Capitalism is good and needed for faster economic growth!

Unbridled avarice and greed bad! Capitalism as an economic growth engine!

narayanamurthyCorruption under Capitalism can be fought, as proved in South Korea and Brazil where elected Presidents were impeached and removed! Actually Indian politics needs to be sensitised over how to tackle the corruption that is now unbridled and almost unstoppable!

A recent controversy erupted over Infosys founder N.R.Narayanamurthy’s criticism of his own company now managed by professional management paying high salaries to the CEO and the COO, as high as Rs.50 crores to 40 crores. But then the board quickly justified saying the high salaries are in tune with the trend. Of course, other Indian companies to pay high salaries! The point here Infosys has set a target for 20 billion dollars in the next few years!

Some experts, from management and other sectors argue that capitalism is after all what it is and what it does. Capitalism is good and it creates wealth. So too jobs and cuts poverty. It is another thing that Capitalism had a very controversial past, starting from Karl Marx days.

Capitalism has a great history : Capitalism has also a great history. It is the economic system where the entrepreneur takes big risks and invests capital and triggers economic growth.

Now, in the new century, with India, China and the USA in mind, we have to see that it is the US economy, the engine of economic growth. But China’s growth rate is 6.7, India 6.6 and the US So, the whole world looks to India as the next big story! Also, China, a Communist country has adopted the capitalist system, with state enterprises and has shown to the world, it is now the world’s third biggest economy, India is predicted to become the third big economy. Russia is nowhere in the picture!

What if, if there are millions under poverty. At least we have found out new ways to accelerate economic growth. We have the technologies, Internet, also technologies like AI (Artificial intelligence, Robotics and many else!

Education has also spread as never before! In every country of the world, from Africa to Asia and elsewhere, there is a furious spread of education. So too medical help and healthcare. Take agriculture, a field in which we are engaged, in spite of much indifference and ignorance of policy makers, there is now the realisation that we can now feed the world. World hunger is attacked squarely by FAO and other agencies.

If you study the big economies there is great deal of poverty in the world and also inside India. To cut the story short, we have to see that Capitalism is the only way, it seems, that thrived and transformed the post-war world. In 1989 Communism collapsed that was hailed as the end of history! Even in the IT and Internet era it is Capitalist, the knowledge economy where you find the new IT billionaires coming from. The world under the new economy has produced unprecedented wealth on the global scale. It is rightly observed that we live at a time when we witness the world poverty significantly and world’s wealth production scaled new heights on an unprecedented scale.
The per capita income on the global scale has increased, though, as it is often quoted that still there are millions of people who live on 1.25 dollars a day!

This new wealth and new hope has to be welcomed and recognised by all concerned. So, the world is now a much better place than ever it had been!’

Capitalism now changed : It is now a caring capitalism, a compassionate system. Capitalism and the history of the modern world is a fascinating story. Max Weber’s (1864-1920) “The Protestant Ethic and the Spirit of Capitalism” is one classic every one of us, who are all concerned with economy and the economic policy making must read and get some enlightenment. Max Weber saw capitalism as a rational organisation of formally free labour. Capitalism is also seen as dominated by the making of money. Economic acquisition is no longer seen as subordinated to man as the means of satisfaction of his material needs. We all seek material comforts and economic security. And so Capitalism is getting a good grade!

But for various reasons that capitalism always attracted criticism, from the time of Bible to the present times. Property was seen as a ‘theft’ and somehow man’s greed came in for much criticism. The Bible asked: “Why are the many poor?”No suitable answer is forthcoming!

Yes, it is for the profit seeking motive of man only Capitalism exists. As Adam Smith famously said:”It is not by the benevolence of the butcher you get your dinner. It is for the self-motivated benefit only the economic ends are met!

So, in spite of calling for an ascetic way of lifestyle, simplicity and restraint and all that, you have to admit that capitalism exists, existed for all the wrong reasons, as Marx would argue. Marx thundered about the bourgeoisie exploitation and the class conflicts that was to lead to the capitalist collapse and the rise of the dictatorship of the proletariat! We know how history has proved!

Karl Marx’s later years : But as I read in one of the latest biographies of Karl Marx(Karl Marx, Greatness and Illusion, by Gareth Stedman Jones, Penguin) how Marx too became a sort of bourgeois gentleman himself in his London days and enjoyed certain material comforts!

So, every one of us who speak of high moral principles have to be modest in our language and expressions.

The exploitative capitalism is still there, right here in our own midst.

But at the same time we have to see how capitalism also has changed over the years. It is now a lifeline for the millions of poor in one generation to get out of the poverty trap.

