INDIAN GROWTH STORY: THE WAY AHEAD ---- PART II

After having taken care of all fakes and duplicates in the population nos., voter list, list of all kind of state and central beneficiaries, property, gold and other asset holders, tax payers and tax evaders, the nation should look towards a remedy to the following governance issues.

• Discretion: Discretion is the biggest strength of governance if utilized with honesty and sincerity. But as the Indian system has been taken over by Corruption Empowered Cabal , ( the lick my boot/ scratch my back variety ) and where discretion is either used to extract money from all helpless and compelled citizenry or incur favours on one's cronies, stooges, relatives, masters and fellow travellers. It is time that Indian governance chooses to live without this word till such time we understand the real meaning of honesty, sincerity and character.
• Reinforcement of Corruption Control Machinery of States: The Indian states combined together have control over a yearly budget which is at least 1.5 times the Central budget. But sadly the central government can talk of CBI and ED originally set up to investigate bribery and governmental corruption ( Its efficacy and intent has always been in question in our corruption mired society ). As far as the states are concerned, they are the hot beds of corruption and a safe and sound source of illegal earning for polity of all hues and colours and the saddest part is that they are never in the eye of the storm in this great nation of Honest Politicians, Super Honest Intelligentsia, Beyond Doubt Journalists and Media. Hope we soon have somebody to plug the backside of this golden egg laying hen.
• Reinforcement of  Law Enforcing, Investigating Agencies and Judiciary: India Spends Only 0.08% Of GDP On Judiciary, Crippling Reforms. As of 2018, the judicial system was functioning with a lower than sanctioned number of judges, the report stated. While judicial vacancies against sanctioned posts stood at 23.25% at all tiers, the report pointed out that in 2016-17, high courts had a judge vacancy of 42% and subordinate courts of 23%.Police vacancies run at about 22% of sanctioned numbers, according to the Bureau of Police Research and Development (BPR&D) report published in January 2017. The most acute vacancies were reported in Uttar Pradesh--at 53% for the constabulary and 63% for officers (2017). Similarly, nearly one-third of all prison posts remain unfilled across the country. Uttarakhand and Jharkhand had the most poorly staffed jails. Uttarakhand, for instance, recorded the highest vacancies among cadre staff, at 72% (2016). As of 2019, only 79% of the district legal service authorities had full-time secretaries to manage the delivery of legal-aid.             These poor numbers are not a sheer coincidence but are a direct result of birth and rise of the corruption empowered cabal . An increase of Rs 85,000 Crore out of a total combined budget of  67 lakh Crore ( Both Centre and States ) is not going to play havoc with the Indian economy but it will be a big asset in controlling corruption and black money, increasing the happiness quotient of general masses. Of course it will be like striking lightening on all members of corruption empowered cabal.
• Human Resource Development: The role of human resource development : the next  gen growth engine has been talked about extensively during the last two decades. Respective governments have been boasting of the great work done in the field of education and human resource development. But what is the reality. Indian Reality is that we have a Rudderless Education system.                                                                                                                                                   Our education system produces about 3 million graduates ( B.A.'s ) , about 1 million technical graduates, 0.18 million MBA's, 0.27 million polytechnic diplomas and 0.75 million ITI's. Out of all these so called educated and qualified class about 80% are simply unemployable. Instead of contributing towards India's progress, they are just a drain on the system as a lot of government money is spent on these colleges and institutes. These people invariably find jobs in the government sector wherein utter discretion is used in the name of  'Interview' and a lot of money changes hands in the form of bribe.                                                                                                                                                In the Skilled manpower segment which is the essence of progress of productivity of a country the situation is all the more worse. Firstly the quality and standard of skilled labour and supervisors is simply not up to the mark. Secondly we have a very distorted pyramid structure when technical manpower is in question. Imagine for 1 million engineering graduate pass outs per annum, we produce only 0.27 million diploma holders and 0.75 million ITI's. On the top of it we have about 200 million unskilled workers who just have two hands as their competence. There is an urgent need to convert these hands into Semi Skilled ones or Blue Collar Manpower  which includes Plumbers, Masons, Carpenters, Electricians, Drivers and workers in leather, jewellery and textile industry to name only a few. It is only in India that in these categories we have only 2% of manpower with any formal vocational training. In Industrially advanced countries more than 90% workers have proper vocational training which helps increasing the productivity and quality of produce and earnings of the individual.                                                                        This is for white collar and blue collar manpower. The concept of pink collar manpower is yet to take off. This is a very specialised cadre and the about 30% of manpower has to be absorbed in nursing, secretarial practices, beauticians and all kinds of  service industry.          Needless to say that we as a nation have to create ways and means to wean people away from villages and agriculture,  to have more and more people in the tax net as also in the organised sector.

The need of the hour is to have somebody who could say with Charles de Gaulle, "In politics it is necessary either to betray one's country or the electorate. I prefer to betray the electorate". It is a pity that political masters of India betray both, the country as well as electorate just to be in power by all kind of foul means. How one wishes that Indian polity too has some statesmen in its ranks, for 
Statesmen think of next generation and create opportunities, Leaders Seize opportunities that come their way, while Politicians think of next elections and fritter away these opportunities and dirty politicians who are the core of Indian polity simply mess up everything and this is what separates wise men from men, men from boys and boys from impudent louts in the realm of changing fate of a nation.

