Monday, May 02, 2005

The real cost of Socialism in India

Reg : Socialism

All our problems in Indian socieity can be traced to unpractical socialism / leftist ideas since 1947.The corruption, nepotisim, fall in moral standards andvalues in all spheres of life is directly linked tothe undermining of our national currency.the socilistic govts until 1991, stiffled growth ofprivate sector (explotiting imperialists !!) and further spent huge money (borrowed or printed ortaxed)on huge PSUs and in reckless expansion of govtmacihnery and creating white elephants like SAIL. while the price of all products produced by PSUs werevery high due to lack of competition and inefficiency,there was also acute shortage of goods (like cementuntil 1980). it gave rise to black market, smuggling,horading and bribery among govt officials.

At one time there was a maximum taxation of about 90 % for many corporates (in addition to high powercharges, sales tax and excise) ; naturally it led toevasion of taxes and created black money.moreover the govt created inflation by meeting thebudgetery and other deficits by printing money.if the wage levels doubled in ten years, price levelsmultipied by four times. And interest rates werearound 20 % ( and unofficial and real rate at around30 % or more ) . Micro credit in samll town markets, etc is at 200 % (kandhu vatti).all govt stastics reg inflation, interest rates, etcae half triths and doesn't cover the black moneysegment. corruption grew slowly and steadily, as it wasimpossible to live honestly on a fixed salary whileprices were rising annually. and huge power was centralised and given to bureacrats who ruled in thelicense permit, quota raj. naturally, they too becomecorrupt. and their culture spread form dept to deptand finally reached the armed forces (Tehelka, Bofors,etc).

Indians were not this corrupt and morally degradedin 1947. There was expoitation, feudalism,zamindarism,casteism, poverty, unempolyment and hunger then ;but as a whole moral values were very high, producingexemplery leaders in politics and other related fields.

These modern day leftists rever Lord Keyenes, whoadvocated deficit financing to stimulate growth.but he prescribed only 2% or less defict. not the 12.5 % defict (gross defict of central and state govtsput togehter as a ratio of GDP). this defict is madeup by recklessly printing money.Keyes had said " there is no better way to underminethe moral and political standards of a nation than byunderming her currency. "there are no free lunches in this world. only wealth,which has been created can be redistriubuted to all.

Soviet Union crumbled not because of US capitalsiticconspiracy, or by huge defence expeditures or byexporting revolution to third world countries atenormous cost ; it crumbled mainly because of overcentralisation of power with burecarcy, corrputionand inefficency of the state run PSUs, short, during the last decades of soviet union,the entire country was run like our present TamilNadu Sate Transport Corporation or Co-op Mills.

The chinese are more wiser and far sighted ; they areliberalising fast and invited MNCs to invest in China.china is still ruled by the Communist party with aniron fist ;they are under no presuure from IMF orWorld Bank or US or WTO ; they sponateously do whatthey are doing. Why don't the Indian communists understand and analyse these factors ?

Please read the book " Free to Choose" by MiltonFreedman,an US free market economist (Nobel prize winner).Competition is most important (while privatising) toensure efficency and productivity. you know very wellthe difference in the bus transport and lorrytransportsector in India. if licences are totally abolishedand free enterprise is allowed in bus transports, then there will be good, sufficeint and cheap buses in all routes ; and moreover the corruption intransport ministry and burecracy, and trade unionswill be finished.

Only 9 % of the total labour force in India comes under organised sector. There is no hope or securityfor the crores of contract labourers, child labourers,agri workers ,etc. if labour laws are liberalisedand hire or fire system is introduced in all sectors(including the govt), the sky will not fall down.the best way that anyone can help the poor in Indiais by stopping the reckless printing of money topay the govt expenses. by guranting the minimum wagesthey get does not erode in real value (purchasingpower), the govt can help them. (than with all theanti-poverty alievation schemes)and the govt is bankrupt ; so we will sell all govtPSUs eventually to meet the deficits.

The dramatic fall in STD rates is a good example offree enterprise Vs govt monopoly. And we are payingartifically high rates for Diesel, Petrol and powerdue to govt monopoloy and corruption.

1 comment:

Anonymous said...

Athiyam Karror!

what kind of thinking are you? What do you know about India. India will got to hell very soon.

We believe strongly one day all of India will rule as a china. China is powerful country in the Indian ocean.

There is nothing any democratic or socialistic in India. But, every Indian fools are thinking India is a power full county. One day these all fools can feel their own foolish.

We are support China. India will go to hell very soon. we are looking forward it.