India-Shining? IT boom, 55 billionaires, 50% more farmer-suicides?

[Iyyarooraan]

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CCTV/Cams

Dr Bharani ref. post # 11 : In India who do you think will control the CCTV/Cams.  Who will have access to them. How do you suppose these things, CCTV/Cams, will work here. Corruption is almost made as the 5th Veda and I doubt even Kalki Avatar will be able to sweep this aside. Yes. it is that hopeless. Perhaps,if we have only electricity for lighting our house, medicine for the ailing, very ordinary communication media with no TV and no advertisements and international news channels, no cinema, no twisty serials and of course no newspapers, we may see or rather hear a different world.

 

[kunjuppu]

NRR,

your post #24,

sir, we have a huge increase in population. we need the short term, fast growing multi crop mode to get 3 to 4 crops a year, of varied grains, vegetables and hay, to feed the people and the livestock.

i do not think the old method of one harvest of nellore rice, per year, will work to feed the 1.2 billion people. at independence time, we were 425 million.

 

[N.R.Ranganathan]

Yes, I agree India was shining. Was shining.

That was the golden period in the history of India.

In the last century , we had stalwarts in almost every field .

M.K.Gandhi, Nehru, Prasad, Rajaji, Patel, Hiren Mukherjee, SP Mukherjee,Bhagat singh , Tilak and others in politics.

Tagore, Bharathi and others in literature

Ramanujam, C V Raman, Bose, Mahalonabis , Babha and others in science/maths

J.N Tata , Visveswarayya and Birla in industry.

Rt.Honble V.S.Srinivasa sastri , Gokhale , M.M.Malaviya in education.

Ramana, Ramakrishna, Vivekananda, Ram tirtha, Shirdi Sai and others in religion.

Reformists like Rajaram mohan roy, Dayanand saraswati.

Good administrators like CP, Sir Mirza Ismail, Patel.

I have left out many names because of poor memory.

 

[N.R.Ranganathan]

Kunjuppu sir,
You are absolutely right. But, what about quality and nutritional aspects ?

With increasing population, we should have concentrated on agriculture,
particularly food grains. I have seen farmers shifting between cash crops
and essential grains. This is due to economics, I agree.

Sir, I think you might have heard about John kenneth Galbraith. He once
said US has no business to go into industry. ( He meant that being a virgin
country with rich soil, US should have concentrated on agriculture and be
a granary ).

 

[kunjuppu]

NRR,

Actually, Indian population is eating better than ever before. More percentage of them. fewer are starving, though pockets of extreme poverty exists, I am told.

I think, the innocents are exploited on a mass scale. By this I mean the tribals of Orissa and such like. Also peasant serfs like those in telengana.

Tamil nadu, thanks to land reforms, and the communist unions, is far ahead, and not sure if there are indentured labourers still prevalent here.

We are now more aware of our poverty, thanks to extensive communication and also general sense of responsibility. There is a lot of cynicism and a great deal of corruption. Chances are, proportion to the size of the population and economy, there was always corruption. Except few people knew about it. For example, the Nehru family was always rich – kamala Nehru could stay in a swiss TB sanatorium for years, and money was not an object. So was jawahar, indira, rajiv, sanjay et al having british education.

There are many other families like that in the north.

India has a lot more fertile land than most countries in the world, and many of them, are now growing 3 or 4 different crops a year. Dry land is being used for new types of crops. We are getting better. Do you know that 60% of our fruits and vegetables rot because we do not have proper refrigeration facilities and also how to can and preserve these for later use.

Mangoes grown in summer, can be kept dormant and be released to the market year around. They do that with apples here in the usa and Canada.

Not sure if the big supermarkets from the west coming to india will improve distribution or storage, but that has been the selling point to let them in. technology for preservation, reuse and better distribution.

Let us see.

ps. the usa can survive and prosper on its agricultural produce alone.

 

[N.R.Ranganathan]

Dear Dr.Barani,
I refer to your post no.11 and quite appreciate your stand of not
getting the new licence by not yielding to the demand of bribe.
You are right and Mundaka upanishad also says - This Atma cannot
be attained by the weak (3.2.4). By weakness, it means spiritual
weakness. If you are spiritually strong, it is ok. MKGandhi had this
inner strength due to adherence to the values like ahimsa and sathya
and he could muster support against the Britishers.

I have just finished my exhaustive commentary on Mundaka upanishad
and a flash occured to me - yes Dr.Barani is right, but all the people must
wake up, stand united and lend him support. The real problem is only
in the latter.

