First Real Energetic Step to Mars and into the Future for us Indians

The launch of Mars Orbiter Mission with the help of the PSLV-C25 has completed its first stage of success for the red planet rendezvous nine months away. The second stage which is leaving the earth’s magnetic pull and enters the sun’s magnetic pull and later into the sphere of influence of Mars is pretty intricate and tricky. It has been reported in the press that very few launches to the red planet has so far been successful.

Yet, our Indian scientists have succeeded in putting the launch vehicle into orbit and this is what really counts. It is that bold step that really counts and what may happen later on, although important to make the mission a success, nevertheless has its own degree of uncertainties and even the other experienced countries have failed multiple times before success came their way. So, here the first step is of utmost importance.

Psychology of the Indian Educated Class

With the first step the ISRO has proved that Indian scientists can take on greater responsibilities.  Smallness of the launch vehicle is not the matter here, but the success of the launch itself. It is not that similar experiments have already been carried out by others, but the maneuverability of the human intelligence while achieving the target that matters. The mission would give a fillip to the subdued human educated mentality in India where it is almost a fashion to dwell in the past. Look around you and the media and you will get the answer as to how much we are forced to live in the past and not be in the present for a change and to dwell our thoughts into the future.

For instance, we talk only of our good old days during our social interactions. We always blame the people who try to think something new and in the process sometimes may take only what is good of the past while molding theirs and our future. We carry on relentless campaign against any positive outcomes of science and technology and try to stubbornly project the past as the best where surprisingly the emphasis strangely is on the decadent state of human mentality.

Fortunately, India had a glorious scientific past which has not been emphasized by the political fraternities or scholars of history in particular. We still dwell upon the ways of negative practices of ritualistic culture and religion. One such instance is the digging of gold by the Archaeological Department just because a seer happens to have seen the same in his dream. And nothing came out of it till date.

We never talk about the waste of money our political class and bureaucracy spends as well as the waste like digging of gold without any scientific evidences. We however are surely vociferous in detailing to the last rupee the amount spent on the Mars Orbiter Mission. Go through some of the press report and at many instances you will see reports of how this money could have been diverted for the poor.

Poverty always will exist in India due to the poverty of mind and the only way out is by such periodical reminders through such mission that there is a stage of life of greater marvel and curiosity arising out of being educated. Even after so many decades of independence we have been able to remove only some percentage of poverty and this speaks volumes about the real intentions of our political class and our society.

We are not in Race

We are not in a race, but we are here through this mission creating a larger space within ourselves. It is through the creation of this larger space within us we can make our society economically and socially justifiable to live and work in. We give inspirations through these missions and spread much greater message than many of our political leaders would have done. We give life to the academics that roll out of our institutes in millions with a symbolic aspiration that a high standard life, not just measurable in terms of money only, is also quite possible. A transformation of the society is possible by imbuing of great hopes and setting reachable targets by instilling our young minds such that the creative energies of our people will never ever go in vain in this country. In this way we slowly become our own future.

Has Carbon Emission Been Made Compulsory in The World?

Has Carbon Emission Been Made Compulsory in The World?

Onions and other Vegetable Prices: Hitting the Common Man

These are supply side constraints as hoarders are at the helm to make the prices skyrocket to dizzying heights while the ordinary consumers suffer. You can read my previous article on this subject ‘Lowering food prices for the Common Man’ and the ways to tackle this. Statements in the press and the ministers seems to suggest that we will have to wait for not less than a fortnight for shipment to reach from China, Egypt and other countries. True, all this is a good, but what we lacked is a mechanism to monitor and pass solutions the moment such a price hike is noticed. This mechanism can be done through some emergency measures written in my article. After all it is a perishable commodity and even the hoarders will be at wits end as to what to do with a sudden unexpected dumping of stocks, be it onions or vegetables. They too will not be able to move it at will around the country for there is ………..infrastructure bottlenecks.

