Monday, 10 November 2008

China Shows the way

Lord Maynard Keynes must be a very happy man today and must be celebrating in his grave. The Chinese Government has toed his line and announced a $586 billion revival package, most of it is the promise to build infrastructure. This was what was expected of Indian Government too. But our policy makers are busy playing in the money markets. They huddle together for days and come up with damp squibs of reduced interest rates, reduced CRR and SLR. The fiscal deficit be damned, this is the time to act and push for higher government spending in infrastructure, housing, irrigation, power, water and so on.
The government should take a cue from the Chinese government and start a resurgent India programme of stimulating investment. We cannot tamely sit back and murmur about slowing growth, we have to do something ourselves and cannot expect FDI to walk in into India. Unless government starts investing private investors will not bring money to the table. This is a blackjack game where the house has to deal first and put money on the table, unless the players are convinced about money available to be won they will not play. That sums up the need for creation of investment climate in the country.


santosh said...

Us subprime crises has nothing to do to India's one. UPA govt. since the time in power has mismanaged economy leaving several major imbalances like high fiscal deficit,high current account deficit,eleveted inflation levels and collapsing of real estate sector.

prasadshetty said...

The problem in India,sir,is that we cannot reach a consensus on any major issue and thus we have our economy held at stake by a government which is more bothered in preserving itself than the country.A wonderful article sir.