Sunday, 22 December 2019

The Indian Economy

Where are we? Where can v go? How can v go? 

Where are we?
At a time when our economy needs full attention, noise decibels are high on the citizenship Act and NRC. One-Act concerns people coming from three outside countries and the other is still in the drawing boards.

Where can we go?
But we have forgotten our immediate burning issue. How to reach 5 trillion dollars and how do we get back to 7-8% growth.

How can we go? 
We need to look at sustainable growth. Some macroeconomists talk about enhancing deficit financing, putting money into people's pockets and create animal spirits to log in more GDP growth.

The term "animal spirits," popularized by ... Keynes..., is related to consumer or business confidence, but it means more than that. It refers also to the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people...

Animal spirits? That's all Keynes produces to explain basic economics?
If that is the case, then why don't we read biology blogs since economists do not have a model for animal spirits.

Challenge the conventional wisdom today.. out of box thinking the way forward...

If a country or economy fails to invest in technology/productivity increases/resource development/education training so that they lack the expertise or infrastructure to handle economic shocks then the economy WILL go into recession.

For India, we need these- 

  • Just creating a speculative bubble  v should not get into the UPA syndrome of jobless growth
  • We need to take fresh guard as a zero-based budgeting taking start base at 2 trillion dollars and identify new areas of growth. Increasing consumption on existing sectors can be a myth.  For eg., When car demand is globally declining how can we create sustained growth over there?  We need fresh thinking. Like these, each sector needs a fresh zero-based budget reviews 
  • India should not just simply look at domestic demand for logging in 8% growth. We need to expand exports and look at enhancing manufacturing focus with new concepts such as partnership with nations like Japan and go for support manufacturing for them and expand export base dwelling on their shoulders riding on their international product brand equity. 
  • New virgin areas of growth AI, VI, Robotics, Big Data analytics and such other fields where research can bring innovative convergence of information technology and science need to be pushed.  For eg., Why not we create robotics for war zones and avoid human losses in places like Siachen. Such concepts should create new monetizable activities for organizations like ISRO. 
  • Encourage research, maximum patents to come from Indian brains,  innovative research thinking has to go infectious and path-breaking startups should emerge. India does not have one google or amazon or apple-like global corporation. 
  • Stop unwanted discussions and everyone should converge their thinking on one agenda- what can I do towards 5 trillion goal. 
  • Innovative expenditure and resource management thoughts with out of box ideas- offloading govt exp to Pvt brands, monetizing national assets fully, etc. 
  • Fancy noises such as abolish income tax etc should get converted to practical thoughts- how do we move into electric cars quickly, how do we reduce oil reliance, how do we offer productivity increases and lure global manufacturing to India
  • We have plenty on the table to do but we leave all and focus on the debate on unwanted chats. 
  • We have plenty of worries on the table

  1. Can the banks survive the mad credits extended in the past? If not where can the depositors go when deposit insurance mitigates a paltry compensation
  2. The slower growth can not absorb the employable population. How do we address that?
  3. How quickly we get back to 7% level growth? Where do we manage resources for kickstarting such growth? 

To sum up

We have too many worries on the table. Hope the politicians retune their mindsets towards economic debates than vote bank gossips.

God bless India


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