Tuesday, February 28, 2012

Swadeshi economy saved India from global recession, Gurumurthy

Indian families’ savings insulated us from global recession, Gurumurthy

Chandigarh, March 5,2010

Indian families’ savings insulated us from global recession and not the policies of UPA government.

Noted economist and social activist S Gurumurthy said this while speaking at the debate on Indian Economy and Budget 2010 held by Bharatiya Janta Party’s Chartered Accountants Cell at Law Bhawan auditorium, sector 37 A Chandigarh.

Gurumurthy observed, “Finance minister Pranab Mukherjee is patting himself for steering away from global meltdown, whereas the fact is that Indian economy never felt a victim to this phenomenon like the US or Western economies. It underwent jerk partly because of oil price rise and meltdown that affected the external sector.”

He attributes insulation from global crisis to Indian lifestyle, which is based on family and community and on balance between consumption and savings.
“Indian family system promotes savings-centric life, but with adequate and affordable, consumption. Our savings to GDP ratio is now about 36% and is likely to go up to 40% and stay there for next 20 years,” he said.

Unlike people in US or Western economies, our families consume out of income and do not borrow and spend. This has made us less dependent on outside world for capital and our exports are far less as compared to any other developing nations.

He said that US economy would have to borrow loan in lacs crores from outside, as the national savings, particularly the household savings, is low and is financed by borrowing.

In contrast, the Indian government is in deficit. Last year the government borrowed some 3.70 lac crores. This year it will borrow some 3.45 lacs. It is Indian family savings, which are mainly deposited in banks, which funds this borrowing, as banks, which finance Indian government’s deficit. The reason is that the Indian families save. More they save in safe modes like bank deposits, insurance and properties, not in stocks. The Indian saving in stocks in less than 6% whereas over 50% of US families own stocks.

Finance minister Punjab, Manpreet Singh Badal also spoke on the occasion. He said that the government should cap subsidies from sectors that are known bread winners of an economy.

MP Balbir Punj, the guest of honor, said that

Convener BJP cell, Tarsem Garg said that the event highlighted UPA’s much acclaimed populist budget as well as Indian economy. Prominent among others present at occasion included president BJP Chandigarh Pradesh Sanjay Tandon,convener BJP CA cell Haryana Suman Kumar Aggarwal, national convener BJP CA Cell Gopal K Aggarwal and convener BJP CA cell Sanjay Kapoor.

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