India – 2014 Elections

19/04/2014

Elections to the Indian Parliament are taking place in various parts of the country.The BJP is blaming Congress and Congress is blaming BJP for the ills of the country. The fact is that both the parties while in the government have done what they thought was good for the country.Both of these parties however have failed to grasp that it is not the policies alone which improve the economy. It is the implementation that is very important. For example the Rural Employment Guarantee Scheme could have lead to production of about 400 million tonnes of cereals and made the country surplus in food grains by deepening existing lakes, by digging new lakes, linking lakes with lakes and lakes with rivers. But there are serious allegations that the scheme provides salaries to people but no significant work is done. This is because the people do not work hard and full time. If a country is to progress, its people should be sincere, honest , hard working and committed to the work they are doing. But in India people are not so. If the country is to progress, the people have to change, become honest,hardworking..

There are allegations of corruption among political leaders. The leaders are forced by people to spend a lot of money for getting elected to Parliament/Legislative assemblies. This leads to political corruption.

People expect undeserved assistance from the government. This leads to bureaucratic corruption.

It is thus clear that the ills of the country are due to the people- common people. The first thing that is to be done is to inculcate good values and discipline in the people. Changes of governments and policies alone may not make much difference to the economy of the country unless the policies have a component to compel people to be honest and hardworking.

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Money, Printing of Currency Notes, Inflation (continued)

30/06/2010

Excerpt from the manuscript “What Ails Indian Economy?”

“In fact, any product, commodity or service acquires value because of the demand. Today, a music system may cost about Rs.50,000. If tomorrow, people are no longer interested in music or there are other ways of listening to music, the music system loses its value. The value of any product or commodity is based on the importance people attach to it, particularly if it is not an essential item like food, clothing and shelter. …..

To understand better, what money is, it would be useful to have some background information. Direct barter system was used in the olden days. It was possible then, as the requirements of the people were limited to, may be food, clothing and shelter. It would not have been very difficult for a person, to locate….. For example in the olden days a person would have grown cereals on his land. The other person would have grown vegetables and a third person would have grown fruits etc. all in the same locality. People knew each other well and the person who wanted to exchange his cereals with vegetables would not have had any difficulty in locating the person who had vegetables to dispose of and at the same time needed cereals.

Sometimes, people had products to dispose of, but they did not need to buy anything at that time. They therefore needed to keep something in exchange for their products. This something has come to be called the money. People used to keep their money in the form of land, cattle, grains and later in gold, silver, copper etc.

In order that goods and services are disposed of and acquired without much discussions, there is need to express their values. Earlier people might have expressed the value in terms of land, grains or cattle or other domesticated animals. People would have talked of wages of a worker in terms of units (weight or volume) of grain. They would have talked of value of some area of land in terms of cattle-10 cows or 20 cows etc. But now the value of goods and services are talked of in terms of currency -rupees or pounds or dollars or euros etc.

People are willing to exchange valuable goods and services for printed small sheets of paper- currency notes, because they know that other people would accept these papers in exchange for their goods. The currency notes thus acquire value. The same is true of gold…….

 (to be continued)