MODI CAN ENSURE THE POST-COVID ERA BELONGS TO INDIA

The Prime Minister has the opportunity to convert the Covid-19 disaster into the success story of the epoch for India, much bigger than the 1992-93 Narasimha Rao reforms.

Among the Big Four of world leaders (the others being Trump, Xi and Putin), only Prime Minister Narendra Modi correctly divided world history into the Pre-covid and post-covid eras. The steps that have needed to be taken by governments to protect their citizens from the Novel Coronavirus pandemic will transform the nature of both society as well as the world economy. The change could work to India’s advantage, once policies are drawn up by the Prime Minister’s Office (PMO) in accordance with the lessons learnt during the ongoing crisis, which in its overall effects is heading towards the scale of a world war, especially if the more dismal predictions of casualties come true. But while the expenditure of Allied powers on the 1939-45 war between them and the Axis powers was less than $5 trillion in present value, as of date, the G-20 member states have committed nearly $10 trillion of additional funding to battle the “invisible enemy”, with more cash on the way. The US accounts for more than $6 trillion of such Covid-linked resources, in contrast to the $800 billion spent under President Barack Obama during 2009 to mitigate the effects of the 2008 financial crash. Bank interest rates have gone down almost to zero in several advanced economies, while India with its high interest rate structure continues to be

A boat is seen on the banks of the river Yamuna after air pollution level started to drop during the 21-day nationwide lockdown to slow the spread of coronavirus, in New Delhi on Wednesday. an outlier. As does the country’s conservative fiscal and monetary response even to the Covid-19 economic shock. Despite efforts by some central banks including the Reserve Bank of India (RBI) to roll back the tide, cryptocurrency is on the rise, prompting leaders such as Xi Jinping to embrace the inevitable and work towards making China a global digital currency hub including with the early use of Blockchain. At present, London, Frankfurt, New York and Zurich are the global hubs of traditional currency trading, with Hong Kong, Dubai and Singapore lagging behind. If Xi has his way, the top centres for such trades will mostly be in China, just as the country already dominates the list of the top ten global banks, having replaced the US.

SEPARATION OF CENTRAL BANKS FROM MONEY

Church and State began to be separated in some of the countries of Europe seven centuries back. The coming years are likely to witness the separation of money supply from central banks and into the hands of diverse entities, several almost entirely beyond official control. Even now, the traditional instruments of control by central banks, including the Bank of England and the US Federal Reserve Board, are increasingly becoming ineffective despite their resort to desperate measures such as zero interest rates. The 1918 Spanish Flu tipped the world into the global economic depression of