India in financial trouble?
People have been asking me…”Is Greece such a big problem…Is Eurozone crisis so difficult to handle…..”
Frankly it is the government of India playing the proverbial ‘foreign hand crisis’. This allows them to do what they want, and not get blamed.
Surely Greece is not to be blamed for our huge, mammoth deficit. G cannot be blamed for our grains rotting in the ‘open’ godown. G cannot be blamed for the huge deficits that our states run. Or for Didi openly REFUSING to pay the INTEREST and the amount due.
Our government has completely lost it as far as petrol pricing is concerned. In case of fertilizers the scenario is the same as petrol -but the people may not see the similarity because a very few people track that sector.
Our jute subsidy is a super duper joke. We FORCE cement manufacturers and agri growers to use jute bags. This is expected to help jute farmers. However on the day we require the bags, we find we are about 500,000 bags (only) short. So we AIR-LIFT it from Bangladesh.
We subsidize many things in Nagaland…now this is stolen and taken to Bangladesh!!
As a government our foreign policy with our neighbors is bad, Karunanidhi decides on our Sri Lanka strategy. Bangladesh is happy as long as we keep taking their refugees. There are schools in Mumbai full of B’deshi kids. Can imagine the situation in Kolkata.
We cannot contain terrorism – on the border or Maoism within the borders.
Our regulators are here to throttle the industry WHILE letting the customer suffer. Awesome combination.
Admist all this the Rupee is headed towards 60….and real estate prices are in the stratosphere. Who buys flats of Rs. 3 crores when the average salary for a professional is Rs. 7-8 lakhs still beats me.
Now if you do not think any of this is a problem for out 6% growth (which is awesome if you ask me) then blame Greece. It is easy to beat a dead snake, right?
Then of course there is Spain,..Italy, France…by that time the elections will be announced.
Anyway the best run states are NEITHER Congress nor BJP.
Look at the map – TN, Kerala, Karnataka (nobody knows who is in power), Orissa, Bihar, UP, ….hey Congress and BJP where are you? LOL
Ashish
Nice article Subra Sir. Indeed correct observation “by that time elections will be announced”.
Krishna
The situation turned so bad that even the past growth figures are suspected. The bleak picture of today questions the veracity of such claims.
Arun
“Karnataka (nobody knows who is in power)”
LMAO 😀
pravin
i am afraid that in such times,the mood of the angry people and even the so called intelligentsia would be to elect a dictator type person in the naive hope that a benevolent dictator can exist.
i’d prefer anarchy(lack of powerful govt ) to an authoritarian stalag
praveen
You forgot Gujrat or was it convenient ?
subra
Gujarat? Sure one Mr. N Modi is the person running it. If BJP it is in power in Guj..sad for them.
NM is good enough to allow them to say so.
LuckyOye
“Bangladesh is happy as long as we keep taking their refugees” Just as we are happy as long as the US keeps taking our H1-B coolies AND sends their data kachra offshore for our young guys and girls (computer bai’s?) to clean.
Sincere apologies if anybody’s sensibilities are offended…but seriously, I know a group of intelligent MBAs in a KPO org happily ‘scrub’ and ‘clean’ their clients data on a regular basis.
Any ideas what will happen to these lakhs of ‘white collar’ jobs when the US decides to impose capital and labour controls to protect its domestic unemployment situation? Will Pronabda be right then? Subra and my friends, India’s troubles haven’t even begun.
subra
sorry i meant “If Bjp THINKS it is in power in Guj” sad for them
subra
LuckOye – every person chooses a job/ career as per his/ her ability, willingness to slog, money being paid and of course geography. I know KPOs which pay Rs. 350,000 to a graduate with one years experience. In this same country there are graduates earning Rs. 100,000 and not sad for it.
In a smaller town a graduate with Rs. 5k income may be thrilled, in a bigger city he will expect a much higher sal.
US will outsource jobs to Mumbai. Mumbai will outsource to a smaller town – and play on the arbitrage. Indians and Chinese work for one of the smallest per day salary – and being a low cost good quality producer is the ONLY insurance in a competitive market. The same guys go and buy a Domino’s pizza where they pay a 300% premium on costs…:-) sad, but the Golden Rule of life is, “The guy who has the Gold, makes the Rules”. Welcome to the big, bad, cruel world.
pravin
LuckyOye,
that makes no sense.people are doing work at KPOs or wherever because it is often their best option given current circumstances.do you propose they grow beards ,wear jholas and protest on NDTV ?
isnt the H1B visa a labor control activity already? electronic data will simply move over the internet.outsourcing is not being done because it is fashionable.it is solelly because it is profitable.
