Dinesh Kamath's Editorial 'Our economy is still not out of the woods' that was published in Newsband

Our economy is still not out of the woods

In India prices are rising and manufacturing is slowing. Although there is a sharp improvement in India’s rank on a World Bank index the economy is still not entirely out of the woods. Rising oil prices is an example. We have slower growth with weak exports at a time when global trade is recovering. Job creation is still to pick up and the latest inflation data is cause for concern. Rising onion and tomato prices pushed vegetable inflation to a high.

Surely there will be back up plans for sustaining the growth momentum and the government will unleash the plans soon. Considering the volatility of fuel prices, the dependency on it would be very limited and we can expect some policy measures from the government soon to curb the inflation menace.

Over-analysis of fluctuations in the growth rate of our economy is not going to be of much help. What is required is a long term strategy for harnessing our resources towards sustainable capital formation and increased production of wage goods. For this purpose, we must have a centralized planning body controlled by a popular government. The government has difficult choices.

The statistics of economic growth reflect partial reality. The actual situation changes with time and policies of government. Generation of jobs has slowed down and inflation is rising. The scenario has changed from what was reported in the economic growth statistics a few days ago

Low prices for vegetables is killing farmers. Our government should have some mercy on them and support high food inflation. On one hand low prices of fruits and vegetable are killing farmers on other hand high prices of same is killing consumers. This type of contradictory situation is arising due to long and inefficient chains of middlemen.

The government may pave the way for some sustained revival by adopting certain austerity measures. First, it is advisable to curb the splurge the politicians indulge in, in gay abandon. Secondly, the election fund should be done away with by making the spending the concerned candidates' onus.