When in November 2008, Indian finance Ministry and RBI announced Rs2000 crores stimulus for the drowning market, we opposed it, and people opposed us. Many of my Indian friends were not even ready to accept that India will face any sort of economic crisis because as Indian politicians and politico-economists says, Indian economy is well-regulated. Yet, their false expectations and trust over regulated economy failed, and Indian government programmed a robbery of tax-payers money worth Rs2000 crores. The loot did not stop there, and again in January 2009, Indian government announced a new stimulus package of further Rs2000 crores.
Yet it did not stopped there too, and now again Indian government is planning for much bigger bail out plan.^[1]
Economic Affairs secretary Ashok Chawla informed about the new stimulus plan, as India’s government will sell 460 billion rupees ($9.44 billion) of additional debt in four parts between Feb. 20 and March 20.^[1]
It has been explained many times that any such bail-out or economic stimulus proves to be disastrous ultimately, as it causes two-way depletion.^[2]
First of all, Indian government will be increasing its fiscal deficit by huge amount to manage a stimulus package. Thus, it will be we, who actually will be burdened with all this debt, and we will be obliged to pay through our taxes, tax-rates will increase to pay-back these debts. In addition, as there are too many holes and breakage in the delivery conduits, a big chunk of money of the stimulus package will be embezzled or wasted.
Mr. Indranil Pan, the chief economist of Kotak Mahindra expressed his doubts regarding the stimulus plan as

“India’s fiscal deficit is one of the highest in the world and the additional borrowings announced today will further put pressure on the deficit.”^[1]

Fiscal deficit is the difference between what Government spends, and what it actually collects from the revenues and taxes in a fiscal year. Obviously, to decrease the fiscal deficit to convincible limits, Government will enforce further strict taxes, and hence will culminate the rate of progress while increasing poverty.
The governmental plans of spending have been a failure since always. We all know how corruption engrossed billions spent in the programs like Mid-day-meal schools, and PM-employment Programs etc. Here is a combined list of wastage and embezzlement of such grants and welfare programs compiled by the NREGA authority itself.^[3]
Now, it is easy to complain the failure on corruption, but the reality is, all such welfare programs are the cause of such corruption because welfare-state itself is a form of corruption^[4] , forcibly looting the producers through taxes to squander the collected loot wealth in poor can never reduce poverty, it is robbery, corruption and wrong at the base, hence it causes further corruption (Boya Ped Babul Ka to Aam Kahaan se Hoye~~ As you sow, so you reap)
Above that, to invest for such welfare programs, Indian government borrows from international communities and takes grants and foreign aids too, and as we have already discussed, it further increases burden rather than being helpful.^[5]
Whenever people talk of corruption in India, they start blaming it to degradation of morals and cultural backlash etc, and hence they start making a new platform for tyranny in form of Moral Policing, but such acts further creates anomaly and disruption because of the misplaced idea about corruption.
Corruption is not because of selfishness or greed, this corruption is the result of the sense of welfare and altruism, as altruism is a fake identity and always involves a certain extent of hypocrisy, it provides space for the growth of corruption. On the other hand, the promotion of rational selfishness always provide space of honesty, hard-work, free competition and undiscriminating comparisons of success or failure.
The idea of economic stimulus and bail outs is also inspired by the sense of Altruism and just like altruism, it is a paradox which in place of helping, cause further deterioration^[6].
First of all, one should understand the meaning and importance of failure and pain in common life.

The physical sensation of pain is a warning signal of danger, indicating that the being is pursuing the wrong course of action, that something is impairing the proper function of its body, which requires action to correct it.
This natural mechanism of pleasure and pain is very essential for any living being or human to actually realize the reasons and hence reality and course of right and wrong.
The example of mentally retarded children can explain it very precisely, who are born with a deficiency of such practical innate mechanical system of learning. Such children have no means of learning that what can and will injure them. The survival chances of such children are always less. The question of the possibility of a living being without having any of the five innate senses also depends on this.^[7]

Failure is no different phenomenon; failure indicates that the course of action was flawed.
Providing economic stimulus or bail outs is nothing but the case of making the enterprises just like the mentally retarded children, with the sense of stimulus and bailout, government actually reduces the market’s capacity to judge what activities are profitable and what are causing loss. Without this capacity of understanding profit and loss, a market enterprise becomes as dependent as a mentally retarded child remains who just cannot experience pain, survival chance of child and such enterprises are always less and hence even if we bail out and stimulate them, they will fail again.
They will fail because by bailing out, we just reduced their capacity and freedom to check out the faults and get better actions. We reduced their incentive to discover all “non-productive-activities” and malinvestment of capital and resources and remove those causes of failure. Thus, all such economic stimulus and bailouts will not only hurt Indian citizens through burden of fiscal deficit, it will hurt the market and enterprises too by reducing their capacity to understand cause of failure and evolve a mechanism to rectify the failure. Such stimulus will help the failure to live long.
Thus, it should be clear that all these economic stimulus and bail outs are designed to shield people from the effects of bad decisions and faulty actions.
Many people also claim that it is all because of greed and capitalism.
What these people forget is the fact, that before 1991, India was a strict socialist country with complete control of government. In 1991, Indian monetary status was zero and India was facing dangers of bankruptcy and a declared economic failure state. We improved from that situation by means of economic reforms, liberalization of markets and a drift towards capitalism. Without capitalism, there was no way for Indian government to even to think about providing any sort of stimulus or bail out.
By announcing that in a school exam, nobody will be failed; school actually removes any incentive for children to actually work hard for learning and getting good grades, and hence hurts the process of learning. Why should a beggar work when he is already getting good food and other essentialities without working and attempting?
Similarly, why will a market enterprise search for and remove the causes of failure if it is provided security against any sort of failure through such bailouts and economic stimulus?
It is not as if governments do not realize this fact, that such helps are detrimental, yet politicians always support such stimulus by exhorting at the emotional causes of helping the failed enterprises and people who lost job. They do so not for helping the market to come above economic crisis, as they know that all such helps will increase the period of crisis only. They do so to gain emotional support of the voters so that they may maintain their stronghold at power, power to rule over people and nation by means of government.
Such economic stimulus and bail outs are no better than the politico-religious issues like Ram Temple and Babri Masjid. Political parties do not raise such issues to revamp religion or morality or spirituality (whatever!^[8] ) they do so to raise an emotional platform to gain vote banks and hence the power to rule.
For proper corruption-less governance, it is extremely essential to limit the government and keep it out of any sphere of economy, or religion because both are the spheres of Individual Liberty and right to live, freedom to act and express.

1. $9.44 billion further for Indian economic stimulus, bloomberg.com [↩] [↩] [↩]
2. Economic Crisis and Fiscal Stimulus by Government, Reason for Liberty [↩]
3. Complains of corruption in governmental programs, NREGA list [↩]
4. Welfare and Embezzlement, Reason for Liberty [↩]
5. Foreign Aid Vs Foreign Investment, Reason for Liberty [↩]
6. Altruistic Paradox, Reason for Liberty [↩]
7. Happiness, pain and pleasure, Reason for Liberty [↩]
8. Shackles of Indian Politics, Reason for Liberty [↩]