A incident shocked Lok Sabha witnessed unprecedented drama when a BJP member (Ashok Argal) walked in the middle of the House flashing wads of currency notes which he claimed was given by a Samajwadi Party leader (Amar Singh) as bribe for absenting himself from the trust vote.
Opening a black leather bag in the midst of the debate on the confidence motion, Ashok Argal, BJP MP from Morena (madhya pradesh), surrounded by his party colleagues, displayed bundles of currency notes saying Rs one crore was given to him by an SP leader as "advance" for abstaining from today's trust vote.
As the members raised the issue, the House was surcharged with members from both sides trading charges and crowding in the well. The opposition members shouted "shame, shame" and "chor hai, chor hai" (thieves, thieves) against the government accusing it of indulging in horse trading.
In the midst of the flutter, Deputy Speaker Charanjit Atwal adjourned proceedings hurriedly. The Speaker entered he chamber later to adjourn again while the Deputy Speaker deferred proceedings for a third time for an hour till 6 PM.
Even after the adjournment, there was palpable tension in the House with members from rival sides shouting at each others.
Besides Argal, two more BJP members -- Mahavir Bhagora and Fagan Singh Kulste-- alleged that money was offered to them.
The BJP members alleged that an SP leader promised three of them Rs three crore each, of which Rs one crore was paid in advance.
Meanwhile, Congress charged that the BJP came up with the allegation that a Samajwadi Party leader tried to bribe three of their MPs because it wanted to disrupt the proceedings of Lok Sabha.
This incident took place today and i wasn't able to resist myself on writing this. This is the saddest day in Indian Political History. Now the bigger question is not that whether goverment will survive or not, whether BJP or SP is speaking the truth or whether who is right or who is wrong? Now , the question is whether these kind of people who do politics at such a low level should be allowed to rule our country? Whether this is moment for which our elders had sacrificed there lives for making our country Independent? Whether power and money has became so important for our parliamentarians that they can even go to this extent? Whether our polticians ethics had so degraded that they made a blot on the face on indian people and had made ashamed us infront of whole world? People who were in yesterday's paliament discussion were talking about nation's pride and integrity had did this shameful act of murdering indian democracy which was considered to be the biggest democratic country of world and we were (its very pathetic using "were" in place of "are") proud of, What punishment can be given to these people who today liked this proud of more than one billion indians? and many more.....
Today's incident may be whomsoever will be guilty but it had hurted the temple of indian democaracy very badly and this will always remain as an ugly wound on every indian and indian democracy's face.
We people are somewhere as much responsible for this as much our so called representatives are. Why we are not ready for taking our burdens of country on our shoulders? Why we had let our country bleeding like this? Why we young indians are not able to think beyond our placements, packages, money, fun and lifestyle? Why we now don't care for our motherland? Whether we don't love our motherland as our ancestors did? Whether we don't even have 552 true indians in between us with a population of more than a billion, who are reasy to serve this country? Why we are not ready for holding reins of country and drive it to pinnacle?
I know very few will be going through this blog and in between those very few a handful people will be letting it to reach there heart, mind and soul to them its my sincere request to wake up and lets together save our nation. We can't let our motherland in so much pain.
lets bring back the proud of our nation and make it the "Vishva Guru".
roar like a lion - "JAI HIND"
Tuesday, July 22, 2008
Saturday, July 5, 2008
INFLATION AT 11.63% - BUT WHY ONLY WE???
Yes, we have a global inflation problem because world demand, especially for commodities, is running ahead of world capacity. The phenomenon is global but policy responses will be national.
So, which countries are going to act decisively to curtail demand? Of the three economically significant global players -- the US, EU, and China -- it is only the EU that has kept demand in check through relatively tight monetary policy. The US and China have not. The US, in order to preserve its financial system and avoid a slow-down, has followed expansionary monetary and fiscal policies, aggravating global price pressures, and while China has tightened, it has been small in magnitude and done with reluctance because any serious slow down to the Chinese growth juggernaut is anathema to the Party.
What does this imply for India? While it is convenient, but no less accurate for that reason, to ascribe the origins of recent problem to external forces, Indian policy-makers have to move on. First, these external inflationary impulses are not going to be corrected externally: for reasons described above, neither the US nor China is going to act forcefully and quickly enough to provide relief for the average Indian consumer. Moreover, we have moved to the second round, where the initial external supply shock has started affecting domestic prices across the board. In other words, we now have a domestic inflation problem which requires domestic policy action.
