RBI worsens the UPA blow

If UPA's populism wasn't bad enough, RBI's misguided interest rate policy finished off what growth was left

You raise rates galore, and what do you get,

The economy weaker and deeper in debt,

I am the RBI and I will do more,

Because I owe my soul to the monetarist store.

(With apologies to Tennessee Ernie Ford, '16 tons')

Worst GDP growth (5.3 per cent, year-on-year) in nine years. Worst manufacturing growth, -0.5 per cent, in 14 years. The analysis has followed and the conclusion is brutal, and correct. The UPA government has led the Indian economy to near destruction. Most of the correct explanations for the collapse of the Indian economy centre on the wildly socialist policies of Sonia Gandhi, Manmohan Singh and Pranab Mukherjee.

Some of these three esteemed leaders are known for their brilliance in strategic political leadership. If so, the question needs to be asked: how come the Congress party has lost nearly every election it has fought since 2009, and that too by humiliating margins? In normal political parties, such leaders would be thrown out ignominiously, but the Congress is made of sterner stuff. Some of these leaders are known for their economic expertise. If so, this "in the name of the poor" economics is no longer suitable for the Indian poor or any economy in the world. And some of these leaders are known for management of committees, allies, policies and the economy. But can anybody point to one committee that has succeeded in making a decision, or one political ally who is satisfied, or one good economic policy that this government has introduced? No, but the three leaders are all there, mismanaging the economy to destruction.

The GDP data that came out refers to the fiscal year 2011-12, a period ending in March 2012. The worst ever Indian budget was presented by Mukherjee on March 16, a budget that soured the economic scene by the introduction of retrograde taxation schemes and by a bad business-as-usual approach to economic policy. Some analysts are attributing the precipitous decline in GDP growth to the precipitous decline in investment sentiment caused by Budget 2012-13. One can blame Mukherjee for a lot of bad policies, and one should, but one cannot blame his 2012-13 budget for the GDP decline in the previous year, 2011-12.

... contd.

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