We are nowadays regularly talking about an economic crisis in our country, the falling rupee, the failed investor romance and policy paralysis.
Things are certainly bad if not worst right now. The utterances from political, industry classes are also not helping our cause. It certainly feels like a failed romance, where you have disbelief in everything the other do, in wake of trying help. Sometimes this help is wrapped in illogical and seemingly foolish ideas.
With the wake of political condition on our country, where political future is at large uncertain. The muddy water is made more and murkier with every passing day. Allegations, cross-allegations, paid media, survey reports are adding to chaos every day. This is causing the butterfly effect, where every cause is driving exponential effect. The effect can be measured on several quantitative parameters apart from qualitative parameters. Inflation, GDP etc are there are mirrors which show the condition of physical economy of a nation, but the common people on streets, the concerns they talk about, their hopes shows the physic condition of a country. A person with a weak body and good physic condition can do better, and is better than a person with a strong body and weak mental abilities. If I extend this analogy then today our country is with a medium strength body laced with several diseases and very weak mental abilities. And the situation is getting bad by every passing day. The drugs that we are providing to this ailing stature are also medieval age, the drugs that shown an adverse effect in the known history.
When economy cripples in a nation that has the substantial population under poverty, nations responsibility is to provide jobs to people. Infrastructure investment is one way to guarantee such jobs. These jobs should be constructive in nature and tied to a bigger mission where monitoring is possible. Government sponsored jobs through NREGA have paved a way for corruption and sucked the manpower from rural economy. This is causing an adverse effect on medium farmers who do not get required manpower when they need it. Majority people do not want to toil if they can get easy money from corrupt practices. Rajeev Gandhi said that government spends a rupee and people only get ten paisa from it, so its time to minimize outflow of funds in name of corrupt social security net, and make people work for their bread. The system of freebies needs to be tightly controlled and should be made available to one who really needs it. The definition of needy is tough for politicians to define, but people of the country already know that who is eligible for freebies and subsidies.
So we started with the topic of what if depression hits India, however, I do not see any such chance in near future. Depression comes when there is a curfew like condition on the roads of prosperity. The monetary transactions go down considerably and people start thinking about very basics necessities of life.
Once this happens it will erode away the shine of the vessel of the economy and will open the unprotected walls against harsh environments to rust upon. People will invest less and less in commodities like house, automobiles, electronics and all other things which fall under nonnecessary categories. A large part of city dwelling population which is dependent upon these pillars of the economy will face the worst situation. The job loss will be reciprocal and spread in no time. It looks like a doomsday figure just like an excerpt from some Hollywood movie, but it's possible and it happened before too. Agriculture is the core engine of the world economy, all other jobs are created over the layer of agriculture, and over the period of time, this engine created several economic engines in the shape of manufacturing, construction, services, information technology and many others. These other sectors are the sectors which laid the foundation of the modern world, our life revolves around them and they depend finally on agriculture. Now let's talk upon the problem, that is agriculture can generate food but not enough money, and to feed all other engines we need that extra money. This extra money is generated in mines, the manufacturing sector, energy sector and then is distributed with the help of services, entertainment like sectors to other section of masses. This depression causes blocks on this very road of development. This is the road which carries a maximum of aspirations and milestones by which qualitative parameters could be measured. It feels like a cholesterol blockage in arteries resulting hemorrhage and heart attacks. So given this context, it could be very well said that following may happen if Indian economy enters this dark area.
1. Failing of top-tier economic sector sectors of services and entertainment. Loss of direct and indirect jobs in this sector will push people to move to other tiers of the economy. This will cause demand supply crunch on other tiers.
2. Will come fall in the lower tier of the economy like private sector construction due to rise in inflation and abetment of liquidity due to rising bank loan rates. This will also cause migration of labor to next tiers.
3. Sectors of manufacturing will cripple due to dropping demands as result of job loss in above sectors.
4. Sectors of FMCG will also see the downside because of declining demand from above sectors.
5. The investment will cripple causing a reciprocal cyclic channel of fiscal crisis.
6. The purchasing power of currency will erode away with the rising inflation. Resources will go scare due to lack of production causing a social crisis. Theft, dacoity, corruption will rise steadily. Law and order will get paralyzed.
These are some of the many problems, the list is very long. This is my thought, but I strongly believe that it is not impossible, if we do not have right people, at the right place and at right time.
