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Journalism of Courage
It isnt just the RBIs rupee rescue act. The current crisis is made up of a reversal of reforms across sectors.
Given the increasing panic that accompanies every government move to control the rupee whether by the RBI,Sebi or the finance ministry the ministry would appear to have done well to remind foreign investors that India has never prevented repatriation. Soothing currency markets,however,which have lost Rs 1.75 to the dollar since the RBI came out with its rupee-support measures,is going to take more. To be sure,the RBIs new governor will need to revisit the extraordinary monetary tightening. But in several other areas,India is not just visibly falling behind in pushing the reforms agenda,it is actually reversing it.
In the roads sector,with the government not providing clearances on time or finalising a renegotiating framework to help revive projects that look unviable amid collapsing growth,India has moved away from PPP to old-style fixed-rate contracts for roads where the private sector is no longer taking any risks. In aviation,while clearing more bilaterals and the Jet-Etihad deal,the ministry wants to examine whether air fares are excessive; in pharmaceuticals,despite 30 per cent of the industry being under stringent price controls,the government wants to bring in more controls on FDI. In the oil sector,despite the hike in gas prices,there is a reversal of the stated policy to allow free-market prices. Convincing investors that India is more pro-reform than anti-reform will require resolute course correction across sectors,not just by the new RBI governor.