There is much optimism on India’s economic future

Fine! Then what are the Prime Minister’s priorities to reach out the poor?

modiThe Prime Minister, after the flush of victories in UP and other states, has now come to the theme that he would reach out to the poor. Wonderful! But are his new priorities to attack poverty? You see, it is an old theme. The poor are very much here and they also constitute the world’s largest population, you know?

So, no government honestly anywhere in the world had given any new mantra to accelerate the economic growth.

If the PM sits for a moment and thinks, then he would find himself against a rock! The UP farm loan waiver to the extent of Rs.35,000 crores is in a large state where the expenditure in the current year in agriculture comes to just 2-3%!

So, what sort of relief the farmers would get. And so too other states. The states are in heavy debts. So, the farm loan waiver is no sure remedy to help the poor farmers, not just farmers but other poorer sections. So you need serious policy framework. Rural India is a complex web.

So too the urban migration. Jobs haven’t been created at the rate as Yogi Adityanath imagines.

So, the CM has to spell out more job creating industries. More innovative industries. So, industrial investments also need incentives. The Yogi too has to go for full-page ads and global investment conference. But he seems to be still talking about other priorities, including a Hindurashtra!

Also, the PM has to have an all India perspective. The rivers, from Teesta to Ganga-Southern rivers link is a high priority. But there is no such indication from the PM’s pronouncements so far.

It is also important that other parties too much co-operate with the government.
It is for the Congress to realise that its persistence with dynastic politics doesn’t take it anywhere.

We have to say certain uncomfortable things about the opposition party. Manmohan Singh can help either the ruling party or the opposition party. Otherwise he has to just retreat. He seems to be giving conflicting signals. He should advise Sonia and Rahul what use he can have to the party.

Otherwise, he should allow the party to do things in a different way. The Congress is a large party. It is a historic party. It has to rediscover its mission. The party, to start with should conduct a weekly seminar, though a small seed, on the future ideology of the party. Every week, an evening one speaker must be speaking to a small audience on the critical next steps. It should be a political topic. Say liberalist politics for a multi-party and multi-cultural society.

There should be open discussions and debates within the confines of the party headquarters. Sonia or Rahul must receive visitors or they should make up their minds to retire and be advisors.

Let us all be a bit honest. Our meetings with senior leaders in Delhi show a pathetic picture. Every senior seems to give the impression that the existing state of affairs with some office and a bungalow seems alright and they seem to imagine they can hang on for an indefinite period!

This is a foolhardy affairs. We warn them. Politics doesn’t wait for messiahs! The bad guys are pushed out. Today, there is a wide awakening. Education has spread. Migration has woken up even the illiterates. Old time loyalties are weakened. Let there be a national consensus on the basic economic and Parliamentary political agendas! WE are a democracy. There is no point to look for any nostalgia. Let us look forward and move towards a honourable self-introspection! Thank you!

l say that the world did not prepares to deal with the emerging risks. Gates says that “getting ready for a global pandemic is every bit as important as nuclear deterrence and avoiding a climate catastrophe”. we are concerned with immediate military conflicts and refugee crises but then, as Bill Gates has warned in a recent speech that climate and technological threats are a reasonable probability ,catastrophe may cost millions of lives in the next decade.

Why, here is one more dire predictions! Next 50 years, we are told, are crucial and depending on how countries are able to cut emissions over the next 50 years will determine the conditions of people’s lives on earth. This is from the Stockholm university’s Resilience Centre! The dire predictions are too much and when we think of future we have to keep this aspect of the Paris climate agreement in mind as well.

The highest allocation since its launch!

We are all likely to forget or even if we know, at least some of the experts and others might know that on Februray 27 2015 the Prime Minister Mr.Modi in a speech delivered in Parliament had described the scheme s a living example of great failure!

gfx4Yes, that is how politics is conducted in the country, though we have to give credit to Mr.Modi for having displaced the Congress party that had been then had become a coterie of corruption presided by a well-rated economic expert!

What went wrong that sent out a powerful signal to the people to vote the mighty party out?
What else but simple act of isolation and no one in the then Congress party, why even now, after three years of such a monumental defeat the party hadn’t recovered from its slumber or arrogance of such magnitude?

Anyway, the much over-rated or maligned MGNREGA has been now taken up by the successor government s inevitable. According to experts like Prof.Ashok Gulati who had studied the scheme it seems that in terms of the price rise and other factors that had been taken into account that the allocations is not a sort of rise but a decline in value.

