Saachiin
What can we do to "arrest" this current recession atleast as far as India is concerned:
India has probably the world largest "paralel" economy.
If we can bring this money into the system, it will completely change the face of our economy. there could be simple measures to do that;
do away with pan number requirement to buy top-end vehicles, heavy vehicles etc. Allow sell in cash payment, with some surcharge. To compensate the loss on income-tax, make the fuel required for this cars ver very costly...say like Rs. 100/ a litre.
This benfit should be open for about one year. there after all all transactions aboce a certain limt like say Rs. 1000/- should be compulsorily done b cheque or credit card.
Ban public vehicles aging above 15 yrs. scrap these vehicles. these are a nuisence an way..give certain tax benefits to scrap old vehicles. this will increase sell of new vehicles.
If this cant be done...scrap high denomination currency there are about estimated 28% of fake currency in the system as per RBI reports..sraping will stop use of this.
Saachiin
Year 2009 or at least the first half of fiscal 2009-10 is going to be a difficult phase for the Indian economy. To emphasize the problems recent data on the domestic manufacturing sector which is the second largest employment generator after agriculture shows that â??of the 96 manufacturing segments covered under the CII-Ascon survey, 32 recorded a negative growth.
The worst hit segments include fertiliser, polymers, steel, pig iron, motor starters, castings, textile machinery, distribution transformer, HCV's, LCVs, rubber footwear and auto cycle tubes. These numbers could indeed worsen in the next 2/3 quarters.
However, as you know, the government and the central bank have acted several times and are continuously monitoring the situation. The consequent high fiscal deficit should not hamper the flow of foreign investments, according to the Deputy Chairman of the Planning Commission, as high fiscal deficit due to the current economic downturn is a global phenomenon and not particular to India. The positives are: despite slowing down in the recent months as rightly pointed out by you, FDI has increased 75% in the current calendar year and 90% in the current fiscal year (over the same period, till November 2008); for 2008-09 the Indian economy will possibly turn in the second-fastest growth rate in the world at 7.1%, after Chinaâ??s 8%, keeping India as an attractive destination for new FII and FDI flows; the February 16 interim budget is expected to contain more spending plans to support the economy for the first four months of the next fiscal; interest rates may be reduced further keeping alive the FII flows to the Indian debt market, which has indeed played an important role during the equity market meltdown; PSBs have reduced their lending rates to encourage industry and particularly the real estate sector. So as and when the global or even US downturn shows signs of bottoming out, India should recover and recover faster than many other economies. The political environment is not likely to cause divergence from the growth orientation of Indiaâ??s economic policies.[visit our blog at ecofin-surge.blogspot.com]
Posted: February 11th, 2009 | Report This Comment