7.
Magic formula
It
is really appreciable to know how the government brought down
inflation rate in India while at the same time our g.n.p. is
increasing at a robust speed. But our interest rate needs to be
rationalized.
May I humbly suggest a magic
formula of interest rate which has proved to be one hundred per cent
successful in:
· USA
for the last 100 years
· Japan
for the last 50 years
· Germany
for the last 50 years.
And
it has turned them into the biggest and best economies in the world.
The
formula is very simple, interest rate is to be kept below 6% per
annum, preferably 4%
E.c.c.
has realized the extraordinary benefit of this miracle, and even
chronic inflation prone economies of Italy & Spain have
tremendously benefited form it. They have been very successful in
bringing down inflation & giving a new boost to the economy just
by greatly reducing their interest rate
Mainstream
economies favour a high interest rate to keep inflation in check, but
in practice it gives just the opposite results. High interest rate
directly increases inflation & stifles industry & business.
And
most importantly, it directly increases interest burden in our central
govt. Budget and this has become the single biggest expenditure in our
budget which affects crucial departments like defense, health &
education.
The
above suggestion needs to be examined carefully and the government
should be bold enough to implement it in the coming budget.
The
central key to the success of American economy is having a very low
interest rate for the last 100 years. Seeing is believing; forget. The
old theoretical economic thinking.
If
need be, the golden India foundation will be willing to conduct all
necessary research in this matter free of cost.
I
wish India to play the role of a world leader in the new millennium it
is the largest democracy in the world and now we have to make it the
strongest democracy so that it can regain the title of visva guru.