Mr Modi’s government can be accused of many things


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replica handbags china Everyone has forgotten just how precarious things were in the summer of 2014, especially Mr Chidambaram who mumbles away monotonously every Sunday.Mr Modi faced two economic problems https://www.bestreplicashandbags.com which, despite his reluctance to engage with economics, he understood clearly.The first was inflation, which has look at here now serious political consequences; and the second was foreign exchange reserves, which the BJP has always thought of a being a substitute for testosterone.Inflation, though abating from the previous highs, was still a problem because food prices louis vuitton replica bags neverfull had risen by over 65 per cent since 2009.Foreign exchange reserves were under extreme pressure and there was even talk of a 1991 like crisis.Once he had been properly briefed, Mr Modi appears to have issued three general instructions.One was to the finance ministry to keep the fiscal deficit down, whatever the cost.The replica bags in gaffar market other two were to the replica bags supplier Reserve Bank of India to do whatever had to be done to bring down inflation and to avoid even the whiff of a balance of payments crisis.So that’s what the finance ministry and the RBI did and, by early 2016, both problems had been largely resolved.The basic approach was to deflate the economy and the fiscal deficit, both of which had bloated like a frog in the monsoon under the tender care of the UPA.Mr Modi’s government can be accused of many things, but not poor macroeconomic management, which was helped along hugely by falling oil prices.It was, moreover, also good political and optics management because people had been exhausted by the Great UPA Inflation of 2009 2013.But here’s where the problem seems to have arisen.Mr Modi, perhaps because he sees macroeconomic issues only through the twin political lenses of avoiding inflation and avoiding BoP crises, should have revised his general instructions in 2016. But he failed to do so.Instead, perhaps with the March 2017 Uttar Pradesh assembly election in view, he ordered demonetisation in November which further deflated the economy when it needed to be inflated a bit.Whereas the earlier policies had deflated it via higher interest rates and low fiscal deficits, demonetisation used the only monetary instrument Mr Modi understood: He simply discarded the old currency.It took all of 2017 for the economy to recover from the shock.But now, as T N Ninan pointed out a few days ago, things are starting to go well.The IMF and the World Bank also concur and believe that GDP in 2018 will grow at around 7.5 per cent.The question, however, remains: Had Mr Modi had a less political understanding of economic policy this flaw has led him to reversing some of the trade liberalisation of the last 25 years would he have done better on the investment, work and jobs front?The answer has to be an unqualified replica bags aaa quality yes.One might say that all prime ministers have only a political understanding of economics. There is nothing wrong with that and that is how it should be.Indeed, as Manmohan Singh was fond of saying, as prime minister he was no longer an economist.But there is an important difference between Mr Modi and his predecessors. replica handbags china

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