Indian Economy: News and Discussion (Apr 1 2011)

[somnath]

And they also faced the problem that is rising up in India now - Hyperinflation. The reason is simple and covered in Economics 101 - that if wages rise faster than production of goods/services, then inflation rate will rise to compensate.

Really? And I am sure you can show exactly how (and how much) wage inflation is contributing to inflation in general? In contrast to imported inflation and above all, supply side rigidities? I am sure you have done enough number crunching to decipher how ~ 4-5 billion dollars of additional "wages" (a tiny % of the total wages paid out in India) can materially change the rate of wage inflation in the economy...(Or is it that you simply took one soundbyte from Prof Ashok Gulati's interview, instead of looking at the report that the interview was based on?) Taking all of that, you can confidently assert that India is going towards a regime of hyperinflation! then we will know how much of Econ 101 you have covered, indeed...

ut I guess it takes a bunch of Nehru family-based Fascist economists to forget this simple fact of reason from history

So C Rangarajan is a Nehru family economist (strange, he was appointed RBI guv in NDA's time)...Or is it Naren Jadhav (NAC member)? Stranger still, given that he was an RBI honcho in NDA's time..

When rationale and basic fundamentals and data are not enough, polemics is an easy substitute, isnt it?

[somnath]

These are straight forward pieces of legislation that required only a simple majority in the Lok Sabha for its passage.

You might be right on the question of "majority" (but I thought IRDA required a constittuional amendment)...In any case, it was a fact that INC asked the BJP for support to pass the Bill, BJP made common cause with the Left..Bipartisan support was required also because of the lack of INC majority in RS (same scenario as now)...When NDA was in power, they pretty much tabled the same draft in Parliament, and this time got it passed in both houses with support from INC (which couldnt refuse its own Bill, could it?)...

Sitaram Kesari etc happened much later, after INC lost the elections in 1996..till then, PVNR pretty much reigned supreme...though Babri Masjid event of 1992 put brakes on many of the reforms, all that did get pushed through was despite opposition from sections of INC...

Added later -indeed, the IRDA Act was passed only by a simple majority, apologies to Putnanja on that point...But bipartisan support was still requied, as INC did not have majority in RS (and even in LS, it didnt have a majority on its own, and a lot of allies were the old "socialistic" types who couldnt be depended upon for a vexatious bill like this)....

[gakakkad]

The intention of MNREGA was populism and not finding people to spend money. NAC and INC have aversion to growth. One of the major problems of India is over employment in rural area's . MNREGA intends to aggravate them. Its almost similar to paying people money to not work in the industries. Even though it was not the stated intention of the NAC but that's what it ended doing.

Industries are finding it difficult to find labour. A paradoxical statement in a country of our population. If indeed our government had intentions of empowering people it would have spent money on giving them skills . Only 5 % of our labour force has vocational skills compared to 60+ % in many countries. How many learn carpentry or wiring or plumbing or insulation in these schemes? What did the government do to provide such help ? Nothing. They could have set up employment kiosks to help the factories hire.

Reason for inflation - The biggest cause is a pathetic supply chain. We hear a lot about grains rotting

Most of the government released stats are of wages. Gehlot wants to double them . No stats have been released about the revenue generated by these projects or infrastructure built.Perhaps no revenue has been generated. We can also forget the 15 billion + spent on MNREGA to be lost forever just like the 2g scam money or the Hasan Ali money.
35-40 % of the collected revenue goes on interest payments for debts. Comparing to about 3 % for health or education . Most of the debts finance these populist political schemes which are non productive. With a declining growth rate can we afford these ? If Man mohan ,Montek and a few others in the UPA would not have been there we would have been on the verge of recession. As most of con-grass is filled with socialist ideologues. When UPA came to power the economy was already accelerating. UPA implemented a few sane policies as you correctly pointed out.(mainly due to Manmohan and Montek) But the net effect of those policies was preventing a slowdown rather than increasing the acceleration. The reason is that those policies helped generate the finance that was needed for the wasteful policies like MNREGA et al .(besides eating billions themselves )
In one way it is similar to the chinese wastage. The only difference is that the Chinese are at least creating some useless infrastructure. UPA is not even doing that. Just blowing money.
If it goes on without reforms I smell a recession around the corner. (may be by 2015) . In fact NAC hardly cares about recession. They have the concept of utopian welfare village in mind. Where people lead a 19th century lifestyle. And the standard of living will surely be decent . But by 1800's standard. Not the 21st century standard.

When NDA was in power it was their very first stint. They were essentially inexperienced. Yet they went on the right path. Capitalism. They made several errors. But going by what's happened in Gujarat they seem to have their priority right. Gujarat grew at 16 % real growth last year.

[nandakumar]

These are straight forward pieces of legislation that required only a simple majority in the Lok Sabha for its passage.

You might be right on the question of "majority" (but I thought IRDA required a constittuional amendment)...In any case, it was a fact that INC asked the BJP for support to pass the Bill, BJP made common cause with the Left..Bipartisan support was required also because of the lack of INC majority in RS (same scenario as now)...When NDA was in power, they pretty much tabled the same draft in Parliament, and this time got it passed in both houses with support from INC (which couldnt refuse its own Bill, could it?)...

Sitaram Kesari etc happened much later, after INC lost the elections in 1996..till then, PVNR pretty much reigned supreme...though Babri Masjid event of 1992 put brakes on many of the reforms, all that did get pushed through was despite opposition from sections of INC...

Added later -indeed, the IRDA Act was passed only by a simple majority, apologies to Putnanja on that point...But bipartisan support was still requied, as INC did not have majority in RS....

Just a nitpick, Rajya Sabha shouldn't matter. An ordinary bill defeated in the Rajya Sabha can be got around by the Government convening a joint session of both the houses and getting it passed. On Money Bills of course, Rajya Sabha rejection doesn't matter. It is only in the case of Consitutional Amendmement Bills a proposal falls through if it is defeated in the Rajya Sabha.
As for Sitaram Kesari's humiliation, true it happened in 1996. But the larger point is this. PVN Rao couldn't have been oblivious of Sonia Gandhi's political ambitions even as early as 1992. He must also be aware that there were any number of party loyalists who would clothe their opposition to Rao as an exhibition of loyalty to the Gandhi family and get a quick ride to stardon in the affairs of the congress party. It would have been so easy for a disgruntled congressman to raise a banner of revolt on the ground that the Government was reversing policies dear to the late Mrs Gandhi!
So PVN would have had to tread a cautious line on contentious issues.

