The Underachiever and Big Bang Friday

by Idéfix Mon Sep 17, 2012 6:29 pm

http://in.reuters.com/article/2012/09/16/india-reform-idINL3E8KF0J220120916

There were quiet celebrations in the offices of Indian Prime Minister Manmohan Singh late last week after he stunned the country with a slew of steps to revive the tanking economy.

In the space of 24 hours, Singh had dispelled the image of an elderly ditherer and demonstrated - two decades after he launched India's transformative drive for economic liberalisation - that he remains a champion of reform.

...

But over 24 hours on Thursday and Friday last week his government unveiled more big-ticket reforms than it had in all the eight years since it came to power in 2004.

In addition to the diesel price increase, it announced that it was opening up the retail sector to foreign supermarket chains and removing the bar on foreign investment in both airlines and broadcasters. It also approved the sale of stakes in four state-run industries.

by truthbetold Mon Sep 17, 2012 8:55 pm

That comment about he did more in these 24hrs than in eight years is factually incorrect and an unnecessary exaggeration.
I don't know enough to comment about fdi but i loudly applaud gas price increases. However govt never pushes far enough to really make the point. Oil / gas subsidy is killing indian budget. If they can bring it down to token subsidy it would be great. In the short run they have to face protests and may also see inflation jump. In the long run evonomy benefits byreduction of deficits. May be even a mortgage rate of 5 to 6% and boom in middle class housing.

by Kayalvizhi Mon Sep 17, 2012 9:20 pm

TN CM Jayalalithaa wrote to PM that reduction in compensation to TN for CST reduction is without logic and TN's losses are significant.

You tell it to him, madam!

by Kris Mon Sep 17, 2012 10:59 pm

truthbetold wrote:That comment about he did more in these 24hrs than in eight years is factually incorrect and an unnecessary exaggeration.
I don't know enough to comment about fdi but i loudly applaud gas price increases. However govt never pushes far enough to really make the point. Oil / gas subsidy is killing indian budget. If they can bring it down to token subsidy it would be great. In the short run they have to face protests and may also see inflation jump. In the long run evonomy benefits byreduction of deficits. May be even a mortgage rate of 5 to 6% and boom in middle class housing.

>>>I think this was bold and is the beginning with more to follow, but mortgage rates at 5 to 6% likely will not happen. Remember inflation control is also a priority item.

by Idéfix Mon Sep 17, 2012 11:36 pm

No Indian government wants onion prices to soar before elections. That is the logic for keeping inflation under 10%. That's the conundrum. Perhaps Singh's steps will prove to be too little too late, but he is at least taking a real gamble two years before elections are due. If he can put the growth engine back in gear, he will have more money for the social programs that can buy his party the next election.

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