Regional Impact

For a last almost 2 decades, India is experiencing a new face of governance in the form of a coalition ruling. Several parties, from different states, setups and agendas share the power under common minimum program. Main stream parties are under stress of loosing the national identity in the wake of increasing regional forces. What would be its economics impact in future?
Regional parties share limited goal, exposure and specific agenda, which is primarily an development of the local area, where it has its strong hold. By getting their strength in line with the centre, they can really push their agendas hard in a much efficient way.
At the same time, it might have some ignorant or even hostile attitudes towards some other areas depending on the coalition structure and local parties there. On a bigger picture, national interests can be sidelined at times, and local issues can get more limelight.
On one side, it is good to have states flourishing, on the other hand, nationals issues are facing grave resistance and its has its impact on integrity.
The way to work out this issue in a more subtle way is to empower states with more freedom as well as the responsibility and make them work almost autonomous under the laws of economics. Surely for a while, it will create disturbance at the centre, and would delay growth of the nation as a whole for the time being, but it would prove very efficient and necessary step in the long run, to give an opportunity to the local parties to grow mature. Once they realise that by just maintaining healthy status at the state level is not enough, they will emerge even stronger and efficient at centre, eventually helping the whole nation to grow as one.
Surely, it would need a powerful, visionary and a strong leadership, but it is a need of the time.

changing rules of capitalism

Collapse of Arthur Anderson, Enron and a few other big players in the industry was analysed as a misuse of the management for self benefit, affecting the companies and their employees. Still nothing much was done beyond punishing the responsible and changing the law to make CEOs/CFOs accountable for all the mishaps in an industry.
On a broader scale, this can be considered as changing environment of the business overall. In the past, primarily business was controlled by those, who either had access to the government, or had a major advantage over the competitors in the form of cutting edge technology or invention. In today's world with globalised market effect, diminishing technological upper hand and with tremendous amount of competition, the key player is the information. Its only about having the information first and acting upon it ahead of others. Information can make companies, create wealth and make people's career and life. It can also destroy the same if misused as seen in Enron. Apart from very conspicuous cases like Enron, many companies come and go, simply blaming the economy or the market. Necessarily the element of responsibility, and accountability is missing in all these events. In a situation, where millions of people are involved with companies in the form of investors, employees, customers, suppliers, service providers and so on, one single decision can ruin the whole show, irrespective of whether its CEO or CFO or financial analyst who takes the decision. Apart from the number game, which produces the results in quantitative terms of profit, loss, and projections, participants have no bearing over the qualitative analysis of the information which is responsible for changing the course.
The spectrum of accountability towards all the elements involved in the business needs to be widened to make it much more transparent.
The new rules need to defined which would bring all those who are responsible for a demise of an organization needs to be under scrutiny. From prevention perspective, there needs to be better awareness created in terms of future goals and targets and should be hold responsible for the every word that comes out of officials. Its not enough just to blame it on consumer index or inflation or global price war and competition and get away with some of the key decisions which essentially provide the driving force.
Rules of capitalism needs to be rewritten to safeguard Common man's interest, no matter in what way he is connected to it, or have direct or indirect involvement in the business. The transformation of such information into actions can affect employment, investment, family or even lives and hence to be put forth in focus, not only during the successes but also during the failures.

castism and economics

Over the centuries, Indian society is following cast system as a part of Hindu religion. For a moment if we keep aside its wrong customary implementation mechanism, it can be seen that it was basically meant to establish economic rules and regulations in the society. Every class/cast had specific functions to perform and had certain associated responsibilities and controls to perform them in a most efficient way. When it was flourishing society with economic stability, this was more of a beneficial system, but along with the fall of kingdoms and subsequent fall of wealth, cast system became stumbling block in a way of progress and eventually became a burden to the society.
We can compare it with the situation in today's industry. Lets take an IT company for e.g. Top management is like Kshtriya who hold the power, and technical Guru' can be like Brahmin, marketing and middle management are like vaishya, and other including developers are like kshudras. Its not exaggeration to think this way, because today economy is in good shape, so we don't really have it as a problem, but tomorrow if and when it goes down, this similarities will surface and there will be fight amongst these classes, like before. Surely today these are not linked to the birth and so may not seem to be of grave danger, but remember even chaturvarnya system originally was not associated with birth, but later in need to keep the control, higher casts enforced this to others.
Hope we learn something from the past, and change the system.

