However, Fredrich Hayek’s warning about easy credit leading to bad investments into over ambitious projects or overvalued and non-productive assets should also, be borne in mind.

Easy credit does not lead to greater investment but only encourages greater consumption, especially of unproductive assets e.g.: property etc., thus creating asset bubbles that soon collapse. However, using the taxation policy to generate funds out of more comprehensive taxation (on consumption -GST), to generate employment and even to subsidize unemployment support is justified and practical as it also, restrains excess consumption power out of the economy thus controlling inflation. Interest rates should be kept low and stable to encourage investments/entrepreneurship. GST rates can however, be varied to control inflation/deflation vide a Cess on the basic tax, which can have both Central and State elements that can be changed regularly (even weekly say at midnight each Sunday) in the manner the interbank rate is fixed and on basis points. This will be a better way of controlling inflation while allowing the interest rates to be kept for what they really are, ‘Dogs in the Manger’ who for their own benefit sit on the assets and deny the really poor jobs and opportunities. Labour laws need to be more practical and perhaps mainly applicable only for large enterprises.

The infusion of such long-term Capital into the financial market would encourage funding for long term Infrastructure Projects and also, greatly encourage Entrepreneurship, leading to greater Wealth creation for ALL. After all, sharing of wealth is possible only after it is first created. Wealth creators thus deserve the opportunity and recognition as they benefit us all.

Conclusion

Wealth historically accrues from tangible resources but today it also, accrues more from intangible resources, mainly as equity in corporations working in the digital, Artificial Intelligence and Genomic areas. To share in the growth of such wealth it is essential that everyone be encouraged to participate in the equity markets, even if only through properly structured Financial Institutions or Mutual Funds. Entrepreneurs generating such wealth should be encouraged and allowed to benefit from their efforts, after all only when wealth is generated can it be shared.

JAI JAWAN! – JAI KISAN! – JAI UDYOGAN!

JAI BHARAT! – JAI HIND!

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