"A jury consists of twelve persons chosen
to decide who has the better lawyer."
—Robert Frost (American,
1874-1963)
Word for the day
Mores (plural noun)
Folkways of central
importance accepted without question and embodying the fundamental moral views
of a group.
Malice towards none
मुझ को
तो होश
नहीं
तुम को ख़बर हो शायद
लोग कहते हैं कि
तुम ने मुझे बर्बाद किया
—जोश मलीहाबादी
तुम को ख़बर हो शायद
लोग कहते हैं कि
तुम ने मुझे बर्बाद किया
—जोश मलीहाबादी
First random thought this morning
Sridevi, was inarguably one of the most talented and gorgeous
actress of all times. She was reputable and widely honored for her talent and
conduct. This has been true for more than three decades.
The moot point is what then prompted the versatile actress to
indulge in excessive weight management practice and other cosmetic procedures!
The answer to this inquisition will enlighten us to the real cause
of her untimely demise.
Ignore it at your own peril
The Economic Survey for FY18, examined the issue of slump in
investment and savings rate in detail.
As per the Survey report "India’s unprecedented climb to
historic high levels of investment and saving rates in the mid-2000s has been
followed by a pronounced, albeit gradual, decline. This current episode of
investment and saving slowdown is still ongoing."
The two key findings of the Survey, in this regard are as follows:
(a) Investment slowdowns
have an impact on growth but not necessarily saving.
(b) Another is that
recoveries from investment slowdowns, especially those associated with balance
sheet difficulties--as in India--tend to be slow. Notably, mean reversion or
some degree of automatic bounce-back is absent so that the deeper the slowdown,
the slower and shallower the recovery.
The Survey examines "Should policies that boost investment
(viz. substantial infrastructure push, reforms to facilitate the ease of doing
business or the ‘Make in India’ program) be given greater priority over those
that boost saving? The issue is about relative importance and urgency. Both set
of policies are crucial in the long run but which one needs to be prioritized
at present?"
The Survey draws on a number of research works done on the subject
by various economists and concludes "that policy should focus on urgent
prioritization of investment revival to arrest more lasting growth
impacts."
The Survey also suggests that "In addition, creating a
conducive environment for small and medium industries to prosper and invest
will help revive private investment. The focus of investment-incentivizing
policies has to be on the big and small alike. The ‘animal spirits’ need to be
conjured back."
Without going into technicalities of the research work relied upon
by the policy experts engaged in the Economic Survey, I must say that it may
not be entirely appropriate to apply the research done in developed western
countries to India context as it is.
"Saving" is integral to traditional Indian ethos - in
both business and household spheres. Living within one's means, sustainability,
austerity, prudence, asceticism etc. form core of the traditional Indian
economic behavior.
Imbibing these principles, Indian economy did extremely well for thousands
of years. In modern times also, Indian economy has shown great resilience in
most episodes of global economic crisis, including the latest one in 2008.
Household savings and not the foreign investment protected us....to continue
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