Oil, inflation and the N deal

As we come to the end of June, the rampant, unbridled growth India has been riding on seems to have died down. Indeed, the way prices have risen in the past few months, India is definitely not shining with all its glory.

In this posting, I seek to find the non economical and political factors which have done this. Although it would be unfair to place the blame squarely on the administration you do expect a little more from a govt which boasts of the likes of Manmohan Singh, M Alhualia and P Chidambaram.

So what has gone wrong, one moment everything seems hunky dory and at the next oil costs 135$ a barrel and the price of bhindi has quadrupled in a matter of a few weeks. 8% growth which seemed a certainity few months back now seems incredulously optimistic.

The main problem with oil seems to be that unlike most other commodities a rise in price has not been accompanied with a fall in demand. Prices of petrol have been kept rigid by the govt and thus the real petrol crisis has not percolated to the counsumers in South East Asia.

Inflation on the other hand seems to have caught even the most seasoned experts by surprise. At 11% the inflation rates seem to be matching the ones of the dark days of the Indian economy. Just goes to show that for all its growth, the booming Indian economy has not really changed anything for more than 40% of the population.

Add that to the Ndeal fracas and you have a perfect troika of troubles. Unlike the other two problems this is entirely due to Indian politics which is just too outdated in this time and age. In an era where even a split second delay spells doom decisions seem to be dragged on and on and on. The only criteria of the govt is to last its term. This failure has indeed led to the loss of a lot of goodwill at the International stage. When the most powerful country in the world offers you a path breaking deal, even willing to bend to your demands, taking stiff criticism from all quarters you are expected to return the compliment. These demons will return to haunt India whenever it sets out to fulfill its international ambitions.

So from a highly personal point of view i can spot only two culprits:

• The Left which has failed to get anything right over the past few years. They have repeatedly held the govt ransom on all important decisions.
• A weak PM who lacks the power, initiative and nerve to lead the largest democracy in the world

I would sign off by saying

GOD HELP INDIA