INDIAN GROWTH STORY: THE WAY AHEAD ---- PART I

The first two decades of independent India should have given the country a sound agricultural footing, the basic infrastructure, a pool of scientific, technical and managerial personnel, a fairly good human resource of blue, white and pink collared workers and adequate financial resources. India was doing reasonably well on all counts up to about 1967 but then we were stuck by the malaise called corruption empowered cabal . Theoretically, every Tom, Dick and Harry of Indian polity and intelligentsia would describe the next gen growth engines of Indian Economy, namely, Infrastructure and Human Resource Development - Next Gen Growth Engines Of Indian Economy, Indian Energy Security - the next gen growth engine, Corruption Mitigation and Good Governance - The Biggest Growth Engines for Indian Economy .But  THE BIRTH AND RISE OF CORRUPTION EMPOWERED CABAL was so fast and overwhelming that the minuscule number of honest and uncompromising individuals of India want to forget these four decades as a bad dream.

During this period, one prime minister remarked that corruption was a universal phenomenon and India and Indians should learn to live with this. Another prime minister remarked that out of 1 Rupee given as a welfare measure by the government only 15 paise reaches the beneficiary. Needless to emphasize that the rest is gobbled by this cabal.Many of this cabal will point out the increase in GDP and per capita income during this period but will not tell you that India could have been more than a conservative 10 trillion Dollar economy instead of 1 or 1.5 trillion.

We have lost about 10 years of the great opportunity window that came our way in the form of energy security disruption and disruption in vehicle industry coupled with the great demographic dividend we possess today, to become prosperous. What ever is gone is gone. We still have 2/3 rd of the opportunity window available to make amends.  Ideally no nation  should ever forget the following lines which are passed down the line generation after generation in the text books of wisdom.

Good Economics and Good Governance is Ideal; 

Bad Economics and Good Governance is A Compromise;

 

Bad Economics and Bad Governance is A Disaster; 

Good politics, bad economics and bad governance is A Catastrophe.

We as a nation have to strive to raise ourselves from the level of Good politics, bad economics and bad governance to the level of Good Economics and Good Governance. With Aadhaar and computerization nothing is impossible in the realm of corruption mitigation and good governance, if the national will is there. 

• Start with the Census of India. Ensure no duplicates, no fakes.
• No fakes and duplicates in the population of India and its citizens.
• No fakes and duplicates in voter lists - Aadhaar linked
• No fakes and duplicates in PAN Cards -  Aadhaar linked
• No fakes and duplicates in Bank Accounts - Aadhaar linked
• No fakes and duplicates in ration card holders - Aadhaar linked
• No fakes and duplicates in other doles and subsidies - Aadhaar linked
• Linking of all real estate with Aadhaar in case of individual property owners 
• Linking of all real estate with some unique no  in case property owned by non individual
• Linking of all other Asset Classes like gold, equities with Aadhaar 

The corruption empowered cabal entrenched in polity of all hues, bureaucracy, judiciary, media, businesses, self employed persons and the so called intelligentsia is sparing no effort in delaying the process of computerization and linking of Aadhaar to all Indian human beings, all subsidies and payments  these guys receive from all government and non government entities, all their assets movable and immovable etc., etc.. Privacy and no other objection to these measures should come in the way because nation has the right to know whether any list contains fake, duplicate or names of dead persons. And it is the prime responsibility of all organs of the government i.e. legislature, bureaucracy and judiciary to curb and mitigate all practices that are contributor to theft and evasion of taxes, corruption/bribery, black money generation.

GOOD ECONOMICS AND GOOD GOVERNANCE MUST FOR POVERTY BANISHMENT IN INDIA

A country like India which is striving hard to address the basic needs and necessities of its impoverished billion plus cannot draw solace from an economy growing at 5 % but needs to have an economic growth galloping at 12-15% for a few decades so that the present generation which was born poor does not grow old with the tag of poverty hung around its neck. Let it be clear to one and all that it is growth and growth alone which can bring prosperity to a nation. Any amount of gimmicks of redistribution of national wealth and measures leading to eternal consumption of national wealth will not yield favorable results.
India and its planners must not overlook the magic of compounding as shown below:

Growth Rate %                      Period in years                   Projected GDP
         5                                      20                                       2.65 times
        10                                     20                                       6.73 times
        12                                     20                                       9.65 times
        15                                     20                                     16.34 times

This only demonstrates what the country, its polity and policy makers can achieve for its impoverished billion plus.Such achievements have been made by Germany and Japan during the period 1960-80 and more recently by China 1990-2010 and there is no reason why India cannot do it. The only requirement is that these guys have to say good bye to their baser instincts and dwell whole heartedly on good economics and good governance. Ideally they should never forget the following lines which are passed down the line generation after generation in the text books of wisdom.

Good Economics and Good Governance is Ideal;
Bad Economics and Good Governance is A Compromise;
Bad Economics and Bad Governance is A Disaster;
Good politics, bad economics and bad governance is a catastrophe.

FIVE DEFICITS : THE BANE OF INDIAN ECONOMY AND GROWTH STORY

The potential of Indian growth story and chance of India to become a global economic superpower has been a hot topic with the economists and analysts all over this globe. The forty year opportunity window is at India's doorsteps just waiting to be grabbed for fulfilling the dreams and aspirations of 1 billion plus Indians. This great opportunity window exists simply on the back of huge demographic advantage of cheap skilled manpower both in the technical and managerial cadres and the world economies looking for new economic order in the face of diminishing old order energy resources and global warming associated with them.

