Recapping my opinions on events of this week:
Greece:
Still blows. There is nothing happening on the ground - neither good nor bad. Politicians are stuck n their blame game and citizens in an vicious downward spiral. Troika is equally at loss getting Greece to do what it just cannot do. How can you increase the GDP of the country whose main lines of business is tourism, fisheries and shipping? Its not like they can setup steel plants or automotives overnight!
Troika will fail. Greece will part away. Greeks will be better off, perhaps the luckiest of the European Union, in the case.
European Federal Union:
Without doubt the most horrible crapshoot of the week. Mr. Barosso wants a European Federal Union. He explicitly states national-democracies are a threat to such an union. My God! What are these guys smoking? These unelected representatives, essentially beurucrats, trying to stitch together a comity of nations using explicit lies and threats, coercing the assetnt of poor and trapped countries.
This, if it happens, will lead to huge lot of trouble at later stages. But before that European Union will not remain in ths shape it is now. UK has called out for an referendum. Look forward to see most other countries joining in like Germany, and Netherlands.
Perpetual QE:
Well, Bernanke just put the currency printing machine on auto-pilot. And professedly, he will stop only when trees grow to moon. Einstein said: Stupidity (or was it insanity) is doing the same thing again and again, and expecting a different result.
Ben does not know this or does not want to recognise it. Obama is super blind to what happens to economy, he just wants to get reelected. Obama has absolutely no economic plan what so ever, and given another four years will do nothing worth a page. Only reason his "Change" dogma worked was because people suffered heavily in the later part of Bush's administration.
But to the matter: Bernanke has blown off a great chance to make a dollar revival. He has failed to stabilise the dollar and US economy. Printing of money will further hurt US economy and Dollar, and will in no way help it.
It will affect every nation, and especially the most populous nation (India, China) with high commodity prices and food inflation.
We may also make for a bubble. But I dont think it will even last that long. It is clearly evidenced that every QE has diminished in efficacy. QE3 would be euqally bad.
Coal Blocks:
The Supreme Court today refused to entertain a government's plea not not to hear a PIL on alleged irregularities in the allocation of coal blocks and sought an explanation whether guidelines were flouted in allotments.
The apex court, which turned down the Centre's contention that the petition based on the CAG report which is under the scrutiny of Parliament's PAC cannot be considered, said "the petitioner has sought to point out illegality and there is nothing wrong in it."
Less said the better. Sometimes you wonder if Government is more deluded than we can estimate.
FDI Retail:
If the coal and 2G were not enough to stall the parliament Govt has gone ahead and revived the most moronic of all the ideas - the FDI in retail.
The stupidity of government and its supporters, I am sure will shock even its most loyal supporters.
IMO, govt merely is trying a deflecting game by trying to shift focus out of Coal allocation scams. Ask this:
a. Does this government really have wherewithal to pass and deliver this legislation?
Obviously no, else they would have done it the first time. D
b. Does this government really think this is a must-have legislation?
No, again. Else why wait for eight years to do something about it?
c. Has this government really done something landmark?
No, again. FDI in single brand retail was allowed much earlier. There was no need or necessity to push through a multi-brand retail - now.
d. Are the government's safeguards like compulsory B2B sales, any help?
No! The B2B format is already operational in India and if the new entrants wanted to enter that format they are free to do so.
e. So what is government giving to the retailers?
Basically, it is giving up the retailers a free hand in entering the retail market, which is exactly what was opposed.
f. Has government done anything new?
No. It has done exactly what it does every time - being stupid.
To conclude:
FDI in retail is a logical conclusion of the liberalization initiated in 2012 1992. But we are million miles before the society (the nation of shopkeepers) can even remotely enable such a legislation. There are many essential legislation that will be needed to reform and to protect the interest of farmers, SMEs, Cold chains, Transport infrastructure, APMCs, Cooperatives, and banking inclusion before a free FDI retails can be safely be allowed.
I also understand the hypocrisy behind this objection. All the evils a MNC company can inflict can also be inflicted by an Indian company.
All I can say is that, such a reform and protection is needed regardless of any infliction or not. Moreover, you cannot stop an Indian company from establishing what is essentially a right to business and employment, but you can control the MNCs.
Another perverse objection is, MNCs with their greater technological base and experience will be very successful in wiping out the slacking Indian companies and millions of shopkeepers with it.
And for the people who think these MNC companies are godsend for employment and manufacturing only have to look at their parent nations to understand how badly these companies have performed in the community, social and employee obligations.
Diesel & LPG:
This is probably the most obnoxious thing the government has effected this week. Next to FDI in retail. Well, they have only done two things
The cap on LPG, IMO effectively increases the cost by 50% for an average household.
FDI Aviation
This legislation is many years late. What were they doing till now?
And for controversy seekers, here is a question: Why liberalize the airlines just when the Air India is lapping 787s from its order book?
But frankly, good riddance. Government has no job regulating this industry which is very bankruptcy prone.
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