The question (in question…boy, is this a lousy choice of words) was actually meant to assess Mr. Parekh’s answer to how rising metal prices, which are a contributing factor to the rising inflation in the country, can be controlled. In all fairness, Mr. Parekh gave a very good answer. But as it usually happens with all of us, nobody dared to challenge the actual usefulness of that answer to the present situation. And consequently, Mr. Parekh got away with it. For a common man like me, inflation is the rise in cost per kilogram of wheat or rice or daal that I buy at my local grocery store every 15 days or so, or the Rs.2 increase in the cost of a vegetable, which I need to consume on a daily basis. Granted this rise does not occur over a very short period of time, but it also does not occur over a very elongated period. Thus, for the common man, it’s this rise that really matters. Consequently, inflation control measures are usually aimed at infusing more commodities in the marketplace in a relatively short span of time. While Mr. Parekh did suggest a long-term strategy to counter inflation in this regard, he did not address anything tangible that would allow a quick and easy control over metal prices. One could wonder if this was partly in keeping with his own perspective of the sector. And I am not saying this without a reason. Consider both the examples you have cited in this post, Suhas. Both the Mundra power project and the Posco project are long-term projects. You cannot set up any of these in a short duration of time. Consequently, these projects will themselves only help to ease some inflation after maybe a period of say, 4 to 5 years. And while Mr. Parekh sounds like he suggested these policies to the government 5 years ago, his conviction fails to come through as anything more than a matter of opinion.

Mr. Parekh was right about one thing though. GDP growth and inflation always go hand-in-hand. You have to maintain a balance. A robust GDP growth in the past 5 years has filled our coffers with valuable foreign exchange, but all that value will ultimately go to ease up on inflation. Now this is where India and the US or the EU are different. The US has traditionally been a very flexible economy, although I have to admit that countries like China, India, and oh yes, Iraq, have put a very serious dent in their treasury. The EU, on the other hand, is a much stable economy in my opinion, but history has always been against them. Still, economists and policy makers in these regions can afford to come up with stop-gap measures and then spend the rest of their lives to constitute other liberal economic reforms, primarily because these countries possess capital reserves. India, on the other hand, has a lot of foreign exchange now, but without a stable economic reform policy, we will lose it.

I believe it was the Himachal Pradesh government who had promised tax concessions to the auto industry, not the central government. In that case, the Haryana government would have been unable to do anything, while the Central Government would think ten times before messing in that fine mud. Why? This is what brings me to the end of my…thoughts. It’s true that we need to get our act together. It’s true that our objectives, from the top echelons right down to the local panchayat level, should be in sync. But the question at the end of the day is whether this is really going to happen in this era of coalition governments. What good is a central leadership if the leaders and policy makers in that government threaten to collapse their own front over what they pretend to be in their people’s best interets? How can a power project or a steel project go ahead when the requisite ministers and/or their subordinates are too busy taking care of their own or their party’s agendas? And here’s the rub: why should anybody expect anything different after the upcoming General Elections. I think it is safe to assume that no party is going to get a clear majority on the floor of the Parliament, which means we will see yet another coalition government. Until and unless we, as in the people of India, unite and demand radical changes to the political makeup of our “representatives”, this situation is not going to change, and the common man will continue to be dragged.

I could not get the point!
So do u want to suggest that we will be benefited by inefficiency? ( I think it will be great idea if you are pointing to it!)
Dear Animesh, I think by very writing about it you have pioneered.

I am not convinved about the spectacularly bearish mood the Indian carries…I believe there is lot of freshness and optimism in the air.
Pls correct me if i am wrong.

Everybody is happy shitting and nobody bothers to clean this mess. Ofcourse these are deep rooted issues and there are too many constitutional and regional barriers to be solved overnight. But then it has to start from somewhere. Somebody has to take the onus to change the things.
But hey don’t look at me I am not the pioneer.