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Re: SHOCKING: April industrial output growth only 0.1%, worse than expected
And this is supposed to be a surprise?
And this is supposed to be a surprise?
He does not even deserve the credit for reforms in the 90s. Congress killed the legacy of Narsimha Rao with such a finesse that no one even talks about him these days while talking about the reforms.In describing the Indian economy since 1947, 1991 is regarded as a watershed. That's because of economic reforms. In 1991 proper, as opposed to what happened later, what were those reforms? They were on the external sector (trade, exchange rate, foreign investment) and industrial policy. Who was Industry Minister in 1991? We don't remember. It was P.V. Narasimha Rao. As PM, legacy of Narasimha Rao as architect of reforms has been forgotten and disowned. His retention of the industry portfolio was a conscious decision to drive liberalization.
A myth has been perpetuated about who drove those reforms and present expectations about reforms are also based on that. In rewriting history to suit what is convenient, one also tends to gloss over and ignore something else. By September or October 1990, the reform blueprint was already agreed on, in consultation with World Bank and IMF. Ipso facto, regardless of who was FM in 1991, the blueprint would have been implemented. It only remained for FM to draft the speech. It is now common knowledge that Dr Manmohan Singh wasn't Narasimha Rao's first choice as FM. That happened to be I.G. Patel. Where was Dr Manmohan Singh at that time? Between 1987 and 1990, he was Secretary General of the South Commission. In 1990, South Commission prepared a report titled, "The Challenge to the South". If one reads that report, it is difficult to argue out a case that anyone who authored or co-authored that report has strong reform credentials.
There was a watershed before 1991 too and that was between mid-1960s and mid-1970s. The worst excesses of State intervention happened then, not earlier. Two points about this. First, those policies are identified with Indira Gandhi. Having accepted that, there were several advisers and bureaucrats (including economists) who went along with the tide. They should be just as culpable as Indira Gandhi. Anyone with a contrary view was ostracized and marginalized. Second, economists rarely understand law. They tend to think those policies characterizing State intervention were only about economics. They weren't. They were backed up with legislation and we are still struggling to remove or repeal legislation introduced between mid-1960s and mid-1970s. Economic policy is easier to change, law is more difficult. It has to go through a legislative process. At least among economists, there will be consensus that mid-1960s to mid-1970s set India back by a couple of development decades.
The consensus breaks down in understanding what has been happening since 2004, in the name of inclusive growth. I have a simple proposition and disclosure requires that I state there are few takers for this view, including in my fraternity (or sorority). The proposition is the following. When the history of the Indian economy is written twenty years down the line, we will look back at the 2004 to 2014 decade as one that was just as damaging as mid-1960s to mid-1970s, if not worse, because the world has changed. As was the case during that earlier decade, contrary views are not encouraged and are marginalized. Advisers, bureaucrats and economists flow along with the tide. That's partly because views of many people are malleable. That's a requisite trait for survival.
The details of policies are irrelevant. At a broad-brush level, we are talking about killing of private initiative and enterprise and dependence on doles and hand-outs from the State. We are talking about such subsidies being fiscally unsustainable. And the most damaging of all – once such policies are introduced, it is very difficult to roll them back.
He is responsible to the nation and not to the remote control. He is the one who should remove it or quit if helpless.And I disagree. MMS is the right man. Remove the God Damn remote control behind him.
You answered it in first line. Business sentiment is all that matters and India has surprisingly lost it.There is nothing wrong with India that should screw it. It's something to do with overall business sentiments.
Without the kinds of reforms we are looking at now to bail the Indian economy, we did fantastically well ye last decade though their were routine cries for reforms.
Let us further look at the industrial sector. Which are the states which contribute to the industrial sector in a large way?
Gujarat, Maharashtra, Karnataka, Tamil Nadu, Andhra, Punjab.
Tamil Nadu is beset with electricity problems. Karnataka has political problems, Andhra is the same. Telangana has hit business. I am not sure about ills of the other states, but I read a piece on Gujarat in an article by a former member of the planning commission which tells that all is not well there.
Add to this the overall political uncertainly, scams, Anna has all effected the country. I don't know what has changed in the last 12 months that this stage has come.
