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State of Finance

Brahmanyan

Well-known member
From what we read in the news media, our Country is facing economic depression. Even though I do not believe in statistics furnished by news media, I have to accept that we are facing fiscal problems of high magnitude. Economic depression is setting in over the globe, it is a part of natural cycle.

As for our Country, there may be many reasons for this. One of them is high levels of tax evasion and unabated corruption. I am happy that present Government agencies are actively involved in arresting corruption, and punishing the culprits. Unfortunately Corruption has permeated in every facet of activity and run the Country almost at par with Government.

In my opinion, another reason for the recession is speculative pricing. Now we find all trades have fallen to the grip of speculative activity, with prices fluctuate depending on the (urgency of) demand and availability. This is not fair trade practice.This trend is not healthy for nation's economy. I can understand if private players fix the prices based on the demand and supply. But I fail to understand how the Government which should safe guard the welfare of its subjects could indulge in this kind of activity. For instance Railways, which is the monopoly of Government the cost of train tickets are increased when vacant seats are allotted to the last minute seekers. Or allow Oil prices to fluctuate on day to day basis. Similarly the cost of Air tickets also fluctuate as per the needs. Following this even cost of cinema tickets change on hourly basis ! This trend was started by the previous Government under the learned Economist Finance Minister, (later became Prime Minister for two terms) who opened up our economy under the able Prime Minister, who was called "Chanakya".

Today, we do not know the real value of our Currency or their purchasing power .

I am not an economist, I know only the basics of economics, that I studied in the College. Where we were given taste of theories of Adam Smith, Alfred Marshall, John Stewart Mill and Keynesian economics. All are British Economists. Their theories are centered around human welfare, and not necessarily money making by Governments. I feel,time has come to the brush up Keynesian theory. Keynes advocated for increased government expenditures and lower taxes to stimulate demand and pull the economy out of the depression in 1930 in UK.
Since we are facing similar situation now, out think tank should come out of the textbooks theories and offer pragmatic solutions.

Perhaps I am a conservative in thinking. I would suggest we should go back to the wise words of our own Economist Kautilya (Chanakya) who wrote Arthasastra, which is ancient treatise on Statecraft, Economic policy and Military strategy.

It is my view that each Nation has to evolve its own system of Governance and finance management. India with second largest population in the world is unique in many ways. Copying western or American theories will not work in our Country.

I wish learned members of Tamil Brahmins Forum can take-up this important subject and offer their suggestions without mixing politics.

Brahmanyan
Bangalore.
 

krish44

Well-known member
We are primarily an agrarian society.

Unless farm sector is improved india has no future.

There is a steady fall in rural income of both farmers with and the landless.

Unless their lot is improved with huge subsidies of fertiliser,power and water they do not have a future.

True Govt gives MSP for their produce and also crop insurance, Yet they are in misery..

They are in grip of micro finance companies if not rural money lenders.

Policy initiatives like MNREGA had not been encouraged for sometime which increased their woes.

Add to it there have been no attempts at cooperative farming like china .nor there is effficient cooperative

marketing of their produce.

Most are unable to hold on to their produce to give to govt agencies for fair price and they sell off to middle

men who make profits.

Since crops are seasonal, the rural folk have idle months .

Many drift to cities and do not return .

It is beneficial to be urban poor than being rural farmer.

One finds biharis, jharkand people all over south cities, mostly unskilled in construction industry , brick kilns.

Local citizens of southern cities are in receipt of so many social benefits given by govt that they prefer to

have a good life and leaving undesirable unskilled labour intensive job to rural folk from north.
 

Brahmanyan

Well-known member
We are primarily an agrarian society.

Unless farm sector is improved india has no future.

There is a steady fall in rural income of both farmers with and the landless.

Unless their lot is improved with huge subsidies of fertiliser,power and water they do not have a future.

True Govt gives MSP for their produce and also crop insurance, Yet they are in misery..

They are in grip of micro finance companies if not rural money lenders.

Policy initiatives like MNREGA had not been encouraged for sometime which increased their woes.

Add to it there have been no attempts at cooperative farming like china .nor there is effficient cooperative

marketing of their produce.

Most are unable to hold on to their produce to give to govt agencies for fair price and they sell off to middle

men who make profits.

