Self-reliant India, as New Economic Model

Economist S Gurumuthy's analysis of Indian economy is always different and fascinating on many counts. In a recent Interview to a English magazine, he said:

"The illiterate economic thinkers and institutions in India, whose training is based on foreign ideas and theories, have not been able to come to terms with the diversity of India. The financial model applicable to listed companies is being thrust on the rest of the economy. The swadeshi approach calls for factoring in the diversities of India. Actually, jobs are provided only by the MSMEs which are the backbone of the economy. This was understood only after Modi constituted the Mudra finance plan. So jobs will be generated only through bottom upwards and top-down economic model which will suit only the cosmopolitan kind of society."

and on internal migration issues:

"This problem is there, but it is blown out of proportion. Let us look at the facts. There are 31 crore intra and interstate migrants in India according to 2011 census. Out of that 4.2 crores are interstate migrants. How many out of that are going back? Not even 10%. When you are planning a lockdown you cannot give two days or even ten days time for people to move. That would have led to chaos and stampede. Particularly when they did not know how long it would take to flatten the curve. So the migrant issue is a creation of the media and the opposition."

Interesting time, ahead

However, it may be the case for nature to have some or other odd events in the world of Indian economy, but for sure, a very very interesting time is ahead for all of us in India. 

Let's not underestimate a body of man's mind and actions over the nature to do right things in life. Life changes when you change your actions or you simply be in actions, all the time to do right things with one simple tool: commonsense.

The following are some good reading:

The Modi magic: why voters kicked out liberal economics along with cong?

A call to arms: Modi offers window to push liberal agenda by Seetha

• The Swatantra had limited success because the intellectual climate in the sixties and seventies was overwhelmingly leftist. That is no longer the case. 

Salli secularism doses by S.Gurumurthy

PBM's ponderings and musings on history of Indian polity: 

• "The key distinction is between those who wanted a conception of citizenship beyond compulsory identities and those who did not. Many who wanted a united lndia, like Abul Kalam Azad and Gandhi, thought, nevertheless, that India was a collection of distinct communities, which could flourish together. Nehru and Ambedkar wanted to transcend that India. Azad and Muhammad Iqbal may have different implications for the territorial unity of India, but their metaphysics of community identity is more similar. An intellectually underrated figure these days, like Lala Lajpat Rai for example, is actually closer to Nehru and Ambedkar in the way he thinks about finding a conception of citizenship transcending community than his politics would suggest."
• "The compromises of practical politics and opportunism blurred these intellectual lines and created strange bedfellows. This is a heretical thought. But in terms of underlying positions, in any other world, Nehru, Lajpat Rai, M.G. Ranade, Syama Prasad Mookerjee, Ambedkar, perhaps even Jinnah, would have been in a similar party: looking for conceptions of citizenship that transcended traditional community affiliations and created space for individual freedom. They happened to disagree on whether you could do it in one diverse nation. Gandhi, Azad, Purushottam Das Tandon, Deendayal Upadhyaya, and perhaps Iqbal, would have been in a similar camp: the modernist project as enacting community identities rather than transcending them."

Year End Posts

Another year is ending and almost a last day is left. The year gone is filled with full of changes with all kinds including many negative change! And I liked them! But the understanding gone in to it is not measurable and only the future will tell me the really use of it in life and work.

Nevertheless here are some good reading, though nothing new is discovered. The fools piece on Reimagining India is really stupid one!

Intractable, vulnerable and contestable by Subir Gokaran

The year of #outrage by Veena

India can win the gold game by S Gurumurthy

Why I’m not on social media by Akar Patel

"Fools" Reimagining India

Good read

Ashok Desai says "Raghuram Rajan made me think more with a 15-minute speech than his three distinguished predecessors did with their 15,000-minute perorations. He should keep his mind ticking."

Gurumurthy says "Reverence for elders and teachers coupled with their power to punish the deviant had helped to prevent deviance. But the modern state doesn’t trust parents or teachers to punish the deviant. Fostering reverence helps to prevent deviance. Deviance cannot be corrected by law. It can only be prevented and corrected by family and society. They need to be strengthened. But modernity weakens both." Read full article Modernity has failed to stop deviance

Interesting reading

Gold: villain or saviour? by S. GURUMURTHY

The elephant experts didn’t by S. GURUMURTHY

The upside of the falling rupee by Neelkanth

Who's afraid of a big current account deficit? by Ajay Shah

What the great-grandson didn’t learn

Making people-driven democracy by Rajeev Dhavan

Interesting analysis on Indian economy

Ambedkar, rupee and our current troubles

India Inc’s austerity momen

UPA policies weakening India and enriching China

Antrix Devas and the second generation scam

Some links

Reckless imports put rupee on ventilator

Economy on verge of internal, external bankruptcy

Bhagwati on India

Will Raghuram Rajan really listen to Raghuram Rajan?

