Getting Indian economy back on track

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Re: SHOCKING: April industrial output growth only 0.1%, worse than expected

And this is supposed to be a surprise?:dude:
 

Daredevil

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Re: SHOCKING: April industrial output growth only 0.1%, worse than expected

The growth rates are coming down at all levels every passing month. IIP growth of 0.1% is a shocker indicating that there is hardly any manufacturing going on this country. We are slowly heading towards (or rather on a edge) Stagflation - no growth and high inflation. Stagflation is perhaps the most dangerous thing to happen to any economy. Unless this comatose government take some quick and efficient steps towards economic reforms and infrastructure building - the country is doomed - economically speaking.
 

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Restore confidence? Take action on Dr Singh

Restore confidence? Take action on Dr Singh

While the middle class believes that while Dr Singh may not exactly be corrupt, they simultaneously also perceive that the best bet for anyone to loot and scoot in India [ Images ] is while he continues to be around, writes M R Venkatesh.


The Mayor of Casterbridge remains a masterpiece to this date. Authored by the great British author Thomas Hardy in late nineteenth century it was interestingly subtitled as "The Life and Death of a Man of Character."

Set in the fictional town of Casterbridge, the novel is all about the story of a hay-trusser's spectacular rise to become its Mayor by his sheer hard work and honesty, his subsequent loss of character and his consequential fall. At the very end, inevitably the mayor goes down unwept, unsung and uncared.

Dr Manmohan Singh's [ Images ] story can very well be termed to be an Indian version of this classic. An economist of great international repute, Dr. Singh "was" an epitome of honesty, integrity and sincerity. He "was" till recently the darling of middle class.

The dramatic rise of Dr. Singh from being a professor to becoming India's Prime Minister through dint of hard intelligent work, mirrors the aspirations of the ordinary Indian.

But let me hasten to add that all that is stated above is history. Readers may have noticed the extensive use of past tense above. No one, not the least the middle class which celebrated him not so long ago, does agree with his economics or with his brand of politics - of being supinely indifferent to anything and everything.

With each passing day the nation (including his own party men) seems to question his ability - both as an economist and to lead this country.

What is worse is that while the middle class believes that while he may not exactly be corrupt, they simultaneously also perceive that the best bet for anyone to loot and scoot in India is while Dr Singh continues to be around.

The sub-title of hardy's novel mentioned above looks so appropriate in the present Indian context.

While one is not sure whether this indifference to corruption by itself it attracts the mischief of provisions of sub-clause (iii) of clause (d) of section (1) of section 13 of the Prevention of corruption Act, (criminal misconduct when a public servant acts contrary to public interest), the fact of the matter is that the most Indians now consider that the PM's silence to be the cause of rampant corruption.

This piece is about Dr Singh's tolerance to corruption, its long term impact on national psyche, our economy and what needs to be done.

Understanding the mess created by UPA

Whatever be it, tolerance to corruption, sheer incompetency or possibly both, Dr Singh will leave a very bad legacy. As and when he demits office his government will leave massive amounts of shit on the wall.

It may be recalled that when UPA Government assumed office in 2004, the domestic economy was reasonably robust. Simultaneously, global economy was witnessing an unprecedented boom. The UPA Government leveraged all this in its first few years to ensure a reasonable growth in excess of eight per cent.

While this growth was a confluence of certain coincidences (both national and international), the UPA managers, misread these to be the result of their policy initiatives. In hindsight, the period between 2004 and 2008 was a great window for India to have taken a great leap forward.

Importantly, the global economic boom provided a perfect setting to carry out significant domestic reforms. Unfortunately, we missed that window. For this failure one has to blame the economist Prime Minister for not striking hard when the iron was hot.

Let me amplify. Recall in 2006-07 and 2007-08 the fiscal deficits were reasonably under control and growth robust. And simply to stay in office and bribe poor voters, the UPA Government wrote off the farm debt aggregating to Rs 72,000 crore (Rs 720 billion) of our farmers. (The procrastination in de-regulating diesel prices then is another case in point as is NREGA & Food security bill a stupid idea.)

The inefficacy of this idea of debt write off is demonstrated by the fact that despite writing off such massive amounts, farmers across the country continue to commit suicides. A statesman would have used this money (substantial by any standards) to integrate rivers in India and left a lasting legacy for the country.

The pity is that the Dr Singh, despite being so endowed, did not behave as one. Rather he took the route of an ordinary politician. Consequently, the UPA has failed to leave any legacy for the country. Even to this day, the NDA is best remembered for its quadrilateral road initiative as is the Narasimha Rao Government for its economic reforms. Even the short lived Deva Gowda government gave us a "dream budget."

Worse still, think of UPA and we somehow conjure images of a government of and for looters. And that means systematically the UPA has somehow robbed the trust reposed on Government, its agencies and its institutions by Indians.

The net result: Indians are cynical of the Government, judiciary, media, intelligentsia, and of course now even the army!

And when the government of the day itself undermines the Constitution, most of us believe that all is lost. Surely the mood within the country is one of absolute despondency with most well-meaning men have virtually given up. And that neatly sums the mess wrecked on the country by UPA.

Need to reverse this mood

It is this mood of pessimism and cynicism that is at the root of the extant economic malaise. And these need to be reversed. But how?

Let us not forget that the critical idea implicit in economic reforms meant that our Government was to be a wholesale peddler of confidence.

Strangely, the architect of reforms - Dr Manmohan Singh seems to have forgotten this fundamental bit. No wonder as he seems to be flummoxed, tongue tied and defensive, the confidence of the common man to invest in India seems to be evaporating. And when Indians do not invest in India, where is the question of others investing in India?