[putnanja]

The PVN govt and the UF governments had majority of their owns, and didn't need the opposition support to pass the insurance, FRBM acts etc ifthey wanted to. These weren't constitutional bills that needed 2/3rd majority. A simple majority was sufficient and PVN had already bought it, just like MMS did later on in UPA-I

Cant be more wrong than that..Both Insurance and FRBM required 2/3rd majority..Both were ideas whose time (and bills) had come in PVNR's time...PVNR's govt (and later PC in the UF setup) tried getting BJP's support for both - BJP made common cause with the Left (!)...When the NDA govt came to power, they got the bills passed with INC support...Something similar is happening with Insurance now...

The PM himself alluded to that in his press conference...

However, extending that to say that "NDA followed RSS policies, which is worse compared to following the institutional NAC policies have world renowned economists" is intellectually dishonest.

I didnt say that, but its substantially right...The sheer intellectual output of NAC, even when I disagree with a number of their proposals, is quite of a different level than what the RSS-types could (or can ever) manage on policymaking...

Anyway, I wasnt making a UPA-NDA point, only the fact that politics is jeopardising essential reforms...

You have said that before in similar arguments with me. Let me dig that up.

and I have to say, you use good tactics in your arguments. You could have easily edited your erroneous statement that the simple majority wasn't sufficient, but you chose to ignore that and slip in the right statement couple of posts down. Have to hand it to you ...

[Suraj]

The 'sheer intellectual output of the NAC' reminds me of the sheer intellectual ability of P C Mahalanobis and co at ISI and the 5-year plans.

The argument about the INC backing the FRBM aeons ago is rather pointless - regardless of what PVNR intended, the NDA administration was the one that passed it, and that is what matters; UPA-1 went about trying to dilute it from the moment it came to power.

The NDA managed to pass bills despite having a tenuous majority, partly because they had at their helm a statesman of sufficient standing to obtain consensus across the aisle, despite the fact that the so called RSS faction behind him was politically disagreeable to those across the aisle in parliament.

If UPA-2, with the largest popular mandate in a quarter of a century since RG's 1984 landslide, cannot pass bills easily, it's their own political calculus gone wrong. If they lack a sufficiently strong personality at the helm who has respect from all quarters, or the willingness to work with their political opponents rather than run roughshod, that is their problem.

Past history has shown that the NDA and UPA are willing to work together under the right circumstances; right now those circumstances don't exist, and it's the ruling dispensation's responsibility to ensure that they find common ground because they got elected to get things done, instead of sophomorically blame the other side as a bunch of refuseniks. When the current regime itself has far stronger political standing than the NDA did, yet cannot achieve sufficient consensus across the aisle, they have a serious problem. They won't be remembered for whom they blamed, but what they did or didn't get done.

[somnath]

You have said that before in similar arguments with me. Let me dig that up

I said I agreed with that statement - so whats the point? (I might well have said something similar in another context, the difference between Dattopant Thengadi and Naren Jadhav is a bit more than chalk and cheese)

and I have to say, you use good tactics in your arguments. You could have easily edited your erroneous statement that the simple majority wasn't sufficient, but you chose to ignore that and slip in the right statement couple of posts down

Whats your pique? I admitted that you were right on that point factually!

The 'sheer intellectual output of the NAC' reminds me of the sheer intellectual ability of P C Mahalanobis and co at ISI and the 5-year plans

Those days, a PCM had intellectual "opposition" from the likes of Pilloo Modi, Minoo Masani and Rajaji...These days, its Datoopant Thengadi and KS Sudarshan to the likes of Naren Jadhav and Jean Dreze More seriously, I am yet to see any critique of the RTI Act, I am yet to see any fundamental critique of the Food Security Bill (on the concept, not execution)...On NREGS, there is more tangible critique - but given its bipartisan political support (Narendra Modi, no less for the fanboys ), and a wide range of economic data points in support (incl the latest NSSO large sample numbers) - I am waiting for some empirics to support the polemics against it (Surjit Bhalla is the best bet to do that, but he's been surprisingly out of his usual touch in this issue)!

The argument about the INC backing the FRBM aeons ago is rather pointless - regardless of what PVNR intended, the NDA administration was the one that passed it, and that is what matters; UPA-1 went about trying to dilute it from the moment it came to power

NDA passed it with INC support (while having opposed it when MMS and then PC mooted the bill - a story very similar to what happened on Insurance, and then again now on the Insurance amendment bills)...And the Finance Minister's first soundbyte after the bill was passed was to say "its only a guidance"!

And yes, on performance, I thought we discussed it in the past..There is about zero data that shows either the NDA govt in Centre or in the states to have shown a fiscal performance that is fundamentally and systemically more conservative than INC (centre and states)...In case you have some data on the contrary, we can discuss...Till then, ideological posturing makes no sense without data...

This govt, UPAII cannot escape blame for not having executed its agenda, and is most likely going to be facing the music in the hustings..It takes most of the blame for a choked pipeline on critical policy measures - but the opposition parties, especially the largets of them all, cannot escape some critique for consistently placing politics over policy - GST, FDI in retail, Insurance amendment - the list is long...Some of which would require their acquiescence even if the UPAII govt was in a derring do mode ..

[vina]

Lo ji.. Super Comprehension want's "broof" and "empirical data" and all that stat-is-sticks (lies, damn lies and statistics eh wot?) that NREGS doesn't affect labor supply and inflation.

Now Sharad Pawar & Co at the Rural Development Ministry want NREGS to be suspended during peak season!

The rural development ministry has informally sounded out states to explore the possibility of suspending the UPA government's flagship rural jobs guarantee programme during peak farming activity periods after the agriculture ministry, headed by Sharad Pawar complained that the scheme was causing a grave shortage of hands on farms during July, the crucial summer sowing period. Suspending the programme legally might mean skirting the edge of what is legally valid.

Labour costs are a key input in the Centre's calculation of the floor price, or the minimum support price (MSP), which it fixes for the farmers' produce.

The Centre would have to "seriously consider" a steep rise in the MSP for kharif crops after it factors in the soaring farm labour costs, Gulati said.

[Singha]

x-post from nukkad for ref of more educated gentry here.

Re: Nukkad - 62

Postby Singha » 19 Jul 2011
India is a credit reporting bureau now which is referred by all banks before approving loans. so just as abroad its probably a good idea to get this report periodically and check what all is recorded against your name. in usa its free iirc once a year, here you need to pay 450 online and mail in the form, addr & id proof which is quite simple. a friend of mine vectored me to this when his SBI home loan ran into trouble because his father had put his name on another loan without informing, once his name was removed from that loan and a letter sent to SBI, the loan got approved.

https://www.cibil.com/d2c/accesscredit.htm

I am posting my letter today Ameen.

