- Unethical and strange financial system
The government of India is on a spree of disinvestment PSU shares to public and various Instituional funds to mobilise resources. There are several objections to this practice.
Our current mindset and financial practices need to be relooked afresh as these are absurd and idiotic and not sustianable.
1. It points to bankruptcy of the government as it is selling the public assets to meet running expenses and not as part of any well planned structural exercise to boost their profitability. If government needed such funds they should invite more subscription of shares rather than disinvesting existing ones.
2. The biggest absurdity in this concept is:
President of India is only a name sake owner of PSUs. In fact it was public money which was raised earlier by way of previous years taxes and deposits that were utilised by government to set up these firms. Hence it is already owned by people of India and they are the real and current shareholders of the same.
Is not it completely absurd and outright fraud to sell the shares of the unit and at much higher prices again to the same shareholders of the company and raise more funds. How can one sell same shares to its owners. Instead of giving them dividend and bonus. It is like selling my own home to myself at new prices and raise money from me only. It is outright absurd and unethical concept. It is also a bad principle in finance.
3. This money is nothing but an indirect form of taxation by GOI in garb of financial jargons and adds to inflation in the country.
It masks the bankruptcy, the extravaganza and poor administration of the country. It shields inefficiency, corruption and wastage of scarce resourced coming in hand of these corrupt and spendthrift government.
If at all these shares should be sold outside the country and to foreign institutions to raise dollars and get actual income and not to exisiting owners that is the people of India. It is absurd.
But then it would result in rise of foreign assets holding in the country and a benchmark has to be established first for its limit to ratio of GDP of the country.
It is estimated that almost 11.50% to 20% of indian GDP is being taken out from india as a black money and surplus money to be stashed away in foreign banks and companies. Loot and plunder and tax evasions are rife in india including top industrialists, businessmen, babus, FII and politicians mafia. No wonder more people are becoming poor and rich are getting rich.
By rasing several times property prices in country, this MM singh government has been acting against national interest helping loot in the country. The artificial price rise of property creates artifical wealth in economy. The money is sucked from public syustem in hands of few landlords and banks. All around prices are increased causing heavy inflation. The agricultural land is beeing abandoned by farmers as the opportunity cost of farming has risen sharply since this person MM Singh took over as PM. With agricutural land prices shooting up from rs 50,000 to rs 300000 lac zone per acre to Rs 2 lac to Rs 2000000 per acre zone, farming is no more attractive and is a loosing proposition. Best farmers cant raise more than Rs 40,000 per acre in a year. Not only huge chunks of land is being converted into comercial projects in name of development to loot and plunder, the remaining land is also no more attractive for farming work.
The hiugh cost of real estate is making it impossible for self employment ventures to be started up by unemployed young generation.
India is slowly moving toward huge unemployment and food scarcity and civil war like conditions. Days are not far when wheat will again be imported from USA like it was done in past under PL480 scheme.
This thoroughly corrupt, brainless and capitalist stooge government of UPA run by sonia clan should be thrown out immediately.
There is no long term and visionary thinking at work.Immediate profits, loot and plunder are driving principles of MMSingh government.
I am surprised why there is so much noise in telecome licensing issue.
It is strange that no one is raising these simple questions disregarding the common sense observations. It does not need any economic expertise. India with hardly 1200 sq yard agro land per person can hardly afford land conversion now.
Prof R K Gupta
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