Tuesday, August 27, 2013

Food security bill - intention, hope, consequences and echonomy

I would prefer to live in society where food is guaranteed and I really applaud the intentions behind it. But probably the timing is not right or probably the means itself.
We have been increasing our subsidy budget year on year by average of 32% from past few years including other government expenses with USD already touching 66.30 I am not sure how the added burden would impact the economy.

A perfect downfall - Food security guarantees more food, ie, more subsidised food, government expends more on importing, reduced foreign deposits, thus reduced FDI/FIIs thus depreciation of INR against USD, thus government need to expend even more on importing to guarantee food and other subsidised commodities, a never ending vicious circle!

How does it impact us - well with depreciating Indian currency, India need to shell out more to import goods and commodities (including essential ones like Petrol, Diesel), thus rise in inflation, increasing living costs, which would impact the very people who needed the food!!!

I hope that it some how work out for good else soon we would be at a stage from where returning back would become a task of biblical proportions.