And yet, what have we seen? Leave aside the obligatory and unhelpful tampering (trade and price controls) at the microeconomic level. On the macro front, apart from the relatively modest hike in petroleum prices, the Indian policy response has been, well, somewhere between poor and awful, meriting a grade of about 2 out of 10.
Consider how fiscal, monetary and exchange rate policies have not just been inadequate, they have gone in the wrong direction.
The fiscal position is deteriorating, and substantially, at a time of accelerating inflation. One estimate is that the true central government fiscal deficit could deteriorate this year by a whopping 2.5-3 (at a minimum) percentage points of GDP thanks to a combination of the loan waivers, pay hikes, fertilizer subsidies, and above all, our automatic destabilisers. By fixing retail prices for petroleum, government spending and the deficit automatically increase when oil prices rise, aggravating inflationary pressures. How sensible is that?
A lot has been written about petroleum pricing policy. Three points, however, bear repetition. Our petroleum pricing, like that of China, and the US, acts to maintain high world oil prices, and to turn the terms-of-trade against us. This is self-inflicted harm, made worse by the fact that the beneficiaries of our policy are countries whose direct and indirect influence on us is far from benign. Second, fixed retail prices are implemented in the name of equity and end up being bad not just for efficiency but also equity: petroleum consumers are richer than the average Indian, who pays for the consumption of the rich through a combination of higher taxes and/or inflation caused by oil subsidies. But a third, and possibly important point as we look ahead relates to climate change. India, like other developing countries, justifiably rails against the rich world for having caused global warming. But we will simply not be a credible or cooperative global partner in the fight against this problem, and our legitimate complaints against the rich risk being dismissed as hypocrisy, if our policy contribution is to encourage rather than discourage fuel consumption. Monetary and exchange rate policies in these last few months have both been mystifyingly inadequate. In late February, a chorus of respected voices in India unanimously rounded upon the RBI for not lowering interest rates when the golden opportunity of US rate-cutting presented itself. The RBI added considerably to its sheen by presciently citing the threat of inflationary pressures as the reason for its inaction. It was right and the commentators wrong. Having displayed its anti-inflationary mettle then, it came as a surprise when in the period since mid-April, the RBI countenanced an exchange rate depreciation at a time of imported inflationary pressures. To be fair, there has been some tightening of the CRR and repo rates, especially in the last few days. But: (i) these have been small and delayed; (ii) the key reverse repo rate, which is arguably the real lever for the RBI to manipulate monetary conditions under conditions of excess liquidity, has remained unchanged at 6 per cent compared to current inflation of 11 per cent; and (iii) above all, combining the tepid monetary actions with the sizable rupee depreciation yields the conclusion that overall monetary conditions far from having tightened may actually be looser at a time of accelerating inflationary pressures.
See how prices and monetary policies have diverged in the recent past, and how even the most recent rate hikes are inadequate to counter price pressures.
Thus, from an inflation perspective, we have destabilising rather than stabilising fiscal and monetary policies. There is a real mystery here because electoral populism cannot easily explain these policies; after all, high, especially double-digit, inflation is considered electorally fatal for incumbent politicians, and RBI policy-making has always reflected that political reality.
It is true that tightening will slow growth, but at 11 per cent inflation and 9 per cent growth, the politically expedient trade-off would have been to sacrifice some growth for lower inflation, especially since there is a plausible case that at 9 per cent growth we are testing the limits of the economy's capacity. Why aren't politicians behaving like politicians? Why is the RBI not being true to its inflation hawk credentials?
In India, political opportunism is ritually invoked to exonerate bad policies. In the current circumstances, even this cynical explanation seems inadequate. Its time for us to wake up before we are killed sleeping silently!!!!
So, which countries are going to act decisively to curtail demand? Of the three economically significant global players -- the US, EU, and China -- it is only the EU that has kept demand in check through relatively tight monetary policy. The US and China have not. The US, in order to preserve its financial system and avoid a slow-down, has followed expansionary monetary and fiscal policies, aggravating global price pressures, and while China has tightened, it has been small in magnitude and done with reluctance because any serious slow down to the Chinese growth juggernaut is anathema to the Party.
