The new government’s decisiveness in ensuring quick clearances, and incentives for lending, for large infrastructure projects during the honeymoon period will be watched keenly for the benefits it brings to the corporate sector and big private capital even as the rest of India is likely to be left out and not pleased at all.
Becoming another China is not easy as that will involve the reduction of expenditure on food subsidies and other welfare measures.
If India is not to be handed over to big business and a rabidly communal fringe, it is best to keep Narendra Modi out of the Prime Minister’s Office.
The RBI Governor lays emphasis on high interest rates as an antidote to inflation and, going against conventional wisdom, hopes that this will stall capital flight triggered by the U.S. Fed’s taper and continue to keep the domestic market attractive to foreign investors.
The U.S. Supreme Court ruling that favours hedge funds in a case relating to Argentina’s debt restructuring agreement with creditors over a decade ago “severely erodes sovereign immunity and may be illegal under other U.S. laws”.
Pfizer’s bid for AstraZeneca is symptomatic of the attempt at global consolidation by Big Pharma as a means to stifle competition or acquire higher-value products. And among their targets are companies in India where 100 per cent FDI is a big attraction.
Two recent cases of debt default bring into focus the rising corporate debt in China, estimated at around $12 trillion in 2013, with most of the loans provided by trust companies that populate the shadow banking sector and account for 30 per cent of credit advanced in 2013.
Unless the RBI makes clear the real intention behind its move on dated currency, the scheme will only serve as a concealed amnesty for the declaration of unaccounted income and wealth by black money holders.
In the run-up to the 2014 elections, the Congress-led UPA is facing the twin troubles of stagnant growth and hyperinflation. Since the neoliberal logic allows it little room for fiscal policy manoeuvre, it has opted for expenditure cuts and is left with only monetary options, which will alienate either the poor or big business.