IMMORTALITY: CAN SCIENCE MAKE US IMMORTAL?:

How Close Are Humans to Immortality?                     (S.Ramamoorthy)

All religions have been preaching that death is the ultimate truth. Is it so? If it is, how one species called "Turritoposis dohrni ( type of Jelly fish)" achieved Immortality? How Close are scientists from achieving Immortality? Can we ( Humans) live forever without death? Let see....

                                                  (BBC Documentary on Immortality)

WHAT IS CALLED AGEING?

Our body is made of trillions number of cells.  50 - 70 billions old cells die every day in our body and these are being replaced by New Cells created through the process called Cell Division. As long as, this process ( cell division ) continues, we will be healthy and live forever.

But problem is that cells can't simply divide forever. One Human body Cell can divide maximum between 50 - 70 times only. This is called Hayflick Limit. Beyond this, cell will cease to divide ( This is called Ageing) and eventually dies.

WHY CELL CANT CONTINUE TO DIVIDE FOREVER?

We know that each Human  Cell has 23 pairs of Chromosome ( Group of DNA, Genes, Proteins). These each chromosome is protected at it's end by something called "Telomere" ( Repetive Nucletoide Sequence) which ensures the exact replication of Chromosome ( necessary to pass the genetic information to new cell) during each Cell Division.

For understanding purpose, we can compare the Telomere with the  plastic Tips on the both end of Shoe Lace ( in this case, Chromosome). Without plastic tips on its end, shoe lace will get frayed and it will not stick together.  Like this, exact replication of chromosome in the cell division is not possible without telomearse at its end.

   

But the problem is that length of the Telomere is being shortened during each Cell Division. After approx 50 - 70 cell division, length of the Telomere will reach the critical level which prevents further cell division( since exact replication of chromosome is not possible)  resulting in the ageing process.

HOW TO INCREASE THE LENGTH OF TELOMERE?

Cancer is nothing but unlimited division of cell. It means that cancer cell has already found the solution to increase the length of Telomere which allows cells to divide forever (IMMORTALITY). Enzyme used by Cancer Cell to increase the Telomere is called Telomearse. Embroyic Stem Cell also uses the same method to achieve the unlimited cell division.

Scientists are now researching how to use this Enzyme called "Telomearse" used by cancer cell & Embroyic stem cell to achieve the unlimited cell division ( IMMORTALITY) in normal cells also.But problem is that these enzyme has the potential to turn normal cell to cancerous cell which is the main constraints for the scientists.

IS THERE ANY SPECIES IN THIS EARTH WHICH LIVE FOREVER?

Yes. Process of Bi logical Evolution has successfully created one species called Turritopsis dohrnii, the immortal jellyfish ( one type of Jelly Fish found in Medeterrian Sea and Japan Sea) which is immortal in nature ( but vulnerable to predation, injury and disease). 

Process used by the above species to achieve immortality is called "Transdifferentiation" which allows jelly fish to go back from adult stage to infant stage again ( Age Reversing ) and infant age to adult stage ( Ageing) endlessly.

2008 Hollywood movie titled " The Curious Case of Benjamin Button" starred by Brad Pit was based on this concept only.

OTHER METHODS FOR IMMORTALITY:

A.Calorie Restriction:

Some scientist have found that calorie restriction ( eating Less) is slowing the ageing process and will increase the life span by about 30 % . It has been successfully tested in rats and some humans.

Problem with this method is that It may increase the lifespan but wont achieve immortality.

B.Anti Oxidant:

There is another one theory called "Free Radical Theory of Ageing" which tells that real cause of ageing is " Reactive Oxygen Species (ROS)" ( ROS is nothing but highly reactive radical atom / molecule which has unpaired electron in its orbit ) created in our cell during the process of oxidation. These ROS will further create chain reaction which will cause irreparable damage to the DNA and proteins eventually killing cell.

