Indian government has lost lacs of crores of rupees due to
ill-motivated decisions taken by minister of Manmohan Singh’s cabinet and due
to faulty actions of UPA government. If one takes into account of all CAG
reports of last two three years and make a total of all losses caused by wrong
policies of the government, loss caused due to fraudulent acts of Ministers,
loss caused due to tax defaults and tax evasion, loss due to bad assets in banks,
loss due to write off of bank loans, loss due to tax concessions given to
business houses in the name of stimulus package during last three to five years,
and unethical rise in black money and exodus of Indian money into foreign
banks.
It will come to billion of billion rupees.
Now government has announced some austerity measures to
curtail expenses. It is nothing but a drop in ocean.
Billions and billions of
rupees have been lost or sacrificed to please a few thousand of business houses
and now the corrupt government is pondering over saving a few lacs of rupees on
foreign trips and conferences or a few crores of rupees by stopping employment.
Pain of poor men will become more painful whereas a few lacs of rich and elite
class families will continue to live lavishly.
India’s economic growth has been consistently falling from
quarter to quarter, rupee is weakening, fiscal deficit is continuously increasing,
inflation is going up and up, price rise is beyond control and so on. Current
Financial data indicates that cloud of crisis is looming large on Indian
economy. Crisis of economy is worse than that of 1991 when the then government
led by learned Chandra Sekhar had to sell gold. Foreign currency reserve can
postpone the crisis for a few months but cannot solve the crisis permanently.
Now
the question is whether such petty savings earned on account by forcing
austerity measures will be able to cope with the critical position of economy
of the country.
The answer is simply NO.
There is proverb in Hindi "Gau Mar ke Juta Dan" ( donating shoes after killing cows).
Corrupt ministers and politicians in general have caused unprecedented loss to
the exchequer and have themselves become billionaire during last five to ten years.
On the contrary pain of common men has reached and crosses the level of
tolerance.
Government has advised all departments to stop fresh
recruitment. It means problem of unemployment will be aggravated and crime will
rise day by day.
Can government stop price rise or inflation or fiscal
deficit by merely stopping foreign trip of ministers or by curtailing expenses
on conferences or by reduction in oil subsidy?
No,
Of course such steps should have rather been the part of permanent
policy, but these policies cannot cure the cancer of corruption and cannot
mitigate the pain of common men already caused by faulty policies of Manmohan
Singh during last two decades.
It is pity that bad policies which have resulted in alarming
sickness of economy are still considered by veteran economists as best diagnosis
to cure the sickness of economy. Government should at least learn lesson from
leaders of sixties and seventies when government used to create job
opportunities by adding more and more projects, more and more industries, by
adding educational institutes, by helping farmers to increase agriculture
output etc.
On the contrary present government always talks of disinvestment
and running their current expenses by selling assets created by governments of
sixties and seventies.
Policies of liberalization , privatization and globalization
has simply and undoubtedly helped only a few lacs of elite class families who
have become billionaire and who figure in list of top 500 richest families of
the world.
Politicians invariably use to commit blunder and people of India always have
to suffer the pain .It is bad luck for Indians and that in India ,politicians
change the policies frequently to suit their whims and fancies but do not change their attitude and do not change their
culture and intention. Common men are always punished for the fault of politicians.
Lastly even if it is assumed that policy of reformation and
that of LPG may help in curing the disease of the country , I hope government
failed to ensure that proper and adequate dose of anti-biotic medicines are
injected into the blood of sick economy .
Obviously reputed economists like Manmohan Singh, Pranab
Mukherjee , Montek Singh Ahuliwalia will do nothing but fuel to fire by their
austerity steps taken at a time when common men is already frustrated with
current government. Austerity steps announced by the government has now made it
clear that the policies announced in 1991 in the name of reformations were not
either properly executed or policies were not fit for Indian economy .
Now at
least people of India will understand whether they committed a blinder by
electing Congress Party to power and by giving unregulated power to person like
Manmohan Singh and his cabinet.
The million dollar question is why the great economist
failed to visualize the consequences of their so-called good policies ,why did
they fail to achieve their goal , why did they failed to predict correct GDP
growth, why did they fail to decouple the Indian economy from the pain of
global recession and so on.
Will they accept their moral responsibility on growing
economic sickness?
Are they not punishable for poor performance and for
cheating the common men in the name of reformation?
Top business houses or ministers or corrupt officers will
face no trouble even if their expenses are curtailed or reduced to zero. It is
only common men who will suffer by so-called harsh measures undertaken by
government in the name of curing the economy.