The demographic advantage of today will become a major disadvantage after a few decades when the bulk of the population becomes old. After all no sanity can deny the fact that ultimately for about 35-40 years of productive life, the same individual is going to be a burden on the national resources for next 25-30 years. The number of aged individuals and non productive years of these aged individuals will keep on increasing as a nation marches on road to prosperity. The problems of developed and industrialized economies mainly emanated from this crude reality of life. Whereas these countries fully utilized the opportunity window that came their way and grew old after becoming rich, it looks quite likely that India may grow old before becoming rich and prosperous unless and until some wisdom prevails on Indian polity and they start addressing the five deficits, the bane of Indian economy and growth story at the earliest in a sincere and earnest manner. If the polity keeps harping on their  vote bank politics with subsidies, doles and freebies  for another decade or so, India would have missed this golden opportunity and all because the nation could not produce leaders who could keep their baser instincts of lust for power and money away while serving/governing the nation.
No doubt India has complete wherewith all to make use of this god sent opportunity to erase poverty, become prosperous and be an economic superpower. But till such time the challenges before India, the potential economic superpower of 21st century are dealt with in an effective manner, nothing worthwhile is going to be achieved. Intelligentsia from all spheres like politics, economics technology etc. talks about the growth drivers of next generation, namely, the corruption mitigation and good governance, infrastructure and human resource development and Energy security but precious little has been done or achieved in any of them during the last decade or so. The following deficits are the biggest impediments to the growth of Indian economy.

• CURRENT ACCOUNT DEFICIT :
• FISCAL DEFICIT
• COMMONSENSE DEFICIT
• GOVERNANCE & POLICY DEFICIT
• TRUST DEFICIT

The first two deficits namely the current account deficit and fiscal deficit are the sole measures of economic health of a nation. Let nobody forget that they are the manifestations of the governance and policy deficit, trust deficit and commonsense deficit which has engulfed Indian rulers. No amount of patchwork solutions through monetary policy and (Reserve Bank of India) RBI actions can provide lasting solutions and are in fact disastrous in the long run as seen in the case of trying to fight inflation through monetary policy. At best these actions can give the rulers some breathing time.

Commonsense Deficit is a crucial factor in marring the destiny of a nation and it has been proved time and again that redistribution of national wealth is not the answer to poverty among the masses of India. As no army can be effective and efficient with a low  tooth ( combat soldiers ) to tail ( support and supply manpower ) ratio, no economy can grow and prosper with a low productive to consumption fund ratio. The polity has to learn to control their baser instincts of vote bank politics and bring in austerity in spending on all subsidies, doles, freebies and government expenditure. The policies and directions of government spending have to concentrate on the force multiplier principle of compounding to reap the benefits for positive gains and not allow it to work for the detriment of economy. Oil pricing policies are a typical case in point. The Indian government decided not to increase the prices of petrol,diesel,cooking gas and kerosene for a very long period just to keep the vote banks happy, even though the international prices were soaring and the rupee was weakening at a fast pace.They even forgot that oil economics could be a thorn in Indian growth story and the resulting impact on fiscal deficit, current account deficit and the national economy is there for all to see. Similarly, the recent food security bill with constant prices to the beneficiary will make the exchequer poorer by Rs 15000 crores every year at an inflation of 10% and will have value reductive effect on the economy.

Governance and Policy Deficit: The Indian government has all these years harping upon the fact that compulsions of coalition government and global economies not being in good shape were responsible for bad state of economy, whereas the basic fact is that the country suffered badly as a result of governance and policy deficit prevailing in the country.It is sad that decisions that were supposed to be good for the country in the eyes of ruling polity were also kept pending  to realize there full impact on the vote bank politics during the ensuing elections in 2014. Now all of a sudden, after destroying the economy for a number of years, lot many legislations and policy measures are seeing the light of the day, the compulsions of coalition politics and tottering global economies not withstanding. In fact during the last month alone projects worth approximately 4.00 lakh crores in infrastructure sector alone have been cleared simply demonstrating 'where there is a will, there is a way'.
Trust Deficit: The biggest negative for the government of the day is the syndrome of trust deficit it has acquired by its actions, deeds and a non coherent approach so much so that the various state governments have no faith its intentions. No body seems to be willing to invest in India, be it the Indian or foreign entrepreneurs/investors. The government seems to be majorly banking on (Foreign Direct Investment) FDI and (Foreign Institutional Investors) FII's for all its economic woes including CAD and propping up economy but the naked truth about FDI is something not very comforting because of huge trust deficit it has built for itself over the years. 

AND NOW GAS AT 8.4 $/ mmBTU - WHAT FOR????

And now the gas at 8.4$/mmBTU. The Indian government bites the bullet on gas pricing, so go the headlines in Indian press. What for and to whose advantage? The gullible, ploy-able intelligentsia with unabashed commitment to anything  pro establishment has not even bothered to look into the nitty - gritty of the policy pronouncement before singing praises of the action of raising the gas price to nearly double the present day price.This only means that the subsidies to power and fertilizer plants as also to cooking gas sector will have to go up substantially and the public sector companies provide for these subsidies. The end result of this exercise for public sector companies which hold majority of gas reserves of the country is going to be diluted drastically.It is only the private sector companies who are going to hog fully the benefits of this windfall.

The nation was once again fed on the often repeated talk about country's need for energy giving fossil fuels like gas, coal etc to fulfill its huge requirements of power generation to give impetus to its sagging growth rates.What is surprising is that the solutions to increasing production of coal and gas has been diametrically opposed to each other. In case of boosting of coal production and power generation subsequently it was suggested that coal allocations should be done almost free of charge to provide incentives to enhance coal production and produce cheap power for rapid industrialization of the nation. And now for increasing gas production, the decision is to double the cost of gas while the aims are the same i.e. quick additions to gas capacity and providing cheap power for rapid industrialization. Now we are being told that higher cost realizations by the vendors will be value additive to the government exchequer. Could any of these buffoons in Khadi belonging to the ruling polity make the nation wiser as to how a similar action in coal allocation could have been value depletive to the exchequer.

