ECONOMICS, GOVERNANCE AND INFLATION IN INDIA

India perhaps is the only country in the world which boasts of economists of international repute at the topmost levels of governance. All the efforts and solutions on the part of government are not yielding the desired results on inflation in India. At the same time they have resulted in considerable deceleration of economic growth. Why?

• These economists have failed to keep in mind the basic principle of "Demand and Supply of goods". They are concentrating only on demand and supply of money which is not working to the nation's expectations.
• The small decrease  in the rate of inflation is only a mirage, for it appears to be a result of high base effect and glut of farm produce and vegetables that is witnessed in winter months.

In Indian economy in present context, there is little scope of controlling the money supply in the hands of consumers.

• Firstly, because it is a result of NREGA disbursements to the poor workers and leakage of funds to the on ground managers of the scheme.
• Secondly, per capita income increase in the country as a result of GDP growth.
• And lastly, the graft and bribe money in the hands of government officials and additional illegal beneficiaries of much talked about Inclusive growth as well as Social, Political and Economic empowerment planks.

Out of these money supply resulting from graft, bribes and corruption is the only one which can be minimised through good governance, whereas the other two are desirable to meet India's goals to become a prosperous nation in a decade or so. Therefore the right approach to fight inflation lies only in increasing productivity and more supply of goods in the market. The actions required to do the same need no elaboration as they are well known to government and its functionaries.

A few reminders to the government of super economists.

Good Economics and Good Governance is Ideal
Bad Economics and Good Governance is A Compromise
Good Economics and Bad Governance is Undesirable
Bad Economics and Bad/Corrupt Governance is A Disaster
Also all experts of a field must remember the importance of non expert opinions for arriving at the correct and ideal solution to problems for they are totally engrossed in higher sciences and tend to ignore/overlook common sense solutions if available.This is amply demonstrated in the following:

• In all work study teams presence of a non expert is mandatory along with the experts to enable them to consider common sense approaches also to arrive at best possible solution.
• Albert Einstein, a noted physicist had to be reminded that his small cat could also get in and out of the cage through the big door provided for the big cat and did not need a separate additional small door.
• Henry Ford assembled his first prototype car in a room with a small door which along with the wall had to be broken to get the car out for its first trial run. After parking the car in the same room after the successful trial he assured the owner that he will get the room repaired to its original state, little realising that he will need to take the car out again and again for subsequent test runs.

INDIAN ECONOMIC GROWTH : GOVERNANCE Vs GLOBAL OPPORTUNITY

The last few years have seen Indian economic growth at 8% plus and the government has been claiming this to be the result of their growth oriented policies and positive economic environment through good governance. How unrealistic and untrue can the government claims be, is borne out by the fact that in spite of policy paralysis, high rates of inflation, Reserve Bank actions to curtail money supply, likely high fiscal deficits, rampant corruption and government inaction in the matter, India will achieve a growth rate of 7% plus. 

This is only a pointer to the fact that Indian economic growth is a result of global opportunity that beckons the nation. Firstly there is an economic lull in the developed economies because of non viability of growth avenues in industry, financial sector etc. because of lack of requirements and a very high labour cost. These nations have abundant capital, technical competence, know how and engineering backup through which they are securing their future. India has emerged as one of the favourite nations for their investments because of the following:

• An insatiable demand and requirement for all kind of goods and infrastructural inputs for the next two decades at least.
• Availability of cheap labour, technical manpower and management resource.

It is imperative that Indian government takes some immediate steps to do some value addition in the fields of infrastructure improvement, providing friendly and favourable environment for investments,coherent policies, sincerity in governance in tackling corruption, graft and black money to achieve a better economic growth rate. The global opportunity is certainly there for the asking but will not be there for all times to come as with passage of time other countries may become more lucrative for investments and technology transfers.Let us not forget that during the last three decades China in spite of being a communist country, and smaller countries like Turkey, Singapore, Taiwan, Malaysia etc.without a very promising human resource were more favoured nations for the developed world.