[gakakkad]

So NREGA is not just a hindrance for industrial labour but also for agricultural labour. Not only was it a contributor to inflation but also central in the pathogenesis of inflation. The most anti-national law of the UPA gov't. Wish Jairam is able to use his skills and take care of the mess. The challenge will be far tougher than IIT-JEE.

[somnath]

Now Sharad Pawar & Co at the Rural Development Ministry want NREGS to be suspended during peak season!

Flash inflation = systemic hyperinflation! I guess the difference isnt known to people who depend on newpaper reports (only) for discerning macro trends!

Its amusing to see people arguing that a wage rate pegged @ the minimum poverty level (100 rupees, or ~ 2 dollars a day) contributes to wage inflation! So the only way Indian inflation can be reigned in is by keeping 200 million people @ below destitute levels!? Some argument, but lost on the ideologically inclined...

For the mathematically inclined, it would be a good exercise to estimate what is the total rural wages that are "normally" (without NREGS) paid out, what is the new wage structure post NREGS, and what is it as a % of total wages in the economy..And how does it compare against overall wage inflation..A crude estimate of the impact of NREGS on overall infkations can then be arrived at...Surprising the that the prime "inflation manager", RBI, hasnt done such an exercise...Or maybe, not so surprising at all!

Sharad Pawar is concerned about peak season wage rates because he needs to set procurement prices and then shell out the money for it...Understandable, but then he should have ideally been more concerned about extension services, which Prof Gulati himself identifies as the single biggest barrier to agri productivity growth...Maybe he thnks managing agri is like managing cricket - hamhanded will do eminently well!

[Suraj]

And yes, on performance, I thought we discussed it in the past..There is about zero data that shows either the NDA govt in Centre or in the states to have shown a fiscal performance that is fundamentally and systemically more conservative than INC (centre and states)...In case you have some data on the contrary, we can discuss...Till then, ideological posturing makes no sense without data...

'We discussed it in the past' ? No, you chose to interpret it one way, and I followed another. You have this interesting tendency to go 'oh remember we talked about it back then, so you agree with me, right'

This govt, UPAII cannot escape blame for not having executed its agenda, and is most likely going to be facing the music in the hustings..It takes most of the blame for a choked pipeline on critical policy measures - but the opposition parties, especially the largets of them all, cannot escape some critique for consistently placing politics over policy - GST, FDI in retail, Insurance amendment - the list is long...Some of which would require their acquiescence even if the UPAII govt was in a derring do mode ..

The opposition is just that - the opposition. History has shown that both sides of the aisle are capable of both collaborating and sabotaging policymaking. In the past, strong personalities have helped usher consensus - PVNR managed to get BJPs support at the NPT summit by sending ABV there as the Indian delegation lead. NDA managed to pass policy because the UPA respected ABV in turn.

Viewing the opposition as chronically incapable of collaborating is the first step towards the ruling party misusing its own mandate. There are enough examples of collaborations in both directions to assert that that the problem is with how its being done now, not that the opposition has suddenly turned irrevocably refusenik. Go ahead and hold that view if you want - ultimately UPA-2 will be remembered for what they did or did not do, not whom they blamed for their failures.

The current UPA-2 has been poor at utilizing its mandate, on several different counts. Both NDA and PVNR's regime implemented far more in qualitative terms considering the tenuous hold on power they had. UPA-2 it seems, thought that with such a comfortable mandate, they could just steamroll their way through. A more experienced leader at the helm, as opposed to a technocrat clearly out of his depth at political leadership, would not have made that mistake, or let himself be railroaded into such a situation.

[gakakkad]

@ Somnath the problem is not giving Rs 100 (about 6 ppp dollars as they will be spending in India and will not be buying imported goods) to 18 % of our population from the government coffers. The problem is keeping 18 % of the population from doing productive work by paying them to do nothing . It you go to factories in Haryana or UP you will find sign boards on factories that labourers are needed. We are all for increased salaries to labourers . But their are far better ways to assure them.

The construction Industry faces shortage of 100 million labourers

http://www.business-standard.com/india/ ... ur/439813/

In our argument with the Chinese trolls we pointed out that the reason why they have 5 times as many fortune 500 companies is that our model favours SME'S. But is stealing labour from SME'S tantamount to favouring them ?

http://smetimes.tradeindia.com/smetimes ... 25400.html

These are not lay news paper clippings.

http://www.policyproposalsforindia.com/ ... nguageid=1

Problem of labour availability and inflation

Many economists attribute increasing labour scarcity in agriculture, rising food price and inflation to NREGA. NREGA has no doubt raised rural daily wage rates, reduced migration and led to several other positive social effects in rural India. But at the same time it has also contributed to rising farm input costs, withdrawal of labour from the farm sector and therefore impacted agricultural operations and food prices. Farmers in Punjab and Haryana now find it increasingly difficult to get labour and are left with no other choice but to increase the wage rate to attract the labourers.

High labour costs due non-availability of labour is resulting in high cultivation cost and thus leading to higher food prices. Many critics feel that by focusing on the employment and not on the production, the scheme merely redistributes the proceeds of a limited production. The scheme no doubt inflates demand but, without corresponding increase in production of useful asset, leads to inflation.

Minimum wage under NREGA should be cautiously increased keeping in view its impact on other unorganised sectors, especially agriculture and that it must be ensured that it is targeted at only the really poor and needy. Possibilities of NREGA being dovetailed with the farming activities, so as to minimize its adverse effect on agriculture, should be explored.

The constructive impact of the 100-day employment guarantee must be confined strictly to months when there is no harvesting or sowing activity so that it does not affect agriculture adversely. With the rural workforce drawn into this scheme the mechanisation and modernisation of agriculture needs to be focused upon.

Government must study the impact of NREGA on various other sectors and take corrective measures so as to ensure that this programme doesn’t exacerbate the problem of food price rise and inflation.

Conclusion

We must understand that NREGA cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more sustainable solution that creates large-scale self-employment opportunities in the secondary and tertiary sectors in the rural areas, stimulates demand and last but not the least, increases rural productivity still need to be found.

My conclusion- Higher daily wages (Rs 100) per se cannot lead to inflation . But inflation is due to preventing workers from doing productive work. (either in factories or farm land). Using the former argument as a means to justify NREG is an example of polemics.

