This is perhaps the most serious issue facing this country and the people, who should be the makers of their own destiny. The one after one steps declared by the Manmohan Singh Govt. could take the nation towards chaos and anarchy. The price-rise in diesel and domestic gas cylinders and yet another price rise in electricity charges will leave the common man gasping for life in this westernized Indian Union. Perhaps the Govt thinks that the people do not understand its sudden move to liberalize the Indian economy is actually a move to divert the attention of the people of this country from Coal gate scandal, directly implicating PM, Dr. Manmohan Singh. Such steps of utter important should have been taken after taking the opposition into confidence.
People of this country are perhaps largely unaware about the actual implications of the Foreign Direct Investments (FDI) in several sectors including that of retail, aviation & insurance. Such opening up will bring in foreign investors into India. With increased capital inflow, business could flourish. New employment may be generated. Employment means more income in the hands of the people. This will give them more buying power. Manufacturing units will be needed to increase their production due to increased demand, and subsequently more men power will be required to meet production schedule. Overall prosperity can be expected out of such FDI.
One of the other benefit, which this Govt is eying on, is, increased foreign currency pumped into the Indian economy. This fund will increase the demand for rupee in the international markets. Here the simple rule of demand & supply will work. Increased demand for Rupee will raise Rupee value and decrease the exchange rate in international financial markets. Subsequently due to cheaper dollar to Rupee ratio, imports will be cheaper. The main benefit of such move can result in reduced international oil import bill.
If the oil bill is controlled, Government thinks that it can lead to reduced inflation rate. If the inflation rate goes down, the Reserve Bank Of India can reduce the interest rates. This will make cost of finance cheaper and hence reduce cost of production, as the manufacturing sectors will get finance at cheaper rates. Hence a reverse cycle that of inflation could bring in cheers and joy for the people of this country.
Hence the idea of opposing FDI into Indian economy is not entirely prudent.
However, this type of situation can only exist in theory and in books. If the experts in Governments believe this could be the outcome of FDI in several sectors, they perhaps live in Utopian world.
While Mamta Banerjee in West Bengal, is against the FDI in retails sectors, others are in favour of it. But the common man does not understand the whole logic behind the FDI and opening up of the economy and selling the Government share in Public sector units.
They are perhaps taking FDI in retail sector to go against the retailers at the street corner shop of one's city. They argue that Govt is closing down one of the avenue for the people to earn employment. Such a small businessman will be left with no choice other than to seek employment with those big stores like Wal Mart.
One of the other benefit, which this Govt is eying on, is, increased foreign currency pumped into the Indian economy. This fund will increase the demand for rupee in the international markets. Here the simple rule of demand & supply will work. Increased demand for Rupee will raise Rupee value and decrease the exchange rate in international financial markets. Subsequently due to cheaper dollar to Rupee ratio, imports will be cheaper. The main benefit of such move can result in reduced international oil import bill.
If the oil bill is controlled, Government thinks that it can lead to reduced inflation rate. If the inflation rate goes down, the Reserve Bank Of India can reduce the interest rates. This will make cost of finance cheaper and hence reduce cost of production, as the manufacturing sectors will get finance at cheaper rates. Hence a reverse cycle that of inflation could bring in cheers and joy for the people of this country.
Hence the idea of opposing FDI into Indian economy is not entirely prudent.
However, this type of situation can only exist in theory and in books. If the experts in Governments believe this could be the outcome of FDI in several sectors, they perhaps live in Utopian world.
While Mamta Banerjee in West Bengal, is against the FDI in retails sectors, others are in favour of it. But the common man does not understand the whole logic behind the FDI and opening up of the economy and selling the Government share in Public sector units.
They are perhaps taking FDI in retail sector to go against the retailers at the street corner shop of one's city. They argue that Govt is closing down one of the avenue for the people to earn employment. Such a small businessman will be left with no choice other than to seek employment with those big stores like Wal Mart.
The Manmohan Government has one solution to all problems and that is to privatize everything that comes in the way of the economic development. His team has only one solution to kick start the economic development activity and that is FOREIGN CAPITAL INFLOW. Always this has been the primary button, pushed if the TEAM MANHOHAN SINGH finds itself in trouble.
It has been very well in public domain that the India shining was actually the best period in the history of the country and India did achieve something which could not have been imagined. But with the demise of the BJP Government and installation of Manmohan Singh Government at centre changed everything. The decade of development and economic boom perished into the recession due to corruption and absolute mismanagement.
The Congress Government always thought that the recession, which hit USA and Europe will come to India. In fact their actions never were to save the Indian economy from that chaos, but to push the Indian economy into recession. Finally Team Manmohan Singh did it, with supreme efforts under the very closely watched IMF bosses, Indian economy has prepared for a giant plunge into recession. During all these happenings, ine fails to understand whay Indian economy managers waited for the recession to come to India and hit us for no fault of ours. What kind of golbalization is this, where you are punished for no fault of yours and these bunch of idiots, including Manmohan Singh & Montek Singh Ahulwalia, who have no experience in handling village based economy. They are the manipulators appointed by IMF & WB.
As everybody is aware that whatever is happening is under the watchful eyes of IMF and WB, who encourage self-centered policies of capitalist policies, which obviously suits them and make their countries huge profit out of everything.