On other matters under discussion, I hold a different point of view.

 

[vsubbu48]

The thread has linked two unrelated items, IT boom and agriculture gloom. It is not clear as to how both are connected. Has boom in IT affected agriculture? No study seems to indicate this. If the IT industry has boomed, it has also increased demand for various items including agricultural commodities. This should have increased the farmer's income. Further, is there only IT boom in the country and is it the only cause of our increasing GDP growth? No, there are sectors like real estate, retail businesses, manufacturing etc that has lead to the growth. IT boom has supported a lot of younger generation who would otherwise be roaming the streets in search of jobs.

The difficulties in agri business is multifaceted. Timely credit on reasonable terms is only one of the issues. There are a lot of issues with the adequate supply of water, electricity, manpower etc. Even if a farmer overcomes all these obstacles, he does not get the price he deserves. There is a wide variance with the farm-gate prices and market prices. An item that is sold by farmers at Rs. 2 is sold to the final consumer at prices ranging from Rs 15 to Rs. 20. The difference is eaten by the middle men like wholesalers, retailers and hawkers. Why has no action be taken to break this chain? Because the number of middlemen are substantial and no political party would like take them on. Uzhavar sandhai is one such attempt to break the middlemen. But I do not know why they failed.

 

[N.R.Ranganathan]

In general, increase in the circulation of money has a corresponding effect on
the prices. If IT employees , whose take-home pay is higher than others, pay
whatever the price demanded by the vendors, it has an effect on prices. The
vendors ridicule the buyers who bargain and tell them - sarthaan pOyya, indha
vilaiyilE vaangaravanga irukkanga . The fixed income class suffers.

This perhaps is the reason behind linking both the sectors.

Big land-owners, hoarders and middlemen are politicians or are backed by
politicians and they swallow a fat margin not only in agricultural commodities
but also in pharma industry. If you protest, they go on strike and essential
medicines are not available. They dictate terms to the Govt. and the public.

 

[Brahmanyan]

We cannot live as individuals in a society. Each economic activity is interlinked with each other. Now that the Government is more interested in facilitating infrastructure improvements to high end people in the IT industries, the traditional farming activities are affected, due to lack of support from the Government. As one living in Bangalore, the city which is booming with IT related enterprises, I could see the pompous living of affluent IT employees in the midst of poverty stricken daily wage earners. The influx of outsiders from all over India, has changed the culture of the City in these ten years. The disparity between the haves and have-nots is so wide, illegal activities have increased beyond control.

Regards,
Brahmanyan,
Bangalore.

 

[N.R.Ranganathan]

Mr.Brahmanyam sir,

I see this phenomenon of poverty juxtaposed with plenty in almost all the
cities and big towns. Disparity is very wide. But Govt. statistics tell us a
different story based on averages. If one is earning 1 lac, second 0.40 lc,
the third 0.10 lc and the fourth 0.05 lc, then the average income per man
is 0.39 lc approx. The income of the third and the fourth is more than what
they get.

Same story as regards inflation. They say inflation has been pegged at 6%
compared to 8% previously ( figures imaginary ). What I see is that the
prices of grains have gone up, of vegetables gone up and of medicines gone
up. I do not know how they spin out these figures. We are concerned with
the things of day-to-day necessity and their prices.

How many people know that the price of emergency drug sorbitrate is now
50 per 100 compared to 6 previously. The prices of anti-hypertension drugs
have gone up by 100%, all over a period of 2 to 3 years.

 

[Brahmanyan]

Dear Sri Ranganathan,

You are correct in judging the veracity of statements on cost of living thrown by the Government. The statistics given by Government is based on random survey done by the NSS which has no relevance to reality. During my professional days I have worked with the NSS people to submit statistics relating to the Industry where I worked.

As one who has been purchasing BP Drugs for more than two decades, I am painfully aware of the increase in price of medicines with every batch of the same produced by the pharmaceutical companies. No wonder the share prices of Pharma industry have reached phenomenal increase.

Some where I read " only thing that defies law of gravitation is the price of commodities in India, which never comes down, once it goes up". How true it is!
Regards,
Brahmanyan,
Bangalore.

 

[kunjuppu]

Some where I read " only thing that defies law of gravitation is the price of commodities in India, which never comes down, once it goes up". How true it is!
Regards,
Brahmanyan,
Bangalore.

