A Blog About Nothing: Economics

Posting everything from facebook here.

Abhinav Gupta
Koi mujhe ek baat samjhao. Congress chor hai. Koi doubt nahi hai. Lekin ye IAC ke log sirf Congress ke peeche kyu pade hai? Kya agar BJP ki sarkaar hoti, to bhi wahi sab hota jo abhi ho raha hai? Agar hota to theekh hai. Nahi to mujhe chamka nahi, the campaign sounds more Anti-Congress than Anti-Corruption right now.

·  ·  · Yesterday at 1:18pm

Meenal Anand, Deepak Verma, Kruthika Kumar and 3 others like this.

Deepak Azad well... it seems to me that having been in power for majority of the last 60 years congress has become experts at corruption. I would doubt if other parties know all the tricks. Anyway more than corruption, it is the 'inaction' and 'inability to make decisions' from the govt on price rise, rupee, telangana, nuclear plant in tamil nadu that annoys me more...

Yesterday at 1:25pm ·  ·  1

Abhinav Gupta

Yaar ye to mat hi bol ki BJP ko corruption karna (is that the right way to say it?) nahi aata. Ye to ekdum hi galat hai.
Congress pe ilzaam tune sahi lagaye hai. Koi shak nahi.
Lekin campaign ka tone note kar. Political lagta hai bahut. Waise, kuch achcha ho to sab sahi hai. Par tab bhi, wo log transparent aur accountable hone ka daawa kar rahe hai (IAC), lekin lag nahi rahe hai aur target hi kar rahe hai Congress ko. Baakiyon ke bhi peeche padho bhai. Sab hi chor hai!

Yesterday at 1:29pm ·

Deepak Azad

I am sure no one in BJP or any other party knows how to stay away from all accountability and yet keep all the power (i.e. Sonia and Rahul). Plus have you heard of scams to the tune of 2G, CWG etc before. Laloo's chara ghotala was some 100crore, Mayawati's parks cost 700 cr, these amounts are peanuts compared to figures og 176000 cr and 70000 cr. Yesterday rupee was at 52, what has our 'genius economist' prime minister done about it?

Yesterday at 1:35pm ·

Deepak Azad sure, if BJP comes to power it may also be corrupt, but the last time they were in power we got good roads in the country and delhi got the metro, which makes me hopeful of 'some positive' coming from them being in power.

Yesterday at 1:38pm ·  ·  1

Abhinav Gupta ‎'May' also be corrupt. Really? :)

Yesterday at 1:44pm ·

Deepak Azad well... given the state of affairs these days i tend to ignore anything below 1000 crs, so if that threshold is taken into account I would say BJP might not be 'corrupt' :-)

Yesterday at 1:46pm ·  ·  2

Abhinav Gupta

And come one, don't be so short sighted as to say that the work done in one govt's term is all because of that govt's efforts. Governing is a continuous long term effort. And the effect of one govt's decision are seen in the other's term! Aise to liberalize bhi Manmohan ne hi kiya tha. Use kyu nahi socho? Aur Vajpayee ke elawa tha kaun bhai BJP me? Jab tak wo tha, log BJP ke saath the. Uske jaane ke baad, kaafi log chod diye BJP ko bhi. Mai bhi.

Yesterday at 1:47pm ·

Deepak Azad India had 2 options in 1991
1. liberalize
2. go bankrupt
it does not take a genius to choose option 1.

Yesterday at 1:48pm ·

Deepak Azad so... BJP still wins by 1 point, as they had Vajpayee. Name one person in Congress...

Yesterday at 1:49pm ·

Abhinav Gupta

Congress has been in power for far too long man. That is why the memories of their scams have been eroded from your mind. There are so many factors, the value of Rupee, the kind of journalism, the level of skepticism that effect the scams we get to know of or the value of the scams. Even the Anna movement has increased scrutiny manifold. Had it occurred 10 years ago, you might have seen such scams from the BJP fold too.! It ain't just about the people in the govt.

Yesterday at 1:50pm ·

Abhinav Gupta None. Congress has none to challenge Vajpayee. But they have better leadership than the current BJP, that's the point. Again, Congress = BJP on almost all respects for me. So let us not compare the two. My question was so different!
And, come on, it is never as simple as the two options you gave. You know that well enough.

Yesterday at 1:52pm ·

Deepak Azad I remember some... there was Laloo's fodder scam , there was that coffins one involving George Fernandes, and currently BJP is involved in a mining scam in Karnataka.

