Correct
the wrong in our economy
Something is very wrong with the economy and
hence the Centre has reconstituted the Economic Advisory Council to the Prime
Minister under the leadership of NITI Aayog member Bibek Debroy.
A combination of forces is holding up growth.
The slide began well before demonetisation. Two poor monsoon years and a
debt-strapped industry are other reasons for no growth. Demonetisation
ruptured the transactional rhythm of the economy. GST has further disrupted
cash flows, hurting exporters. Rising
fuel prices can cause more inflation. Kharif output has been hit by irregular
rain. Both the rupee and the sensex have fallen off recent highs.
In all activities of present central
government, whether it is demonetisation, adhar for everything, GST, the public
are put to untold misery and looks as though we have reached point of no
return. Public finance is not a laboratory to experiment with. The huge loan to
ADANI for coal mines in Australia, the ambitious project of super fast train, are
things that drain the precious resources. Now to create capital for these,
public must bear the brunt of increased taxes, cess levies etc.
Modi is trying to do too many things too soon
without ensuring a suitable implementing machinery in place. Demonetisation
seems to be mostly short circuited by some bankers in spite of lower level
staff rising up to a Himalayan task. What is causing big concern is that the
anti-corruption and vigilance mechanism of the nation seems to be too weak to
either check corruption or bring punishment to the guilty.
These are the flip flops of the current
economic scenario caused by tried major reforms of note ban and GST which
reduced both rhythms in business and overall economic growth. Two poor monsoon
years, poor rural and urban demand leading to dismal show of the corporates
producing durable commodities with under utilisation of capacity and loss of
jobs caused by dwindling private investment are playing the major cards.
The interest rates in the banks have come down
considerably. It is the right time to facilitate the business society and public
to get extricated from the slow down caused by twin reforms.
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