My reflections at Prabuddha Bharat's STEP 2016

On 24-25 September 2016, Prabuddha Bharat Belagavi had organised a "State of the Nation Conclave 2016" the Conclave was supported by the Visvesvaraya Technological University and Rani Channamma University. The conclave was addressed by renowned speakers and I was also asked to present my reflections on the State of the economy. Below is the text of my reflections at the conclave.

"It is always a feeling of deja vu when you get invited to your home town and are given a chance to address a gathering of delegates in a prestigious conference. I must make it a point to thank Shri L K Havanur, The president of Prabuddha Bharat, Prof Sandeep Nair for thinking about me to be a person of some value to speak to the august audience.

I would  like to place before you my thoughts on three things about the state of the economy.

1. Economic themes post 2014: there is a paradigm shift in the economic themes post 2014 and the new government has been talking about two very important themes;

 

    a. Ease of doing business: we have been doing business, the wrong way for the past 70 years and have been able to bend rules backwards to accomodate our whims and fancies. The times have changed and also the new regulations on GST will change the way we conduct business in the country. whenever you go to the market to buy anything, the regular question asked is whether you want a bill for the transaction, if you want it then you wil have to pay VAT or sales Tax and the price of the product will go up by that extent. This choice is invariably offered by businessmen of all hues and sizes. With the implementation of GST, the question would become redundant as the seller would have already paid his part of the GST and would be eager to recover that amount from the buyer. Hence learning the clean way of doing business becomes more important. this to my mind is the real contribution in ease of doing business. business becomes easy when every body follows the same rules.

 

   b. Make in India: there is a lot to be done in promoting 'Make in India', a lot is being done though, labour laws are being tweaked slowly and surreptiously to make it easy for hiring and firing. But the challenges of Make in India are numerous. One of the biggest challenges is the Prohibitive Land proces and highly complex ownership structure of land holdings. this is one obstacle whcih is going to be diffifcult to remove and make "Make in India" easier.

2. Challenges faced by the government in monitoring the economy:

    a. Collecting economic data is a nightmare for our statiticians. Our IIP data is published three months late, Our inflation data is not relied upon by our own industry people. collecting, collating and computing GDP has become a bone of contention between private data aggregators and the government statitistians. Collecting authentic data in a timely manner is a big challenge for a country whose unorganised economy is larger than the organised economy.

   b. Building and maintaining an organised market for various commodities, products and financial services is another major challenge. creating an ecosystem of organised markets and then collecting and disseminating data are two sides of the same coin.

3. What has changed int he last two and a half years?

       

       a. A very personal example is that I have been asked to be on stage and present my reflections on the state of the economy. The organisers wanted me to talk about my thoughts without asking me about my lineage. This is the biggest change here. Earlier dispensation wanted only those with the right lineage to address gatherings. Being capitalist is no more considered regressive. Still some pockets of the civil (should we call them that) society think that being communist is being progressive. So first victory over the class war has been won by debunking the thought about left leanings being progressive.

     b. We have a government at the centre which has engaged a number of common citizens in a constant dialogue on governance with the help of loca circles and the mygov initiative on the digital platform. I appeal to all of you to please participate on this platform positively and constructively.

    c, Finally you have elected this government in the hope that the government cleans up the house. when you engage somebody to clean your house, remember that the cleaner is bound to reach undr your seat too to get the job done. therefore don't complain that the janitor has reached under your chair too. get up and declare your dirty assets to the government before the cleaner approaches you. these are the last few days available for declaring your black money, make the most of it and declare before the due date.

I would like to end my submission with the following lines

Mera desh badal raha hain, aage badh raha hain.

Thank you"

UNION BUDGET 2015-16 My Take

Hi,

Its been a long time that i have actually visited my own blog and tried to type.

on 28th February we had an amazing session at our college. We had organized a budget viewing session on the large screen at our college auditorium, this was followed by a few remarks by experts on finance, economy, agri-horticulture and taxation.

The highlight of the programme was the presence of Shri. Athani Veeranna, the Chairman of our Institute, who is a leading chartered accountant and an acknowledged expert in taxation matters. He was his usual self in being highly meticulous in pointing out the pertinent facts in the budget and then giving his views on the budget proposals.

Prof B Veerbhadrappa, an economist, Economics Professor and the finance officer of Davangere University who sat through the entire proceedings. He gave a fabulous overview on management of the economy and spoke about the balancing act of the finance minister.

