Numbers will out.

Projection for the growth rate for this fiscal is down to 6.9% from the expected 8.5%. Our most revered Finance Minster has said that this was " on account of a slowdown in industrial output and investment growth ". How profound is that? With the budget being postponed to mid March, on account of the ongoing elections in some states, he admits to the rising subsidy ( bribery? ) bill from Rs 1.34 trillion to Rs 2.34 trillion. Standard & Poor's has warned that India's credit rating could be downgraded. At present it is BBB- which is the lowest investment grade. Below this is BB+ which is the highest speculative grade. Anything below that just indicates rising vulnerability to business, financial and economic uncertainties. The S&P report said," High inflation, a weak government fiscal position, and slower economic growth have hurt investor confidence in the rupee, triggered a capital outflow, and weighed on the sovereign outlook on India in 2012." Predictably business bodies have responded by calling for lowering interest rates. Low interest rates benefit a small section of society, those who want to buy houses and cars on loan, but have no effect on the rest of the population who live on cash,spending as they earn. High inflation, on the other hand, affects the vast majority of people cutting spending on goods and services of everyday use. People cannot reduce spending on food, school fees, rent and travel expenses but cut down on cosmetics, household goods like refrigerators, eating out and holidays. Thus inflation has a deleterious effect across the economy from FMCG to white goods to services like restaurants and hotels. Predictably also, faced with uncontrolled deficit the Finance Minister is sure to raise taxes across the board to raise more revenue. It may raise more money in the first one or two quarters but will add to inflation and will eventually lead to contraction of the economy. Till now we had a positive list for tax on services which meant that only a named service would have to pay tax. Now we are going to move to a negative list which means that only those services specifically mentioned will be exempt, the others will have to pay tax automatically. It is not just adding 12% to your bill, you need an accountant to calculate every month's tax accrued and then go and submit it at the relevant window. The scoundrels justify this by pointing to other countries with the same system forgetting to mention that they also cut government expenditure, reduce the number of public servants and reduce waste. There are 80 ministers at the center, each guarding his own turf, leading to policy paralysis and millions of civil servants refusing to work without bribes. This is the biggest subsidy we taxpayers have to bear. Get rid of the trash and watch the growth spurt. Cleanliness is, after all, very big business.