DrKunal Dhamesha A good article on nationalism but from economic perspective it does not make much sense. First of all India follows fiat money system and not gold standard. Plus current fall in rupee is attributed to lack of change in policies to attract foreign funds, instead there has been outflow of foreign funds. As long as the question of using Indian products lets evaluate is it possible? First take items which can not be easily substituted. Take oil, we dun produce much so we cant substitute imported oil with domestic production. Now if we stop using our cars or vehicles. Firstly, it is not sustainable solution. One can only stop using it for 1 week? At the most 2 weeks. Secondly, stopping all vehicles in country will only lead to loss of production(this does not mean literal production, refer to GDP definition) which will affect GDP growth rate which is already lack luster. Which in turn will cause more outflow as the investment community will think India as unattractive investment case. Third stopping all vehicles will only cause demand supply mismatch and inflation!!! Now, we evaluate substitute items. Let§ take Pepsi (as beverage has substitute we can drink Darjeeling tea instead of Pepsi) an MNC which takes home a lot of money to US according to you. Firstly region "Asia Middle east and Africa" contribute only 4% to global Pepsi revenue (so small). Secondly, if we see net profit margin of Pepsi it is merely 9.4% for 2012. Which is kind of average net profit margin. Secondly, many of the MNCs have their production facilities in India. Pepsi also has bottling plants plus their food items manufacturing facilities which provide employment opportunity as well as they also buy raw materials from the country. So, in turn MNCs contribute lot to economy. So, it is clear that Pre-1991 era approach of nationalism is not feasible solution. We should see this as an opportunity to boost our exports as depreciation makes export more competitive.
Posted on: Tue, 27 Aug 2013 03:14:14 +0000
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