Mr. Basavanagouda, the coordinator of the Tarala Balu Krishi Kendra also did a great job of providing insights into the budget proposals for the agriculture sector. He analysed the proposals with respect to the wish list of the progressive agriculturists.

Then it was my turn to voice my opinion on the budget proposals. A lot has been said about the budget in the last three days but my opinion is my opinion and as always i beg to differ a little from the tread path. So here it goes....

JAM- the Jan Dhan - Aadhar - Mobile troika will necessarily plug the leakages in the subsidy system (a glimpse of the fallout of the troika was evident when the brother of the PM participated in demonstrations)

62% of the tax collections are to be devolved to the states and this is being projected as the spirit of true federalism. I see it in a different light. The center wants to put the onus of providing subsidies on the states so that there can be separate policies for separate states.

one of the visions of the government enunciated was of providing 100% housing by 2022. This is a laudable decision. Industries in cement, steel, housing finance, power and infrastructure can look forward to large opportunities. In fact, the next two decades will belong to the infrastructure industry.

An announcement of setting up an unified Agricultural market has been made, if this becomes a reality, then commission agents in APMCs will have to look for better business opportunities or remodel themselves to be a part of this new arrangement. Anyhow this will change the game for ever in the Agricultural produce markets.

MUDRA (Micro Units Development Refinance Agency) is being setup with a Rs 3000 cr. initial investment, this should pave way for credit availability to small, tiny and micro industries and free them from the clutches of private money lenders. The unorganised market of money lenders charges usurious interest rates and it has become the bane of the businesses at the proverbial bottom of the pyramid.

A bankruptcy code is envisaged to help faster start-ups and faster winding-up of companies. Along with ease of doing business, ease of closing business is also of vital importance so that resources are not wasted on trying to make unprofitable business to survive. This is a welcome move.

A vital point is that NBFC with more than 500cr capital will be treated as financial institutions under the SARFAESI Act. this would prevent the goonda raj prevailing in the private financing of commercial vehicles and tractors.

The Finance minister has promised a universal social security system, I am now feeling that we are truly moving forward to become a developed country. The Atal pension scheme is the right step in this direction.

"Sabka Saath and Sabka Vikas" has also brought in "Nayee Manzil" to appease the minorities with less formal education to start micro enterprises. (if the same was done for all communities then it would have been real sabka saath and sabka vikas). Here the government seems to be wooing the minority just the same way as the earlier governments.

A Rs. 25000 cr Rural infrastructure Development Fund has been announced, good days are here for gram panchayats and taluk panchayats. Hope the money finds its way to real infrastructure.

Apart from the RIDF another Rs. 70000 cr has been announced as investment in infrastructure, supporting my take that this is going to be a decade of infrastructure.

Much needed boost has been provided to the power sector by announcing a policy of plug and play power projects, Ports to be converted to companies (did somebody say Adani?) a start-up fund of Rs. 1000 cr for IT start-ups.

Financial Markets have found a new measures by the merger of SEBI and FMC. A welcome move, for that matter too many regulators spoil the broth, so minimum government is essential for maximum governance. Measures to develop and deepen the bond markets, introduction of Indian Gold coins and authority to FEMA to control equity investments will pave way for better administration, development of markets, freedom from gold imports and a sovereign gold bond to take care of the craze for gold investments.

The central theme of the budgetary proposals seems to be a road map for establishing a cashless society. Ease of doing business has been addressed again in bringing about a public contracts resolution bill ans a regulatory law for infrastructure.

Education seems to be loaded with skill development and not with mind development. A Student Financial Aid Authority to take care of financing the students of higher education is a welcome move but what is needed is "NATIONALIZATION OF EDUCATION" if Modi is being hailed as a Thatcher of India then it is imperative that the BJP with its majority pushes for Nationalization of education. only such a move will be able to provide education to all the classes of people. Germany is a very good example of what nationalized education can do to the country.

A Bank board to be setup and then this is expected to grow in to a bank holdings company. A Sovereign holding company to hold all governments investments, to be managed professionally is the right direction to take. Hope this too happens in the near future.

Finally a commercial division in the courts has been announced, this will pave way faster resolution of business conflicts and lead to better environment for conducting ones business.

I would not like to dwell on the tax proposals, As it is said that Taxes and Death are a certainty and they are not avoidable. Both cannot be moderate, thus less spoken of them the better.

All in all a budget that creates hopes, promises more than it delivers and seeks to flush out black money by making life difficult for offenders. this budget can be called high on hopes and low on real, ground level issues. let's hope that whatever is promised is delivered, as that is all that we can do for the next four years.