Corruption, Black Money in India : Aadhar the only Viable Solution

Corruption amongst politicians, bureaucrats, technocrats, other government functionaries and corporate world is rampant in India. Though the cases that come to light through media everyday are a minuscule sample of the menace of Corruption, Black Money and Bad Governance, the government and the polity have shown scant concern in this regard. A few raids, some action on the part of vigilance authorities and once in a while expose by media efforts cannot produce any meaningful dent on the extent of corruption, black money and bad governance malaise which is deeply rooted in all aspects of Indian economy, governance and day to day lives of all Indians. To whatever extent we may reinforce our anti corruption machinery, judicial system and laws we can only manage to put a scratch on the problem. The real fight against corruption and black money will come through good governance and administrative action only.
Aadhar project of the Unique Identification Authority of India can be the real aadhar of the nation's fight against corruption and black money. The project was given concurrence by the government as an exercise to give identity proof to 1 billion Indians. Slowly and slowly when the total repercussions of the Unique Identification Number started unfolding themselves, the polity seems to have developed cold feet suddenly.Firstly because it takes away the punch from the slogan of inclusive growth and social, economic and political empowerment and secondly it puts their survivability in politics in question as major support to elections comes through these cadres and such tainted money. The amounts involved are simply mind boggling. A sum of Rs 1,50,000 crores which goes into corruption and black money through leakages, bribery and pilferage in welfare benefits such as subsidies, pensions, NREGA, India Awaas Yojna, mid day meals and Sarva Shiksha Abhiyan. After all these are the only sops that can be offered to their political loyalists at 2nd and 3rd level. In this country who wants to have power without any financial gains attached to it? Who wants to serve the nation and its masses free of cost? The UID project has come under attack from all flanks. The very basis of of unique identification number i.e. procedures for data collection and potential errors therein as well as concerns over privacy are being challenged. What kind of hidden agenda or ulterior motives are behind this, is any body's guess.

Real estate along with all other asset classes is the other main source of corruption and black money. The only viable solution seems to be through linking of all immovable and movable assets with UID number. These assets will include all commercial and residential property, all agricultural land, gold and jewellery, all vehicles ( commercial and private ), all luxury items, DMat accounts, investments in commodities, banks and mutual funds etc. etc.. Along with these linkages the following steps are also a must.

• Government should have the power to acquire about 5-10% of real estate deals in the secondary market by paying 10% premium to the declared value of the deal.
• Practice of power of attorney in respect of real estate should be abolished.
• All Discretionary powers in the hands of government functionaries should be withdrawn because in India they are always used for one's own hidden agenda and ulterior motives.

Once the investment avenues of ill gotten money are plugged, we can see a ray of hope in improving the living standards of Indian masses at a much faster rate.

BAD GOVERNANCE IN INDIA:ROADS & INFRASTRUCTURE

Roads, highways and expressways are a very important mode of transport in a country and have enormous impact on the economy and connectivity of people and places. The sector demands a priority from the government for approvals, land acquisition, funding etc. which are not forthcoming at a pace India requires to achieve double digit growth of economy and bringing in some aspects of comfort and conveniences in the day to day lives of its people. All because of bad governance i.e. not having an integrated approach between various agencies involved. All this has affected the pace of development of the road network development in a big way.

The state of Roads and their maintenance is  invariably substandard so much so that during and after monsoon months they are not worthy to be called metalled roads ( pucca roads ).On roads full of large pits and eroded rough stretches, no vehicle can move even at speeds of 30 kmph resulting in longer and inconvenient travels. The petrol consumption for the same journey is almost double of travel in normal conditions. This condition prevails all over India for about 6 months in a year meaning thereby that petrol consumption during this period is almost double.What a waste of our our precious foreign exchange! How much it will contribute to subsidy burden and annual fiscal deficit? On the top of it the wear and tear, break down damage cost to the vehicles and the annual repair bill of these roads costs to the nation a few thousand crores . Bad governance in India and insensitivity to the woes of its citizens and little concern for nation's assets is the hallmark of our governments.

