Recession

The inequality generated by decades of neoliberalism and the resentment it has caused across the world have in recent times led to uncertainties that only intensify the fear of recession.

• Growth is decelerating worldwide, including United States which is experiencing 50-year low unemployment rate. China lost momentum with industrial growth at a 17-year low. Prospects for the third quarter are gloomy as well.
• The performance of major economies affects the rest of the world economy. For example, depressed Chinese demand caused the fall in Thailand’s second quarter growth rate to the lowest since 2014. 
• Scattered talk has given way to widely expressed fears of an impending recession affecting financial investment behavior, with investors dumping stocks and shifting to government bonds, resulting in a slump in stock markets.
• The deeper malaise is the depressed demand due to extreme inequality in assets and incomes that has resulted from decades of neoliberal growth across the developed world. Globalization moved productive activities to cheap labor locations had depressed wages across countries with large profits for a few and tax concessions for the rich have accentuated inequality.
• Incomes in the top percentile have exploded, those in the middle and lower ranges have  stagnated sapping consumption demand. Growth came by finding ways of stimulating demand not depending on current income, but driven by credit. That, beyond a point, is not sustainable and the fear of another recession is likely.
• The USA-China trade war and other countries responding with similar measures, the world is faced with a proliferation of beggar-thy-neighbor policies that makes a bad situation worse. The unknown consequences of Brexit cannot be anything but adverse. These uncertainties intensifies the fear of recession.
• The challenge for capitalism was finding an alternative way of reviving demand depressed by underlying inequality. In the past the states used to step in to lift economies out of recession with their spending for a short a time. With neoliberalism that has shrunk the revenues of the state and public spending being is mostly debt-financed, this option was shunned. The only way to drive private demand is with credit in the form of near zero interest rates and getting central banks to hugely increase liquidity in the economy.
• Capitalism’s current predicament arises because this policy has not worked, though it has been experimented with very low interest rates and in some countries even have turned negative. While this policy has not delivered growth, it has encouraged speculation financed with cheap credit. This has led to accumulation of corporate debt as firms borrowed mainly to speculate in financial markets and pay off their rich shareholders with costly share buybacks resulting in asset price inflation and financial fragility. But with low growth central banks were compelled to continue this policy regime.
• But as the threat of recession looms, erstwhile advocates of fiscal prudence and austerity such as the IMF are calling for adding fiscal stimuli to the policy mix. Infrastructure upgrades, expanding public housing stocks and targeted tax cuts should all be considered. This is the recipe for a return to more robust growth and inflation.

The recession threat is immediate and policy is likely to respond too slowly. If the recession does set in, it can be devastating. In 2008 China, Germany and India were affected less and this time they are among the countries whose performance could drive the recession. Corporate debt often denominated in foreign currencies at high levels, a recession would find many debtors defaulting on payments and forced to sell assets. That could result in asset price deflation and will have reverberations in an over-committed financial sector. Only a set of freak occurrences can prevent another recession.

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Growth focused economy is unsustainable

Most world leaders seem to believe that economic growth is a panacea for many of society’s problems. There are many links between our society’s addiction to economic growth, the disturbing ecological crisis, the rapid rise of social inequality and the decline in the quality of democracy. All these are deeply interconnected processes.

• Greater economic growth on its own does very little or nothing at all to enhance social well-being. 
• Reducing income inequality is an effective way to resolve social problems such as violence, criminality, imprisonment rates, obesity and mental illness, children’s educational performance, population life expectancy, and social levels of trust and mobility.
• Societies that are more equal do much better in all the aforementioned areas than more unequal ones, independent of their GDP.
• Unchecked capitalism tends to increase inequality and undermine democratic practices. The focus of a successful social policy should be to reduce inequality, not to grow the GDP for its own sake.
• Our frenetic economic activity has already transgressed ecological planetary boundaries. If current trends continue, humanity will soon face dire and dramatic consequences.
• Constant economic growth is a biophysical impossibility in a limited biosphere, and the faster the global economy grows, the faster the living systems of the planet collapse. This growth increases inequality and undermines democracy, multiplying the number of social problems that erode human communities.
• We have created a dysfunctional economic system of growing the pace of production and consumption, destroys the ecological systems upon which it depends. And when it does not grow, it becomes socially unsustainable. In a game with these rules, there is no way to win!
• Breaking the spiral of socio-ecological disaster is easier than we think. We do not need a new planet to colonize, but only to change the way we frame things.
• The economy is a subsystem of the ecology, not the other way around. If we begin to organize our priorities according to the biophysical reality rather than the market demands, it quickly becomes clear that our dominant economic system is absurd because it destroys the ecosystems that are the source of its wealth.
• In a desirable economic model the goal is to serve the well-being of communities and ecosystems and not to accumulate capital. At a global level we cannot afford to grow at all since we need to reduce economic throughput to be sustainable. 

