Ila Patnaik has a nice piece on how India fared in the current global financial crisis and shoots people who argues that India was saved from severe financial crisis because of the government and RBI role in controlling everything.
Thus, she concludes:
- “It is important to recognise that India is a very poor country. We know very little about how to establish institutions or regulate markets that can support a sophisticated economy where a billion people can enjoy high productivity. Nobody in the world wants Indian-style monetary or financial policymaking. Our path ahead lies in learning how fiscal, financial and monetary institutions work in countries where per capita GDP is many times bigger than what we have in India. Our hope for making progress lies in learning these things with an open mind, and demanding a pace of change in India so that we can become more like an OECD country. A villager with no roads may foolishly boast of having no accidents, but he cannot teach people how to regulate traffic on busy intersections. It is important for policy-makers to remember that India has no lessons to offer to regulators operating in the sophisticated world of finance, and proposals suggesting that they should learn our style of regulation only make us look foolish.”
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