Friday, August 16, 2013

Greasing the economy's wheels

67th Independence Day:

Greasing the Economy’s wheels.

B. Yerram Raju

Nobody can understand the ‘level playing field’ better than the FM. Level the prices of dollar, diesel, petrol, electricity from any source – hydro, thermal, gas, nuclear, and 10kg bundle of firewood, people will have limited choices in all the alternate forms of energy needed for fueling economic growth. We would like to level the bus fares and rail fares with the air fares so that the common man can travel by air. You pay as much for a kg of rice as for vegetables and after all we believe in equality. Ensure that same price you would pay for a kg of meat as well. Grow more organic, pay more for vegetables than for meat. People don’t flock at the non-vegetarian tables in dinners and get-togethers.

Keep earning more to pay more; the GDP grows. With such growth, it is possible to find answer for the joblessness. Increase the minimum wages – whether it is MNREGS or other sectors, it adds to the GDP and growth gets recorded. Human development index may be lower in rank for India: in any case, the countries that have large GDPs and higher growth rates do not have high ranks in HDI.

The stock prices of oil firms is more important for the economy as they play in international market for purchase of oil and gas and also for keeping parity between the rising private sector and the public sector in energy markets. When subsidies on oil account diminish, the FM can see a queue of rating agencies like S&P, Moody’s, Fitch, etc to give the country higher rating and the country would be able to attract foreign investors that may tide over the current account deficit. Disinvestment targets would be reached before the vote-on-account budget next February.

Don’t for a moment bother about the poor. We know them better. We know how to take care of them. We gave them ‘aadhar’ cards; we are prepared to give them mobiles linking them to banks to draw cash. We can make our banks lend to them, for we can write off their loans in the next budget – a promise we are sure to hold in the elections. We gave them already gas – 9 cylinders a year. These poor know that we would give cash, clothes and a can of beer, the elixir of life for their votes. They are the largest numbers for us to bank upon. We gave each Parliamentarian, whether they attend or not, the annual grant of no less than a couple of crores of rupees of cash after free travel and house, free fuel for his/her car and a dignified life so that they can keep their constituencies engaged in perpetual dependence. 

Government employees, for sure, would be with us: we are giving them increasing dearness allowance and we are prepared to announce even wage increases much before the elections and this would also help our GDP grow faster.

We have even changed the Governor of the Reserve Bank to give confidence to the corporate sector, that in the next monetary policy, money becomes cheaper and we from the government can also borrow at low cost. We have already reached 68% of GDP in our public debt. We have enough space to borrow and we have now the IMF to support us for further debt. We are keenly looking at the Election code as to how the electorate can be wooed without hurting the politician. After all, all the parties are united when it comes to Right to Information Act provisions to exempt the politicians from any disclosures. We know how to abort the law. We stood the test of times; so many scandals of himalyan size did not bother us. We had the right answers for every scandal. We know how to take care of ourselves. With such a track record on our side, people, we are confident would be with us in this hour of distress when the economy is down the dumps and when their savings fetch them only a farthing.

People have short memory. They will forget our lapses when they have to vote for us for their choices are limited if not none. No matter if we increase diesel price by Rs.5 a litre. There will be street shows for a few days. Situation becomes normal and life moves on like water in the river Ganges. There is an army of environmentalists who fight pollution in Ganges. We have environmental protection laws too to take care of them. We ruled for decades and we know the pulse of India and of Indians abroad as also those foreigners who matter to us. We would assure that we would grow!! We know when and where to grease the wheels of the economy, like none before.

The author is an economist and can be reached at