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If the rich nations in the world keep growing their economies by 2% each year and by 2050 the poorest nations catch up, the global economy of more than 9 billion people will be around 15 times larger than it is now. If the global economy then grows by 3% to the end of the century, it will be 60 times larger than now. The existing economy is already environmentally unsustainable. It is utterly implausible to think we can “decouple” economic growth from environmental impact since technological advancement have only increased our impacts on the planet, not reduced them. The GDP – the monetary value of all goods and services produced in an economy – is a deeply flawed measure of progress.

Income tax reduction doesn't impact economic growth

No one likes to pay taxes, particularly more taxes. Discussions about tax rates rouse emotions as discussions about where those taxes are spent. The influence of tax rates isn’t as significant as the emotional response to them might suggest. The basic question is: Do tax rates—by adding money when cut or subtracting money when raised—result in economic growth or contraction, meaning more or fewer jobs? The structure and financing of a tax change are critical to achieving economic growth. If the tax cuts are not financed by immediate spending cuts, they will result in an increased budget deficit, which will result in inflation and increased interest rates. The net impact on growth is either small or negative or uncertain. Base-broadening measures can eliminate the effect of tax rate cuts on budget deficits. They may also reallocate resources across sectors toward their economic use, increased efficiency and raising the overall size of the economy. All tax changes will not have the same impact on growth. Reforms that improve incentives, reduce subsidies, avoid windfall gains, and avoid deficit financing will have more auspicious effects on the size of the economy, but may also create trade-offs between equity and efficiency. 

• The tax policy can influence economic choices, it is by no means obvious that tax rate cuts will ultimately lead to a larger economy in the long run. 
• The income tax rate cuts would raise the after-tax income to working, saving, and investing, they would also lessens their need to work, save, and invest. The first effect raises economic activity, while the second effect reduces it.
• Tax cuts financed by immediate cuts in unproductive government spending could raise output, but tax cuts financed by reductions in government investment could reduce output.
• If they are not financed by spending cuts, tax cuts will lead to an increase in government borrowing, which in turn, will reduce long-term growth. 
• The historical evidence and analysis suggest that tax cuts that are financed by debt for an extended period of time will actually reduce growth.
• Tax reform is complex, as it involves tax rate cuts as well as base-broadening changes. Such changes should raise the overall size of the economy in the long-term, but the magnitude of the impact are uncertain. 
• Broadening the tax base by reducing or eliminating tax expenditures raises the effective tax rate and hence will operate in a direction opposite to rate cuts and mitigate their effects on economic growth. But base-broadening has the benefit of reallocating resources to sectors that have the highest economic return, which should increase the overall size of the economy.
• A well-designed tax policies have the potential to raise economic growth, but there are many stumbling blocks along the way and certainly no guarantee that all tax changes will improve economic performance. 
• A tax change will be more growth-inducing to the extent that it involves (i) large positive incentive effects that encourage work, saving, and investment; (ii) small or negative income effects, including a careful targeting of tax cuts toward new economic activity, rather than providing windfall gains for previous activities; (iii) reductions in distortions across economic sectors and across different types of income and consumption; and (iv) minimal increases in, or reductions in, the budget deficit.
• Debt-financed tax cuts will tend to boost short-term growth, but also tend to reduce long-term growth, if they are financed eventually by higher taxes. Second, revenue-neutral income tax reform can provide a modest boost to economic growth.
• The tax rate on the average American was around 21% in 1947 and declined to around 15.5%, in 2015. The tax rates for the highest earners dropped from 86.45% in 1947 to 39.60% in 2015.  During this period US economy (GDP) grew from $243 billion in 1947 to $18,905 in 2017. Over that period, taxes increased and decreased; wages climbed and dropped; interest rates rose and fell; and so on. But GDP grew year after. It grew because something other than money drives the spirit.
• Income beyond $250,000 per annum gets tossed into savings & investment account and gets utilized for vulgar spending like gambling, trading, holidaying, ornaments, real estate, vulgar homes, money laundering etc and taxing this money doesn't make any difference to anybody.

