With growth rates falling, inflation soaring and the rupee teetering the economic papers are full of articles blaming the excessive spending of the Congress on useless social schemes for the mess. It is easy to be wise in hindsight but what is the point of having degrees in economics if they could not foresee the result when we could. Should they not have started a campaign to stop the Congress from bringing the country to its knees? As citizens surely it was their duty to prevent a plunder of the nation's finances instead of presenting us with postmortem reports on the carcass of the economy. One article gives us a detailed analysis of the problems. It says," Whether intended or not, the UPA government's policies amount to leaving a scorched earth for the new government." What we have said before. And again," Thanks to the UPA's fiscal policy and its inevitable monetization, the proportion of government securities that the central bank ( RBI ) is holding, exceeds the securities that the Federal Reserve is holding in the US as a percentage of GDP." " The three major charges against the UPA's fiscal spending of the last five years ( if not 10 years ) are that it has been largely unproductive, it has crowded out the private sector from the banking system forcing it to go for riskier foreign loans and it has reduced monetary policy effectiveness so thoroughly as to burden the aam aadmi ( common man ) with a relentless rise in his cost of living.....One could not have come up with a better policy concoction to eviscerate the economy." Why did he not anticipate this result when we have been saying the same since 2009. To pay for its extravagance the government has forced Public Sector Units or PSUs, which are companies controlled by it, to distribute excessive dividends. In the last 3 years PSUs have paid the government Rs 917.93 billion in dividends. Desperate for cash the government has been selling of shares in these companies cheaply. Cash stripping and forced sales have resulted in a fall in the value of PSU stocks. MMTC was selling at Rs 1030 per share in February 2011 but is now selling at Rs 48.15, a loss of 95%. Market capitalization of MMTC has dropped from Rs 1.03 trillion to a mere Rs 46.85 billion today. In total PSUs have lost a colossal Rs 6.83 trillion in market capital. If only the pundits had spoken out before and stopped the plunder.
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