Rupee decline, wobbly markets and 'lowest' GDP growth highlight inept handling of economy by UPA-II government
http://economictimes.indiatimes.com/news/economy/indicators/rupee-decline-wobbly-markets-and-lowest-gdp-growth-highlight-inept-handling-of-economy-by-upa-ii-government/articleshow/13694064.cms
NEW DELHI: India's economic growth plunged to its lowest in nine years during the January-March quarter, deepening the gloom and pessimism that has gripped much of Indian business and highlighting what many economists and industrialists characterise as the inept handling of the economy by the Manmohan Singh-led government, which has sent investor confidence plummeting.
The government, which has often appeared to be in denial, blaming troubles in Europe for the economy's predicament, appeared to hit the panic button on Thursday evening, asking all ministries to cut non-plan expenditure by 10% and banning creation of new posts. Gross domestic product, or GDP, rose 5.3% in the three months to March from a year ago, down sharply from 6.1% in the previous quarter, the Central Statistical Office said in a statement on Thursday.
"This is a wake-up call," said HDFC Non-Executive Chairman Deepak Parekh, who hoped the dire growth numbers would at last lead to some action from the government.
Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. "It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power," C Rangarajan, chairman of Prime Minister's Economic Advisory Council told ET.
Robert Prior Wandesforde, India and South-East Asia economist at Credit Suisse, said in a note: "It will inevitably send shivers down the spines of senior coalition politicians, who will no doubt be heaping pressure on the RBI to react and react aggressively." An HSBC report referred to India as a gasping elephant.
Core sector data released on Thursday showed the new fiscal year had begun on a weak note, with output of the eight key infrastructure industries, which have a 38% weight in the gauge of industrial growth, rising only 2.2% in April.
Expenditure estimates showed private consumption growth had dropped marginally to 6.1% in the last quarter of 2011-12 from 6.4% in the previous quarter, though a 3.6% rise in investments during the January-March quarter after a 0.3% contraction in the previous quarter provided some hope.
Exports rose only 3.2% in April.
Growth Pulled Down Largely by Manufacturing
In recent days, Goldman Sachs, Morgan Stanley and Citi have downgraded their forecast for the Indian economy for the year ending March 31, 2013, to just above 6% from close to 8% not so long ago. Agriculture has grown at a modest 1.7% in the quarter.
Most economists blame policy paralysis rather than global headwinds, the favoured explanation of the finance ministry, for the economy's woes. Finance Minister Pranab Mukherjee, who many blame for the current economic mess and a disastrous budget for 2012-13 that dealt a body blow to an already fragile business sentiment, said the economy may have bottomed out but had nothing concrete to offer.
"These are disappointing figures in the context of our recent performance, but have to been seen in the light of overall global developments," he said, promising "necessary steps to address the imbalance on the fiscal front and on the current account" to check inflation, improve capital flows and spur growth, which he acknowledged was the "lowest in the contemporary period".
NEW DELHI: India's economic growth plunged to its lowest in nine years during the January-March quarter, deepening the gloom and pessimism that has gripped much of Indian business and highlighting what many economists and industrialists characterise as the inept handling of the economy by the Manmohan Singh-led government, which has sent investor confidence plummeting.
The government, which has often appeared to be in denial, blaming troubles in Europe for the economy's predicament, appeared to hit the panic button on Thursday evening, asking all ministries to cut non-plan expenditure by 10% and banning creation of new posts. Gross domestic product, or GDP, rose 5.3% in the three months to March from a year ago, down sharply from 6.1% in the previous quarter, the Central Statistical Office said in a statement on Thursday.
"This is a wake-up call," said HDFC Non-Executive Chairman Deepak Parekh, who hoped the dire growth numbers would at last lead to some action from the government.
Senior policymakers appeared to be pinning their hopes on the RBI cutting rates. "It is critical to appreciate that there is no scope for any further fiscal stimulus, but if inflation moderates, then RBI has a greater room to exercise its power," C Rangarajan, chairman of Prime Minister's Economic Advisory Council told ET.
Robert Prior Wandesforde, India and South-East Asia economist at Credit Suisse, said in a note: "It will inevitably send shivers down the spines of senior coalition politicians, who will no doubt be heaping pressure on the RBI to react and react aggressively." An HSBC report referred to India as a gasping elephant.
Core sector data released on Thursday showed the new fiscal year had begun on a weak note, with output of the eight key infrastructure industries, which have a 38% weight in the gauge of industrial growth, rising only 2.2% in April.
