The reaction hits the people.

Newton's third law states that every action has an equal and opposite reaction. When you float on water the downward pressure of your weight is matched by the upward resistance of water. In economics it is different. The reaction usually surfaces after sometime, may be surprising in its manifestation and need the courage of patriotism to control. Instead of recognising the growth in the economy between 2004 and 2009 as due to very loose monetary policy in the west, resulting in a flow of cheap money, and taking steps to prevent excessive corporate debt the Congress chose to take credit for the growth. It allowed its coalition partners in government a free hand resulting in massive scams. To win elections in 2009 it resorted to a huge increase in spending which increased fiscal deficit and resulted in double digit inflation. To plug the big hole in its finances the Congress resorted to an extortionate increase in taxes, leading to further increase in inflation and a drop in demand. When people stop spending corporate profits fall. Kingfisher Airlines has already gone out of business and now Jet Airways has declared a loss of Rs 9.995 billion in the June to September quarter. When companies make less money they maybe unable to repay loans they have taken from banks, which means banks see a rise in bad loans. Non Performing Assets are set to rise from 3.4% to 4.4% by 31 March next year but we do not know how many loans have been quietly restructured by giving fresh loans so that they do not reflect on banks' balance sheets. Some experts believe that NPAs could be more than 10% of total loans. Our most revered Finance Minister has urged state-run banks to " closely monitor 30 largest defaulters ". On the other hand the government is giving Rs 140 billion to PSU banks to lend at lower rates to people to buy cars and other goodies to boost consumption and tax collection. With elections due in 2014 the Congress thought it could repeat the bribery of 2009 and passed the Food Security Bill which seeks to distribute rice at Rs 3 a kg and wheat at Rs 2 a kg. The Minimum Support Price it pays is higher than market prices which probably led to diversion of land to growing cereals. Which has resulted in a surge in the prices of vegetables with onions selling at Rs 80 a kg. Trouble is politicians act but we suffer the reaction.