The Economic Times - - Money - A BALA­SUB­RA­MA­NIAN

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

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