More industrialists should be given Padma Awards.

26/01/2017

Perusal of the list of 2017 Padma Award Winners shows that there is only one awardee in the field of Trade and Industry among the 89 awardees. This does not appear to be just and fair to the Trade & Industry sector, considering their huge contribution to the country’s economic development, employment generation etc. About 8-10% share for this sector would encourage them to contribute more to the socio economic development. Similarly to appreciate the role of spiritualism in shaping the values of the society and in recognition of the importance of spiritualism in the life of an individual, more holy people should be awarded Padma Awards, though they do not aspire for any award.

The Awardees should have some privileges and immunities.

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Ways to encourage local entrepreneurship

14/01/2017

If a country is to sustain the economic development, local entrepreneurship should be encouraged, as without entrepreneurs a country cannot maintain development. Some of the policies to be adopted are:

i. If a project is to benefit people of only one village or town, the contract for the project should be given to a contractor from this village/town only.

ii. If no person from the village/town has sufficient money to invest, loans should be extended to willing entrepreneur on liberal terms. If no person has required knowledge or experience, such experts can always be employed by the entrepreneur

iii. Local people should be encouraged to set up partnership/private limited companies to undertake projects.

iv.If large project is likely to benefit a larger area and it is to cost much more than any person/group of persons from this area could afford to invest, the project could be given to any outsider, but local people should be associated by allotting some percentage of shares of the company.

v. the persons whose lands are to be used for the project should be allotted shares, in the investing company, instead of payment in cash, or the land owners should be paid for their land, partly by cash and partly by allotment of shares. This is in addition to providing employment to one or two members of the family of owners of the land.

These policies may affect a few communities and entrepreneurs from traditional business centres( large towns and states like Rajasthan, Gujarat etc)  by depriving some opportunities, but these policies may prod them to go for bigger projects than they were engaged hither to, thus compensating their loss of opportunities for small projects

These policies could be done away with, once entrepreneurship is developed widely.

 


How long should India seek foreign investment for its economic development

01/11/2015

For fast economic development of the country, India should open up its economy fully to foreign investment. But this should be a short term strategy. For long term sustainable development, India should develop technology, encourage Indian companies to invest abroad and export technology. India, being a large country with a population of over 1250 million should not be a regular importer of technology. According to World Bank data Finland with a population of about 5 million has over 7000 researchers per million of population. That is why it is able to develop, utilise internally and export new technology. China has about 1000 researchers per million of population. But India has only about 160 researchers/million of population. India should give top priority for increasing this number at least to the level of China viz 1000/million of population. This is what, India should do to become a developed country. Its dependence on other countries for technology should gradually decline. For sustainable development India should depend on R & D and not on foreign investment.


Inflation and economic Development  

19/01/2015

It is important to create demand for goods and services before the products are made in India and services sector is established. How do we create demand? By putting money into the hands of as many people as possible. If we take various sectors of the economy, agriculture sector is the one where more than 50% (nearly 65%) of the people are engaged. If those in the agricultural sector are to have surplus money to purchase additionally produced goods and services, the prices for the agricultural products should be increased for farmers and the wages of agricultural labourers should be increased. This will mean:

  1. When prices of onions, tomatoes, rice, wheat etc go up, there should be no agitations against the price rise
  2. There should be no ban on exports of these items
  • There should be no permission for imports of these items
  1. There should appropriate storage facilities  to store surplus production and there is no distress selling
  2. Farmers should be employed full time i.e. at least for 8 hours a day. This will require farmers to take up allied work like dairy farming, poultry farming, goat and sheep rearing, honey  making, rope  making etc. or intensive farming like multiple crops, good irrigation, etc.

People not engaged in agricultural sector will suffer with increased prices. To remove their sufferings their wages should also be increased. Their wages otherwise  also will go up with large scale demand from farmers and farm workers for the manufactured goods leading to higher profits for factories which in turn will lead to higher wages.


INTERNAL DEBT and ECONOMIC DEVELOPMENT

20/03/2014

EXTRACTS FROM MANUSCRIPT, “WHAT AILS INDIAN ECONOMY”

While India has incurred more foreign debt than is required, it has contracted less domestic debt than is required to meet the legitimate development needs. According to the Reference Manual, “India 1998”, the total domestic debt in 1997 is Rs. 334914 crores which works out to about Rs.3500/- per person. (per capita foreign debt is Rs.4300/-)

Most of the developed countries have much larger per capita domestic loan than India whereas in India, external debt is higher than internal debt…….

……thee is absolutely no valid reason for not incurring more debt to Reserve Bank of India ( this is same as printing currency notes) to meet the developmental needs. The total, both domestic and foreign debt per capita comes to only about Rs.8000/-. The total debt of USA is over $ 5 trillian( $500000crores or Rs.22000000crores)(in 2004 over US$ 11 trillion) and the per capita debt is over $20000 or Rs.860000(approximate) which is about 100 times that of India. Japaese Government’s debt is US$4 trillion-$400000 crores or Rs.17500000 crore. The per capita debt is Rs.15,00,000 which is about 180 times that of India. In the case of most of the developed countries the per capita debt is much higher than in India. The countries could develop only because of the high debt and the fact that they wanted to rely on themselves……….. since Nehru’s time…the elite, intellectuals, economists, administrators etc. justify their inaction/indiffdrnce to the needs of the people, by saying that India does not have resources to undertake large projects and hence the problems of the people could not be solved.

