The sage has spoken.

The great Indian sage, Mr Montek Singh Ahluwalia says that India could grow by 8% in the 12th Five Year Plan. That is provided the governments at the center and the states can get their acts together. Which seems to be enormously doubtful since they have been unable to agree on a nationwide Goods and Services Tax for years and the Chief Minister of Tamil Nadu walked out of a meeting of the National Development Council in Delhi protesting about the " shabby treatment " meted out to her and saying that the Center was " stifling the voices of chief ministers ". TOI December 28. Mr Ahluwalia said," I would like to emphasise that achieving an average of 8% over five years, following a first year growth of say 5.8% ( 2012-13 ) and say something over 7% in the second year, will involve a sharp acceleration in the last three years of the Plan." What he is saying is impossible because even if growth is 7% the second year we will need growth over 9% for the remaining 3 years to get near an average of 8%. Almost before the Great Sage had stopped speaking than the Prime Minister was in action saying that 8% growth over the next 5 years is " ambitious ". He said," We cannot change the global economy, but we can do something about domestic constraints which have contributed to the slowdown." He goes on to say," Unfortunately, energy is underpriced in our country. Our coal, petroleum products and natural gas are all priced below international prices. This also means that electricity is effectively underpriced.......some phased price adjustment is necessary." Not the whole truth is it? Today petrol is selling at an average price of $3.20 a gallon in the US where there is no subsidy and the price includes tax at 12%. One US gallon is 3.8 liters so if we calculate @ Rs 55 to the dollar we find that petrol is selling at less than Rs 50 a liter. Diesel is somewhat more expensive. Here we are paying Rs 76 per liter for ordinary petrol and Rs 79 for premium so petrol, at least, is extremely overpriced. As for coal, according to the Geological Survey of India we have reserves of around 293.497 billion tonnes. Why in God's name are we importing 70 million tonnes every year from Australia and Indonesia? Diesel is selling at Rs 48 per liter which is low so he wants to increase the price gradually by Rs 10. The effect will indeed be electric because inflation will instantly shoot up preventing the RBI from reducing interest rates that everyone is begging for so desperately. At the same time he is under orders to increase handouts to the " vote bank " in the coming budget to have any chance of winning elections in 2014. We are entitled to ask what the hell he has been doing since 2004 that he has been clinging on to his kursi so shamelessly. He was built up as a World Famous Economist but will leave behind a broken economy. What a legacy to have!