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Who killed India's growth machine?

Will we continue down the slippery slope, can we grab onto a glimmer of hope?

Nadir Godrej 

Will we continue down the slippery slope, can we grab onto a glimmer of hope? Our was very bright And everything was going right. Why, double digits were in sight But suddenly we had a blight. Now five per cent seems like a stretch. The hero has become a wretch. Indeed there are suspects galore And I don't think we can be sure Who did it but we can guess What the origin is of this mess. The usual suspects should be there Bad governance has its share. The claimed that he could see Some scams in coal and in 2G And whether you agree or disagree These sectors slowed quite visibly. * * * High taxes act like a noose And often kill the golden goose. Now golden geese of course are rare But every goose has its share Of feathers that might well be plucked If the goose has not ducked. Colbert while governing his nation Observed the art of good taxation Was plucking the goose with minimal fuss. In the previous budget we missed this bus. Pursuing was such a bar. In snubbing the court we went too far. If Vodafone and Shell are extorted Then investors can't be exhorted To invest in a country that's fickle. How do we get out of this pickle? This isn't something we can afford We badly need funds from abroad. Chidambaram's aware of this effect And he's been more circumspect But all the same the market fell When accountants couldn't tell What the fine print really meant. Would IT sleuths then be sent To Mauritius for investigation Of Residency Certification? No one proved to be proficient At figuring, "Necessary but not sufficient". The clarification was very fast But can one conclude the danger's past? * * * Why are we always trying to truss The goose? This merely causes fuss. For goose must be allowed to grow In order that the feathers flow. With all this fuss we fear one day The geese may all just fly away. Some think by far the biggest hits Would be our dual deficits. The current account is pretty bad And yet I feel somewhat glad That the size of the deficit Would be a nearly perfect fit With our immense imports of gold, Which isn't consumed and could be sold If of course the need arises. Let's not be hung up on mere sizes But see the composition too. The deficit is also due To capital goods which we need And which will certainly help to feed New exports and our future growth. But S&P and Moody's both Will surely move to a down grade If powerful moves aren't quickly made To encourage capital flows Alas! That's the way it goes. * * * The fiscal deficit is big And yet we shouldn't give a fig If the is growing faster An identity we should master- If the product of debt over GDP And nominal growth, you see, Is greater than the deficit The will still be fit. For debt to deficit will fall And that's the number that we all Should be tracking.

Is it high? It's seventy and we'll get by. And what is more it will fall Unless we make the stall. Of course it's always worthwhile ending What's obviously wasteful spending. And subsidies clearly count Over the years the cost will mount. And fossil fuels should be taxed Those subsidies must be axed. I think it's safe to presume That if we excessively consume Liquid fuels the global price will rise. These subsidies aren't green or wise. But the major reason that we ought To stop subsidies is that they distort The market and are inefficient. Cash transfers are much more efficient. The way forward we'll clearly see When every Indian has an ID. And everyone should be on board This is something we can afford. * * * Let's bear in mind inclusive growth Is good for rich and poor both. To get ourselves out of this slump We really need to prime the pump. There is no real paucity We can afford generosity. And everything the poor spend Helps us all in the end And thanks to the multiplier The goes even higher. The poor can get back on the tracks With a negative income tax. Some advantages this scheme can boast- The very poor get the most, Cash reaches where it is desired And no more than is required. And why I think this scheme is fine Is that in time costs will decline. As incomes rise less is paid. And in good time all those we aid Will in turn pay their tax As they get back on the tracks. * * * In spite of all the heavy debt I feel the government should bet On future growth to bridge the gap. We should ignore the alleged debt trap. For India another cause of gloom Was the global commodity boom. Why have the prices been increasing? Some blame the quantitative easing Or China's steadily rising might And its unrelenting appetite. For India this is a cause of pain. The reason why I will explain. Many commodities we must import And last year we did more than we ought. Supreme Court problems led to more Imports of coal and iron ore. This makes the current account deficit Increase by more than just a bit. And the commodity price escalation Then feeds into our high inflation. * * * Enter stage left the RBI Concluding demand is far too high It merrily raises interest rates. As expected growth abates The stock market tumbles down, Foreign investors start to frown, Then capital inflows begin to stall And the Rupee goes into free fall Reigniting the inflation. Such is the plight of our nation. But the commodity boom will soon end And the Indian will then mend. Metals saw an early fall And gold has now ceased to enthral For gold to rise all must buy The fact it's rising makes it fly But when smart money does withdraw Collectively we see the flaw. Bad weather kept the Ags quite high But now there's a reason why The rise has begun to stall And soon we will see a fall. A bumper crop is in the making And prices are on the verge of breaking. Thanks to the benefits of fracking The price of gas has started cracking But oil somehow is still up there Though I think the chance is fair That oil will soon begin to tumble Even if it doesn't crumble. I think we should understand That we need this helping hand. The CAD will naturally decline And help the Rupee to do fine. With Rupee strong and prices low Inflation is then bound to slow. Don't you think it would be great If the RBI chose not to wait And reduced the interest rate Now and not wait till it's too late. * * * Now in a good Agatha Christie The beginning is always misty But the dénouement is always clear But this whodunit is I fear Somewhat like the Orient Express Where as usual one has to guess But the culprit is not one but all Our case, I think, also does fall In that unusual category. In the Orient Express you see All the suspects plunged the knife, A gory end to the victim's life. So too in the case of the growth machine By careful deduction it is seen That in this period of great strife Many culprits plunged the knife. The global economy's sideways slithering The government's bungling and blithering. The RBI's quite rigid stance The rating agencies looking askance. The frightening commodity boom The pervasive sense of gloom and doom. Will we continue down the slippery slope. Can we grab onto a glimmer of hope? The FM did his little bit. Will the RBI now rise or sit? Will the global mend Or the commodity boom end? To revive our Indian growth * * * We need at least one if not both. We know there's many a cause But whatever the reason for the pause We shouldn't sit still and merely wait We can't depend on the economy's fate. We can always make a bid For the bottom of the pyramid. Opportunity can be seen In making our planet green. With prices of commodities high All of us should certainly try To produce much more here We should invest without fear. The may seem quite dark But all we need is a spark. If we collectively do strive The will revive.

Nadir Godrej Managing Director, Godrej Industries

First Published: Fri, March 08 2013. 21:38 IST