[amit]

An interesting perspective of the POSCO saga by Sunita Narain...She can be a bit shrill at times, but often has good insights.

http://www.business-standard.com/india/ ... fe/441387/

There was a bit of spirited discussion on this article here - seems some parts of it reached Ms Narain as well! She ha wriiten a rejoinder to that..
http://business-standard.com/india/news ... et/443021/

The reason is that this money comes on a monthly basis, and comes year after year. The earning of Rs 3,000 to 4,000 every month per household takes people marginally above the wretchedly low poverty line (also called the starvation line). But this earning comes regularly – it is their subsistence – and, more importantly, it gives them economic security year after year.

Sorry Somnath this lady again gets it wrong. Once I can understand but twice?

But the important issue is that this earning is “good” enough for them to fight till death the acquisition of their land.

Total bullshit. They fight till death because they are misinformed and taken for a ride by professional anti-development lobbies which parachute into these dreadfully poor regions, whip up passions and then fly out.

The reason is that this money comes on a monthly basis, and comes year after year. The earning of Rs 3,000 to 4,000 every month per household takes people marginally above the wretchedly low poverty line (also called the starvation line). But this earning comes regularly – it is their subsistence – and, more importantly, it gives them economic security year after year.

Like I wrote the in my previous post her problem is that she is looking at the steel plant as a standalone factory and not considering the massive eco-system that will arise around the steel factory. Just think Jamshedpur.

These folks who are now living just barely above the poverty line would get better paying jobs in such an ecosystem. Apart from that they would have better access to health facilities and education. Keeping the status quo means forever condemning them to marginal existence. That's what anti-development activists like Medha Pathkar wants. Is that also what Sunita Narain wants?

This is partly because for so long we have discounted the option of land-based livelihoods in our economic vision. We have only understood farmers are desperately poor, driven to suicide and migrating to cities. All this is true, but it is equally true that land-based occupations provide sustenance to millions. And if the voices coming from Jagatsinghpur, Nimalapadu and Kalinganagar and the scores of mutinies across the country are to be believed then this land-based occupation is still worth fighting for.

A typical tickling the sentiment paragraph. The question to ask Sunita Narain is this: What happens to the next generation? Will they also be condemned to marginal subsistence livelihood? Is there enough land to distribute? In the Posco area she talks about land holding in the region of 1/30 of a hectare. If a farmer has two sons (conservative estimate) what will they get? 1/15 of a hectare? And won't they be condemned to eke out a meager living that their father did since it is highly unlikely that they get access to education and vocational skills that could help them to go up the employablity ladder.

If we understand this connection then we will also learn to take the current occupations more seriously. We will then work to improve economic returns from the land so that it can compete with the returns from profitable and economic activities. I don’t believe the challenge is to pit one economic future against another. But it is certainly a challenge to accommodate the view that there are many ways to growth and well-being. The aim is to get there. Together.

Admirable sentiments. If only she would work out the specifics of how to do this and then write about that!

It reminds me of typical Op-Eds in Indian papers. Within 1,000 words (or less) they tell you what's wrong with the economy and what's the solution - usually what's wrong takes about 600-700 words and the remedy about 300 words.

Re-read Sunita Narain's article with this in mind. You'll find it very interesting.

[somnath]

Admirable sentiments. If only she would work out the specifics of how to do this and then write about that

She doesnt, but at least she presses (some) important points...Sunita's pointing towards the "sustainability" of livelihoods question...As I said in that post, maybe the reason why the "Haryana model" of acquisition is more palatable is the presence of an annuity...

What I cant believe (or fathom) that all the opposition to land acquisition is just a Maoist-Christian-Islamist-NGO conspiracy to keep India backward...Or the handiwork of just a few cranky NGO-types..Given the scale of the issue, the policy gaps are evident...The policy responses should take the pressure points into account - Sunita Narain identifies at least one of them...Thats all...At least she is more useful than those who simply go on rants on everything without offering concrete solutions, especially in our pink papers!

You have this interesting tendency to go 'oh remember we talked about it back then, so you agree with me, right'

Fantastic..Maybe you have some data to back up the claim of "UPA having dilued FRBM, unlike NDA" as well? If its just a POV, then of course there's nothing to debate on..

PVNR managed to get BJPs support at the NPT summit by sending ABV there as the Indian delegation lead.

Dont think ABV went to the NPT talks, though he was deputed as India's rep in a number of UN conferences (as are numerous politicians from all sides)...What he became "famous" for in this respect was the UNHCR conference in 1993 (?) where there was a resolution on Kashmir that was moved, and the Indian delegation (with ABV as its lead) managed to stave it off...

Broadly, the culpability of UPAII on policy isnt in doubt, and it will face the music in the elections...At the same time, it is also a fact that the cussedness borne out of the shock of the 2004 defeat hasnt gone out of the BJP..As a result, it has been a perennial, Pavlovian naysayer - nuke deal, GST, Insurance - even on policies where it should have gone out and expressed suport (even if to win brownie points)....Its bad enough that there is a semi-functional govt, its worse when critical legislations that seemingly make forward are stuck because of cussedness of another party...

@ Somnath the problem is not giving Rs 100 (about 6 ppp dollars as they will be spending in India and will not be buying imported goods) to 18 % of our population from the government coffers. The problem is keeping 18 % of the population from doing productive work by paying them to do nothing . It you go to factories in Haryana or UP you will find sign boards on factories that labourers are needed. We are all for increased salaries to labourers . But their are far better ways to assure them

First, PPP is quite useless in these analyses...Second, it doesnt matter if consumption is of imported goods or domestically produced ones, as long as the external account is kept on an even keel...Third, the supply-demand mismatch in industry is of a skills deficit origin...The sort of people opting in for NREGS wont qualify as "supply", even if they did not have the fallback of the programme...But income support through the programme leads to them sending their kids to school, and younger brothers to an ITI - leading to an overall enhancement of the family and community...Remember, the wage levels in NREGS are such that any "productive" job would/should yield far more, and therefore NOT lead too many people towards the dole...

In a labour surplus economy like India - the latest NSSO numbers on "self employed" display the extent of surplus, to argue that a cash transfer programme through manual labour is causing wage inflation in "general", macro terms is more than a bit rich..anyone making that claim should be asked to furnish some numbers to back that claim..

The argument of the naysayers is quite circular, and amusing..NREGS was supposed to be "bad" because it would reuslt in large scale leakages, and the "poor" ont benefit at all...Now, NREGS is "bad" because it pushes up overall wage levels in the poorest sections of labour (to a level of destutition plus, no more)! It should be removed so that the "good" outcome, of having wages below subsistence level is regained!

