1. Where are we heading??
Being an economics’ students I must believe in the power of demand and supply. But I am still confused
if the only the factors of demand and supply must be used for pricing of everything. If yes than we must
get ready for a lot of repercussions just like we are witnessing in the Indian economy.
The economy was opened up in the years of 1991-92 and since then we have really grown by leaps and
bounds, there is not even a single doubt about the great things achieved by Indian economy post
Liberalization. The products and services availability has become better; the level of customer services
has changed dramatically. Now we don’t have to wait for 12 months if we want a landline or a mobile
connection, all of the things are at the doorsteps. The level of production and the variety of goods and
services are not restricted to only few brands now it’s very easy to purchase even a BMW within 24
hours which was a dream for even an upper middle class Indian. But there is a darker side also…..
Free economy has real power of wealth creation but it can be disastrous if not controlled and that is
what we are witnessing in Indian economy. The prices of commodities even those ones which are of
basic need are almost running with escape velocity. Framing is becoming expensive than ever. The gap
between the nominal and real income of the population is getting larger and at the end of the day the
common man has to strive for everything he/she desires. I must not say that free economy of the forces
of demand and supply are the only reason behind all of this but for sure it is one of the dominant one.
The prices of wheat have almost doubled in last 3-4 years and same is the case with other commodities
and edibles but has the income of a common man has gone up by the same level?? The answer is always
a big “NO”. The concentration of economic power may be seen in the Indian economy where a handful
of people are playing soccer with all of the things which are basic need of a common man.
For agricultural products at least the evil to be blamed is the so called free market and the pricing
power given to the speculators of the commodities which is working through a mechanism of “Futures
Trading”. For sure its s fantastic tool for all of those who want to hedge their position in various
commodities but let me put a simple point here about the number of farmers using future trade as a
hedging tool who must be a real customer for it. More than 95% people playing on terminals of
commodity exchanges like MCX and NCDEX are pure speculators and do not hold even a single
percent of interest in terms of hedging their position and then the government comes and say that there
is no impact of future trade on spot prices. The case with international exchanges like NYMEX and
COMEX is no different. In the year 2008 when the crude oil was above 130 dollars per barrel the open
positions on NYMEX were more than 300 billion dollars and when the speculators stared getting short
of money we witnessed and huge downfall in crude oil prices all round the world.
The reason behind talking about all of these things is to convey a simple message is that the logic of
future trading works on the forces of demand and supply which says “let the market decide everything”,
which may not be good always. The existence of capitalism for sure has opened the doors of
developments but the intense capitalism is destroying us. The government is forgetting its role as a
controller of the economy and most of the people there are just having good times on the seats. No
one wants to take the pain of controlling or monitoring the things and one ultimate answer is always
there which always gives a notion to me that the government this reckless capitalism and free market to

2. rule the economy and everyone wants to shed the part of responsibility by hiding behind the so called
wall of free market economy. For sure India would never grow if there were not some steps taken by
Mr. Manmohan Singh in 1991, but we all must understand that at that time he was a planner and now he
is in a position to control the things. All of the free market policies which are creating problem for India
are a repercussion of new Industrial policy formed by Mr. Singh but here I would like to clarify that the
policies were not having any kind of flaw and Mr. Singh has done a fantastic job as an economic planner.
The economy is in a bad shape due to wrong implementation work done by others and now someone
has to take care of it otherwise the nation may face huge troubles and the nation will become a “not
very good place to live” for a common man.