A comment on a post in The Examined Life argued that Nehru's job as a Prime Minister was...
"to expand the government through socialism and deliver the gains to as many people possible. This the Nehru adminstrations did to the best of their ability. It was up to the private sector to stand up and to do its job and it failed to measure up. Why blame Nehru for that ?"I do not want to go into the abilities of Nehru as a Prime Minister and his contributions for India. I also do not understand what one means by "to expand the government through socialism". But those are matters for a separate post some other time.
What I fail to understand is how one expects the private sector do do well when there is no incentive for it to do so and in fact when it has been weighed under by the countless barriers put up by 'socialist' governments year after year! It is a typical leftist point of view that defies the basic principles of finance and economics!
Now with the return of the Congress aided by unaccountable leftists, the concept of economic socialism is gaining currency once more!
An article in IHT illustrates how the CMP of the UPA government is riddled with socialist agendas that fly in the face of common sense and economics!
"Interest rates," the text of the program promises, "will provide incentives both to the investors and savers, particularly pensioners and senior citizens."Thats precisely the problem! The retrograde economic policies of the Left and the concept of economic reforms are constantly at loggerheads and trying to achieve economic progress is futile under such circumstances!
The trouble is, investors would like to see Indian lending rates slashed by half to reach Chinese levels. Pensioners, senior citizens and factory workers want to be paid a better rate on their savings. The two objectives are irreconcilable.
The Finance Ministry and the central bank have repeatedly said that government-administered interest rates are keeping borrowing costs too high in India. Unless rates on postal and pension savings drop, banks, which compete for the same funds, won't be able to lower their own deposit rates. Unless banks can pay less to depositors, they can't cut their lending rates.Is it too hard to realize this simple fact? Yet why do the policies of socialism form the basis of the economic agenda in the CMP?!
It gets worse. The Common Minimum Program says that rural credit will be doubled over the next three years and that "immediate steps will be taken to ease the burden of debt and high interest rates on farm loans."
Banks won't bear the burden of the government's social agenda. They'll pass on the cost to corporate borrowers.
Without growth, the only thing the government can distribute is poverty.Exactly!! And thats what I am afraid might happen!!