the issues plaguing the economy sector by sector. Considering the Government either cant understand why we are growing or degrowing in any case. Look at 2 sectors, agriculture & manufacturing. the decline has been the steepest in both. Agriculture decline from 3.7% in Q1 to 1.7% in Q4 (contribution 18% approx to GDP) and manufacturing from 7.3% to -0.3% in same period. For a country growing consumption & churning out graduates like nobody's business, we need more products to consume thus increasing employment opportunities for young.
lets look at the holding sector, Services & more specifically financial services. In careful number gazing the biggest growth in this sector comes in Community, social & personal services. So what's the aphrodisiac for this sector? Well it's the Government silly as it includes the Government services. In simpler terms, government is bloating like never before thus squeezing the private sector to grow.
Private consupmtion expenditure contracted from 59.5% of GDP in Q1 to 52.2% in Q4 while the Government did one better as it bloated from 10.6% to 11.4%.
Let me tell you dear Indians, (Who say Govt ke pass bahut paise hain) when govt corners so much , it increases the borrowing costs for everyone and that includes private sector, which by stretch of every data has proved to have given better returns on investment than the public sector.
So the problems we face can be summarised as, Bloated government, falling growth, rising inflation & falling ruppee. so the picture that emerges out is that the pain has just begun. What is causing this bloated government us another area to look at..
1. Oil Subsidies : Diesel subsidy is around Rs13 per liter, Kerosene is insane at Rs30 odd & LPG at Rs390. SO more the clamour to balance the budget and you can expect
2. Value of Rupee : Well at the current account deficit level & economic climate with a Communist government at helm, you can very well kiss the global investor confidence good bye so no $ in and Rs statys at 53-56 level thus higher import bill and god help.
3. Lunacy of subsidies by soup alphabets : NREGA , Food security bill , NRHM , Fertiliser subsidy Minority welfare and the total bill runs into
Add Oil subsidies of Rs140000 Cr , it comes to frightening Rs 420000 Cr . Add the loan write off havoc & Power subsidies, it will cross Rs 500000 Cr, almost 50% of our entire budget and where does this leave the interest rate for the private sector if the govt mops up all the funds and then dumps it in subsidy . The leakage of this around 55%.
The story of NREGA is legendary now. For the Rs40000 allocated to it every year, Only Rs1500 odd crores were distributed as wages for to the rural poor while rest of money has gone into a blackhole. the arguement for starting the scheme was
1. To provide jobs for rural poor 100 days a year
2. Help create local assets - only assets created under this scheme are the SUV's of village pradhans (all CON men)
You can read rants of Jairam ramesh, rural development minister against the scheme.
http://indiatoday.intoday.in/story/nrega-unproductive-and-creates-no-assets-says-jairam/1/199002.html
Another nonsesne that needs to be kicked on the backside is the story floated of 'Policy paralysis'. The problem is not policy paralysis, Problem is wrong policies. There are policies being debated and implemented everyday i.e capital gains on old, RTE, FSB . However, the problem is they only give 2 choices..
1. Terrible
2. More terrible
So it again boils down to have consistency in economic policies, conceived & implemented with a long term vision. To begin with, We should refrain from putting any tax on diesel vehicles till the time we improve public transport.
I have given up even trying to slot the policies in 'Terrible' category. The whole government including the head of executive , Prime minister, inspires no confidence and talks about inane and archaic ideas of 1991. He forgets that we are in 2012 and lot of water has flown down the Thames or Rhine. That time, West was not going through such economic crisis and IMF & WB were willing & capable to lend money. FII/Corporations were waiting for India to open up. Today, they are bankrupt.
There only solution is to correct & erase profligacy & tighten our belt by cutting subsidies. Promote sensible policies, reduce budget, current account deficit. Most important have consistency & stop this vindictive attitude towards the industrialist and behaving like a Bulldog kicked in the balls (Vodafone tax case).
Stop this nonsense of NREGA, NHRM & bankrupting FSB. If you want to support poor anyhow then look at direct cash transfers.
Look at implementation of GST. Get the states to rally around by allowing them greater control on their finances. Out of 38 odd Cabinet ministers, CONgress has around 30.
These half brained NAC members along with former waitress as their boss will beggar this nation. More than anything, stop blaming Greece as everyone with an iota of brain knows that govt are lying and with the trajectory of growth, no need to wait for August. Answer is Q1 2012-13 numbers will only go downhill.
“It is not an exaggeration to state that the magnitude of the economic damage and mismanagement by the Congress party under Dr Singh’s watch will be embarrassing for even a student of introductory economics,” as Malik, Sr Columnist as Business standard wrote.
