> The world is going through a food crisis, heck, the Arab spring is > being attributed to it, and you blame the NREGA for the high prices? > Your single cause inflation theory isn't the truth - it is far more > complicated than that.
This isn't really going well as an argument, because this "single cause" thing is new to me. There are many causes to inflation, such as the rupee depreciating (makes our imports costlier), hoarding, bad policy, oil prices and local impact. In theend it comes down to supply and demand, and what NREGA does is to both reduce supply and increase demand. The increased demand is good. The reduced supply is not. There are steps necessary to work through the supply issues, and increasing MSP by 10-15% is a ridiculous way to supplement NREGA. Much of our food inflation is local. > Billionaires should happen like air? That is... interesting. Again, > sorry, not going to attempt to bridge philosophical differences - too > deep, too wide. For once, I agree :) >> NREGA needs quite as much to go as our banking system needs fixing. >> Both have become necessary evils politically now. Though if you asked >> me I would privatize all public sector banks and cut off government >> lifelines first. > > Oh look, America did that and see how responsibly the banks acted. > > Indian private banks, like ICICI send goons home to break your knees > when you miss credit card payments - you want to aspire to that ideal? America didn't "do that". It did the opposite - it quasi-nationalized banks. Government lifelines ensured the banks didn't die. The reasons banks got into trouble was that they were deregulated - a concept very different from de-owned. India's regulators have done a much better job, even though they have been squeamish in certain areas. (For example: the onerous needs in KYC are hugely responsible for why the poor remain unbanked) Not just is sending goons home illegal, RBI has curbed the practice and courts have actually fined banks that have even tried without due process. (ICICI was fined Rs. 55 lakh for one instance by a court http://articles.timesofindia.indiatimes.com/2007-11-06/india/27953166_1_car-loan-recovery-agents-icici-bank ) In fact, the response to "goons" or even "heavy moral pressure" is the kind of act AP created against Microfinance, which should teach large organizations that they either work through the legal process when recovering loans, or they'll get shafted. Moneylenders - who are the source of finance minus the banks - still send home goons and break your knees, for what are horrendous rates of interest - do you want to aspire to THAT ideal instead? I suppose I would rather trust a private banking system with a strong regulator than a crappy full of moneylenders who operate outside of the law, or a public banking system that only benefits the landed/corrupt. We could go link after link about how banks have been good or bad, but it's plain to me how a proper banking system helps everyone especially the lowest layer (formal credit is what rural India lacks severely; that's also why RBI is screaming "financial inclusion" desperately) Anyhow, huge philosophical differences remain, and my end-point is that handouts don't help the poor in the long term, the solution lies in property rights, infrastructure that might need machines (power, road, water), freeing of the agri markets and so on. The oil subsidy, fertilizer subsidy and NREGA just distort the picture and keep the really poor still poor.