Yesterday at 1:53pm ·

Vinod Dobhal

‎Abhinav I do not completely agree with your comments... IAC is pushing all parties. It is currently looking as if they are targeting Congress, but that's because, 'It' is the party in power. IAC has submitted memorandums to all the state govts. They are reaching out to civic bodies, be it in Delhi, Mumbai, Indore or any other city. I have been associated with IAC (partially) and seen their work. They are not at all political... I am not a supporter of BJP, nor Congress. But the effort they (IAC) have put in for the anti-corruption campaign is tremendous. I could not have imagined this from any political party be it BJP or Congress or anybody else...

Yesterday at 1:54pm ·

Abhinav Gupta Chalo.. kuch to yaad hai :)
Waise mujhe Congres ke bhi aur yaad hai. Sukhram comes to mind. So does Sheila Kaul.

Yesterday at 1:55pm ·

Deepak Azad true, the sad part is that BJP has been missing strong leadership for a while. Arun Jaitely looks good, but he cannot win elections. And if elections were to happen today, Congress might still come to power because of lack of a strong BJP leader.

Yesterday at 1:56pm ·

Abhinav Gupta ‎Vinod, it is good to hear that that is the case.! Really! There is not much doubt of the kind of effort you guys are putting in. But if someone (read people like me) keep needling you guys to keep you in check (if it is necessary), then it's a win-win for all!
Keep up the good work man..!!

Yesterday at 1:56pm ·

Abhinav Gupta ‎Deepak, tabhi to sab Modi pe aankh lagaye baithe hai. But abhi unclear hai ki log kaise react karenge. Waise Mayawati bhi target kar hi rahi hai PM banna. People will probably prefer Modi over him anyday. Sadly, so will I.

Yesterday at 1:58pm ·

Deepak Azad ‎... point is I do not expect BJP to just sit with folded hands and do nothing, which is what Congress is currently doing about price rise etc.

Yesterday at 1:59pm ·

Abhinav Gupta Chal ye discuss karte hai. Congress BJP chod. Kya kare price rise ke liye?

Yesterday at 1:59pm ·

Deepak Azad take for example petrol prices - a large part of the cost we pay is taxes. Once the oil companies were given a free hand over petrol pricing were the taxes reduced? so that the price does not increase substantially but the oil companies do get more money...

Yesterday at 2:03pm ·

Deepak Azad petrol is costliest in India... surely other govts are doing something right..

Yesterday at 2:03pm ·

Abhinav Gupta I think I need to read up about oil pricing dhang se to say anything that makes sense. Wait!

Yesterday at 2:11pm ·

Abhinav Gupta Good article. Read this: http://sanhati.com/excerpted/2552/

The Political Economy of Oil Prices in India at Sanhati
sanhati.com

Based on the recommendations of the Kirit Parikh Committee, the Government of In...See More

Yesterday at 2:17pm ·  ·  1 ·

Deepak Azad well... that confirms what I have been thinking all along... reduce/eliminate the tax on oil products !

Yesterday at 2:23pm ·

Deepak Azad ‎"the pre-tax price of petrol in Delhi was only 23.44 rupees per liter in July 2009" - the retail price around that time was about 42-43 right ?

Yesterday at 2:24pm ·

Abhinav Gupta ‎44 according to this article.

Yesterday at 2:25pm ·

Abhinav Gupta Let us find something that explains the govt's stance on taxing at these levels too.

Yesterday at 2:25pm ·

Abhinav Gupta Kaafi mast article nikla yaar..!

Yesterday at 2:34pm ·

Deepak Azad yup!

Yesterday at 2:36pm ·

Kruthika Kumar just saying, the telecom scam is said to have netted Rs. 10,000 crore to the parties involved. the 1.76 lakh crore is estimated to be the maximum loss to the exchequer from that scam. Pardon my interruption if everyone here already knew that, but generally everyone keeps saying raja pocketed 1.76 lakh crore, which is slightly ludicrous and also quite wrong.

Yesterday at 3:27pm ·

Abhinav Gupta Opportunity cost v/s real value again..! But, yeah.!

Yesterday at 4:03pm ·

Rohit Chaudhary Guess who has the answers on inflation! http://www.dailypioneer.com/component/content/article/400-coffee-break/16472-namo-proposes-pm-disposes.html But the govt. being in paralysis, has not taken even a small step forward.

NaMo proposes, PM disposes
www.dailypioneer.com

Daily Pioneer: Leading News paper

Yesterday at 4:30pm ·  ·

Rohit Chaudhary More than paralysis in action, it is the irresponsible fiscal spending on grandiose schemes that is fueling inflation continuously. Whatever momentum was generated in the economy through 1991-2004 is now fading & we are witnessing the consequences now.