India Budget 2009

If there can be a perfect example for a damp squib, this is it! my earlier post I had opened a discussion on the role of media in creating a hype about the union budget and had also mentioned what can be realistic expectation of the new regime.

I was spot-on, in saying that no fireworks could be expected.

Now let see some of the important budget provisions and find out what they mean for you, me and the financial markets.

1. India Infrastructure Finance Corporation Limited (IIFCL) has been granted flexibility in raising finances and lending to infrastructure projects, meaning that it has been left to fend for itself.

2. The allocation for NHAI has been increased by 23%. Good move this would help in the development of national highways.

3. Farmers, the darlings of the politicians (that's not because they are voters but because most of the parliamentarians and politicians are farmers themselves!) have been offered an interest subvention @ 7% and a 1% subsidy for prompt payment (this means the effective borrowing rate fr farmers is 6% and they are not required to pay income tax too). It pays to be a farmer in India.

4. The Market development assistance for exporters in the form of interest subvention on pre-shipment credit extended up to 31st March 2010. Our finance ministry expects the global crisis to blow over by then and then we will be charging the same interest rate for our exporters as other manufacturers.

5. SARAL-2 will be introduced this year. Have you ever heard of a simplified simple tax form. here it is!

6. NREGA the wonder child of Congress (How come the name does not start with Nehru-Gandhi name?) has been allocated Rs.39100 crores (Rs. 391,000,000,000) this year. Lets do a small analysis. NREGA guarantees 100 days of gainful employment for one individual in every household in rural areas and pays Rs. 100 per day per head. This amounts to wages of Rs. 10000 per household for a year. So if Rs.391 billion have to be spent then this money is expected to cater to 39.1 million households, out of approx 197 million households as per the official census of 2001. The corollary of this is that 20% of our population is in abject poverty and is not capable of raising Rs.10000 per household in rural areas. If this is true then Shame on us. If this is not true then, there seems to be a problem with the way our government works.

7. A national mission on women's literacy is being set up and it will help in reducing illiteracy amongst women in the next three years. WOW a commendable job.

8. Students who take loans for education will enjoy a moratorium on interest payments till they finish their course. That is a great thing and it will go a long way in helping poor students to educate themselves.

9. A public Private Partnership is being envisaged in managing the good old employment exchange. That is a great idea, all you private placement consultants and naukri.com better watch out big brother has just entered the fray and he will gobble you up.

10. The Unique Identity Number project has been allotted Rs. 1.2 billion to start its operations. That will kick start the operations but we need more money to count the number of people in this country and provide smart cards for each of them.

11. GROSS FISCAL DEFICIT is expected to be 6.8% of GDP and the Gross State Domestic Product limit has been raised to 4%. Mr. Finance Minister Sir, your targeted Fiscal deficit was 3% and you went on to stretch it to 6.8%. How can you expect your counterparts in the State Governments who take pride in profligacy to contain themselves to 4%?

12. Direct Taxes: Individual Income tax slab at the lowest level has been raised by Rs.10000 for male individuals and women. The lowest slab for senior citizens has been raised to Rs. 240,000, a raise of Rs. 15,000. For the HNIs the surcharge of 10% is abolished. Here the people in the middle tax bracket seem to have got the wrong end of the stick.

13. Fringe Benefit Tax has been abolished. Now your company will allow you to go on tour and spend money and not worry about paying FBT on part of the amount you spent on that junket.

14. Commodities Transaction Tax is abolished. I don't know what to say. the government keeps banning commodities trading whenever it sees a flare-up in commodities prices. So the right question would be which commodity is being allowed to trade right now to understand the impact of abolishing CTT. Any way removing CTT will help commodity exchanges and help stock brokers to start commodity terminals as a hedge against the failing fortunes in the stock broking industry.

15. Minimum Alternative Tax: the MAT under which corporate growth has been swept under by the previous finance minister has just got bigger. MAT has been increased to 15%. There is no incentive for tax management using the growth=depreciation route now. THE SINGLE LARGEST REASON FOR THE STOCK MARKETS TO REACT THE WAY THEY DID IN RESPONSE TO THE BUDGET.

16. Thankfully there have been no major changes in indirect taxes.

17. GST to be operational from 1st April 2010. Good move. GST to be bifurcated to central GST and State GST. BAD MOVE. This means we are going back to the good old days when we had central sales tax and state sales tax. so in Karnataka instead of CST and KST we will have CGST and KGST. (How to share the spoils of the tax revenue amongst the centre and the state could have been kept in wraps and a common GST would have been better)


That's about it. As far as disinvestment is concerned, no specific announcement was made.