We must understand that NREGA cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more sustainable solution that creates large-scale self-employment opportunities in the secondary and tertiary sectors in the rural areas, stimulates demand and last but not the least, increases rural productivity still need to be found.

Tautological, and no major problems with this analysis..NREGS is not meant to be a solution for "unemployment"...It is a safety net for the destitute...Why have the "physical labour" part? Simple, to ensure that only those who really are near destitution "opt in" - its a self opt out mechanism...In the medium term, with UID, mobile banking and banking access, this will morph into a cash transfer programme, not unlike the celebrated Bolsa project in Brazil...

You might want to read the discussions on this topic earlier - all hte "points" were well covered!

[Virupaksha]

We must understand that NREGA cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more sustainable solution that creates large-scale self-employment opportunities in the secondary and tertiary sectors in the rural areas, stimulates demand and last but not the least, increases rural productivity still need to be found.

Tautological, and no major problems with this analysis..NREGS is not meant to be a solution for "unemployment"...It is a safety net for the destitute...Why have the "physical labour" part? Simple, to ensure that only those who really are near destitution "opt in" - its a self opt out mechanism...In the medium term, with UID, mobile banking and banking access, this will morph into a cash transfer programme, not unlike the celebrated Bolsa project in Brazil...

You might want to read the discussions on this topic earlier - all hte "points" were well covered!

The "opt out" exists on paper, but in reality I doubt it. Why will any one opt out when one get say 1/2 of the dole for doing nothing?? You once say it is a dole and then second time, by saying "opt out", you are saying that it is not a dole.

As I said long ago said, you dig a ditch and fill it up once, the second time. The third time, he is not going to do it. In the second stage, He is going to ask his local leader to give the officer a cut and continue sending payments to him. The leader will simply add his own names to the list, In the third stage, the leader is going to remove the names of those opposite parites and if the leader is locally more powerful......

at the end of the day, all except the non-corrupt and non-political enjoy the money. i.e. the destruction of the rural middle class and small land owners, who cant afford to mechanize as well pay the higher salary resulting in the already available, double digit food inflation. now these "lazy people" with the dole start demanding. is the money from the nregs enough to send his kids to school and to the city for ITI?? no, it is not. It is a subsistance dole, i.e. enough to survive but not enough to grow. So in one shot, you have increased corruption, destroyed the rural middle class who used to send kids to ITIs and started a group of people with essentially no work on dole.

[somnath]

As I said long ago said, you dig a ditch and fill it up once, the second time. The third time, he is not going to do it. He is going to ask his local leader to give the officer a cut and continue sending payments to him. The leader will simply add his own names to the list, and bingo all except the non-corrupt and non-political enjoy the money.

I am sure you have some data to back that claim up?

Regardless, do a thought experiment...A chap does what you say, and hence gets half of NREGS wages (40-50 rupees a day, for 100 days) given to him for doing nothing...Why should it then push up wage rates in general? Or cause "shortages" of labour in peak season? The chap isnt doing anything, gets paid some money, but only half of subsistence levels for 100 days..Why shouldnt he simply enlist himself at the "productive" farm worksites and earn the extra 60-70 bucks too, more than doubling his income in the process?

Or is it that the rural poor is so irrational that he simply whiles away his time on a half-than-subsistence level wages for 100 days and withdraws himself from the labour market?

Contradiction?

[Virupaksha]

As I said long ago said, you dig a ditch and fill it up once, the second time. The third time, he is not going to do it. He is going to ask his local leader to give the officer a cut and continue sending payments to him. The leader will simply add his own names to the list, and bingo all except the non-corrupt and non-political enjoy the money.

I am sure you have some data to back that claim up?

Regardless, do a thought experiment...A chap does what you say, and hence gets half of NREGS wages (40-50 rupees a day, for 100 days) given to him for doing nothing...Why should it then push up wage rates in general? Or cause "shortages" of labour in peak season? The chap isnt doing anything, gets paid some money, but only half of subsistence levels for 100 days..Why shouldnt he simply enlist himself at the "productive" farm worksites and earn the extra 60-70 bucks too, more than doubling his income in the process?

Contradiction?

Nope, The human psychology.
if your salary is say, 1 lakh per month, would you be ready to work for triple the time with no holidays for a salary of 1.25 lakh?? i.e. marginal increase concept

If I can sustain a very very basic living, would you be ready to do a back breaking work or would you not demand "more" for it than previous??

That "more" is the increased cost for the small farmer, the rural middle class.

Unfortunately however "intellectual" the DU and planning commission ding dongs are, they cannot fathom the complexities of the human society and thus their allround failings at the cost of the middle class.

P.S: The per capita rural income of India is around 25-30000. Now for the poorer rural sections, 6-7000 would have been entire yearly income previously.

[somnath]

Nope, The human psychology.
if your salary is say, 1 lakh per month, would you be ready to work for triple the time with no holidays for a salary of 1.25 lakh?? i.e. marginal increase concept

Thats not the illustration you defined...Stretching your definition, if I am paid 1 lac rupees for doing nothing, and I can have a job that pays another 1.25 lac - I will do both, pocket the former AND work to top up...You are suggesting that the farm labour wont, and is somehow psychologicaly irrational....

Its highly callous to be ascribing such "irrationality" to the poor...There have been numerous empirical studies to disprove (much less "irrational") hypotheses...

Remember, you are talking of a "dole" of ~100 rupee only for 100 days under NREGS...By current standards, 100 rupees a day is the per capita poverty benchmark, for 365 days...For a family of four, thats 400 rupees a day for the earning member (or 200 each for the 2 earning members)....Ergo, to suggest that there is systemic generic distortion of labour market because of NREGS is rich...Local distortions? Possible in some places...Which is why the govt is looking at merging activities under Bharat Nnirman etc with NREGS...

[Virupaksha]

per capita rural income of India is only around 25000-30000,

10,000 is a pretty sizeable income for poorer sections.

You forget that the income is not like us sitting in airconditioned offices, it is back breaking work. Dont get me wrong, they will be willing to work but only at higher rates, as I said leading directly to destruction of small farmers and todays double digit food inflation.

[Nihat]

NREGS may be Informally Shut Down in Peak Season

The rural development ministry has ‘informally’ asked states that they should consider deferring the Mahatma Gandhi National Rural Employment Guarantee scheme (NREGS) during sowing, transplantation and harvesting in their region.
Suspending the scheme during these periods would free up rural labour to take up work on fields and check the rising cost of agricultural labour, ministry officials said.