Solution is to take Anti Oxidants ( Vitamin A. E ,C) in our food which will control this ROS and in turn will slow ageing process.

CONCLUSION:

Modern science is just decades away from achieving Immortality. But Big Question is that whether Immortality will be Boon or Curse?

 

EXTINCTION OF DINOSAURS: HOW IT HELPED HUMAN EVOLUTION?

EXTINCTION OF DINOSAURS: HOW IT HELPED HUMAN EVOLUTION? 
( By s.Ramamoorthy)

Our Mother earth is surrounded by danger . Any small asteroid of dia 10 Km from the "Asteroid Belt" of solar System ( between Mars and Jupiter) is more than enough to wipe out the 90 % of living organism on the earth. Any "Supernova" Explosion of near by stars ( 100 Billion Stars in our milky way galaxy) within 10 Lakhs Light years distance will kill almost entire life on earth.

Fact is that these kind of "Mass Extinction events" are not new to us. Our earth had already faced 5 Nos of such Mass Extinction event in last 60 Million Years. Still Life survive. Extinction of one set of species have always paved the way for evolution of a new set of species with different characteristics. Life bounced back strongly after each and every "Mass Extinction"

Here, we are going to see one of such "Mass Extinction event" called " Cretacous - Paleogene Event ( K-Pg event)" occurred before 660 Million years ago which wiped out 76 % of life on earth including all non avian Dinosaurs which ruled the land for almost 140 Million Years.

                                             (Documentary on K-Pg Mass Extinction)

CRETACOUS - PALOGENE EVENT ( K-Pg Mass extinction ):

Dinasours ( belongs to  "Reptiles" Group of Animal Kingdom ) which evloved around 200 millions years ago had ruled the entire land for almost 140 million years without any major competitors. In contrast. "Mammals" ( Group of animals having Mammary Glands, Hair,Warm Blooded) ancestors of primates and Humans had also lived along with Dinosaures at the same time but in very small size like rats ( < 10 Kgs).

Mammals ( our ancestors) were not able to compete with giant sized dinoasures ( weighed 140 Tonnes) for food & Land which forced them to remain in very small size  like rats weighing < 10 Kgs.

Luckily, an Asteriod called "Chicxulub" ( just 10 KM Dia) had struck the Yucatain Pennisula of Mexico before 660 Million Years ago with 100 Megaton Force which created 180 KM dia Crater.

This sudden impact created Mega tsunamis, Volcanic Eruption, Massive Earth Quakes throughout the globe killing 50 % of life on earth instantly. Dust Cloud raised due to this impact covered the sun for many decades resulting in 20 % reduction of sunlight to the earth and  caused the Acid Rains throughout the globe. This stalled the photosynthesis for decades which killed Herbiovers ( plant eating animals) and Carnivores ( Meat eating animals). At the end of this mass extinction event, 76 % of all life on earth were completely wiped out.

In nut shell, animals which weighed more than 10 Kgs during that time became extinct.

BUT,HERE COMES THE OPPORTUNITY FOR MAMMALS.

Mammals ( our ancestors), so far remained in very small size ( less than 10 Kg) due to the competition from Giant Dinoasure ( 140 Tonnes) for Food & Land smelled this opportunity for New Lease of life.

It's small size ( < 10 Kg) favored it in this catastrophic event since it required less food for survival. This omnivores ( eating both plant & Meat ) survived this "Mass Extinction" by eating the death plants & animals ( Scavengers).

After few million years from the "Asteriod Impact", dust cloud ( which covered the sun ) slowly vanished and eco system became back to normal.

Plants started photosynthesis once again and occupied the land as usual. Mammals so far lived as very small species & as scavengers used this new opportunity thrown by this dinoasure free world where food were available in plenty without many competitors. It responded by diverging into many different species ( Whales, Horses, Primates ( ancestor for apes and humans), Herbivores & Carnivores ) in few million years and grew into giants like "mammoth"of 14 Tonnes.

