View: Modi’s ‘thalinomics’ is a recipe for bad economy
Indian food, when done right, comes in a thali — a metal plate with half a dozen or more little bowls of vegetables, pickles, and so on. The word of the week in India is “thalinomics”: The go nment’s official survey of the Indian economy, published a few days ago, introduced the word to talk about how food was getting cheaper for people across the country. But it is now being used to talk about the go nment’s entire approach to the Indian economy — a little bit of this, a little bit of that, all mixed up together till you are unsure what you’re eating.
What works for food doesn’t quite work when it comes to economic policy. Every year at the end of January the Indian finance minister presents the federal budget, which is not just a statement of revenue and expenditure but also a guide to policy-making in the coming year. Given the intensity of India’s slowdown — six successive quarters of slowing growth, taking it down from almost 8% to 4.5%, a six-year low — all that Indian investors and consumers really wanted from their go nment at this point was some clarity. What is its plan? How does it intend to reverse the slowdown and raise India’s growth trajectory? By that standard, the only one that matters, the go nment’s budget — presented on Saturday — was a failure. It tried to do too much, and ended up serving a mismatched platter of competing flavors.
Some people hoped that the go nment would junk its fiscal targets and spend its way out of trouble — a bad idea, as I have argued earlier, albeit one that might have temporarily increased business confidence. Others prayed it would stick to its deficit reduction targets, in order to restore credibility to its battered reputation. In the end, the budget took a middle course — it allowed a fiscal slippage of 0.5% of GDP, to 3.5%. Not enough to be considered a real stimulus, but not quite enough to save ratings agencies from tut-tutting either. The finance minister claimed to be cutting middle-class taxes, but most taxpayers are unlikely to benefit from the budget’s changes. And the stock market — which fell 2.4% after the budget was presented — was dismayed that a tax on long-term capital gains stayed in place.
The go nment was similarly confused about trade. One section of the finance minister’s speech insisted that India must become part of the global value chains that are shifting slowly away from mainland China; but another, larger section was devoted to the sort of protectionist rhetoric we last heard in the socialist, isolationist 1970s. Tariffs were raised on a slew of products to protect Indian manufacturing. India continues to close itself off to trade when it should be opening up.
Narendra Modi, India’s prime minister, likes to be seen as an economic reformer but his go nment’s instincts have revealed themselves as anything but reformist. What’s now clear is that it doesn’t have a coherent agenda, either. Moreover, Modi’s go nment has spent so much time talking up its own achievements that, when faced with a crisis, it can’t afford to acknowledge its mistakes and take any real corrective action.
The question for Indian investors now is: What could force the go nment to focus on the economy? The slowdown wasn’t enough. Voters seem to care more about social issues. Big business is so scared of the Indian state that it never speaks up. Buried in the budget numbers is one answer to investors’ questions about what will make the go nment move, albeit one that will dismay a lot of people: the bond market, and ratings agencies.
This is a pretty good idea. There’s no reason why Indians’ limited household savings should be the only ones raided by the go nment to fund its spending. Indian bureaucrats have always been sniffy about foreign capital, but they can no longer afford to put on airs. Yet depending on foreign capital to finance the deficit isn’t going be straightforward if the go nment keeps overspending. Moody’s Investors Service pointed out that “India’s general go nment debt is already significantly higher than the average for Baa-rated sovereigns”; the agency had shifted its outlook to negative late last year. So good news of a sort, I suppose: In deciding to depend upon global pools of capital, India’s go nment will be forced to listen to at least one group of people who care about growth and investment. It’s up to the bond markets now to do what nobody else has: Get Modi focused on the economy.
译文来源：阿巴森 http://www.abaripsen.com/49296.html 译者：Joyceliu
Puthumbaka Raghu Kumar
Finance Ministry is in the hands of Psuedo economists and nothing better can be expected.
finance has be in the hands of trusted ones ...
In addition to Thalieconomics, the go nment should consider increases in rents/house prices and utilities for any meaningful comparison.
This moron Mihir does not understand the life of ordinary man...for them inflation is their biggest enemy...instead of appreciating the fact that food plate has become more affordable, he is mocking...another stupid comment of his"Govt. living beyond its means..." The Deficit in America and most of the world is far higher than that of India...fact that he disingenuously forgot to mention,
this media group is BJP supporter
Think Mihir Sharma is a diehard socialist and not an open minded economist he is touted to be. India will shine after the dirt of communal and appeasement politics by previous go nments is reversed and progress is the key word.
most economists are ideologues.
Russell Ian Duarte
Modi, Seetharaman, AShah and other clowns, when and where was the last time you ate a Veg and A non veg thali, can you be decent enough to order or treat us at your expense,,, of course its our money finally that you get as salary that u will pay.
like it or not clowns are wearing crowns
70 years of Indian history go nment agenda is to built Ram Mandir. in this country we have single Virulogy lab in Pune only. any where the suspect of corona virus detected the samples goes to Pune and that cost 5 days extra due to transportation, every city does not have direct flight to pune.
Yeshwant Sinha time BJP did good on economic fronts.
HONESTLY ...i feel go nment is really confused and not sure of it's economic policies !! Once policy is announced there are multiple tweaking / Changes ..! As a common man Onion price /petrol / chopped rates on Fix deposit / PPF / LC ...hurts ..
老实说……我觉得政府真的很困惑，对自己的经济政策并不明确!!一旦政策公布，就会有多种震荡/改变！作为一位普通人，洋葱价格/汽油/固定存款利率大幅下调/ PPF / LC…都让百姓受伤。
confused so are the highly educated in western economics advisors.. US methods are not apt like veggies can not handle BAT pickles.
slow down today is the long term effect of demonetisation
Nehruvian fabian socialist economy with intrusive regulation and financial terrorism on semi literate entrepreneurs
Mihir,I hope you have passport ready. Modi is narcissistic-insecure man with agenda of vengeance.He is not known for humility or intelligence.
UK is offering good opportunities to Indian investors and advisors
THIS IS HOW THE 5 TRILLION US D ECONOMIES CAN B BUILT.......
Modi is uneducated but loaded with Jumlas .. His 18000 paid coolies are defending him in the social media. Modi loot the common man to pay to his coolies
No any state go nment in India is interested in Public Transport system in the bigger cities. Public transport should be encouraged and that will have bigger impact of reducing road accidents and environmental pollution, less road maintenance etc. but neither the center nor any state Government work for public betterment all are in the politics for their family gain, land grabbing and amass of wealth for their kin.
You must be educated from RSS school to come with such dumb ideas. Dumbos like you elected imbecile like Modi.
we should consult desi economists like Arun Shouri. Swamy, Gurumurthy, Shaktikant, K K kamath
我们应该咨询像Arun Shouri, Swamy, Gurumurthy, Shaktikant, K K kamath这样的经济学家。
Sudesh Prakash Yadav
Mihir Sharma has a doctorate in spreading negativity about Indian economy. He comes up with silly articles every second day. Epitomizes the paid media with a hidden agenda.
Feku maharaj has only jumla. No plans or vision for the economy and the country.
irrespective what govt plans indian economy is more driven by entrepreneur ship of our industry. As Rusi modi use to say if you can succeed in India you can succeed anywhere