... except cell phone charges!!!!

 

[Brahmanyan]

... except cell phone charges!!!!

Oh Yes. True. I have missed this.ray2:

 

[N.R.Ranganathan]

Newton must be turning violently in his grave at the failure of law of
gravitation !

 

[vsubbu48]

The effect of IT boom is restricted to a few cities like Bangalore, Chennai, Hyderabad and Pune. But the inflation is spread throughout the country. Therefore, contribution of IT industry in the current inflation is very limited as will be evident from the following. When there was economic distress in 2008 due to the sudden collapse of financial institutions in the USA, there was widespread recession in the world. Our government panicked and to avoid the fallout introduced a stimulus package. This involved release of about 20,000 crores for infrastructure, industry and export sectors. Banks were encouraged to finance real estate industry on a massive scale to create jobs in the unorganised sector. The government also announced across-the-board reduction in cenvat to bring down the prices of cars, textiles, cement and other goods. This created a) substantial supply of housing, b) demand for cars/mobikes and c) other consumer goods. The budget allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme for the financial year 2010-11 was as much as Rs 40,100 crores. There may be corruption in the scheme but the fact remains that this amount of Rs 40,100 has come into circulation. While such humungous amount of money was released into the system, there were supply bottlenecks that created the present inflation which the government is unable to tackle and has conveniently passed on the responsibility to RBI.

 

[DrBarani]

but the fact remains that this amount of Rs 40,100 has come into circulation. While such humungous amount of money was released into the system, there were supply bottlenecks that created the present inflation which the government is unable to tackle and has conveniently passed on the responsibility to RBI.

Rs.40,000 crore is Rs.10,000 to 4 crore people... equivalent of one free TV set to happy recipients of Tamil Nadu and being such a small money it has no impact on the overall economy.

The real culprit is the American Federal Reserve Bank that is exporting inflation all over the planet with the hope that domestic inflation may create some jobs.

 

[vsubbu48]

The real culprit is the American Federal Reserve Bank that is exporting inflation all over the planet with the hope that domestic inflation may create some jobs.

Kindly elucidate your point.

I have mentioned stimulus package, reckless financing of real estate, cars/bikes and consumer durables by banks and funds released under MNREGA together created the present inflation. (You have chosen to quote only the last item) All these three items released a lot of money into the economy and it had a multiplier effect due to 'credit creation'. Too much money chasing too few goods creates inflation is a well-known fact.

 

[kunjuppu]

it was in my email today. some wit, probably the writer of a late night show wrote it...good one.


US in RECESSION

The recession has hit everybody really hard...

My neighbor got a pre-declined credit card in the mail

CEO's are now playing miniature golf.

Exxon-Mobil laid off 25 Congressmen.

I saw a Mormon with only one wife.

If the bank returns your check marked "Insufficient Funds," you call them and ask if they meant you or them.

McDonald's is selling the 1/4 ouncer.

Angelina Jolie adopted a child from America.

Parents in Beverly Hills fired their nannies and learned their children's names.

My cousin had an exorcism but couldn't afford to pay for it, and they re-possessed her!

A truckload of Americans was caught sneaking into Mexico.

A picture is now only worth 200 words.

When Bill and Hillary travel together, they now have to share a room.

The Treasure Island casino in Las Vegas is now managed by Somali pirates.

History will re-name this President "Owe"Bama.

And, finally....

I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security,retirement funds, etc., I called the Suicide Hotline. I got a call center in Pakistan, and when I was suicidal, they got all excited, and asked if I could drive a truck

 

[Yamaka]

Rs.40,000 crore is Rs.10,000 to 4 crore people... equivalent of one free TV set to happy recipients of Tamil Nadu and being such a small money it has no impact on the overall economy.

The real culprit is the American Federal Reserve Bank that is exporting inflation all over the planet with the hope that domestic inflation may create some jobs.

For anti-Americans, every bad thing around the world is because of American Govt and the Federal Reserve... Good try.

In 1979, when I came to the US, U$1 = Rs. 8 and I got U$ 8 for the journey! Today, U$ = Rs. 45. 5.

How did this happen?

Lately, to unclog the credit market, Fed pumped several trillions of dollars, and then slowly removed it.. right now, its balance sheet is about U$ 2. 5 trillions after giving QE 1 and QE 2 worth of about U$ 1.8 trillions.