A wand for Raghuram Rajan

On a scale of 1 to 10, Manmohan Singh gets negative rating

Timely articles, must read

Secular smokescreen by Nirmala Sitharaman

Beyond the Muslim quota By Tufail Ahmad 

India’s cocooned intellectual elite by Rajeev Mantri  and  Harsh Gupta 

Dollar’s taking us for a spin by S. GURUMURTHY

S vs B "For us Indians, it’s getting a bit too much. So, some questions."

Subbarao's tenure 'worst era of performance by RBI governor'

Upfront attacks

Former Finance Minister of India Yashwant Sinha says "..government led by Congress has destroyed every sector of the economy and is now destroying every institution of government. It will be criminal negligence on our part to allow them to get away with it."

In his latest article in NIE, veteran Indian nationalist liberal S.Gurumurthy attacks upfront ruling party's leaders. Very interestingly he asks "Aurobindo, Vivekananda and Gandhi too oxymorons?" 

"Manmohan Singh has given up on all claims to being an economist as that would have fetched howls of derisive laughter."

B R Ambedkar, please!

S.Gurumurthy has very interesting article in the BL on global financial crisis and its impact on real economy. The most interesting part is below para:

• "Milton Friedman suggested that governments must statutorily limit the rate of money expansion to the rate of growth of the real economy. That is, there must be direct correlation between money and growth. But now, post 1990, the financial economy has grown 10 times the real economy."

The essence of the above arguments was the pioneering work of Dr.B R Ambedkar in the early 1920s. But nobody had have interest to read and understand from his point of view.

Economic history of India

Gurumurthy has great article in today's BL.  Its a must read. A bit from the article:

• India could never have been an agrarian economy then as it is now, given India’s share in world manufacturing at 24.5 per cent in 1750 and with industrial employment then estimated at between 21 and 28 per cent. It was the collapse of Indian industry during the colonial period that drove people back to the farms. This kind of widespread and widely shared economic activity would not have been confined to the minuscule Bania community.
• There is need to recall, re-author, and review Indian economic history, which is even now a prisoner of the Marx-Weber perspectives.

Some Links

"Ambedkar himself has been accorded quasi-divine status by his followers"

"This less serious comment calls for serious response. Otherwise illiteracy about India will continue to persist for lack of literacy among Indians who speak for India. But, it calls for a peep into the world and the Indian economic history which most Indian academics, particularly economists, seem to be least interested in and therefore less aware of."

Some links

"The Congress tried in the past decade to counter Hindu communalism by courting the poor."

Do you think India needs Market Monetarism?

Remembering Vivekananda

Vivekananda’s agenda for India: Development with culture

More on Vivekananda @150

"India has progressed in many ways. But not in intellectual ambition. Almost all our great figures appear to us monumentalised, precisely because we are incapable of comprehending the rich and diverse intellectual soil that nourished them."

Under the Rurbanisation model, medium industries and businesses could shift to villages and bring with them middle-class professionals to live in the new habitat. A similar initiative is being taken in Gujarat.

Rajaji said that but for Vivekananda we would have lost our religion, not have gained our freedom; we owed everything to him”. 

Random reading

"...the quota system does not automatically translate into effective governance. Nor does it mean that issues concerning women in the community will automatically be addressed."

"Gujarat has not been much in the news except when NarendraModi says something abusive, malicious or outrageous. But there is a Gujaratbeyond Modi and the Hindutwits."

New drama on CAG vs TWO G SCAM: Some relevant new facts and figures with analysis.

Morality polity: A huge fall indeed

• "Schweizer Illustrierte, a popular Swiss magazine, unrelated to politics in India, had reported in 1991 that Rajiv Gandhi had $2.5 billion in secret Swiss bank accounts. It would have now grown to over $10 billion at US treasury rates. Later, Russian journalist Yevgenia Albats, in her research book on the Russian spy agency KGB, uncovered documents that showed that the Gandhi family was receiving, with ‘gratitude’, payoffs from the KGB. These reports have been cited in news items and in columns repeatedly in 1988, 1992, 2002, 2006, 2009 (twice) 2010, and 2011 in The Hindu, Times of India, Statesman, India Today, and repeatedly in The New Indian Express. Yet, the Sonia Gandhi family and the ruling party have been maintaining an intriguing silence on these serious exposes. They did not dare sue the newspapers or the writers. A few weeks back, ‘Business Insider’, a fairly well regarded e-magazine based in US, had listed 23 world’s richest politicians. Sonia Gandhi, with her wealth estimated at between $4-19 billion, stood fourth in the honour list. Only the Saudi king, Sultan of Brunei, and Michael Bloomberg (New York mayor) were above her in the list. Again the Gandhi family and the ruling party are deafeningly silent on this report. Should they not sue them if the reports were false? Intriguing, isn’t it? The government is helpless, understandably. Why is the opposition too silent? More intriguing, isn’t it? " 

More here.

