Posts

Showing posts from December, 2020

Debt Trap - Solutions

           Present time loan become the essential part of the life. All countries central governments, states and provinces governments, Municipal corporations, all are borrowing money to manage their expenditures. Thus they have to pay interest per year then this interest portion in budget reached one third to fifty percent. Then this debt trap continously increasing  if any year revenue decreased then to repay loan and interest again borrow bigger amount then previous year loan taken. This debt trap also now popular to buy home, personal loan.           Industrial or production companies take loan that's right because they are doing commercial activity. Business need money to increase production and they can earn money by this investment in future. So need to reduce borrowing for the non commercial activities where in future return is zero and investment amount also forfeited. Fiscal deficit of all countries are on high this ...

Health Economics

        Present time governments expenditure increased but tax and non tax revenue decreased due to lockdown. One side unemployment increased and other side covid-19 pandemic people facing health issues and near one million people died. So government required huge money to fulfil gap between revenue and expenditure. Required heavy expenditure on vaccination to people country wide. USA & UK are choosed the way of quantitative easing to buy government financial assets and bonds. This method is good for emergency support but what is next, When government will repay this financial support this is a big question. Other side I am suggesting a new option for emergency financing to long term financing for economic output growth.  1. Government should support industries and enterprises by make a law where 30% of bank loan convert in preferential share so interest burden will reduce and possibilities of NPA will become very less. This stake bank can sell to others or ...

Food security and Agricultural subsidy

          Present time all countries governments giving agricultural subsidies on various type of agri inputs and purchase of ready crops. Mostly governments are giving subsidies on fertilisers, seeds, interest of loan amount, agri tools, electricity and diesel etc. These subsidies reason to support farmers, agri labours to stay in this employment and food requirements of country can be fulfilled.         Second when crops become ready for market sell then a minimum support price is announced by governments for various crops. Minimum support price where government buy agri products from farmers. Government use these products for public distribution system to fulfil marginal & poor people food requirements on subsidies rates.            Present time this system have many leakages. Nearly 20% products become waste due to unproper storage system. Many time people are forced to buy these waste and unhealthy ...

Quantitative Easing & GFLR

            Present time central bank of US & UK going to buy government financial assests ie. Matured bond held by financial  ( pension fund, insurance fund) & banking institutions. Present time due to covid-19 lock down cycle of money is halted so central bank will print new note or issue digital currency to by government new bonds or government liability bonds which are on maturity.              This time economies are suffering from recession, tax collection of governments are decreased so meet the financial requirements for current liability and expenditure central bank is pumping fresh money in the economy so rise of interest rate will stopped and cheap money will be available at market. Thus industrial output would be maintained and unemployment in public will stopped.          This method is good but ultimately we are pushing economy by monetary credit but in future if inflatio...