What does this imply for India? While it is convenient, but no less accurate for that reason, to ascribe the origins of recent problem to external forces, Indian policy-makers have to move on. First, these external inflationary impulses are not going to be corrected externally: for reasons described above, neither the US nor China is going to act forcefully and quickly enough to provide relief for the average Indian consumer. Moreover, we have moved to the second round, where the initial external supply shock has started affecting domestic prices across the board. In other words, we now have a domestic inflation problem which requires domestic policy action.
And yet, what have we seen? Leave aside the obligatory and unhelpful tampering (trade and price controls) at the microeconomic level. On the macro front, apart from the relatively modest hike in petroleum prices, the Indian policy response has been, well, somewhere between poor and awful, meriting a grade of about 2 out of 10.
Consider how fiscal, monetary and exchange rate policies have not just been inadequate, they have gone in the wrong direction.
The fiscal position is deteriorating, and substantially, at a time of accelerating inflation. One estimate is that the true central government fiscal deficit could deteriorate this year by a whopping 2.5-3 (at a minimum) percentage points of GDP thanks to a combination of the loan waivers, pay hikes, fertilizer subsidies, and above all, our automatic destabilisers. By fixing retail prices for petroleum, government spending and the deficit automatically increase when oil prices rise, aggravating inflationary pressures. How sensible is that?
A lot has been written about petroleum pricing policy. Three points, however, bear repetition. Our petroleum pricing, like that of China, and the US, acts to maintain high world oil prices, and to turn the terms-of-trade against us. This is self-inflicted harm, made worse by the fact that the beneficiaries of our policy are countries whose direct and indirect influence on us is far from benign. Second, fixed retail prices are implemented in the name of equity and end up being bad not just for efficiency but also equity: petroleum consumers are richer than the average Indian, who pays for the consumption of the rich through a combination of higher taxes and/or inflation caused by oil subsidies. But a third, and possibly important point as we look ahead relates to climate change. India, like other developing countries, justifiably rails against the rich world for having caused global warming. But we will simply not be a credible or cooperative global partner in the fight against this problem, and our legitimate complaints against the rich risk being dismissed as hypocrisy, if our policy contribution is to encourage rather than discourage fuel consumption. Monetary and exchange rate policies in these last few months have both been mystifyingly inadequate. In late February, a chorus of respected voices in India unanimously rounded upon the RBI for not lowering interest rates when the golden opportunity of US rate-cutting presented itself. The RBI added considerably to its sheen by presciently citing the threat of inflationary pressures as the reason for its inaction. It was right and the commentators wrong. Having displayed its anti-inflationary mettle then, it came as a surprise when in the period since mid-April, the RBI countenanced an exchange rate depreciation at a time of imported inflationary pressures. To be fair, there has been some tightening of the CRR and repo rates, especially in the last few days. But: (i) these have been small and delayed; (ii) the key reverse repo rate, which is arguably the real lever for the RBI to manipulate monetary conditions under conditions of excess liquidity, has remained unchanged at 6 per cent compared to current inflation of 11 per cent; and (iii) above all, combining the tepid monetary actions with the sizable rupee depreciation yields the conclusion that overall monetary conditions far from having tightened may actually be looser at a time of accelerating inflationary pressures.
See how prices and monetary policies have diverged in the recent past, and how even the most recent rate hikes are inadequate to counter price pressures.
Thus, from an inflation perspective, we have destabilising rather than stabilising fiscal and monetary policies. There is a real mystery here because electoral populism cannot easily explain these policies; after all, high, especially double-digit, inflation is considered electorally fatal for incumbent politicians, and RBI policy-making has always reflected that political reality.
It is true that tightening will slow growth, but at 11 per cent inflation and 9 per cent growth, the politically expedient trade-off would have been to sacrifice some growth for lower inflation, especially since there is a plausible case that at 9 per cent growth we are testing the limits of the economy's capacity. Why aren't politicians behaving like politicians? Why is the RBI not being true to its inflation hawk credentials?
In India, political opportunism is ritually invoked to exonerate bad policies. In the current circumstances, even this cynical explanation seems inadequate. Its time for us to wake up before we are killed sleeping silently!!!!
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