During Manmohan Singh back in 2008 interest rates
were cut from over 7% to just above 4% because of recession... Real wages and
incomes must be saved form price rise of daily use things to increase demand
which are best represented by CPI than core-CPI or manufactured items…
Most important, real wages must be protected to
increase savings and consumption, without saving investment and growth is not
possible... Oil prices too could not increase too much if we use right foreign
exchange right foreign exchange rate policy just to offset effects of oil price
changes...
Foreign debt has risk of exchange rate or
depreciation in the currency... Borrowing in domestic currency may hedge
against the risk of default... The US borrows in its own currency that is why
loans are free of the risk since it can mint money and pay loans...
Containing inflation and increasing real wages and
maintain competitiveness of business is important for demand and growth...
Fostering the spirit if competitive Federalism could further help contain cost and
increase productivity...
The government should try to bring the liquor, oil,
electricity and real estate to the GST to increase its tax base which could not
been done before due to the fiscal revenue deficit... they have a huge
demand...
(What) the GST collection does to revenue would
depend a lot on the above four... Lower inflation and higher real wages could
increase demand... Some countries include major expense like tobacco and booze
in their inflation index...
Economy would recover... People have only delayed
spending, especially the investors and consumers that have lowered inflation
and interest rate expectation... A good budget and monsoon could further boost
investment... INDIA''s long-run fundamentals remain intact...
It is worth introspecting that the US-Iran tension
is coinciding with the lower oil prices which has made it to bounce back;
despite of production cuts prices have been low... Higher oil prices have had
been the cause of higher inflation and interest rate and lower demand in the
global economy...
Lower oil prices are good for demand and global
economic growth, for oil exporting countries too...
Containing inflation and increasing real wages and
maintain competitiveness of business is important for demand and growth...
Fostering the spirit if competitive Federalism could further help contain cost
and increase productivity...
Devolution of more funds to the States and their
ability to decide their tax rates allow for higher states' spending...
If unemployment has not reduced prices, in the US,
then a rate cut expectation might delay spending, but high real wages and
income and expectations could increase spending if the Fed avoids the rate cut
expectations, though not a rate cut...
US' ails are low demand and higher supply, the share
of labour has been low than capital, that is responsible for lower prices than
target, capitalist is supplying more at zero or neutral real interest rate, but
lower interest rate expectations have delayed spending, though real wages have
increased.....
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