Our prosperity depends on what we can buy.

Assuming a long term Wholesale Price Index of 6.5% for inflation in India Rs 100 is needed to buy today what Rs 13.80 would have bought 30 years back. Keeping money in term deposits in banks would have earned a negligible 1.6% per year before tax, gold would have given 3.3% while stocks would have given a return of 8.45% per year. These are average results. The author has forgotten the property sector which has given total returns of around 10,000%. And that is the root cause of what is ailing the Indian economy today. Vast amounts of black money, over which the government or the Reserve Bank have no control, has created a parallel economy. Farmers have sold land for sums they could not dream about and house owners in cities have built illegal extra floors for rent. Large income, without any productive enterprise, is partly responsible for the rampant inflation and has severely increased poverty as people waste money on rent because they cannot afford their own living space and spend ever higher on necessities. This has created 2 classes in India - those who own properties have become middle class or rich while those who do not remain trapped in ever increasing poverty. Where there is black money there is bound to be bad loans. Progressive Constructions ltd, a company owned by our most revered Union Textile Minister, Kavuri Samba Siva Rao ( who he and what does he do? ) has taken out loans of Rs 3.5 billion, mainly from SBI and other public sector banks. PCL has already defaulted on Rs 700 million loan from SBI and owes Rs 1.49 billion to Andhra Bank, Rs 470 million to Corporation Bank and Rs 420 million to Allahabad Bank. Gross Non Performing Assets of 40 listed banks rose by 36% to Rs 2.43 trillion by December last year apart from Rs 4 trillion which has been restructured, which is a nice word for rolling over with fresh loans. " The company was borrowing beyond its capacity and couldn't pay back since many projects, for which money was advanced didn't take off," said an official. If a project did not take off surely the money was not spent and should have been returned. Unless it was used. For what? The company is headed by the minister's daughter Ms Srivani Mullapudi. " There could be some issues," the minister admitted. Quite.