S Gangadhar

The Indian Economy and Gold Imports

I congratulate Mr. Kumar on writing such a wonderful assesment of Indian economy. He has the courage to call a spade a spade. I also disagree completely many views by other readers, who are basically over-optimistic about Indian economy and stocks. I am particularly taken aback by views of Mr. Nagesh and am addressing them sequentially here.
First he talks about India's GDP growth, but the fact is that this growth means nothing. India may be growing at 7 or 8 percent and yet may end up in a ditch. What at the end of the day means is whether you are able to export more than you import or vice versa. Indian trade deficit is growing at 20% annum. Japanese
economy is growing at a mere 1/4th the rate of India, but it adds $150 billion to itself every year. That's what counts. The emphasis on GDP is a game for business journalists, the people who don't understand economy and know only to take notes when the real economists speak. So please forget about India's "phenomenal" GDP growth. If GDP growth alone was the criteria, I dole out another another example; even Ethiopia is growing at
8.4% this year. Does it mean that Ethiopian economy is stronger than all Europe, Japan, and US economies? Ha.

Mr. Nagesh is also wrong about the corporate tax. Their collections prove nothing. Corporates are experts in running businesses, not in predicting economic cycles or movements of the markets. Having stake in the growth, they are usually blind to what sort of economic situations lie ahead. They feel the growth will go on and on. But this is not the case. There have been busts and busts around the world and the corporates which have been oblivious to them have literally lost their businesses. In the US during 1999-2000 the tax
collections were strong, and yet the recession followed in the following year.

Mr. Nagesh's harping on whether 60% or 70% of the Indian population is dependent on agriculture shows that he is just interested in oneupmanship, and has not imbibed the spirit of the article. Would it matter much if whether 6 members or 7 of his family went hungry? Will he argue about the exact number?
The fact is that every two out of three Indians is directly or indirectly dependent on agriculture, and the bigger fact is that most of them are unhappy with the state of affairs. That's what counts most.
Finally, if he thinks that the government and Indian businesses will give extra filliip to agriculture, probably he has not studied Indian agriculture. Agriculture is the last thing on anybody's mind, a reason why the problems have become so huge, so deeprooted.

I again congratulate Mr. Kumar on writing a fair assessment on the Indian Economy. He is sending out the most honest views to the world. Kudos
S. Gangadhar.

Gold Losing Its Shine?

Thank you for a fantastic article. So many people knead so much jargon in financial market analysis these days that even reading it is a boring job. However Naga has done a fantastic job. He has spoken gospel in a few paragraphs. God bless him. Keep up the good work.
Rocky Hue.