Greece is in financial trouble – and by now all of us know it. The trouble is a result of years of mismanaging the economy. All you have to do is read Michael Lewis’s article about this in Vanity Fair – and it had appeared long back.
How different are other countries? Well not very different. Governments have made impossible to meet promises – US, UK, France – all are guilty of similar mistakes if not greater mistakes, and one day all the problems will come home.
What about India? Well we have one major mistake which will kill one of the future governments – indexed pension for the government servants. When the government is told of the danger they do not react fast enough. For example when the government did a calculation and realised the enormity of the ‘defined benefit’ indexed pension, they quickly converted new joinees (a few years ago) to the NPS. However the army has not yet agreed to defined contribution.
When committees suggest downsizing of the government the government does not listen to it.
Currently if you are blaming the Euro crisis, the Chinese Realty collapse, or the Americans for the dollar being at Rs. 55, please cut out the crap. Look at the way the UPA government is allowing / helping legitimate looting of the exchequer. The politician and the bureaucrat combine is causing a lot of harm.
Just look at the numbers! NREGA, Telecom scam (if Raja was the only guy who took home so much of money, I would be surprised), Fertiliser subsidy, petroleum subsidy, mess in the coal mining, inability to handle Telangana,….it is a mess.
If people are pulling their money out, do you blame them?
The foreign markets look interesting – and if you are not worried about the $-Re rate, even the debt market looks good in the short run of 12-14 months….
The fiscal part of the economy is poor – so please reduce your expectations on growth!
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