Even though the current crisis—especially in the US and Europe—is very close to the Great Depression and other economic and financial events of the 1930s, don’t you think the world is far better prepared due to the immense technology and knowledge prowess it has now, compared with what it had in that age? (“Rediscovering history” by Niranjan Rajadhyaksha, Mint, 25 February). For example, the way in which strategy or solutions can now be put together by leveraging technology will be many times faster than what could be done during the Great Depression. Also, the sheer size of the economy and its diversification into so many new sectors makes it more resilient, in my view.
War is not a solution. Yes, bombing Pakistan will not serve the purpose. But neither will “wishing strength to the millions in Pakistan who have steely resolve”. (“Pakistan, an ordinary nation” by Salil Tripathi, Mint, 5 March). Yes, stereotyping all Pakistanis is wrong, but when a nation fails, every citizen has to take ownership of that failure. The millions of Pakistanis that you are talking about have lived in denial for ages. They preferred to ignore their government’s role in the devastation of Afghanistan.
These same citizens continued (and they still do) to deny the role of their government in Jammu and Kashmir. It is this denial which is hurting them now and, more importantly, hurting us. The question that the world needs to ask itself is whether we should allow things to continue in their current rotten state and wish that “millions of peace loving Pakistanis” will rise and clean their society or whether we should force them to take action. We in India should not make the same mistake that Pakistan has been making for the last 30 years—i.e., denial about the existence of a rogue state in our neighbourhood.
“India’s missing think tanks” by Rohit Pradhan and Sushant K. Singh (Mint, 2 March) is an inspiring read. China has an amazing number of think tanks, even overtaking the heaven of think tanks that is the US. The Chinese Institute of Social Sciences alone has 50 research centres covering 260 disciplines and 4,000 full-time researchers. Compared with that, ours is a pitiable number. Even these have, as Pradhan and Singh observe, become retirement clubs for bureaucrats and generals.
Our focus on the Wholesale Price Index and ignoring of the Consumer Price Index is tragic. The deflation will be only temporary and notional. It will not translate into lower prices for common men who form a majority as far as consumption is concerned. I strongly oppose the lower interest rate regime for a nation such as ours, which has one of the highest savings rate in the world. China has already expressed its apprehension about the safety of its investments in US treasurys. India has also invested heavily in US treasurys and lower interest rates will harm our country in the long run.
While no one would argue for a very high interest rate, it is suitable for our country to have an interest rate of around 12% for industry and 10% for our savers, investors and depositors. The permission given by the Central Board of Direct Taxes to pension fund managers in equities will have far-reaching consequences for pensioners in our country, in view of the lack of proper social security system. Further demanding larger stimulus package from the government without increase in revenue and purely on government borrowings is also a dangerous trend and will ultimately put us into the “junk” category by rating agencies.
--K. Vittal Shetty