We have failed once again. We failed to check the drain of money from our hands to the hands of those capitalist countries who are very carefully managing the whole show. The idea is not that we do not need capital and we should oppose the change taking place at the policy at highest level of the country. But there are several parameters, which needs to be adhered to and followed to. The national interest has to be supreme.
The recession in USA and Europe was detected in around 2005-06, but India waited for another 4 years for it to come to India. This was policy bankruptcy of learned economists of this country. In fact the tragedy is that these economic experts were the people who were in power at that time. They should have learned from US & European economic disaster. We needed to learn why they have reached this particular flash point where the entire world economy is under severe threat. Instead of learning from their mistakes, we have been walking the same foot-steps. These so-called financial experts must be on the pay-roll of IMF & WB.
The only problem with these experts economists was that they had no connection with the culture and ground realities of Indian polity.They are absolutely unconnected to the reality and causes of the price rise.
Governing-wise they have failed the people and country. They have never ever thought about the simple and the most important facts of project price escalations. They have not considered the causes of why they should levy higher rates of taxes and look for different means and names for the taxes.
Liberalizing is not the ONLY step they should have thought for the revival of Indian Economy. There are several other steps and policy decisions which can elevate faltering Indian economy. Several years ago from this platform only I had suggested that the US Government will require to support the defaulting banks by deficit budgeting, which is called Federal support to bring the US economy to life. Europe has different problem and they have complicated it by floating Euro.
As everybody is aware that whatever is happening is under the watchful eyes of IMF and WB, who encourage self-centered policies of capitalist policies, which obviously suits them and make their countries huge profit out of everything.
We have failed once again. We failed to check the drain of money from our hands to the hands of those capitalist countries who are very carefully managing the whole show. The idea is not that we do not need capital and we should oppose the change taking place at the policy at highest level of the country. But there are several parameters, which needs to be adhered to and followed to. The national interest has to be supreme.
The recession in USA and Europe was detected in around 2005-06, but India waited for another 4 years for it to come to India. This was policy bankruptcy of learned economists of this country. In fact the tragedy is that these economic experts were the people who were in power at that time. They should have learned from US & European economic disaster. We needed to learn why they have reached this particular flash point where the entire world economy is under severe threat. Instead of learning from their mistakes, we have been walking the same foot-steps. These so-called financial experts must be on the pay-roll of IMF & WB.
The only problem with these experts economists was that they had no connection with the culture and ground realities of Indian polity.They are absolutely unconnected to the reality and causes of the price rise.
Governing-wise they have failed the people and country. They have never ever thought about the simple and the most important facts of project price escalations. They have not considered the causes of why they should levy higher rates of taxes and look for different means and names for the taxes.
Liberalizing is not the ONLY step they should have thought for the revival of Indian Economy. There are several other steps and policy decisions which can elevate faltering Indian economy. Several years ago from this platform only I had suggested that the US Government will require to support the defaulting banks by deficit budgeting, which is called Federal support to bring the US economy to life. Europe has different problem and they have complicated it by floating Euro.
But Indian problem is not that complicated yet. The government must listen to demands of farmers. Continue providing them important subsidies and exclude rich farmers, who are actually the entire political class doing business in agricultural farm products.
They should make the public infrastructure project delays as non-bailable offense. This will reduce cost of projects and hence surplus amount can be utilized in some other upcoming projects.
Instead of bringing in Wal Mart, they should try to form and encourage co-operatives, which can do wonders. The present government is not serious about the interests of farmers and subsequently common man. Amul, is the greatest example of farmers' cooperative movement spearheaded by Late Mr. Kurian.
We do not need Wal Mart. We need Govt. supported co-operatives. These co-operatives have done wonders, if handled by like of Mr. Kurian and not by Sharad Pawars. The FDIs will bring foreign managers to India, who will watch us working. They will ask us to be in discipline. Why you want to put your self in discipline in front of the foreign bosses, when we can decide to be disciplined, ourselves.
However, policy paralyzed UPA II government has made up its mind on importing policies of those world economies, which are themselves are in soup and IMF & WB must answer for their failure. Remember, it not only the Communism has failed, it is also the Capitalist ideology on gas.
Continued ........ Part 2
They should make the public infrastructure project delays as non-bailable offense. This will reduce cost of projects and hence surplus amount can be utilized in some other upcoming projects.
Instead of bringing in Wal Mart, they should try to form and encourage co-operatives, which can do wonders. The present government is not serious about the interests of farmers and subsequently common man. Amul, is the greatest example of farmers' cooperative movement spearheaded by Late Mr. Kurian.
We do not need Wal Mart. We need Govt. supported co-operatives. These co-operatives have done wonders, if handled by like of Mr. Kurian and not by Sharad Pawars. The FDIs will bring foreign managers to India, who will watch us working. They will ask us to be in discipline. Why you want to put your self in discipline in front of the foreign bosses, when we can decide to be disciplined, ourselves.
However, policy paralyzed UPA II government has made up its mind on importing policies of those world economies, which are themselves are in soup and IMF & WB must answer for their failure. Remember, it not only the Communism has failed, it is also the Capitalist ideology on gas.
Continued ........ Part 2
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