PM Modi seems to have left economic policy to the ‘experts’, rather than his natural instincts. Blow upon blow has been landed by these worthies on the economy.
Prime Minister Narendra Modi seems, from the start of his term in office, to have left economic policy to the “experts”, rather than his natural instincts, and the effects are clear. Blow upon blow has been landed by these worthies on the economy, the latest being the incomprehensible interest rate hike announced by the Reserve Bank of India on 6 June. Several RBI Governors, including the past trio of Reddy, Subba Rao and Rajan, have looked westwards for appreciation and have imposed punitive rates designed to cut growth (i.e. employment and income) in an economy where around 400 million people are hovering around the margin of subsistence, many close to starvation. Of course, the very central bankers of London, Frankfurt and Washington plus fund managers based in North America and Europe themselves have slashed interest rates to near-negative levels, even while they applaud every upward movement in interest rates in India. Their purpose is to reduce the holders of rupees to penury and the holders of dollars, pounds and euros (including the many in the country with illicit accounts in offshore banking centres) to the status of masters, able to pluck equity and other assets from their domestic owners cheaply. The latest RBI rate rise has further lowered the value of the rupee, a fact that will bring smiles to the faces of those with money abroad. This columnist is presently in China, whose currency is ten times the value of the rupee, and may possibly be on track to be 15 times more valuable. Not too long ago, the rupee and the Taiwan dollar were equal in value. Today, the rupee is half the value of the Taiwan dollar, and counting. It was expected that the Prime Ministerial term of Narendra Modi would result in the rupee being at the least Rs 30 to the US dollar, rather than an all-time low that could soon fall to Rs 70 per USD. Of course, basking in the smiles of their peers in London and New York, RBI officials must be delighted at such an outcome. Rather than India’s Main Street, what they are looking to protect is Wall Street, including the rating agencies that were blind to the 2008 market crash. Rather than wallow in servitude to such dodgy institutions, what was expected was India joining hands with a Coalition of the Willing in both East and West Asia that would trade by using their own currencies rather than those of countries that have cost investors in Asia, Africa and South America trillions of USD because of defective governmental policies and greedy moneymen.
In contrast to economic policy, Prime Minister Modi has led from the front in foreign policy, fashioning an innovative approach to relationships that could change long-held perceptions of India. His Singapore speech was among the finest the Shangri-La Dialogue has witnessed. Modi correctly defined the Indo-Pacific in the most expansive terms, as stretching from the eastern and southern coasts of Africa to the western shores of the Americas. In a silent rebuke to those who conflated the concept into a geopolitical weapon against China, Modi warned that the Indo-Pacific should be inclusive, not exclusive, its waters should be free and open, and the concept was emphatically not aimed at any country (i.e. China). At the same time, he made it clear that there should be freedom of navigation in sky and air, and that resort to military