Numbers rule the day.. 31st May 2012, Hong Kong

Spent the whole day crunching numbers and after a while I started seeing peculiar shapes floating around, resembling some of the numbers I was working on, that’s when I knew it was time to stop. Optical illusions were scaring me. No such luck as falling back on a ‘bandh’ to cut slack given my geographical location. Thought I would catch up on the news, only to be confronted by more numbers. The GDP numbers for the 4th Quarter from India that trickled in were disappointing. We now finish up at 6.5% for 2011/12.Administrative obstacles have been blamed for holding back key investments coupled with policy paralysis. Not surprising? The Government has been distracted by more grave issues that range from protecting its scamsters and playboys than running the economy. On Twitter today I had opined that this is one Government which has managed to reinvent the art of blundering and efficiently covered the whole gamut. From petrol, to the national airlines, to telecom, to coal, to cartoons, to even onions! Mr.Nandy reminded me to add to the growing list, Vodafone, Reebok, retrospective taxes, GAAR, and death by hanging for not paying VAT! The only good news that now trickles in is that roaming charges will no longer be applicable when you roam from state to state. Thank you Government for finally doing something for the mango man as we await to know how soon this would be implemented, not 2050 I hope?

I am also of the opinion that real growth of India does not need to be measured in GDP, rather it could also be measured in terms of what I call as the corruption growth rate. The rate of corruption is directly proportional to the growth of the economy. How else can you explain the growth in the corruption / scam sector from Bofors era to the 2G era? Believe it or not, when you crunch the numbers it has grown a whopping 2749900% between FY Bofors to FY 2G! 64 to 1.76 lakh crores! On this basis, we have progressed phenomenally as a country.

I hope you enjoyed your ‘bandh’, stayed at home and had an easy day? Good food, siesta etc? What other option is there, how else do you show your dissidence to a Government that focuses only on kicking the common man’s common posterior for fun?

( Courtesy: Times of India )

Good night for now…

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4 Responses to “Numbers rule the day.. 31st May 2012, Hong Kong”

  1. Muraliraja Says:

    Apart from many things that came to my mind after going through the GDP numbers is to write to you for your opinion on few things regarding economics. Incidently I wanted to do this long before but kept on hold. Even today I’m going to the same. Thanks to the word “procrastinate” ! Will write to you someday on that.

    Regarding slowing growth, in my opinion the GDP numbers doesn’t really mirrors the situation in our country. As you know there are so many business even today -from agri to engg. industries to service sector -lot of transactions happen unaccounted. None has clue how many billions transactions happen daily in our country in this route. And all this amount doesn’t comes under the GDP data. I heard that an approx. figure for transactions of this kind is accountated in GDP calculation. But none has given convincing answer to me on this. Maybe I should speak with people who work on this data.

    According to me the economy is not as slow as it is projected. I agree there is policy paralysis, no reforms etc. I think beyond the governments hold there is this amazing set of Indian entrepreneurs starting from the fruit vendor in pull cart to big auto parts suppliers they keep this economy running even in this gloom environment. And it’s unlikely the momentum will stop anytime soon.
    Everyday I see a billion people rush to their work no matter what. Bandh or no Bandh. Terrorist attack or bad monsoon. People just keep moving. The very next day after the phenomenal petrol hike, I haven’t seen a single gas station empty. It was business as usual. Even when gold touched record high price, T-Nagar was crowded. Of course all this will eventually end some day. But not anytime soon.

    The New Indian is hardworking & already tasted a bit of success. He is hungry to grow. Thanks to the flat world he is sure of opportunities around him. Unless there is natural disaster or a war kind of situation there is nothing that can stop the Indian mind this decade.

  2. Sharmila Says:

    Relevant Murali. Nobody has any idea how much of India’s economy is unaccounted. There are many ‘unaccounted’ transactions that ought to have been accounted in the first place, leave aside the small time vegetable vendors in the agri business, but we are talking about multiple sectors that should be accounting for it’s transactions, paying duties, paying taxes and benefiting from subsidies if any. Not accounting for transactions is because there is no equitable give and take policy in our system, it is mostly ‘take’ and very little of ‘give’. In perfect market conditions, had all sectors accounted for their transactions, there would be an expected increase in Govt public spendings ( its revenue being derived from consumption of goods & services via taxes , duties etc ), an increase in investments into India or capital formation, which should ideally lead to an increase in exports and reduction in imports. GDP is the sum of all the above. So, even if one of the variables in the equation is out of whack, it would impact the other three significantly. This is of course based on Market priced expenditures. The other way where GDP gets impacted is when you indicated that production is not being accounted and we are unable to compute what values have been added to each sector at cost ( factor). And the entrepreneurs however notable their achievements are dependent on a Government that needs to perform. Think of an Indian entrepreneur who is exporting machinery abroad, can he afford Air line strikes, ‘bandhs’ or a breakdown of a truck carrying his machinery because of potholes on the road or a lorry strike ( because of diesel hikes )? Its a never ending vicious cycle, from start to finish there in inter dependency. This is why the Government must spend, invest and attract investments.
    TNagar thrives because the purchasing power of people as you rightly point out has increased, a hike in fuel costs, a hike in interest rates, a hike in tax rates will significantly change all this.Indians will invest under all conditions even if it means pushing themselves in a corner, but they will not splurge on items which will not yield a return when the going gets tough. Gold is sought after as an investment, so people will spend on it even if it’s price continues to rise, like they will on property. I am not literate in Economics & Market conditions, but, I think we Indians work on a different tangent when compared to the rest of the world. Even during war , many smart Indians will hoard and profit.

  3. Imagine when “shadow banking” kicks in…the numbers will get skewed even more!

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