The Stability...

Article;

Budget 2013 Focus to be on Economic Revival Fiscal Health and Boosting India as Attractive Investment Destination

Comment;

Stability in the sense of an economy has several meanings. There is political stability, there is economic stability and then comes the price stability which is a part of economic stability, which stability is he talking about? The growth of the economy has been held hostage by price stability which is responsible for high interest rates and low economic activity, and ultimately low profits. The RBI is continuously, except in one instance the April repo-cut, hopeful and is waiting that inflation will come down and there will be legitimate reasons to cut the repo-rates, not just profits. The macro-economic variables, nominal and real, of which employment is a real variable, a real measure of economic growth is missing out of this important stability discussion. Neither the central bank nor the government is talking about this important variable. It could be a sign that we need to reduce the repo-rates now and it could be an achievement of the government it can showcase. But since we Indians do not believe in numbers, like many, and many do not understand their meaning at all we do not think we need those numbers. But actually we do need the economy’s unemployment rate so that the RBI can decide in favor of high real employment growth, low interest rates and higher GDP growth. But then economy’s growth rate will increase and then it will not mean stability either Political or Economic. It will mean elections…