Lowering Food Prices for the Common Man

In Kerala, the grand festival of Onam is fast approaching and falls on the 15^th and 16^th of September this year. Yet the spiraling prices of all essential commodities have proved to be quite a dampener. This is the situation as at present and then one can imagine about more hikes in prices in the days to follow when there will be a surge in demand as people would surely go for a spending spree so as to meet the important requirements for their homes. The same is the case elsewhere in India where the prices of food has gone up like anything and leaving the ordinary man at the perils of a weak income.

There is no savings or rather the common man’s savings are cut and pruned and he is then left with nothing much to invest or plan a good purchase of a two wheeler or a car. The food inflation really eats up into the pockets of a common man mostly, but not certainly if one where to change the concept of food inflation itself.

As experts would have us believe that the food inflation arises out of the bottlenecks in infrastructure development and lack of proper planning and disbursement. However, these constraints in infrastructure development are the real advantage that a country like India has in order to bring down food inflation. Let us do some little analysis.

Food inflation occurs when there is scarcity of one or more food items in an area where the demand for the same is more than the supply. That is quite easy thing. The next is that food inflation occurs when there is shortage of supply and this is cleverly exploited by the hoarders. Yet how is the infrastructure bottlenecks an advantage?

Simply because the infrastructure bottlenecks affecting the regulator or the authorities are always similar to the infrastructure bottlenecks faced by the hoarders. This is more so when the items are perishable commodities.

So how do you estimate the potential of a hoarder of perishable commodities? The hoarders can easily be divided into active hoarders, middle level hoarder and passive hoarders. They also operate in that level and therefore it is quite easy to locate them even by considering the size of the country. Most of these hoarders are actually astute businessmen trying to exploit a situation that the country has thrown into their laps.

By understanding these active, middle level and passive hoarders some dozen areas could be located around the country where one can give the label active hoarding areas, middle hoarding areas and passive hoarding areas. The next step is to identify the most sought after commodity which these traders trade in and so does the customers who demand them.

It is to be noted that the active areas and the middle level areas these hoarders create a cartel and have excellent communication system. However, unfortunately for them these are perishable commodities.

The authorities move in and dump those very vegetable, fish, meat or other perishable commodities in large quantities in only these identified areas at say 35 to 40 percent lower price than the existing market rates. What will happen is that the back bone of these hoarding chains will collapse bringing down the prices of perishable commodities elsewhere in the country. This also means that there is no need to distribute commodities throughout the country as then expense will soar, but the authorities can take advantage of the hoarder’s chain itself to bring down the prices of perishable commodities. 
If the infrastructure is the problem then innovate to a modern transportation with the help of helicopter service for dumping vegetables at shortage areas. One may also make use of the coastline ferry service to a great extent for smoother transportation of such commodities in order to control the prices. 

For other commodities that are not easily perishable yet are within the ambit of food stuffs their prices can be regulated if there is decentralized distribution and decentralized imports through various shipping harbors. The same dumping action can be resorted to albeit in some calibrated slow manner to bring about confusion among the hoarders. This would mean that there will be sudden supply of some of these ‘not very perishable commodities’ and then a stop gap and then again a sudden spurt of supply. The prices will automatically fall in place. But all these need some action and not just promises as ground realities would suggest. If however, the demand is greater than supply then we would need to import large scale to bring down the prices in the whole country.

Balancing Growth and Inflation in Difficult Times

What the RBI has done to check the rupee fall isn’t a wrong move if it is taken to be a temporary step. Although a lot of criticism has been poured over the Central Bank the steps have greatly highlighted the need to do more on the fiscal side rather than the monetary side. The move on the part of FED and the consequent fall of EM’s currencies was there for all to see. It rather came as rude shock yet on the whole it has been good to the extent that relying on easy money has its pitfalls in the future, if not in the present or immediate future. The economy of the world is slowly trying to grasp the idea as to how to create more jobs and sustainable businesses and that the way through the monetary channel has its own limitations.

There is nothing wrong in saying that the rupee correction is long overdue basically due to lack of fundamentals in the economy. So simply blaming the RBI for its miscalculations isn’t right. But it did give more room for thoughts and obviously the stance that monetary channels have to be pruned with times. We wouldn’t have seen this as a thorough proof without the RBI venturing into it. Now since the time has come to focus on growth and balancing of inflation we can do so within our reasonable means so as to bring about investor’s confidence in our market.