Expenditure estimates showed private consumption growth had dropped marginally to 6.1% in the last quarter of 2011-12 from 6.4% in the previous quarter, though a 3.6% rise in investments during the January-March quarter after a 0.3% contraction in the previous quarter provided some hope.
Exports rose only 3.2% in April.
Growth Pulled Down Largely by Manufacturing
In recent days, Goldman Sachs, Morgan Stanley and Citi have downgraded their forecast for the Indian economy for the year ending March 31, 2013, to just above 6% from close to 8% not so long ago. Agriculture has grown at a modest 1.7% in the quarter.
Most economists blame policy paralysis rather than global headwinds, the favoured explanation of the finance ministry, for the economy's woes. Finance Minister Pranab Mukherjee, who many blame for the current economic mess and a disastrous budget for 2012-13 that dealt a body blow to an already fragile business sentiment, said the economy may have bottomed out but had nothing concrete to offer.
 |
"These are disappointing figures in the context of our recent performance, but have to been seen in the light of overall global developments," he said, promising "necessary steps to address the imbalance on the fiscal front and on the current account" to check inflation, improve capital flows and spur growth, which he acknowledged was the "lowest in the contemporary period".
Finance ministry for 10% cut in non-plan expenditure
NEW DELHI: The finance ministry on Thursday announced a 10% cut in non-plan expenditure in the current fiscal as part of austerity measures aimed at containing its ballooning fiscal deficit.
The Centre is aiming to bring down its fiscal deficit to 5.1% of GDP in 2012-13, from 5.76% in the previous fiscal. It also hopes to cut its subsidy bill to below 2% of GDP this year.
The ministry has argued that there is tremendous pressure on government resources, which necessitates rationalisation and optimisation of resources.
The cut will not apply to interest payments, repayment of debt, defence capital expenditure, salaries, pensions and grants to states. The total non-plan expenditure is Rs 9.7 lakh crore, but after the exclusions the government could only save at most Rs 20,000 crore.
It also announced a ban on creation of new posts and on holding government functions in five-star hotels. The directive from the ministry's expenditure division to all ministries and department has also imposed curbs on foreign travel. It has also directed that the size of delegations and the duration of visits be kept to "absolute minimum". Re-appropriation proposals on this will not be approved.
"There will be a total ban on holding of meetings and conferences in five-star hotels...purchase of vehicles is banned until further orders," said an office memorandum issued by the ministry.
Earlier this month, Finance Minister Pranab Mukherjee had said in the Rajya Sabha that he would impose new austerity measures.
"I am going to issue some sort of austerity measures... whether people like it or not ... to convey a signal that we are responding to the situation," he had said.
The ministry has also cautioned that the rush of expenditure on procurement should be avoided during the last quarter of the fiscal and, in particular, the last month of the year "so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure".
The memorandum says that funds should not be released without prior approval of the ministry to any entity, including state governments, which default in furnishing utilisation certificates for grants-in-aid released by the Central government.
The Centre is aiming to bring down its fiscal deficit to 5.1% of GDP in 2012-13, from 5.76% in the previous fiscal. It also hopes to cut its subsidy bill to below 2% of GDP this year.
The ministry has argued that there is tremendous pressure on government resources, which necessitates rationalisation and optimisation of resources.
The cut will not apply to interest payments, repayment of debt, defence capital expenditure, salaries, pensions and grants to states. The total non-plan expenditure is Rs 9.7 lakh crore, but after the exclusions the government could only save at most Rs 20,000 crore.
It also announced a ban on creation of new posts and on holding government functions in five-star hotels. The directive from the ministry's expenditure division to all ministries and department has also imposed curbs on foreign travel. It has also directed that the size of delegations and the duration of visits be kept to "absolute minimum". Re-appropriation proposals on this will not be approved.
"There will be a total ban on holding of meetings and conferences in five-star hotels...purchase of vehicles is banned until further orders," said an office memorandum issued by the ministry.
Earlier this month, Finance Minister Pranab Mukherjee had said in the Rajya Sabha that he would impose new austerity measures.
"I am going to issue some sort of austerity measures... whether people like it or not ... to convey a signal that we are responding to the situation," he had said.
The ministry has also cautioned that the rush of expenditure on procurement should be avoided during the last quarter of the fiscal and, in particular, the last month of the year "so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure".
The memorandum says that funds should not be released without prior approval of the ministry to any entity, including state governments, which default in furnishing utilisation certificates for grants-in-aid released by the Central government.
No comments:
Post a Comment