Not so good news on the economic front

Discussion in 'Economy & Infrastructure' started by Sakal Gharelu Ustad, Jan 1, 2013.

  1. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    India’s fiscal cliff: Why Chidu may be praying for inflation | Firstpost

    I believe elections in the year 2014 are only going to worsen the economic situation, since it is impossible for govt to stop giving out doles.

    I am sure RBI is going to cut the rates and inflation will go up the roof to rein in the deficit. Also, inflation is more powerful tool as most Indians do not understand this route of govt. manipulation.
     
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  3. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    By Benjamin Franklin for USA, but I think it holds true even for India. Leftist assholes. They must really hate the country :rage:
     
  4. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    But I believe giving money is better than giving food grains!!
     
  5. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    Any Specific Reasons? I thought it will only cause inflation!
     
  6. pmaitra

    pmaitra Moderator Moderator

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    And that is also partly due to India's imports, especially in the weapons sectors.

    India should only allow foreign investment in industries, not companies of pen-pushers. In a way, no financial institution shall be allowed to take any money out of India more than what they have invested.

    Not too worried about these figures - it is used to make you feel good even when things are bad.
     
  7. pmaitra

    pmaitra Moderator Moderator

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    [​IMG]
    One word - Theft!
     
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  8. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    It will cause some inflation but if properly implemented benefits outweigh costs.
    1) It is not paternalistic. Finally we are not assuming that poor people are dumb and giving them the right to decide which grain to eat. Poor people still can sell and actually do sell grains on the open market to buy whatever they want. Only that they get less price due to adulterated food stuff.
    2) Cash transfer is easy to monitor. You can sit in Delhi and see if money is transferred or not. There might be some fake beneficiaries but it helps alleviate the problem of state support needed to check adulteration and transfer of grains. It would have less leakages.
    3) More business for the banks and expansion of banking facilities.
    4) This will give poor people another reason to learn the working of modern banking systems. This will in a way integrate them in the society.
    5) It is a big problem to manage both farm and food subsidy at the same time. Due to minimum support price(MSP), you cannot give away the grain to the needy if there is leakage in the system and middlemen are selling back the grain to the govt. Now, govt can better support MSP system due to no feedback from the stolen grain. Also, higher food prices mean open market prices will be higher than MSP and less food will rot in govt warehouses as more grains will go out in the market due to high prices.
    6) As far as inflation is concerned, the money paid to the beneficiaries can be adjusted according to inflation. So, those who are most poor would not bear the cost of inflation. And middle class can bear a small hike in food price inflation.
    7) The gains of trade would not be restricted to the monopoly shopkeepers appointed by the government. It is a big corruption scheme where shopkeepers pay hefty amounts to become a vendor in any village. Now, people would have the right to buy from any shop they think is good.

    If I have no other option but to select among welfare schemes, point 1 is enough for me to go with cash transfer.
     
  9. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    I think these figures matter because they affects investment decisions. Most firms use these figures to gauge the economic outlook of the country(Believe me it matters!!). And India's condition is not so rosy because 70% public debt is not good for a developing country with high CA deficit.
     
  10. pmaitra

    pmaitra Moderator Moderator

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    Yes, I see your point. It's about the 'mood' of the market, which is rather subjective.

    I am against any kind of public debt. The government should never be in debt. One should not spend what one does not have.
     

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