10-17-2008, 06:39 AM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Economy in free fall</b>
The Pioneer Edit Desk
<b>Nation pays for UPA's mismanagement</b>
The UPA Government is truly in a fix. After claiming economic 'success' and promising an extraordinarily high rate of growth for the past four-and-a-half years, the Congress-led regime has painted itself into a corner and brought the country frightfully close to economic disaster. Obviously, the fundamentals of the national economy, which Finance Minister P Chidambaram claims are "strong", have been weakened to a point where industrial growth has fallen dramatically and agriculture continues to rapidly decline. The stock market, which is seen as an indicator -- although at times erroneously -- of the state of the national economy, has crashed. The flawed policy of trying to beat back inflation by introducing credit squeeze and mopping up liquidity has left virtually every sector battered and bruised. It has definitely not helped ease inflationary pressure; nor has the financial meltdown in the US -- and to a certain extent in Europe -- helped matters. But just as the US Administration chose to ignore the smoke signals before the mightiest of the mighty financial institutions were reduced to ashes, unleashing a chain reaction whose impact is being felt across the globe, the UPA Government elected to believe in its own propaganda while splurging on bogus 'social welfare' schemes, thus displaying amazing profligacy. No less amazing is the fact that the Prime Minister, described as an 'economist' by his admirers, failed to spot the spreading blot -- he was too pre-occupied pushing the nuclear deal to create business opportunities for American firms and jobs for American citizens to bother about Indian firms and their Indian employees. The near-collapse of Jet Airways, which has terminated the services of 1,900 employees, and the pink slips being handed out in the IT and IT-enabled services sector, which showcased India's remarkable economic surge, are only some of the symptoms of the creeping, deadly malaise that threatens the health of every sector of the economy.
Even at this late stage, the Government could possibly halt the decline and avert the emptying of public coffers. There is no percentage in either demanding or expecting a 'bailout' for enterprises whose fortunes have plummeted. Indeed, if the absence of intervention by the Government -- for instance, by way of reducing operational costs, taxes and fuel surcharges -- has exacerbated the problems plaguing the aviation sector, mismanagement and misplaced expansion are to blame for the genesis of the problems. There really is no cause to shed tears for Jet Airways, though it is extremely unfair that its sins should be visited on its employees. But the looming crisis is not only about the turbulence being faced by private airlines and their greedy managements; it is about the entire economy moving from the doldrums into increasingly stormy and uncertain waters. This is largely on account of the gross mismanagement of the national economy ever since the UPA came to power in the summer of 2004 -- since then, it has done everything to squander the advantages it inherited from the NDA Government. Yet, the people who presided over the making of this unmitigated disaster have the gumption to insist that all is fine and there is no need to panic. The Prime Minister and his Finance Minister could try telling this to those who have lost their jobs or are facing job cuts.<!--QuoteEnd--><!--QuoteEEnd-->
The Pioneer Edit Desk
<b>Nation pays for UPA's mismanagement</b>
The UPA Government is truly in a fix. After claiming economic 'success' and promising an extraordinarily high rate of growth for the past four-and-a-half years, the Congress-led regime has painted itself into a corner and brought the country frightfully close to economic disaster. Obviously, the fundamentals of the national economy, which Finance Minister P Chidambaram claims are "strong", have been weakened to a point where industrial growth has fallen dramatically and agriculture continues to rapidly decline. The stock market, which is seen as an indicator -- although at times erroneously -- of the state of the national economy, has crashed. The flawed policy of trying to beat back inflation by introducing credit squeeze and mopping up liquidity has left virtually every sector battered and bruised. It has definitely not helped ease inflationary pressure; nor has the financial meltdown in the US -- and to a certain extent in Europe -- helped matters. But just as the US Administration chose to ignore the smoke signals before the mightiest of the mighty financial institutions were reduced to ashes, unleashing a chain reaction whose impact is being felt across the globe, the UPA Government elected to believe in its own propaganda while splurging on bogus 'social welfare' schemes, thus displaying amazing profligacy. No less amazing is the fact that the Prime Minister, described as an 'economist' by his admirers, failed to spot the spreading blot -- he was too pre-occupied pushing the nuclear deal to create business opportunities for American firms and jobs for American citizens to bother about Indian firms and their Indian employees. The near-collapse of Jet Airways, which has terminated the services of 1,900 employees, and the pink slips being handed out in the IT and IT-enabled services sector, which showcased India's remarkable economic surge, are only some of the symptoms of the creeping, deadly malaise that threatens the health of every sector of the economy.
Even at this late stage, the Government could possibly halt the decline and avert the emptying of public coffers. There is no percentage in either demanding or expecting a 'bailout' for enterprises whose fortunes have plummeted. Indeed, if the absence of intervention by the Government -- for instance, by way of reducing operational costs, taxes and fuel surcharges -- has exacerbated the problems plaguing the aviation sector, mismanagement and misplaced expansion are to blame for the genesis of the problems. There really is no cause to shed tears for Jet Airways, though it is extremely unfair that its sins should be visited on its employees. But the looming crisis is not only about the turbulence being faced by private airlines and their greedy managements; it is about the entire economy moving from the doldrums into increasingly stormy and uncertain waters. This is largely on account of the gross mismanagement of the national economy ever since the UPA came to power in the summer of 2004 -- since then, it has done everything to squander the advantages it inherited from the NDA Government. Yet, the people who presided over the making of this unmitigated disaster have the gumption to insist that all is fine and there is no need to panic. The Prime Minister and his Finance Minister could try telling this to those who have lost their jobs or are facing job cuts.<!--QuoteEnd--><!--QuoteEEnd-->