Remember, investment is rooted in confidence and confidence in intuitions, institutions in men and men in character. When the sole objective of the man who occupies the high office is to continue occupying it at any cost and consequence to the nation, it impacts the overall investment climate – a fact that must be known to the economist in Dr Singh, if not to anyone else.

Obviously, restoring the faith of the common man on the democratic institutions and systems - in effect the Constitution - is the only priority for the next government. It has to be demonstrative. For that the guilty needs to be exemplarily punished and fast.

That does not mean the next government need to go out on a witch hunt. Nor does it imply creating a hype of arresting a few and then coming up with the standard Indian phrase: Let the law of the land take its own course. Given our past experiences, these utterances do not inspire confidence in us.

What is required is a time bound action of punishing a few. How about just one - the Prime Minister? Try him on the grounds of acting contrary to public interest and test this proposition under provisions of Section 13(1)(d)(iii) of the Prevention of Corruption Act.

The charge against Dr Singh should be on a singular point - that by his very silence and despite clear evidences he did not discharge the onerous responsibility cast on him by our Constitution. This question can be examined directly by the highest court - possibly through a presidential reference - and a verdict sought within a time frame.

Unless such drastic and pointed actions are not taken by the next regime, the India growth story could well and truly over.

That Dr Singh may not be held guilty (and one prays so) by the courts is beside the point. The fact is that such an action will instantly signal that we as a nation are ready to fix accountability for tolerating corruption even at the highest levels.

It would also instantly mean that we are ready to tackle the menace of corruption which as we all know flourishes because of such extraordinary tolerance to corruption, especially at high levels, probably as a quid pro quo for remaining in office.

Once this message is sent that the system seeks to fix the delinquent; things will definitely improve. Believe me, for too long, our tolerance to corruption - not corruption per se - is at the core of the issue. It is this tolerance that encourages the corrupt and provides them the necessary cover to the corrupt to get away.

Put pithily, punish those who tolerate corruption at the highest levels, the menace of corruption can be tackled forthwith.

It is time we address this fundamental issue. Let us make a good beginning by testing this idea on Dr Singh. The next Government has to take quick, decisive and laser like action on Dr Singh, hold him accountable, try him in a proper court of law and if held guilty, punish him.

It may be an outlandish idea now. But think about it, plan it and effectuate it. The benefits overwhelm the cost several times over.

M R Venkatesh is a Chennai-based Chartered Accountant. He can be contacted at [email protected]
 

Daredevil

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Re: Restore confidence? Take action on Dr Singh

I agree with the author. Our nikamma PM MMS has fostering a situation where corruption is tolerated at all levels and no action is taken against the corrupt. He also needs to be punished along with other corrupt ministers for allowing corruption and not taking any measures to curb the same.
 

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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.
 

Sakal Gharelu Ustad

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Re: Restore confidence? Take action on Dr Singh

This is what I posted in some other thread yesterday:

Economy: 2004-14 will be as damaging as mid 60s, 70s': Blog on Policy Puzzles by Bibek Debroy | ET Blogs

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 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.
 

Sakal Gharelu Ustad

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Re: Restore confidence? Take action on Dr Singh

And I disagree. MMS is the right man. Remove the God Damn remote control behind him.
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.
 

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Re: Restore confidence? Take action on Dr Singh

How true.

A good man gone to seed thanks to the system!
 

Sakal Gharelu Ustad

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Re: SHOCKING: April industrial output growth only 0.1%, worse than expected

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.
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!!
 

Yusuf

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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.
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.
 

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Re: Restore confidence? Take action on Dr Singh

I agree with author.. If his integrity is so clean, let him tell the nation whats happening behind the screen.. And he should do the job what suits him the best.
He is just been using by madam and company.. If he is real patriot he should come out of his selfish mood and accept he is a puppet and nation is going to dogs.

In fact India doesnt need MLAs and useless so manay members in parliament.. its simply waste of public money, time and energy.. upto Zilla panchayat elections required for democracy in present form... and Governor should be elected directly by people.. grama panchayat, taluk panchayat and zilla panchayat elections are enough and one election to choose one governor for a state..

Same way 2 houses lok sabha and rajya sabha are not required.. just one house constituted of MPs(only loksabha form.. rajya sabha not required) and all governors of state is enough to run sessions..

President should be elected directly by people.. and cabinet for different ministry will be formed in house of MPs.. if required they may choose a name sake PM just to lead the house..

high time we bring amendments into our old model constitution.
 

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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!!
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.
 

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Re: Restore confidence? Take action on Dr Singh

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 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...

height of foolishness to expect something from puppet mms who cant help himself, and who cant speak truth to the people (for the people) he is ruling.

ppl have reached threshold of frustration to hear congis chamchas bakwas.
 

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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.
 

Sakal Gharelu Ustad

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Re: Restore confidence? Take action on Dr Singh

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.
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.
 

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Re: SHOCKING: April industrial output growth only 0.1%, worse than expected

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.
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.

Many things have changed. To name a few:

1. Telenor suffered due to corruption. That might be due to their own negligence but it shows India in poor light with govt. blatantly involved in corruption.
2. High deficits
3. No further reforms
4. Global downturn
and many others.....

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.
There are always failures in macro-economic predictions but there are some pitfalls, which can always be avoided.
 

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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.
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.
 

Sakal Gharelu Ustad

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Re: Restore confidence? Take action on Dr Singh

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.
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.
 

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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.
Politics was never for MMS. He is a technocrat. He quits and we might see worse in India while the UPA is in power.

I don't believe Modi is at loggerheads with the RSS.
 

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