Four months from today, a new government will be in office (according to the people’s verdict). Nothing that the present government will do between now and April 30 will alter the state of the economy radically.
Is it the intention of the government to vastly expand the government at all levels. The government’s bluff will be called if another slice of the cake will be reserved even while the size of the cake remained the same
As I write this essay on Friday, the buzz is that among the measures under contemplation are interest-free crop loans and a cash transfer to small and medium farmers. Even if the government directs public sector banks to provide the money for crop loans, how will it find the money for cash transfers? The fiscal deficit at the end of November 2018 was 115 per cent of the target
In case of Manohar Lal Sharma vs Narendra Damodardas Modi and other cases (Rafale deal cases) the judgment of the Supreme Court pronounced on December 14, 2018, will be remembered more for the questions that the Court did not decide than for the questions that were decided.
It is the market that first called out the Prime Minister and his government. Markets do not like crude disruptions such as demonetisation. Apart from the enormous pain and suffering that it imposed on millions of people and businesses, demonetisation caused grave uncertainty, and markets dislike uncertainty and unpredictability in government’s policy actions.
I am in favour of some tension between the government and the Governor. However, I strongly disapprove of government-appointed directors deciding issues that fall within the jurisdiction of the central bank/Governor.
As long as Sardar Patel lived, he did not forgive the fanatics who killed Mahatma Gandhi (as Home Minister he had banned the RSS for 17 months), but both the RSS and the BJP have found it expedient to forget that chapter of history.
The government’s initial concern was only about interest rates but, on that issue, Dr Urjit Patel was on a strong wicket — he had the support of the Monetary Policy Committee. Soon, the government realised that interest rate was not the only ‘hurdle to growth’; other fault lines had emerged
External events are impacting the Indian economy. The government is unwilling to alter or calibrate its positions on the projected growth rate, government expenditure, NPA resolution, and tax enforcement. The government seems to believe that it can tide over the crisis by further muddying the muddied waters!
The consequence is that the government revenue has become oil-dependent, government is loath to give up easy revenues, and there is mounting anger among the people as prices of petrol, diesel and LPG soar every day.
RBI had done no study or preparatory work; yet the Central Board of RBI hurriedly met on November 8, without an agenda and without a background note, and dutifully “recommended” that the notes may be declared no longer legal tender.