These Primates ( ancestor of apes and modern Humans) which evolved in this post Dinoasur world further diverged into Apes roughly around 30 Million Years Ago. Eventually, Modern Humans had evolved around 2.5 Lakhs Years ago in " Great North Rift Valley"  of Africa from these apes.

SO ALL CREDIT OF HUMAN EVOLUTION GOES TO THIS "CHICXULUB" ASTEROID.

QUANTUM COMPUTER: INFINITE MACHINE?

QUANTUM COMPUTER: INFINITE MACHINE?

Are our Modern Computers  really powerful? Can we really understand the unresolved mysteries like  Model of Universe, Human Brain,Protein Folding, Weather Pattern, Cryptography, Extraterritorial Life with our current existing super computers. No. Because the processing Speed of Tiahe - 2 (World's Fastest Super Computer as on date) is only 33.8 Peta FLOP ( 10 ^15 FLOPS). It is estimated that we need at least 1 Zetta FLOP ( 10 ^21 FLOPS) Super Computer to accurately predict the Weather Pattern of Globe, Pattern of Storms, Tsunami and our Current Computers will take billion years to solve the cryptography, Protein Folding and etc. Processing Speed of our Human Brain is 1 Exa FLOP (10 ^ 18 FLOPS) which is 35 times faster than Tianhe - 2. So We lack the necessary Computational speed to find the solution to the above problem

SO WHAT PREVENT US FROM MAKING THE SUPER COMPUTER WITH INFINITE PROCESSING SPEED. 

1. LIMIT OF TRANSISTOR SIZE AND END OF THE MOORE'S LAW:

 Our computer is modelled on the decade old Transistor Based Microprocessor. Transistor is nothing but switch which control the flow of electron between Source & Drain. According to Moore's Law, no of transistors in a chip will double approx in every 2 years. Current size of the Transistor( distance between Source and Drain) in the chip is just 22 nm ( enough to accommodate just 50 Silicon Atoms). At this rate, we will achieve 5 nm Transistor ( enough to accommodate only 10 silicon atoms) by 2025.  Here Comes the problem.

In this 5 nm gap between source and Drain, transistor wont work since Quantum Tunneling Effect ( one property of subatomic particle in which electron will pass through the barrier in it's path) will take place. Since Processing speed of the chip is directly related to the size of the Transistor, we are nearing towards the Upper  Limit of the processing speed of a single Chip. Beyond 2025, further reduction in the size of transistor & increasing the processing speed of a single chip will be almost impossible.

2. SPEED OF ELECTRONS

Speed of the electron in Transistor is just 10 % of the speed of light which is limiting the size of the chip and it's processing speed. 

3.HEAT GENERATION & POWER CONSUMPTION:

Power Consumption of Tianhe -2 is 27 MW for just 33.8 Peta FLOP operation. At this rate, we would require 8 Lakhs MW Power ( India's total installed power capacity is just 2 Lakhs MW only) to run the 1 Zetta FLOP Super Computer to accurately predict the Golabl Weather Pattern.

This is the main restriction of the Transistor Based Classical Computer since transistor will generate heat  at exponential rate for linear increase in it's frequency.

4.DIGITAL BIT:

Classical computer stores information in the form of digital Bit in the Transistor. So Transistor can take only one position at a time ( either 0 or 1) whereas Qubits ( in Quantum Computer) will take 0 or 1 or ( 0 and 1 at same time which is called Quantum Superposition). 

SO ONLY WAY TO ACHIEVE THE INFINITE PROCESS SPEED IS TO MOVE OUT FROM THE TRANSISTOR BASED DESIGN. QUANTUM COMPUTERS ARE PROMISING ALTERNATIVE. Let us See How it works?

QUANTUM COMPUTER:

Qunatum Computers are  totally different from the Transistor Based Classical Computer. It works on the principle of Quantum Mechanics. HOW IT IS ACHIEVING INFINITE COMPUTATIONAL SPEED?

