400 WORDS

For past decade and more, Indian aviation industry is posting record growth in both passenger traffic as well as aviation infrastructure. With many ancillary industries mushrooming, specifically in MRO activities and other support services, it is time India took it to the next level by entering the aircraft manufacturing segment. As HAL already producing fighter aircrafts, most of the technology is readily available within India and the rest, specifically, engine design and avionics can be easily imported or acclimatized locally. With over 1000 smaller as well as wide-body planes on order, India itself will be spending over 100 billion dollars in near future, notwithstanding increasing demands from other countries. Besides, aging aircrafts have to be regularly taken out of service and aircraft graveyards is a stark reality. This solves the issue of demand adequacy in small-to-medium term. Additionally, the uninspiring demand for Airbus A-220 and sub-par performance of Embraer jets create an opportunity to introduce a new aircraft with a capacity of around 100 passengers for short-haul journeys at a competitive price point. With a big question mark on the industry workhorse B-737 series having many technical issues, the market is wide open for other manufacturers to fill the ever-growing demand gap.

The present government’s big push for indigenizing manufacturing and promoting India as a manufacturing powerhouse, the case of proposing manufacturing passenger aircrafts is strong and attainable. Though the design and construction of an aircraft of this size would take many years, it is possible to speed up intermediate stages with strong capital base of the interested industrial houses, quick clearances from the Indian government and some kind of business assurance from domestic airlines at first, and foreign airlines later. This would help pave the way for having this top-end industry flourish in India. Nowadays, the United States, Europe (majorly Germany and France), Canada, Brazil and China are active in manufacturing aircrafts, China being the latest entrant. Recently the Japanese government also has proposed to encourage investments in aircraft manufacturing. This will ensure that India would be building something incremental in technology, as opposed to any pathbreaking technology, which has an extremely high gestation period. Once in operation, India can find markets for these aircrafts in countries with high demand for short-haul flights such as South Africa, Argentina, Australia, and Middle East with a competitive offering of an aircraft which has an affordable price tag and lower operational costs.

21h July, 2024

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Migration is a fact no one can deny. In India, this migration is concentrated in industrial and business-oriented towns/cities, attracting lot of economic migrants. However, the recipient cities and towns unfortunately, are not built for such large and continuous influxes we have seen, which test, damage, and destroy city infrastructure and make those cities gradually unlivable.

The city managements, unfortunately, fall woefully short on vision and action to keep the infrastructure updated to comfortably accommodate such population. All top ten cities by population in India qualify for this problem of overcrowding and being poor on infrastructure. Issues like lack of adequate and potable water, irregular electric supply, inadequate roads leading to lengthy traffic jams, overcrowded public transport, insufficient and yet costly dwelling units, unaffordable and inadequate medical facilities all seem to bring these cities perform poorly on quality of livability.

Given persistent lack of vision, executive capabilities and adequate funding, there does not seem to be a viable mechanism to reverse the situation very soon, with continuously deteriorating living standards and waste of productive hours in commuting.

What needs to be done is to discourage industrial and services facilities from focusing on large cities, where they find a captive workforce. Instead, the government should come out with policies which will encourage industrial and service clusters in unoccupied or even in barren areas, 

which can be converted into planned towns and cities to facilitate hosting such workforce and ancillary services. Thus, cities around large industrial plants producing heavy machinery, vehicles, power generation and such can be built on unoccupied tracts of land. Similarly, all IT parks and technological complexes can be built on dedicated lands away from cities and towns where such new areas can be converted to functioning cities having controlled population and better amenities, driving skilled population in those areas.

Pieces of land, which are in the vicinity of large road and rail networks, availability of adequate land to build an airport and having a convenient and sufficient water supply would be ideal candidates for this purpose. If any of these requirements are deficient, government policies should encourage building waterways, pipelines, road, and rail networks and even airports. When executed, this will help in population shift, leaving the current cities decongested with manageable population and reinstating infrastructure adequacy. New planned cities would provide a better and cleaner habitat to people migrating there, supporting evenly spread and healthier economic growth.

5th July, 2024

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World over, with democratic systems having a high bias for socialism, a merit- and productivity-based society is rare to find these days. The losers in this situation are only those people, who acquire skills and experience, work for themselves and their families, only to see their hard-earned income being squandered on those who are lazy, greedy and used to getting things for free in their lives. Governments also facilitate this by announcing freebies, concessions, welfare schemes and what not, to those people who carry weight in terms of votes which can tilt the electoral balances. Corporations do pay taxes, but those corporations have many tricks of creating complex company structures, setting up fake loss-making units where the real taxable income is suppressed. For big corporations, international low-tax jurisdictions become go-to destinations for avoiding taxes. Individuals do not have such luxury.

In many cases, the working population spends over 80 hours per week on day jobs and to make ends meet, picks other side jobs to earn a decent income. All this creates an imbalance in society where a small percentage of taxpayers work hard and long to earn what they deserve, while a sizable percentage of freeloaders get multiple benefits from the governments. Governments also end up pampering this already pampered lot, again at the expense of productive work done by the taxpayers.