[somnath]

Now for the poorer rural sections, 6-7000 would have been entire yearly income previously.

Dont get me wrong, they will be willing to work but only at higher rates

Its belabouring upon the point, but one last time...If the "productivity of Indian agri is dependent upon farm labour working for 6000 rupees/year (<20 rupees/day), then the issue is not (substantially, systemicaly) in wages..

In that scenario, NREGS is only providing a "floor" to wage rates for agri labour, in the same way as MSP provides a floor for agricultural prices for the farmer!

[Arjun]

Fantastic..Maybe you have some data to back up the claim of "UPA having dilued FRBM, unlike NDA" as well?

Somnath, isn't it logical to assume that a left liberal government would typically run higher fiscal deficits than one not as focused on welfare programs ? Why are you taking the contradictory stance of commending UPA on a stronger welfarist orientation compared to the NDA on the one hand, and yet implying that the fiscal deficit performance would be the same as NDA on the other?

Government spend goes into either welfare / entitlement programs or into administration / governance (including defence). If you are saying fiscal deficit performance is the same for both NDA and UPA, despite higher welfare outlay from the UPA - that can only mean that UPA is underspending on administration as compared to NDA. Obviously that directly links the UPA to India's infamous governance deficit that we are all familiar with.

[somnath]

Somnath, isn't it logical to assume that a left liberal government would typically run higher fiscal deficits than one not as focused on welfare programs ? Why are you taking the contradictory stance of commending UPA on a stronger welfarist orientation compared to the NDA on the one hand, and yet implying that the fiscal deficit performance would be the same as NDA on the other?

One, these are cliches, and not not borne out in modern politoco-economic narratives (a "liberal" Clinton administration brought the US budget to surplus, a "conservative" Bush admin took it right to the other way)..Two, no party in India has ever positioned its economic narrative in fiscal terms - not even the BJP, despite what some people might "wish" it to...(Barring Swatantra Party, which did - but its moot right now, unfortunately)

Substantively, there is no "implication" here - the data is there to see (the fiscal performance of various govts, state and centre, over time)..

The UPA govt, I and II, have delivered the fastest growth of any regime post 1991 - and that has enabled it to turn in reasonably "trend" numbers on the fisc, despite spending unprecedented amounts on welfare...

Net net, on matters of data, it is only that...Unless someone shows something to the contrary...The "contradiction" or "illogic" is only in people alleging fiscal conservatism for BJP (and profligacy for INC), when no such trend is visible!

[Arjun]

Two, no party in India has ever positioned its economic narrative in fiscal terms - not even the BJP, despite what some people might "wish" it to...

But the UPA is positioning itself as more welfare scheme-oriented that the NDA. Which would imply the following for future governments -

1. UPA government welfare scheme outlay as % of GDP > NDA welfare scheme %
2. if (1) is correct, and assuming tax and other revenues would not be significantly different (which is a reasonable assumption), one infers that either (a) a future UPA government deficit would be higher than that of NDA OR (b) UPA spend on administration & defence as a % of GDP would be lower than NDA.

So assuming (1) is correct, the outcome is either 2(a) or 2(b)

[somnath]

Which would imply the following for future governments

Again, why are you "implying" anything, just look at the data!

BTW, tax-to-GDP has gone up as well...

[Arjun]

You are not getting my point. If what you say is true...then it can be only be explained by one of the following reasons-

1. Temporary tax buoyancy due to growth over last few years... as for the future, tax & one-off revenues are unlikely to be significantly different between any future UPA or NDA government
2. Despite all the rhetoric, welfare scheme spend as % of GDP is broadly the same for both parties
3. UPA is underspending on administration & defense as compared to NDA. Assuming that efficiency of both party spends on administration is the same, this is not good news either.

[gakakkad]

@ Somnath My compliments to your B-school . One must hand it to you. Con-grass is lucky to have an ardent supporter like you. When UPA came to power whole world was growing fast. There was no major economy that was facing a problem . The reforms were initiated in 1991 . Obviously immediate the immediate impact was not all that drastic. It took 10 years for the society to make necessary changes to take full advantage of reforms. Acceleration of growth rate was clearly observed from 1999 onwards with each year growing faster than the preceding. The pattern continued regardless of the government . And was also observed in the UPA government. The problem with all these so called welfare schemes is sustainability. I am not saying that we are in serious trouble yet or that there is hyper inflation . But the policies of the government are getting us there. And why did reforms succeed in 91 and were not reversed ? Because we needed 1.5 Billion dollars urgently. It was made conditional by the WB-IMF. Apparently our politicians had a GUBO session with the bankers. UPA (or for that matter anyone else) seriously needs another crisis to carry forward the next wave of reform. This proves the discursive dominance theory of reforms. [a theory that in complicated jargon laden sentences says that govt needs GUBO sessions to liberalise and reform economies. BECAUSE TILL they receive the session (which is often delivered when crisis or exigency ensues and begging bowls are raised) arguments are in favour of existing paradigm and thus the reforms will not ensue]

While most stats have improved in the last few years UPA cannot be given the credit. The credit goes to the private sector which excelled due to the economic base that they developed since 1990s.
In fact we are growing under potential and that discredit does go to the UPA. An important reason for the American problems is its over ambitious social security and health care schemes like medicare and medicaid that will empty out in 2020. NREGA is a similar welfare scheme that we can hardly afford. The same money could easily have been spent on giving these workers vocational training in welding or plumbing or wiring . There are far better ways of improving the condition of the Indian poor than what they are doing. And you cannot be totally dismissive of the labour shortage stats.

[somnath]

You are not getting my point. If what you say is true...then it can be only be explained by one of the following reasons-

1. Temporary tax buoyancy due to growth over last few years... as for the future, tax & one-off revenues are unlikely to be significantly different between any future UPA or NDA government
2. Despite all the rhetoric, welfare scheme spend as % of GDP is broadly the same for both parties
3. UPA is underspending on administration & defense as compared to NDA. Assuming that efficiency of both party spends on administration is the same, this is not good news either.

Again, instead of quoting and/or analysing actual data, "lazy" assumptions on "if, can be, would be, imply, unlikely" variety...Even less analytically defensible than branding of political parties on fiscal "liberal/conservative" lines...

Look up the data - its all in Economic Survey and RBI Report on state finances - then tell us whether there are discernible differences in the fiscal performance of INC and BJP govts..Beyond the headline numbers..

