Expecting a quick recovery in rural consumption will be foolhardy3 min read . Updated: 17 Dec 2018, 11:10 AM IST
The irony is that talk of farm loan waivers should ideally lead to worries about the fiscal deficit, and lead to a correction in the markets. But any such worries seem to be missing on the Street
Former Reserve Bank of India governor Raghuram Rajan wants farm loan waivers banned from election manifestos. While there are good reasons for this, the stock markets are celebrating the prospect of such populist measures in the run-up to the general elections. The ruling Bharatiya Janata Party’s (BJP) loss in the state elections in Chhattisgarh, Madhya Pradesh and Rajasthan should have increased risk premia on account of increased political uncertainty, but any such worries seem to be missing on the Street.
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