Tax cuts that target new economic activity, reduce distortions to the allocation of capital, and are not deficit financed are more likely to lead to economic growth. Advanced countries that decrease their tax rates do not experience less economic growth as changes to the top individual income tax rate are not associated with economic growth. Studies show that the US economy has not grown in conjunction with large changes to individual income tax policy. In summary, the impact of tax cuts on growth depends on how the tax cut is financed and the assumed international capital flows. Failure of capital to flow internationally reduces the likelihood of success of tax rate cuts.

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The income tax created more criminals 

than any other single act of government ... Barry Goldwater

Almost all studies indicated that, income tax reduction has significant and negative impact on economic development. Hence income tax reforms aiming to reduce tax rates benefits only rich to become much richer and is in violation principles of democracy and equality. The present tax regime which taxes class four employees is ridiculous while almost all businessmen pays meager taxes that never exceed 10% of their real income, where as TDS deductions for salaried class starts at Rs.2.5 lakhs pa. The suggested rationalization of tax rates to be as under with stringent penalties for violations.

Since broadening tax base has evil aim of taxing the poor while doling out concessions to the rich with other hand and is unacceptable non-sense as it results in much work and little gain. Riches beyond certain point neither increases consumer spending nor capital accumulation but goes into unproductive spending & laundering that burdens the economy and abuses nature. While intelligence, talent & hard work must be rewarded, the high:low wage ratio of over 10,000 is untenable and must be brought to acceptable 200. Extreme poverty must be subsidized heavily and extreme wealth must be taxed heavily.

US debt spiral

By the year 2020, the United States is expected to have a total national debt load of approximately $20 trillion dollars. The cost to service the public portion of that debt is expected to be nearly $800 billion per year, and that's assuming that we don't encounter significantly higher interest rates.

  

• The combination of high debt, mounting spending pressures from population aging, and moderate growth pose the risk of fiscal/financial crisis – a low probability event but one with potentially enormous costs for the U.S. and global economies. 
• To reduce that risk, the US Administration and Congress should restore the health of the country's public finances through gradual but sustained further reductions in the deficit.
• Economic growth is vital for a nation's ability to sustain its public debt. Many debt crises in emerging economies have been caused by declines in growth. In advanced economies, the largest increases in debt ratios occurred when policymakers mistook a prolonged decline in growth for a temporary recession, and failed to cut spending or increase taxes. 
• Economic growth is key because when growth declines, revenues decline commensurately, and governments are reluctant to cut spending in response, so that more debt accumulates.
• Living with high debt is living dangerously. As larger deficits are financed, the debt also swells.
• An interest-debt spiral is inconceivable for the United States, long considered a safe haven and benefiting from the "exorbitant privilege" stemming from the dollar's role as a reserve currency. A country's status as a safe haven is ultimately based on investors' perceptions, which can change abruptly. With privilege comes responsibility, and preserving the credibility of the U.S. public finances is vital not only for its citizens but also for the stability of the international financial system.
• If it were possible to sustain high inflation and low interest rates, investors would take their funds abroad. That rules out the "financial repression" strategy. Alternative approaches such as outright default would be even more disruptive. To avoid spooking investors, candidates should not suggest inflation or default as potential means of slashing the debt. That leaves old-fashioned fiscal adjustment through spending cuts – which are increasingly difficult as population aging adds pressures on entitlement programs – and revenue increases. The pace of adjustment should be gradual, in order not to disrupt the global recovery. The U.S. debt ratio may thus be expected, at best, to decline slowly. 
• Imposing statutory caps on domestic and military spending will definitely temper the deficit but will get swamped by healthcare and social security spending that will rise with aging population. Also Trump wants to spend $1 trillion on infrastructure in 10 years, surge in military spending and large tax cuts for individuals and corporations which will only increase overall debt.
• Deficits are helpful when economies are in recession. But when they are in near full employment , as US economy is now, deficits should be kept below 3% to avoid drag on investment or worse a financial crisis.
• The share of public debt is expected to reach 89% of GDP by 2027, increasing the risk of financial crisis and raise possibility that investors will become skittish about financing government's borrowing, although many countries have far higher debt levels.
• Besides deficit, tepid economic growth is also a concern. Over next 10 years real economic growth may not exceed 1.9% per annum. The steadily growing economy appears to be giving policy makers more time.
• Prepare to live dangerously for several more years.

