1. The chief economic Advisor Basu has stated that moderate debt crisis in Europe may actually help India a little, as capital will flow in India ,being a safer heaven.
It is good that he finally saw the point and stated so.I have been arguing same since a fortnight.Logic says investment should move from unsafe makets to safer markets.So why Indian investors are panicking?
We should,capitalise on this and sell Indian market features globally.We should keep markets steady like Israel,Srilankas and Mexico.
But our PM,Finance Minister and so on never bothered to make any statement at all to put the nerves at ease of capital market investors and operators last week.A strong reassuring statement would have sure contained the slippage.Even now nothing has come out and stock markets may take a further beating in coming week and this may result into serious avalanche.Common people may loose thousands of crores.
It is highly irresponsible behaviour of our government.We have hardly any financial linkages with Greece, Portugal or Spain.
2. The FIIs role has to be investigated as almost 50% of them come from a non significant country like Mauritius.Who are these guys?It is strange.It shows India has some dubious channels open vis a vis Mauritius and its tax laws and banking system.
The FIIs- like rats, ran away from Indian markets withdrawing as much as Rs 4800 Crores last week creating panic.They panicked or created panic to re-enter at lower levels using Greece crisis as an excuse- is a big question?
GOI should, restrict outflow of such money for time being till situation improves.FIIs have proven that they have no loyalty or concern with Indian markets.Why should we bother for them ?
3. I reject Basu's observation that Indian financial markets are now globalised and will have to take beating along with major markets.It may serve his self illusions and ego satisfaction but it is not true.Our investments in capital markets in India and globally is just peanuts.
Instead of singing blindly globalisation songs, Basu should design a system that effectively insulates country from shocks.We should not encourage FIIs,MNCs too much.They come for greed not for charity to us.
4. Now GOI has designed a new conspiracy to mitigate inflation figures.Their intentions are so open and arrogant but people of India specially those who praise Man Mohan and his cabinet and congress by default refuse to see the light.
The base year is being now changed to 2004-2005 thus removing very sharp price rise in years 2002 to 2004 ( 3 years period)in various goods and the property.
The basket is also being expanded to include electronic goods and other items thus modifying the formula to reduce inflation effect artificially.
It is matter of regret that instead of honestly trying to reverse situation Man Mohan government is playing over clever and trying to hide inflation by jugglery.
Where is the need to change base at this moment.We have already a revised 19993-1994 base.
It clearly shows that politicians in power do not want seriously to take any measures to reduce inflation in country and initiate conservation of money measures but wants to mislead people by changing base year and bringing in low inflation products like telecom and electronics.
5. India should learn lessons from Greece and some other countries who are out on extravaganza and too rapid attempt for expansion in name of reforms.Greece was the one to start it.India is now doing same.I dont know why MM Co are in a hurry to grow. Who gave them this directive? Is it a joke to have 10% GDP growth rate year after year in a resource starved country like India with 50% poor and low per capita.
So what is happening ? prices have gone up many times eroding our global competiveness and purchasing power domstically. Result is a big zero.The common man is at the same place .Beyond any purchasing power, as he was in year 2000 .
Besides reckless taxation and now a Direct Tax Code to tax citizens more and more like EET, this spend thrift and wasteful government of congress is set to create havoc in country in a few years' time and agricultural and legal reforms have been totally ignored.Is it by chance or design that frequently imports are opened for various commodities instead of growing them in country? National security is not only to have wheat and rice.We need many basic commodities for self reliance.We need cattlefeed and land for it.
6. Important national assets of mineral wealth have been doled out to prive sector companies like Reliance and others.While some companies like CAIRN India have done good work in Rajasthan deserts to source oil, our domestic firms have a poorer record.This is not privatisation. What right Mukesh Ambani's family had to sell gas at cheaper prices to ADAG of his brother? The intervention of Supreme court was necessary and just.But at the same time GOI should ensure that lacs of investors of ADAG are not doomed and power projects do come up in the country.After all gas is to be utilised too.We need electricity expansion badly.Here mediatory role, and a fast one, of GOI is very important.
The issue is -at what prices natural products should be sold to strike a balance between next 30-40 years availability, consumption targets, cost of production and cost of end products like power generation or auto fuels.The impact on India's carbon foot print and environment degradation should also be kept in mind.reckless expansion od Auto sector should be contianed.
It is seen that in India public opinion is very weak and in typical 'why should I bother attitude' of even best educated and aware citizens is emboldening politicians and babus to take society for a ride and exploitation. Are we really liberated from British mindset and British Colonialism?
Dishonesty ,corruption and manipulations are order of the day.
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