Thursday, May 7, 2009

stick it to the man - part 1 - getting a move on

for those wondering what this story is gonna be about...a minor correction to their line of thought...this is a political commentary...but u can read it like a story...after all...we are a democrazy aren't we :P

So todays diatribe on the handling of the recession by the government and how we should get a move on and get out of this situation.

But first a few basic lessons in economics for the un-initiated. If I print a Rs 100 note and u do some work for me for that amount, that money passes on to u...u spend that money buying apples, ordering some garden work etc etc and that same money passes on to those people who in turn spend that money forward. This is called the multiplier effect.

What happens in a recession is that someone stopped spending (for whatever reason) and the multiplier effect works the opposite way reducing everybody's spending power and the cycle goes on.

Hence in such times when people are shy of spending, it falls to the government to spend and put money into the market. It needs to spend. The last boom was in a great deal spurned by the govt spending massively on the golden quadrilateral project.

Now look why our governments hands are tied. It spent 60k crore on waving of farm loans, it spent another huge chunk of money on NREGS and it'll be spending more money on tax sops further on. I won't just as of now comment on the merits/de-merits of these spendings
just that other than the NREGS none of them have even a remote chance at helping anybody get out of recession.

So what would I have done if I were in the hot seat.

(stolen all the money and gone to the carribeans :P )

I would have spent my money on two key things

1. Greening the industries
2. Development of sports as an industry

When we were growing at 9% nobody had time to think about how to do things in a better, cleaner way. Now would be the time to say...hey we are destroying the earth the way we are going...lets see how we can reduce the damage, lets spend on green energy. Millions of dollars would need to be spent on this over many years. Technology would need to be brought in from abroad, developed indigenously etc etc. We would achieve the dual purpose of getting money back into circulation and improving earth's sustainability

Now the second avenue for spending money. You know the tally of medals (gold or otherwise) we got in the olympics? Ok thats a rhetoric question, dont answer it please, it hurts. Other than the fact that we have absolutely hideous sports facilities for the size of the nation we are (what would you expect given that we have worse educational facilities), but what's even worse is that a 'career in sports' is not something you'd hear a parent talk about usually. There are no sports scholarships, no high school or college level leagues, dirth of playable stadiums. And that is why there is so much opportunity in sports as an industry we haven't even begun to tap into it yet.

So as MGM says when one episode ends...That's all Folks :)

p.s. don't go by the date on the pic...that's only cause i didnt set the camera settings before shooting


  1. Maybe we should first learn to the smaller things.

    Let 'children' play and not force them to study.
    Switch off the extra lights or any other electrical equipment.
    Waste no water.

    Rest will fall in place, automatically.


  2. guess i shall be visiting this space often!

    good stuff.

  3. @LSL...err LSL yaar govt spending ki baat ho rahee hai to boost the economy in comparison to giving tax sops or jst reducing prime lending rate :P

  4. So is that your hand? ;)

    I didn't understand a word of that post...Yayyyy!

  5. So i'm looking at my hand as i type and I swear nobody has every winked at me for my hand before...this is a first ;)

  6. thts it?!

    see the multiplier is all about how the spending of one becomes the income for the the govt kicks in when the initiave in the pvt sector is lackin (the way it is right now due to the recession....)
    but then...all u can come up wid is just greening the industries and developing sports?!! cmon ! thr is soo much more thts to be done here ! there has to be more demand ! the govt will have to spend like crazy to increase the money in circulation and give purchasing power to the people ! monetary policies or otherwise...people have to be encouraged to spend more !

  7. @Crimson Feet...will await ure next return :)

    @Confusion...Ivy dear the two things that u jst said 'thats it' to would entail the government spending around 100k crores atleast over the next 5-10 years.(guess estimate)

    thats how u pump money into the market and that is how u give purchasing power to the people

  8. @ sanely insane....

    something has to be done NOW !

    I have a way...govt subsidies on all the designer labels :P tht wud encourage spendings for sure :P

  9. But that is exactly the point. All we talk about is what others should do for us. Have we forgotten 'Help yourself' was a virtue?


  10. Oho matlab meri to maar hi lo :P this is a political commentary...its whole focus is what the right govt should do...grr :P

    what we should a separate kind of post..this and the next series of posts is all abt politics

  11. Okay question! Why do you have your hand put next to this post? What's the relevance? :P

    And well the rest of the post.. uhh.. umm.. hmm.. :P

  12. You've said it so well - the multiplier effect that is. I wish it was still easy for us to continue w/ consumerism. We're plain scared.

    P.S: You have a strong hand, like your wrist :)

  13. @Siras...we had the election, you can notice the ink mark on my index finger...a symbol of having participated in the process

    @Still thinking...I am anyways against the consumerist attitude...I think it is the bane of our society

  14. I agree about greening the industry, but Shouldnt we actually develop a few things that can legitimately be called industries? Take film industry, shouldnt it be given the title of a legitimate industry. The tourism industry has to be greened, yes. And what I abso-fuckin-lutely hate is that industry is taken to mean the ITES and BPO industry, STOP IT now. Develop technological industry, m talkin machines baby, real, big, clunking monsters. Do summin about science, people are just not studying science all they seem to do is complete their graduation(enginnering, period) and go for a stupid MBA degree. Bloody tribe of computer scribes. Obama is gonna kick the whole Indian IT operation in the nuts before the year ends. Get another speciality. IT has limited use. And all the clients are sub prime crisis hit western countries. Ok I really should stop now, it is become a blog post inside a blog post.


Wachchaaaa Woo