Spending first leads to poor economics.

Our most revered Finance Minister said that the government will be recapitalising banks with Rs 140 billion so that they can lend at lower rates to those who want to buy vehicles or consumer durables, such as TVs refrigerators. Government spending is made up of what it raises from taxes and borrowing the rest from banks. The amount it borrows is called the Fiscal Deficit and is added to its total debt burden. It makes little sense, therefore, to borrow money from banks to give it back to them to lend to people at lower rates. This is just another form of subsidy. The same man said recently that subsidies on food and fuel must be reduced to balance books. So the Congress wants to reduce subsidies on some goods while raising them on others. Another desperate attempt to somehow boost demand to create a few more jobs before elections next year.Trouble is that food subsidies cannot be reduced because the Food Security Bill promises wheat at Rs 2 per kilo and rice at Rs 3 per kilo to 700 million people and only state owned companies are allowed to sell fuel and we are told that they are being forced to keep prices low to help consumers, thus running up huge losses. Truth is that the government collects vast amounts of taxes on crude and then claims it is subsidising end products and having to bail out the losses of these companies. The attempt is always to grab as much money from us right at the beginning so that they can bribe the " vote bank " with wasteful social schemes which increase inflation and harm the poor. Anyone buying a property costing more than Rs 5 million, which is virtually every property in cities, is forced to deduct 1% as tax and deposit it at the relevant office. Knowing how government offices function it means wasting days standing in queues and having to pay bribes to submit the tax. If we are being forced to act as agents of the government surely we should be given the same perks as the crooked civil servants, such as free healthcare and pensions. Banks deduct 10% from the interest they pay on term deposits. You then have to file tax returns to claim a refund at the end of the tax year. Which means having to pay an accountant and paying service tax on that. Thus we vote for and pay for a feudal government which exploits us 24/7. Is it any wonder criminals are attracted to politics?