One of the two major reasons for the economic backwardness of the country is the theory…….that India did not have resources.(the other one was that India was over populated…..these leaders did not understand that manpower is the main resource. Instead of utilizing the manpower they went about taking of reducing population growth by introducing family planning programme even as early as 1950s when the density of the population was even lower than that of many European countries.

The secod resource is land. India has sufficient cultivable land even today-i.e. even when the population has increased and the government had encroached upon fertile land for non-productive purposes..

The third resource is money. The leaders did not understand that money at that time was coins and currency notes.(In 2000s it is cheques, credit cards besides currency notes.) While coins are expensive to mint,currency notes could be printed easily by the Reserve Bank of india and the government could have borrowed from the Reserve Bank…….

Even after more than 50 years of independence,there are villages which do not have lakes and which they need and where there is possibility for lakes. Even in the 1990s/2000s, there is need and of course, scope , for thousands of canals of hundreds of kilometres etc. For these works,what is required is just simple tools which the village artisans can make,man power and cattle energy,which the country has in abundance and also local-Indian currency to which the government has unlimited access. There is no need for the government to sign Memorandum of Understanding with Reserve Bank of India on limiting deficit financing. The monetary and other policies of the government are to be decided by the elected representatives of the people and not by officials of Reserve Bank of Indian who are not answerable to the people.


ERADICATION OF CORRUPTION

19/03/2014

Being part of the larger society, the political and bureaucratic functionaries have the same level of honesty and integrity as the common people of the society. However, as those in Government service have opportunities to extract bribe, by delaying and/or denying something or by extending undue favours there is need for them i.e. those in government service to be mare honest. They should also be more hard working and committed to the people than the rest of the society.

There were reports in newspapers that in a developed country, Prime Ministers have resigned on allegations of corruption. Even the Governor of the Central Bank of that country resigned on allegations against senior official of the Bank. There were stories in newspapers of every government in another developed country making efforts to eradicate corruption among government officials and teachers but the practice of bribing continuing to exist. In another country admission in kindergarten schools is reported to be secured by paying bribes. These countries have developed phenomenally and in some cases in spite of paucity of raw materials and occurrence natural calamities. So, governments have to take up a large number of large scale projects.

Corruption has hampered the economic development of the country but corruption is not the sole cause of economic development of any country. So eradication of corruption cannot be a one point programme of any government though there is need to eradicate the same. It should only be one of the several issues to be tackled.

The intelligentsia and social activists should also devote attention on reforming the society. Values like honesty, hard work, self-respect (declining avoidable assistance from any quarter), devotion to duty, patriotism, fear of God etc. should be inculcated in the minds of the people from childhood.

In countries like India, by constantly talking about corruption, (sometimes exaggeration), the Press and the Intelligentsia, in spite of very good intentions, have contributed to the prevalence and spreading of corruption. People have come to conclude that bribing is unavoidable and has accepted bribing as a necessity. The same is the case with social evils like drug addiction, violence, etc. It is better to avoid disproportionate publicity to any issue.


China’s economic develoment

20/02/2011

China’s economic development in the past 30 years has been phenomenal. It has overtaken several countries including Germany and Japan to become the world’s 2nd largest economy(GDP US$5.7 trillion). It has become the largest exporter in the world. There is discussion already,on when China would overtake USA(GDP US$ 14.6 trillion) to become the largest economy. However, it appears that China may not overtake USA in GDP, in the near future, as its development is based on weak foundation:

a. unlike in countries like India, in China, the contribution of foreign invested companies to the GDP is very high- about 40%. Foreign direct investment in China is nearly US$ 1 trillion.

b. contribution of foreign invested firms to china’s foreign trade is over 50%

c. if foreign firms withdraw, China would lose its position as the 2nd largest economy and the largest exporter. GDP growth rate would also fall substantially from the present
level of around 10%

d.China’s investment in research and development is low- about 1.5% of its GDP, compared to 3% in USA. It depends on foreign countries for technology.

e.arable land in China is limited-only about 140 million hectare(just about 15% of total area) for its population of 1350 million. USA has about 175 million hectares for a population of about 300 million.

f.agricultural land is over exploited with high input of fertilizers. Soil degradation is likely to lead to drop in agricultural production.( China has however done a good thing in leasing large areas of agricultural land in Africa.)

g. natural and man-made calamities take place more often in China than in many countries.

While the achievement of China in the last 30 years is adorable, it may also have to be noted that this has been possible because of foreign assistance, which means foreign developed countries also have contributed to the progress. Of course, the foreign countries have benefited enormously from their investments.