Quantum Laws are weird and totally different from Classical Laws of Physics. Quantum Computers are based on the following Quantum Properties

1. Quantum Super Position (  Sub Atomic particles can be present at multiple place at same time and it can take multiple position at same time)

2. Quantum Entanglement ( Two entangled subatomic particles transfers information between them instantly ( Faster than speed of light) irrespective of distance between them.)

3. Quantum Tunneling ( According to this property, sub atomic particles can pass through any barriers in it's way and we can't block their path)

THE ABOVE QUANTUM PROPERTIES ARE WELL KNOWN AND TESTED IN LABOR TIES EVEN THOUGH SCIENTIST HAVE NO CLUE ABOUT HOW IT WORKS.

MECHANISM OF QUANTUM COMPUTER:

Quantum Computers stores information in the form of Qubits. We can use any subatomic particles like electron, proton, neutron as Qubits. How it really works?

We know that sub atomic particles are spinning on it's own axis like earth spins.We can control the spin of the subatomic particles by applying magnetic filed since it has charge.  So spin down is "0" and Spin Up is "1" and due to Quantum Superposition, it can take both 0 and 1 at same time (Seems Weird. Scientist have no explanation for this. Hypothesis is that subatomic particle can be present at multiple universe at same time which allows them to take 0 & 1 at same time).

So 2 Qubits can have  the following 4 position together at same time where as classical computer will take only one of the following position at any time.

      Qubit 1         Qubit 2 

A        0         &        1

B        1        &         0

C        0        &         0

D        1        &         1

SO PROCESSING SPEED OF THE QUTANTUM COMPUTER IS EXPONENTIAL. IF WE HAVE 500 QUBITS ( OR 500 ELECTRON), WE CAN PROCESS 2 ^ 500 NO OF POSSIBILITIES AT SAME TIME( WHICH IS MORE THAN NO OF ATOMS IN THE OBSERVABLE UNIVERSE).

DESIGN CONSTRAINTS FOR QUANTUM COMPUTERS:

Though, quantum computers has potential for infinite processing speed, design of such computer require cutting edge technologies due to the " Quantum Dechoherence" effect since subatomic particles are very sensitive to the environment. It is mandatory to keep quantum processor at temperature in between - 273 Deg C to Absolute Zero ( minimum temperature attainable in this universe) and in isolated condition from all from of Electromagnetic waves & Magnetic field to maintain it's "Quantum Superposition".

Another problem is that Heisenberg's uncertainty principle which rules out the exact measurement of two states of the sub atomic particles. Solution to this problem is Quantum Entanglement. But technologies to measure the state of Qubits through Quantum Entanglement is still in nascent stage.

Another major constraint in the Quantum Computing is the creating algorithm for Quantum Processing

COMMERCIALLY AVAILABLE QUANTUM COMPUTERS:

Some of the Quantum Computers are commercially available in the market. Example is "D Wave two" 512 bit Quantum computers works on Quantum Adiabatic process designed by US based D Wave System. It is installed in Nasa & Google's Quantum Artificial Intelligence Lab at USA to study about Machine Learning & other related fields.

SO QUANTUM COMPUTERS ARE LOOKING LIKE PROMISING ALTERNATIVE FOR TRADITIONAL TRANSISTOR BASED CLASSICAL COMPUTER. 

INTERNATIONAL CURRENCY WAR: WHY INDIA SHOULD DEPRECIATE IT'S CURRENCY IN LONG TERM?

INTERNATIONAL CURRENCY WAR: WHY INDIA SHOULD DEPRECIATE IT'S CURRENCY IN LONG TERM?( By S.Ramamoorthy)


We Indians always complain about the depreciation of Indian Rupee against USD assuming that Rupee Appreciation is directly related to the strength of our economy and to our pride. But most of the nations in the world are desperately trying to devalue their currency through money printing just to make their export very competitive. Our currency value against USD is Rs 61/- which we feel that very low...

