Thanks for the excellent article on exchange rate policy by S. Narayan, “Fishing in troubled waters”, Mint, 18 June. The concerns raised by him in the article are very relevant. I believe the finance ministry as well as RBI are aware of the challenges posed by the huge inflow of foreign capital into India. However, they seem to have very few options to deal with these flows. They seem to be concerned that any move to control inflows of foreign capital could have far-reaching repercussions in the form of a sudden outflow of capital. This could, in turn, have a cascading effect on other parts of the financial markets and economy. It would be great if the writer could share possible solutions to this problem/situation in his next article.
Your analysis of the present political scenario in the editorial, “New affront”, Mint, 14 June, is incontrovertible and unmistakable. Today’s shallow, short sighted and self-aggrandizing state satraps, such as the Mulayam Singhs, Mayawatis and Jayalalithaas, are undoing the stupendous achievement of the late Sardar Patel, who abolished princely states in India.
They are holding the entire nation to ransom by playing the ugly caste card. To rein in these regional political thugs, the only remedy, as suggested by constitutional experts such as Subhash C. Kashyap, is to amend the Constitution and bar those regional parties that have no representation in state assemblies in more than five or six states.
Such a measure will effectively bar them from contesting parliamentary elections.
This is in reference to your article titled “The dissimilar Asian twins”, Mint, 19 June. I have the following observations:
The comparison of India with China has far too often—and almost annoyingly so—focused on outcomes rather than processes. This is characteristic of this article as well. The specific arguments in it draw too much upon the strategic thinking patterns of the previous century. China has been lauded as a country with grand vision and India is belittled as one with ambiguous ideas about its future.
This dates back to a preference for a powerful Union government—almost along the lines of the Chinese model. Such a centre can not only push through politically sensitive reforms, but also go around the globe flexing its muscle and conducting diplomacy of oil, land and trade.
I, however, would any day prefer a confused India to a determined China. The reason is the type of governance each implies. Confusion is a democratic collation of views and ideas— where we push to evolve consensus rather than manufacture it.
If none evolves, it is typically for a good reason. It is also at this point that I would like to draw your attention to the quality of economic growth in either country. The Chinese growth is top-down—government-led spending, FDI-led investment, export-led job creation, sustained by a cheap currency. Indian growth, on the other hand, is a healthier combination of the bottom-up and top-down approach— government does its bit on price stability and policy reform while entrepreneurs drive growth and job creation.
It would be plain to any sensible observer that Indian growth is of higher quality and is more inclusive than its Chinese counterpart.
In the process, if India loses a few oil deals and misses opportunities to influence the military government in Myanmar, I would not complain.
After all, the government, its foreign policy, strategic influence in various spheres and oil well ownership rights are not an end in themselves, but a mode of state chosen by the people for the people.
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