This is in reference to cover page of popular Business India magazine-10th June 2012 issue wherein the three most important men governing the Indian economy are shown representing 'the three wise monkeys' a.k.a 'three mystic apes'-a pictorial maxim. Together they represent proverbial principal to "see no evil, speak no evil, hear no evil". Not many know, the source that popularized this pictorial maxim (representation) is a 17th century carving over a door on a certain shrine in Japan. In China, a similar phrase exists-2nd to 4th century B.C.: "Look not at what is contrary to
propriety; listen not to what is contrary to propriety; speak not what
is contrary to propriety; make no movement which is contrary to
propriety". It may be noted that this phrase was shortened and simplified after it was brought into Japan.In India, however, masses popularly know this phrase as- 'Gandhi-Ji ke teen Bunder' with a misconception regarding the phrase to have originated recently.
Coming back to our point to ponder-the recent state of economy & sorry state of affairs we as an economy are pushed into.Let us review certain recent facts-the GDP of India grew merely by 5.3% in Q4 FY2012 & by 6.5% FYE2012-both being nine year low; the IIP (Index of Industrial Production-details out growth of various sectors in an economy like mining, manufacturing, electricity) data-released on 12th June 2012 for April 2012 showed the output at factories, utilities & mines was stagnant, rising only by 0.1% in April from a year ago, rupee has lost it's value from 44.84 to 55.82INR for each USD falling almost by 24.5% compared to last year. Let me take a pause for a moment & understand what the depreciation of a local currency actually means? In simple words, when outflows of an international currency (US Dollars-since it is most widely used currency in the world) surpasses its inflows- the local currency depreciates (i.e) a country would have to shell out more national currency to buy 1 USD. The value of Rupee as on 2nd of January 1992 against a dollar was 25.79INR; going by the definition, conventional wisdom says- rupee by now should had been appreciated & should had traded anywhere between 10.00-19.00INR for a dollar (best possible & worst case scenarios) currently!!! The reason why I say so is, we as an economy have opened up to foreign investors post July 1991 (the economic reforms of 1991 or LPG policy 1991) which means allowing FDIs & FIIs, further India has been an active member of WTO since its formation on 1st January 1995; ideally with foreign players coming in over the years-the flow of Dollars should have multiplied (which did!!!! Forex reserves which have increased over the years is a case in point) resulting in appreciation of Rupee-which did not happen or rather which wasn't & still isn't allowed to happen. I remember having read a famous quote by Steve Forbes-editor-in-chief as well as President & CEO of Forbes,Inc. in reference to-debasement of currency as,"it's the most dumb(thing to do)". Further, India faces a threat of loosing it's ratings from Investment grade to Speculative grade by S&P (Standard & Poor's -credit ratings agency) on the verge of India's yawning trade deficit, fiscal deficit, ever increasing subsidiaries, policy paralysis, retrospective change in tax laws-this is exactly what FIIs don't want!!!. The Government has so far blamed EURO Zones crisis (external factors beyond it's control) & coalition compulsions for the kind of situation we are into; but let me draw your attention on policy paralysis.
Last year government had announced FDI in multibrand retail-which it backtracked on opposition by it's allies (the Trinamool Congress party); the government had in its 2010-2011 budget announced its intention to allow more banking licenses, but progress has been slow as the government has been unable to amend banking regulation act, FDI in civil aviation has become a necessity considering the fact infrastructure plays a major role in progress of the nation-& the destitute state our aviation industry is into. Are we really done on policy paralysis front? Certainly NOT !!
Consider this; the National Land Reforms Council (NLRC) which was formed in 2008 under the chairmanship of Dr.Manmohansingh himself; have not conducted even a single meeting since the day of its inception!!! "This (the failure to convene NLRC meet) undermines the credibility of the government at very highest level, when it does nothing to carry out its own assurances & mandate", said Aruna Roy-member of National Advisory Council criticizing the government. Further the failure of the Government to appoint full time chairman in the UTI (Unit Trust of India) ever since U.K.Sinha took charge as the chairman of SEBI in February 2011 speaks of government inaction & even in-case of LIC (Life Insurance Corporation of India) the term of the then chairman T.S.Vijayan which came to an end in May 2011 was not extended. Does the EURO Zones crisis obstruct the Government's decision on countries most respectable institutions??
It's depressing!!! Getting up, going through the 'pink papers' in morning.It's been a while since I read something really good!!! For me its been a routine & kinda mandatory; but for these three (the Prime Minister, the Fin Min & the RBI governor) I am sure they have applied the years old Japanese Golden Rule-'to see no evil, speak no evil, hear no evil'. But unfortunately, the evil in our case refers to much needed economic REFORMS !!!!!!!!! "TO SEE NO REFORMS, SPEAK NO REFORMS & HEAR NO REFORMS"
Signing OFF. . . . . . . . . . . . .
