Method in confusion.

An apology would seem to be called for. We had assumed that ministers and officials were trying to imitate demented parrots when they continued to harp endlessly on a growth rate of 8% but it appears there was reason for their echolalia. It appears that the services sector comprises 57% of GDP, industry is 28% while agriculture makes up 15%. Services, led by IT, has been growing at over 10% which gives a " floor " GDP growth rate of 6%. Industry was growing at 8% giving a floor growth rate of 2% so even if agriculture remains flat we should expect a GDP growth of 8%. ET, January 4. Why both services and industry should continue to grow regardless of circumstances is not explained. Our economy is not export driven like the east Asian economies. Internal consumption accounts for over 80% of the economy and this would surely be sensitive to inflation. For households there are some expenses which are compulsory. Food, rent, travel costs, utilities, school fees, medical expenses and some social obligations like marriages must be paid for. When the cost of all these are rising, some by 50-100%, then people will cut back on what they see as non essential expenditure such as eating out, cinemas, travel, buying a new car and so on. These are taxpayers with legitimate income. There are vast numbers of people whose main earnings come from black money including politicians, civil servants,ration shop owners, property dealers, builders, shop keepers and others. These people are immune to inflation. The union government spends Rs 8.16 trillion on the salaries of 6 million employees. State governments and public sector companies employ another tens of millions. If only 5% of the population have black income that makes 60 million people who can spend regardless of prices. That is equal to the entire population of Great Britain. However, to depend on black money for growth seems stupid. This would explain why headline inflation remains at 9% in spite of 13 interest rate rises. A lot is being written about policy paralysis. When there are 80 ministers there can never be any decision. If the environment fellow wants reduction of greenhouse gases the minister of biogas will object. If minister of kabaddi wants to play a Sachin in his team the minister for cricket will object. Coalition dharma. With this government the only growth we can expect is that of deficit, poverty and corruption. Not at 8%, more like 800%.