Raghuram Rajan can’t root out corruption, make the government more transparent, or attack the red tape that is deterring investment and strangling growth. Rajan can’t tweak tax policies to broaden revenue streams and encourage an explosion of startup companies. He can’t reform education and training programs, or see to it that India has as many toilets as mobile phones. He can’t spearhead the improvements in infrastructure that are needed to create more manufacturing jobs. He can’t strike grand bargains between the parliament in New Delhi and powerful state leaders, who are at odds on virtually every upgrade the economy needs. The central bank has no say over barriers to imports and investment. It can’t nudge executives to improve corporate governance. It can’t reduce India’s reliance on foreign energy at a time of rising tensions in the Middle East or hold off the competitive threat from China. All Rajan can do is treat the symptoms of India’s funk, not the underlying sickness. The man who must address the core problems, Prime Minister Manmohan Singh, is a spent force. Those of us -- me included -- who hoped Singh would use his sizable re-election mandate in 2009 to renew the drive for reform have been sorely disappointed. After myriad scandals and years of policy drift, India’s economy seems barely better off than it was in the early 1990s, the last time the rupee fell this sharply.
Posted on: Sat, 07 Sep 2013 10:22:33 +0000
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