Indian Economy: Back to the 80s
Indian economy entered a new disastrous phase with the introduction of the food security bill and the new land acquisition bill by the UPA Government led by Congress. With that, any debate about the economic reforms by the Congress is now fully settled. There will be no more reforms. The country has now gone back to the 80s type Soviet economics. Ironic, as the Prime Minister now, was the Finance Minister of 1991, under whose stewardship limited reforms first happened.
The food security bill, an ambitious project, aims to provide food, as a matter of legal right. Under the program, government will subsidize grain for around two-thirds of its 1.2 billion people. So, simply put, the taxpayers will pay tax, and that will go to feed everyone’s stomach. Fine, should be no problem with that ideologically, for a center left government. Now, comes the more interesting part. The Land acquisition bill, which takes the cost of land acquisition for industries, to four times high, to an absurd level, where no one, no company, no corporate, no industrialist or industrial houses, will want to buy land or invest anywhere and create jobs. Now the taxpayers will pay taxes for people who won’t sell their land for industry other than an absurd price, and therefore will never be able to. So, ideally there will be no new job creation, no new industries, and 2/3rd people of the country will eat on the tax of the rest 1/3rd. Sounds like Socialism? That’s exactly what it is.
There have been a lot of debate recently between welfare economics versus growth economics, and we are not going to go to the details. There are academic papers, with data and stats by economist Jagdish Bhagwati for those who are interested. Simply put, the UPA government ran with a growth of plus 8 percent for the last one decade is due to the liberal economy by the NDA government before, which created massive jobs, made India a world leader in pharmaceuticals, IT, technology, and service industries. Now, with the global recession, UPA government took the easy way out. The FDI reforms never happened, scams became norms, market slowly got bottlenecked and closed, more and more rules and bylaws came into existence, and more and more cheap populism happened as a means to solidify vote banks.
There’s two ways for trying to achieve equality. One is to provide for opportunities, create growth, have a functioning proper market with reforms, industrialize and create jobs and have a modern economy. The other one is taking the money from rich and middle class, and give it to the poor. The second one is more radical and appealing ofcourse, but it promotes one simple problem. If you give someone free food and free stuff, why would he want to work for it anyway? You don’t teach the man to fish here…you just take the fish from someone else and redistribute. Unfortunately the UPA Government took the second way, probably at the cost of the nation, for years to come, unless someone bold enough comes to change this madness.
Ronald Reagan once said, the greatest social program is a job. The UPA Government perhaps condemned the country to permanent poverty and socialism, by stopping all means to create anymore jobs, anymore growth, any more opportunities.
Indian economy entered a new disastrous phase with the introduction of the food security bill and the new land acquisition bill by the UPA Government led by Congress. With that, any debate about the economic reforms by the Congress is now fully settled. There will be no more reforms. The country...
Indian economy entered a new disastrous phase with the introduction of the food security bill and the new land acquisition bill by the UPA Government led by Congress. With that, any debate about the economic reforms by the Congress is now fully settled. There will be no more reforms. The country has now gone back to the 80s type Soviet economics. Ironic, as the Prime Minister now, was the Finance Minister of 1991, under whose stewardship limited reforms first happened.
The food security bill, an ambitious project, aims to provide food, as a matter of legal right. Under the program, government will subsidize grain for around two-thirds of its 1.2 billion people. So, simply put, the taxpayers will pay tax, and that will go to feed everyone’s stomach. Fine, should be no problem with that ideologically, for a center left government. Now, comes the more interesting part. The Land acquisition bill, which takes the cost of land acquisition for industries, to four times high, to an absurd level, where no one, no company, no corporate, no industrialist or industrial houses, will want to buy land or invest anywhere and create jobs. Now the taxpayers will pay taxes for people who won’t sell their land for industry other than an absurd price, and therefore will never be able to. So, ideally there will be no new job creation, no new industries, and 2/3rd people of the country will eat on the tax of the rest 1/3rd. Sounds like Socialism? That’s exactly what it is.
There have been a lot of debate recently between welfare economics versus growth economics, and we are not going to go to the details. There are academic papers, with data and stats by economist Jagdish Bhagwati for those who are interested. Simply put, the UPA government ran with a growth of plus 8 percent for the last one decade is due to the liberal economy by the NDA government before, which created massive jobs, made India a world leader in pharmaceuticals, IT, technology, and service industries. Now, with the global recession, UPA government took the easy way out. The FDI reforms never happened, scams became norms, market slowly got bottlenecked and closed, more and more rules and bylaws came into existence, and more and more cheap populism happened as a means to solidify vote banks.
There’s two ways for trying to achieve equality. One is to provide for opportunities, create growth, have a functioning proper market with reforms, industrialize and create jobs and have a modern economy. The other one is taking the money from rich and middle class, and give it to the poor. The second one is more radical and appealing ofcourse, but it promotes one simple problem. If you give someone free food and free stuff, why would he want to work for it anyway? You don’t teach the man to fish here…you just take the fish from someone else and redistribute. Unfortunately the UPA Government took the second way, probably at the cost of the nation, for years to come, unless someone bold enough comes to change this madness.
Ronald Reagan once said, the greatest social program is a job. The UPA Government perhaps condemned the country to permanent poverty and socialism, by stopping all means to create anymore jobs, anymore growth, any more opportunities.
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