economics and democracy

Where most of the developed countries run democratic system and are at the same time, economically most successful, it is interesting to see why India lagged behind so much in last half a century while celebrating stable and largest people democracy in the world. The huge amount of corruption in public sector, utter lack of public disciplinary policies and systems, and tremendous amount of exploitation of human and other resources clearly indicate that economics and politics did not really go along well in last 5-6 decades. What would be the reasons?
It's a third major paradigm in the Indian society, the culture, which should play a major role as a catalyst, which seems to be ignored. Though India is probably the oldest and most populated democracy, it was never capitalistic in its social behaviour. Culture has played the biggest role in the civilization of the society. The influence of religion, philosophy and monarchical system has always had a upper hand in the society. In such a civilization, where 4-layered social structure(chaturvarnya) was adopted for over centuries, Brahmins were the most educated group of people and their level of education was primarily limited to religion, philosophy, maths, arts and some amount of science. The other group, Vaisya, who was primarily a group of business persons, also had only basic level of business knowledge. Several dynasties had social systems in place, but primarily more hierarchical and not democratic.
The problem appeared when India got independence and accepted democracy. Country and its people were not ready to invent systems, policies which could be governed and run by the people, but at the same time which would abide principles of modern economics. Especially in the beginning years of independence, leaders and beurocrats at the top level in government got trapped into economics at one end and socialist structure at the other. Policies which had tighter government control like license raj, less involvement of private sector, stricter import export policies, demotivated small and medium scale businesses, and extreme amount of red tap ism are indicative of such a confusion of these leaders at that time.
There are possibly 2 ways to approach. One is to try to educate people the principles of modern open economics in capitalistic terms, and its benefits and drawbacks, its responsibilities and flexibilities, and its importance to the existence of the society, similar to what developed western countries adopted. Other option is to somewhat rewrite economic principles and laws in terms of Indian context, considering the social patterns, level of people's education, and cultural set up.
In last 10 years or so, leaders have entered another level of confusion. They want to implement option one, but then don't seem to take efforts to educate people with capitalist approach. They still stick to socialist approach, in which case western principles of open economics wont exactly fit in.
Lets hope that astute and well educated leaders of today and tomorrow manage to conglomerate these two options together and be able to come up with some median way which would suit Indian situation the best.

outsourcing

Outsourcing is buzword now a days, rather I should say a Biz word. The whole business community revolves around it. Its the most volatile 'love and hate' relationship of modern times. Lets try to see the other side of the coin and see if it fits into an equation.
Imagine a country X, outsources some of her work in country Y. X being advanced country, have enormous need of goods, but because of high life standards, its getting difficult to gain the profits at expected level locally. On the other side, Y is a developing country, have enough resources and skills available, but in need of more work and more money. It may look like Y is extracting something out of X to become rich, but the other side of it, X is getting the same item at much lower manufacturing cost. So there 2 scenarios, either keeping profit margin constants, consumer in X gets the item at cheaper price or producer in X gets richer by gulping the additional profit. Either case, consumer benefits, and most likely the producer as well. But at the same time, developer in Y becomes richer, so is it a win-win situation?
In a way yes, because at one point of time, Y would become rich enough to start acting like X, and would outsource her needs to some other country Z. It could become a chain in itself, but then it has to loop back to the origin. In other words, its always X's responsibility to maintain the same gap with Y in terms of life standard, so that when Y advances, and passes it onto Z and so on till it comes back to X, X should have advanced to a proportional high, so it would still have the necessity to outsource back to Y.
In this big chain, the one who would not be able to maintain this gap, would be responsible of breaking the chain and in tern herself going down, making it lose-win situation.
It's a political compulsion in lieu of business accountability.

polinats?

I am a common man with simple goals and simple life. I want to keep it that way, probably it will be that way even though sometimes I feel like changing it..

So what do I care what economics is? Why do I care what happens in business world, or in politics for that matter? Are these even related? Does it matter?

Well, You sure, you don't care? Because we think you should..Why? Simply because it does matter in your day to day's life. It affects your everyday's life.

Don't think so? Ok, let's try to analyze and find out..!