Some heads up -

1. Central Tax-to-GDP ratio went up from ~9.2% in 2003-04 (the last and "best" year of NDA) to ~13% in 2008-09 (it dipped to ~11% the following year on account of the crisis, but is back to 12.5-13% now)...
2. Debt servicing ratios as % of GDP declined too (I am not sure about the numbers)

[somnath]

@ Somnath My compliments to your B-school . One must hand it to you. Con-grass is lucky to have an ardent supporter like you

All schools I went to have much better specimens of "success" than I would probably ever be I have no emptahy sympathy for INC, just that I dont find their track record/behaviour on anything materially different from the rest of the gang...

But coming to your points, lots of wrong assumptions..

When UPA came to power whole world was growing fast. There was no major economy that was facing a problem

When the NDA came to power (1998), we were in the midst of a global high run as well, led by the US..In Asia, that big giant China was turning it on big time, partly by canibalising markets and capital from the East Asian tigers that went for a brief free fall then...In fact that was one opportunity that India missed - we got almost nothing out of the East Asian carcass...

The reforms were initiated in 1991 . Obviously immediate the immediate impact was not all that drastic

On the contrary, the immediate impact was quite liberating...India averaged >7.5% growth for three years consecutively 1993-96...

Acceleration of growth rate was clearly observed from 1999 onwards with each year growing faster than the preceding.

Not true at all...the growth rate between 1998 and 2003 was quite erratic - hitting a (hindu growth rate style) low of 3.8% in 2001 (I think it was 2001, might be mistaken)...

And why did reforms succeed in 91 and were not reversed ? Because we needed 1.5 Billion dollars urgently. It was made conditional by the WB-IMF

Not quite..The loans were all repaid by 1992-93..There was no compulsion beyod the first flush and the frist couple of disbursements from IMF...the reforms were sustained because there was a core team that persisted with it, and gradually political consensus grew around it...You might want to read Bimal Jalan's and Shankar Acharya's acounts on the events those days - they had prime ringside views...

While most stats have improved in the last few years UPA cannot be given the credit. The credit goes to the private sector which excelled due to the economic base that they developed since 1990s

that was the idea! get govt out!

[gakakkad]

Agree with you this time mate. I am amazed that I being a doctor lasted this long against you mba's . I agree that what we need is no government. Total laissez faire.

[uddu]

Somnath, the growth rate story can also be said like this.
It's because of Non-congress ruled states that are progressing and pulling India forward with better growth and better development the Growth rate of India is showing a positive trend. It's not because of Congress rule at the center.
Bihar and M.P which was part of BIMARU states, that was pulling down the growth rate is doing so well now. Both are BJP ruled states. Gujarat another BJP ruled state is doing well. Same with Karnataka except scams by the CM (Surely cannot be compared to the ones during Congress or JD (s) rules. If done so, this will look like tips given) So why not say that it's because of Non-Congress govt's at the state level the high GDP growth is possible and the credit is taken by the congress.

[Virupaksha]

In that scenario, NREGS is only providing a "floor" to wage rates for agri labour, in the same way as MSP provides a floor for agricultural prices for the farmer!

no, he is NOT.

The cost of farming increased =/= actual farmer getting the increase =/= prices of farming products

The right side is regulated and not a free market with a "minimum support price" followed sparingly but already almost equal to cost of farming. And there are as always politics as well, the central MSP for rice varies for state to state . The left hand is a "free" market with a significant distortion by NREGS. The farmer is under double whammy.

Farmers (I know in AP mostly) are in dire straits. If you have not heard, stories of farmers thinking of crop holidays was doing the rounds after the last cropping season because they couldnt sell their produce and it rotted in the farmyards. Every day the regional newspapers were giving out the news of farmers. Ofcourse, they escape the ee-lite anglaish newspapers.

I expect that the prices of food grains to grow with inflation much greater than general inflation in the next 4-5 years because of NREGS affect, and will stabilize there - by which time many small farmers would have sold their lands, assuming ofcourse no new increase in NREGS.

[Suraj]

Fantastic..Maybe you have some data to back up the claim of "UPA having dilued FRBM, unlike NDA" as well? If its just a POV, then of course there's nothing to debate on..

Are you unaware of the multiple smoke and mirrors statements about how the 'rigid budget law is affecting social program spending' statements from PC and the povertywallahs ? NDA just wasn't in power long enough at that time to dilute FRBM in any manner! Here's a few articles from those days, either the press shaping opinion, or direct quotes: link, link, link. Quote:
However, the “pause button” on adherence to the FRBM targets was pressed for Budget 2005-06 itself, a mere eight months after the FRBM rules were notified! While the FRBM targets of 3 per cent for fiscal deficit and elimination of revenue deficit was initially slated to be achieved for 2008, the goalposts were shifted to fiscal year ended March 2009.

Now, even the 2009 deadline has been given a go-by. But this time round the blame for this has been placed entirely at the door of the global financial meltdown.

Broadly, the culpability of UPAII on policy isnt in doubt, and it will face the music in the elections...At the same time, it is also a fact that the cussedness borne out of the shock of the 2004 defeat hasnt gone out of the BJP..As a result, it has been a perennial, Pavlovian naysayer - nuke deal, GST, Insurance - even on policies where it should have gone out and expressed suport (even if to win brownie points)....Its bad enough that there is a semi-functional govt, its worse when critical legislations that seemingly make forward are stuck because of cussedness of another party...

Oh, so this is a fact ? So let's have your factual proof. Quite literally, why don't you go find someone from NDA who says 'we are opposing this just because we lost in 2004', since that's your exact contention - of it being a fact ? This should be interesting

[somnath]

Are you unaware of the multiple smoke and mirrors statements about how the 'rigid budget law is affecting social program spending' statements from PC and the povertywallahs ? Here's a few articles from those days, either the press shaping opinion, or direct quotes: link, link, link. Quote

So a couple of media articles and op-eds is all that is there as "data" for your contention of "UPA diluted the provisions of FRBM, as compared to NDA", or NDA was more "fiscally prudent than INC/UPA"? (Two out of those are nothing but advocacies of "scrap FRBM"..)....If this is "data", no wonder the conclusions/POVs are what they are Go through the Economic Survey (and the RBI report on state finances) - would give you more insights into the state of the fisc over time than assorted media op-eds...