Manmohan off course is no PV Narsimha rao, inarguably one of the 2 best prime minister this country had along with Atal behari and we have none to blame but this Thug , scam a day govt to blame for not being able to realise our dream of lifting more & more poor out of poverty this decade.
As a Business Standard editorial notes, “Indeed, UPA-II’s policy activity is, in some ways, more worrying for the economy than its paralysis —for it reveals that this government does not understand the scale of what is needed, nor does it possess the follow-through required for good policy-making.”
With Insipid Manmohan & mentally bankrupt but politically ambitious & influential Pronob (Only Vimal) the country is going FUBAR .
Law & order would require another full day to think & write.
Why do I think of this term today? well, I am at a point where i just cant decide the right term to describe the state of India. The problems are plenty and the solutions nowhere in sight. Indian Union is going through a similar state & our Vietcong is no one else but the grand old party of india, the CONgress. There are lot of erudite commentators making the case of sending current Manmohan led thug regime to ICU. I am not the one to disagree with them on the state of their health but on the prescription only.
This government/Cabinet is fit case to be sent to a mental asylum. The amount of skullduggery they have involved in can put Goebbels along with his Nazi stormtroopers to shame. No wonder Hitler saw cultural similarities with India and Indians as his blood brothers. Like the Nazi Propaganda machine, CONgress party & its loyal foot soldiers in the english media have started spinning a new story of conspiracy against the government. The ink on the last story (Greece is responsible for economic meltdown) has not even dried and they are back to old days in more than 1 ways...
1. They are back to their lying, bluffing & paranoid socialism days
2. They are back to Indira days of seeing a CIA conspiracy in everything that happened in the country.
3. The solutions that they propose or propound in through loyal foot soldiers in media, are only 2 kinds. Terrible and more terrible.
Let me talk about the economy first by looking at Q4 growth rate of 5.3% and thus the whole year of growth coming down to 6.5%. Let us jog our memories a bit back to the statements made by the 'dream team' of Manmohan singh & Pronob making tall statements during last budget speech of making a growth of 8.5%. Even this year, Pronob was making an estimate of 6.9% growth.
The most favored reason touted for this insipid performance is meltdown of greece. That is laughable to the best of my knowledge. The problem with Greece started in the month of April(mid) while we are talking about growth of Jan-March. Actually, we can thank greece for helping reduce the Import bill of Oil & electronics.
Look at the quarterly trends to see a better picture. Q1 2011-12 we grew at 8%, Q2 at 6.7%, Q3 at 6.1% and eventually landing at 5.3% for Q4. remind ourselves of the response of Govt post every qtr. "Q1 the response was, "This growth of 8% is an aberration. It's only matter of time before we hit back on 9% plus" to consolation of "We should not be skeptical to grow at 6.7% when the whole world is slowing" in Q2. We did a tad better in Q3 (in terms of statements), "We will see a pullback in the last quarter" and for the Q4 we have greece story.
Let us look at the issues plaguing the economy sector by sector. Considering the Government either cant understand why we are growing or degrowing in any case. Look at 2 sectors, agriculture & manufacturing. the decline has been the steepest in both. Agriculture decline from 3.7% in Q1 to 1.7% in Q4 (contribution 18% approx to GDP) and manufacturing from 7.3% to -0.3% in same period. For a country growing consumption & churning out graduates like nobody's business, we need more products to consume thus increasing employment opportunities for young.
lets look at the holding sector, Services & more specifically financial services. In careful number gazing the biggest growth in this sector comes in Community, social & personal services. So what's the aphrodisiac for this sector? Well it's the Government silly as it includes the Government services. In simpler terms, government is bloating like never before thus squeezing the private sector to grow.
Private consupmtion expenditure contracted from 59.5% of GDP in Q1 to 52.2% in Q4 while the Government did one better as it bloated from 10.6% to 11.4%.
Let me tell you dear Indians, (Who say Govt ke pass bahut paise hain) when govt corners so much , it increases the borrowing costs for everyone and that includes private sector, which by stretch of every data has proved to have given better returns on investment than the public sector.
So the problems we face can be summarised as, Bloated government, falling growth, rising inflation & falling ruppee. so the picture that emerges out is that the pain has just begun. What is causing this bloated government us another area to look at..
