Time to reset investment
This is in reference to “How Swamy blew it (FE, May 19). The government wishes for a good monsoon and its loquacious MP for a new RBI Governor. These may temporarily lift market sentiments but not radically address inherent economic/ monetary fault lines .That Dalal Street today, is as anxiously looking at the skies as Marathwada farmers, is a telling commentary of our times. The prolonged instability in the numbers, be it IIP, inflation,WPI , trade indices are signs that economy borders on the indifferent. That more than 20% of loans of Indian banks are stressed, only adds to the premise. Politicians are averse to see the larger picture. An impending US Fed rate cut would tend to devalue rupee and the RBI needs to keep rates high to stem large dollar outflows . Whimsical changes now in key rates would render climate for investment, more uncertain.The need today, is to push for investment. Take for example, the private-sector fixed-capital investment, as a share of GDP that peaked at 33.6% in FY12 has since trended down to the current low of 28.7% in FY15. Major states have registered a decline in ongoing projects, depressing the capital markets. That puts the onus on government to fund fresh large scale investment. Pay panel largesse could tempt practicing populism. RBI had warned of an inflation push of 150 basis points,due to this. This amount is better allocated to pressing needs of investment. Perhaps one can draw inference from Brazil, where president Roussef came into power in 2014 ,on fiscal misadventure. But rising inflation and unemployment thereafter, has brought her today to near political dead end.
A renaming blueprint
Film-personality Rishi Kapoor has rightly initiated a debate by tweeting about excessive naming of institutions/awards/schemes etc of governments after members of the Nehru-Gandhi family. Earlier Nehru-Gandhi loyalists in Congress party raised a hue and cry on the decision of central government to remove monopoly of Nehru-Gandhi family from most commonly used five-rupee denominations of postage-stamps of definitive series. Though Indira Gandhi will be remembered by the nation for a historic and unprecedented win in 1971 Indo-Pak war, but it is beyond understanding how and why Rajiv Gandhi dominates even amongst Nehru-Gandhi family in naming of schemes, awards, institutions etc at the centre and in states ruled by Congress. Central government should rename schemes, awards, institutions etc presently monopolised by Nehru-Gandhi family leaving only a reasonable number of them. Rather, all naming done post-independence, should be reviewed with a new system. Political rulers misuse their authority, installing statues like erstwhile Haryana chief minister Om Prakash Chautala flooded the complete state with statues of his father. Consent of opposition leader should be must in installing statues.
Subhash Chandra Agrawal