Since crops are seasonal, the rural folk have idle months .

Many drift to cities and do not return .

It is beneficial to be urban poor than being rural farmer.

One finds biharis, jharkand people all over south cities, mostly unskilled in construction industry , brick kilns.

Local citizens of southern cities are in receipt of so many social benefits given by govt that they prefer to

have a good life and leaving undesirable unskilled labour intensive job to rural folk from north.
Agreed fully. Our Country is basically an Agricultural Country. I strongly believe in Gandhian Swarajya, that all benefits should reach the poorest of th poor in our villages.

Nehruji and his supporting team of Ministers who faught for freedom, understood this well.
In spite of rich natural resources and hard working population, this nation faced worst famine every year. It was the wisdom and untiring work of Nehruji, who built mighty Dams and supporting facilities in all parts of our Country and able support of people like Sri C.Subramanian, Dr. M.S.Swaminathan, Dr.Verghese Kurian and others, famines became history.
Migration of agriculture labour to urban areas to do unskilled jobs is the worst degradation self respect. Caste Politics and munificent offering of ill-gotten money and freebies in exchange of votes has completely spoiled the individual endeavour to exhibit their skill.
I find a lot of changes happening in agrarian sector. I hope the present Governments in Center and State will coninue their best efforts to change our villages a self sufficient unit and stop the migration of agriculturists to urban areas.
Brahmanyan
Bangalore.
 

krish44

Well-known member
Now Turning to the cities and metros
We all concede that we are facing a downturn in economy.

Govt has tried to cut taxes for industry and brought it down to 22% for existing companies and !%7 for those coming up after oct1 .

Private sector is happy.

Similarly putting money in hands of Govt and PSU employees by DA increase of 4% is likely to boost urban

spending

There is stronger need to cut GST rates to 5 and 12% . !8% 28% are high .

Singapore has 7%.

Income tax slabs need to be raised atleast to 12000 zero tax.

These will bring back spending and boost growth.

Tax administration need to be humane with no witch hunting of middle class
 
Our Country is basically an Agricultural country.

Migration of agriculture labour to urban areas to do unskilled jobs is the worst degradation self respect. Caste Politics and munificent offering of ill-gotten money and freebies in exchange of votes has completely spoiled the individual endeavour to exhibit their skill.

I find a lot of changes happening in agrarian sector. I hope the present Governments in Center and State will coninue their best efforts to change our villages a self sufficient unit and stop the migration of agriculturists to urban areas.
Brahmanyan
Bangalore.
Dear Brahmanyan Sir,

Several decades back we were a young nation who just obtained independence. It took a few decades of hard work for us to achieve a reasonable degree of self sufficiency in food supply. All these are understood. It is natural to romanticize agriculture in a country which has suffered many bouts of famine with a high percentage of poor people.


However as things stand today the agriculture sector contributes only 12% to GDP whereas it is estimated that 50% of working population is from this sector. This is basically unsustainable. This is the fundamental issue. Indian consumer cannot sustain 50% of the population who contribute only 12% of GDP.

Therefore our best bet is to reduce the percentage of population that is employed in the agricultural sector. Farmers instead of perennially dependent on govt subsidies must be gainfully employed in other skilled sectors. That is the only way.
 

Jaykay767

Well-known member
Keeping politics aside :)-

The current crisis has 3 parts to this - farm sector crisis, massive joblessness, consumption fall.

Short term has to focus on

1. reviving the farm sector via increasing funds to mnrega to sustain rural folks, targeted support for farming and farm produce prices,
2. Funding / reviving the msmes to grow and hire more people. It is always relatively easier to grow a established company than for a startup.
3. Reviving Consumption - only way is by putting more money in the hands of the people - personal tax cuts, increasing funds for mnrega, increase payouts to Kisan Yojana from the current 2000 per quarter to atleast 6000 per quarter.