But here are some statistics........

 1. Value of one Japanls (World's Third Largest & developed economy) Yen Against US dollar: 101 Yen
 2. Value of one South  Korea;s ( Developed Country) Won against 1 US dollar: 1032 Won
 3. Value of one Indonesian Rupiah against 1 US Dollar: 11789 Rupiahs
 4. Value of one China's Yuan ( World's Second Largest Economy ) against USD: 6.16

The above major economies are well developed and Major exporting economies in the world which are artificially keeping their currency value low against US dollar by printing paper money just to make their exports very competitive. Still they are very strong..Inflation is under control.

SO IF DEPRECIATION OF RUPEE IS GOOD, WHY WE COMPLAIN?....Let us discuss in detail

QUESTIONS ARE AS FOLLOWS

A. How International Currency Market is working?

B.What are India's  Problem? and Why India should depreciate our currency in long term?

C. What will be the consequences of International Currency War?


A. HOW CURRENCY MARKET WORKS? WHO DETERMINES THE VALUE OF OUR CURRENCY?

In a free market Capitalism, price of anything in the market is being determined by the supply and demand mismatch. So in the currency market also, value of any currency will be determined by the supply & demand of the dollar against local currency i.e difference between Import & Exports of that economy. If a country imports more than what it exports, demand for dollar will increase since dollar is defacto reserve currency and all imports should be paid in dollar. In case of India, we are net importer country ( our total import in June 2014 was $ 38 Billion USD and Export is mere $ 27 Billion).

In international monetary term, it is being called us "Current Account Deficit" or CAD ( Difference between Bill paid for imports and Revenue earned on exports). So when a country becomes net exporter, it earns revenue and vice versa.

Any country should aim for lower import since import is nothing but expenditure from pocket where export is income...

So Let us see How it affects the Exchange rate of currency?

They are two type of exchange rate control system. One is fixed exchange control system / managed exchange rate system in which government will permanently fix / manage the exchange rate of their currency against dollar which India, china, japan follows and another system is floating exchange rate system in which market pressure will determine the value of the exchange rate where government plays no role at all.

Advantage of Floating exchange rate system is that Market Factors will depreciate the value of currency if country becomes net importer and appreciate the value of currency if country becomes net exporter whereas in the managed exchange rate system, if value of currency depreciates, central bank will sell dollars from their foreign exchange reserves to arrest it fall and will buy dollars from market by printing local currency in case of appreciation of currency against dollar. This process is called Balance of Payment.

Let us see what is Balance of Payment. Before that there is another one fancy terms called as Capital Account which includes the following

1. Foreign Investments including FDI ( Foreign Direct Investment & FII ( Foreign Institutional Investment and Portfolio investment)

2. Loans ( External Commercial Borrowing (ECB), Loan received from other countries)

3. Bank Capital ( Net foreign assets and Liability of Banks & NRI Investments)

Balance of Payment = Current Account ( Revenue from Export - Revenue from import ) + Capital Account ( FDI flows + Loans +Bank Capital) .

If a country follows floating exchange systems, then no need to worry about balance of payment because market pressure will keep Balance of payment  always Zero  by adjusting the exchange rate. In the managed exchange system which India follows, it is the central Banks job  to maintain zero Balance of Payment since it wont allow market factor to decide the value of currency.  

In Case of Net Importing countries which follows Managed Exchange Rate System like India:

In these countries, market pressure will try to depreciate the currencies of these countries since import is high which will increase the demand for dollars. But since these countries are not allowing rupee to depreciate for unknown reasons following will be the impact.

