Growth hatao

Thank you, UPA government and RBI governor, for telling us India isn8217;t worthy of growing at 9 per cent: 6-7 per cent growth is good enough. That8217;s the secular rate of growth, presumably, a political improvement on the 8216;Hindu rate of growth8217;. Thank you for showing us that panic can so easily destroy logic: the RBI8217;s monetarist mania won8217;t affect an inflation led by food and commodity prices. Thank you for showing the aam aadmi where he stands: Indians who rode the growth curve and took loans to build a small home or start a small business are hurting the most. Big business can borrow abroad. Rich consumers aren8217;t affected. Farmers were also supposed to be aam aadmi. But the government is trying to stop them from getting the best price for their output; it wants to fleece farmers to give cheap food to consumers. And thank you for demonstrating that bureaucratic socialism was never dead, it was merely biding for time.

The bureaucratic socialist state flourished between late 1960s and mid-1970s. The 20-point programme was an idea of that era. The Congress is again talking about a 20-point programme. The substance behind this symbolism is that inflation is the perfect excuse to dust out old manuals. Prices of steel and cement are no longer market determined. Drug prices were being targeted even before inflation became the favourite scare story. Prices at which cotton seeds can be sold are fixed. Forward trading moderates prices 8212; farm production is seasonal, but consumption is year-round 8212; but it has been deemed inflationary.

Control elsewhere? An increase in the discretionary element in taxation. Administered interest rate fixing 8212; senior citizens should be cross-subsidised; note in passing that politics is full of senior citizens many of whom find a largely young India8217;s aspirations something to be controlled. More evidence: SEBI, incredibly, decides to grade IPOs, forgetting that equity is about risk evaluation by buyers; this is the cost of aam aadmi confusion in financial regulation. The RBI had a regular policy review coming up in April, inflation hadn8217;t shot up any more, but rates were still hiked on a weekend. Rule-based policy is no longer acceptable. Growth hatao is the new slogan. Markets gave their verdict on Monday. People8217;s verdict may be harsher.