REASONS FOR THE GLOOM................a layman's perspective

           REASONS FOR THE GLOOM................a layman's perspective

There is no need to be overtly negative.

The low growth is due to(pls read and comment)
Immediate reason---food security bill that will make govt spend over 3 lakh crore(govt says 1.25 lakh crore but u need to put infrastructure in place and that requires double the amount atleast)

1)policy paralysis of govt as govt has not passed any law on

          a)pension reform
          b)insurance reform
          c)land acquisition
          d)no policy on coal block allocation
          e)goods and services tax(gst)

2)Environmental clearences have rattled the industry as most of the tribals are claiming the forests and the hills as their sacred property and refuse the companies to mine anything.As a result of that

         a)Posco project for setting up steel unit in orissa has been hanging fire for 10 years
         b)Yesterday vedanta group was refused by the tribals to let them mine bauxite from
            a hill they say is sacred.By the way we have world's 3 rd largest bauxite reserves
            and still remain net importer.

        c)Most of the coal plants and hydropower plants are stuck
        d)No clearence for new airports

        So investors have no intention of facing unlimited delay and they are not investing

3)Supreme court of india(u heard it):After coal scam and iron ore mining scams supreme court has banned mining exports from goa and karnataka and this move alone has made india loose about 17 billion$ this year alone!!!

After 2g scam supreme court cancelled the licences of most of the companies so they are reluctant to invest again fearing such intervention in future too

Supreme court has told govt that gram sabhas must be convinced before mining anything fro that area.As expected foolish gram sabhas don't understand **** on how economics works!! and they are stalling everything

4)super corrupt govt.(anyone disagrees)??

5)rising interest rates to control inflation has led to fewer loans for capital ventures and has hit sme's(small and medium industries hard

6)Socialist policies of govt like food bill:Now this bill cleared the parliament yesterday and look at the markets today,rupee has hit 68 against dollar,steepest fall in like 18 years,sensex is down and ppl are terrified(except nri's who had a payday in this crisis).Now whay is this bill so dangerous??

       a)Our growth forecast for  this year is only 4.8% and it may still fall
       b)Our current account deficit is about 70 billion dollars this year and this will only add to the bill
       c)In the current pds (public distribution system) about 40% of foodgrains rot while they remain   
          in the open so this bill will lead to wastage and the effect will be .....NIL

  
      d)This is the reality of our storage facilities!!
 

       e)The provision of the bill is officially 1 lakh 25 thousand crore rupees but to set upthe mechanim
        we need at least 2 lakh fifty thousand to 3 lakh crore rupees.effects will be
                                                                           1)no money for infrastructure
                                                                           2)decreased spending on health
                                                                           3)lower spending on education
                                                                           4)lower spending on sanitation and clean drinking
                                                                              water
                                                                           5)increased petrol and diesel prices
                                                                           6)possibly increased taxes
                                          
7)And this cartoon sums up our condition perfectly

So all i am saying is that there is no fundamental flaw here but a lot of foolish decisions that have deterred the investors to shy away from india



I must admit that i am not an economics expert so feel free to tell me where i am wrong,,,,i don't mind a rebut

INDIAN DOOM:FOOD SECURITY BILL

from organizer.org

INDIAN DOOM:FOOD SECURITY BILL

It seems that the 'unprogressive' united progressive alliance aka UPA has finally managed to fulfill its primary goal it set out in 2004 after coming to power-making india a socialist economy,a consumption led economy rather than a manufacturing oriented economy and destroying completely the 'indian growth story' along with potential of millions of its young people.Recent reports indicate that rupee has crossed 64 against the dollar,sensex has tanked below 18000 and what does UPA care about?Food security bill of all the things!!As if NREGA was not enough UPA wants to completely shatter indian economy for years to come.People may say i am over-reacting but the effects of this bill will be felt for years to come and will push india years back.Now lets briefly discuss whats wrong

sriks6711.wordpress.com

economictimes.indiatimes.com

1)When UPA came to power,india was growing at good rate,although not 8-9% but still the fundamentals of economy were good,moreover people hoped for better future.But in the last 10 years government has only been successful or has tried to pass only civil nuclear bill with the USA.It bothered with nothing else except maybe 2g scam,coal scam,commonwealth games scam and whatnot.Arguably,govt was too focussed on these scams to pass any meaningful bill.

m.indiatoday.in

www.toonpool.com

2)NREGA:Congress passed national rural employment gurantee act in its first 5 years of power with the sole aim of grabbing votes(congress wallahs will differ) and they did get votes and came back to power.Now this bill provides employment to a person for at least 100 days of a year and pays a bare minimum wage.Specifics are not a point,the thing is this scheme has been a massive failure on the ground(as if we hoped any better).Agricultural workers have started enrolling for nrega,pushing cost of farming fairly high,contractors are enrolling fictitious workers and pocketing the profits and the scheme is virtually unimplementable in maoist affected states.Due to all these reasons our subsidy bill has increased manyfold without any meaningful contribution to society.

breakoutwear.co.uk

3)MANUFACTURING:It saddens me to say that according to stats indian manufacturing accounted for 24 % of the world in 1857,just about 100 years later it had fallen to 3 odd%.But the real shock is that even after 66 years since we virtually manufacture nothing meaningful.Mind you,there is ample difference between manufacturing and assembling as latter is a forte of indian economy,not the former.Forger about high end stuff,we can't even manufacture a 50 cc engine for sunny or luna.All the cars manufactured in india have foreign engine except maybe nano(if you wanna call a 625 odd cc 2 cylinder engine a true car engine).We can't make a single computer chip.Forget about the high end computer chips manufactured by intel and arm we can atleast try with smartphones?From the defence to auto to pharma sector we manufacture nothing worthwhile,heck india succeded in making war grade steel only in 2013,we were importing that from si
ngapore and russia before!!

4)FOOD SECURITY:As if already the condition wasn't bad enough we are gonna pass this act pretty soon and i see no one in the media seriously objecting to this useless crap law simply by the magnitude of its ambition.The bill hopes to provide 67% of the population(you heard right),ie roughly 80 crore people with highly subsidized foodgrains costing us atleast rs 1 lakh 20 thousand crore per year minimum although the actual cost will be at least double of that.I mean am i the only one shivering at the idea of this bill.

5)FUTURE:I don't wanna sound pessimistic but policies such as these are gonna paralyze the country totally,its only a matter of time before we feel the pinch.What about building more medical colleges,nore engineering colleges,building roads and power plants?What about spending money on r and d.We have to answer all thes questions before implementing laws like food security.

6)WHY STEPS TAKEN BY GOVERNMENT ARE WRONG:First of all i must clarify that i am no analyst or economist but i have shared my views with many people(bankers etc) and they seem to agree.The only reform(if we can call it that!) that this govt headed by a supposedely brilliant prime-minister and finance minister has done is increasing the interest rates to bring in the inflation.Now this has flopped,as we can all see from the soaring prices(remember onions).The reason for this failure is pretty simple-BLACK MONEY.Now because the majority of money in india is circulating currency and not the e-money(debit card,credit card or accounted money),,,the reforms at bank level like mentioned above has no effect as this unaccounted money was never part of the system in the first place!!.

7)WAY FORWARD:The only path is privatization of our inefficient and moribund public sector units so that we can end govt control over industry bringing down red tape and nepotism.This move will take power away from 'socialist' politicians to scuttle every progressive move and help save this nation.And last but not the least this UPA govt needs to go simply because it has put economy in dumps and is giving out doles like a foolish king.

By the way although we want UPA out in 2014 elections but our PM has different ideas.See for yourself