Moral of the story: More the things change, more they remain the same. The 1991 wave of reforms was not of Congress manufacturing, but out of compulsion of the IMF. Now that the economy is strong enough to withstand the perils of global financial meltdown we can do it our way, the NEHRUVIAN WAY. In fact, at one time the Finance Minister was singing paeans to Mrs. Indira Gandhi, for having the grand vision of financial crisis 40 years back and resorting to nationalisation of banks.

WOW I am very happy that we had such visionary leaders who could predict turmoils four decades ahead. Our FM needs to read a little of modern economics and find out that this financial crisis happened to US because the Glass Steagall Act was repealed in 1999. There was no way how our Prime Minister could envision that this would happen in 1979.

Now for the markets, the immediate support for the markets is 3800 on the NIFTY. Nifty has to fill the gap it created on that euphoric morning after the budget first. Then lets see if a plunge protection team is formed and whether it works else we will see the October 2008 bottoms again.

Will the FM deliver?

If you happen to watch the business channels these days, all of them want to sensationalise and make news of something there is no news about. these news channels survive on sensationalising the banal. That's exactly the thing they are doing with the upcoming budget. they have already labeled it as the "Big B" (The original Big B must be squirming at the thought of this unlikely and banal competition).

What can be reasonably expected by the budget?

1. Income tax slabs will be raised to make way for the 6th pay commission. may be the lowest slab will be up from Rs.150000 to 200000.

2. A broad and vague statement about GST to be introduced will be spoken of with a deadline of three to four years so that the listeners will feel good about some progress in the administration and the practitioners will also feel good that it is not coming soon yet.

3. A proposal for disinvestment to bridge the gap in the fiscal deficit will also be talked of and an arrangement of selling equity in PSUs to other PSUs will be taken up to satiate the views of people hankering for fiscal prudence. Whether it is fiscal prudence to disinvest by transferring the money from one pocket of the government to the other pocket is a debatable point.

4. The recent success of farm loan waiver in the electoral hustings is bound to cast its shadow (or should I call it lustre) on the budget and there will be a constituency which would hanker for more of the same. This constituency will surely be catered to, and an announcement in some form or the other can be expected out of this budget too.

5. NREGS will also become a mainstream project of the government, given the keen interest of the family in the project. An announcement of extension and raised "deficit funded" programme can be expected on this subject.

6. Securities Transaction Tax, the slow poison affecting the stock markets and the Commodities Transaction Tax the poor cousin of the STT will remain the same and no reprieve on these items can be expected.

7. Some superficial and cosmetic changes can be expected in the indirect taxes system to make it look market friendly. Here the phrase "look market friendly" is important.

8. Education seems to be the new frontier where the government will show its keen interest. especially Higher education, rightly so when we have a former UGC chairman as the Head of the cabinet. More central universities, IITs, NITs, can be expected to be announced in this budget. We can also expect at least 5 universities to get a substantial largess to augment their resources.

9. Defence expenditure would go up by 20%, this has become an annual feature now with the prevailing Geo-political situation.

10. Setting up of a new force of the type of NSG/RAF may be announced to combat internal insurgents.

11. Some politicians are vying for a special status for the Hyderabad-Karnataka region, Bihar, etc., these may see the light of the day and some package can be expected for Hyderabad-Karnataka region and Bihar in an attempt to woo non-congress voters there.

On the topic of special status, one thought crosses the mind, Article 370 gives a special status to J&K and politicians from congress have been talking about a similar status to Telangana, Goa north-east, etc. Does this mean that we are heading towards a decentralised system of governance? Are we heading towards a federal system with a weak centre and strong regional states? only time will tell.

So, if this is reasonably expected of the budget in general, one has to stop and think whether it is really the "BIG B " as our media wants us to believe. I remember economic times portraying a caricature of honourable Shri. P Chidambaram as the superman during the 1997 budget. Ten years ago it was for the print media to raise the hype, now its the turn of the electronic media to do the same. The reach and impact of electronic media is deeper and broader. If the media starts encouraging false hopes and sensationalising no news as BIG NEWS then the nation will be in for a big surprise. It seems that the present electronic media has taken upon itself the mantle of changing the opinions in the country. This type of sensationalism in the electronic media and instant justice meted out to people via the media will not get them anywhere. People are bound to realise sooner or later that the "BIG B" is also same as the case of "prince stuck in the bore well" or "A man who prophesied his death" or "leopard in somebody's house" or "injured tigress on the road". All these media stories took up nearly 48 hours of national TV space at one time or the other leaving aside grave issues like hoisting of the Pakistan flag at Srinagar.

