A Possible Financial Future of India
As expected from the forceful removal of former RBI governor Raghuram Rajan by the Modi government and his replacement with Modi's own man Urjit Patel, the new governor has reduced the interest rate as told to him by his political masters. Narendra Modi and his lawyer turned finance minister Arun Jaitley think that higher interest rates is what is keeping the Indian economy from growing at a faster rate, and the solution of this problem, naturally, is a lower interest rate. This is an obvious outcome of they being surrounded by Keynesian economic advisers. Modi and Jaitley have no clue whatsoever about economics; they are doing whatever their advisers are telling them. As I have said many times in past, this Keynesian thinking is totally wrong. Artificial lower interest rates will never help the Indian economy grow. In fact, it is this manipulation of the market rate of interest by the RBI governor, and now the monetary policy committee (MPC), is what is stopping the Indian econ...