Saturday, June 14, 2008

Common man's Economy




During my Post-Graduation once I had to attend an extempore speech competition because of my friends’ request. They all wanted to pass some times among the beautiful girls who came from different from different colleges. I think I should not remind you that we personally never do anything wrong but our friends do. Anyways, one of my junior was upon stage and she had been given the topic “SENSEX”. The girl who was a graduate of Journalism and doing PG in the same subject started giving her speech on “CENSUS”. It took a few seconds to understand what was she saying and suddenly the whole hall started laughing. The girl stopped for a moment and realizing her fault started crying. I still reconsider the incident and try to find out the reason that what was the reason that among the hundreds of audience she chose me to attack and started referring me as a manner less…….. And then the whole auditorium locked their lips and started looking at me as I was really the one who laughed. That’s the most embarrassing moment of my campus life. Anyways, a few days later the episode ended nicely and both I and the girl have been selected for two roles of a short film being made by our seniors. Everyone except me (and may be the girl) forgot about the incident and the topic” SENSEX”.

The boom of Indian share market was just beginning that time and the Sensex was mere 5,000 plus. Within two years this figure reached 20,000 Mark. That’s really incredible and we all have started thinking that India is really shinning. There are other factors which make our smile brighter. Our own indigenous companies have started acquiring foreign companies and pocketed some marvelous deals in recent years which were beyond our imagination a few years back. Indian businessmen are making their place among the richest persons of the world and the number is increasing very fast. This is the third year in arrow when our economy has grown at a rate of 9% and above and the FDI has increased in such a pace that our current Forex Reserve has sat an example for many other developing countries. Our Per Capita Income has also grown strongly. The boom in Private Sector earned huge revenue for the country and most importantly sectors like IT, BPO, Bio-Technology, Pharmaceuticals etc. has created lakhs job opportunity.

Now, the question is if there’s so much benefit then why didn’t we open our market earlier? Well, I guess there is a mistake in the question, which is quite common and we repeat it all the time we discuss such issues. We forget that we, the aam-admi never open or close anything, precisely I can write, we never do anything because we don’t have any such RIGHT. Government whom we elect as our “Bhagya-Vidata” decides our fate by making such decisions and only when it suits their terms and conditions. There is a simple fact known to us that every individual tries to maximize his power and profit no matter whether it’s a government or Bhagya-vidata himself. An open market means governments less control and less interference, then less power resulting less importance and finally less profit. Knowing these entire how could it be done? In 1991 the country’s economy was in such a situation that there was no other single option left to the Government except Liberalization and Opening Market. Otherwise the free market concept couldn’t have entered India so easily. And now, the other question comes in mind. If we give the market freedom to decide itself what is good and what is bad for the aam-admi, then what is the usage of Government in Economy? So, our intelligent leaders never have let the control go out of their hand totally, they have only loosened the string a bit. And the string is still so much powerful that every time an aam-admi intends to do something of his wish, feels breathless under the pressure of “License-Raj”, “Laal-Fitashahi” and “Babu-dom”.

Price control mechanism which went out of fashion along with socialism is still being imposed by our government to control inflation where as it’s been long proved that through other macro-economic policies it can be handled much nicely. And the logic is quite understandable because in a country like ours inflation can change the fate of the Government and there are such previous examples also. So, no political party wants to take the chance. Indian politicians irrespective of different parties love to offer free rural power to impress our farmers, because it attracts Vote and there is nothing sweeter than this vote in a democracy. But it mainly benefits big farmers and not the poorer. But you have no RIGHT to point it out because then you would be called the enemy of India. Subsidies on oil are threatening to cross Rs. 200,000 crore this year and everyday we are witnessing the game being played by our political parties on this issue. The main objective of this game is simply to attract the aam-admi towards them and nothing else. Some of them are more generous, they are demanding more subsidies. And no one is even thinking about taking any constructive steps so that we can avoid the same situation in future. I guess if I write anything about subsidies given for kerosene and cooking gas which mainly benefits middle class, I would be treated as a crazy man and my own mother would surely stop talking with me. Political parties’ stunts over fertilizer’s subsidy are very much known to us, so better stop here. India has always under invested in infrastructure building and this is nothing but a consequence of faulty spending priorities. I wonder sometime that if I can understand that investment in infrastructure or other public spending yields large social returns in the long run then how is it possible that our knowledgeable leaders and Babus know nothing about it! Despite the decent financial sector and high quality capital markets Indian Banking System is still not free from direct control and interference of government and banks still have priority sector lending quotas. And recent addition is writing off farm loans. You think of any aspects of economy and there comes immediately the negative role (small or big) being played by our government in our mind.

One of my friends is working in a very well known liberal think-tank which works on government policies and tries to change the wrong ones. The more my friend works on these policies, the more he becomes angry. It has become a routine that whenever we would meet, he would spend half of the time scolding government. We either tease him or simply ignore his statements. But every time this formula doesn’t succeed and we fail to stop ourselves from arguments and debates. And the night passes with the discussion of broader issues of different ideologies with a little wine in all of ours stomachs. The very next day, when our employed friends snooze in their respective offices and feel embarrassed and we, the rest unemployed cancel our interviews to compensate last night’s sleep, we all promise that we won’t do this kind of unnecessary talk anymore, including my libertarian friend.

No comments: