The Second Stimulus Will Fail

The second Indian stimulus package will fail to revive the economy. The government has eased credit in the infrastructure sector and consumer market, provided some duty reliefs and tried to relieve the pains of the realty sector by allowing them ECBs. This will no doubt increase liquidity in the market and provide a short term relief to certain sectors but it will not lead to broad based recovery of the indian consumption. The government should realise that consumers only spend when they have a confidence that they will keep on earning and will be able to pay their debts in short as well as long term.

The direction of package is wrong especially because the pain point in Indian crisis has not been lack of money to spend, but, the willingness to spend. The electronic media has amplified the fears of slow down to such a level that people are just cutting down on spending fearing a job loss. It is leading to a spiral effect where consumption has gone down forcing manufacturers to cut back expenditures and eventually jobs. Thus, the problem will not be solved by giving people more money to spend or make the stuff cheaper as there will always be a doubt that it might suddenly run out as it was introduced. The problem will be solved by making broad based reforms to boost confidence in the Indian story, governance and economy.

The Indian government should have sensed the mood of the nation and tried to prop up the confidence by offering package that would have appealed to the heart and the head. The government could have created a special vehicle to focus on improving the infrastructure in the country and in devising processes to increase access to the new infrastructure. Spending on building infrastructure would have not only created new jobs, but also sent a signal that the government is interested in growth and they are going to take advantage of the slowdown to build infrastructure to fuel long term growth. This signal would have reinforced confidence in the Indian story and investors would stay put in the country, thus, providing a much needed psychological cushion to the consumer market.

Secondly, the government should have spent substantially on recruitment and modernisation of security personnel and revamping of judiciary . The recent mumbai attacks would have allowed the government to take such a step and restore the confidence in governance. Another step that the government could have taken would have been to launch e-governance in the country. E-governance should have been introduced at every level the citizen interacts with government institutions. This would have sent the signal that the government is trying to reduce corruption and give a power to the citizens to make the bureaucrats accountable.

Thirdly, the Indian government should have taken the opportunity to start investing in clean energy sources. With all the world attention on climate change and the commitment of US administration to spend on clean energy the government should have started a mechanism to allow the Indian industry cash in on the emerging next bubble. China has taken a lead in the manufacturing sector already. The government could have earned a lot of money by creating carbon credits and trading them for a profit. Inspite of it, there is a huge market in India itself, which if we dont capture, will be served by others.

I really feel that the government is far away from the concerns and the need of the time and the people. If something could be done…

Teaching 100,000 english

That’s the mission I aspire to acheive to contribute to social responsibility. I think it will be immensely beneficial if I can somehow build a process and a coalition to enable teaching the english language to atleast 100,000 people.

It is a worthwhile mission because it will allow individuals a foot in the globalised world. It is far more important in this age and time because of the availability of technology that can easily provide accessibility to internet on mobiles – the most widespread medium of communication in India. If we can all somehow learn english , we can be the biggest content contributor globally. This will allow us to shape world opinion the way we see things, and hence close cultural ties with the world. Ultimately, leading to more and more jobs and a brighter economic future.

Secondly, I think the fact a large proportion of population would be educated – it would bring sense into our democratic system. The other day I was going through a forwarded email about the education qualifications and criminal records of our parliamentarians. I was saddened to see that more than 20 percent of the strength of the house had criminal records and the educational qualifications were also not something to be really proud of. It is also sad to see that people who have been uneducated have not led their community to education and a bright future. However, I resigned myself to an apathetic attitude – thinking that the leaders are representatives of their voters. If the voters, want such leaders than they should be there. I think the reason for existense of such kind of leaders is the prevailing scarcity for everything (security, education, healthcare facilities, infrastructure, etc.) leading people to elect those who can arm twist their way to snatch some proportion of the scarce pie for their constituency members. With education and proper laws things can change and better governance will be provided as it will be difficult to fool and divideople.