Thursday, January 30, 2014

Why Indians want to emigrate to the US.

In his State of the Union address President Obama bragged about how the US is now producing more oil and gas than it is importing and how manufacturing is returning to the US for the first time in 20 years. As the world's largest energy user the US is now able to maintain a steady supply of energy because it has adopted hydraulic fracturing in a massive way and is not as dependent on unpredictable supplies from the middle east and Venezuela. The US has been suffering bouts of extreme cold weather with temperatures dropping to -30 Celsius in places resulting in a huge demand for heating but unlike other years electricity and gas rates have held relatively steady. Compare that to Delhi, the capital city of India, which suffers daily blackouts because the previous Congress government did nothing to increase production of electricity and transferred transmission to private monopolies which have increased bills to astronomical levels. The present Chief Minister wants rates to come down so the duration of blackouts have increased, whether as a warning to the government is not known. Gujarat has the same rates but there bills are much lower which is a puzzle. Most of our more than 7,000 kms of coastline have not been explored for oil or gas. The reason is the demand by politicians for personal bribes and for massive amounts of money to be paid to the government to be granted any contract. This is then used for social schemes to buy votes. This is called Private Public Partnership but in reality companies do not invest any money at all but borrow every penny from public sector banks. Thus taxpayer money is being borrowed by private companies to pay the government to obtain contracts and the companies then repay the banks by charging toll from taxpayers in the case of roads or exorbitant rates in the case of electricity. The result is soaring inflation, rising labor costs and falling industrial output. Ten years back the cost of hiring a plumber, mason or electrician would have been 20% of the cost of materials but today the cost of labor is the same or more than the cost of materials. Bribes paid to politicians are invested in properties, raising the property prices and rents. Social schemes, such as the NREGA, are linked to inflation and so wages rise with inflation which then leads to rise in prices, raising inflation, in a mad cycle. Today rural inflation is higher than urban inflation which means higher food prices to come. That is why Obama can boast but our lot want to be treated as VIPs by airlines so that they can smuggle in contraband in complete safety. Is it any wonder Indians die to go to the US.

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