Yes, it has been tiresome to listen to a Finance Minister whose continual theme has been 'The macroeconomic fundamentals of the economy are strong.' But it's undignified not to have a FM at all. In the worst financial crisis the world has seen in decades with no end in sight, policymakers (read UPA government) do not see it necessary for India to have a finance minister. It makes one wonder what the FM's job is when all is hunky-dory.
Perhaps the gorement imagines that between Deputy Chairman, Planning Commission and Governor, RBI, and a part-time FM/PM/EAM, it has all the bases covered. Perhaps it believes that since there is little room for fiscal remedies, there is no need to have a whole person devoted to the finance ministry. Perhaps it has more important things to think of, such as effective quality education for all, higher education reforms, healthcare, unorganised sector.....nah! gorement has had almost five years to ponder these problems and so far it has not come up with any solutions.
Now that the elections are almost here and all parties have gone into poll mode, we cannot expect any policy decisions for the next six months. In the meantime, we continue to lose jobs, inflation remains interestingly intractable at over 5%, banks are refusing to lend, consumers are refusing to purchase consumer durables, and corporates are busily redressing their balance sheets in case l'affaire Satyam spills over.
In six months time, the same gorement might be back in place, this time determined that the Holy Economic Trinity of Manmohan Singh, P Chidambaram and Montek Singh Ahluwalia will come up with action. But by that time India's window of opportunity will be lost altogether.
Saturday, February 7, 2009
Sunday, February 1, 2009
Conferences and conferences
Being a veteran of business association conferences, I am actually beginning to enjoy them. One can kick back, switch off and wake up at intervals to eat the sumptuous meals of the host hotel. Alas, I believe the clientele for such conferences is sharply reduced.
Not so in Davos, where hundreds of top business and policymaker types are merrily pontificating away. The number of sessions is vast and topics cover the gamut of anything the world may currently be thinking of. At the end of the conference, everyone will feel good about having contributed to global thinking, having met friends and competitors, and spent money wisely. The outcomes will then be written out by a small group of backstage beavers who get to decide what to include, what to leave out, and what to put in the mouths of the policymakers. Nobody checks to see if the panelists actually said what comes out in the summaries and reports. That's the interesting thing about conferences.
But then nobody reads conference reports either. So ultimately, the question is why do people spend money attending conferences? Most of the time, they are in the audience with little scope of contributing as moderators often do not even take questions. Do they want to listen to conference veterans? Do conference veterans find it useful to pontificate at conferences? Is the networking such an important part of the conference that people are willing to spend the money? All these and more question bother me about the entire conference industry. But hey, as long as they are there, I get to eat!
Not so in Davos, where hundreds of top business and policymaker types are merrily pontificating away. The number of sessions is vast and topics cover the gamut of anything the world may currently be thinking of. At the end of the conference, everyone will feel good about having contributed to global thinking, having met friends and competitors, and spent money wisely. The outcomes will then be written out by a small group of backstage beavers who get to decide what to include, what to leave out, and what to put in the mouths of the policymakers. Nobody checks to see if the panelists actually said what comes out in the summaries and reports. That's the interesting thing about conferences.
But then nobody reads conference reports either. So ultimately, the question is why do people spend money attending conferences? Most of the time, they are in the audience with little scope of contributing as moderators often do not even take questions. Do they want to listen to conference veterans? Do conference veterans find it useful to pontificate at conferences? Is the networking such an important part of the conference that people are willing to spend the money? All these and more question bother me about the entire conference industry. But hey, as long as they are there, I get to eat!
Thursday, January 29, 2009
Economic fatigue...
Ok, so I was travelling, I was sick, etc. etc. But a blog is a commitment, come what may...My excuse for not writing for 2 months when so much was happening in India and the world is fatigue. After three days of being stuck to the Mumbai events, life became too depressing. Economic news heightened the depression.
The good news is that IMF has finally got its act together - it has come out with yet another outlook for the economy, and deciding this time that it was too much of a bore to keep going through the same exercise every alternate week, it finally brought out growth expectation figures that it can stick with for the next two years. From 2.2% in November, growth outlook is now 0.5% for 2009. Can it possibly get any lower?
For India, analysts from Economic Advisory Council to RBI and everyone inbetween have been gleefully concocting figures. The forecasts range from financial year 2008-09 to calendar year 2009 to financial year 2010-11. And some people even insist we should be happy about having elevated our minimum growth expectations from the Hindu rate of growth of 3.5% to 5%. Others point out that India will still grow faster than most other economies. But the outlook, whichever forecast one believes, is depressing.
The worst part is that RBI's moves do not make much sense. The Gorement of course has thrown up its hands which are tied behind its back due to past fiscal irresponsibility to criminal extent. Now relying on monetary policy, we find that RBI, after taking what it probably fondly imagines are revolutionary steps of lowering interest rates, has gone into 'wait and watch' mode. Nothing needs to be done at this stage, which is why we do not even need a finance minister. Good to know that the post is redundant even during the worst financial and economic scenario the world has seen in 70 years. Perhaps we can do without most other policymakers too.
The entire onus for growth stimulus now appears to have been placed on the rural population which policymakers think is sufficiently isolated to not be affected by unnecessary gloomy confidence complications. After all, monsoons have been good the past few years, agriculture has actually been expanding at 2-3%, loans have been waived, much has been spent on rural health and Bharat Nirman, with enough leakages to satisfy everyone. It's payback time for the rural folk now and they better return the favor!
As for me, I am going to crunch some figures.
The good news is that IMF has finally got its act together - it has come out with yet another outlook for the economy, and deciding this time that it was too much of a bore to keep going through the same exercise every alternate week, it finally brought out growth expectation figures that it can stick with for the next two years. From 2.2% in November, growth outlook is now 0.5% for 2009. Can it possibly get any lower?
For India, analysts from Economic Advisory Council to RBI and everyone inbetween have been gleefully concocting figures. The forecasts range from financial year 2008-09 to calendar year 2009 to financial year 2010-11. And some people even insist we should be happy about having elevated our minimum growth expectations from the Hindu rate of growth of 3.5% to 5%. Others point out that India will still grow faster than most other economies. But the outlook, whichever forecast one believes, is depressing.
The worst part is that RBI's moves do not make much sense. The Gorement of course has thrown up its hands which are tied behind its back due to past fiscal irresponsibility to criminal extent. Now relying on monetary policy, we find that RBI, after taking what it probably fondly imagines are revolutionary steps of lowering interest rates, has gone into 'wait and watch' mode. Nothing needs to be done at this stage, which is why we do not even need a finance minister. Good to know that the post is redundant even during the worst financial and economic scenario the world has seen in 70 years. Perhaps we can do without most other policymakers too.
The entire onus for growth stimulus now appears to have been placed on the rural population which policymakers think is sufficiently isolated to not be affected by unnecessary gloomy confidence complications. After all, monsoons have been good the past few years, agriculture has actually been expanding at 2-3%, loans have been waived, much has been spent on rural health and Bharat Nirman, with enough leakages to satisfy everyone. It's payback time for the rural folk now and they better return the favor!
As for me, I am going to crunch some figures.
Subscribe to:
Posts (Atom)