Consequently, the credit market is smoothly running, and refinancing is quite easy and cheaper... and the long run inflation in the US is about 2-3% or less. 10 Y T bond is about 2.5% and yield is falling. Bond holders all around the world, including India, China, Japan etc are accumulating US T bonds.

Where's the problem?

 

[DrBarani]

Kindly elucidate your point.

I merely pointed out that Rs.40,100 crores is a blip in the economy and doesn't get called "humongus" for the purpose of creating a major wave of inflation or other problem. India's problem is the shadow economy and not what is visible to the accounting department. Much of the inflation is driven by the bogus Gold Price. Gold is the real world currency. And the Gold price is near $1770 per ounce, thanks to Federal Reserve Bank that (erroneously) believes inflation will create jobs in America. Fed has handed out over $10 trillion to many banks, and had stonewalled efforts to get itself audited for years. After lawsuits last month some of those numbers came out. Much of that money has moved out to foreign accounts including India.

The contribution of IT sector to India's economy is not yet a major factor impacting its direction.

 

[Nara]

....The real culprit is the American Federal Reserve Bank that is exporting inflation all over the planet with the hope that domestic inflation may create some jobs.

The US Fed is guilty of many things, but to say they are hoping on inflation to create jobs, one has to be ready to face the charge of being obsessively paranoid.

Check out this site for historical inflation rate for U.S. economy. In the last 10 years the inflation rate has ranged from a low of -2.10% (deflation) to a high of 5.60%. The average was 2.50%. More than 95% of the months the annually adjusted inflation rate was below 4.5%.

During the same period, the inflation rate for India ranged from 3.8% to 11.7% with an average rate of 7.57% (Source: India - Inflation rate (consumer prices) - Historical Data Graphs per Year).

Anyone who is not totally uninformed about U.S. Fed knows that what the Feds fear most is inflation -- a whiff of it they rush to raise rates.

There is lot to find fault with U.S. policy and the Fed, but wanton promotion of inflation, that too hoping to create jobs, is not one of them.

Cheers!

 

[vsubbu48]

I merely pointed out that Rs.40,100 crores is a blip in the economy and doesn't get called "humongus" for the purpose of creating a major wave of inflation or other problem. India's problem is the shadow economy and not what is visible to the accounting department. Much of the inflation is driven by the bogus Gold Price. Gold is the real world currency.

When i said humongous, I meant all the the items mentioned by me. Gold prices affecting the inflation rate is still not clear to me. Incidentally, is gold price jacked up by FED?:high5:

 

[DrBarani]

When i said humongous, I meant all the the items mentioned by me. Gold prices affecting the inflation rate is still not clear to me. Incidentally, is gold price jacked up by FED?:high5:

Gold is practically the world currency. All other prices are mapped to Gold for repricing. Right now, with dollar being weakened by US Federal Reserve (in its attempt to increase inflation rate in US) all those with dollar assets have abandoned them and moved to Gold. This is what has propelled Gold upwards. Further, the Govt (CFTC / commodities and futures trading commission to be precise) has banned derivative trading in Gold from July 15th. It has further driven people to buy real Gold - (earlier people were just buying Gold contracts) and this has pushed gold price even more.

US (and the Fed) is the biggest bully out there in international arena and its decisions have global implications. The Fed is mandated by US Congress to pursue (a) price stability (b) improve job market. While it is able to achieve (a) easily, it has failed miserably with respect to (b) owing to poor policies.

Gold, just like Oil, is a global commodity. Any price increase in Gold in New York will hit home in Srirangam. India is not immune to what happens elsewhere in the world. The inflation we see in India is a direct consequence of capital market manipulations in US.

 

[kunjuppu]

drB,

what is a good inflation rate in your opniion.

Let me pray tell you where I am coming from.

Way back in economics class, I remember, vaguely my prof telling us that a small amount of inflation is good.

It keeps the interest rates high enough, for the savers to get a sense of satisfaction that their money is producing an income and also a reward for thrift.

To the borrower, since inflation, causes in reality a devaluation of the currency, he infact, is paying less in current value than what he borrowed. And that in itself maybe an incentive for him to pay back. the same goes for government borrowing too.

Also due to raise in prices, we have increased opportunities to raise prices of goods, and in turn, increased profits, which in turn means increased bonuses (in a good willed ideal world), but no one really cares that this is a discounted money from a year before or such.

Ofcourse beyond a certain point, inflation becomes a bitch, because if income increase does not keep up, purchasing power goes down, and along with it comes 1001 woes.

