Some food for thought
"Journalism largely consists of saying 'Lord Jones is Dead'
to people who never knew that Lord Jones was alive."
—Gilbert K. Chesterton (English writer, 1874-1936)
Word for the day
Equity (n)
The quality of being fair or impartial; fairness; impartiality.
First thought this morning
A prominent journalist publically complained that not much
information is coming out from "sources" about the political
developments like finalization of new cabinet etc.
After Samajwadi Party (SP), now the Congress Party has reportedly
taken a break from electronic media.
BJP has been selectively avoiding TV Channels and anchors for
past couple of years at least.
Many keen prime time TV watchers have indicated that the
sickening shouting chorus every evening has become intolerable and they no
longer feel like watching it.
All this perhaps is indicating that the degeneration of
electronic media is about to bottom out and we shall hopefully see a new format
soon. I wish the new format would emphasize on constructive and meaningful
debates on relevant issues, besides highlighting the numerous good things
happening all around instead of sensationalizing the trivial meaningless tirade
of petty politicians garnished by partisan rants of news anchors.
I also wish that at least for prime time private channels follow
the Rajya Sabha TV format. Some meaningful debates moderated by subject
specialists, and news read dispassionately by news readers. The rock star
anchors may play their bands in late night shows.
Chart of the day
Govt should focus on impediments, growth would come automatically
For past one week, the markets have been preoccupied by the
election results. Most analysts, economists and strategists have suggested a
growth oriented agenda for the new government. Market participants are keenly
looking towards the first monetary policy statement under the new regime,
scheduled to be announced on 6th June.
I however believe that the top priority of the government should
be social reforms, especially in the area of education and health. The
governments in past two decades have worked hard to make a strong foundation
for the economic growth. For example consider the following:
- Most of the government monopolies like power, roads, telecom, coal, ports, airports, civil aviation, defence production, insurance, pension, higher technical education, city rail transport (Metro), etc., have been divested to private sector.
- Most of the sectors have been opened to direct foreign investment and competition.
- The country is surplus in many key infrastructure areas.
- Substantial financial sector reforms have been implemented. Insurance and pension is privatized and growing fast. NBFCs are growing and regulation is evolving fast. Private banks have grown and helping in attaining the goal of full inclusion.
- Devolution of fiscal power and decentralization of public expenditure started with implementation of 14th Finance Commission recommendations.
- Fuel subsidies have been rationalized.
- GST is evolving fast and likely to stabilize this fiscal.
- Evolution of a contemporary bankruptcy resolution mechanism is progressing well. The NPA accretion for lenders has peaked. There are signs of credit market waking up from deep slumber and banks returning to business as usual in next couple of years. Most large stressed accounts already in the process of resolution.
- The government has promised implementation of totally revamped and simplified Direct Tax Code within a year.
- Public sector bank consolidation has started in right earnest with Bank of Baroda (BoB) taking over its three relatively weaker peers. Incidentally, the process of lateral appointment of CEO also started with BoB.
I therefore believe that on economic front the government job is
now limited to (a) assuring stability and predictability of policy; (b)
facilitating fast completion of key ongoing infra project like dedicated
freight corridor, Bharatmala and Sagarmala projects etc.; and (c) letting the
businessmen and entrepreneurs lead the mission to achieve higher growth.
However, on social front there are a lot of growth impediments
that need immediate attention. For example—
- Poor availability of highly skilled workers. Rising unemployability of college graduates, due to poor teaching and training standards.
- Deteriorating health of citizen with rising incidence of debilitating diseases like diabetes, obesity, hypertension, cancer, arthritis, etc.
- Lack of civic discipline amongst common citizens.
- Rise in incidence of crime against women.
- Degeneration of social and religious customs and traditions that are causing (a) tremendous financial stress to household, especially rural and lower middle class; and (b) avoidable social strife.
- Juggad mindset that hampers scalability and adherence to discipline and process orientation.
On the sides, I found the following notes received in my
WhatsApp inbox worth sharing with the readers.
- Several data points indicate an imminent rise in agflation including (1) weak monsoon (2) very low planting of corn and soybean in USA vs historical average (3) Pest attack of epic proportions in China (4) USA EPA approving 15% ethanol blending from June 2019 in USA. USA EPA decision has already lead to spike in ethanol prices in USA and fall in crude oil prices.
- Spike in rare earth prices following China decision to curb rare earth exports. This will affect the cost of LED lights, and many other electronic items.
- China Food Inflation— Chicken Wholesale prices +57%; Egg Futures +38%; Pork Wholesale prices 41% YoY; Fresh fruit 30.9% YoY 17.9% during Jan-April period. This is due to swine fever outbreak.
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