Thought for the day
” Hence it comes about that all armed Prophets have been victorious,
and all unarmed Prophets have been destroyed.”
-
Niccolo
Machiavelli (Italian, 1469-1527)
Word for the day
Drake (n)
A valley with steeply sloping sides
(Source:
Dictionary.com)
Teaser for the day
Narendra Modi to Shankracharya Swaroopanand Saraswati – “O’
lord thou are supreme amongst all wise, a truly elevated and enlightened soul,
please enlighten me ‘what is Dharma’ and ‘who is God’?
Bitter pill alone is not enough
Two people who would certainly be delighted by the decisions to
hike rail fares, and proposal to hike energy prices are former Prime Minister
Dr. Manmohan Singh (MMS) and former Finance Minister P. Chidambaram (PC).
Despite their best effort and intentions they could not do this due to pressure
from party (read Ms. Sonia Gandhi) and supporting parties and allies (read SP,
BSP, DMK, NCP and TMC).
I am sure incumbent Prime Minister Narendra Modi (NaMo) and
Finance Minister Arun Jaitely (AJ) are completely conscious of the fact that
not letting the short term political expediency overwhelm economic compulsions
has decimated the national level influence of Sonia Gandhi, Mulayam Singh,
Mayawati, Karunanidhi, Shard Pawar and Mamata Banerjee; even though these
people would still like to believe that it was inefficient handling of economy
by MMS and PC that led to their electoral rout.
Having said the obvious, I would like to flag this to the NaMo
and AJ that the medicine that can completely cure a serious disease in early
stages may be totally ineffective in the late stages of same disease even in
materially high dosage. In such circumstances either surgery is a completely
different line of treatment is warranted.
The diseases of inflation and fiscal impropriety in case of
Indian economy are, in my view, have advanced to a higher stage.
A small fiscal correction through subsidy rationalization and
disinvestment in public sector enterprises (PSEs) though critically important
may not be sufficient measures.
In my view, besides effectively and immediately containing their
spillover effect on consumer inflation these measures must be adequately
supplemented by necessary structural corrections. The “bitter pill” given alone
may break the proverbial camel’s neck (in a potentially drought year) and kill
the still fragile recovery in sentiments.
In particular, I feel, the following must be considered for
almost immediate implementation:
(a)
Dismantling of monopoly of public sector
enterprise over sale and distribution of energy. Oil marketing, coal mining and
sale, natural gas sales and distribution infrastructure businesses should be
opened to free competition with adequate constitutional protection (unlike last
time when oil marketing was opened to private entities without appropriate
assurance as to sustainability of the model).
(b)
The purchasing power of household consumer
should be adequately protected and enhanced both through fiscal and monetary
means, especially considering that implementation of GST will likely hit him
most.
A line, clear and thick,
should be drawn between compliant and non-compliant businessmen. Those who are
in habit of defaulting should be severely punished. But consider adequately
supporting the “good” enterprise to immediately kick start the investment
cycle.
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