Nirmala Sitharaman, marinated in JNU, may actually cause unraveling of Indian economy.

For the economy, the ideal is no inflation and no tax-and-redistribute. Next to the ideal is moderate and controlled inflation.

For the economy, the ideal is no inflation and no tax-and-redistribute. Next to the ideal is moderate and controlled inflation.
For the economy, the ideal is no inflation and no tax-and-redistribute. Next to the ideal is moderate and controlled inflation.

What becomes of a society that depends solely on what it does with its Capital? Yes, Capital is just a material reality. On its own, it is just there, inert, unproductive. It has to be in the hands of entrepreneurs if it has to be productive. For example, Mukesh and Anil Ambani both had equal Capital, to begin with. Mukesh is multiplying his share, and Anil has squandered his share and even his bail money has to be arranged by Mukesh Ambani.

Both inflation and tax-and-spend cause redistribution of the Capital (wealth of society). Inflation causes wealth to flow from the poorest (farmers and wage earners) to the richest.

It is a tragedy that people refuse to read economics. Laws of economics are brutal. They will give no allowance to Sitharaman’s honesty and patriotism.

Now the cruel fact of life is that the rich are rich because they are intelligent, and the poor are poor because they are not so intelligent (don’t cry crap like “system,” nobody can enslave the intelligent people in a system of exploitation. Intelligent will come together and overthrow it).

So, moderate and controlled inflation will comparatively lead to growth in the economy because wealth is being transferred from the dumb to the intelligent who would put it in entrepreneurial uses and grow it.

In contrast, in the tax-and-redistribute system of Nirmala Sitharaman, wealth is transferred from the intelligent to the dumb who simply squander it away, leading to loss of Capital, and hence stagnation and decline of the economy.

That is why the Land Acquisition Act of Italy was so evil: it increased the Capital cost of projects to unviable levels and caused the transfer of Capital from the productive classes to the drinking classes.

It is a tragedy that people refuse to read Economics. The laws of economics are brutal. They will give no allowance to Sitharaman’s honesty and patriotism. And nobody can control a hungry and unemployed mass of 140-crore human beings.

So, for the economy, the ideal is no inflation and no tax-and-redistribute. Next to the ideal is moderate and controlled inflation.

Team PGurus

14 COMMENTS

  1. I dont know how this article got through the editor’s desk but it is foolish in the extreme. “Rich people are rich because they are intelligent…….” i have never seen such tripe published in this newspaper and hope this mistake is not repeated. I have been impressed by the quality of reporting at Pgurus thus far – perhaps this article can be withdrawn?

  2. Painting too rosy picture by the writer….. economics have always been an arm chair subject discussion and it continues to be so. No one has any knowledge of the future

  3. For India a strong Micro Economy will result in vibrant macro economic fabric. Encourage small and medium enterprises… at least there is a start on this direction. Appreciate this please…

  4. Not sure why this article is misleading from the headline. The Marination of JNU, as per the title – may actually unravel the Indian Economy, that’s what the title said. But the article is just opposite to the title. If not distributing the money to some places, say for poor, the author seems to suggest the redistribution for wealth from rich to poor is spread to the hands of no so intelligent? Wrong. In both classes there are equally intelligent and no so intelligent lot. How UPA implemented 0% interest loan to the farmers. They end up buying luxury goods for their wards. True it is. So, the right economy was our traditional economy which was Varna (Occupation based). Though the Varna is not based on birth, but it actually influenced by birth. Even a Kirana shop run by a Komuti near my house, their children sits on the “kalla” and could dispense the exact change. The child at the most be studying in 4th standard. How did they acquire this. By following his parents. Rajagopalachari suggested that all children should go to school in the morning and in the afternoon they can spend time with their parent’s business. This system could impart the skill right from the childhood. Morning can be spend on knowledge and the evening on skills. This is not actually the child labor and it is the skill learning. Likewise the economy was distributed based on the trait that a child imparts from the society and surroundings. This was wrongly transpired hence we are in a mess.

  5. Modiji for what ever reason ,is ignoring Dr.Swamy at the cost of reviving our faulty economy.
    Dr.Swamy is the only capable man to do the following:
    #1.Capture all ,cutting across party lines,who sent money abroad and send those to jail.
    #2.Capture all hawala traders and jail them.
    #3.Stop PN route of dirty money two way flow.
    #4.Punish all those who are stashing our money abroad.
    #5.Abolish income tax,allowing money to remain with in our shores.
    #6.Invest heavily on precision agriculture, the funds received through steps #1 to #5 and more, practically stopping FDI.
    Dr.Swamt can-do many more which Modiji or his cabinet colleagues have no understanding.
    Will modi listen and stop country from falling further economically or otherwise.Empty rhetorics either by ignorance or by design would not carry this country forward.

  6. The stock market is down not because of FM, it is due to FDI withdrawal of funds. The P-NOTES influence was the reason for inflated stock market. The correction is good for economy, and strict measures are needed to control domestic and FDI, to prevent malpractices.

  7. mr. Anil ambani did not lose because he is not intelligent. at one point he was ahead of his brother. business has risks. it does not always pan out like one plans.
    socialism has proven beyond a shadow of doubt that it kills the economy. and yet, worse, ghandy rammed it down into our constitution during the emergency she imposed illegally. Strange that nobody is arguing for the removal of the illegal killer socialism that the constitution says must be India’s fate. Ms. Sitharaman has sworn allegiance to the killer constitution, right?

  8. Very illuminating article. Maybe it has blessings of Sanatan dharma too. The 21st century version of Sanatan dharma believes every rich person is intelligent. Shankaracharya’s who kept a distance from riches did so because they were not intelligent.

    That is the sense I get from this article. Correct me if I am wrong.

  9. Rubbish statement that only rich people are intelligent and poor people are poor because they are dumb, stop perpertrating

  10. On today’s date a cost of a moderate 3 bed flat within hyderabad is pegged at 2.5 crores. A ridiculously inflated price tag because the loans from the banks will be on that price so as to milk the financial institutions untill the whole system crashes out. Prominent politicians have a cut into this sector of financial milking so nobody raises his or her voice. The bubble will break and the economy with the cohorts of the politicians will have another chance to mess with it yet again in the name of fixing it.

  11. Wrong the present problem is due to asset price I inflation till 2014 and borrowing on that inflated assets. Poor regulation is the fuel to the fire.FM is not to be blamed. Don’t postpone the correction kicking the can down like the west.

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