FDI in RETAIL in INDIA:WHY SO MUCH OF OPPOSITION

The decision of government of India to allow FDI in retail business has been the focus of so much of commotion inside and outside parliament. Whereas the government is certainly to be blamed for the timing of the decision particularly when more pressing and rewarding issues like fight against corruption, graft and black money, setting our electric power generation industry in order and increasing the pace of infrastructure development which need immediate attention. The opposition parties are just playing petty politics for short term gains and nailing the government with larger ulterior motives by instigating their vote banks with half baked truths. Interestingly the main opposition i.e. BJP was the original exponent of the idea of FDI in retail in India as early as the year 2000.
To day's call for keeping all shops and Kirana stores closed by various unions is motivated by reasons known to them only, for their businesses have not suffered in metros where large retail stores are already existing and are selling goods at substantial discounts to maximum retail price mentioned on these goods. The politicians who have taken up their cause have never raised an eyebrow on avoidance of various government taxes by this sector and its huge contribution to the black money generation. They have never taken up the issue of the wages, working conditions and benefits that are the right of all employees working in these stores. Their concern for workers and nation are simply deplorable.
To day Anna Hazare, a highly respected Gandhian leader who has taken up the issue of corruption in India on his shoulders and awakened the Indian masses for a war against corruption, has also jumped into the fray with  his objections to FDI which are out of sync with the modern concepts of globalisation.

BAD GOVERNANCE IN INDIA:POWER SECTOR

Power is the back bone of industrial growth and improving the lives of masses of a country. It is surprising that despite of talking big on Energy Security and massive plans to increase India's installed capacity from the present 1,60,000 mw to 8,00,000 mw in 15-20 years and to 16,00,000 mw in about 30 years, we are sleeping on introducing energy management concepts in this sector.The various aspects of this sector are grossly mismanaged and need immediate attention on the part of both, the government and consumers.

• Power production - Majority of country,s power plants are running at a maximum  of about 75-80% of installed capacity.
• Energy transmission loss and thefts account for 30-35% of the installed capacity.

These two factors alone account for about half of the installed capacity. While the industry, business consumers and the household consumers are crying for more and more of quality power supply, our governments are not bothered to address any of these concerns.

• Massive Energy capacity addition plans have been announced and approved during the last few years but without any concerted effort on the part of various government ministries, departments and agencies. Large sums of money have been invested but additional electricity is not available to industry and other consumers, sometimes because of issues related to environment clearance, acquisition of land, non availability of coal, gas etc, and finally because of transmission facilities not being in place. With all the expertise available, with all the good and sincere intentions of the polity and government, with all the concerns for the nation and its poor millions, we are mute witnesses to this bad governance.
• National grid not being in place, requirement of additional power needs at one location cannot be met with the availability of surplus power at another location in the country by diversion and the surplus power is a total loss.

Lastly the consumers from all walks of life - government,business establishments,industry and household sectors should be encouraged to  have solar passive architecture, heat insulation technologies and adopt non grid electricity sources where ever and when ever possible.

TRUE FACE OF INDIAN POLITY

The winter session of Indian Parliament has started last week. The government proposes to introduce a large number of bills which are meant to address the hot issues of corruption, graft, black money etc., as also various others meant for the good of Indian economy and progress of the nation. Surprisingly, ten days have passed without any business being conducted in the parliament.

The government blames the opposition parties whereas these parties blame the government for this logjam. The fact of the matter is that politicians by and large are just playing dirty politics over frivolous matters so that somehow or the other Lok Pal bill, Citizen Charter bill, Judicial Accountability bill, Whistle Blower bill etc., in fact everything connected with corruption, graft and black money do not come up for discussion in the parliament. As if opposition's stance on black money and price rise was not enough, government ill timed the issue of FDI in retail to add fuel to fire.After all most of them have their vested interests. They all know the answer to ailments of Indian economy  but who wants to cut the branches of the tree of corruption, who wants to cut the limbs of graft and black money demon. None of them, for this in essence is the golden hen which provides them personal prosperity. It also provides them security to survive in the power game through so called inclusive growth of their near and dear ones, cronies, stooges, loyalists and political brokers.