Saturday, January 13, 2024

Factory Resets - Economic Management

 

Inflation Control – Factory Resets For

*The complex data thickets used to control “Inflation” keep many of our brightest minds busy with breathtakingly nuanced discussions. The top-down’ fixing of MSP, subsidies and basic incomes, loan waivers schemes and farmer suicides keep many in the administrations, elected and selected, ‘rishi’, ‘maharishi’ and ‘buddhi jeevi’ concerned, exercised and agitated.  

*The net result of all these ‘boiling the oceans’ is that the Rural communities, that supply “Foods & beverages” and other primary goods continue to suffer an adverse term of trade of 1:2 (arguably) for ever. 

*The devise of “Cost plus ‘formulae’ end up supporting minuscule amount of Agri Produce, in items and quantity, leaving the rural populations- two thirds of India gasping under the chokehold of market forces’ as ever; forcing the ‘majority’ of Indian People into a life of ‘penury’ and ‘indignity”.

 *Any good business must play the market to its advantage. The Farming communities just don’t have adequate economic muscle, i.e. the ‘pricing power’. So, it must be supported for our own good. Allow me lay out a few “Factory Resets’ for “Thought Scape’ that feed inflation control.

 *The Local admin of Taluka/ District +FPOs, decides and declares, every month, "Kurien Price" for all upcoming produce; that is 50% (at least) of the price that a housewife pays or it sells for in the Taluka/ District town. Now we have 6000+ outfits deciding prices, that leave a very adequate markup (~100%) for the logistics chain.    

*Farmer brings the crop /produce to Mandi. It gets graded, sorted, bagged and stored.

*The Mandis, FCI and all others warehouses accept and issue Warehouse Receipts", possibly co-issued by a local Bank/post office.   

*Farmer can release her produce to sell as s/he needs money. The wholesale buyers and the govt pays for its needs. Alt, the Banks/PO can lend to the buyer (better collaterals) and even to the Farmer if s/he decided to ‘wait’ by discounting her WRs (full collateral).

*All pressure on CFI (Bhartiya Lok Nidhi) and FCI etc is lifted. The logistics chain is forced to become efficient. Now the farmer is truly a 'business man' whose prices get linked to market prices, allowing her to manage her cropping decisions.

*That's how Varghese Kurien grew our Milk Industry that became the world' largest, by 1995. It is well documented.

 *With the local admin and banks providing real support at the grass roots, the Agricultural economy 'rebalances': It will have surpluses, to set up value adding industries locally and to weather bad times.

*This ‘system’ can be effectively worked by the crème de le crème of our society, “elected and selected” who man the Administration: FOR the People.  

 

Another set of People who have ‘no pricing power’ is the “suppliers of their labour’.

*It is estimated that 80% of those employed DO NOT have an appointment letter- the foci of all the kerfuffle or folderol about voluminous labour laws!  

*The Local admin of Taluka/ District, decides and declares minimum wages, every month, for ‘unskilled worker’ – a khalasi, a housemaid that must at least be “Consumption Needs of a Household +30%, the savings rate.". The local units of outfits like CACP will have work cut out for them here.   

*These Taluka minimum wages, called “Lokhande Wage” to honour Pandit Narayan Meghji Lokhande, the 19th century father of trade union movement in India set out by 6000+ outfits will be adequate, enabling a young worker to live with her household as a “person of worth”. There would then be surpluses with the households, to support ‘capacity building’ of next generation.

 

*The Kurien Prices and Lokhande Wages are unlikely to ‘harm economy as empirically demonstrated by the 2021 Nobel Prize winner David Card. The manufactured products would certainly experience a swell of demand from the bottom of the pyramid.   

 *A stable fiscal foundation so created will help reduce subsidies and ‘freebies’ over time and rebalance economy, where Monetary Policies can be meaningfully applied, i.e. “inflation control”.  

*These two ‘first principle’ measures are foundational to achieving “Antodaya’, as envisioned by Mahatma Gandhi: And the Constitutional values of our Republic.  

 

*The ‘largest’ economy tag (concern of a few millions) may elude us but our steep rise on “Happiness Index’ (adding a 1000+ million to happy list), would be the envy of the world- by 2034.

*Detailed computations in support are set out in my book “Factory Resets of Governance Rules”. The Governance Structures, Systems and processes have been “Reset’ with strong incentive structures such that the Wo/men, who steer our Democracy, work FOR the People: Favour pleasantness of life’ journey over productivity and control.

No comments:

Post a Comment