Page 12 - DECO303_INDIAN_ECONOMY_ENGLISH

Unit 1: Nature of Indian Economy

Bajaj Hindusthan and Suzlon face dollar debts amounting to as much as double their market Notes
capitalization.
That means some of India’s biggest blue chips are deep in the hole, and there’s no way for them
to tap the equity markets to raise money to finance projects or make their interest payments.
“Looking at valuations at that point doesn’t really matter,” said Morgan Stanley’s Sharma. “If
companies are making losses or don’t have adequate money to cover their debts, it’s just too
bad.”

Did u know? The India is one of the major milk producing country and per capita milk
availability in Punjab is highest in country.

1.4 Nature of Indian Economy

Now, let us discuss about the nature of the Indian economy. You must take note that the nature
of Indian economy is mixed, but its goal is socialist. The privatisation we see today was not a
deliberate choice but we were left with no other option. Public enterprises failed to deliver and
the government needed money to support its welfare programs so the only way out was
privatisation. In 1990s, when economic liberalisation happened, most of the reforms came because
IMF required them as a condition for loaning money to India in order to overcome the economic
crisis that the country was facing then; not because of some ideological shift.
Even today, governments talk about ‘inclusive growth’ and people approve it; which is nothing
but an alternate phrase for ‘re-distribution of wealth,’ which in turn is a core principle of
‘socialism’. Yes, we haven’t seen the bloodshed that the communism is capable of, but that
doesn’t mean we don’t have socialist leanings. We are in that grey zone, neither here, nor there–
which is even worse than a purely communist state: a communist state will go down quickly. It
gives an opportunity to build from the ruins, a capitalist state will rise up quickly, where as a
mixed economy goes nowhere; it is just stagnant.
When people say, “The money that the productive parts pay as taxes is being mutualised by
politicians,” the major flaw in that is not ‘misutilisation,’ but productive parts having to pay
taxes. Why do they need to pay? For producing? Worse, the more you produce the more you are
penalised. Isn’t it violating individual and property rights? Misutilisation is a subjective term. If
the government spends on housing, a shelter less guy may appreciate it, but I, as a tax payer,
who wants to see it spent on education will feel robbed. The government shouldn’t be handling
all this. All the problems arise when the government tries to intervene and control what should
happen voluntarily.
When people say, “There is no political accountability,” the question is, accountability to whom?
The Public? The Public is nothing but a sum of groups and individuals with varied interests,
intellects and standards so it is not possible to be accountable to each one. Hence, the Government
choose groups which are majority in number (in India it is always the poor and unproductive)
and feed them (thereby institutionalising poverty) so that they can win the next election (as
democracy is merely about numbers and not reason or logic).
The US declaration of independence has these lines.
“Men are endowed by their Creator with certain unalienable Rights that among these are Life,
Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted
among Men, deriving their just powers from the consent of the governed.”
The Government’s only purpose is to protect individual rights and every individual will be
happy to pay to that extent. Nothing more nothing less.

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