The Government’s
attempt to increase the share of real income to the agriculture has been
unsuccessful due to too much players in the seller’s market with least pricing
power due to the practice of setting MSP or price for their productivity or
product despite huge inelastic demand... which led to poor incomes and point to
mismanaged demand for the whole economy...
Agriculture is 70% of
the economy in terms employment which has multiplier effect on the investment
and supply and unemployment and demand and growth of INDIA...
Higher employment and
lower real income of the farmers point to lower investment and higher inflation
and risk for jobs...
Growth is a concerted
effort of the Government and the RBI... to increase competitiveness... and
demand and supply both... by gainful investment and employment by increasing
productivity of the mass... through innovation... to increase the real economy
growth rate...Prices, interest rate, wages and the exchange rate...
IT is true expectations
and not estimates are important... If the common man is aware or conscious of
it duties as an economic man with growth in real income he has every reason to
be hopeful and would also rationalize expectations, spending too...
If the Central Bank lowers inflation expectations through lower
cost of capital and that would help increase spending and use any capacity
investment and unemployment... Under equilibrium zero nominal rate of interest
rate would converge to zero real rate of interest which would neither centivize
or crease demand nor supply and help achieve price stability and full employment
and full growth...
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