Dear CONgress intellectuals (I meant the St Stephens passed out Humanities groupies) I hope that you have some patience (not intellectual heft) of listening to Right wing nuts like me. I am doing my bit by shutting my brain from shrill cacophony you produce when we bring up the case of cutting down fuel subsidies. I have come to terms with your intellect or lack of it along with the buffoonery when you argue with gems like, "Lets talk emotions" or "Facts are misleading" but we still need to move ahead and find a solution to the mess that we find ourselves in thanks to a 5th pass waitress and a Sarkari Babu. As Mani Shankar Aiyyer would call, I went to a not so fancy X'tian college in DU and that with an Indian name - Kirori mal College & then Rajdhani. Those of you don't know 'Kirori mal' means 'One who owns Crores(Millions)'. You see I understand only Money and capital, No emotions.Coming to 'Babu' being dubbed as 'Underachiever' by Times, I have my strongest objection. To the least he has been an "Superachiever" given his intellectual capacity.
However, this article is not another one in a series of voices baffled at the skulduggery of UPA government and it's chief architect , Smt Sonia Gandhi. This is not to absolve Manmohan Singh of any wrongdoing to the nation state. This is an attempt to tackle the issues facing the nation, to begin with Current account deficit , now at alarming 4.2% or approximately $175+ bn.
Let us look at the chief culprits of this deficit..
1. Oil import - $80+ bn
2. Gold imports
3. Electronics & capital goods imports
Oil imports :
Frankly speaking, none has any solution worth giving and sense of helplessness is exhibited once you talk about ballooning oil import bill citing international prices. However , nobody talks that international prices are have gone down from the high of $108/ barrel to almost $92/barrel in an year. Now the question is why this price drop is not reflected on the streets of India.
a. Rupee has dropped some 23% against dollar in an year's time thus negating any positive impact on the prices that could have accrued to the end consumer.
b. Governments, state as well as central shamelessly continue to tax the petrol as per %age and not as some absolute rupee value. Whenever there is any price increment, govt earns a bonanza thus giving more subsidies to the vote banks.
c. Huge subsidies given to diesel (Rs13/ litre), kerosene (Rs30) and LPG(Rs300/cylinder) and where does major volumes of these three products land up?
Diesel: Majority is consumed by transportation sector at 37.9% approx, followed by agriculture sector at 18.8%, Buses consumer 6% of the total diesel, followed by the large Gensets run by the corporations to tackle chronic power shortage. The much maligned private diesel vehicles consume anything between 0.6% of the total. Such is the nature of the beast & ignorance on the part of media who keep on throwing Diesel consumption by SUV's as some Hydra headed monster. This is in sharp contrast to the Kirit Parikh Committee report that pegs the consumption by passenger cars at a staggering 15% of the total. Aren't you surprised that the subsidies given in the name of 'Helping the farmers' actually is a misnomer. 64% of the total diesel consumed thus lands up in the road transport sector, Taxis, MUVs, Buses, Trucks etc.
So what should you reform? Off course the road network. Delhi Alone looses 101312 liters of fuel per day due to idling at traffic junctions.
Remedy:
1. Target a speed of 55-60km/hr on national highways from current 35km & improve power situation by providing solutions to coal mess & rationalising tariffs to industry to keep them lower to the cost of running Gensets.
2. improve the density of 8 lane highways
3. Reduce the number of toll plazas and reduce waiting time
4. Redesign the urban traffic intersections and have a benchmark of number of vehicles crossing as threshold to put a flyover.
5. Saving approximately Rs 8000 -9000 Cr to the very least in subsidies. Put this damn money in highway construction & let other industries too flourish.
Kerosene :
Majority of this lands up in adulteration of petrol or sells in open market. Considering majority of kirana shops are owned by politically powerful and their cronies, there's no hope in hell to stop the leak.
Answer thus lies in direct cash transfers to the under privileged.
Having said that, there is only one way to reduce the import bill of future and that is to fellow at development model for the nation. It needs to be sustainable and not draining on the Economy & Ecology.
This American style development model driven by 'Personal automobile' is not the way forward for India. Is anyone thinking about future? We have 1/4th land and 4 times the population of America, thus giving a density of 16 times more than America. Our nation will become a giant parking lot if we go ahead with the current model.
Answer off course is not to ban the usage of private vehicles or tax them but to build public transport infrastructure . Build metros network in all 50 top cities in next 10 years. Improve railway network.
We forget that we essentially are a peninsular nation. Our 60% population can be reached by water far more effectively, thus leaving road, railway transportation for the heartland. Build the water grid.
Gold imports:
Historically we have been a Gold consuming nation for various reasons, primary being the metal seen as 'Safe investment'. How can the government wean off the populace from the lure of Gold and thus saving the foreign exchange in the process. We don't produce any gold and import almost 1000 tons per year.
Remedy: Make use of the gold holdings in private hands by pegging currency (Rupee) to Gold. We should stop looking at western models or reasons for not doing the same. They have limited good , maximum is with US (8000tns approx) and thus will land up limiting their money expansion.
We, on the other hand have 30000 tons in private hands. Need I say that even if we back 50% of Rupee with this, we can have $15tn M1+M2 & M3. Not only will rupee most stable currency but better suited to face the challenges of borrowings.
Secondly government must provide a stable policy environment, reform judiciary to settle Corporate governance issues with decisiveness. Strengthen the law to root out crony capitalism, greater protection of small shareholder interest and make example of corporate politico nexus by harsh punishments.
This will give confidence to citizens to invest more in the stock market, thus give capital to domestic industry to grow fast and thus wean them away from God import.
Alas Government as full of morons is doing exactly the opposite, taxing Gold. No long term vision, all short term.
The real reasons morons for investment in gold, is 'No Confidence' that Indians have for the government to manage the returns on hard earned money by providing legal protection for their risks against frauds.
Manage Inflation for people to wean away from Gold.
As for the 3rd component Of capital Goods imports(electronics):
We have no short term solution but look at greater transparency & involvement of Private sector in the defense industry to take advantage of 'Offset policy'. Lot of people don't realise that defense technologies have a huge impact on goods that come into civilian domain. Off course it helps create a High -Tech industry able to innovate . SEZ policy needs to be looked at from a very different angle. Subsidies be given for organizations involved n pure research and development rather than wasting on 'Body shops' like Infosys or Wipro along with TCS
Lets not waste a good crisis . Relook at solutions in a calm manner and stop knee jerk reactions. I have anyway no hope in Hell from the paid & economically illiterate media.
Sonea Madamji, MMS uncle, You are the bestest ekanamist, bestest PM & you raped the national economy better than Gulshan grover
Sonea Madamji, MMS uncle, You are the bestest ekanamist, bestest PM & you raped the national economy better than Gulshan grover
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