India begs new leadership. Whilst Dr. Manmohan Singh has
many strengths, managing a coalition and Sonia Gandhi does not seem to be
one of them. His Finance Minister and RBI Governor are making a mess of things
and PM cannot do much.
Ex-minister Raja took the corruption to new heights by looting billions of dollars of public money (of several tax payers) walks free and even visits the temple of democracy (Parliament) without any impunity. At least 2% drop in economic growth of India can be attributed to the corruption orchestrated by Raja. This dented confidence of several foreign and domestic investors and led to great disappointment to the multitude of Indian citizens, to see them walking free - this will induce the future ministers and bureaucrats to loot billions more.
Ex-minister Raja took the corruption to new heights by looting billions of dollars of public money (of several tax payers) walks free and even visits the temple of democracy (Parliament) without any impunity. At least 2% drop in economic growth of India can be attributed to the corruption orchestrated by Raja. This dented confidence of several foreign and domestic investors and led to great disappointment to the multitude of Indian citizens, to see them walking free - this will induce the future ministers and bureaucrats to loot billions more.
With the general elections to elect a new Govt. a few
months away, let us hope voters of India will give replace UPA. Let us give a
chance to NDA, even if it means Narendra Modi in power. What we need is
performance. Modi can perform as he has proven in Gujarat. Of course, his
attitude towards minority is a worry; however the Indian constitution has been
designed with enough checks and balances to rein in PMs and Presidents who keep
dictator ambitions. Moreover, India is not Gujarat and if he follows
anti-minority policies all over India, someone has stated that it may even sow
the seeds of next partition of India.
Of course, Dr. Manmohan Singh is among the best of the
best economists world has seen. His track
record under Narasimgha Rao during 1990s opened up new possibilities in Indian
Economy. It surprised the world, who has mostly written off India as a
sluggish, slow growth country of snake charmers. Suddenly the world realised
the immense potential since ancient times and flocked into the country in the
form of FDIs and FIIs. Many Indians became multi-millionaires while many
poverty stricken households catapulted to middle class buying up consumer
durables such as TVs, DVDs, PCs, Laptops, Fridge, etc. and even small cars. BJP
Govt continued the success story. India even survived 2008 global crisis.
Those days India also had dynamic RBI governors such as Bimal Jalan,
Reddy, etc. Bimal Jalan was able to reduce Indian interest rates to 6% during early 2000
when US reduced its rates to 1%.
However, now when the US has reduced its rates
to 0.25% India's RBI had hiked the rates to 8.5%, making it almost impossible
to do business in India. The cost of capital and cost of borrowing are so high
that doing meaningful business is almost impossible. We had discussed this
earlier (See http://www.financialviewsonline.com/2011/11/foolish-rate-hike-part-ii.html
) The current drop in India's growth rate to 5.3% could have been avoided had
RBI been more smart.
Similarly, the current sharp fall in Indian Rupee and the
consequent costly imports of oil is self-afflicted. (See http://www.financialviewsonline.com/2011/12/indian-economy-under-attack-sleepy.html).
Whilst many try to blame the poor performance of the UPA government on Euro,
the matter of the fact is that most of the blames lies with the Govt.
Let us hope, very soon Dr. Singh will cease to the Indian PM which will give him time to author a few books on Economics and Finance. Financial thoughts firmly believe those books will be treasures and will be cherished by the generations to come, not only in India, but all over the world.
