So positive economics is: high interest rates on deposits, low lending rates, low inflation and food prices but high MSP, no GST but top class infra and only Subbu Swamy can help achieve it!
Maximum rate cut on small savings is not even 1% meaning, if you have an investment of 1 crore in savings, you will be poorer by 1Lakh (simple interest ) - translating to a loss of 8333 per month. Now tell me which middle class has an investment of 1 crore in ppf/ small savings?
Economically speaking - high interest rates on small savings is the single biggest reason for higher interest rates in the economy- if you want economy to pick up and credit to sustain growth then u need lower deposit rates/ ofcourse banks need to pass on benefits!
I am not an IT cell walah & I am merely talking plain economics -if deposit rates continue to remain high,in no way can a Govt with large borrowing prog,think of sustaining growth on the strength of its own capital- private capital formation is important & rates must support it!
Eventually Govt may go for suspension of this order but fact remains that lower deposit rates are must for bringing down rates in the economy and in no way can our manufacturers/ exporters compete with ROW with rates of around 7-8%.
I have been consistently consistent on this - here is old thread from 2016 after similar post rate cut outrage - one need not be an economist to know this simple fact

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More from @alok_bhatt

1 Apr
Talking of Interest rates - Indian middle class would do well to remember the contribution of two unsung heroes of that move- NN Vaghul & KV Kamath; latter single handedly demolished the carefully crafted high interest regime mastered by likes of Deepak Parekhs/ Keki Dadiseths!
Ofcourse ABV Govt policies made that happen but fact remains that but for that assault on high interest regime by Kamath led ICICI, cars and houses would have remained a distant dream for middle class. HDFC used to charge upwards of 22% on home loans
Guess what, check net worth of Deepak Parekh and Keki and compare it with that of Kamath - you would know who reaped biggest benefit of this expansion of growth. But fact remains that Kamath is an unsung hero of Indian Middle Class for whatever he did in mid 90s and early 2000s
Read 7 tweets
30 Mar
Based on chatter amongst maritime community, Suez Canal Authority- sis.gov.eg is gonna blame Indian crew & make them scapegoat. But @MEAIndia , seafarers union & int’l maritime org is on the side of ship. BTW how many know Suez Canal is also called Marlboro canal .. Image
Thanks to the practise of facilitation payments paid by ships, Suez canal is also known as ‘ Marlboro canal’. It is well known amongst circles as to how Egyptian pilots & authorities insist on cartons of cigarettes / money from Capt as a guarantee for safe canal transit
Shipping companies -when thousands of dollars per day is at stake, don’t mind paying these few hundred dollars but this practise has now assumed gigantic proportions. Reason why Maritime Anti-Corruption Network started a campaign to help stop this practise macn.dk/home/
Read 6 tweets
26 Mar
I had visited Dhaka almost 18 years ago & what amazes me today is the giant leap of Bangladesh on all development parameters -more so since Sheikh Hasina took over in 2009 for her second term -a run that continues till date and is longest phase of stability in #Bangladesh50
While in Dhaka, I came face to face with disparity, that I have not seen anywhere till date. When I visited Dhaka, Khaleda Zia was at the helm of affairs of BD and (must have been) occupying the Gana Bhaban- official residence of BD PM... military checkpoints were all over!
World trade was undergoing massive changes and Bangladesh, as a nascent and upcoming centre of readymade garment trade, was facing a high degree of uncertainty. Every hotel we went to, I saw Chinese (u can identify them by the noise they make at their respective tables)...
Read 13 tweets
25 Mar
Peruvian economist, Hernando De Soto, vide his book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, advocated need for resolving property rights issue to help unlock land value with overall objective of conveying informal Eco to formal one!
I was first exposed this book by @TheKunwarKhan - brilliant and simple concept which talked about freeing the land held by vast majority of those at the bottom, with an objective of unlocking land potential by cutting down on property disputes via property title reforms.
And PM @narendramodi did exactly that as mentioned here - this is exactly how he generates “hope” amongst his followers / those who don’t talk on Twitter or Facebook / but are biggest beneficiaries of his work.... hope and delivery cycle goes on and is powering Modi juggernaut
Read 4 tweets
25 Mar
We need to use economic lever - last pic is important as they all are part of Oxford Chair as sponsored by UKIBC
Karnataka Govt is sponsoring a chair at Oxford, Indian Govt also donates to them as per this report - besides we need to write to each one of them listed here ouem.co.uk/about-ouem/
Those petitions at @Change have no impact whatsoever - if we are really keen on fighting this battle, go to those folks who fund Oxford’s various academic activities- oiem.co.Uk has more details
Read 6 tweets
25 Mar
As a long term @BJP4India supporter, I have observed BJPs transformation from a fighting force into a ruling/governing force. PM Modi’s role and leadership in this transformation needs no more elaboration as it is a widely known and accepted fact. #BJP
Alongside BJPs transformation, even PM Modi also transformed himself and that alone explains his seamless and successful transition from a state CM to Indian PM with appeal that transcends our geographical boundaries. As his stock went up worldwide so did India’s.
So what is that sets apart PM Modi form all his contemporaries across political spectrum. What is that explains his sheer hard-work & hunger for success through last 7 years in Delhi (amidst all that 24X7 scrutiny & hate that he generates in the mind space of his detractors)?
Read 15 tweets

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