In cortical blindness a person can see perfectly normally but his brain is unable to process the information from his eyes and so he is unable make sense of what he is seeing. Echolalia is when a person repeats a set of words used by another. Our experts must be suffering from both conditions because they keep repeating the same words no matter what the economic data is. Indirect tax collections have grown by a whopping 37% in the April-June quarter, to Rs 1.54 trillion from Rs 1.12 trillion last year. A contented Chief Economic Officer said," Given that GDP growth is the tax base what it suggests is that underlying nominal GDP is growing at a healthy pace." Indeedy doody. How pray do you explain the fall in industrial production in May to 2.7%? April has been adjusted down from 4.1% to 3.4%. Production of consumer durables and non-durables have fallen. Could the fall in factory output and the jump in tax collection be linked? The tax collection has risen because of an increase in taxes on fuel, motor vehicles, consumer durables and services. Of these only the hike in tax on fuel is justified because, even with the rise in taxes, fuel prices have dropped from last year due to the fall in the international price of crude. But here too there is blindness because the government stubbornly refuses to adjust the taxes on petrol and diesel so that their prices are the same, as in other countries. People have to buy fuel and they need entertainment, such as restaurants and cinemas, so they cut consumption of consumables and postpone buying durable items. In the view of one expert we have to encourage savings by citizens so as to reduce our dependence on foreign capital. India's ' investment income ' has fallen to -1.3% of GDP, which means that it costs every Indian $2 per month to keep this foreign capital in India. We get $1.4 for every $100 we invest abroad while we pay $3.8 for every $100 invested here, whereas the US pays out $1.8 for inward investment but receives $3.3 from abroad. So what is the solution? Increase taxes so that people consume less and save more. But if taxes are increased it will add to inflation and people will be spending more on essentials, leaving less for saving. Another expert is of the opinion that for the economy to grow we need to create jobs by boosting our manufacturing sector. Our manufacturing sector was only 13.9% of GDP in 2010, compared to 29.5% in China, 24.8% in Indonesia, 24.5% in Malaysia and 33.6% in Thailand. What does he recommend? Reduce interest rate, bring down the rupee and investment finance. If the real interest rate falls people will stop saving, preferring to buy gold, while a fall in the rupee will increase prices by making imports, such as oil, more expensive. The RBI reduced interest rate by 75 basis points but consumer confidence remains weak. How can people have confidence in fellows who cannot see and keep echoing the same drivel?
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