Why such a bright game changing idea was kept on hold for all these years and has been brought in just before the elections. Equally surprising is the fact that this long term measure to boost the investor confidence and alluring multinational companies to make investments into this sector of prime importance with an open and coherent pricing policy is valid only for five years and again has to be reviewed before the next elections.

For what? Your guess is as good as mine. and again what a game changer!!! These wise men with all their theories and thinking expect that exploration to exploitation to value addition will all fructify in a span of five long years both for the investor and the nation and an investor who spends his own money will bite the bullet on their face value.Heard from many of them that they are finding it difficult to convince the investors to flock to India and participate in the Indian growth story. Yes the investor who has to pump in his own hard earned money is not convinced about the sincerity and long term vision and coherence of Indian policies. The Indian polity is capable of sacrificing everything at the altar of vote politics and self.

CHALLENGES BEFORE INDIA , THE POTENTIAL ECONOMIC SUPERPOWER OF THE 21st CENTURY

Twenty first century belongs to Asia and India is potentially one of strongest contender for emerging as an economic superpower. This opportunity window is there for the asking but will it happen or not is the question, the entire Indian citizenry is holding its breath for. Happening of this miracle depends totally on the wisdom, vision, far sight and honesty of purpose of the Indian leadership. There is no doubt about the wisdom of the men at the top but sadly majority of their actions are guided by their baser instincts like lust for gaining power and sticking to it by fair means or foul. This more often than not results in their actions leading simply to vote catching rhetoric in stead of furthering the cause of India's march to prosperity and status of economic superpower.

The economic superpowers/giants of today are at that position not by a stroke of luck but because of the ability of their leaders to guide the destiny of those nations in the right manner.Mind you at the turn of the 20th century these countries were economically perhaps worse off than where India is today. This does not imply that it should take India something like five or six decades to realize this potential of economic superpower. As a matter of fact, India should be galloping on the road to prosperity  because it does not have to tread on the same beaten path of science,engineering and technology evolution unless and until it is foolish enough to experience reinventing of wheel all by itself.

There is many a slip between the cup and the lip. There are many pitfalls on the road to becoming an economic giant. India must learn from the experience of others and try to nip these pitfalls at the earliest. The challenges that need to be looked into and  overcome for realizing what is there for the asking.

• The first and foremost is curbing the menace of corruption and black money. In fact it is corruption and corruption alone which is blowing away Indian dream of getting prosperous.  The country must understand that corruption and black money is the biggest drag on its economy and is eating into all the good work being attempted by governments in a very big way. There cannot be a substitute for corruption mitigation and good governance - the biggest growth engines for Indian economy.
• The present economic downturn and melt down in global economy is a result of overdoing of social welfare by those countries and if they could not sustain with excesses of social welfare schemes  there is no way the Indian economy in its very infancy can pull off this miracle. In fact social welfare schemes have been the bane of many advanced economies of the world and these include allowances to jobless, pensionary benefits, health insurance etc. to name a few. There is no doubt that these are a must for any concerned government but all these benefits must be granted in a manner that they are self sustaining and in no case, at any point of time be a drag on the economy. India must learn from the horrid experiences of the western world and imbibe remedial measures to keep its date with the status of an economic superpower of 21st century.
• Reigning in population growth should be the topmost agenda of all Indian governments. In late fifties and early sixties of last century, everyone  was engrossed in the debate ' Is India Overpopulated ' and invariably one would come to the conclusion that India was certainly not overpopulated in the true economic sense as the land/mineral resources could certainly more than suffice for a population density of about 270 persons per sq. mile. Can we say the same with the present population density of about 750/ sq. mile. India is definitely on the verge of getting overpopulated if not already overpopulated. Today we talk of the demographic dividend but after a couple of decades this dividend is going to become a curse with more and more persons joining the ranks of pensioners and enjoying these benefits for very long periods because of increasing life expectancy as a result of good medical care and facilities provided by the Indian government. While the western world grew old after becoming rich, there is every likelihood that India will grow old before getting rich if the long term impacts of population numbers and demography are not taken care of now.
• Proper and out of the box management of water resources of India. comprising of perennial rivers, plenty of rainfall and underground water table. All civilizations and all prosperous geographies on our globe owe their very existence to the abundance of available water resource in their areas. Though India has been gifted by nature with a huge and well distributed water resource comprising of perennial rivers, plenty of rainfall and underground water table but the nation has not bothered to maintain it properly. This is amply seen in the snowline moving higher and higher and the groundwater table going deeper and deeper. This being a direct result of shoddy policies of the government emanating from quest for energy security through use of fossil fuels, deforestation because of pressures of growth in population and failure to harness any substantial amount of river water, in fact a major portion of this water is allowed to go to sea.
• Infrastructure is the core of all economic growth and index of a common man's comfort and conveniences and its importance is very well understood by the planners and economists. But simply raising the rhetoric is not enough. The nation is eagerly looking forward to some concrete action which is getting sacrificed at the altar of good governance. In fact India is plagued by bad governance in road and infrastructure sector.
• Energy security : If infrastructure is the core, energy security is the mother of all economic growth and much to the chagrin of all well meaning citizens of India is not only prey to bad governance but the path taken by the rulers and planners is directionless and not in sync with the futuristic realities of energy security scene all over the globe. India must draw strength from the fact that the oil rich countries have simply transformed their economies by getting the best out of their abundantly available energy source i.e. oil. Luckily for India, it has abundant solar, wind and hydro resources and in fact  many times more than the country's likely requirements by the turn of the century. The thrust in researches and technology development should logically come from India whose needs during the next decade or two for additional power are may be 5 times its present power production. With the pluses of resource availability, massive demand and almost nothing to loose because of obsolescence of high value investments in research, technology and manufacturing infrastructure for any other power production mode, India must seize this opportunity which can be the biggest catalyst in India's march to the status of a global superpower.
• All human beings are inherently wedded to the philosophy of getting short term gains, the gains that bring reward to the person in quickest possible time. The short term solution or patchwork may appear to be lucrative for the run of the mill polity but the long term fixes are a must for India, the potential superpower of the 21st century. Statesmen think of next generation and create opportunities, Leaders Seize opportunities that come their way, while Politicians think of next elections and fritter away these opportunities and dirty politicians simply mess up everything and this is what separates wise men from men, men from boys and boys from impudent louts in the realm of changing fate of a nation.

