"There
is no substitute for the comfort supplied by the utterly taken-for-granted
relationship."
—Iris
Murdoch (Irish, 1919-1999)
Word
for the day
Tweedle
(v)
To lure
by music, e.g., The Pied Piper tweedled the children into following him.
Malice
towards none
Mohd. Shahid
was truly a magician with the stick.
I am
fortunate that he guided me once when I was in junior camp. The stick gifted by
him, after I played with him for 45minutes, is still my most precious
possession.
First random thought this morning
Sachin Tendulkar's
act of seeking favor from a minister for his friend raises three pertinent
questions:
(a) Does the process for
selecting Bharat Ratna awardees need to be overhauled. May the highest honor be
conferred only posthumously?
(b) Should the elected representatives
who do not conduct themselves in accordance with the constitutional oath of
office to act "without affection or ill-will" and "without fear
or favor", be barred from public life and tried for sedition?
(c) Why the ROI (return on
investment) for elected representatives should be greater than Zero?
That is the precise point! Sir - 3
As I highlighted yesterday (see here)
government, planning administration and the monetary regulator all fully
appreciate the skewed structure of the inflation. They must also have realized
that the impact of inflation is not uniform for different segments of the
society. Unfortunately, this knowledge and understanding is not adequately
reflected in their actions.
Ostensibly,
both the monetary and fiscal policies have focused either on the:
(a) Miniscule top end of the spectrum that has
led to perilous widening of socio-economic inequalities and added little to the
sustainability of economic growth. In each business and economic cycle we see
this section coming under stress rather easily, seek even more assistance from
the government, and bring the financial system to the brink; or
(b) The large, vulnerable and politically
relevant bottom of the spectrum. Historically, most of these efforts have
occurred without building robust delivery mechanism; have been based on ad
hoc policies driven by electoral considerations; and has led to dissipation
of scarce resources.
Though, in recent times, efforts have
been made to improve delivery mechanism through financial inclusion (JAM, DBT)
and use of technology (UID) etc.
This effort will certainly bear fruit in
future. But if ad hocism and electoral consideration continue to
dominate, the results may still not be optimal.
The
consequences are for everyone to see. None of the segments is satisfied.
The question is what is the way out. In my view, a combination of
the following could work:
(a) Minimize capital
controls. Allow foreign capital to move freely in all sectors. Make policies
stable, predictable and friendly. Support competitive domestic businesses to
grow and let the uncompetitive domestic businesses to fail.
(b) Provide necessary
escape velocity to the middle and lower middle class households by leaving more
cash in their hands for consumption and investment. High quality public health,
education and transportation would help in a big way. Subsidized housing and
lower taxes are must.
(c) Make a comprehensive
long term sustainable support system for the bottom of the pyramid. Improving
delivery mechanism, and targeting subsidies is quintessential. Make a legislation
that prevents a political party claiming exclusive credit for whatever it has
done with the public money. Let them claim credit for what they have achieved
through spending from party funds. This may take electoral consideration out of
fiscal policies.
(d) Encourage Indian entrepreneurs to lease
manufacturing facilities in China for producing consumer goods to be sold
exclusively in India at cheaper rate. Local manufacturing should focus on high
tech, high value add industries and services.
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