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Responsibility comes calling

Dec 1, 2008

In India...
A day after the 60-hour ordeal of terrorist assault on Mumbai ended claiming the lives of nearly 195 people, the Congress-led UPA government seems to have finally realised its responsibilities. The Home Minister, Mr. Shivraj Patil, who faced widespread criticism for the lack of security measures to counter terrorism, resigned on the grounds of 'moral responsibility'. It must however, be pointed out that this not the first instance of such an attack during Mr. Patil’s tenure as Home Minister, as about 300 people have died this year itself in India as bombs have exploded in markets, religious places, bus and train stations and theaters. The Mumbai attack, was nevertheless, the deadliest such assault in the country in 15 years. As per a leading business daily, the loss to the city in financial terms during the three day ordeal was to the tune of Rs 500 bn.

Mr. Patil’s portfolio will now be managed by Mr. Chidambaram who was so far shouldering the responsibility of guiding the Indian economy through the global recession, as the Finance Minister. The Prime Minister, Mr. Manmohan Singh who will now also act the Finance Minister, will not just have to fortify the country’s fragile defense infrastructure but also try to minimise the impact of the global meltdown on the domestic economy. He has already sought the support of the largest democracy in the world, the US, in his endeavour. He has sought for guidance on building a crime-fighting agency modeled on the FBI and tougher anti-terrorism laws.

Indian corporates, in the meanwhile, will also have to show some sense of responsibility. Besides undertaking critical measures necessary to sustain growth they will have to show resilience to low business confidence, particularly in the aftermath of the attacks.

...and in the US
The recession engulfing the US economy deepened this month as employers slashed more jobs and manufacturing contracted at the fastest pace in a quarter century. However, President elect Barrack Obama seems to be dealing well with his responsibilities. At least for the time being. He has already crafted a plan to save or create 2.5 m jobs in two years to stave off what he called a ‘crisis of historic proportions’.

According to the US Labor Department’s report, payrolls in the US shrank by 320,000 workers in November, the biggest one-month drop since the 2001 terrorist attacks. The jobless rate has jumped to 6.8%, the highest level since 1993. What is more, Goldman Sachs has forecasted a 9% unemployment rate by late 2009.

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