Apropos of the edit ‘Europe’s Greek tragedy’ (January 29), the lesson that can be drawn from the Greek crisis...
Apropos of the edit ‘Europe’s Greek tragedy’ (January 29), the lesson that can be drawn from the Greek crisis is that lending ever greater sums to a mismanaged and failing economy does not make it solvent. It defers the day of reckoning for the economy, but delivers no salvation. National debt, at $413.6 billion, is bigger than the country’s economy, The premise on which Syriza has won the polls completely populist, that it will increase pensions, hike the minimum wage, expand healthcare, give free electricity to 300,000 households and denationalise a chunk of the economy. But it has conveniently forgotten that Greece was living beyond its means even before it joined the euro after abandoning drachmas, and after it adopted the single currency, public spending soared. Public sector wages, for example, rose 50% between 1999 and 2007—far faster than in most other euro zone countries. The government also ran up big debts paying for the 2004 Athens Olympics. Everyone knows Europe today is a continent with no growth, no inflation, and high unemployment. It is very hard to tell people that Europe is the solution, that it has the answers. There is little doubt among economists that the easiest mechanism for a country to gain competitiveness is to have its currency depreciate.
NITI no friend of federalism
Apropos of the column ‘Leveraging NITI Aayog for federalism’, it is fashionable to think that the Planning Commission was a “Soviet-style” body that held undue influence on what the states got and therefore, its successor, the NITI Aayog, is going to be a much more federalism-oriented body which will uphold what the states say. One can foresee a situation where a more industrialised state flexes its economic might and corners a greater share of the Central transfers than say a Bihar or Odisha. With the NITI Aayog becoming largely an advisory and academic body, the best it can do for states is to send them “best practices” reports and suggest that they follow its recommendations, regardless of the funds devolved from the Centre. It is, in fact, an attack on federalism to have dissolved the Planning Commission, given funds devolution now becomes the sole task of the Finance Commission where, given there will be competing demands from the states, just devolution of funds will never occur. Some states that have already achieved a level of progress are likely to keep surging while the poorer states keep lagging, and now by ever-increasing magnitudes.
Barack Obama’s words on the freedom of religion, enshrined in India’s Constitution cannot but be seen as a hard nudge to the Centre to follow the principle, complete with the comment that India’s full membership of the Security Council would entail “greater responsibility”. It would be facile to see this as a $14-trillion Christian nation advising a far-less secular economy on the need for wide-spectrum equanimity. As its long-term strategy, the US looks upon India to counter Chinese influence in the Eastern hemisphere. Sustained internal rifts, that too over fundamental rights of inclusiveness, could render India an unstable fulcrum for leverage against China.
R Narayanan, Ghaziabad