In The Media ⁽⁴⁰⁰⁾

Read full article At independence, India suffered from widespread poverty, abysmal social indicators and rudimentary infrastructure. It then went on to adopt socialism as the centrepiece of its development strategy, with attendant features such as licence permit raj, distribution and price controls, and autarkic trade policy. The result was meagre progress for almost four decades. The process of change began gathering steam only with liberalising reforms, first introduced grudgingly in the second half of the 1980s and then deliberately from 1991 onward. But with the first four decades nearly lost, despite progress in recent decades, India’s problems have remained massive. Therefore, as a critic, if you choose to evaluate any of India’s governments according to problems that remain unsolved, you can have a field day. That is precisely the approach critics of Prime Minister Narendra Modi have taken. Such criticisms prove nothing and indeed apply with greater potency to preceding governments. Genuine evaluation requires assessing the progress made by a government against that by other governments. If this correct metric is applied, it is difficult to escape the conclusion that…

Read full article In one important respect, Budget 2019 breaks new ground. For more than a decade, I have argued that apart from a compelling reason for an alternative scheme, social spending must take the form of cash transfers. Such transfers empower the beneficiary rather than bureaucrats and agencies that get hired to distribute in-kind transfers. Armed with the cash, it is the beneficiary who chooses what to buy and from whom. Yes, up to 5% beneficiaries may blow up the money on liquor, but that is no reason to punish 95% responsible citizens. Therefore, it is heartening that for the first time in India’s history, a government scheme has recognised the sovereignty of the beneficiary. Under the newly announced PMKISAN programme, GoI would unconditionally transfer in cash a sum of Rs 6,000 a year to each of 125 million marginal and small farmers. GoI has allocated a solid Rs 750 billion for this purpose in the interim budget. If the idea of cash transfers gains further acceptance, India can make huge gains in terms of beneficiary welfare, as well…

Read full article Today, we give farmers 2.2 trillion rupees in subsidies on fertiliser, power, crop insurance, seeds, credit, irrigation and a myriad other items. We have a massive programme of procurement of grains at above market prices; we give highly subsidised food grains to 75% of rural population; and we offer guaranteed employment for 100 days to one adult in each rural household. We run schemes that provide houses and LPG connections to rural poor and free primary education and free primary health care to rural households. Finally, substantial resources have been invested in bringing roads, digital connectivity and electricity to rural areas. Yet, after seven decades of development effort, stories of widespread farmer distress remain a daily feature of our television programmes. Why? It is tempting to hypothesise that since stories of distress capture viewer attention more readily than those emphasising positive achievements, media has a vested interest in focussing on them disproportionately. Given the vastness of India, there is always farmer distress in one or another of its corners, providing fodder for primetime television on a regular…

Read full article Abstract: It was with great sadness that I woke up to the news of resignation by RBI governor Urjit Patel this Monday morning. Urjit has been a friend for more than two decades and I have greatly admired him for his brilliance, professionalism, integrity, conviction and friendship. With his departure, India has lost a committed public servant. It is a rarity that a resignation, tendered amid policy differences with the government, elicits such a warm response from none other than the PM. In an unusual gesture, not only did Prime Minister Narendra Modi extol the governor for his thorough professionalism and integrity but also applauded him for steering “the banking system from chaos to order”. Patel earned this high praise through sheer hard work and principled policy making. He inherited from his predecessor an extremely fragile banking system. Years 2008 to 2014 had seen an unfettered expansion of credit by public sector banks (PSBs), with the RBI failing to deliver on its key regulatory mandates.

Patel was piloting the bank system from chaos to order, his successor must take up the taskRead full article It was with great sadness that I woke up to the news of resignation by RBI governor Urjit Patel this Monday morning. Urjit has been a friend for more than two decades and I have greatly admired him for his brilliance, professionalism, integrity, conviction and friendship. With his departure, India has lost a committed public servant. It is a rarity that a resignation, tendered amid policy differences with the government, elicits such a warm response from none other than the PM. In an unusual gesture, not only did Prime Minister Narendra Modi extol the governor for his thorough professionalism and integrity but also applauded him for steering “the banking system from chaos to order”. Patel earned this high praise through sheer hard work and principled policy making. He inherited from his predecessor an extremely fragile banking system. Years 2008 to 2014 had seen an unfettered expansion of credit by public sector banks (PSBs), with the RBI failing to deliver on its key…