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Experts flay govt bailout packages

The government bailout packages were strongly criticised by economy experts at the inauguration of a two-day seminar 'Global meltdown: opportunities and challenges' organised by University of Pune's...

Written by Express News Service | Pune |
March 21, 2009 12:55:07 am

The government bailout packages were strongly criticised by economy experts at the inauguration of a two-day seminar ‘Global meltdown: opportunities and challenges’ organised by University of Pune’s (UoP) department of management sciences (PUMBA) in association with the UoP’s CSIR-IPR chair.

Vice-Chancellor Narendra Jadhav came down heavily on industrialists and said that they were creating a self-serving notion among people about recession to be a part of government’s bailout packages. “Industrialists know that the government will come up with a package. Hence,they project that if the government fails to include them in the bailout,they will have to cut jobs,which will be a setback for the government during the upcoming elections,” he said.

Jadhav added that students,especially,should look into such details,study them and learn from these experiences. Jadhav further cautioned,”If Indians keep their economic activities on hold in undue fear of recession,slowdown in India would actually turn into recession.”

Complementing Jadhav’s statements,former IIM -Bangalore director said that Indian government should refrain from announcing bailouts. “Why should the government announce bailouts from taxpayers’ money? Corporates earn enormous salaries for themselves and then ask for bailouts from the government,” he said.

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M S Unnikrishnan,managing director,Thermax Limited,however refuted that the industries are projecting India’s recession for their own benefit. “Industries do not need to do that as the government is already giving them various sops like subsidized petrol,” he said.

Jadhav said that there are three possibilities by which the world economy will recover from recession.

“The ‘V’ curve behaviour,which means a big fall immediately followed by big growth,is the highest probability of 70 per cent to 75 per cent of overcoming the recession. This will take about 1.5 to 2 years counting from September 2008,” he said.

The V-C reinforced that Indian economy is not facing recession,which mean negative growth rate in two successive quarters. “The situation in India is that of a slowdown,which will affect some sectors,but not as gravely as it is being projected,” he said.

In this backdrop,Apte suggested of government’s policy intervention in non-banking financial institutes including mutual funds. He said that such institutes have internal risk management regulations,which are not sufficient.

“The government must look at forming a regulatory body for this sector,” he added. Apte added that the government must focus on having an expansionary fiscal policy targeted at manufacturing and infrastructure sectors.

The two-day seminar will have about 250 paper presentation on various topics like brand building,intellectual property rights,cultural diversity,retailing,rural economy management to name a few. The inauguration of this seminar organised as part of UoP’s diamond celebrations was attended by Captain C M Chitale,dean,faculty of management,B V Sangvikar,professor and head,PUMBA.

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