Our economy is booming. Why worry?

From 1 January taxes on properties in Mumbai were raised by 30%. This is called Ready Reckoner which is the rate set by the government regardless of the actual sale value of the property. This will increase the stamp duty, registration tax and property tax on every property resulting in a rise in values of all properties. In early December Delhi raised taxes on Category A properties by 200%. Previously you had to pay tax on a presumed value of Rs 215,000/sq meter but now you will have to pay tax on a presumed value of Rs 645,000/sq meter. This works out to a presumed value of around $12,000/sq meter, only slightly less than in New York. The other 7 categories of properties have been increased by 25%. Taxes are collected on presumed value because half the value of any sale is paid in cash or black. Whereas stamp duty and registration charges are around 1% in most civilised countries, in India they vary from 6-12%. No one wants to pay vast sums of money in taxes to corrupt politicians and civil servants so they try to minimise sale value as much as possible. A lot of the properties are owned by politicians and civil servants who have mountains of black money from bribes and rent seeking and this is the only avenue of investment for so much cash. Politicians at the center and states are always trying to find ways of increasing tax collections to fund their expensive lives and to distribute handouts. The result is that properties have become so expensive they are beyond the reach of 80% of people who have to waste money on rents which increases levels of poverty. The Bombay stock market has risen to 19,426, a gain of 25% last year and experts predict that it will reach 22,000 this year. People are buying gold despite the price rising to Rs 30,898 per tola. The HSBC Purchasing Managers Index for manufacturing in December rose to 54.7 from 53.7 in November. This is a real rise in manufacturing showing that demand is strong. Industrial Output rose 8.2% in October as opposed to a fall of 0.7% in September. So, according to all indices including prices of properties, share prices, PMI  for manufacturing and industrial output the economy is booming. If gold is selling like hot biscuits despite its price rising to Rs 30,898 per tola then it shows that people have plenty of money to invest. The sector most dependent on bank loans is the property sector and if prices are rising by 10-20% per year surely people are not in the least bothered about high interest rates. Why then are the politicians and their followers, the freeloading press, always frothing about reducing interest rates? Is it because the Congress wants to borrow vast sums of money to dole out throughout this year to bribe the " vote bank " for the forthcoming general elections? We are in for a dive. That is the worry.