Understand the political compulsions. The same guy was the hero in the 90s when he had a free run. And it's not only about Sonia, but pesky allies. Blame the political system. Unless we have political reforms, these issues will remain. Not only the UPA, even the NDA will face the music. BJP too has to listen to RSS. It will also have to listen to its allies. Someone like Nitish will make life miserable for the BJP that is if they partner in the next election.He is responsible to the nation and not to the remote control. He is the one who should remove it or quit if helpless.
We need a statesman and he fails on most accounts.
Who knows, the government may have taken the stand on Vodafone to prevent any corruption charge. Seriously a lot of things are happening which has nothing to do with the business environment but other factors. Like I said, nothing has changed in india that was there 5-6 years back when we were belting the numbers.You answered it in first line. Business sentiment is all that matters and India has surprisingly lost it.
The Vodafone regressive taxation was the worst thing to do and then you mention its name in white paper on black money, while Vodafone played by the then existing rules. This is the basic undergrad lesson to not engage in retrospective taxation and such a big economist screwed upon it. Getting some 1200 crore has made the country pay much more dearly. Already the Uninor thing was creating bad sentiments!!
Who would invest in a climate where govt will hunt you down for your investments when it feels like!!
he has proved his useless worth.. congress just used puppet mms name to destroy a good leader in PV Narasimha Rao and to be in lime light and to keep ruling India...Understand the political compulsions. The same guy was the hero in the 90s when he had a free run. And it's not only about Sonia, but pesky allies. Blame the political system. Unless we have political reforms, these issues will remain. Not only the UPA, even the NDA will face the music. BJP too has to listen to RSS. It will also have to listen to its allies. Someone like Nitish will make life miserable for the BJP that is if they partner in the next election.
1. It was Rao who gave him the free run.Understand the political compulsions. The same guy was the hero in the 90s when he had a free run. And it's not only about Sonia, but pesky allies. Blame the political system. Unless we have political reforms, these issues will remain. Not only the UPA, even the NDA will face the music. BJP too has to listen to RSS. It will also have to listen to its allies. Someone like Nitish will make life miserable for the BJP that is if they partner in the next election.
The govt. is out of funds due to its populist measures. SC ruled against retrospective taxation in this case and govt. still moved forward with it like an ignorant kid.Who knows, the government may have taken the stand on Vodafone to prevent any corruption charge. Seriously a lot of things are happening which has nothing to do with the business environment but other factors. Like I said, nothing has changed in india that was there 5-6 years back when we were belting the numbers.
There are always failures in macro-economic predictions but there are some pitfalls, which can always be avoided.Let me also add, I say this from being in the field on the ground if you will with practical knowledge. I am into industrial supplies. The nuts and bolts of industry goes from my market area. I don't rely on book knowledge or analysis and shit. Western analysts always fail about India because they really don't know India.
If there was no Sonia factor, MMS would have been a great PM. Again back then there were no allies.1. It was Rao who gave him the free run.
2. We had to ship gold out of RBI if you remember, we had no choice back then. It was standard IMF package and would have worked in same way with or without Mannu.
3. When he is at the helm, he would be held responsible or else he should back down if incapable.
4. BJP does not reform by stealth. From Pokhran to golden quad. , ABV left many legacies.
The reasons you gave above sound like usual Congress rhetoric where if you point about their corruption, they start talking about George Fernandes. You cannot remove the blame from someone by pointing that others are worse.
Then Quit!!If there was no Sonia factor, MMS would have been a great PM. Again back then there were no allies.
I don depend on a 9-5 job and get an assured monthly salary. I am into business and I support anyone who is good for business.
My problem is with the entire God Damn political system. I am not a cong fan but yes an MMS fan for what he did in 90s and was thrilled when he became the PM. Just like I am a Modi fan for his economics.
Yes he should be accountable as he is at the helm, but then he is helpless in the power structure that exists. Anyone else too would have been the same.
Politics was never for MMS. He is a technocrat. He quits and we might see worse in India while the UPA is in power.Then Quit!!
Modi brought himself out of shadow of RSS and is at loggerheads. If you are only capable of bending backwards then politics is not for you.