Yesterday at 4:44pm ·

Anshul Pandey Well, this one fact hurts me more. in 1991, when India was on verge of bankruptcy, Congress 'family' had more money in their overseas account than India's GDP. :)

Yesterday at 5:02pm ·  ·  1

Abhinav Gupta I think I can guess which scheme you are talking about RC. I still disagree with you on that though. Of course NREGA has issues. With every 2 steps forward, you go one back, that is development. And it has many intangible benefits which you just can't measure in monetary terms.

Yesterday at 5:04pm ·

Deepak Azad ‎.. not India's GDP, but India's forex reserves. but I get the point.

Yesterday at 5:05pm ·

Abhinav Gupta I didn't know that! But not surprising..!!

Yesterday at 5:05pm ·

Deepak Azad ‎Abhinav Gupta whoa! haven't you seen that pic of Rajiv Gandhi from a swiss magazine along with his swiss assets ? :-)

Yesterday at 5:07pm ·  ·  1

Rohit Chaudhary It's not only NREGA but also farm loan waiver, right based entitlements....and the list goes on. Not that any social security is a no-no but it should be effective & the quantum should be according to what the nation's fiscal position can afford in the long run.

Yesterday at 6:35pm ·

Abhinav Gupta RC jo tune last me kaha usse to har koi hi agree karta hai..! Shayad ye sarkar bhi :D

19 hours ago ·

Rohit Chaudhary Nai karti ye sarkar kuch bhi till the time NAC is there....this one sheds more light http://www.livemint.com/2011/11/25003103/The-anatomy-of-a-stationary-st.html?h=B

The anatomy of a stationary state - Views - livemint.com
www.livemint.com

The anatomy of a stationary state, The United Progressive Alliance?s road to eco...See More

11 hours ago ·  ·

Abhinav Gupta Well yes, I have Deepak :-)

6 hours ago ·

Abhinav Gupta

RC, this is a really really bad article you have posted here! All 3 examples he has taken are based on such superficial assumptions and inferences that someone can destruct his analysis in 2 minutes!
Let us go example by example:
1. Food Prices: Sure distortions will happen. Agree with his point. But look at his explanation. Farmers will stop growing food because they can get cheaper food in the market. Am I to understand that farmers grow food only to fill their stomachs? Do they not have other expenses? No clothes, no utensils, no fuel, no education for their kids. OK, the last thing is free, but you get the point. Reducing MSP is not going to reduce agricultural output by itself. There aren't many other labor markets that can absorb that quantum of jobs. They are going nowhere! Plus the Food Security Bill isn't just giving out unlimited quantity of cheap food to whoever demands it. Checks and balances have to be there, and they will be. Implementation-wise, yes corruption and black-marketing will happen. But that is irrespective of the government in power. BJP is no saint either.
2. NREGA and labor shortage - What a joke! NREGA is ensuring that the minimum daily wages are now being given to labor as is their right. And sectors which don't will face issues. Labor is migrating, of course, but from sectors which still pay Rs. 50 a day to others which don't. Superficial rhetoric claims that agriculture is suffering. Well, most of the NREGA benefactors were under-paid hired farm-hands. What is happening now is a CORRECTION of the market, not a distortion as they are now getting wages just below the minimum wage as deemed by law! Now, it is a different matter if you oppose minimum wages themselves, favoring free market there too.
3. Does this guy understand the consequences of deregulating kerosene? What is worse for the society, low spending by the middle class or denial of basic fuels (for cooking, for example) to the poor?

about an hour ago ·

Rohit Chaudhary

‎1. The paragraph talks only about farmers with less than 1 hectare land, who would be disincentivized towards growing food crops (wheat, rice, etc) and would instead move towards cash crops. This would happen because they can anyway fulfill their food requirements through ultra cheap FSB food. And thus, there would be shortage of food crops, and govt. would have to pay the bill for increasing food prices. And believe me, this has started to happen...I know of first-hand recent experiences.
2. NREGA is leading to labour shortage in construction sector, again please check with any builder/mistry in NCR and he will tell you. And it is not that minimum wages were not paid, they were being paid. But obviously if you can get the same income in your home (village) while putting in a third of the amount of work, you will prefer to stay at home. Agriculture is also facing acute shortage of labour....again personal experience. Agreed rich farmers didn't pay at minimum wage rates, but they provided free food and housing.
The shifting of labour back to villages would not have actually been harmful if labour would have been provided equally productive work. But alas this is just not possible.
3. Nowhere has kerosene deregulation been mentioned in the paragraph. Kerosene is used only by the poor, so the middle class does not come into this equation.

19 minutes ago ·

Abhinav Gupta

‎1. Agree with the point on cash crops. The author just wasn't talking about that though!