INDIAN BUDGET 2013 : WHAT COUNTRY NEEDS ??

Annual budget is a yearly exercise of the government to take stock of the financial activity of the government for the year gone by and present what the nation should expect in the coming year. All these years it had been more or less an administrative effort in accountancy without any coherent and rationalized approach to the future of the country and its citizenry. It has always been  an exercise of reducing and increasing some taxes or in other words a simple balancing of collections and expenditure. The directions will depend upon the whims and fancies of the government, the urge to please one sector of industry or the other or the necessity to fool common man for his only asset 'the vote'.

The country in general and the common man in particular has waited patiently for umpteen number of years for some magic to happen because of the so called all sincere efforts of the rulers of the country but alas we are neither moving towards the status of a global superpower nor towards the often repeated slogan of poverty alleviation. At best India's journey all these years can be described as a journey towards some degree of industrialization, that too in patches and in fits and starts which has failed to impact the lives of the poor in any significant manner. In fact it appears that the economy is simply directionless as far as Indian chance of becoming a global superpower is concerned. India has all the where with all in terms of all natural resources including a huge human resource, managerial, technical, skilled and unskilled with favourable demographic mix coupled with a fairly large economy. Still if India fails to get its rightful place in the next decade or two, it will be because of the absence/lack of wisdom, vision, far sight and statesmanship in the polity.

The country's economy is in a spin and is riddled with the problem of high inflation and dwindling GDP growth rates accompanied with continuous rupee devaluation vis a vis other currencies. Everyday one hears about the wish list of expectations of various groups from Indian budget 2013. The stock market guys want some measures to improve the feel good factor, different industry sectors want sops and concessions to their own sectors, the middle class expects some concessions in direct taxes and fuels, while a vast majority of Indian polity which survives and thrives only on its ability to dole out freebies, subsidies and sops to the poor have nots out of the public exchequer is gunning for this vote catching rhetoric. There are no quick fixes to  the problem of high inflation, rupee devaluation and slowing down of growth. In a scenario where the economy needs solution to the problems of high inflation, current account and fiscal deficits:  

• The first and fore most concern of the finance minister ought to be bringing down inflation considerably as a matter of fact much below the so called tolerable limit of the economists of the country. By now the ineffectiveness of monetary actions of the Reserve Bank of India (RBI) and the huge slowing down of economic growth rate thereof should set the polity thinking on an integrated approach to  ECONOMICS, GOVERNANCE AND INFLATION IN INDIA
• Current Account deficit should be the next priority of the government and a temporary fix might be achieved somehow or the other but a long term and  permanent solution will emerge only when a solution to the thorn of oil economics in the Indian growth story  along with reducing gold imports which thrive on the black money availability, is found out.
• Topmost priority to the next gen growth engines, like

1. Corruption Mitigation and Good Governance - The Biggest Growth Engines for Indian Economy:  Whole of India is aware of the corruption and the resulting black money. In fact if by any sincere means the government can mitigate it and bring back major amount of parallel economy to the mainstream economy, the Indian growth story can be hastened up tremendously along with wiping out the demon of fiscal deficit.

2. Infrastructure and Human Resource Development: Next Gen Growth Engines of Indian Economy : The right mix of rail, road and waterways for transportation of men and material has a multifaceted beneficial effect on the economy in terms of job creation, increasing demand of steel and cement, efficient, low cost and timely movement of industrial goods and agricultural produce, and above all cutting down of oil and fuel costs. Priorities in human resource development to increase the earning capacity of an individual alongwith increase in productivity will go a long way in poverty alleviation and growth rate sustainability.

3. Indian Energy security - the next gen growth engine : Nothing can be achieved with shortage of electricity in the growth story of the country and the aim of providing a comfortable and meaningful life to a common man.