Measured in real terms at the 2011-12 prices, the expenditure is a decline. Says the experts that measured in current prices, the budgeted expenditure in FY 15, it has actually been declining.
Fine. The real question is whether the much touted scheme, why even credited to the now discredited National Advisory Council over which Sonia Gandhi presided over with such fanfare, is it a mere dole scheme, to disburse funds freely for the poor as a populist election appeal or was if functioning as a development -oriented well-thought out scheme?

We who are living far away from Delhi and the outside of New Delhi’s comfort zone of Lutyen’s bungalow zone, the scheme is a hazily conceived scheme to win the successive elections in a populist fashion, very much like the other schemes, very much like AIADMK schemes, so many to count here, anything and everything that catches the fancy of the poor, from almost subsidised low-cost meals to what have you (if readers permist, we also cite the kio-ends like Tasmac liquor shops to even corruption currency notes at the time of elections!) all that go win an election!

Yes, that was also one such scheme, we mean the much over-rated MGNREGA which was in many parts a laughing stock even with the poor and the villagers. The scheme led to a sudden shortage of farm labour and to that extent it led to a depression in agriculture activities.

We in this very medi pointed out many times that it would have been a welfare scheme for rural farm labour if it had been tagged with farm labour employment.

The cost of agriculture production activities might have been kept under watch but no one paid any attention. So the scheme in many parts, we were eye witness to such farce as sending the labour out in the roadside activates where the labour simple idled for the time allotted and ended up with no sustained production activities whatever!

Nor as now pointed out by experts in retrospect that the scheme must be redesigned in consultation with the Panchayat Raj activities. That would serve some direct benefits like conservation, sanitation, lake formation etc.

Even now, the implementation of the MGNREGA must be recast in the light of the experience gained under the empty populism of the Congress regime.

A decentralised planning and supervision a much transparent spending of the funds that is by account very huge and so much benefit the maximum reach and benefit. The scheme is a good one and from experience it is better to improve and improvise rather than take any partisan view of things.

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The Reserve Bank Governor’s warning!

Was it worded in the politically incorrect language?

Raghuram_RajanThe highly-rated RBI Governor, Raghuram Rajan had made the very insightful remark on India’s economic growth claims claiming that because only the Indian economy is reportedly growing at 7.5 plus rate that we, Indians, shouldn’t feel complacent nor should we imagine that we are tat the top of the world! India is only reporting such high rate. But then, the hard reality is that in terms of per capital incomes we are at the bottom of the scale, China is reporting four times such growth in per capita incomes.

Mr.Arun Jaitley and Ms.Nirmal Sitharaman, the two ministers pounced upon Mr.Rajan to say that the RBI Governor should not have used a language that was hurtful to a section of the people. Certainly, the RBI Governor is a public official and a high profile one at that and any remark that provokes people and divert attention from serious issues must be avoided.

Fine. Point taken. But how the two high profile ministers in the government conducted themselves? Did they help to enlighten the public with the inside knowledge of the Indian economy?

This is the real question. Unfortunately, the two seniors didn’t help the public good, in our opinion. Why?

The Finance minister, not an economist, but only a clever lawyer, but a competent person, had been giving the impression that everything is good with the economy.Also, Ms.Sitharaman is also a highly competent minister in charge of commerce and trade.

We all know and it is public knowledge that exports from India is decelerating. From the peak of 390.5 billion dollars recorded in March 2013 to 22 billion dollars in March 2016.Almost for more than a whole year. The RBI Governor in his Ramnath Goenka Lecture delivered recently has dealt with the reasons for such an export deceleration. He cited, among others, there major reasons how the countries as they grow and expand their trade the growth of the GDP and the Exports don’t match.GDP might grow but the exports might change patterns depending upon the growth of countries. As GDP grows, as say in China its non-traded service constitute a greater share of GDP, also trade-intensive capital goods investment muted etc.

The point here is that the structure of the trade and exports components change and we have to learn to live with a new normal growth and the old double digit growth in exports, says the RBI boss, is at best would be a memory!

Anyway, the RBI Governor on his part had made clear that if India is to reach a level when poverty of the vast mass of the Indian people are to be removed and a new level of prosperity and a decent living for the vast majority of the people is to become a reality then, the RBI Governor candidly said than the Indian economy must be growing at a higher rate for the next 20 to 30 years or more!

This is the reality of the Indian economic policy making challenge.
Till now, this harsh troth was not said so simply and openly.
The professional economists of the earlier era, under the UPA regimes, the economists who also indulged as politicians (!) did a great disservice to the Indian people by not talking so openly or candidly.
By keeping mum all the time as the chief executive of the country the ones who pretended to promote India’s economic growth only kept their jobs safe only. Not the lives of the people from the endemic poverty.
Now, we have a real change for the better. Now, we see under the Prime Minister Narendra Modi a new bold initiative, Transforming India by a series of reforms the Indian government wants to promising a faster growth.

