To the Economists here

by Rishi Tue May 20, 2014 9:03 pm

Lord Meghnad Desai says the new government should do the following.

1. Simply release the grain stockpile into market. (gurucharan Das also says the same thing.)

2. Stop subdizing the rich by putting an end to fuel subsidy.

Do you agree?

by truthbetold Wed May 21, 2014 5:11 am

Yes on item 2.
Mms govt already started on this by deregulating fuel prices to some extent. A total market driven fuel price will help more rational market behaviour, more fuel efficient products and more help for environmental activities.

by truthbetold Wed May 21, 2014 5:12 am

Disclaimer. I am not an economist nor do I play one on such.

by Rishi Wed May 21, 2014 5:18 am

truthbetold wrote:Yes on item 2.
Mms govt already started on this by deregulating fuel prices to some extent. A total market driven fuel price will help more rational market behaviour, more fuel efficient products and more help for environmental activities.

>>How do you bring the food price down? Should Food Corporation of India release release into the market the grain they stored?

How would you help the farmers? It seems about 284000 have committed suicide because of heavy burden of debt.

by Merlot Daruwala Wed May 21, 2014 6:11 am

Rishi wrote:How would you help the farmers? It seems about 284000 have committed suicide because of heavy burden of debt.

That figure must be a cumulative number over some specific period chosen for purposes of scoring a disingenuous debating point.

As per Wiki, ~17000 farmers commit suicide a year as in India, which is only ~9% of the total number of 187,000 suicides per year (Source: Lancet). OTOH, agriculture is the stated vocation of over 60% of the population in India. In other words, farmers are committing suicides at far lower rates relative to the general population.

So I'm not convinced Indian farmers are under some special systemic stress. The bogey of farmer indebtedness and suicides is typically raised to justify farm loan waivers of the kind the UPA did in 2008. This was a badly administered, widely abused (and scammed) scheme which is responsible for ruining the credit culture in India in recent times and leaving public sector banks with massive NPAs.

by harharmahadev Wed May 21, 2014 10:31 am

Rishi wrote:Lord Meghnad Desai says the new government should do the following.

1. Simply release the grain stockpile into market. (gurucharan Das also says the same thing.)

2. Stop subdizing the rich by putting an end to fuel subsidy.

Do you agree?

I love Modi. He is DA MAN!!

Yes I agree. Not only should the government release the grain stockpile into the market, it should dismantle PDS and help setup electronic commodity trading.

Agricultural industry must be liberalized and brought within the tax system. There are too many loopholes and it provides a gateway for money launderers. Indian businessmen are quite shrewd. If industries are allowed to invest in agriculture, agri productivity will rise dramatically and prices will drop dramatically due to economies of scale.

Fuel subsidies must end completely. Artificially suppressing fuel prices creates anomalies in the market and spawns Mal-investments. It adds to India's debt burden, which lowers its ratings, which results in increased borrowing costs and lower rupee value.

I can go on and on. In short - Modi is DA MAN!

by harharmahadev Wed May 21, 2014 10:33 am

truthbetold wrote:Disclaimer. I am not an economist nor do I play one on such.

Thanks for the clarification. However, most members were able to deduce that based on your responses.

by truthbetold Wed May 21, 2014 11:59 am

harharmahadev wrote:
truthbetold wrote:Disclaimer. I am not an economist nor do I play one on such.

Thanks for the clarification. However, most members were able to deduce that based on your responses.

hhm
we know you are the "stock broker without clothes".

by harharmahadev Wed May 21, 2014 2:05 pm

truthbetold wrote:
harharmahadev wrote:
truthbetold wrote:Disclaimer. I am not an economist nor do I play one on such.

Thanks for the clarification. However, most members were able to deduce that based on your responses.
hhm
we know you are the "stock broker without clothes".

You do what now?

by swapna Wed May 21, 2014 5:57 pm

Good responses by Mr Drinkman and Ha!Ha!Mahadev.

Large-scale, fixed-price purchases and stockpiling of foodgrains by any government entity distorts the price-demand-production/ supply mechanism, and the flow of price-information from the product market to the producers (farmers), technology developers (hybrid seeds for example) and the capital markets (lenders for the purchase of farm equipment, etc), impeding productivity increases, attainment of economies of scale, price decreases and abundance.

The government's decision on price subsidies is bound to be invalid because it doesn't have to make the. more difficult income allocation - to food, shelter, clothing, education, healthcare and transportation - decisions that the consumer does. The relative values that the government assigns to these components of material life are not the same as those that different segments of society do. Remember also that governments' decisions are more influenced by those segments of society that help it win elections.

Similar arguments apply to fuel price subsidies, but in addition are the externalities - effects that lie outside the control of markets - like environmental degradation and the subsidized fuels industry's disincentives for investments in large-scale, public transportation systems.

Summary: controls on markets of the kinds you mention should be removed.

by harharmahadev Thu May 22, 2014 12:28 pm

swapna wrote:

Summary: controls on markets of the kinds you mention should be removed.

Not all controls are bad. The government has the responsibility for regulatory and quality controls.

To be specific - price controls on markets should be removed.

For example - government should focus their attention on ensuring that gas stations are not adulterating petrol. They should keep an eye that gas stations are not price gouging customers. Governments should not dictate pricing. Whenever the government sets a price, everybody and their brother tries to game the system.

by harharmahadev Thu May 22, 2014 12:50 pm

Btw... I bought INXX (India Infra ETF) last week after Modi victory. I got a decent spike. But I'm going to hold it for 3-4 years. I think this baby is going to be in the 20s in 2015-16.

by truthbetold Thu May 22, 2014 8:35 pm

harharmahadev wrote:
truthbetold wrote:
harharmahadev wrote:
truthbetold wrote:Disclaimer. I am not an economist nor do I play one on such.

Thanks for the clarification. However, most members were able to deduce that based on your responses.
hhm
we know you are the "stock broker without clothes".

You do what now?

Since you asked:

https://answers.yahoo.com/question/index?qid=1006050209041

by Sponsored content

Hitskin.com

To the Economists here

To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here

Re: To the Economists here