On the basis of such a short synopsis as above, what do you think is an ideal inflation rate 4% 6% or more or less? Definitely not more, I think.

Currently we in Canada get zero to one percent for our savings, which suck, and which havocs those who live on interest income especially retirees, who are forced to dip into their capital, which could be disastrous for everyone.also due to the low interest rates, the housing market has gone haywire, as people are buying houses based on current day mortgages which in reality stretch out into the future. A 1% increase in mortgage, and Canada would see a repeat of u.s. housing crisis.

Hence my query to your learned self.

I thank you.

 

[DrBarani]

drB,

what is a good inflation rate in your opniion.

Let me pray tell you where I am coming from.

Way back in economics class, I remember, vaguely my prof telling us that a small amount of inflation is good.

It keeps the interest rates high enough, for the savers to get a sense of satisfaction that their money is producing an income and also a reward for thrift.

To the borrower, since inflation, causes in reality a devaluation of the currency, he infact, is paying less in current value than what he borrowed. And that in itself maybe an incentive for him to pay back. the same goes for government borrowing too.

Also due to raise in prices, we have increased opportunities to raise prices of goods, and in turn, increased profits, which in turn means increased bonuses (in a good willed ideal world), but no one really cares that this is a discounted money from a year before or such.

Ofcourse beyond a certain point, inflation becomes a bitch, because if income increase does not keep up, purchasing power goes down, and along with it comes 1001 woes.

On the basis of such a short synopsis as above, what do you think is an ideal inflation rate 4% 6% or more or less? Definitely not more, I think.

Currently we in Canada get zero to one percent for our savings, which suck, and which havocs those who live on interest income especially retirees, who are forced to dip into their capital, which could be disastrous for everyone.also due to the low interest rates, the housing market has gone haywire, as people are buying houses based on current day mortgages which in reality stretch out into the future. A 1% increase in mortgage, and Canada would see a repeat of u.s. housing crisis.

Hence my query to your learned self.

I thank you.

Dear Mr.K

I do not think any inflation is good in the fiat currency economy where money can be "printed" at will. That inevitably erodes any value on hand, regardless of how much effort was put in to generate it. But inflation may be good only in a non-fiat currency (e.g. Gold pegged) economy. However, you will find that no inflation occurs in such a system. World has lived with Gold for millenniums and there was no inflation. Inflation became a problem only after when paper-currency was introduced. Paper with ink on it has value only worth the paper and ink. Merely calling it a "federal reserve note" suddenly cannot transfer special magic powers and raise its value to the moon. This is why dollar lost 98% of the value in 98 years and caught up with its original paper and ink price (2 original cents) precisely at the same time S&P downgrade occurred. I don't think it is concidence. Economics cannot be fooled forever.

The problem I see is, people (including govt or central banks) are looking at simplistic numbers like "CPI" /inflation, and other trivialized parameters to fix the economic crises. Here is what needs to be understood:

If my salary goes up from $1 to $2 I have two dollar bills.
But if the value of the dollar falls by 50%, then I am back to square 1. Double money, half value. No change in my fortune. But that is the best case scenario that can happen with fiat currency! When the dollars double, the value falls by more than 50%! Hence, inflation can NEVER bring prosperity to people or create new jobs. The Fed, the governments, the economists are all completely wrong there. New jobs can only be created when this function

(Number of dollars x Value of dollar)

increases. Only the increase of this function can leave behind disposable income at the hands of businesses and people, create more spending leading to a higher job market. So, more dollar bills is not the answer! Even less dollar bills will do the job if the value of dollar can be pushed up (by raising interest rates). That is the point - QE was a bad move. What was needed was draining liquidity and raising interest rates...exactly the opposite of what the Fed has been doing! That is why QE1, QE2 didn't work and QE45 won't work either. But you will see job market quickly improving when the US interest rates start going up. When rates go up dollar value goes up (as there is more demand for dollar) and this creates value and a net disposable money on the hands of people who are ready to spend. Right now, there is no net disposable money on the hands of people. This situation won't change simply because Fed dumps more money into bank lockers. It doesn't matter if the excess money in bank lockers remained as currency bills or just raw wood, they don't participate in economy, so dumping more money there is a futile exercise.


Bottomline: Inflation doesn't create jobs. Jobs may create inflation. Fed has the cart in front of the horse and keeps wondering why it doesn't move.

Well, I wrote something above, I am not sure what I wrote, so I leave it to you to see if I made any sense! I appreciate your query.