Saturday, February 7, 2009

No FM

Yes, it has been tiresome to listen to a Finance Minister whose continual theme has been 'The macroeconomic fundamentals of the economy are strong.' But it's undignified not to have a FM at all. In the worst financial crisis the world has seen in decades with no end in sight, policymakers (read UPA government) do not see it necessary for India to have a finance minister. It makes one wonder what the FM's job is when all is hunky-dory.
Perhaps the gorement imagines that between Deputy Chairman, Planning Commission and Governor, RBI, and a part-time FM/PM/EAM, it has all the bases covered. Perhaps it believes that since there is little room for fiscal remedies, there is no need to have a whole person devoted to the finance ministry. Perhaps it has more important things to think of, such as effective quality education for all, higher education reforms, healthcare, unorganised sector.....nah! gorement has had almost five years to ponder these problems and so far it has not come up with any solutions.
Now that the elections are almost here and all parties have gone into poll mode, we cannot expect any policy decisions for the next six months. In the meantime, we continue to lose jobs, inflation remains interestingly intractable at over 5%, banks are refusing to lend, consumers are refusing to purchase consumer durables, and corporates are busily redressing their balance sheets in case l'affaire Satyam spills over.
In six months time, the same gorement might be back in place, this time determined that the Holy Economic Trinity of Manmohan Singh, P Chidambaram and Montek Singh Ahluwalia will come up with action. But by that time India's window of opportunity will be lost altogether.

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