The FM tried his best to influence the interest rate's downward revision without any concrete action to reduce inflation and Current Account Deficit(CAD), but resisted well by Subbarao for good economic reasons. So, like any crooked politician, the FM is trying to put his man in that seat with the idea of manipulating RBI which will surely 'doom' Indian economy. I will quote 2 instances of how this UPA has failed in economic policies that sent CAD unmanageable. 1) At the time of KG Gas Discovery, it was hailed that India will become self-sufficient in gas consumption which could have saved lot of Dollars. That is why India did not seriously pursue the Iran-Pakistan-India pipeline and negotiations with Iran on gas price. Later, the greedy Ambani thought of looting by not delivering gas at agreed price and quantity which has increased the imports and foreign exchange for buying. What the government did to bring greedy Ambani in line? But they took steps saying gold imports are reason for CAD and reduced its imports by increasing duties? Actually all the gold was bought by the 'black money' of the politicians/bureaucrats only and not by the public. Again this is a government failure in controlling the black money. 2)We are blessed with huge coal reserves which if exploited, will be sufficient to meet our energy requirements. Because of wrong policies/swindling in allocation of coal mining licences, we are importing lots of coal which again adds to the CAD problem.
I had seen a documentary on economic crisis in America in which Mr. Rajan was also interviewed. Before the big bubble in America, he predicted that the crisis will come and he was very much criticized by US analysts. But finally when the crisis came, he was in the news as he had already predicted such crisis in America. I have positive hopes.
good thing. All economists are fairly unanimous on this.
But economic growth can be and most often is also a double edged sword!
And, in the words of the famous social commentator/author/journalist, Mr. Kuldip Nayar, Indians often end up using the wrong end of the sword!!
So true with today's obsession for 'growht', 'reforms', 'liberalisation'!
Like pearls cast before swine, economic reforms in the hands of Indian policiy makers under the UPA and the NDA regimes have and will only damage the commoners' cause further and further more!
It is another matter that the majority of Indian middle class commoners are too stupxid to understand this
COST OF FUND FOR IMPORT SHOULD BE VERY HIGH. COST OF FUND FOR EXPORT SHOULD BE MODERATELY CHEAPER. EASY AVAILABILITY OF FUND & INCENTIVE FOR PRODUCTION OF MASS CONSUMPTION OF GOODS AND SERVICES.
Rajan is an economic adviser to the P M. But the onion prices soured to Rs 40 per kg., which means Rajan fell to chalk out the economic policies and check the inflation.