REFORMS IN INDIA ONLY SCRATCHING THE TIP OF THE ICEBERG Of GROWTH POTENTIAL

Of late government of India has initiated some reforms like the Foreign Direct Investment (FDI) in retail, insurance and pension along with a small attack on the subsidy bill which are likely to have positive effect on the fiscal health of the country. No doubt the country needs funds to control high current account deficit and investments by way of FDI and Foreign Institution investments (FII) which results in perking up Indian rupee visa a vis dollar. Rupee has appreciated about 8% as a result and this will reduce country's oil import bill by the same amount. The feel good factor about the Indian economy brought about by this and likely to be strengthened further through continuing of the reform process only can at best help in changing the course of GDP growth trajectory but cannot take it to the highs of a good double digit growth which is there for the asking in the light of global turmoil and the opportunity window that has come India's way because of low cost skilled manpower, right demography and a huge insatiable internal market.
The next gen drivers of  Indian economy i.e. infrastructure and human resource development, corruption mitigation and good governance, and Indian energy security have been actually left unattended and unaddressed. It is hard to understand the logic and wisdom of trying to develop India through service industry alone rather than through the hard core manufacturing and industrialization approach. No country on this globe has achieved prosperity through this route, least of all a country of the size and population density of 650 per square kilometer.Though a meaningful reform process is needed in all the sectors mentioned above, the following need attention on topmost priority basis if the intentions of the government are to make a sincere whole hearted effort to make India a prosperous country and catapult it to the status of an economic superpower in the foreseeable future.

• Corruption mitigation and bringing out black money whether stashed in banks abroad or packed in gunny bags and lockers in the country itself or invested in real estate or other asset classes  or businesses generating and thriving on black money is the first and foremost reform that is needed in the country. A concerted effort on a war footing in administrative, judicial and legislative reforms/measures  to achieve this goal is required. This can come through only when " Loyalty to the nation is the motto" rather than loyalty to the chair or party as is professed in power corridors now a days.
• Austerity in all government spending and cutting down all infructuous expenditures.
• Rationalization of subsidies (already existing and likely to be provided in the near future) and defining a clear road map for doing away with them. No doubt subsidies are a must in a poor country with a large population living below subsistence level but the country cannot afford to have them for eternity and it is the responsibility of the government to come out out with ways and means so that the number of beneficiaries decreases by at least 10 % each year. Subsidy in no case can be an open ended scheme. Simultaneously it is the responsibility of the government to see that there is no pilferage/ theft of subsidized goods and subsidy going into undeserving hands.
• Doing away with all discretionary powers vested with executive and legislative executive particularly for doling out favours of real estate, promotions and postings, post retirement jobs/extensions which are generally used for obtaining favourable decisions/rulings by who's who of the power corridors. After all there is no dearth of talent and experience in this country and people remain in the power corridors by virtue of their manipulative skills and ability to fit in the jig saw puzzle of the government.

INDIAN OIL ECONOMICS : IS IT THE ETERNAL BANE OF INDIAN ECONOMY AND INDIAN GROWTH STORY

In a country like India which relies mainly on the oil imports for meeting its needs, all aspects of oil economy should find the topmost concern and priority in country's policies, governance.India is heavily dependent on the imports of oil, in fact 80% of the country's demand is met through imports.The oil demand and requirement is  likely to grow many fold in the light of likely prosperity that will ensue with the passage of time and unless and until the government clears the mess of oil economics through radical policy changes, transparent oil pricing mechanisms and pin pointed governance. The road infrastructure must be improved for its quality, quantity and conformance to international traffic engineering principles at all levels starting with national and state level highways, urban road infrastructure and rural roads.In fact all infrastructure is the key to Indian growth story and the road sector with more than 50% weightage in infrastructure is the all important next gen growth engine of Indian Economy directly through employment and construction activity, logistic support etc. and indirectly through massive savings on oil requirements.

Oil Economy: Pricing and distortions
The Excise, VAT and other taxation accruals from the oil sector are of the order of Rs 2,35000 cr whereas the subsidy burden is to the tune of 1,85000 cr. Through the subsidy or doles to the oil companies to cater for their under recoveries, these companies manage hefty profits a major portion of which accrues to the government in the form of dividend. ( in fact government received Rs 20000 cr as dividend from these companies in the last two years ). No doubt the Indian oil economics over the years has been the goose that lays golden eggs for the government kitty, it is likely to become an eternal bane of Indian economy and Indian growth story in the light of finite nature of oil availability on our planet, the ever increasing requirements of mankind and the awareness amongst the oil producers to milk their limited resources to the maximum.
While the government can neither afford to lose its oil revenues nor pass on even partial burden to the public at large because of compulsions of dirty coalition politics and requirements of vote politics.But it surely can resort to minimizing the effects of oil economy on Indian growth story through following time tested steps guided by reductions in imports and decreasing subsidy burden to control both current account deficit and fiscal deficit.

• Cutting down Oil wastages and needless subsidies

1. Toll barriers and slow speeds : Delays at toll cost Rs 87,000 crore every year as per the survey to be released by road ministry out of which the fuel loss is a hefty Rs 60000 crores with an additional subsidy burden of about Rs 20000 crores.
2. The subsidy cost of pilferage, theft and kerosene consumption by other than the target group is of the order of  Rs 25000 crores.
3. The LPG earmarked for domestic use finds its way to all kind of commercial activity leading to a gross subsidy of Rs 50000 cr.
4.  Out of the total diesel subsidy of Rs 1.05 lakh crore, the goods vehicles account for 37.9% and agriculture sector accounts for 18.8% which is desirable. The rest consumed by taxis, cars, other private vehicles, three wheelers, power, industry, railways, defence and others should not have access to subsidised diesel. A saving of about Rs 45000 cr can be easily achieved without any major effect on inflation.                        

• Use of Biofuel Blends

A 10% blend which is used by countries like Brazil will result in a 10% decrease in oil import bill and  subsidy bill.

• Urban Transportation Infrastructure and System   

Topmost priority for an effective, efficient, fast, reliable and comfortable mass transportation system for all urban conglomerates with a population of 0.5 million and above rather than individual's own vehicle based model. The high efficiency and low cost of travel coupled with de-congestion of roads can result in massive savings in both, the oil imports and subsidies.