Any person or corporation or state or nation, which can't repay smaller debt today will certainly can't repay bigger debt in future. So it is in the interest of lenders to stop restructuring of loans, that has very poor track record (1 in 100 success rate or even less), and stop dealing with such over spending entities after few warnings. Eventually, such debts will get written off in some form or other. But lenders are also helpless about parking their earnings or trade surpluses safely. Balance is the key! Every one must learn to balance income & expenditure, imports & exports so on on real time basis. Not doing so is recklessness or irresponsibility or both. Stay away from such people.

Why do we need economic growth?

Most things don’t grow forever. If a person grew at the same rate for his whole life, he’d become gigantic. Yet most economists are united around the idea that the economy needs to grow, always. And at a high rate, for the good of the country and its people.

• Economic growth is the increase in the goods and services produced by an economy, typically a nation, over a long period of time. It is measured as percentage increase in real gross domestic product (GDP) which is gross domestic product (GDP) adjusted for inflation. The economic growth every year is essential to a country’s stability and prosperity. But some economists argue that it makes more sense to focus on measures of well-being than growth.
• Maximizing growth doesn’t necessarily help people, but also that rapid growth can itself come at a cost, such as when the pursuit of growth is used to push through policies that are expected increase the GDP but may have negative consequences for millions.The pursuit of growth can be quite dangerous. The welfare of a nation can scarcely be inferred from a measurement of national income.
• For a developing economy where the basic need isn’t met and growth is necessary for more food. Economic growth in a developing economy can go a long way to improving living standards. When people are living in poverty, they experience a deprivation of basic human needs, such as food, shelter, education, basic health care. Economic growth can enable many of these basic needs to be met and this economic growth can radically increase living standards among those countries.
• It's an election winner. Politicians see growth as very important. Elections are won or lost on the state of the economy. Look what happens if growth disappears and recession looms. People get very concerned about falling incomes and rising unemployment. 
• If poverty is to be relieved and the rich are not to be made poorer, then growth is necessary. Making the poor richer is not easy and there are many political obstacles in the way. But at least growth makes it easier.
• When real incomes are already quite high, economic growth can have a marginal impact on living standards. There is a strong diminishing marginal utility to extra income. 
• Economic growth is driven by technological improvements, which reduce the costs of production and enable more to be produced. This technological progress in many ways feels an inevitability. How could you stop this technological progress? Technological improvements have particularly improved the productivity of agriculture and manufacturing. This means we can support ourselves with a smaller % of the workforce on agriculture and manufacturing. Many of new jobs are in service sector.
• In theory, economic growth should enable people to work less, enjoy more leisure time and would enable to retire earlier, if they are able and willing.
• Increased GDP offers the potential for higher living standards but certainly doesn’t guarantee it because of uneven distribution and how it is used. GDP measures activity in the economy, but there’s no way to know whether that activity is actually good for society. The BP oil-rig explosion, which killed 11, and the subsequent spill, which leaked 3 million barrels of oil into the Gulf, actually lifted GDP because of the amount of money spent cleaning it up.
• Economists often say that without growth it will be impossible to address income inequality. But even with growth, there’s no guarantee that inequality will decrease. The economy’s current trajectory is of increasing inequality. Economic growth leads to the depletion of resources - a problem that's likely to get worse as world population and world consumption grows.
• One of the biggest sources of rising expenditure in western economies is health care. There are simply more things that can be treated. Also, there is the irony of having to treat diseases of affluence (such as obesity, heart attacks, cancer etc).
• Economic growth will not solve the fundamental problems of human psychology / behaviour. It can increase sense of inequality. Growth will not reduce the incentives to cheat and steal. It does not make people more charitable and good-natured.
• Environmental problems facing humanity, economic growth could exacerbate these issues and reduce living standards.
• Some of the most content people in the history of the world got by on a lot less. Some saints have argued they were much happier when they forsook their wealth.
• Rather than worrying about increasing real GDP, we could spend time promoting greater social harmony.
• The point is that life is a struggle for most people in developed economies, and technology and increased efficiency has not done much to fix that over the last 40 years. No doubt there are a few that have enjoyed increased leisure time, but at the expense of the masses.

