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    Economic Analysis of Modern India

    Premises:  Agriculture gets first priority.  Economic development should take place after educational study is complete.  

    India has made strides in agricultural development by growing hybrid varieties of food grain but at the same time has over emphasized rice production.  For agriculture to be fully developed the land should be inter cropped.  By inter cropping is meant that about ten meters apart fruit trees should be grown and in between grains vegetables etc.  This greatly boosts the yield of agriculture, maintains oxygen balance of the atmosphere and protects the farmer as both fruit and agricultural production rarely fail in the same year.  This development which should have been done first has so far been neglected.  Though there is fruit production in India it is more or less for the rich.  Intercropping will greatly boost fruit production and the latest report by the US commission on health and nutrition has stayed fruits are the best food for health.  Fruit consumption among children needs to be greatly increased.  

    I feel the lack of development in indented India in the first forty years was good and should have continued till educational analysis came up with the best solutions.  My previous blogs have thrown light on the correct approach to economic development.  

    Pre independent India developed faster than post independent India for the first forty years due to irrational policies of the Congress party led by Jawaharlal Nehru.  Direct taxes were applied to those with incomes of USD 100 and above.  There was 97.  75 % tax at the top bracket, Taxes were used to develop the public or government sector and salaries were kept as high as possible and prices as low as possible.  Public sector production was given at low cost to those who had licenses who sold it in the black market as there were shortages.  Depreciation of plats was fixed at fifty years or two percent annually.  

    Irrational financial planning led to very low growth tax evasion and low development which was in my view good.  

    After the end of the Soviet Union India went on the capitalist road and since 2003 tapped the vast rural market to energies development.  It has done considerable work in development but agriculture has still not been intercropped.  I feel development is going in the wrong direction.  

    The world economy cannot function with petroleum prices above USD 100 per barrel and the limits to development with petroleum and natural gas have been reached.  WE can expect the world economy to enter a phase of boom bust boom bust as the price of petroleum gyrates above and below USD 100.  In short India rapid development since the late 1990s and the worlds for that matter has been at best a stop gap and of little worth.  

    Maybe the countries facing sanctions like Cuba and North Korea will emerge as the paradises of the future