Praxeology: My Reflexions on India

Recently while appearing at Frankfurt’s Goethe University to accept the Deutsche Bank prize in financial economics, RBI's new governor Raghuram Rajan asked an important question to the monetary authorities around the world. He questioned the merit of the unconventional monetary policy of ultra low interest rates to spur economic growth. Rajan said : We should wonder whether lower and lower interest rates are in fact part of the problem, I say I don't know . He also said: "We seem to be in a situation where we are doomed to inflate bubbles elsewhere" "In general, central bank stimulus risks letting governments off the hook... warning against central bankers seeing themselves as the ones who can solve all economic problems" "We need to think of the dangers of over stimulation. We need to think of the sustainability of growth created by stimulus measures" "It (interest rate tool) is very, very blunt ... targeted fiscal policy may be ...

Mr. Libertarian, Murray Rothbard, described the true nature of the State - aka government - in his monumental work The Ethics of Liberty in this way: " The State is nothing more nor less than a bandit gang writ large ". St. Augustine of Hippo, before Rothbard, said similar things about the State officials in his The City of God : “ What are kingdoms without justice? They're just gangs of bandits" . Famous abolitionist Henry Clarke Wright wrote this: States and nations are to be regarded as we regard combinations of men to pick pockets, to steal sheep, to rob on the road, to steal men, to range over seas as pirates - only on a larger and more imposing scale. When men steal, rob and murder as states and nations, it gives respectability to crime - the enormity of their crimes is lost sight of, amid the imposing number that commit them, and amid the glitter and pomp of equipage. (taken from, Carl Watner, The Criminal Metaphor in the Libertarian Tradition...

The new RBI governor, Raghuram Rajan, came with lot of fan fare in his new position as a central banker of this country. People, especially the industry,  had huge hopes from him that he will lower the interest rate and help revive the sagging economy, but he disappointed them by announcing an increase in the repo rate by 25 bps. After his policy announcement many media people are hailing him as an independent central banker who is not getting under the pressure of Indian government. But, is it true? Also, during the session with news reporters, after his policy announcement, Rajan said that his RBI is an "anti-inflation" institution! But, is this also true? First, the idea of an independent central bank is a joke. The Indian central bank RBI was nationalized in 1949 itself. This quote from the RBI's website will help dispel the myth of autonomous Indian central bank: Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by...

Last week the Delhi court delivered its verdict on the famous 'Delhi gang rape' case, which is also known as the Nirbhaya case. This verdict and the statement of judge as well as the sentiment of Indian crowd show how botched and wrong headed the Indian State judiciary system is. Delivering justice, judge Yogesh Khanna said , This has shocked the collective conscience of society... These are the times when gruesome crimes against women have become rampant, and courts cannot turn a blind eye to the need to send a strong deterrent message to the perpetrators of such crimes... This crime in every way falls within the rarest of rare category warranting a death sentence ...The increasing trend of crimes against women can be arrested only once the society realise that there will be no tolerance (of) any form of deviance against women (emphasize mine).  Not only this, after the announcement of the verdict, the news items report that, Cheers went up from a crowd inside and ...

Both houses of Indian government - Lok Sabha and Rajya Sabha - passed the Food Security Bill last week. It will become law after the President signs it. Incumbent UPA government is hailing it as a ' game changer ' program which is going to remove hunger in India [sic]. This program covers 67% of India's population (75% rural and 50% urban). It is going to provide 5 kg rice, wheat and coarse grain per person per month at the price of Rs. 3, 2 and 1 respectively. This bill is going to cost 1.24 lakh crore to the poor tax payers. Opposition parties like BJP were opposing this bill, but they also didn't vote against it! The real question people, especially the tax payers, should be asking is, can this bill really remove hunger? In my latest economic report I answer this question. In brief, if it was that easy to remove hunger by passing such legislation bills, then, our world would've removed hunger ages ago!