May 22, 2019 | 06:01 AM


21.06.2013India's Flood Of Woes

An overwhelmed state government was hard put to cope

Naazneen Karmali, Forbes.com

The north Indian state of Uttarakhand, blessed with nature’s bounty- it has the Himalayas and some of India’s mightiest rivers run through it- was the scene of nature’s fury this week as flash floods and landslides caused a devastation that is being dubbed as a ‘Himalayan tsunami’. Amid the torrential monsoon rain, rivers overflowed, destroying homes and trapping thousands of people in the debris. Television coverage saw entire buildings toppling over and being swept away in raging rivers.

Analyzing The Murdoch Divorce: Why Wendi May Not Go Quietly
Can Google Fly Its Internet Balloons Wherever It Wants?
Sony PlayStation 4 Launch Edition Already Sold Out At Amazon


An overwhelmed state government was hard put to cope, forcing the federal government to press 10,000 troops from the army into servicing the massive, ongoing rescue operation. As many as 33, 000 people have been evacuated though twice as many still remain stranded. The official death toll so far is 150 though it is suspected to be vastly under-reported. A good many were pilgrims from other parts of the country for Uttarakhand, also referred to as the Land of the Gods, houses some of the holiest Hindu shrines in a popular pilgrimage circuit called Char Dham; June is traditionally the peak pilgrimage month.

India’s response during such emergencies shows the country probably in its worst light as politicians deflect accountability and the blame game begins. The opposition Bharatiya Janata Party (BJP) was quick to pounce upon the Congress party-led government and term the disaster as ‘man-made’ for allowing illegal construction along the river banks and ignoring the environment ministry’s recommendations for protecting the ecologically sensitive area. A federal auditor issued a damning report as recently as in April, stating that Uttarakhand (which incidentally, is ruled by a Congress government) has no disaster management plan to speak of. A State Disaster Management Authority had not met once since it was formed in 2007.

The disaster in Uttarakhand was not the only one playing out. In what is a flood of bad news, the rupee sunk to an all-time low this week of close to rupees sixty to a dollar. The currency has lost over 6% in the past year, dragged down by India’s record high current account deficit, to become one of Asia’s worst performing currencies. While the Reserve Bank of India intervened to ensure that the rupees 60 mark wasn’t breached, the government sought to downplay the currency’s fall with chief economic advisor Raghuram Rajan saying that the rupee wasn’t in a shambles at all.

Investors took a dim view of such assurances and turning skittish on news of the US Federal Reserve’s plan to cut back the monetary stimulus, drove down the Sensex. It plunged by over 500 points or 2.7% Thursday, recording its biggest fall in 21 months. Prices of bonds crashed and in an unprecedented move, trading in government bonds was stopped for an hour. A national survey revealed Thursday that unemployment has risen 10% in two years confirming that India’s growth has largely been a jobless one.

With no sign of the country being able to attract foreign direct investment in the short term, the rupee is expected to weaken further. Some bankers say that rupees 70 to the dollar is a more realistic value. There is a glimmer of a silver lining in this cloudburst. A banker recently reminded me that economic crises in the past have spurred reforms. The current rout of the rupee may force the government to finally act to contain inflation and kickstart the stalled investment cycle. Failing which, the country may remain adrift.

Top Stories on FatCat.com.au

Measuring the return of an investment property Renting out an investment property for $700 a week doesn't mean a thing, unless you understand how to calculate your...

News from TheBull.com.au

© Copyright 2019, FatCat.com.au. All right reserved.