INSUBCONTINENT EXCLUSIVE:
By Ajay Bodke A niggling detestation for the dispensation that denied him a second-term as RBI Governor is clearly evident in former UPA
continuing tirade.
Dr Rajan surely did excellent work as RBI Governor, but then he also routinely and purposely transgressed ''the Lakshman
Rekha'' while holding that hallowed position to amplify the fissures in Indian society and indulged in scaremongering, knowing perfectly
well that a newly-elected government would refrain from engaging in an open duel with the august financial regulator.
He actively sought to
create a flutter through these well-thought-out non-monetary, non-fiscal interventions to further his appeal among the liberal
establishment, especially on the banks of the Potomac - the Thames.
This stood in stark contrast with the exemplary restraint shown by
professional central bankers, when holding office on non-monetary, non-fiscal issues in mature democracies like the US, UK, the EU and Japan
stands hollow when seen in the context of an emasculated PMO in the previous government that was wholly in thrall of an unelected National
Advisory Council.
One of the principal reasons for the economic slowdown is the Twin Balance Sheet problem facing the Indian economy and
financial system, the genesis of which lay not with the Modi government but the crony capitalism practised previously that left a toxic
legacy of Rs 9.4 lakh crore ($134.3 billion) dodgy loans, effectively bankrupting most of the PSU banks, power financing companies and some
responsibility for allowing this plunder rather than pontificating later
Despite severe fiscal pressures, the Modi government needs to be lauded for trying to resuscitate the vital nervous system of the Indian
PSU banks, by infusing nearly Rs 3 lakh crore ($42.9 billion) as fresh equity capital between FY2014-15 and FY2019-20.
To its credit, the
government has not shied away from rolling out many politically tough but economically necessary historical structural reforms like the GST,
These structural reforms, though disruptive in the short run, are bound to create a solid foundation for strong and sustainable growth in
Many of these revolutionary reforms have struck at the heart of entrenched interests that were allowed to proliferate and plunder government
finances over the past seven decades.
These entrenched interests have waged a fierce war and fighting every inch of the way to cling on to
their spoils.
Rome was not built in a day! So, why should it be any different for a continental-sized complex country with one-sixth of
humanity in entrenched poverty for seven decades?
A confluence of global and domestic headwinds are being addressed by the government and
regulatory authorities, not by sniping at each other and scoring a point, but through a pragmatic, single-minded focus on reviving growth in
an increasingly fractious global trade environment marked by rise in protectionism.
This 'Sapta Sindhu' of bountiful monsoons, benign global
crude oil prices, continuation of aggressive monetary easing along with the steps being pursued to shore up revenues by plugging the rampant
evasion of GST, aggressive embracing of privatisation and raising of resources by monetising non-core assets, reviving animal spirits by
slashing corporate tax rates and positioning India as an attractive destination for new manufacturing facilities and pump-priming the
economy by continuing its large investments in infrastructure sectors like roads, railways, power transmission will have a significant
economic multiplier impact over the medium-term and impart the necessary push to revive economic growth.
(Ajay Bodke is CEO - Chief
Portfolio Manager (PMS) at Prabhudas Lilladher