Long term focus -
1. Semi privatise farm sector - Allow big players like Tatas to take on "lease" vast farm lands and hire the farmers or one of thier families as employees . Also pay monthly rental for their lands leased by them.
2. These big players can manage the complexities, the seasonal issues, weather issues, etc..and ensure they pay their employees regularly.
3. Revive msmes - merge multiple players within each location, and fund them to emerge as mid segment players hiring more labour force. This will ensure they don't collapse during the next downturn.
4, Private investment - ensure foreign players invest in india , not just sign mous and sit idle.
5. Finally only way for equitable society is to implement Amma canteen across the country, to ensure no one goes hungry. Some will say UBI but it will take forever to implement this - identify poor, make a payroll, identify or setup bank accounts, direct transfer money, poor people's ability to access banks and withdraw the money, etc.. Too complex to implement quickly.
 

Brahmanyan

Well-known member
Dear Sri " Kala Bhairavan",

I don't think it is wise to reduce the percentage of people involved in Agriculture, which is the lifeline of any Nation, while our population is increasing leaps and bounds.
My DIL belongs to the family which still continue agriculture as their main Occupation in Tanjore District. I used to visit their village to attend the family functions.
Now almost all members of the family, except one Uncle, have migrated to cities in India and abroad. He told me now it is difficult to get agricultural labour, since the present generation children of farm labourers migrate to Cities after getting educated. Now with the help and guidance of TN agricultural department, he has started mechanisation of his agricultural activities. Last time while I was in their village, I saw him using Japanese made machine for planting paddy saplings in his land.
This mode of mechanical operation is economical only for big land holdings.

Agriculture, especially the crops selected in south being seasonal and delicate, require intelligent labour to attune the operations with nature. Just like other agrarian trade the agricultural operations require lifelong training passed on from generation to generation. Book learning will have limited use !

Most of the Brahmin families in rural Tamil Nadu, who owned farmlands have left the villages after disposing off their lands.

I have written in detail about the present status of agriculture in villages, since you have raised the subject.

I wish this important subject is taken up separately for discussion in our Forum.

Brahmanyan
Bangalore.
 
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Brahmanyan

Well-known member
Keeping politics aside :)-

The current crisis has 3 parts to this - farm sector crisis, massive joblessness, consumption fall.

Short term has to focus on

1. reviving the farm sector via increasing funds to mnrega to sustain rural folks, targeted support for farming and farm produce prices,
2. Funding / reviving the msmes to grow and hire more people. It is always relatively easier to grow a established company than for a startup.
3. Reviving Consumption - only way is by putting more money in the hands of the people - personal tax cuts, increasing funds for mnrega, increase payouts to Kisan Yojana from the current 2000 per quarter to atleast 6000 per quarter.

Long term focus -
1. Semi privatise farm sector - Allow big players like Tatas to take on "lease" vast farm lands and hire the farmers or one of thier families as employees . Also pay monthly rental for their lands leased by them.
2. These big players can manage the complexities, the seasonal issues, weather issues, etc..and ensure they pay their employees regularly.
3. Revive msmes - merge multiple players within each location, and fund them to emerge as mid segment players hiring more labour force. This will ensure they don't collapse during the next downturn.
4, Private investment - ensure foreign players invest in india , not just sign mous and sit idle.
5. Finally only way for equitable society is to implement Amma canteen across the country, to ensure no one goes hungry. Some will say UBI but it will take forever to implement this - identify poor, make a payroll, identify or setup bank accounts, direct transfer money, poor people's ability to access banks and withdraw the money, etc.. Too complex to implement quickly.
Dear Sri "Jay Kay",
I appreciate your well articulated suggestions to improve the economy of the Nation.
As a believer in Gandhian economics, I have my reservation in handing over Agricultural operations to big players. Human nature is such there is always happiness and self pride in ownership. Instead we can try Cooperative farming, as in Scandinavian Countries. Even in China this has been tried and found successful."As per Wikipedia, the number of farmers who have joined the cooperative farming is 38.7 million, accounting for 15.5 per cent of all farmers in that Country."
Unfortunately Cooperative movement has not been successful in our Country due to Government and Political intervention.
I am not comfortable to invite FDI in all sectors of business activities. We have enough local talent to run successfully conventional trade.
Government run Canteens are all right for a short period. However food industry should be left to private sector, and Government should encourage small players like "Dharshani" hotels in Bangalore.

Government has already commenced in helping the BPL families to open Bank accounts and direct transfer of subsidies to the bank account.
Regards,
Brahmanyan
Bangalore.
 