2. I think the discussion boils down to whether NREGA can provide productive work for 8 hours a day, 10o days a year, to everyone who is eligible. Let us take systemic issues such as earning the same with just 4 hours of work instead of the earlier 8 for now. That is something that no govt can solve in the short term. What is more important is providing work that helps the society and needs to be done just once.

And there, yes, NREGA will face issues. It will not be able to do so indefinitely and the lack of competence of people in charge of NREGA at the block and village level is a hindrance too. We need some foresight and some economic, social and cultural sense in planning the work that needs to be done, but again let us not blame the current govt. straight away. It is a learning process, and I am sure the govt., or the next govt also, will strive to improve that scenario.

3. I talked of kerosene only because he was talking of bleeding oil companies. And they aren't bleeding in petrol anymore! And LPG is not used by the people we are discussing about here. The only point left to talk about tat mattered to the point he wanted to make was kerosene and its deregulation, which would make the OMCs stop bleeding!

Let us discuss the rest on the blog, no? :-)

11 minutes ago ·

Rohit Chaudhary

Ok Tiny as discussed, lets close this thread now :) But just a couple of general observations, IMO socialistic policies look & feel like providing perfect solutions to problems of the poor, but often they fail to take second/third order and side effects of the purported solution into account. These effects then go on to create bigger problems. That has been amply proved by anecdotal evidences.
And as they say, capitalism is the unequal distribution of wealth while socialism is the equal distribution of poverty!

Rohit Chaudhary The facts are good, but the assumptions & inferences are silly. 1) Why does the stock market cheer deregulation of fuel prices? Because Reliance, Essar & some imaginary foreign companies will come and capture Indian market!!! Not at all, Reliance & Essar have scaled down their OMC businesses after making huge losses. Even if we assume that some new private company will come in, why would investors invest in the existing companies which don't have any direct relation with the sector & the stock market would go up. The basic, simple and logical reason is that deregulation will improve the fiscal situation in the short term. 2) The article assumes that "Since the private sector wants to enter the oil sector and earn windfalls, it highlights the under recoveries"...One expert committee after another has come to the same conclusion of approaching towards deregulated prices. Does the author suggest that all committees were bought over by the private sector? IMO, the article suggests conspiracy theories when there exist none.

23 hours ago ·

Abhinav Gupta This I will agree with that the article has a bias from the first line. Padhte hi samajh aa gaya tha ki woh anti-deregulation hai.

But the fact that under-recoveries have been exaggerated makes
sense. And when I read this article, what I understood was that the author justified the point of under recoveries being relevant only for private firms, while being more of rhetoric for the state controlled companies. I didn't sniff any conspiracy theory there! I think you are reading too much into that 1 line. The author agrees with you RC..! :)

19 hours ago ·

Abhinav Gupta Also, about your first point. Again, I didn't see that in the article. Maybe I read it too fast! And fiscal situation se yaad aya. A friend of mine was talking about how the tax structure on oil can be modified to curb inflation. Govt to khoob paisa kamayegi deregulation se, no doubt. Lekin short term me bhi bhaari padh raha hai basic expenses me.
Tum batao, tumhe kya lagta hai. Tax zyaada hai kya tel pe? Kam karne se kuch hoga?

Rohit Chaudhary Tax to bohat hai but it is a big & clean source of revenues for both centre and state governments. Govt. tax 5-10% kam bhi kar de to itna to international prices ek week me hi change ho jate hai. So that might not have great effect on prices. Waise in the long run it is good to have some taxes on petroleum products to encourage renewable sources, which is in India's interest.

9 hours ago ·

Abhinav Gupta Some is a misnomer here, isn't it? And can't taxes here be used as any other corrective measure to stabilize the economy in the short run? 5-10% tax cut nahi zyaada keh rahe hai hum. Deregulate kar diya hai ab to petrol ko. Petrol me under-recoveries ki baat nahi hai ab. To net to govt. ko hi mil raha hai. Chahe tax se ya state operated OMC se. Time to cut these taxes!
Plus, again, some taxes? :-)

6 hours ago ·

Rohit Chaudhary Taxes on petroleum products constitute 20-30% of total tax earnings of states. Isme zyada cut karne ka scope nai hai....states bankrupt ho jayengi :P OMC se dividends central govt. ko hi jayenge, states ko nai. Simple si baat hai....govt. ko itni spending karni hai to kahi se tax karna padega. And petrol pe karne ka faayda hai ki quantity is easy to monitor and little scope for tax evasion + environmentally it is better than taxing other products. I don't think big cut in petrol taxes is possible, ideally I would like small reductions with better utilization of generated taxes.

5 hours ago ·

Abhinav Gupta This is the point we got stuck at too. Tax ghatane ke nuksaan bhi kaafi lage.