Lessons to be learnt from Economic crisis in India.

India must analyse the cause for the present economic crisis and correct the wrong policies.

A. In my view the reason for the crisis are:-

1. India have opened the economy indiscriminately to foreign countries.
2. Taxes and duties of imported items have been drastically reduced which affected the Indian Industry badly.
3. Allowing of FIIs to Indian stock market indiscriminately and drastic tax reduction for FII investments have de stabilised the stock market.
4. Allowing importing of non essential items and dumping in Indian roads affected all the units of all Industrial Estates and small scale industries and deprived the earnings of crores of Indian working people.
5. Opening of Future and Option Trade to FII , made the price of essential commodities to unrealistic levels due to entry of illegal and black money to the market.

B. What India have to do:-

1. Change trade currency from USA Dollar to Euro.
2. Ban all Future and Option market in India at one stroke.
3. De-list all Indian papers from all foreign stock markets. They must not be allowed to dictate the trend of Indian stocks.
4. Increase the tax on FII investment. Entry tax ( at least 25 % ) as well as Capital Gain tax { short term ( 3 years) = 50 % and Long term 40 % } to be levied.
5. India does not need FII money any more as the Domestic Institution, Mutual Funds and Pension and Insurance companies can sustain the stock market and they will not desert India and will support the market in case of crisis.
6. Most of the FII money have already gone out of India and India must not fear about stock market crash.
7. Open direct trade with all Gulf countries including Iraq and Iran. They are the real friends of India.The real reason for Iraq war has exposed USA's aim of controlling oil wealth of Arab nations.
8. Start oil pipe line work immediately.USA’s selfish threat must be ignored. USA want to control oil usage by any country must be defeated.Lot of Arab countries are interested to supply oil to India. This will isolate India from artificial oil price rise by the developed countries.
9. Increase tax and duties of all luxury items costing more than Rs 3 lakhs.
10. Ban all luxury cars and allow only cheap , economical and fuel efficient cars.
11. Encourage saving of oil by increasing public transport system vigorously.
12. Introduce more trains with Janatha class.
13. Essential commodities must be supplied in ration shops.
14. Janatha meals at subsidised rate must be provided in all the hotels with out any limit .
15. Land cost to be arrested. Wealth tax linked with real market rate must be introduced. The wealth tax must be applicable for the third property and any tax payer must be free from wealth tax for any two house/plot.
16. Surplus land of industry must be acquired by Government to develop housing for the middle/lower income group.

C. What India must get from USA:-

1. Only new and latest equipment at reasonable price must be supplied.
2. USA must not be allowed to interfere with Indian Nuclear policy and Nuclear Installation.
3. USA must scrap Quota for all imports from India.
4. USA must issue visa to all applicant of visa with out any limit.
5. USA must compensate India for increased Oil cost spent( 100 % ) for the past 5 years.Iraq Policy of India supporting USA has affected India's trade with Gulf countries.

D. Basis :-

1. There is no natural calamity in India or any where in the world resulting in shortage.
2. We have adequate supply of all essential commodities.
3. There is no shortage of Oil supply or surge in oil consumption in the world.
4. USA has lagrge Oil stock.USA want to conserve this and want to use oil from gulf.
4. The shortage is designed by the developed countries to discourage the developing countries to consume more oil.