Part 5: what India/World could do to avoid deep recession?

1. It is clear to everyone that US does need to carry out reforms at every level to put its economy on track. However the less it relied on government funding the better. So the question is how US economy could be revived without government spending- without government increasing its debt level? One option could be, if world financial institutions and dollar surplus countries created a SPV with largely equity stakes by all stakeholders which could then take equity stakes in mostly strategic projects and/or on-lend under certain conditions & regulatory oversight to financial institutions and industry in US and other countries most severely effected by current situation. Part of this equity could be guartanteed by US to be converted in to debt after ten years or so- time enough for US to turn around economically. Reduction in Iraq war spending would not only allow US government to improve quality of its spending but all take stake in this SPV. Participating countries would not only benefit from projects that are undertaken but also earn a decent sum from largely idle dollars in their kitty. Inflation risks are negligible from this liquidity injection as much liquidity has dried up in US in wake of financial crises.

2. In the previous article it was mentioned government must encourage and accelerate development of small largely self contained model cities. It may be added that SEZ like incentives may be provided though they are unlikely to suffer from land related controversy in most cases. Such cities are likely to attract, relocate from overpopulated cities and house a large number of sectors like pharma, BPO, IT, educational products industry, part of renewable industry and so on with huge cost savings and better work and life standards