ECONOLITICS>>>>>>>>PART 2

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Continued....Part 2

        If the entire gamut of the events are checked and if they are tried to be understood, it can be summarized in the shortest possible terms as childish mismanagement of the country. The country is in the hands of those who are neither ready for the rule nor have basic inclination of serving the society and working for the people's welfare. Their first and the foremost task is to amass the wealth for themselves and their nears and dear ones, since they are not sure of coming back to power or hold the same post of power they are holding right now. The reason is obvious and they themselves know it very well.

                     The Indian National Congress as established under the vivid leaders, like Gandhiji, Nehru, Sardar Patel, Maulan Azaad and many leaders who dreamed Indian independence and these leaders always advocated the self-reliance. The Indian freedom struggle is side stepped now. The history if not repeating itself then at least we are watching the same events which led to slavery are developing slowly. Manmohan Singh will not be forgot and even forgiven for what he is doing to the economic fiber of this country. His Government is perhaps breaking everything which is built over years of hard work under socialism. The gem of Public Sector units are being sold of under the disguise of disinvestment.

A systematic ploy is developed by few, to grab these units at a cheaper prices than they are and the benefits goes to those traitors, who have the power to sell these units off at a cheaper prices to big corporate houses. The matter does not end there. These corporate houses are bigger cheaters, as they sell their stake into these once a public sector gems to some foreign corporates after slicing off their profits. So the big units made with the money of the government under the idea to help Indian masses, go into the foreign hands without much fuss about it. The bigger problem is that Indian common man looks at these unfolding of events helplessly. Because he has right to vote just for once every five years and those elected go merry for 5 years, without bothering about who voted for him and why was he entrusted to represent him in the Parliament.

The INC, which fought British capitalism is more than eager to bring the same big profit hungry, monsters from foreign countries. So the actual profit which should be of Indian will be siphoned off by these foreign corporates.

Under the FDI the same government is trying to bring these types of corporates.This is perhaps bigger cheating and bigger crime than even a mass murder carried out by Ajmal Kasab during Mumbai attack in November 2008.

Do we really need foreign investments? Do really need FDI ? Is the FDI the only way out of the need for Capital investments?

It is an open challenge to any economic expert from the government seeking to push for FDI for further economic development of the country.  Which can be put forward in utmost simple words that the capital can be generated locally with little foresight and national pride. The government can gain billions of rupees from its own people. the largest part of the savings which people used to make remains untapped.


Why interest on savings rates are so less?

If the government raises interest rates on the savings, people will be more than interested in saving their surplus money. These funds can be lend by banks to invested in huge infrastructure projects by genuine government agency, or even some reputed corporate houses, like L & T, Tata, etc., which works as the bridge between banks who have funds and the infrastructure projects executors which require liquidity.

One complete these projects will earn back the money they have borrowed from the Banks and Banks will give good return on the savings attracting more excess funds floating in the money market. Lowering of Cash Reserve Ratio will ease the liquidity crunch in the liquidity market, easing off the financial crisis faced by the corporate houses for starting new business ventures. The Reserve Bank, worried about the inflationary pressure due to increased liquidity supply in the money market can direct the Banks to more vigilant in the projects in which the banks are lending excess funds, received from increased savings and eased cash reserve ratio.

The UPA Government has set all national priorities wrong. People do not need car to travel as the standard of roads is too bad at the same time,  public transport is well placed, only needs some fine tuning here and there. Boosting car sale and related policies have adverse impact on the oil import bill. Finance Minister, P.C., needs to update his knowledge that when he thinks putting ban on import of gold, as it becomes a dead investment, why to allow so many car manufactures in the country, where we cannot afford to import petroleum products.

People now has access to more than one SIM card for their mobile phones and now they prefer multi-SIM card phones. But they find it hard to eat vegetables in their meals and fruits once a day. Electronics items like LED TVs are launched simultaneously with that the markets of South Korea and Japan and even USA, but do have the similar health facilities and social security facilities of these countries here in India? Opinions may differ but the point is are we really ready to be there when plenty of ground work remains to be done before reaching there!

Government is actually slowly taking its hands off you and me and the entire population. By bringing in FDI in retail sector, aviation sector and insurance sector at one go and selling its share in Public Sector Units, government is pulling its hand and leaving everything to market forces. It has done so in many sectors. Perhaps few of them required such an action but does the same pill can be useful in different deceases. This is bankruptcy of policy imaginations.  It thinks the market will decide everything in the free economic conditions. How it will do if billions of Rupees are siphoned off by the public servants, ministers. 

It is really interesting to understand that the inflation will come under control with the rise in foreign currency reserves and drop in dollar prices, due to FDI. As with Rupee will be in demand and dollar will be thrown to purchase Rupee to invest in local markets, could make dollar cheaper and consequently it may bring the oil bill down a bit besides other imports, but that can not be sustained in the long run. Any rise in prices in international markets can push oil prices up and negating the benefits of increased dollar supply and reduced cost of imports, mainly oil in the Indian market, pushing up inflation once again. 

This was the case when the investment was allowed through the participatory notes in Indian Share Market. Markets boomed, leading to high profit earned by the shareholders of many companies. They earned huge profit by selling their shares to Foreign Institutional Investors (FIIs). This profit was diverted into local estate market and brought one of the greatest ever boom in estate and construction industry. Those who entered the market and booked their profit by exiting after some time, earned huge profits. Who stayed there for longer were losers as the economic recession in USA and Europe required funds there, which were parked in India. 

What these so-called experts needs to understand is the basic needs of the farmers to satisfy and to help them increase their produce and not the market to sell their products. What will they sell if they have nothing to grow. Will the Walmart build dams, canals produce fertilizers at a price which is affordable?

There are many questions and lesser answers. The economic reforms in India have failed and for past 22 years people of India has not experienced any improvement in their life. Never expect to improve either, as whenever WB, IMF and are involved in economic recovery, people suffer and rich becomes richer. IT IS THEIR BASIC FORM OF REFORMS EVERY WHERE IN THE WORLD. EVERYBODY EXCEPT P.M. MANMOHAN SINGH, F.M. P. CHIDAMBARAM, P.C. CHIEF MONTEKSINGH, KNOW THIS FACT.