Tuesday, August 27, 2013

Why not Gold Bonds

Sub Heading: India needs to do what Roosevelt did in 1933 and bring Gold Bonds rather than India Bonds in its hunger for dollars

Behind every symptom, there is a disease. And behind disease, like, say, cardiac complications, there is a cause, which is either embedded in the DNA or picked up by choice—be it smoking, or excessive drinking and eating. The drastic fall in the price of the rupee in relation to the US dollar, as we are witnessing now, is a symptom. The disease has been diagnosed by experts as current account deficit, which is the gap between what we earn in dollars by way of goods, services and transfers, and what we pay under these heads, again by dollar. But the current account deficit, or CAD, though still high, is responding to controls. From a scary 7 per cent of the GDP last year, it is poised to settle for 4.5 per cent by March next. So what exactly is the disease?

Tuesday, August 6, 2013

Create 50 states

Its time to create small states and make them accountable rather than sing wrong tune of federalism 
The imminent formation of Telangana, the 29th state, and the consequent outcry for a multitude of smaller and ethnically more cohesive states, questions the inherent arbitrariness of the 1956 states’  reorganization, brought about by Jawaharlal Nehru and Govind Ballav Pant in a haste. Telangana is the remnant of the Nizamshahi, the land where the Nizam family, as titular head in the British period, could still live off the fat of the land. The Nizam rule had it injected a sense of uniqueness into the people’s mind, ahubris not ironed out by Operation Polo
But Nehru’s government got rattled by nationalist posturing in many regions of the country at that time. It thought—rightly, perhaps, with linguistic separatism rocking the erstwhile Bombay province—that sub-nationalist enthusiasm is nothing but a precursor to mob violence, and of course a political challenge to Nehru’s authority. So little attention was paid to the reservations that Chief Minister of Hyderabad state Burgula Ramakrishna Rao had expressed about the merger of Talangana with Andhra Pradesh, and Nehru went ahead with putting the two unwilling horses under the yoke just because majority population in both places spoke Telugu.