Saturday, 29 September 2012

Diesel Price Rise, Rationing LPG Cylinders and FDI in Retail


Government of India recently decided to raise price of Diesel by Rs. 5.00 per litre, placed restriction of 6 LPG cylinders for a family per annum at subsidised rates, and allowed FDI in retail area. All these decisions raised eyebrows in political field and citizens' groups. However, there is no increase price of kerosene. This has been welcomed by all. Restriction of 6 number of LPG cylinders may be increased to 9 by state government after bearing subsidy on additional cylinders. Central government has brought taxes on additional cylinders (more than 6 or 9, depending on the subsidy given by state government) to zero giving relief of approximately Rs. 97.00. However, this had been given to all LPG cylinders for domestic use. Dr. Man Mohan Singh, prime minister of India informed citizens the decision is harsh but there is no alternative solution under present circumstances. In general the decision is termed as bold but harmful to citizens because of expected price rise.

Rising Prices
Rising prices is not new to any country in the word. India is no exception. Elders always state that during their child days for a particular sum of money so much could be brought. Now for the same article 10 times money is needed. Books on economics vehemently subscribe to the idea that rise in prices is indication of physical development. In ordinary circumstances none of the citizens should have crib for rise in prices provided it is strongly connected with development. However, Indian situation is different. Price rise takes place without expected physical development. Government never justifies or gives logical connection between price rise and physical development. Rise in prices should be connected with increase in employment or rise in spending capacity of a common man. Without this rise in prices makes living of poor more miserable. The government should have carried out audit of expenditure incurred by producers/manufacturers and explained to citizens why it is essential. Therefore, it is not justified.
Foreign Direct Investment
FDI at face value appears to be a good decision. Development needs funds. When there is a scarcity of funds India should attract foreigners to invest in India. This way there is no risk of debt. However, none in the world would invest unless the returns are attractive. That means the foreigners would make more profit than they could make in their own country. There is also a possibility that money laundered by Indians may return back to India openly. This means it would be a golden chance for corrupt politicians and capitalists to convert their black money in to white money. In order to avoid this the government should fix some norms say if any Indian has a share holding (stock holding) 1% or more such a company shall not be allowed to invest in India. Another criterion should be the company should find an Indian cooperative society as a partner in the venture. Some restrictions like these are necessary to take full advantage of foreign investment for development and training of Indians.
On the other hand small retailers in India are afraid of FDI. They feel their business would collapse. They would be thrown out of market. This fear is not in the interest of nation. For thousands of years trading community had sucked blood of customers. They do not have any norms for profit. They must be warned to trade goods at reasonable profit. It is not difficult task for them. They can establish cooperatives and establish a common storage for all traders in the locality. Their cooperative can buy goods directly from producers at much lower cost. All goods can be stocked at a place accessible to all members of the cooperative and transported to individual shops in least possible time. This way individual investment could be brought to nearly zero while making stock availability to need of the hour. They should learn new methods of administration and make their business superior to new players invited in retail field while still maintaining their other methods useful for customer care. Small retailers must accept this challenge, unite and convert this in to an opportunity to serve customers better.
It is a laudable effort of the government to take above decisions. As already said if this improves competition, increases employment and helps in improving service, it is welcome by all. However, the government may not be thinking about most needed reforms. Why Dr. Man Mohan Singh can't really exhibit his boldness for such reforms? Is he supposed to take bold decisions suitable for rich (both monetarily and politically) people only? Why should he be shy in taking bold decisions in favour of a common man? Condition of India worsens basically on account of three worries. Firstly, corruption, secondly, terrorism (both internal like Indian Terrorists, Naxlites, Maoists etc. and external from outside countries) and casteism. It is not difficult to find solution for these. Ways are available. What is needed is will and boldness. U earnestly request Dr. Man Mohan Sigh to be bold and take decisions to eradicate these. Briefly the methods needed are:-
Corruption is basically because of easy availability of cash in large denomination. This needs various actions for eradicating. Briefly these are,
i)        Reserve Bank of India (RBI) recently accepted need of poor people who cannot keep minimum deposit in saving bank account and hence cannot use bank facilities. A basic bank account (BBA) has been authorised with zero balance while keeping other facilities unchanged. This will allow every Indian to have bank account. The government and political parties should enlighten citizens and help them to get a bank account. Some more bank accounts are needed for which RBI should prepare guidelines and make it compulsory to start these new bank accounts. Details can be found here.
