Today INR has touched down to a level(R 68.75=1$) as never before .Many reasons are attributed to this fall.Current Account Deficit due to receding exports vis a vis galloping imports primarily of oil and gold .Besides FDIs are also not forth coming to rescue of weakening of economy.Today Bank Paribas has estimated GDP growth of just 3.7%
From 1947 onward we started looking on foreigners rather than creating our own sound economy to reduce dependence on foreign help.In initial years it might have been necessary to depend on foreign help but not forever.Initially we were with going with begging bowl scouting for foreign help now we are going with begging bowl for FDI. Can FDIs be answer to our economic evils ?
Can any country afford to survive on FDIs? . In 1991 when country's gold was mortgaged to Bank of England,historical liberalisation of Economy by the very same person who has been now Country's PM for last 9 years was intitiated. with steps taken then it was believed that country's dependence on foreign money either in the form of aid or any other assistance shall get reduced and investments of foreign investors would increase.These investments were expected to benefit to infrastructure sector which would given boost to industrial production which in turn would have given rise to GDP and plenty of internal accruals which again could have been partly be reinvested for infrastructure development thereby slowing dependence on FDIs on long run. But 22 years past nothing of the sort has happened.Today also we are desperately begging for FDIS .Why ?
Like Banks where NPAs spoil their balance sheets and in turn hamper their growth our country's internal accruals (read revenues)post 2004 are being increasingly being spent on non productive targets with lofty causes to elevate the misery of poors and poors' related development scheme.There are many well known schemes introduced by UPA under different Nehru Gandhi names.But did they bring the desired result or reached to target groups ?UPA chair person because of her closed door acquaintance with country's economy may rejoice in the success of those schemes but the fact is otherwise. Because of corrupt and defective delivery system the benefit of those schemes is not reaching to the targeted groups and is being pocketed by middlemen-the politicians ,bureaucrats and banks.Thus the money which could have been used for productive purpose by utilising it for infrastructure development, was diverted to these so called lofty vote catching but non productive schemes with not much benefit to poors -the targeted group. And now comes Food Bill which is expected to ruin the country's economy further even though considered a master stroke by UPA chairperson and her team as winning formulae for winning the next elections while finance minister of the Govt goes on exhorting for FDIs.
I don't think any one could be opposed to poors related benefit schemes to elevate their plight but the question is to what extent a country can afford to divert internal accruals to these schemes and depend on FDIs for infrastructure development .Whether Indians consider Foreign institutional investors blockheads to invest in a sinking economy as a result of internal revenues being diverted to non productive purposes how so ever lofty they are?. FDIs can serve only a limited purpose when the country's economy is booming and CAD is under reasonable control. With continuing deficit in balance of payment position(which has hardly any support from exports) Govt's war cry for FDI may in the long run kill Indian economy.With this war cry(any way very few foreign investors are getting allured to this war cry) with out strengthening our internal growth India again going to become a begging bowl country for foreign help rather than investments if this tendency of massive diversion of country's revenue on non productive purpose like the present food bill (howsoever lofty it may be ) is not stopped forthwith. Poverty can be partly get eliminated by higher industrial production which can come only with growth of infrastructure and then certainly country is entitled to introduce as many poor oriented schemes with effective delivery system to elevate left over poor groups.
From 1947 onward we started looking on foreigners rather than creating our own sound economy to reduce dependence on foreign help.In initial years it might have been necessary to depend on foreign help but not forever.Initially we were with going with begging bowl scouting for foreign help now we are going with begging bowl for FDI. Can FDIs be answer to our economic evils ?
Can any country afford to survive on FDIs? . In 1991 when country's gold was mortgaged to Bank of England,historical liberalisation of Economy by the very same person who has been now Country's PM for last 9 years was intitiated. with steps taken then it was believed that country's dependence on foreign money either in the form of aid or any other assistance shall get reduced and investments of foreign investors would increase.These investments were expected to benefit to infrastructure sector which would given boost to industrial production which in turn would have given rise to GDP and plenty of internal accruals which again could have been partly be reinvested for infrastructure development thereby slowing dependence on FDIs on long run. But 22 years past nothing of the sort has happened.Today also we are desperately begging for FDIS .Why ?
Like Banks where NPAs spoil their balance sheets and in turn hamper their growth our country's internal accruals (read revenues)post 2004 are being increasingly being spent on non productive targets with lofty causes to elevate the misery of poors and poors' related development scheme.There are many well known schemes introduced by UPA under different Nehru Gandhi names.But did they bring the desired result or reached to target groups ?UPA chair person because of her closed door acquaintance with country's economy may rejoice in the success of those schemes but the fact is otherwise. Because of corrupt and defective delivery system the benefit of those schemes is not reaching to the targeted groups and is being pocketed by middlemen-the politicians ,bureaucrats and banks.Thus the money which could have been used for productive purpose by utilising it for infrastructure development, was diverted to these so called lofty vote catching but non productive schemes with not much benefit to poors -the targeted group. And now comes Food Bill which is expected to ruin the country's economy further even though considered a master stroke by UPA chairperson and her team as winning formulae for winning the next elections while finance minister of the Govt goes on exhorting for FDIs.
I don't think any one could be opposed to poors related benefit schemes to elevate their plight but the question is to what extent a country can afford to divert internal accruals to these schemes and depend on FDIs for infrastructure development .Whether Indians consider Foreign institutional investors blockheads to invest in a sinking economy as a result of internal revenues being diverted to non productive purposes how so ever lofty they are?. FDIs can serve only a limited purpose when the country's economy is booming and CAD is under reasonable control. With continuing deficit in balance of payment position(which has hardly any support from exports) Govt's war cry for FDI may in the long run kill Indian economy.With this war cry(any way very few foreign investors are getting allured to this war cry) with out strengthening our internal growth India again going to become a begging bowl country for foreign help rather than investments if this tendency of massive diversion of country's revenue on non productive purpose like the present food bill (howsoever lofty it may be ) is not stopped forthwith. Poverty can be partly get eliminated by higher industrial production which can come only with growth of infrastructure and then certainly country is entitled to introduce as many poor oriented schemes with effective delivery system to elevate left over poor groups.
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