Thread by @dravirmani

#India is unique: @RBI Governors Raghu Ram Rajan & Urjit Patel produced the highest real rate in world & wondered why economy is tanking! Only a handful of us pointed this out repeatedly and asked for monetary policy easing, including monetary supply base (in my case).

https://twitter.com/vdehejia/status/1156125251505254400

2/ec business-standard.com/article/opinio…

3/c Now we need (1) Repo rate reduction to 4%, (2) Gr of monetary base of ~14% per yr, (3) Pragmatic measures to solve PSB-NBFC bad loan problem, (4) Dramatic GST simplification in 1 Step, (5) Introduction of #DTC (Diect Tax Code), to restore growth to 7% this yr, & higher nxt yr

4/c At a mtg of economists with @RBI Gov a week ago, I raised the possibility of a return of (global) deflation, a mild form of the kind seen after #GFC2008. Now this =>

https://twitter.com/wlwatts/status/1156181424560594944?s=21

( cc @nsitharaman @PiyushGoyal @PMOIndia )

5/c The world has negative interest rates(suggestive of deflationary pressures)

https://twitter.com/ftalphaville/status/1156550772840161285?s=21

we have positive 4-6% (suggestive of tight monetary policy)

6/c (I have argued for decades) In India, repo rates cannot be the sole focus of monetary policy. Money supply/monetary base (LT "liquidity")is equally important. High PF rates distort allocation of savings, but they are not an absolute barrier to overall monetary easing