Do we need economic growth? Not really. But, if managed well, it doesn’t have to do any harm and gives the potential to make improvements in our material well-being. Needless to say, economic growth is far from the panacea to make society better. It is a neutral component of human well-being. There’s nothing wrong with targeting economic growth as long as you are aware of its imitations. Governments and society need to be judged on so much more than simply whether their economies are growing.

We have to find a way to make the aspects of capitalism that serve 

wealthier people serve poorer people as well.

If money is your hope for independence you will never have it. 

The only real security that a man can have in this world is a reserve of 

knowledge, experience, and ability ... Henry Ford

Money has no utility to me beyond a certain point ... Bill Gates

For India with large number of unemployed youth, economic growth is the only way to create enough jobs and security. The present phenomenon of jobless growth is unsustainable. The current trends of economic growth are also associated with increased pollution, over exploitation of non-replenishable natural resources, destruction of ecology etc is a destructive growth. Additional wealth created is grabbed by top 10% wealthiest people. The disparity between rich and poor is widening. This kind of growth is absurd. In an ideally developed world all people should be equal, even though perfection is unachievable. We need to grow to accommodate ever rising population.

Economic growth will destroy everything

• Everyone wants everything. How is that going to work? 
• Economic growth promises that the poor can live like the rich and the rich can live like the oligarchs.The promise of private luxury for everyone cannot be met: neither the physical nor the ecological space exists.
• The planet that sustains us is already bursting through the physical limits. Climate breakdown, soil loss, the collapse of habitats and species, the sea of plastic etc all are driven by rising consumption. 
• Growth must go on: this is everywhere the political imperative.
• Simple Lifers who seek to resist growth & its impact will be silenced, especially by the media. 
• Thirty years ago, it was ridiculous to buy bottled water, where tap water is clean and abundant. Today, we use a million plastic bottles a minute, worldwide.
• Green consumerism is not a solution for planetary survival. There is no significant difference between the ecological footprints of people who care about their impacts and people who don’t.
• Those who identify themselves as conscious consumers use more energy and carbon than those who do not.
• Environmental awareness is higher among wealthy people. The richer we are, the bigger is our ecological footprint, regardless of our good intentions. The green consumers mainly focus on behaviors that have relatively small benefits.
• People who recycle meticulously, save their plastic bags, carefully measure the water in their kettles, then take their holidays abroad that cancels their environmental savings 100-fold. 
• People who have gone green in no way enable them to overlook their greater impacts.
• None of these means that we should not try to reduce our impacts, but we should be aware of the limits of the exercise. Our behaviour within the system cannot change the outcomes of the system. It is the system that needs to change.
• World’s richest 1% produce around 175 times as much carbon as the poorest 10%. 
• If everyone aspires for higher incomes, how the earth will support its impacts.
• As growth outpaces efficiency, the total use of resources keeps rising. Efficiency with its physical limits, decoupling from the use of essential resources is impossible.
• A global growth rate of 3% means that the size of the world economy doubles every 24 years. This is why environmental crises are accelerating at such a rate. Yet the plan is to ensure that it doubles in perpetuity. 
• Perpetual growth is unsustainable on a planet that is not growing.
• Poorest 60% of the world’s people receive only 5% of the additional income generated by rising GDP. A $111 of growth is required for every $1 reduction in poverty. On current trends, it would take 200 years to ensure that everyone receives $5 a day. By this point, average per capita income will have reached $1m a year, and the economy will be 175 times bigger than it is today. This is not a formula for poverty relief. It is a formula for the destruction of everything and everyone.
• Those who see an indefinite rise in consumption as normal and necessary, are beserkers, destroying the prosperity of future generations.
• Green consumerism, material decoupling, sustainable growth are all illusions, designed to justify an economic model that is driving us to catastrophe. The current system, based on private luxury and public squalor, will eventually impoverish us all.
• We need a different system that establish the parameters by which we judge its health. We need to build a world in which growth is unnecessary, a world of private sufficiency and public luxury. And we must do it before catastrophe forces our hand.