ii)       Every person has to approach some government office to obtain certificates for various purposes. The government must prepare Citizens' Charter for every office and implement it ruthlessly. The government employee should not ask citizens from desk to desk and must get his/her requirement at one desk only. There should be severe punishment if any government employee asks citizen to contact some one else. Details can be found here.
iii)     Government must develop a method for instantaneous and secured money transfer for transactions needed by citizens daily. Details can be found here.
iv)     Propaganda expenditure during election is 10 times or more compared to official limits specified. Gram Panchayat election needs expenditure in a few Lakhs, Municipal corporation-Vidhansabha-Loksabha election it is crores. There is natural tendency to get back all expenditure after getting elected. Also provision has to be made for future elections. After all no one can be expected to spend such a huge amount without getting returns. This means the government spends for propaganda in indirect way. Why not make it in a direct way? The government can save lot of money if spent directly. To pass any examination there is a requirement to earn minimum marks. This is between 33 to 50%. There is a laid down standard to be eligible for any post in all sectors. However, while electing a candidate there is neither rule for minimum marks (votes) nor for qualification. There is inscape need to decide on these issues. May be 35% of listed votes and 5-15 years of social service would be the standard for contesting and getting elected. Some more details areavailable here.
v)      After spending so much money on election, many of the voters don't exercise their right to vote. Candidates getting approximately 15% votes win elections. This means so called people's representatives, represent just 15% of citizens. Steps are needed to make voting 100%. Some more detailsare available here.
vi)     Administrative reforms for political administration are needed. The present system of over 50% members in the house shuld be scraped and revised to passing marks say 33% for a single largest party. There is no need for a opposition party as all members of a house have a common concern for the nation. Any motion or bill there should be support of at least say 20% of members. This must be first proved before the motion or bill is taken for discussion. Any member creating nusance shall be debarred for remaining period of the house and shall not contest any electin for at least 6 years from the date. More information is available here.
vii)   Government must study why people are reluctant to part with land needed for development and take action to revise Land Acquisition Act suitably. More details are available here and here.
viii)  Government must withdraw all currency notes with denomination Rs. 100.00 and above without giving cash in return. This can be done as detailed here.
ix)     Government must have details of all private company (operating in India) share holders holding stock 1% or more in various companies (depending on size of companies). These details must be updated on daily basis and must be available on a specific website for information of every citizen.
x)      Finally the government should create an independent statutory authority like Lokpal and Lokayukt for keeping watch on the government, politicians and all those who earn income much higher than an average person. All these citizens must submit their property details to the government and revise at least once a year. The government should get these audited and evaluated by competent authority.
Fight against corruption can be fought successfully provided it is fought logically and step by step. In my opinion steps given above may be successful.
Kasab the Terrorist
Terrorists both internal and external succeed because of internal help they receive. The help is mostly in the form of information and buying material. No terrorist can succeed without this help. Hence, concentration should be on these helpers. There is inescapable requirement of a law at least for helpers of external terrorist and terrorists trained in other nations. All such helpers should have only one punishment ant it must be death. While awarding and executing this punishment quantum of help given by Indian helpers shall not be taken in to account. Active or passive help and concealing information shall all be considered as adequate reason to hang them until death. More details are available here.
Indian Dalits
Caste structure in India
Caste system in India is unique in the world. In India caste is considered as a norm to evaluate performance of an individual while knowing "No one can select parents" meaning caste gets attached generation by generation without giving any weightage to the work done by an individual. Swami Vivekanada had firm belief against the present caste system. He used to say if a upper caste child needs 1 teacher the lower class child would need 5-6 teachers. He talked of leveling all castes to upper level. India has accepted need of reservation to certain castes to level those up with so called forward castes. It is considered that caste system would never vanish in India. At the same time disadvantages of caste system are accepted by all. There is a possibility of irradiating caste system in a few centuries. Advantage of reservation may be taken for this purpose. The reservation should be considered as an opportunity to do away with caste system. Change needed is reservation should be based on caste of any of the four grand parents instead of an individual. The present system of caste by birth may continue if parents belong to same caste. In case of children of parents from different castes the individual shall not be known by any caste. He or she should be recognised only as Indian (not even by religion). Some more detailsare available here.


Ghayoor Abbas said...

this is a nice post.
I learned a lot from this post.
I hope i will be back in a jiffy:)
Do remember me please!!

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Jana Hitwadi said...

@ Ghayoor Abbas, Thank you brother. Would you like to contribute towards solution to the problems faced by India. Have nice time.

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