Indian Economy

• Interest rates ups and downs. Its so jerky!! Why can't it be smooth and bearable?
  Year 2006 saw a upward swing in interest rates and in 2007 we are seeing it rise almost every month. Why? Its because of measures taken by finance ministry to control inflation. But Inflation is adamant and rejecting to move below 6.!!
  Finance ministry is expecting that after rise in interest rates, people will get discouraged from taking loans and encouraged for savings. But this is unjust to common man who is invested in housing by going for loans. Infact it is cheating. Common man was first lured into investing in property, because of finance minister's policy to bring lots of money in market ( show off India's purchasing power and create a picture of rapidly developing India). By 2004 interest rates dropped like anything. It was foolish to keep fixed deposits with banks, or go for bonds, or save in post or ppf. Strategies were implemented to attract more and more money into stock exchange (IPOs and MFs) and real estate. Infact it seemed clear that government wished that people should spend and "stop saving". But alas, too much greed has shown its ill-effects. Uncontrolled and easy flow of money into market shot up property demand ( and following that the cement and steel prices). Property prices in Pune have easily doubled / tripled in short span of couple of years. Same is the situation in other big cities. What is this property demand in reality? Is it home for homeless? Is it legal home for those who stay in slums? I think not. A major factor for the demand rise is because property became an attractive investment option for rich and middle class. Buy for X amount and sell for 2X,3X in few years. Buy and rent out. These rents are certainly not affordable to those who are homeless.
  
  Now since 2006 we can see interest rates shooting towards North. Finance ministry and government is desparate to bring inflation in control and ensure that they will once again get voted to power in coming general elections. But, I cannot understand if raising interest rates is the only means to control inflation. We have not seen noticeable impact on inflation because of "interest rate" related corrective measures. Infact we cannot see its effect on the costs of goods of daily necessity to common man. They continue to rise inspite of couple of good monsoons. For common man good rains means cheaper and ample food. Its surely something more. Is it our export policy? Is it the middle men? Is it unplanned agricultural production?
  
  Is government becoming impatient? Why can't it advertise saving habits. Why can't it stop taxes on savings. Why does it showcase highly luxurious lifestyles in TV serials? Why can't it show the reality of unemployment and need of enterprenurship? Why can't it show "hard work" required to lead luxurious life.
  

• I cannot see "Made In India" in area of cosumer durables.Why?
  We see whole lots of "Made in China" all over the world. From electronic goods to toys, to small innovative products, everywhere you find "Made in China". For some such products there is no alternative present in local market. Why?
  India has high unemployment rate, then why can't we use them to create cheap innovative products that will rule the world?
  
  
• It is good to see the slowly growing "Made in India" in world automoblie markets ( especially cars). Its heartening to see the Indian automobile biggies like Tata, Hindujas, Bajaj, Firodiyas, Mahindras are colloborating and preparing for progressing in world market.
  But we need to be aware of some facts:
  We still need to make a mark in commercial vehilcles, aircrafts, ships and rail. Cars are not basic necessity , they are luxury.
  Cheap, Innovative, non polluting automobiles using alternate cheap fuel, will finally win the race ahead of conventional automobiles running on petroleum. So our Indian automobile industry should concentrate equally on the new concept vehicles so that they hit world market at right time.
  
  
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