The rising rate of homelessness in places like San Diego
is one of the signs of growing poverty in the United States.

All progress is precarious, and the solution of one problem 

brings us face to face with another problem ... Martin Luther King, Jr.

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The only benefit of the rapid economic growth is millions of people are lifted from impacts of extreme poverty. The rest of the benefits are illusory. In the late last century, unfettered capitalism in the United States led to rapid economic expansion. This was characterized by widening class disparities and profound economic insecurity among the poor. Today, forty million Americans live in poverty, nearly half in deep poverty who live on less than $2 per day per person and don’t have access to basic human services such as sanitation, shelter, education and health care.

Development is not a buzzword but a toxic word

Despite its widespread usage, the meaning of the term ‘development’ remains vague, tending to refer to a set of beliefs and assumptions about the nature of social progress rather than to anything more precise. Development fail to address poverty or to narrow the gap between rich and poor, but in fact it both widens and deepens this division and ultimately creates poverty, as natural resources and human beings alike are increasingly harnessed to the pursuit of consumption and profit. The survival of the planet will depend upon abandoning the deep-rooted belief that economic growth can deliver social justice, rational use of environment, and human well-being.

• The word ‘development’ as a buzzword is in vogue for almost 60 years and its actual meaning is still elusive, since it depends on where and by whom it is used.
• Everyone uses it as she or he likes, to convey the idea that tomorrow things will be better. 'Development' has been widely used as a hard drug, addiction to which may stimulate the blissful feelings that typify artificial paradises.
• President Truman merely wanted to include in his 1949 Inaugural Address as a fourth point that would sound ‘a bit original’. So from the very beginning, no one not even the US President really knew what ‘development’ was all about. This did not, however, prevent the word from gaining wide acceptance.
• There was an unquestioned assumption that “development”, whatever it was, could lead to improvement in the situation of 'poor people’. And no one cared to define it properly.
• Any measure (foreign investment, lowering or raising of trade barriers, well-digging, literacy campaigns, etc) was justified ‘in the name of development’, making even the most contradictory policies look as if they were geared to ‘improving the lives of poor people’. This trick has been highly instrumental in preventing any possible critique of ‘development’, since it was equated almost with life itself.
• During the cold war period (1947-1991), the great powers disagreed on almost all issues except one: ‘development’, the magic word that reconciled opposite sides. Its necessity and desirability were not debatable, and the two ideological adversaries vied with each other in promoting it across what was then known as the Third World. ‘Development’ was mainly used as an excuse for enticing ‘developing countries’ to side with one camp or the other.
• This political game turned to the advantage of the ruling ‘elites’ who were influential in international arenas, rather than grassroots populations.
• To reconcile the requirements to be met in order to protect the environment from pollution, deforestation, the greenhouse effect, and climatic change and to ensure the pursuit of economic growth that was still considered a condition for general happiness has resulted in the coining of the catchy phrase ‘sustainable development’, which immediately achieved star status.
• It is impossible to bring together a real concern for environment and the promotion of ‘development’. ‘Sustainable development’ is nothing but an oxymoron, a rhetorical figure that joins together two opposites such as ‘capitalism with a human face’ or ‘humanitarian intervention’. Hence the battle to define what ‘sustainable development’ is really about.
• The ‘new era of economic growth’ was certainly not in favour of those who considered environmental sustainability a top priority. Despite increasing concerns for the environment protection, but the popularity enjoyed by the idea of ‘sustainable development’ is overwhelming. Increasing number of people feel that something has to be done to lessen the impact of human activity on the biosphere due to the mounting environmental crises. And yet, ‘development’ whether sustainable or not remains high on the agenda, and no one seems about to forsake it.
• Irrespective of ideologies, no politician would dare to run on an election platform that ignores economic growth or ‘development’, which is supposed to reduce unemployment and create new jobs and well-being for all. Small investors and ordinary people expect an increase in profits or wages. ‘Development’ has become a modern shibboleth, for anyone who wishes to improve his or her standard of living.

