There is a global economic disaster waiting to consume the world, as the major economies of the world try to evade this calamity manufactured by our loose and ambitious economic policies.
Now I am not an economist, far from it but I give myself the liberty to comment on this complex issue. I feel there have always been two sides to this story, which goes far back.
Now, on the one hand there are regulations which are great for promoting a solid economy like Germany, with its foundations in industrialisation; and on the other hand there are market driven economies, like the US, which thrive on free competition.
Yes, the second approach seems to hold true in the context of our country as our very own Dr. Manmohan Singh has proved-ever since he opened our market to the world in the early 90s.
It has promoted healthy consumerism and made many businessmen, who were dying to free themselves from the shackles of the state sponsored license raj since independence, millionaires.
But market driven economics, based on loose regulation, have also diabolically failed to sustain economies, as proven by the current recession in the world.
There is a new wave amongst nations bitten by the recession to have the state playing a bigger role in regulating the market. These last few years have shown the world how bankers have taken massive risks with the public money in investing in precarious schemes.
But discouraging these trends can prove to be less lucrative for the best bankers who would then go to freer economies. Now that would certainly be an anathema for those with a firm belief in keeping the economy competitive.
Now, since we as a nation have graduated to the capitalist model, we have seen unexpected growth and private enterprise. But because of this shift we are moving away from the socialism that is so deeply ingrained in the character of our society.
More and more subsidies are cut, especially on fuel and fertiliser which stand at 20,000 cr and 6,000 cr respectively. We believe that these subsidies are a burden on our fiscal deficit which stands at 5.9% this year or nearly 5.22 lakh crore but at the same time the total amount of tax concessions to the corporate world stands at nearly 5.22 lakh crore.
Take for instance the IPL, which is currently mired in controversy because of underhand dealings and spot-fixing. IPL is truly a money making machine with the state having nothing to do with it.
In a paper recently, Kumble seemed to be batting for strict action against the players involved in spot-fixing. There are some who want the franchises to be punished too, as they are apparently breaking the limit of spending on players through underhand dealings.
The bigger question is that does a free-for-all economy disintegrate our values and promotes greed?
Occupy Wall Street and Frankfurt Occupy are two movements which are precisely driving home this point. Millions are angry at having to pay in the austerity drive due to the mistakes of a few.
But we also know that state driven policies like those seen in our country and our neighbour China are also bad for competition, and put too much power in the hands of a few.
Among economists in the western world, there is talk that the free market US model and the more traditional European model in which you have cheap education and healthcare have both failed. So there are speculations of working out an altogether different model which will cater to the needs of the 21st century.
Now I believe an economy that promotes competition and when required is disciplined by the state might just make that elusive Utopia a reality!