As long as capital account surplus (Net  FDI, FII , ECB, NRI Deposit came into India in last year is around $ 100 billion ) matches the current account deficit ( Bill paid for Import - Revenue from export which is  around $100 billion in last year), there is no problem. But in the case of financial crisis, capital flows will start to flee from the economy as happened in 2009( only $ 6.8 Billion net inflow against $100 Billion now) by depreciating the currency value & increasing the dollar demand...So to stop the currency fall, central bank should be forced to the sell dollars from the foreign exchange reserves ( India current foreign exchange reserve is $320 billion). Once foreign exchange reserves got over, India will be in serious trouble as happened in 1991 Economic Crisis of India when India forced to pledge 67 MT of gold to International Monetary Fund. 1997 financial crisis of south east asian nations also teaches us the same.

Now another interesting question is that why USA which is net importer country like india is not being affected by Dollar Depreciation? Why case of USA is different from others? 

Answer is obvious. Dollar is defacto reserve currency of the world. 65 % of the world's Surplus money ( $ 6.8 Trillion ) is being kept in dollars. It is being seen as safe heaven in case of financial crisis. World has no other choice than to depend on Dollars. This is the reason why value of dollar got appreciated in 2008 financial crisis even though culprit was the failure of American Financial System.We call it as Triffen Dillema.

In case of Net exporting countries which follows Managed Exchange Rate System like china, Japan:

In these countries, market pressure will try to appreciate the currencies of this countries since export is high which will decrease the demand for dollars. But  these countries are not allowing rupee to appreciate for the following reasons

1. Rupee appreciation will erode the competitive advantage of their export.
2. Reduction in exports will kill the employment as exactly happened in 2008.
3. Redction in exports and unemployment will reduce the GDP resulting in social unrest


So these countries wont allow their currencies to appreciate against USD by artificially creating the demand for Dollars through newly printed local currencies ( money printing)......THIS IS CALLED CURRENCY WAR... All these countries are printing new money every year just to depreciate their currencies artificially inorder to increase their exports.

B.WHAT ARE THE INDIA'S PROBLEM ? WHY SHOULD INDIA DEPRECIATE THE CURRENCY IN LONG TERM?

Let us see the How exchange rate will affect our day to day lives

For example, if value of indian currency falls from Rs 61 to Rs 100, it is the good news for export sector like Software, Textiles since they will be paid in dollar from their client and their rupee realization  of that dollar will be huge for same work. So there will be boom for export sector which will create the employment as happened in software boom of south India(India's sofware export is just  $120 billion but it creates 50 lakhs direct and indirect jobs). At the same time it will increase the cost of imported items like petroleum, gold & coal resulting in inflation.

So Export means Income and Job Creation and Import means expenditure and erode of saving. India's problem is that it is net importer country. As long as it is net importing country,net advantage of rupee depreciation is null. So India should try to reduce it's imports and starve to become net exporter country in long term..But question is How?

India's Major exports are Oil ( around $ 125 billion in current FY), Gold ( around $30 billion) Coal & Machineries.

Import of Coal:

Worst Part is that india is having world's second largest coal reserve. Still, it is importing coal since Public sector Coal India is not able to mine more to meet the local demand.Real solution is to open coal mining to private players which will create local employment and even exports instead of imports.

Import of oil:

India imports 70% of oil from other countries even though it has sufficient reserves locally. What is needed is that opening the sector for private players and FDI. Technologies  from FDI and Competition will ensure the local oil production in india by creating job and reducing the dependence on imports.

SO INDIA SHOULD SHOULD TRY TO BECOME NET EXPORT COUNTRY VERY SOON  WITH BENEFIT FROM DEPRECIATION OF CURRENCY

 C. WHAT WILL BE THE CONSEQUENCES OF CURRENCY WAR?

We have seen so far that How countries are artificially keeping their currency value low against USD by printing money. What will be the consequences of this?

1, This newly printed fiat currency will create the asset bubbles in the world economy and will one day result in uncontrolled inflation.

2. It will encourage the carry trade ( where this money will find it's way to emerging economics like india where interest rate is very high) which will further increase the risk of financial system.