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Dear friend,

I don't think it is wise to reduce the percentage of people involved in Agriculture, which is the lifeline of any Nation, while our population is increasing leaps and bounds.
My DIL belongs to the family which still continue agriculture as their main Occupation in Tanjore District. I used to visit their village to attend the family functions.
Now almost all members of the family, except one Uncle, have migrated to cities in India and abroad. He told me now it is difficult to get agricultural labour, since the present generation children of farm labourers migrate to Cities after getting educated. Now with the help and guidance of TN agricultural department, he has started mechanisation of his agricultural activities. Last time while I was in their village, I saw him using Japanese made machine for planting paddy saplings in his land.

Agriculture, especially the crops selected in south being seasonal and delicate, require intelligent labour to attune the operations with nature.

Most of the Brahmin families in rural Tamil Nadu, who owned farmlands have left the villages after disposing off their lands.

I have written in detail about the present status of agriculture in villages, since you have raised the subject.

I wish this important subject is taken up separately for discussion in our Forum.

Brahmanyan
Bangalore.
Dear Brahmanyan Sir,

I know I oversimplified the issue. But somehow we can't escape maths. It is the brutal truth that subsidies alone cannot sustain all this population dependent on agriculture. There is already consolidation in the delivery side. Consolidation has to happen in the supply side as well. If we can safeguard against crony capitalism, it is possible.
 

Jaykay767

Well-known member
Dear Sri "Jay Kay",
I appreciate your well articulated suggestions to improve the economy of the Nation.
As a believer in Gandhian economics, I have my reservation in handing over Agricultural operations to big players. Human nature is such there is always happiness and self pride in ownership. Instead we can try Cooperative farming, as in Scandinavian Countries. Even in China this has been tried and found successful."As per Wikipedia, the number of farmers who have joined the cooperative farming is 38.7 million, accounting for 15.5 per cent of all farmers in that Country."
Unfortunately Cooperative movement has not been successful in our Country due to Government and Political intervention.
I am not comfortable to invite FDI in all sectors of business activities. We have enough local talent to run successfully conventional trade.
Government run Canteens are all right for a short period. However food industry should be left to private sector, and Government should encourage small players like "Dharshani" hotels in Bangalore.

Government has already commenced in helping the BPL families to open Bank accounts and direct transfer of subsidies to the bank account.
Regards,
Brahmanyan
Bangalore.
Thanks and appreciate your words !

Agree with your views largely. FDI has to be selective, and no point in bringing them In areas where our local msmes can do better, it should be focused only on high tech.
 

Jaykay767

Well-known member
The other option is to form public sector companies and enable food storage and distribution and corrct market pricing for the farmers and thier produce.

This will eliminate middle men, and ensure the entire money reaches the farmers instead of the current mess.
 

tbs

Well-known member
hi

may be OVER POPULATED COUNTRY in this finance situation....country land is same...we decreased

agricultural land and increased more concrete buildings....so our balance in economy nose down...
 

Jaykay767

Well-known member
The reduction in personal income tax or better a complete abolishment will immediately put more money in the hands of the employed middle class, and spur consumption immediately. This will eliminate the tax terrorism, and harassment.

This will ensure the companies get back on feet, become healthy, and in turn reduce the bank NPAs.

People will also hire more workers for home and add to job growth in the informal sector.

The fiscal gap, can be managed via sale of PSUs and cut on govt spending for the first 2 yrs.
 

krish44

Well-known member
Most think agriculture is not worth pursuing.For a person ready to change with times, it can be a profitable

proposition.

My sambandhis are regular farmers . Their family shifted from agraharam straight into farmlands for stay.

They built a farmhouse -a three storied building . His two sons who were in IT companies helped to build

the farmhouse. They cultivate land using drip farming with self fabricate pipes over the farm land.

They use pumps to water the fields . They have electric feeders from main road to feed continuos power.

They have cows for milk,farm labour to help in field. They have barter economy for exchanging their produce

for their other needs.They have all modern electronic gadgets home [frig,TV,ACetc] besides mobike and car.Being farmers ,they have no

tax liabilty. Medical care could be better . But otherwise it is pretty good living.Far better than retired

pensioners in this forum
 
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