Indians are rather evidently being scape-goated on Wall Street (“we stole their jobs, remember?”), although it was the Indian middle-class and Indian businesses on whose backs American investors and the middle-class saved what could be saved of their ruined portfolios.
It was also India where American corporations squeezed profits they could from their firms.
You’d think some one would for once remember that….
Meanwhile, India’s PM Manmohan Singh is only too happy to help even more – this time, the oppressed of the earth, in Europe.
“At the G20 meet on Wednesday, Prime Minister Manmohan Singh pledged $10 billion for bailing out crisis-hit eurozone.
…..At around the time that Manmohan made the announcement in Mexico, his number two in the cabinet, Pranab Mukherjee, was holding perhaps his last EGoM (empowered group of ministers) to decide on another kind of excess: too much food grains.
He gave away $ 10 billion, that is Rs 56,000 crore, in the blink of an eye. PTI
Not for the first time in this decade, India’s food production and food procurement have broken records. As a result there is nearly 82 million tonnes (MT) of food grain with the Food Corporation of India (FCI) which does not know where to keep it……..
The government buys wheat at about Rs 12.85 from farmers. Storage, transportation and other costs add another Rs 5.35, taking it to about Rs 18.20 per kg. But at the PDS outlets, it sells wheat at an average of Rs 5 per kg. Hence for every kilogram of wheat sold, the government loses about Rs 13 (very rough, back of envelope calculations). This is what is referred to as subsidy. Similarly for rice and other food grains which would take the total subsidy for releasing 13 MT to about Rs 17,000 crore.
It is cheaper for the government and better for the Indian economy to let the food grains waste than feed the hungry. Excess food grain is not as easy to give away as spare cash.
The Pranab Mukherjee EGoM was meeting to take a final call on this excess headache. It decided to pare down Rangarajan’s recommendation for release of 13 MT to just 8 MT to bring the subsidy burden down from Rs 17,000 crore to Rs 10,000 crore only, a saving of Rs 7,000 crore.
Back to Manmohan and his Mexico munificence. He gave away $ 10 billion, that is Rs 56,000 crore, in the blink of an eye. That is, he wrote off eight times more money to save the world than his finance minister saved by snatching away 5 MT of food from the plates of hungry Indians.
This place at the world’s high table sure costs a lot, a few million empty stomachs here in India. Suddenly, I’m not feeling so good about this superpower act. Are you?
If you crunch the numbers, check the outcomes, see the context, Indian foreign policy bombers have hit the target target.
Most often.
See my post on 60 years of Indian foreign policy http://wp.me/p8KUL-1BD
This was apart of the BRICS coordinated effort.
China came up with some US$ 40 billion. Russia with some US$20 billion; India and Brazil with some 11 billion each and South Africa with some 4 billion. Exact numbers elude me. Totalling to some 70-80 billion odd.
I am sure they would have negotiated a interest set-off in the future against this amount, or something. We will get to know the mechanics later.
I am OK with these guys. It is small team that delivers.
But I would have loved it if this US$11 billion went to Pakistan for firing their electricity generation – and we get our money back as onions, potatoes, basmati, wheat, cotton, whenever we want and when they can spare it.
Maybe that will get us better returns that giving to the Eurozone!
OK..Maybe, I just don’t like this superpower notion that Indians have got.
India is not a superpower.
It’s an emerging regional power that has many many problems.
India should fix those, keep at peace with your neighbors and not get drawn into dealing with the West.
The Economic Times Mumbai:2012 Jun 21 India’s IMF Contribution is Not Aid
http://pinterest.com/pin/11681280254035861/
OK. But why bail out anyone?
All this does is make the bureaucrats more powerful
The interest will eventually be unpayable and then the debt will have to be canceled.
They always start things out as a loan, but it will be aid.
Masses of people starving in India and Singh forks over money to others.
See it this way!
India’s US$300 billion or so of reserves need to be invested.
Between 40%-80% of Central forex reserves are held as US Treasuries.
With this action, these will be held as IMF Bonds. Is IMF more unsafe than the US?
On the other hand, the justification for this investment was that IMF needed funds to lend to Europe. Much like the US needs to finance its deficit.
So, same difference. Same lack of safety.
Now the spin is that the West needs the BRICS to ‘save’ them. This is a big time message to the world.
Especially for those who believe that: –
1. West is the best
2. Western leaders are cast in gold alloys – and desi netas are made of mud.
If attack you must, attack Bretton Woods and its de facto continuation.
2ndlook is what you need.
I don’t believe western leaders are made of gold by any means.
No one who reads this blog would think that.
My problem with Manmohan S is on the nuclear deal…it is a sure loss of national sovereignty to have international watchdogs crawling all over the place.
They are ninety percent spies for the ruling powers.
Neither do I. At all.
The point I was making was about your attacking the BRICS decision on lending to IMF for Eurozone.
The nuclear deal is another topic, another day, another time.
And the gold-alloy comment is very general. No specific people in mind at all. At least on 2ndlook, what gets people ire is my attack on the West.
I can attack India – justified, bigoted, any type of attack. It is OK. It may even raise a few rah-rahs.
But not the West!