In fact it is time that the rulers and planners of the country understand the implications and full impact of oil economics on Indian economy, for otherwise they can neither attain the high growth trajectory being aimed at nor give a meaningful push to their social welfare programmes. Indian economy and Indian growth story will always be at the mercy of global factors and manipulations as is being witnessed presently. No body can deny the fact that if the Indian current account as well as fiscal deficit had been kept at reasonably low levels, the inflation, high interest rates, economic slow down and devaluation of rupee would not have escalated to such an extent because of global economic turmoil that has almost signalled the onset of disbelief in Indian growth story.

INDIAN GROWTH STORY: A REALISTIC PICTURE

Everybody on this globe recognises the opportunity provided by the global economic situation and outlook, Indian demography, Indian economy size, availability of large competent technical and managerial human resource along with  technical and engineering competence to catapult Indian nation to the status of a global economic superpower.The Indian GDP stands at 1.7 million million dollars which is about 1/9th of US GDP whereas per capita is about 1360 dollars which is a dismal 3% of the US per capita. Even if India manages to  grow to an economy as big as that of present USA, per capita wise it will only be comparable to today's per capita of East European countries. 
Growth rate vs GDP increase: Indian GDP can become 9 times its present value if it keeps on growing continuously at 10% for the next 23 years. The same period increases to 32 years with a drop of 3% in the annual growth rate. 
In the light of these facts, the following need to be understood and addressed by India's planners and polity otherwise the Indian dream of becoming a world leader will perish sooner than later.

• Will this opportunity window be available to the country for such a long a period.
• Will developed nations continue to pass on low level manufacturing hubs to India as they did for Singapore, Taiwan, Malaysia, South Korea and lately China or their experiences with a big economy with potential to become an economic superpower will make them hesitant to make use of cheaper manufacturing base of India with potential similar to that of China. After all developed countries also wish to grow richer rather than stagnating at present levels of prosperity.
• Will India grow rich before getting old or grow old before getting rich.
• Does India expect that it will be offered status of an economic superpower on a platter.The offerings will come only in areas which give value addition to the earnings of the developed world in short term as well as help maintain their technology leadership in the longer run.

Indian polity and planners have to work seriously to extend this opportunity window much beyond the realms of global economic situation and outlook through policy action on administrative, judicial, electoral and economic reforms to mitigate corruption, doing away with subsidies, provide good governance and some out of the box thinking for avoiding getting old before getting rich, become technology leaders in renewable energy fields rather than live on bought and borrowed technologies as and when they are offered at whatever prices along with attached strings.Simultaneously Indian polity and planners should aim to increase the tooth to tail ratio of annual budgets ( Ratio of  funds devoted to GDP growth to funds devoted to all government expenditure ) at all levels in states and centre within the applicable constraints of fiscal deficit and inflation.

NREGA and UID: The Two Main Potential Harbingers of Prosperity in India

NREGA (National Rural Employment Guarantee Act) and UID (Unique Identification Number) coupled with E-governance can be real game changers in India's road to prosperity in the shortest possible time.India presently has 500 million Below Poverty Line (BPL) hungry mouths which are supposed to be a big liability on the nation. But thinking positively the same hungry mouths translate into 200 million adult working heads and that amounts to 1600 million working hours on a daily basis. So is it certainly not a drag as is made out in many government circles, it is in fact a much bigger asset not many countries on this globe can even dream of. The destiny of Indian nation now depends on the wisdom and sincerity of Indian polity and how it decides to perceive this fact, for the first perception is the road to gloom and destruction while the latter is a short cut to prosperity and fulfilling the dream of being a developed prosperous nation.

Indian government has no doubt noble thought process of working towards making the life livable for these masses with a variety of measures like providing proper food, house, safe drinking water, clean and sanitary conditions, rural roads, health care services and education and even work. To fulfil these missions  food subsidy, fuel subsidy, NREGA jobs and a host of other freebies and doles are being provided but in actual practice all these efforts of providing subsidised food and fuel, free midday meals and even a job are almost totally lost at the altar of corruption and corrupt practices. While the government spends its hard earned monetary resources, the designated beneficiaries get a small fraction out of it and that too many times in the form of sub standard adulterated and rotten food stuff. The government through a plethora of schemes  has opened too many avenues for individuals and mafias to reap undue advantage through pilferage, theft, benefit going to undeserving individuals and in many cases to non existent names. All this because of government's sole aim of undertaking these measures only for votes and without  real concern to the plight of India's poor citizens. Its lack of sincerity and inability to check corruption and management costs of these schemes only point out to some vicious hidden agenda.
This figure of 500 million BPL individuals is as it is exaggerated when we see so many non eligible names in   small checks carried out at district level. A fair estimation points to a figure of 400 million individuals needing assistance. A sincere effort in pure national interest would be to empower all BPL family heads financially in lieu of work and work alone to such a level that they can take care of all requirements of their family members viz. food, health care, education etc. Ensure a sum of Rs 1000/- per month to each individual at a total cost of Rs 400000 crores which translates into 3200 crores of work days ( @ 125/ day ) for 20 crore adults i.e. 160 working days per annum ( men and women have both included ). Doing away with subsidies, freebies and doles (and including the expenses involved in the proposed food security bill) completely by centre and states and making payments to individuals having UID only through banks can easily take care of this amount.

