What the Greek tragedy can teach us?

A year-and-a-half after Lehman Brothers up-ended the world economy, a similar tragedy is unfolding in Europe. If the Americans were widely blamed for poorly regulating buccaneer capitalism and excessive risk-taking, this time it is the European Union (EU) that should take the rap for letting rogue borrowers like Greece to join the eurozone. Despite a 110 billioneuro ($140 billion) bailout package, Greece looks set to threaten the political and economic basis of the European Union. The size of the bailout — for a country with 1 per cent of India’s population and one-quarter its economic size — is larger than India’s current GDP by a wide margin.

How can a country as tiny as Greece rock the EU, which is bigger than the US economy? The answer: in an integrated world, market confidence is key. Greece had to be rescued from a debt default to prevent a domino effect. If it had gone under, the markets would have started dumping the bonds of other problem countries like Spain, Portugal, Ireland and Italy. Once panic sets in, the EU cannot survive.

This brings us to the first lesson for India, which is actually an economic union of many linguistic states, just like the eurozone: don’t let central or state debt grow to unsustainable levels. For the last few years, the UPA government has been squandering the fiscal prudence achieved in the NDA years through profligate spending. The public debt-to-GDP ratio is a high 82 per cent for centre and states — and rising.

From "What the Greek tragedy can teach us?" by R Jagannathan in DNA

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Whither IITs and IIMs? UPA govt is set to destroy them!

The UPA government has set the stage. It has decided to open the education market to the foreign players. With such a supporting govt at the hustings foreigners and their agents will swallow the education market in no time. It is high time that the patriots rise to the occasion and stop this advent of neo-east India companies.

R. Jaganathan of DNA has shed light into this subject:

 
Union HRD minister Kapil Sibal is about to destroy an important national legacy: the IITs and IIMs that have made Indians world beaters in tech and management. His foreign universities bill, if passed in its present form without reforming the Indian system of governance, will lead to the ruin of not only the technology and management institutes, but all government-run academic institutions of repute.
Let’s first make a digression here before we come to the specifics.

Five years ago, BSNL was India’s biggest and most valuable telecom company. Today, it is an also-ran and will soon become an artefact of history.

Five years ago, Air India and Indian Airlines ruled the skies. Today, the sky has fallen on their heads. As a merged entity, they have become the government’s biggest basket case.

Ten years ago, ONGC and Indian Oil were India’s oil kings. Reliance was nowhere. Today, ONGC has been robbed of profits and Indian Oil is a pale shadow of its former self. The latter survives on government handouts and subsidies.

Where is the connect with Sibal’s foreign universities bill?

Here it is: opening up without giving equal autonomy to domestic institutions is a recipe for disaster. The private sector will use the Indian system of bribing ministers to hold back the domestic companies or institutions while they themselves grow in size and stature. Nobody will bat for the public sector, and soon enough, they will live up to the image of inefficiency and sloth.

What happened to the BSNLs, Air Indias and Indian Oils will now happen to the IITs and IIMs. Consider what’s wrong with Sibal’s bill. The entry norms specify a minimum corpus of Rs 50 crore, regulation (but no ceiling) of fees by the UGC, non-remittance of profits from educational activities, and a possible exemption from SC/ST quotas.

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