They have put forth ten new promises. Aadhar number for 90% of the ration cards. Increase rural tepeldensity 100% by 2020. 175 broad band connections by 2017.Deregulation of GM crops by March 2018.WTO-compatible norms by March 2018.Third party scrutiny of road project execution agencies by end of 2016.

Of course a grand promise of 10% growth in GDP.175 million jobs. A 10 trillion dollar economy.

Bravo! It is needed such a grand vision. Then only a sceptical and doubting Thomases-filled nation can be rejuvenated!

We welcome the government’s rush to think big and do things with great hopes. A nation succeeds by the scale of its own beliefs.

May the tribe grow? Or, when you will act and do justice?

ModiNew--621x414Mr.Narendra Modi, the Prime Minister, might not have imagined in the wildest of his dreams that a set of intractable problems, corruption, black money and also unpaid huge bank loans by the high and mighty, besides his unfulfilled promises of getting the black money from foreign banks and putting into the citizens accounts as much as Rs.15 lakhs per family? Or, per head?

Whatever it is, the amount, the amount now lying in run realised debts in the PSU banks ,now after Mr.Mallya fled the country has really become something no one seems to have a clue so far. We, citizens, all believed that bank loans, once taken, would be repaid like you and me, one day with interest!

But no, alas! This is not true at all. Only lately we realised that if you are a bigwig, in business or like Mr.Mallaya, in Formula I race or IPL cricket or simply a member of the Rajya sabha, you can flout rules and delay payment. On the very same day when Mr.Mallaya fled we saw a pathetic replay of a defaulter, this time, it is not like Malaya but a humble farmers in far away Tamil Nadu district, he was shown beaten up by police or by the recovery agents and his tractor was seized and taken away! As a result the poor or unfortunate farmer decided to take his life and he committed suicide!

This was in a state quite advanced in agriculture and in district known for its irrigated fields! What about the other farmers, more unfortunate, in far off Maharashtra in the drought-hit Vidarbha district. No one anymore seems to have kept count of the number of unfortunate farmers who take their lives. Yes, farmers’ lives are cheap and deaths of farmers are not reported in the daily news. It is no more news worthy.

Now, as for the big banks and big loans, as in the case of the King Fisher Airlines, we are told that there are bigger defaulters in other industries and yet they are not declared as defaulters. The story is long and unpalatable for all who know how the Indian economy and politics work.ven a child knows that no banker would shell out cash in such big boxes, or in sacks (we don’t know how the money was transferred but we all know before the money is handed out it must a phone call or an email or through some unknown channels it is the politician, a minister or a higher-up secretary who would have advised the bank manager to shell out such big cash bundles.

It is sheer hypocrisy that till date no one seems to be willing to disclose this was done s a quid proquo for a favour done by the corporate heavyweight. And, pray, this all happened when the Congress party, call it UPA or NDA (!) was in power.

Why then this silence? Now, this sort of bulk cash disposal can’t happen in India without political patronage. So too, under the successor government. Why it took two years to come to this stage? Even now, there is much doubt whether the money can be recovered, not just from one corporate heavyweight but from other heavyweights as well.

Or, do something so that we start afresh. No less important is also to fight corruption. As per one account in Karnataka in the court of Lokayuktha, there are some 750 cases registered and there is no chance they would all be disposed off, given the disbanding and reconstitution in the avatar of ACB (Anti-Corruption Bureau), a state government department.

Also there are some high profile politically sensitive corruption cases. When all these cases would be disposed off? We don’t want to sound embarrassing to anybody.

The point is that we have to initiate some large scale or limited scale reforms in party funding or Election Commission Reform and speed up the implementation of the Right to Information Act and there are many such sensitive areas. Today, we write from the grassroots, that corruption t all levels, yes, all levels are rising by leaps and bounds.

We are sure the PM downwards must know this trend very well. Unless, the many democratic institutions from Panchayats up to the district and state levels upto Delhi we fill up vacancies we can’t have things under control. So, please encourage press freedom, freedom of expression, media freedom. The PM can then get the latest developments.

So that many of the problems at many levels might get themselves solved.Democracy is a great tool. To get the citizens express their grievances. Please see how China under Xi has managed to tackle corruption. It is really a tough call in China with one party and strict media control.

It must be a bit easier in a democracy. People must feel relaxed and happy. Indian people are relatively a happy people by the latest Happiness Index, you know! So, feel happy for the small mercies you enjoy!