Any way This budget as I see it is going to be a non-event and I pray that I will be proved wrong. Over to Honourable Shri Pranab Mukherjee to to the Honours.

New Government Old Politics

I am writing this after a long time. In the meanwhile as the powers that be changed and exchanged their jobs, me too changed the job (you can find out about it on my profile). The last month has proved it again that as more things change, they remain the same. The Loksabha saw the first skirmish of what was to come in the next five years. DMK and UPA do not seem to see eye to eye on the disinvestment issue. That caused the stock markets to lose 500 point on the sensex and gain 450 points in a matter of two days. Now, was this a predetermined trading strategy is any body's guess.

The Nifty has relentlessly gone up from 2550 pre-elections to 4500 post elections and has made a lot of investors richer. What should one make of this near doubling of the nifty? May I remind you of the October lows (i.e. 2008 October). In the last eight months majority of the front line stocks have posted phenomenal returns, Reliance, SBI, RCOM, Reliance Capital, Reliance Infra, Reliance Industrial Infra, Suzlon, the list goes on...

Has the economic outlook changed so drastically that the despair of the markets has gone and the economic boom is right round the corner? Has the global financial crisis blown over? Does a change in the leadership in Government (in this case no change) make such a difference that people will throng to the stock markets and buy whatever comes their way at whatever the price? We have heard that markets are irrational but are they so irrational that they DOUBLE IN EIGHT MONTHS?

Given these circumstances, we can reach to two conclusions.
1. The markets were artificially brought down and a panic situation was artificially created so that gullible people sold out at lower prices. The economic situation had not worsened at all and everybody was crying WOLF.
2. The economic situation has really worsened and there seems to be hope that things will turn around. This hope has made the markets rebound and get ready for scaling new heights. The worst is over and out and things will be great once again. Our PM also corroborates this statement that India has the capacity to grow at 9% p.a. despite the slowing growth world over.

I would like to leave these question open for discussion...

Please feel free to leave your comments at the end of the blog.

TWO CIRCUITS AND A SCAM

The Indian stock markets hit two circuits and were closed for the day. It was an unprecedented thing that happened.

A decisive win for the UPA has brought back the bulls in the market with a long list of wishes.

1. Easing of FDI norms for Insurance sector.
2. Reform in the banking sector (especially on the labour laws side)
3. Disinvestment from public sector undertakings to make up for the deficit brought about from last year's doles.
4. Dismantling of the Administered Pricing mechanism for petroleum products.
5. Easing of interest rates and making credit available to the industry.
6. Boosting exports by implementing a new export promotion policy.
7. Spending more money on health, infrastructure and education.
8. FDI in the aviation sector.

I HAVE ONLY ONE COMMENT TO MAKE FOR ALL THIS WISH LIST. THIS LIST WILL REMAIN A LIST AND YOU WILL PROBABLY BE ABLE TO SEE ONLY 40% OF THIS LIST COMING TRUE IN THE NEXT FIVE YEARS.

AS FAR AS THE MARKETS ARE CONCERNED THE REGULATORS ARE NOT IN SYNCH WITH THE MARKETS AND THEY NEED TO REFORM THE MARKET FIRST. A TRADING OF 300 ODD CRORES CAN STOP THE MARKETS FROM TRADING AND CAUSE A UPPER CIRCUIT. THIS IS THE BIGGEST SCAM OF ALL TIMES AND NEEDS TO BE PROBED.

Additional reading http://www.moneycontrol.com/india/news/market-outlook/nothing-to-be-proud-of-vk-sharma/398047/1

If the market can be easily manipulated with 300 crores then it is a very shallow market. We first need stock market reforms and we need a regulator not an opinion maker in the regulators seat.

All the best.

State of the Economy and State of the State

Inflation inched up to 5.6% in the last week, it was attributed to the truckers strike during the period of study and all the big names in the financial industry are talking about inflation easing to 2-3% in the next three months. On top of this, these big names are calling for further rate cuts and reduction in statutory ratios for banks. India does not have a Glass Steagall Act, but it is common knowledge that investment banking and commercial banking are kept at arms length in the Indian banking industry. This arms length has significantly shortened in the last five years. In the banking parlance we have a new way of talking about this. Instead of calling these activities investment banking and commercial banking activities we call them by the kind of income they generate and name them as "fee based Income" and "Fund Based Income". Of course some investment banking activities would be fund based activities and therefore they form a grey area.