The undeniable success of ‘development’, linked to its undeniable failures in improving the condition of the poor, therefore needs to be called into question. Those who are ready to recognise that ‘development’ has not really kept its promises are also loath to discard the notion altogether. Failures, they would say are from erroneous interpretation or ill-considered implementation. After all, God himself may not answer all our prayers or grant all our requests, but his righteousness remains beyond doubt. In a nutshell, ‘development’ could be defined as: the essence of is the general transformation and destruction of the natural environment and of social relations in order to increase the production of commodities (goods and services) geared, by means of market exchange, to effective demand. 

• A country is the more ‘developed’ the more limited the number of free things that are available: to spend an afternoon on the beach, to go fishing, or enjoy cross-country skiing is nowadays impossible unless one is prepared to pay for it.
• In a ‘developed’ country, human beings are also turned into ‘resources’ and are expected to know how to sell themselves to potential employers. Prostitution may be officially condemned, but it has become the common lot: everyone is for sale.
• Poverty is proof of the ‘good health’ of the capitalist system. It is the spur that stimulates new efforts and new forms of accumulation. Economic growth – widely hailed as a prerequisite to prosperity – takes place only at the expense of either the environment or human beings. 
• World segregation is such that those who enjoy a so-called ‘high standard of living’ hardly come into contact with the poor and may thus cherish the illusion that their privileged circumstances may sooner or later spread to humankind as a whole. But climatic change, the greenhouse effect, and nuclear clouds cannot be contained and affect everyone, rich and poor alike, perhaps in the not-too-distant future. This is the real meaning and the real danger of globalisation. 

It is clear that ‘development’ is not a buzzword but a toxic word. It has been used time and again to promote a system that is neither viable, nor sustainable, nor fit to live in. The benefits that it still confers on a tiny minority are not enough to justify its continuing acceptance, in view of the lethal dangers that it entails. This is being progressively admitted. Given the amount of information that have been gathered on the manifold man-made hazards that impinge on our daily lives, why is it that we do not believe in what we know to be certain? The answer, probably, lies in the fact that our belief in ‘development’ is still too strong to be undermined by the scientific certainty. A change could be conceivable if we recall the Amerindian wisdom that teaches us that ‘we hold the earth in trust for our children’. It is high time to debunk the ‘development’ buzzword. To do so means that we must define it relying on actual social practices, rather than wishful thinking. We must be aware of its inclusion in a corpus of beliefs that are difficult to shatter, expose its mischievous uses, and denounce its consequences. The most important thing is that there is life after ‘development’ – certainly a different one, but there is no evidence to suggest that we would lose on such a deal.

All progress is precarious, and the solution of one problem brings us 

face to face with another problem - Martin Luther King Jr

Development as a buzzword - Gilbert Rist

In India there would be no speech by politicians or officials or anybody without reference to the buzzword 'development' which in fact justifies, promotes and expand their activities and vested interests in multiplying their profits albeit unjustly, undemocratically and often unlawfully. Every rich and 'street smart person' tries to jump into the bandwagon of  'development' gang and corners some share of the booty. Those who can't in the name of ethics & morals, will get lost in this siren world to lead ignominious life. Excepting escaping from extreme poverty by masses, there is no justification for destruction of ecological assets and deterioration of social life in the name of 'development' and 'capitalism'. China's development if loaded with the factors of ecological destruction and erosion of human values, it would be negative. Finite world doesn't have enough resources to support ever increasing population without erosion and degradation. 

Ease of doing business to economic prosperity

Choropleth map of the World Bank's Doing Business index from "Doing Business 2017"

The ease of doing business index is an index created by the World Bank Group. Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.