3, This new money will increase the volatility of Stock Market and Crash as predicted by Mr.Raguram rajan in his recent interview.

INDIA'S SELF INFLICTED WOUND: FOOD INFLATION..( By S Ramamoorthy )

INDIA'S SELF INFLICTED WOUND: FOOD INFLATION..( By S Ramamoorthy )

In his 6th Monetary Policy statement announced on 05.Aug.2014, RBI governor Raghuram Rajan has made his point  clear that his target of CPI (Consumer Price Index) inflation rate is 8 % by Jan 2015 and 6 % by Jan 2016 which means that Industry cant expect Repo Rate Cut ( rate at which RBI lends to Bank) in near term. With out Repo Rate Cut, recovery of GDP growth ( Last FY GDP growth rate is4.6 %)  is next to impossible.

Well, Let us look in detail about CPI Index....Question are as follows

A. What is CPI rate and how it affects common people like us ?

B. Whether Raghuram Rajan can tame the  CPI by just playing with Repo rate or at the cost of compromising the GDP Growth?

 C. What will be real danger of sacrificing the GDP growth for CPI Inflation?

A.WHAT IS CPI INFLATION?:

It is the  inflation rate being released by "Ministry of Statics and Program Implemention (MOSPI) " on every second monday of the month..CPI  inflation rate is believed to be the real inflation rate in the economy being faced by common people like us .CPI inflation rate of India in June 2014 was 7.31 %

Following are the major weightage given in the CPI Index

1. Food, Beverage & Tobacco : 49.71 %
2. Fuel & Light                         :   9.49 %
3. Housing                               :   9.77 %
4. Clothing & Foot Wear         :    4.73%
5. Miscellaneous                     :  26.31%

It is clear from above that Food & Fuel are the major constituents ( 60 %) of the CPI inflation Index

Mr.Raguram rajan believes to control the price of Food & Fuel by just manipulating the Repo Rate or by killing the GDP growth rate which will increase the unemployment and social unrest.....Let us see below, why it is impossible for Mr.Rajan to tame the CPI inflation as he desires and How he will finally end up killing so called Indian Growth Story

B. WHETHER RAGURAM RAJAN CAN TAME THE CPI BY JUST MANIPULATING THE REPO RATE OR AT THE COST OF COMPROMISING GDP GROWTH?

Agriculture contributes only 13 % to the $ 2 Trillion Indian GDP. Rest are Services ( 65 %) and Manufacturing ( 22 %)..But worst part is that agriculture employs 50 % of indian population compared to service and Manufacturing which means that 60 billion people of India is sharing the 13 % revenue of India where as remaining 60 Billion people are sharing 88 % of Indian revenue...This is the real cause for social imbalance. Real solution to the social imbalance is to move out people from Agriculture to Service & Manufacturing which  can only solve the social imbalances.

Now Big question is that why Food Prices are always high in India. Let us see....

We all know that inflation is nothing but supply, demand mismatch...When demand of a product surpasses the supply, it will result in inflation? Whether it means that India's agriculture production is very less compared to the demand of people.. BIG NO.........India;s Rice production in this year is 106 million MT and Wheat production is 95 million  MT..India is second largest producer of Vegetables, Fruits & Milk item in the world.....This production rate is more than sufficient to feed 1.2 billion .....So Supply side, we are infact producing more goods than what we can consume......If it is the case, interesting question is that How Prices of Food items increases every year?......Who is the culprit?........Main culprit is UPA government led by Sonia gandhi........Let see in detail


1. Indian Agriculture market is controlled by Government which is procuring more than 40 % rice & Wheat production in the economy without having sufficient warehouse facilities resulting in rotten of Wheat & Rice....This over procurement limits the availability of grains in the open market resulting in inflation where middle class people like us buy that ....For example, Food Corporation of India has stock of 67 million MT of Rice & Grain well above the requirement for Public Distribution System which requires only 30 million MT.....Extra 37 million MT grains are getting rotten every year.