1. Oil Subsidies : Diesel subsidy is around Rs13 per liter, Kerosene is insane at Rs30 odd & LPG at Rs390. SO more the clamour to balance the budget and you can expect
- increase in diesel prices - which should be done but a mechanism should be evolved where govt does not make a windfall (due to tax structure) due to hike. Fid the taxes at absolute Rs rate rather than %
- Tax on Diesel vehicles - Pure insanity & kill the golden Goose. Already Auto industry is grappling with falling petrol vehicle sale. the consumption of Diesel by private vehicles is just 6-14%(various estimates) of total diesel consumption in India. hardly any impact on subsidies.
- LPG price rise - Till the time NDA govt came in 1999, India had only 310 Mln LPG connections and they gave out more than 320 mln in 6 yrs of their rule. with the current inflation ruining household budgets, more pain.
2. Value of Rupee : Well at the current account deficit level & economic climate with a Communist government at helm, you can very well kiss the global investor confidence good bye so no $ in and Rs statys at 53-56 level thus higher import bill and god help.
3. Lunacy of subsidies by soup alphabets : NREGA , Food security bill , NRHM , Fertiliser subsidy Minority welfare and the total bill runs into
- NREGA - Rs 40000 Cr
- FSB - Rs 140000 Cr
- NRHM - Rs17000 Cr
- Fertiliser subsidy - Rs 70000 Cr
Add Oil subsidies of Rs140000 Cr , it comes to frightening Rs 420000 Cr . Add the loan write off havoc & Power subsidies, it will cross Rs 500000 Cr, almost 50% of our entire budget and where does this leave the interest rate for the private sector if the govt mops up all the funds and then dumps it in subsidy . The leakage of this around 55%.
The story of NREGA is legendary now. For the Rs40000 allocated to it every year, Only Rs1500 odd crores were distributed as wages for to the rural poor while rest of money has gone into a blackhole. the arguement for starting the scheme was
1. To provide jobs for rural poor 100 days a year
2. Help create local assets - only assets created under this scheme are the SUV's of village pradhans (all CON men)
You can read rants of Jairam ramesh, rural development minister against the scheme.
http://indiatoday.intoday.in/story/nrega-unproductive-and-creates-no-assets-says-jairam/1/199002.html
Another nonsesne that needs to be kicked on the backside is the story floated of 'Policy paralysis'. The problem is not policy paralysis, Problem is wrong policies. There are policies being debated and implemented everyday i.e capital gains on old, RTE, FSB . However, the problem is they only give 2 choices..
1. Terrible
2. More terrible
So it again boils down to have consistency in economic policies, conceived & implemented with a long term vision. To begin with, We should refrain from putting any tax on diesel vehicles till the time we improve public transport.
I have given up even trying to slot the policies in 'Terrible' category. The whole government including the head of executive , Prime minister, inspires no confidence and talks about inane and archaic ideas of 1991. He forgets that we are in 2012 and lot of water has flown down the Thames or Rhine. That time, West was not going through such economic crisis and IMF & WB were willing & capable to lend money. FII/Corporations were waiting for India to open up. Today, they are bankrupt.
There only solution is to correct & erase profligacy & tighten our belt by cutting subsidies. Promote sensible policies, reduce budget, current account deficit. Most important have consistency & stop this vindictive attitude towards the industrialist and behaving like a Bulldog kicked in the balls (Vodafone tax case).
Stop this nonsense of NREGA, NHRM & bankrupting FSB. If you want to support poor anyhow then look at direct cash transfers.
Look at implementation of GST. Get the states to rally around by allowing them greater control on their finances. Out of 38 odd Cabinet ministers, CONgress has around 30.
These half brained NAC members along with former waitress as their boss will beggar this nation. More than anything, stop blaming Greece as everyone with an iota of brain knows that govt are lying and with the trajectory of growth, no need to wait for August. Answer is Q1 2012-13 numbers will only go downhill.
“It is not an exaggeration to state that the magnitude of the economic damage and mismanagement by the Congress party under Dr Singh’s watch will be embarrassing for even a student of introductory economics,” as Malik, Sr Columnist as Business standard wrote.
Manmohan off course is no PV Narsimha rao, inarguably one of the 2 best prime minister this country had along with Atal behari and we have none to blame but this Thug , scam a day govt to blame for not being able to realise our dream of lifting more & more poor out of poverty this decade.
As a Business Standard editorial notes, “Indeed, UPA-II’s policy activity is, in some ways, more worrying for the economy than its paralysis —for it reveals that this government does not understand the scale of what is needed, nor does it possess the follow-through required for good policy-making.”
With Insipid Manmohan & mentally bankrupt but politically ambitious & influential Pronob (Only Vimal) the country is going FUBAR .
Law & order would require another full day to think & write.
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