Health of Our Economy

Price rise of cereals and vegetables is exerting pressure on the working poor of India for whom survival is becoming difficult. Price of manufactured goods is not rising as predicted. Food is all that poor need; goods they cannot afford. With input costs of agriculture rising, cost of cereals would be rising further (cost of fertiliser, pesticide and diesel is higher) Minimum support price of cereals will be raised as input costs increase. It will match up with market price. With supply chain missing, the food and energy costs will climb higher. Newer policies were evolved to lower inflation. To curb the inflating tendencies, reserve bank of India had cut repo rates 13 times in 19 months(from March 2010 to October 2011). Then again in 2012 it had cut 50 bps and twice 25 bps(which is another 50 bps) in 2013.But all these cuts did not help. The fiscal deficit could not be corrected. So subsidies promised are just too big a burden. The increase in cost of petroleum products subsidies was 150% from 2011 to 2013.If the subsidies are not controlled, the fiscal deficit will be higher. With lower tax collection, government's proposed big budget expenditures are just not possible. More bad news is that industrial growth has slowed down. Because implementation of projects is delayed, invested capital is struck. Policy actions and administrative reforms can implement speedy implementation of projects. We are importing too much gold and we are importing too much oil. So this adds more problems in our economy. There is hope that domestic consumption of oil is reducing and we can introduce price reforms in petroleum products. We must make more exports and improve our economy. Availability of coal for our energy needs is another big hurdle in economic development. Here too, it is policy making which is bothering the economy and not allowing progress.Although we have plenty of coal, policies for allocation of coal blocks to private companies is being delayed.Transparent allocation is a solution. There are so many "if"s and "but"s...If this goes well then...But for this we are doing well.