DNA, January 12, 2015
The finance minister has used the RBI as a wing of his ministry and even junior officials in the ministry have been dictating instructions to the central bank at various levels
There could not have been a better performance review of the Prime Minister and the finance minister. (“Policy trap”, Mint, 24 November). While you have brought out the salient aspects of poor governance, one issue that has been missed in your edit is the massive loan write-off by public sector banks. Mint has published detailed stories on this issue but any review of the government’s policies should comment on the callous handling of bank finances. The finance minister has used the Reserve Bank of India as a wing of his ministry and even junior officials in the ministry have been dictating instructions to the central bank at various levels.
This is to bring to your notice the approach of extreme caution being adopted by big business in India. Large business houses have indulged in knee-jerk reactions to the financial meltdown in anticipation of a recession in demand and credit. A freeze on new employment and business expansion seems imminent.
Our submission is that big business is underestimating the strength of the Indian economy—its size and diversity—which can provide both the necessary demand and supply stimulus for growth. All that is needed is that all economic agents—the government, consumers, investors and entrepreneurs—maintain a positive attitude in going about business as usual.
Therefore, the current freeze being advocated is definitely the wrong way to go about things. The Indian economy is certainly capable of manufacturing prosperity and breeze through the global financial meltdown and the ensuing economic crisis at only a slightly reduced rate of economic growth of 6-7% per annum. But for that to be possible, business will have to continue spending, earning and employing without any unusual inhibitions.
However, the efforts of big business alone might not be sufficient for ensuring that India coasts through the global meltdown. There is a need for support from all the other economic actors: government, consumers, investors and depositors.
For the government, this is the time to plan and execute infrastructure projects and employment programmes which can generate jobs and enhance productivity.
Investors need to not only keep themselves invested in firms with sound fundamentals but also need to pick up undervalued blue chips offered by the depressed stock market.
Consumers need to do their job too—consume with the usual gusto and ensure that the demand outlook for business remains bright. Depositors also need to be proactive in checking rumour-mongering about bank failures and play an active part in the formation of reliable information networks.
Such actions by these actors will further national interest. A stronger economy will further everybody’s interest—the saying, “united we stand, divided we fall”, has never been more relevant.
The demons are in the mind; wake up every day expecting the future to be bright and sunny and invariably you will find your belief to be vindicated.
—Pradeep S. Mehta & Siddhartha Mitra
I consider Dawood Ibrahim, the most wanted Indian criminal, an extension of people such as Shakil. (“A disturbing encounter”, Mint, 20 November). They conveniently find a safe haven in Dubai while making frequent trips to democracies such as India. It is a case of best of both worlds.
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