A widely publicised and exaggerated viewpoint in Kerala is that we depend on NRI money.
But what about the poor farmers and cultivators in the highranges who produce our traditional export items like pepper etc?
Keynesian identity states that in an an open economy
Y=C+I+G+Nx+K,
where Nx is net exports and K is capital inflow.
NRIs add to K and a good part of it is spent on consumption, especially conspicuous consumption.
Poor cultivators add to Nx.
Now the recession has adversely affected both K and Nx.But our politicians, journalists and others exaggerate the case of NRI returnees and forget about the poor farmers who are badly affected by both globalisation and recession.Moreover, their income adds to productive capital and not to conspicuous consumption.
There is a powerful NRI mafia. No persons, except some NGOs, cry for farmers.
Now whom do you support? The NRIs or the farmers?
Friday, March 20, 2009
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