India facing situations akin to financial emergency

PM has said there is nothing like the 1991 type of economic crises in India. However, this study stresses the crisis in 2013 is more serious than 1991. An emergency like situation seems developing due to the record fall of rupee. Economic system is not one sided. This is operated by the political system prevailing in a country. The government could not provide the political system for a liberalized economy as was expected of it resulting in an all round failures.

Wrong policies yields wrong results. The ill consequences of economic policies of PM Manmohan Singh are in front of us all to see and bear with. The credibility of both has fallen down on ground eating dust- Manmohan and rupee, simultaneously together. The value of rupee is falling continuously since the last 3-4 months touching its lowest ebb at 65 rupees per dollar. Even the PM himself was entrapped in the flood of scams and scandals during his second tenure. His office had effected changes in the CBI report of coal allotment fraud. His reputation has tail-dived below the ground after the related files is said to have been misplaced. Files were not produced before the CBI to install further investigations. The credibility of rupee is directly related with the PM, his government and the economic policies of his government. The credibility of rupee is also directly connected with the parallel economy of the government's nurtured corruption also. P Chidambaram has said last week accusing the world economic scenarios as the reasons of India's economic woes which he expected to come back on tracks sooner. The PM has been duping the nation for the last 9 years by repeatedly indicating towards the high GDP rate. A restless nation waits for a change. with hopeful eyes. Recent developments have torn off his hollow claims. Indian economy is in a huge mess. Almost financial emergency type situation has emerged in the country.

Inflation directly hits the masses

Center blames world economic crisis. Specialists opine the American economic situations impact internationally. America is at present out of woods, but rupee is continually weakening up compared to dollar. People do not understand the financial jargons like GDP, government deficit, inflation, stagflation, imbalance of payment but the inflation in certain way hits them hard directly.

The prices of petro-products increase with the decreasing value of rupee. Transportation gets costlier with every increase of diesel prices. Gold undoubtedly is unproductive investment, but attraction for gold in India is infinite. Government has imposed 10 % tax on the import of gold. Smuggling of gold has gathered momentum. With the falling strength of rupee, the imported items and the consumer products, manufactured with the imported raw materials costlier will grow. Steps taken by center do not provide relief. The experience is only of getting cheated. Whatever the PM says do not happen. What he does not say happens for certain. What the poor people can do?

Economic crisis might be the repletion of 1991 crisis

PM assures the nation there is no possibility like the economic crisis of 1991. Nevertheless, bigger crisis in 2013 is looming large over the head than the one that had visited in 1991. There was the crisis of foreign exchange reserve in 1991. There was no reserve left to pay for the import bills beyond three weeks. Narsimharao was the then PM. Manmohan Singh was the then finance minister. The nation's gold was pledged in foreign. The so-called policy of liberalization was introduced. The cost of a dollar then used to be equivalent to 12 rupees. India is a victim of directionless leadership. The foreign exchange rate of rupee was fixed by the center then. Finance minister himself lowered the value of rupee. I dollar became equal to 18 rupees. Export augmented. Import duty was finished. Doors to foreign investments into the stock exchange were opened. The country market of India became foreigner. In 1993, rupee was left open for the strength of market play. Government went weakening up and market emerged stronger. Today, there is the challenge of saving foreign exchange reserve. If the foreign exchange reserves also deplete due to burgeoning imports, the situation could be worse than 1991.


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