The rupee slumped to 46.75 against the dollar by the time you see this in print. It will thus have lost four rupees to the dollar in just six months, which speaks volumes for the way our economy is being managed, if that is the right word. The finance minister who is as much in the dark as anyone else about this sudden breakdown in the economy has been going round asking everybody to be happy and not to worry too much, for everything will be all right in the end, as they say in films. This is what we have been hearing for the last fifty years, but the end never seems to come and things get worse every year.

So far the economic breakdown had affected only people like you and me, that is, people outside the government, who make their both ends meet in the private sector. This sector has been affected very badly in the last few years. Jobs have vanished into thin air, companies have folded, factories have closed down, and millions of people thrown out on the streets.

But government people have had an easy time. They have been getting their salaries on due dates and also their bonuses and pensions. But now apparently, even they are in trouble and as unsure of their cheque at the end of the month as anybody else.

In Maharashtra, government babus had to go without their bonus this year because of some legal difficulties, if you believe the chief minister. The real difficulty is that the government had no money in the till. That was yesterday.

Today I read in the papers that the government has decided to cut down babu salaries by ten per cent, which is a step in the right direction, but one that the government may not be able to take at all.

So Maharashtra, supposed to be the most affluent state of the country, has also joined Bihar and up in the long list of states who have become habitual defaulters. This is only the beginning.

I have a feeling that time will come when all states will be defaulters, and ultimately they will also drag the Centre with them. The Centre is already virtually bankrupt. Out of total revenue receipts of Rs 204,000 crore in this year's budget, interest payments account for Rs 101,000 crore, defence Rs 60,000 crore and staff salaries Rs 30,000 crore, making a total of Rs 191,000 crore. What does it leave the government? a bare Rs 13,000 crore, for everything else.

So it has to borrow money in the market, not just in the country but also outside, to keep the pot boiling. It will borrow Rs 112,000 crore this year, of which two-thirds have already been raised, although the year is only halfway through. We are now borrowing increasingly from friends in and outside the country, including NRIs.

Last year, there was the excuse of Kargil. This time there is no such excuse but even then it has come out with millennium deposits, with the same purpose.

It's going to be a big racket, since the rupee is depreciating rapidly, which means that you will receive an additional 5 per cent on your deposits, over and above the very high interest rates the government has announced. But you cannot go on raising cash this way, for one day you will be told that nobody is prepared to invest in government bonds. The chickens will then come home to roost and the government will slip into real bankruptcy, as many governments in Asia have done in recent years.

However, look at what is happening in countries like USA and Britain. There they are discussing budget surpluses, not deficits. USA will have a surplus of over 3 ,000 billion over the next ten years, and the presidential aspirants are debating what they will do with the money.

Bush says that he won't really need it and try and give most of it back to tax payers whom it belongs. Gore says that he will use it to reduce social security and medicare charges, which also comes to the same thing.

Same thing is happening in Britain, though the quantities there are rather small, because Britain is a much smaller economy. There also the Tories and new Labour are debating what to do with the extra cash. The Tories say that they would reduce tax rates, while Tony Blair says that he will spread the largesse all round, particularly among the low-income groups. How did they manage to do this? Until a few years ago, they had budget deficits to deal with. Their governments reduced tax rates but saw to it that the economy was kept buoyant and total tax receipts were boosted. Even then, their tax rates are much higher than ours.

Our problem is that we do not have longterm financial plans focussing on budgets. We do not know the finance minister does not know what his revenues are going to be or should be, how much the expenditure and of course, the deficit.

All countries have long term budget plans, including USA, which does not believe in planning, or says it does not believe, but actually has a much more efficient planning programme than we have. It was on the basis of this programme that they were able to predict the volume of budget surpluses likely to arise over the next ten years. They have ten-year plans which actually work. We have five-year plans that never work. In fact, nobody in this country knows how the economy is likely to function in the near or even distant future.

At the time of this year's budget, there were all kinds of forecasts, with the finance minister himself saying that GDP growth would be 8 per cent during the year. Who told him this? His economists? These are the same economists who have been wrong year after year for the last so many years and who are really responsible for the mess we are in. But it so happens that our finance ministers rely on them at budget time and come up with bogus figures like 8 per cent GDP growth and other similar nonsense.

How is it that an economy that was supposed to end up with a growth rate of 8 per cent will wind up with just 5 per cent? Industrial growth will be even less than that, according to present indications. This is going to be one of the worst years on record, just like the year Chidambaram presented his disastrous budget.

We seem to be proceeding from one disastrous budget to another, though we are told all the time to be happy, and keep smiling. The reason why the budgets turn out to be such big disasters is that the finance ministers simply have no leavers to control the economy. Everything in India now depends on outsiders.

The stock market depends on foreign institutional investors who bring in or send or take out their funds according to their own convenience which has nothing to do with the state of affairs in India.

The foreign exchange market also depends on outsiders, and how many dollars they bring or take out. The current account deficit also depends on foreign investors and nobody knows how they do their calculations. And what does the finance minister do? He keeps running after all these outsiders, trying to humour them, and asking them to be good boys and not to topple the apple cart. He is not India's finance minister, but foreign investors' man in India.

He is their man, not ours, and the economy too is theirs, not ours. This is what globalisation really comes down to handing over your economy to foreigners and hope for the best?.