so unless indian wages shoot up dramatically or american wages drop considerably,labor controls dont work.just like price controls dont work.
and capital controls? er..it is the indian govt which is probably more likely to impose capital controls .it is not as if the rupee is a paragon of virtue.both the dollar and the rupee are sinning whores.
ksm
Today IIP data comes are 0.1. I am pretty sure that the govt spin masters did not want to show negative figures for second consecutive month. So they made as if it looks like a positive figure. The drama does not end here. The brokers ( lets cut rates lobby) started their rheoteric and this time they are very arrogant. They said that they are not bothered about inflation. So now the cat is out of the bag. We know all along these b******s are not bothered about aam aadmi and they are concerned about their fat paychecks and corporate profits. Since they are earning in crores in case of slow down or recession they can leave happy life. Only the middle class herd crowd will suffer hugely. Sadly this middle class idiots are not understanding this and playing cheer leaders to corporate mafia.
If we cut interest rate, we are officially gonna to say that our interest rate is fuckingly low than the official inflation. Won’t foreigners laugh at us by seeing this. Remember I am not talking about the CPI which many countries use. We talk about WPI. CPI is 10 and more. WPI is 7 and more. Now already our interest rates are less than inflation which is a great joke. But we are now going to do that in terms of WPI. RBI is going to be a laughing stock.
Dont forget the currency is damaged and out of shape now. The prudent way is to raise rates. That is what a educated banker is supposed to do.
Also please dont forget that the rate cut will not be passed on the customers. It will be eaten by the banks.
RBI is misssing another golden opportunity to prick the bubble.
But one silver lining is Chakravarty is making right noises. But one summon from north block will make these guys to eat humble pie.
areaMan
Excellent post Sir. Some of your venting-spleen-out posts are fantastic. This is one of them. (I imagine, you typing it out non-stop in 5-10 mins start to end. Bang..Bang…QuickGunJobDone!).
“…There are schools in Mumbai full of B’deshi kids..”
I can understand, some of this is for exaggeration effect. But seriously? Is the situation so bad now? I know lot of domestic help workers, maids, construction labourer being Bgdeshi migrants, but I still seem them in minority.
Can you name (or without naming point in the general direction of) atleast one school that has even 50% Bgdeshi kids?
Thanks. And keep writing such posts. Love em.
ksm
Kudos to Subbarao
RBI Governor D.Subbarao comes to party. Even though he comes late he came latest. Inspite of all the pressures from Government, Corporate Mafia and media brokers he held his fort like a man possessed. This gives us a comfort that atleast somebody is thinking long term for the betterment of country. As I wrote earlier, he was a worried man after last month mis adventure and he is now trying to make amends.
Inspite of Pranab Mukherjee’s pressure, he handsomely declined to cut the rates. In fact the brokers and mafia should thank their stars for Subbarao not to raise the interest rates. Such is the state of economy that cutting rates is idiotic.
SBI and Its Chairman
Like a cheap road side fellow, SBI was trying a cheap trick last week. They claimed to cut rates from 0.5 to 3.5 for some sectors which no one heard of. They also said that they will cut further if RBI cuts CRR. They claim the SBI interest rate cut was not applied to retail. Some sections of SME and Agriculture was the beneficiary. As a ex-banker we know already the agriculture loan normal rate id 7-8 and below. Did they cut to 4% now? Whom they are trying to fool. Subbarao ignored these cheap tactics. Many know that this cheap trick is to induce RBI to cut rates and then swallow the interest into their balance sheets. I wonder why SBI forgot it social objectives and competing with blood suckers like HDFC and ICICI?
Godrej Comedian
This guy who could not come up with any reason for rate cut in CNBC today. But repeatedly telling that we need to cut rates. Now he started saying we need to cut CRR. Until last month he was talking about Repo. Now he was taking about CRR. Somebody might have told him that SBI is begging RBI for CRR cut. So he also started like a tape recorder. We know he forayed into real estate and he wants that bubble to be inflated further until he sells all his assets. Poor guy.
Tale of Core-Inflation
Media brokers and Corporate mafia found and coined a new term called core-inflation. I really dont understand these guys. Are they really idiots or acting like one? we need to know this. When RBI says people are suffering from Inflation, these idiots are telling core-inflation is reducing. Core-inflation means manufactured goods inflation. Am I buying heavy machineries to my home every month? I buy groceries damn it.
What policy paralysis
Until now, our fuel prices are regularised. We were not facing issues. Why now? suddenly all are talking about policy paralysis. If the govt allows FDI in retail and FDI in aviation do you think our economy will improve? No. Mallya’s financial condition only will improve.
Attack Real Estate
For real growth to return, we need to prick the real estate bubble.