On Inflation, Interest Rates, Consolidation & Indian Government…from Manmohan to Obama

The text below was my reply to a query on 22knots.com…….why interest rates going so high now & inflation on rise…..what are the Government strategists up to? Please read on, comment, shoot me if u have to…….

“My version…….u have to read to the last paragraph though!

“We reap what we sow….ET, FT & business papers say that with Grace! “Consolidation” is a ‘nice’ word for taking losses after we have shown “Enormous Profits” on our Balance Sheets at an earlier time. Our GDP growth is unfortunately not in direct proportion to how well we have networked (as we all seem impressed that our views can be read on WWW, which makes us agents of change!). It is about how much we have produced…with least resources….for highest output…and what we did not KNOW….on Comprehensive Basis! Because GDP is measured PER CAPITA. If the produce does not reach ALL to make them MORE WORTHY….then it’s lost cause and effort, right?

“The Relative distance between work to output has been Captured by intelligent CFO’s in times when Engineers & Workers were to be paid LESS (not Marine Engineers surely, but WE land-lubbing ones!). The Top Man everywhere (then) wanted FDI (& most of it)……..and where there was much competition then, but no past record of such HIGH RATE OF GROWTH rates, nor qualification (this includes mega infrastructure and power projects). We also put Agriculture as a degraded term so farmers had to commit suicide and intelligent guys were busy creating hybrid Brinjals, when they should have been working on higher production from existing farm means….for which India was historically known (legendry Indian movies of yore…..Mother India, Upkaar…all films then were about the farmer & rural).

“Now we have movies on how to make money fast and get the girls (or boys, whichever!)….well all indicators of what we VALUE now. High salaried engineers and managers working off-field to leverage money than create GDP!! No, don’t get confused….

When Relationships between sociology, technology, political sciences and Finance get skewed…..it’s called Bad Governance. Corruption can be ONE cause, but not ALL of it!

The USA is the master of Sociology & Humanities…because only there, when we go for studying Engineering, we must have credits in some Humanities & Sociology courses. That way they RULE the pulse of the world….by being able to predict where society is headed and plot the relationships that business, commerce and finance should follow. This of course, is job of ANY government!

In India, we have a educational system that teaches us to do our job right or as we are told to do (nothing wrong on that!)…..because Government is supposed to think for the homogeneity of what we all do cumulatively, correct? Or yes, surely a little less than USA, China, Japan & much lesser populated Europe and high moneyed & more orthodox Gulf countries would.

CONSOLIDATION, in my definition, is the way to correct this offset/skew between social & economic factors…..both of which constitute the POWER of POLITICS. RBI is nothing but a body of Government of India. It is NOT the judiciary. IT GETS its task cut from government….indirectly POLITICS. Government of India…whosoever it would be have EQUAL chance to do “Immensely Well” and “Blow it up” when it comes to managing the balance between SOCIAL & ECONOMIC (GDP). The ONLY resort is to LOWER the INTEREST rates, when they WANT TO do it Immensely Well (they are in favour with masses) and HIKE UP the Interest Rates when they “Blow it UP” !


So, the anti-corruption rallies, Loknayakta, Kapil Sibal’s education relook…..ALL ARE INDICATORS of a GOVERNMENT having BLOWN IT BIGTIME THIS TIME!! And if you do not believe it….take it from attached news cutting….From Manmohan to Obama! All this, after World Recession when India is supposed have NOT been effected that much…..wait for the next one!!


Please do send your feedbacks!

references : The Economic Times, New Delhi of 2nd August, 2011 where front page Headlines read “WE HAVE LOST OUR WAY – SAY PM TOP ADVISORS (india)” and “US CUTS A DEAL – FIRES GLOBAL FEARS” and another post earlier July2011 “CONSOLIDATION Begins as Small Power Companies Feel Fuel, Funds Heat”


One thought on “On Inflation, Interest Rates, Consolidation & Indian Government…from Manmohan to Obama

  1. In continuum…..my thoughts on another 22knots post regarding India No. 2 or 3 after USA!!!

    Hi guys!

    In the end…does it really matter if India is No. 2 or No. 3???……Not just our media scribes; even overseas and American ‘experts’ have actually projected India at No. 1…potential superpower when Sensex crossed 17k, even prior to recession! Sensex and Stock Exchanges and Euphoria have direct linkage but NOT the GDP, wealth within a country, way people live, etc. With what yardstick does India come above even Comoros islands which I visited as poorest country on Earth…….open island nation…….the huts were no worse than the poorest of poor OR even half as bad and despondent as slums of Mumbai!!!

    WE DMETians who are so widely travelled should be able to determine yardsticks that are not necessarily in Books of Economics….just by NOTICING the ETHOS within a nation! How fast does a country bounce back from a major catastrophe? Do we hear any noise from Japan after the Tsunami and Nuclear catastrophe? What….they come ….after India, you mean??

    No! 1, 2, 3 are very-very distant dreams when we look at comprehensive and holistic development within India. As a salesman, can I match my Chinese counterpart in their speed from mere quotation to delivery? One tenth!!! Can I match a US group’s cohesion with any forum I belong to within India (yes, I am member with BOTH ICC & CII too)….No! Can even RSS match the Chinese government’s “China only within China” pitch or even gross patriotism of a US group that some called “rednecks” (I must apologise for that word itself).

    It’s all to CREATE a certain future situation politically & financially in a way…..though not the ONLY factor in shaping ETHOS. Because we in India become VERY Happy when things are good and do not know how to GET UP when we get hit by anything….or would just not care……because it happened to another area, section of society. Even after Kasab….vessels can just drift to our JUHU Beach….for God’s sake…..I cannot recall anything like that even when we did not even know Automation on ships during early days after DMET!!! In modern times….where are all those fancy navigational detection aids???

    Somewhere along above rhetoric of mine, you will say, I lost track of the discussion/argument….but no, No. 1, 2 & 3 are like the best football teams or Tennis OR badminton (yes best wishes for world cup!)……good in ALL quarters of the game……..that India has rarely shown AND sustained……even for Cricket!!! 😉

    DMET was No. 1 in itself…sustained for very long….let’s : )) smile about that, shouldn’t we???

    P.S. I am putting some of what I write on 22 Knots on my Blog https://yogimusic.wordpress.com just so I remember what I rambled and to take feedback (from those who are in marine jobs and wouldn’t reply to my-kinda-land-lub-posts!

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