Every bad action has a much worse reaction.

Isaac Newton's third Law of Motion states that every action has an equal and opposite reaction. That is true in the pure world of physics but in the messy world of human beings an action maybe completely ignored and forgotten or result in exaggerated response. Thus, every bad action results in much worse reaction, because of the multiplier effect of millions of emotional human beings. The BJP government between 1998 and 2004 had lowered taxes, reformed telecom, bringing about a mobile revolution, reduced deficits, reduced subsidies in fuel and generated a Current Account surplus. In its overwhelming greed for power the Congress promised freebies to the poor who are happy to get mouldy bread today than jam tomorrow, not realising the diabolical ploy in the Politics of Perpetual Poverty. Thus trillions of rupees were wasted on a massive lie called " inclusive growth " instead of on productive infrastructure which would have allowed the poor to move out of poverty by starting small businesses, better education and improved health. This massive spending resulted in huge deficits, high inflation, an explosion in property prices, leading to accumulation of black money, and a fall in the value of the rupee. The government is now stuck. To reduce deficit it has to cut expenditure, but this will reduce growth. To reduce inflation interest rates need to go up but that will increase borrowing costs for industry and cause many companies to go bankrupt as they are sitting on massive loans which they need to restructure. To reduce CAD exports need to be encouraged by a weak rupee but that will increase prices of imports, especially oil, and add to inflation. To survive in next year's elections more humongous bribes need to be paid but that only adds to the fiscal deficit and inflation. The Congress thought that at least one painless method of reducing CAD would be to reduce the import of gold. After all purchase of gold by the people is completely unproductive and just locks up finance. So they increased taxes on gold from 2% to 10%. Gold imports fell but sadly so did precious dollars from the export of jewelry by 54% to $4 billion because of shortage of gold. Gold demand in Thailand has doubled as smugglers use drug routes to fill the demand in gold. Bad faith results in bad action. The reaction is terrible for India.