Budget – second helping

Aiming to get consumption up and savings down is a step in the right direction

Perhaps more of a footnote, or a doggy-bag.

Spending is up on infrastructure, farms and rural sector. Irrigation – Modi’s big innovation in Gujarat and the thing that, tied to electrification, transformed the state’s economic fortunes, is now a major element of the national Big Plan. Good.

The income of farmers is supposed to double over the next five years, providing a feel-good factor into the next general election, but more importantly giving more of the economic pie to households – increasing consumption at the expense of savings. This is also good and needs to happen because India has too many poor people, and at the same time absolutely massive potential internal markets. If spending goes up then India can become rich; that’s not going to happen if the mass of people has no money to spend.

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Indian budget takeaway

Rajan knows that all accelerated growth always leads to dangerous economic imbalances.

Revealing a despair that I shared, Elaine Meinel Supkis wrote in 2007 that,

‘There are very, very few fiscal conservatives around. We like reduced debts, sober analysis of economic facts and building for the future coupled with real capitalism, not predatory, debt-fueled speculation.’

Debt-fuelled speculation, aided by the venality of bad-faith politicians and academic central bankers, has ruined the economies of the West. We live in hope that India will resist mammon-obsessed financial quants, and follow a line of genuine value creation, unleashing prosperity across society and nurturing aggregate demand not asset-price bubbles, generating healthy rather than piratical profits. As Hyman Minsky eloquently put it , ‘The primary aim is a humane economy as a first step toward a humane society.’

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Development dangers for India

India needs to be careful not to take on too much foreign debt

These days which country would not relish minimum 7% annual growth and a central bank lending rate of 6.75%? Apart from being an attractive investing environment, it means a whole range of monetary policy options can be deployed in response to changing economic conditions, especially adverse ones. This happy situation stands in contrast to those countries where zero, near zero or even negative interest rates mean that governments and reserve banks have nowhere left to go except competitive currency destruction, which ultimately means the impoverishment of their citizens.

India, despite its relatively benign position compared with the USA and China – to name only two out of dozens of troubled economies – remains oddly unloved in terms of the inflow of foreign capital and the tenor of opinion surrounding its prospects.

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Fears and weaknesses – comparing India and China #1

India’s fear is that change will destroy its ability to suffer and survive; therefore India fears change.

Although Bharatiyata! Is mostly concerned with India, it is important to compare it with neighbours and competitors. To this end, examining India and China together is interesting, especially because their journeys into the future will run so much more closely together in the political, economic and military fields from now on.

One particular way in which the two countries can be held up to the light, as it were, to see how they differ, is in their weaknesses. What are their Achilles’ heels, psychologically speaking, and how might these affect them in macro terms?

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Hitler in Mumbai – the strange case of Subhas Chandra Bose

I always tell people that Indians do not ‘get’ Adolf Hitler. In fact, as an example of what I want to do on this site – help Westerners to understand India – Hitler is a good place to start.

I was in Mumbai airport, passing through the dingy and down-at-heel domestic terminal this time, not the sleek and art-ified international one, when I spotted a proud stack of Hitler’s Mein Kampf for sale in the rather good little bookshop there. To say the least, this is not something that would go down well in London or Berlin (although apparently the Germans are reprinting the book for the first time since World War II).

For Indians, though, the prominent swastika on the cover – and on the cover of Nazism itself, if you like – speaks spiritually of the cycle of life and harmony and piety. They don’t see the symbol reversed and transformed into Hitler’s sinister black spider. But the big thing to remember is that Hitler is something of a hero in India. Not, I stress, because the Indians are at all inclined to be fascist; in fact I cannot think of any nation less inclined. Rather, it is because the Indians see Hitler as having stood up to the dictator Churchill.

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A word about photos and videos on this site

Putting this site together has been quite an education. I have now figured out enough of the software to be able to use it, and I was looking forward to making the joint look nice by adding some photos and videos. I tracked down some lovely images of India on Flickr and on YouTube found some films I helped to make for the BBC. The Flickr photos were from people who had uploaded and listed them with a Creative Commons (CC) re-use licence: you are supposed to be able to insert them on your site under certain conditions (don’t alter them or use them for commercial purposes and so on). All was well until I began to double-check on the licence and copyright situation – and then my blood ran cold.

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A twenty-year project: Andaman and Nicobar Islands #1

 

In a couple of decades India will be one of the two largest economies in the world, and Bharatiyata! aims to be here for those entire twenty years as India takes its place as world leader. With our very first post, and as a foundation project, we are embarking on our long journey by setting a challenge: that by the time 2036 comes around, the incredible beauty of the Andaman and Nicobar Islands will have been enhanced by the development of the largest resorts, deep-water harbours and free trade entrepots in the world, dwarfing Dubai and surpassing the beaches of Thailand, even outclassing Hong Kong and Singapore as vibrant free-trade utopias. That quest begins right here and now.

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