Retail polity

In the on going debate on FDI in retail sector, even the so called liberals are grouped in different camp. If you  glance through the following pieces you will get to know what I meant so called liberals. But the fact is that Walmart is not the only guy who is going to stay here for long, after all the king of competition is going to help us  in improving our life style. These pieces in my view are must read, if at all you bother to get some concrete view about why we should or should not allow FDI in retail sector in India.

Market economy or market society by S.Gurumurthy

Exploring pros and cons of FDI in retail by Bibek Debroy

The party of no principle by Surjit S Bhalla

All road to "Swiss" but misses the point!!

• That leaks make news is well known. More sensitive the leaks more shocking the news. The alleged ‘apology’ of L K Advani to Sonia Gandhi to the Bharatiya Janata Party task force on black money abroad saying that she held secret Swiss bank accounts was indeed a stunner. The leak shocked the BJP to grief, surprised the Congress to joy, and bewildered the media to splits. A plain reading of Advani’s letter shows that he has not regretted for the task force report mentioning Sonia’s name at all. Yet, thanks to the media spin, the whole country believes he has.

• Here is the story of the ‘regret’. The task force of the BJP consisting of four specialists — Ajit Doval, a  security expert, Prof Vaidyanathan, a  financial expert, Mahesh Jethmalani, a  senior lawyer and myself, an experienced chartered accountant — had submitted a meticulous report, running to almost 100 pages, on the black money stashed away abroad. Citing two unbiased sources, the task force report had said that Sonia Gandhi family reportedly held huge funds in Swiss banks. This should have made big national news; but it did not. Why?

(From article by S.Gurumurthy)

Mass scams and bombarded governments

What was Rajiv Gandhi’s fatal error in politics? It does not need a seer to say that it was his claim to honesty — branding himself as ‘Mr Clean’ — that proved fatal to him. 

Arun Shourie, BJP and F A Hayek

I merely site some of the emerging order here, yet political, for the moral order we do not know how much time it will take India! If any one is familiar with Professor Hayek’s ideas know better that Mr Arun had misinterpreted Hayek idea of Rule of Law.

Arun Shourie said during the first Dhirubhai Ambani Memorial Lecture addressed by the then President Kalam “……..and I am just paraphrasing Professor Hayek on how law evolves — by exceeding the limits in which those restrictions sought to impound them, they helped create the case for scrapping those regulations, they helped make the case for Reforms.”

Take for example of ET letters:

• “Mr M K Venu is right in his analysis (ET, July 15) of the effect of Arun Shourie’s remarks at the Dhirubhai Ambani Memorial Lecture and his so-called 180 degree turn (read, “a complete volte face”). He mentions his war, alongside S Gurumurthy, against Ambani, but sanitises it by saying that “Reliance had done something in excess of what it had been permitted to do”. Yet, the charge then was that Reliance had smuggled in its entire Patalganga plant.
• Whether he had been right or not, Shourie is now in a bind: Reliance has survived him as well as Gurumurthy, leaving him to explain his past vis-a-vis the firm even as he conforming to today’s political order.
• That explains why Shourie uses a technique that all demagogues employ: the idea is that a startling confession at the outset can excuse the most outrageous sayings. Reliance, once accused of breaking the law for its own gain, is seen to have laid the foundations of liberalisation, a la Hayek!
• This is a misreading of Hayek. As Venu shows, Hayek argued against arbitrary official action that stultified commerce, or targeted some particular business. He instead argues for greater legal certainty as a foundation for the rule of law. He did not say it is permissible to flout the rule of law. That would not do in any civilised society. That Shourie said it is OK to subvert the law (if you are impelled by a higher purpose, albeit a well concealed one) is worth remembering.”

M K Venu said in his article in the ET

• “Shourie then paraphrased what Austrian economist Freidrich von Hayek, the guru of most believers in free enterprise capitalism, had said: "…by exceeding the limits in which those restrictions sought to impound them, they helped create the case for scrapping those regulations"

What the BJP Volunteers should be familiar with here is the list but to note take one: “Understand party ideology and propagate it. Have you read Pundit Deendayal Upadhyaya's philosophy of Integral Humanism ? Have you read the works of Savarkar, Guruji Golwalkar, Advaniji (My Country My Life), Arun Shourie, Vivekananda, Friedrich Hayek (Road to Serfdom), Edmund Burke (Reflections on the Revolution in France), Francois Gautier etc.”