As long as the democratic norms do not shed their bias towards socialism and adopt meritocracy, the situation is going to get worse by the day. Specifically, the governments need to work on policies which will enable the non-workers to start working and earning. They should also support and advocate cultural changes which espouse hard-earned income being far superior to living a borrowed life at the hands of a taxpayer. The focus should be on creating new jobs, where such non-working and non-earning people can be deployed.

For abject poverty, such people should be provided with free or subsidized skills training along with time bound subsidized amenities to help them start earning for themselves. Otherwise, allowances and freebies will continue to kill their productivity and make them perpetually dependent on handouts. Such imbalances can create animosities in groups, leading to discontent, instability and eventually collapse. There have been many examples of this phenomena worldwide.

Governments must proactively recognize this and for a stable prosperity, stop feeding into this imbalance of wealth transfer from productive to non-productive people.

5th July, 2024

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Irrespective of different ideologies and theories about active government role in economic management and targeting perpetual economic growth, the reality is quite different. An economy is essentially an optimum combination of private productive income and its consumption. The growth or decline of such transactions should provide a better view of an economy’s growth potential, its stability and the quality of productive capacity of the people involved in it. Though much can be said about the direction and narratives built for the current economic situation globally, focus should only be on the income of the people within an economy and their capacity and willingness to consume such income.

The most enormous and tricky task for any government should be to ensure sustained income-generation opportunities. It is most desirable, where all the eligible people in an economy are earning for themselves an income which can sustain them and lead to prosperity, thereby increasing healthy consumption and contribution to economic stability and growth. Sadly, this is extremely difficult to achieve and hence ignored by almost all governments. They choose the easier path of distributing money in different forms to maintain social stability and end up creating enormous liabilities for future generations, while destroying the economic foundations. Governments must work to facilitate gainful income for people instead of doling out freebies and handouts.

To effectively progress toward a situation which will bring in strength to the economic backbone, namely private productivity, governments need to work on the following aspects on an ongoing basis:

• Building accurate and current database of people, their skills and their willingness to land jobs

• Creating an ecosystem to boost skills-based entrepreneurship for identified workforce

• Identification of sectors with employment potential and their sustainability mapped with available skills and quantum of workforce

• Cyclical projections on sectors, and workforce against income opportunities and threats

• Encouraging creative destruction to support growth in job prospects and income opportunities

• Continuous monitoring of work & business situations

• Ensuring wages and income stability and equilibrium

• Establishment of the sweet spot for quality of work and income opportunities against work-life balance

• Removal of anomalies of compensations against contributions within the economy

• Policy introduction or changes through a positive feedback loop

Instead of finding short-cuts and appeasing different sections of voters (in democracies). governments should spend all efforts on a long-term and positive income situation for all its citizens. This will usher in lasting stability and prosperity for the economy.

1st July, 2024

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Financial media's obsession with inflation is legendary. Articles upon articles, expert opinions, central bankers’ body language and intonations fascinate all the media. However, is the hype really worth it?

In today’s world, inflation is almost always artificially created and inefficiently managed. Governments keep on borrowing recklessly, and the normal taxpayer suffers as the value of his/her savings continues to go down. This make-believe drama is conceptualized, created and executed by a few favored actors within the government-central bank-stock markets nexus. The communication is also made complex and indecipherable so that a commoner considers it to be serious and wise, even if not understandable.

The crux of the matter is the data-based inflation management style adopted by most major central banks lacks the basic ingredient, trustworthy data. As it is, employment data, which is one of the most influential aspects, does not have any stable, logical and proven correlation with inflation. The made-up formulaic representations do not pass the commonsense test either. If such an aspect is used to determine the direction of inflation, the chances of implementing a wrong or misleading decision are quite high. Such half-hearted decisions lead to more upheaval and the unnecessary urge of persistent positive GDP growth queers the pitch even further.

Instead of focusing on such data, the Central Banks need to let the interest rates remain non-manipulated and focus on reducing introduction of money 

through government bonds. If essential, such bonds should ideally be placed with the private sector, to be spent within the private sector, thereby boosting economic activity.

The reason for hesitation and high chances of taking wrong decisions on interest rates is lack of understanding of the task at hand, coupled with urge to retain vice-like control over the economic activities. Above all, the media, being even less knowledgeable and prone to propagandistic views, amplifies this indecisiveness and futile approach to supposedly control inflation as something particularly important and prophetic.

Concisely, what we have is greedy governments which create excessive money for social control through enticement. Indecisive or even confused central bankers and even more clueless media all serve these concocted dishes to the general public. As the media keeps on splitting hair on inflation, the true task of monetary management stands sidelined.

For the pleasure of such massive mismanagement, the price has to be paid only by private individuals and corporations through taxes in different forms, all depleting private productivity.

26thJune, 2024

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