I am taken into a trance when I see these cartoon by Surendra in The Hindu and today’s too has lived up to its standards. With the recent shift of thoughts and ideas and after multiple confusions as to who should be the presidential candidate, the fingers seem to point towards Pranab. It sure is a good recognition and acknowledgement to someone who has served the nation for a long time and I have had special respect to this chap for finance is never an easy thing to play a role at especially when there are so many dependencies and headaches and whatever is done or not done can prove fatal.
One might be a testimony to the great job he has done as the finance minister; we could rewind the clocks a little and see how things have shaped up. The resurgence of the G20 nations in the wake of a 2008 crisis which simply multiplies thereafter. Followed by this was the recognition of the BRIC countries and their strengths in the global scenario. India casting its own banner as one of the most powerful emerging countries in the economic front and we had our PM and FM chairing the many global events in the financial front. And even now we show a growth rate of about 6.5 which is not too shabby either. Although it is not the most promising feat, we still are ahead of the countries in large trouble, the euro zones.
The economy has had a major set of challenges from the past two years now and the major one being the inflation. Inflation again would be an indicator of growth as long as it is the market inflation. Once it turns to the food inflation, it is where the threat starts. At first the inflation was supply side but now we see that agriculture has noticed a considerable growth but the other factors don’t seem to shy away from contributing to the inflation. The fuel prices still contribute a lot and the newspapers even today show how big the contribution to the wholesale price index (WPI) is. Diesel even now contributes to about 4% of the WPI. Along with this are the additional challenges with the reducing IIP-Index of industrial production, reduced growth of the manufacturing sector, reduced exports, depreciating value of the rupee and the conversion rate steepening with respect to the dollar, the continuous challenge with the FDI and trying to bring it into India, the internal opposition for the idea of multi brand retailing, the challenge of ever growing price of the oil and the loss made by the oil companies which has to be evened out by the govt. Meanwhile there is still a challenge of continuing the social sector programmes and it is something that would have a continuous say on the deficit front for the spending in this area cannot be compromised at any stage. To add to the list, the whole global front is hinting a continued recession and the latest message by S&P stating that India is being considered to be moved from the investment grade to a speculative front which would have far reaching effects as reduced foreign money in the sector and even our large Forex reserves may not be sufficient to hold on to in the current scene.
The challenges are plenty and the time could not be more challenging. At this scenario, we are considering change in the leadership. Maybe a fresh eye can bring in a new perspective and bring in the much needed change to the economy. On the other front, taking out a person with such a huge experience in the field and putting him elsewhere a question naturally arises as to how valid was it to make a shift and bring in a new person who has to be brought to speed about the helm of affairs. ..