Things are certainly bad if not worst right now. The utterances from political, industry classes are also not helping our cause. It certainly feels like a failed romance, where you have disbelief in everything the other do, in wake of trying help. Sometimes this help is wrapped in illogical and seemingly foolish ideas.
With the wake of political condition on our country, where political future is at large uncertain. The muddy water is made more and murkier with every passing day. Allegations, cross-allegations, paid media, survey reports are adding to chaos every day. This is causing the butterfly effect, where every cause is driving exponential effect. The effect can be measured on several quantitative parameters apart from qualitative parameters. Inflation, GDP etc are there are mirrors which show the condition of physical economy of a nation, but the common people on streets, the concerns they talk about, their hopes shows the physic condition of a country. A person with a weak body and good physic condition can do better, and is better than a person with a strong body and weak mental abilities. If I extend this analogy then today our country is with a medium strength body laced with several diseases and very weak mental abilities. And the situation is getting bad by every passing day. The drugs that we are providing to this ailing stature are also medieval age, the drugs that shown an adverse effect in the known history.
When economy cripples in a nation that has the substantial population under poverty, nations responsibility is to provide jobs to people. Infrastructure investment is one way to guarantee such jobs. These jobs should be constructive in nature and tied to a bigger mission where monitoring is possible. Government sponsored jobs through NREGA have paved a way for corruption and sucked the manpower from rural economy. This is causing an adverse effect on medium farmers who do not get required manpower when they need it. Majority people do not want to toil if they can get easy money from corrupt practices. Rajeev Gandhi said that government spends a rupee and people only get ten paisa from it, so its time to minimize outflow of funds in name of corrupt social security net, and make people work for their bread. The system of freebies needs to be tightly controlled and should be made available to one who really needs it. The definition of needy is tough for politicians to define, but people of the country already know that who is eligible for freebies and subsidies.
So we started with the topic of what if depression hits India, however, I do not see any such chance in near future. Depression comes when there is a curfew like condition on the roads of prosperity. The monetary transactions go down considerably and people start thinking about very basics necessities of life.
Once this happens it will erode away the shine of the vessel of the economy and will open the unprotected walls against harsh environments to rust upon. People will invest less and less in commodities like house, automobiles, electronics and all other things which fall under nonnecessary categories. A large part of city dwelling population which is dependent upon these pillars of the economy will face the worst situation. The job loss will be reciprocal and spread in no time. It looks like a doomsday figure just like an excerpt from some Hollywood movie, but it's possible and it happened before too. Agriculture is the core engine of the world economy, all other jobs are created over the layer of agriculture, and over the period of time, this engine created several economic engines in the shape of manufacturing, construction, services, information technology and many others. These other sectors are the sectors which laid the foundation of the modern world, our life revolves around them and they depend finally on agriculture. Now let's talk upon the problem, that is agriculture can generate food but not enough money, and to feed all other engines we need that extra money. This extra money is generated in mines, the manufacturing sector, energy sector and then is distributed with the help of services, entertainment like sectors to other section of masses. This depression causes blocks on this very road of development. This is the road which carries a maximum of aspirations and milestones by which qualitative parameters could be measured. It feels like a cholesterol blockage in arteries resulting hemorrhage and heart attacks. So given this context, it could be very well said that following may happen if Indian economy enters this dark area.
1. Failing of top-tier economic sector sectors of services and entertainment. Loss of direct and indirect jobs in this sector will push people to move to other tiers of the economy. This will cause demand supply crunch on other tiers.
2. Will come fall in the lower tier of the economy like private sector construction due to rise in inflation and abetment of liquidity due to rising bank loan rates. This will also cause migration of labor to next tiers.
3. Sectors of manufacturing will cripple due to dropping demands as result of job loss in above sectors.
4. Sectors of FMCG will also see the downside because of declining demand from above sectors.
5. The investment will cripple causing a reciprocal cyclic channel of fiscal crisis.
6. The purchasing power of currency will erode away with the rising inflation. Resources will go scare due to lack of production causing a social crisis. Theft, dacoity, corruption will rise steadily. Law and order will get paralyzed.
These are some of the many problems, the list is very long. This is my thought, but I strongly believe that it is not impossible, if we do not have right people, at the right place and at right time.
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