• Economic activity requires a streamlined regulatory environment and transparent policies and accessible to all.
• Entrepreneurial activity is a support to economic growth. Higher entry rate of new businesses cultivates competition and innovation. The entry of new firms into an economy creates jobs, contributes development of the private sector and economic growth.
• Ease of doing business indicators are (1) starting business (2) registering property (3) dealing with construction permits  (4) getting electricity (5) getting credit (6) protecting investors (7) paying taxes (8) trading across borders and (9) enforcing contracts (10) resolving insolvency. 
• Good governance is essential for businesses. Transactions costs are lower when regulations are simple, transparent and predictable. Entrepreneurs do not have to waste resources on red tape enabling anyone to do business without having to resort to connections or informal payments.
• Ease of Doing Business has significant effect to economic growth.
• In developing economies competition, growth and job creation are formed in the informal sector regularly because of too much bureaucracy and regulation. Informal sector firms lack access to the opportunities and protections that the law provides but even firms operating in the formal sector might not all have equal access to these opportunities and protections.
• Since the introduction of the economic reforms in 1978, China has become the world's manufacturing center, where the secondary sector (comprising industry and construction) represented the largest share of GDP. In spite of its slowdown, mainland China is still a main driver of global GDP expansion, accounting for a larger share of world economic growth than the rest of Asia combined.
• Dealing with construction permits and getting credit have negative effect to GDP. Registering property and trading across borders have positive effect. Getting credit has negative effect to GDP. Registering property has positive effect to GDP. Trading across borders has positive effect to GDP. 83% of the total variation in the economic growth can be explained by the changes in the indicators of ease of doing business specifically dealing with construction permits, getting credit, registering property and trading across borders.
• Other indicators such as enforcing contracts, getting electricity, protecting investors, paying taxes, resolving insolvency, and starting a business have no significant effect to GDP. This implies that even if it is easy to do business under these indicators, it has nothing to do with GDP.
• Singapore has the easiest to do business and has the best regulatory performance in doing business in Asia. China produces the highest level of GDP. 

Ever since Modi has become PM in 2014, nothing much has happened for improving 'ease of doing business ranking' which was 130. India had been downgraded in the 2016 to 131. In 2017, India's ranked climbed to 130 out of 190 countries in the World Bank Group's annual report.  India has made a substantial improvement in some areas such as electricity connection, but slippage in other areas, including payment of taxes and enforcing contracts, prevented improvement on the rankings that is followed widely by global investors. The World Bank acknowledges several successes since Mr. Modi took office in 2014. Still, due to even-larger improvements in other economies, India’s ranking in several areas fell this year. On the ease of starting a business, it slipped to 155th from 151st. On dealing with construction permits, it stumbled to 185th from 184th. On paying taxes, it held steady at 172nd. The report’s authors acknowledge that the ranking doesn’t reflect all the progress India has made recently in improving the business environment. Lawmakers have recommended the implementation of a large number of reforms across all states, going beyond the scope of Doing Business. It takes Mumbaikars 14 procedures and about a month to start a new company.

New Zealand tops this year’s ranking, dethroning Singapore to two. UK is ranked 7, USA at 8, Russia at 40, China at 78, Sri Lanka at 110, Egypt at 122, Pakistan at 144, Bangladesh at 176 etc indicates India has to long way to go for economic growth and prosperity.

With in Indian states, AP and Telengana have jointly topped the 2016 ease of doing business rankings, while last-year's topper Gujarat slipped to the third spot. The rankings are on the basis of a 340-point business reform action plan and their implementation by the States for the period from July 1, 2015 to June 30, 2016.

My View:
India's current years credit ratings are just a notch above 'junk status'. Efforts to enhance ratings during 2016 due to higher GDP growth rate & lower inflation rates were brushed aside by Moodys citing huge national debt and fragile public sector banks with Rs.7 lakh crores NPAs which needs huge recapitalization for stay put into business. Credit rating enhancement is at least two years away. The demonetization debacle has further complicated matters. Modi embarking on high speed reforms like GST etc are likely to create confusion & chaos with high inflation in short run while long run impacts are uncertain. In short, India is experiencing uncertain future on economic front with Brexit, H1B visa issues, unencouraging FDIs despite invincible political authority Modi enjoys.