What motivates them.

China's Consumer Price Index is down to 3.4% in April compared to 3.6% in March, comfortably lower than the government target of 4%, but food inflation is still at 7%. Growth is expected to drop to 8.1%. This gives the Chinese room to lower interest rates and stimulate the economy which is expected to grow at 8.1%. China has foreign currency reserves of over $3 trillion and can stimulate growth as it pleases. India on the other hand looks like a basket case. Growth is expected to drop to below 7%, fiscal deficit is expected to be 5.9%, Wholesale Price Index was 6.89% in March while the CPI was 9.47%, almost double of the RBI target of 5% and the rupee keeps dropping which will only exacerbate inflation. Yet while the Chinese are cautious in stimulating the economy for fear of stoking inflation the RBI has already reduced our rates by 50 basis points. In a report on May 3, Morgan Stanley said," Considering the fiscal policy is still expansionary and RBI has already embarked on on easing path faster than warranted, risk of inflation pressures re-emerging is very high." msn.com, May 5. The report said that a significant part of the recent deceleration in headline inflation and core inflation can be attributed to delay in hike of administered prices. If the government wants to restrict oil subsidy burden to levels provided in the Union budget for 2012-13 fuel prices will have to increase by 39% adding 2.47% to WPI. The problem is that petrol is already at Rs 70/lit because of taxes while increasing diesel price will immediately impact food prices. The report warns that India is the only country in the region with a current account deficit, and a wide one at that, and faces a " high " risk of a shock in its balance of payments if global risk aversion increases due to any reason. So why is China so well off as compared to India? To maintain their absolute hold on power Chinese leaders are terrified of any internal disturbances and are therefore keen to keep up a high rate of growth with low inflation to make the people feel wealthy. They calculate that people will tolerate less freedom as long as the standard of living keeps on rising. In India, on the other hand, criminal politicians are totally focused on winning elections at the cost of everything else as power gives them the chance to loot. They use taxpayer money to bribe the poor who are called " vote bank ". This means that the majority of the population need to be poor to be susceptible to bribery and kept illiterate so that they do not understand or question the gradual destruction of the country. However, bribery has produced uncontrollable deficit leading to inflation and a falling rupee which, in turn, leads to further inflation. Hence the need for growth at any cost to increase tax revenue and reduce deficit while levying extortionate taxes on all goods and services. But this only reduces demand and, yes, growth. Even a headless chicken would have more sense. Ask Venky's?