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Thursday, March 12, 2009

Recession Series :Government policies and the common man

Recession has not spared any one this time.Every one starting from the exporters, IT companies to small businesses are feeling the pinch.Business is down everywhere.There are lay offs in the software industry,small time diamond workers in surat have lost their jobs, Textile workers are also loosing their jobs.But, Is the Government doing anything in this regard ?Lets analyse some of the key steps taken by the present govt and how it is affecting the common man.
  • Government did something in the form of stimulus.RBI reduced the interest rates in order ease up liquidity.It thought , this move will put more money into the hands of people.People will take loans and buy cars, apartments,etc.This in turn will trigger demand in the related sectors thereby improving the economic condition of the country.But, how many people will benifit from that? Only a few elite sectors like automobile,real estate will benifit.It will definitely not help the common man on the street.
  • Another measure that the govt took was to reduce the price of aviation fuel.This will no doubt help the ailing airline companies which are already suffering a lot from reduced demand for travel.Now the situation is such that the aviation fuel has become cheaper than common mans fuel like diesel and petrol. What an irony ? The govt is helping the rich stay rich , even in times of economic down turn by providing stimulus at the cost of common man.
  • Another much publicised project of the UPA govt is the NREGA. This has definitely given employment oppurtunities to large no. of rural poor.Though there have been criticisms of NREGA , about large scale corruption, use of machines instead of people in carrying out the development works under the scheme,etc.But it has atleast provided jobs to the rural poor.Its reach is such that even the workers who lost jobs in the cities are returning back to their villages , where they can get employed under NREGA.

In my next posts we will discuss a few things about what the givernment can do in order to help the common man.

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