2. Poor Public Distribution System: Even though GOI spends Rs 1.25 Lakh Crore rupees for Food Subsidy out of which only 43 % of the food grain reaches the people who are in need. Remaining 57 % are being looted...

3. Common sense is that why government is unnecessary buying more Grains that also at higher Prices famously being called as Minimum Support Price which is being revised every year regularly....Reason is pure vote Bank Politics......India spends Rs 1.25 Lakhs crores as food Subsidy every year and Indian Governement is currently spending Rs 143 for every Rs 100 it earns which means that Government is raising Rs 4.5 Lakhs Crores Loans from open market every year to spend in unproductive assets like this because of  Farmers Votes....

4.Since Minimum Support price is very attractive, getting revised every year and above the market price, farmers are more interested to produce Rice & Wheat rather than Vegetables, Cerals & Fruits resulting in  less production of Vegetables, Cereals, Fruits

5. Another main culprit for Food inflation is that NREGA ( National Rural Employment Guarantee Act) famously being called us 100 Days employment scheme....GOI spends Rs 33000 Crores every year for this scheme which is pulling Labors from Agriculture to this since work load is nothing here...This increases labor shortage for the farming & construction resulting in higher cost of production for Agriculture goods...This Rs 33000 Crores money in the hand of poors further increase the demand for food items without increasing the supply.

6. Another worrying fact is that 18 % of indian agriculture production are getting rotten due to insufficient Cold Storage Facilities resulting in loss Rs 44000 Crores...India has cold Storage facilities just enough to store the 30 Million MT of Agriculture goods which is 50 % less than the required capacity.....It will cost Rs 55000 Crores rupees to create the cold storage faciltiy which GOI is not ready to invest.

7. Problem of Middle Men: Indian Agriculture market is mostly controlled by Middle Man Mafia..This is very unregulated and they are indulging in Hoarding of Goods just to create artificial demand...

So India's food inflation is self inflicted wound which can only be healed by taking following steps

1. Government should not interfere in the Agriculture Market. Government should immediately withdraw the subsidy being wasted  here.Let Market Pressure determine the Price of the goods.

2. Allowing FDI in retail: Only FDI can make Investment Like Rs 55000 Crores to create sufficient Cold Storage Facility to prevent 18 % of Goods getting rotten every year. This entry of FDI will automatically curb the Middle Man role ending Hoarding Practices.

3. Allowing Corporate Farming: Small Farmers cant bring the best practices from the world..India's yield rate per Acre is very low compared to the International Standard.It is only corporate can bring theWorld Class practices to India resulting in higher production.


SO FOOD INFLATION SEEMS STRUCTURAL ISSUE THAT CAN'T BE CONTROLLED BY JUST MANIPULATING WITH REPO RATE

 C.  WHAT WILL BE THE REAL DANGER OF SACRIFICING THE GDP GROWTH FOR CPI INFLATION?

So far, we have seen that Food inflation ( 50 % of CPI) can't be tamed by controlling the Repo Rate as RBI thinks..As long as Repo Rate is high, substantial recovery in GDP growth is not possible....Let us see what are the side effect of Lower GDP growth?

1. 12 Million Graduates are entering into job market every year.To create employment for them, GDP should grow at the rate of 8 - 9 % every year or most of the 12 million will be job less and if it continues for 2-3 year, their future will be ruined

2. Lower GDP growth & Higher Unemployment growth will lead to social unrest and crime.....I correlate the support for Anna Hazare & Arvind Kejriwal with Lower Growth since when people lose faith in the system, they will seek change which may finally result in people springs as happened in Middle East.

SO IT IS VERY HIGH TIME TO CONCENTRATE ON HIGHER GDP GROWTH RATHER THAN DEFENDING THE INDEFENSIBLE.