Praxeology: My Reflexions on India

So finally the RBI governor Raghuram Rajan decided not to accept the second term at RBI 's helm under the barrage of ludicrous attacks from the BJP MP Subramanian Swamy (see here , here and here ). This decision was expected of Rajan and anyone who has left little bit of self-respect inside them. Rajan announced, in an internal letter to RBI staff, that once his term finishes in September he will return to academia where he basically belongs. Rajan is a professor of finance in the Booth School of Business, University of Chicago, USA. In my latest economic analysis below I discuss two things: why Rajan decided to resign from his position as RBI governor and, most importantly, what are the implications of his decision, especially how this decision will affect the Indian economy in future?

What is the root cause of most of the good and bad that is happening in our world? What is the root cause of our pleasure and pain? Matt Ridley answers these questions in his new book The Evolution Everything . Ridley brilliantly uses Charles Darwin's theory of evolution via natural selection, which he calls the "special theory" of evolution, to analyze various phenomena like the universe, morality, life, genes, culture, economy, technology, mind, personality, education, population, leadership, government, religion, money, internet and everything, and shows how all these phenomena have evolved naturally bottom-up rather than being planned and designed by someone (Gods or politicians or bureaucrats or monarchs or dictators or relgiious leaders or geniuses etc.) from top-down. These phenomena are result of bottom-up forces, especially the forces of human action. They are result of human action rather than human design.  After analyzing these bottom-up evolutionary phe...

Since coming to power the present prime minister of India Narendra Modi is making one foreign policy disaster after another one. The reason why we have to keep these disasters in mind is because they exactly contradict the public image of this hindu nationalist leader as a strong man with a chest of 56 Inch. This image was very carefully crafted by Modi's marketing people during the 2014 election run-up to win votes. They portrayed then prime minister Manmohan Singh as a weak man who speaks nothing at all or barely opens his mouth. Compared to Manmohan, Modi was portrayed as an outspoken strong personality which India was in a dire need to have at the helm. As I said during the election run-up, this image was only a marketing propaganda of the Modi campaign. Modi was and is an extraordinary popular delusion and madness of crowd phenomenon. I urged people to see Modi's actions, and not his words. The following list throws a light on his foreign policy actions contrary to what h...

Recently the Modi government's finance minster Arun Jaitley announced a big reduction in the interest rates of major small saving schemes like the PPF (Public Provident Fund) and Post Office Term Deposit: The government announced new interest rates on small savings instruments on Friday, slashing the returns on Public Provident Fund savings from 8.7 per cent to 8.1 per cent and one year post office deposits from 8.4 per cent to 7.1 per cent ( source ). Before this big cut in the rate of interest of these small saving schemes, Mr. Jaitley also dared to impose a tax on EPF (Employee Provident Fund) withdrawal in his fresh budget. He had to rollback this tax proposal later on after a big backlash from the salaried class people of India (see here )! After the announcement of this rate cut, there surely was another uproar in the country from the savers class. Mr. Jaitley, to do the damage control work, came out and defended these interest cuts by saying the following: The econom...

Recently I sat down with Mr. Jayant Bhandari - Jayant Bhandari is an investment adviser, particularly in the natural resource sector, living in Canada. He advises institutional investors. -  to discuss India, Gujarat, Narendra Modi, Liberty and Austrian Economics in India and other such relevant issues. The following is the audio podcast of our discussion.

Since the beginning of 2016 the stock markets around the world are collapsing. The Indian stock market has erased all the gains which it had achieved after Narendra Modi came to power; all Modi mania has now evaporated. The Indian currency rupee is again trading below 68 level against US dollar, and inflation is picking up too. in this analysis I discuss why the world and Indian markets are crashing and what lies ahead of us.

In this book review I am going to take a look at a very important book written by French sociologist Professor Jean Baechler, The Origins of Capitalism . What differentiates the Western civilization from the rest of the world is its capitalist spirit, which, sadly, started waning in the last part of the twentieth century. What makes the Western world materially richer and better than other parts of the world in the past two and a half centuries is its economic system of Capitalism. Jean Baechler discusses important questions like what is Capitalism? Where did it come from and when? What are its distinguishing features? Why was it essentially a western phenomenon and now a Western export? This book and its teachings are important for a country like India, which is still reeling in poverty in this twenty first century. If India, or any other country, wants to make economic progress then its people will have to take these teachings to their heart,  understand the forces that are r...