The following additional advantage will accrue

• Government's inefficient and scam ridden public distribution system  will no more be required.
• No bogus individuals and no unnecessary payments
• 3200 crores extra man days can do wonders for the country.
• Government as facilitator and not provider
• Banking facility to almost every citizen
• Only two bodies to be kept under checks and controls. One the BPL certification authority and the other  work certification authority.
• Such a large force comes into the realm of organised sector making providing them Healthcare and Education  a much easier job.
• All corruption in many aspects of life will be mitigated.
• And above all such a large section of society will live with self esteem and heads held high. 

To make such an important headway in NREGA and UID, the two main Potential Harbingers of Prosperity in India, government can in some way compensate financial organisations like banks and insurance companies so that all the benefits could reach the doorsteps of the poor millions of the country at the earliest. It must be ensured that no spanners are put in implementation of such magnificent schemes having far reaching effect on the destiny of India by any vested interests.

Infrastructure and Human Resource Development: Next Gen Growth Engines of Indian Economy

'Money makes the mare go' the old adage is relevant to everything in human life and applies equally to India's growth story. Ample finances can be made available in the government's kitty through meaningful concerted efforts in the areas of corruption mitigation and good governance to progress and sustain Infrastructure development and human resource development, the next gen growth engines of Indian Economy. India is destined to achieve much bigger things in world's economy rather than the 7-8 % growth rates which have been given to us on a platter by the compulsions of developed world. If India fails to accord topmost priority to these two extremely important growth engines to bring them at par with the developed world in a short span of about a decade or so it will miss the ominous dream of being a prosperous nation as also the world leaders on the economic and technology front. Such opportunity slots normally last for about a decade or so for in the meanwhile the advanced countries  recover and newer third world countries present more lucrative options.
Infrastructure development comprising of Roads, Construction, Rail, Airports, Ports, Power generation and transmission, Irrigation, Telecom etc. is one of the keys to development of a country because it

•  is manpower intensive and a big job creator directly and indirectly through other allied industries.
•  generates a huge demand of steel, cement, capital goods, machinery, trucks, wagons etc..
•  improves upon logistics of men, materials, agricultural produce so very essential to any country's growth story.

Human Resource  is equally important growth engine of the Indian economy and until and unless nurtured with an immediate hugely intense national effort will convert into a national drain on the Indian growth potential. The favourable demography picture of human resource in India is going to last for a decade and a half at the most as the ratio of available working  hands to non working stomachs with claims on retirement pensionery benefits will keep on dwindling from now onwards. This will result out of a likely decrease in birth rates as the education and prosperity levels rise and accompanied increase in average life span. India has to make best use of this favourable human resource demography opportunity window.The developed countries became rich before they aged where as India and Indian polity has to strive very very hard and meticulously to get out of this catch 22 situation of getting old before getting rich. 

Human resource development of all segments of manpower  has to be accorded topmost priority because it will

•  result in massive industrial productivity increase through efforts to convert all unskilled workers to semi skilled ones and improving the capabilities of skilled, technical, administrative and managerial workforce of the country.
• result in enormous up gradation of the country's  education system through value additions to the capabilities of educationalists and teachers which will enable individuals to think for the betterment of their own families and country and will be a great help in having a responsible and responsive democracy in the country.

Indian Growth Story-A True Perspective

The Indian polity, planning commission, economists and intelligentsia keep on harping on 7-9% GDP growth of the country during the last few years. This has come about as a result of global opportunity provided as a result of very large low wage human resource with an excellent demographic mix, good education and intelligence quotient, a huge captive market for even the basic human existence elements of food, medical health, hygiene, drinking water, means of transport, electricity etc. etc.. Coupled with this is  the fact that the polity was left with no option but to provide these amenities after 64 years of deep slumber, inaction and fooling around of Indian masses with high sounding vote catching words and phrases.They rightly saw the danger to their political existence and survivability. The developed nations seized this opportunity with open hands and had no inhibitions in selling their low level products and technologies mainly in the consumption theme along with near obsolescence technologies in the fields of power, logistics, manufacturing and allied industry. With this they have initiated the Indian masses to the taste of fruits of prosperity which will act as a nucleate to keep pressure on Indian polity for more and more of it.In the bargain these developed nations have ensured steady returns for themselves for maintaining their own high standards for long times to come.
There has not been any value addition to this phenomenon of GDP growth by any of the governments of the country. The three main engines of Indian Growth Story, namely human resource development, infrastructure  development, corruption  and black money mitigation are lying dormant and precious little has been done to make them  vibrant. Country has not made any significant effort to improve upon the unskilled, semi skilled and skilled worker pool or  the technical, administrative and managerial pool of the country. During some moments of sanity  in some of the government elements, some wonderful programs and initiatives like thrust on infrastructure, UID project etc. have been initiated but have taken a back seat because of cheap and  economically destructive political agenda of providing subsidies, doles and freebies and motivated corrupt governance.
The developed economies are really happy about such policies and priorities of Indian government for these will ensure perpetual dependence of a country of 1 billion plus for next generations of consumer goods, capital goods and manufacturing technologies. The basic questions India's polity needs to answer are.

• How long we will keep contributing to maintaining the technology and financial leadership of the developed world? 
• How long we will be denied the chance of becoming world leaders which is our right because we have abundance of natural resources and other wherewithal, namely a huge human resource which is bound to have one of the largest banks of geniuses on this globe and a fairly large budget along with the massive scale of our needs and requirements?

The wait may not be very long. All that is needed is sincerity, honesty of purpose and long term vision in formulating economic policies and providing reasonably good governance.The governance must change to nation centric from the present self and party centric if a growth rate of 9-10% is to be a reality for next 20 years as is being touted by various government spokespersons.