Toughsituationscallfortoughmeasures.When Indianreformsstartedin1992,thecountryneeded tough measures to address macro-economic concerns. The Indian economy has travelled a long way since then. Reformist measures becametheorderof theday,andalltheseyears,the financialmarkethaslivedinthenameof Indian reform. In today’s context, Prime Minister (Narendra Modi) is talking not only about reform but also about transforming India.
While that is the journey of every economy taking into account evolving moving parts, taking tough measures impacts different types of stakeholders in the economy. These stakeholdersrangefromentrepreneursof allkinds—big to small enterprises, the affluent community, the middle class population, large pool of savers and those below the poverty line.
Evolution of tough measures also needs to change with time. It looks like that is exactly what Reserve Bank of India gover nor Raghuram Rajan has brought to the country. They may sound simple and at times may even hurt people in a certain segment of the country. However, Rajan persists relentlessly with no selfish approach. This requires not only guts and judgement (a term widely used by corporate managers) but also a deeper understanding of the issues.
Whileitmaycauseshort-termpain,shouldwe not put our faith on the table that it may mean gain for the economy in the long run? wasonlyafterthismeetingthatbankersturned extremely aggressive and brought in huge amount of dollars into the country.
Third — the recent debate around NPAs; everyone knew a year ago that the potential NPAs in the system was quite high. In fact, the numberrangedfromRs3lakhcroretoRs8lakh crore.Thosewhohadtheproblemof NPAsused to cite a lower number, while those with relativelybetter-managedNPAswouldciteahigher