In order to cut the long story short the following questions and answers would throw some light into the whole balancing act that the RBI and other commercial banks would need to bring in growth into the economy.

Question- Where should growth take place as in the case of India?

Answer – Growth in India should take place in the real economy especially in infrastructure, energy, power, manufacturing, exports and services.

Question- But won’t growth affect inflation as a lot of money poured into banks would shoot up the inflation?

Answer- Yes and No both is the right answer for it is the way we deal with the money that assumes importance here and not simply putting money as investment.

Question- How is that to happen?

Answer – When banks give loans they tend to do so over the counter and this is inflationary and that means any liquidity will create the existing level of inflation to shoot up.

Question – Then how will the banks give loans?

Answer – The banks will give loans only in packaged forms with focus on specific purposes only with periodical appraisal of these loans. Weekly audits or fortnight audits would be better. Under no circumstances should the money be allowed to float around in non-productive purposes.

Question – But there is a credit crunch and shouldn’t the RBI do something about it?

Answer – The RBI in its early policy of tightening liquidity has done the right thing then, but now ought to loosen its fingers.

Question – But wouldn’t that be inflationary?

Answer – True, if it is done in the traditional way with the banks given the money directly to give away as loan to one and all. However, if there is regulatory mechanism or some sort of mechanism through which the banks can specify the ‘live’ projects for the loan to the RBI then the loan amount is in packed condition. Then there wouldn’t be any surge in the existing inflation.

Question – Does that mean if any of the packages leak there will be inflation?

Answer – Yes, even if the banks were to fund several specific projects costing one lakh crore rupees then there wouldn’t be any increase in the existing inflation. But even if 1% of that amount goes loose or over the bank counter in several non-specific loans then inflation will shoot up through the stratosphere. This is a certainty.

Question – What about the FDI route?

Answer – FDI investments are non-inflationary as they have specific projects to start off. For example, IKEA may start furniture business and may also do business in some related items. They will surely not run into the fish market and start selling large scale sea fish or start a real estate business overnight. All these FDI projects are disciplinary and hence they tend to inflate the inflation much less than over the counter business.

Question – Money that goes directly into the hands of people are inflationary?

Answer – Yes, money that goes over the counter with little control from the bank side like flashy credit cards, quick loans, easy credit on gold or landed property and any other means. These are surely necessary, but the banks should put some restrain on it. Many of this money go for loose purchase and speculation.

Question – What about CRR cut, Interest rate cuts and others?

Answer – Unfortunately the CRR cut, CLR cuts, Interest rate cuts, capital infusion, printing more rupees and such like are all inflationary. However, these are a must for growth to take place and the only way is to evolve a technique such that the commercial banks can give a list of ‘live’ projects for loan disbursement to the RBI and this should be in packaged form with periodical and better still weekly appraisal by the bank on the firm that has taken it. Under no circumstances should the money get diverted for something else. If that is so, inflation will shoot up dramatically.

Question – That is for large projects and what about a firm that requires 10 crores rupees as loan?

Answer – Whether large or small firms the principle for following the anti inflationary path is the same. Banks should give 10 crores in loan under a package deal and then start to monitor the money on a weekly or fortnightly basis. If all banks do the same then there will be no increase in the existing inflation.

Question – What about real estate loans?

Answer – Real estate loans are usually seen to be porous and may leak to different projects and are very inflationary. The best way to tackle the same is to keep specific projects in a loan packaged form and which the bank should keep rigid track. This is true for those real estate businesses that have huge capital and even the small ones.

Question – Will the rupee stabilize if the above is followed?

Answer – When the economy picks up it is obvious that the Indian long run growth story would again be news. This would mean a lot of flow of both FII and FDI money into the Indian market and thereby lifting the value of the rupee.

Question – So by keeping a tight parameter for loans the economy would pick up?

Answer – Sure, but also the delay in licensing, lack of structural reforms, over taxation and corruption have to be addressed too. As anyone knows ‘Live’ projects cannot be given loan until the bottlenecks are removed. Otherwise, who will bother to invest?