Quite literally, why don't you go find someone from NDA who says 'we are opposing this just because we lost in 2004', since that's your exact contention

Are you being facetious? Again, look at actual data - voting behaviour...Nuke deal - voted against...GST - publicly opposed by CMs (including opposing the opinions of Sushil Modi)...Insurance amendment - publicly opposed...FDI in retail - publicly opposed...Most of them should have been right up the alleys of BJP...If these are well thought out policy decisions, it would be interesting to see BJP officially include these for policy reversals in their manifesto - scrap nuke deal, take off GST proposals, no increase in FDI in Insurance...

[Suraj]

So you disagreeing that the UPA actually changed the goalposts on annual deficit management goals ? Note that I didn't just quote opinion shaping, but successive budgetary acts that went against the FRBM. Here's the extent of the planning commissions interest: "We don't care about FRBM targets as long as we get money": Montek. 2006 report on RBI's dissent: link
The RBI Annual report expresses concern that dilution of the goals set in the FRBM Act may not be conducive to economic growth in the long run.
More of it in the 2006-07 report on RBI's website.

Nice job of mixing up correlation with causation - because the NDA did not agree to various policy measures "they are still smarting from the defeat of 2004". Again, you didn't just claim they opposed for opposition's sake - since you stated it explicitly as a fact, where's the factual relationship with 2004 ? If you want to throw about words like 'fact' here, you shouldn't be asking others for anything more 'factual' than very strenuously asserted personal opinion, as in this case

My straightforward position on the matter is this - neither party are incapable of cooperation, or stonewalling. Politics is a delicate give and take process. It takes proper leadership to achieve their mandate goals. Qualitatively both Cong under PVNR and NDA have accomplished far more simply because they had strong personalities who had respect across the aisle. The UPA-2 is just finding out the hard way that just an electoral mandate isn't enough - they don't have anyone like ABV or PVNR to get things done in Parliament.

They were elected to get things done, not to find scapegoats. Even if you find that imaginary soundbite where NDA literally claims they're stonewalling because of 2004, it's still the UPA-2's business to find consensus one way or the other. If they can't, it's their own fault - they were elected, not NDA, and they are the ones supposed to deliver the goods. Apologists who just point fingers across the aisle will be forgotten soon enough.

[devesh]

Suraj ji,

don't get your blood pressure up. the pamphleteers will continue their job. that's what they do. it's a mystery to me that the pamphleteers still run around shouting about "NDA obstructionism," when UPA-II has a super-duper majority. UPA presently has such a solid strength in LS that any arguments of "obstructionism" by Opposition is nothing but distraction. they have such a majority and still complain about lack of "cooperation." it is their own utter political ineptitude that is causing this.

OT, but increasingly, INC is becoming a paper tiger. it is good at only gaining and keeping power. they are incapable of even political management and shrewd legislative calculations. that they are failing even with super strength in LS is an indicator of their incompetence.

[putnanja]

The statement "NDA is still smarting from 2004 defeat" is taken verbatim from the INC spokesperson, who keep repeating it every so often. so is it any wonder for the congress-wallahs to keep attributing it for everything that the opposition does?

The congress expects the opposition to roll over and agree to everything that it does. unfortunately, politics doesn't work like that, and there needs to be give and take. given the visceral hatred that Sonia has for the NDA, is there really any surprise about the bad blood between ruling party and opposition? Shekhar Gupta of Indian express has written multiple editorials stating that the ruling party doesn't reach out to opposition parties enough. It is the ruling party which has to work with the opposition to get bills passed. The congress doesn't want to be seen giving anything to BJP, but expects the BJP to support everything it does. The nuclear deal where the opposition was kept out of loop, the handling of the CVC issue where the PM/HM rode roughshod over the opposition leader etc shows how the ruling party behaves. BJP did assist the ruling party when the pension reform bill was tabled and the ruling party didn't have enough quorum, and the left tried to block it. So, it depends on the ruling party too to have good open channels of communication with the opposition

[Suraj]

The statement "NDA is still smarting from 2004 defeat" is taken verbatim from the INC spokesperson, who keep repeating it every so often. so is it any wonder for the congress-wallahs to keep attributing it for everything that the opposition does?

Ah, so that's the genesis of this strawman. At least they didn't go all the way back in history and blame the NDA's position on Ravana and Surpanakha

[somnath]

since you stated it explicitly as a fact, where's the factual relationship with 2004 ? If you want to throw about words like 'fact' here, you shouldn't be asking others for anything more 'factual' than very strenuously asserted personal opinion, as in this case

I am quite ok for that to be defined as a POV - so it is not cussedness borne out of the 2004 defeat, but cussedness out of INC behaviour, lak of MMS's personality etc etc!!! Net net, we have legislations not going forward because parties cannot agree on policies, including those that they purportedly have "credentials" on! Question isnt about who's at fault - I said a couple of times INC will pay the price at the hustings - but about the fact that things are stuck, to the detriment of national interest...For a party that is suppose dto be "nationalist", its a strange position to take though...

So you disagreeing that the UPA actually changed the goalposts on annual deficit management goals ? Note that I didn't just quote opinion shaping, but successive budgetary acts that went against the FRBM. Here's the extent of the planning commissions interest: "We don't care about FRBM targets as long as we get money": Montek. 2006 report on RBI's dissent: link

Again, some more commentary and soundbytes...Data resides above all of these - and you can get it without googling at all..Limited point was - where is ANY evidence that NDA was more fiscally prudent (or "submissive" to the dictates of FRBM) than UPA? That was your point, wasnt it, now and sometime back? No amount of soundbytes can replace data in even amateur analysis - unless of course the idea is to find a point where none exists!

To be sure, there is nothing sacrosanct about FRBM, or about a fetish on fiscal deficits - but the reality is that no party (thankfully) has it, not INC, not BJP...To argue otherwise is just occupying an imaginary ideological position that doesnt exist in the polity...

it's a mystery to me that the pamphleteers still run around shouting about "NDA obstructionism," when UPA-II has a super-duper majority. UPA presently has such a solid strength in LS that any arguments of "obstructionism" by Opposition is nothing but distraction. they have such a majority and still complain about lack of "cooperation." it is their own utter political ineptitude that is causing this

Some more uninformed rhetoric...UPA doesnt have a majority in RS - while technically it is possible to have a joint session and ram a bill through, practically it is very very difficult to achieve (has been done very few times)...Second, bills like "FDI in Retail" or GST will necessarily need states to sign up - you cant have GST with a quarter of India not participating - and BJP has publicly gone out to say thay they dont support both of these...Third, some bills (like the Insurance Amendment AFAIK) will require 2/3rd majority, ergo, BJP's support will be required...