Now, if the rates are lowered and, what would happen? I happen to run a small "fee based business" and I am drawing this from my own experience. Banks have a PLR range of 12.75% to 13.25% (official RBI figures) and deposit rates of 7.5% to 9.6%, this leads to a margin range of 3.15% to 5.75% on the higher and the lower side. Risk aversion is the rule of the day fr banks these days, bankers these days are wary of giving loans. They prefer to have treasury income rather than interest income. meaning there is a positive bias towards the investment banking conundrum rather than the rig morale of commercial banking. because of the risk aversion I do not expect bankers to lower their PLRs, even if they lower their PLRs they will charge a premium on the PLR for all kinds of customers other than prime customers. Coming to think of it, if we go by the usual definition of the prime customer: steady cash flows, consistent declaration of profits, consistent IT returns, consistent IT payments, etc. i would say majority of Indian customers, individual as well as corporate fall under the sub-prime category. Then what do we do with the lowered PLR? Do we need this PLR only for declaration purpose on the RBI web site? Banks will still have a bad choice of borrowers and therefore will always be risk averse. Therefore expect banks to make more profits but at the cost of taking higher risks. (That's really a nobrainer as more risk only means more profit and there's no such thing as reckless profit)

Now the STATE of the STATE. All these days we had a government which was running on the steam and momentum provided by the Keynesian pump priming done by the earlier NDA government. The present regime was always waxing eloquent about growth rates and was complacent with doling away the tidings brought about by the higher growth rate. Economies grow or de-grow after a lag of two to three years of taking action on the economic system. now that this government is completing its term of inaction, complacence and profligacy, we have the PMs panel re rating the growth to 7% from the earlier projection of 9%+ growth. Has this been due to the global financial crisis? notwithstanding the global financial crisis the momentum of growth could have been kept up by committing public funds to developing infrastructure, housing, water supply, power generation, electricity supply, primary education, secondary education and other such worthy causes. But all these were given a go-by and the government resorted to the age-old "congress" method of appeasement and cheap populism of subsidising the rich farmer.

After this disaster, now we will be a country with an actually inactive Prime Minister for the next four months. doesn't congress have one able man / woman to entrust the top job? If the PM undergoes a cardiac surgery and has to convalesce for three months, can't this country find a replacement for this honourable man? Do we have no choice left at all? Why should Pranab Mukherjee chair cabinet meeting as the stand-in PM? What happens if we have a 26/11 type of a situation again or if we are forced to go to war with our ever friendly neighbours? Why can't the stand-in PM become the real PM? Where are all the so called strongmen from Bihar, Maharashtra? Why don't they claim a stake for the PM's gaddi now? Why should we rely on a Prime Minister (I have high regards for his stature and ability when he is physically fit) who is undergoing a bypass surgery for the second time and is required to take rest for three months? Can we afford to give a three month medical leave to our Prime Minister during this hour of crisis?

Information processing speed is the key!

One of the major shortcomings of economy management is the speed and method employed in data collection by various agencies of the government. Today, the IIP number for September were announced, which showed a growth of 5.1% in the core sectors in September!. my only objection is that with the turmoil in October and the pace of disintegration of financial markets and financial institutions, do these number carry any weight? don't we have a mechanism to find out ground realities on "Ground Zero" on a real time basis?
For example steel prices declined by 30% in the month of October (This information is from the market and not from a government source and we are on 8th of November) if this information is available to an individual like me in a remote town in India, why is it not available to Government data collectors?
Iron ore prices have crashed starting from September through October and it is common knowledge in mining areas that iron ore miners, transporters and traders are in dire straits, does this information reach the government or it will reach when one of the transporters, traders commits suicide or one big timer goes bankrupt?
Tata Motors and Ashok Leyland have cut production of commercial vehicles as thousands of HCVs are lined up in the second hand market. A result of ore transporters losing business completely. Does this reflect in the statistics of the Government now or will it reflect only in December 2008 or January 2009. Would it be any useful to the policy makers or the public to know this after most of the single truck owners have defaulted on their loan payments and their trucks confiscated?
There is an immediate need to tone up the information gathering process and make it real time. In this era of IT and e-governance this is the least our government can do, more so, when we proclaim to be the World leaders in Information Technology.