Play dirty, but get the job done.

Governor of the Reserve Bank, Raghuram Rajan thinks that India has lost one generation of economists so that there is a lack of good economists to make policies. Does it mean that our top economists have migrated abroad, as Rajan himself did, or that all our economists are employed by the government or by companies so that their advice is biased? What is troubling for us ordinary folks is that although there are many good articles analysing economic figures a lot of them are contradictory so it is difficult to know whether we are going up or marking time on the same spot. Industrialist, Rahul Bajaj is disappointed that despite his emphatic election victory last year the Prime Minister has been timid. It is inexplicable why he is allowing the opposition to block all his bills in the Rajya Sabha, where he is in the minority. 67% of the Rajya Sabha MPs are wealthy, 17% have criminal charges against them and 100% would like to double the perks that they get, which makes them greedy beggars. He could have filed non-bailable charges against the criminal types and promised juicy contracts to others to get them to support his bills. The Congress dropped corruption cases against Mulayam Singh and Ms Mayawati and dished out coal mines to friends. You cannot fight according Queensberry Rules with opponents who fight dirty. So, can the economy really improve from here? Retail inflation is steady, the rupee is stable and there may be early signs of a pick up in demand. Increase in government spending on infrastructure could boost the economy. This may not create jobs as companies are sitting on excess capacity which will accommodate rising demand. Even if companies want to expand they will not get credit because banks are staring at losses of Rs 1 trillion from bad loans. The government has decided to spend Rs 700 billion over the next 4 years to recapitalise public sector banks. Will that be enough to get banks lending again as well as funds to spend on infrastructure is not known. Net sales have fallen for 3 quarters in a row which is not encouraging for recovery. This is supported by slowing industrial output in May due to weak manufacturing. Despite this indirect tax collections jumped by 37.5% in the first quarter, gleefully reported by the Chief Economic Adviser, as a sign of a pick up in economic growth. Maybe, taxes are the disease which is blighting our economy. High taxes and low interest rates create wealth for the rich and keep us poor. That is why it is essential to pass the Goods and Services Tax bill. Threats or promises, whatever it takes.