The Big Story: Growth + Inflation

Outgoing Reserve Bank of India Governor Raghuram Rajan left with a parting note of caution, insisting that the independence of the central bank must be maintained. This might be a concern for the new governor, Urijit Patel, from the very start of his tenure as the RBI gets used to the idea of a Monetary Policy Committee doing the policy making – a new approach that, while endorse the RBI, still represents a significant shift in the way India's monetary policy is designed.

That isn't all that Patel will be dealing with. Results from the first quarter of the financial year, released right before the handover, showed that India's economic growth is still uneven and that the economy will have to seriously accelerate if it is to reach the government's 8% Gross Domestic Product growth target for the year.

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Even more concerning is the rising inflation figure. From stubbornly high inflation through much of the early 2010s, India was gifted a massive drop just as the Narendra Modi government took power, thanks primarily to the huge slump in oil prices the world over. With those remaining low, and the RBI using the buffer to address other concerns, inflation has been in a much more manageable range.

But it is now looking uncomfortable yet again, and the effects of a positive monsoon and the implementation of the Seventh Pay Commission have yet to reverberate through the system. At the same time, government continues to demand lower interest rates, with Commerce Minster Nirmala Sitharaman only the latest to jump in the fray.

Patel will have to navigate what has now become a tediously simplistic growth vs inflation debate, one that has predecessor spent much time discussing, despite the RBI's aims having explicitly been set as inflation-targeting in a pact signed by Rajan. A creditable tenure will see the RBI governor deftly handling government and industry demands while managing inflation and all the other tasks left behind. A truly great stint at the central bank however, would be achieved if Patel can use the new structures – inflation targeting and the Monetary Policy Committee – to pivot away from the old growth vs inflation debate altogether.

The Big Scroll

Political Pickings

  1. Jammu and Kashmir Chief Minister Mehbooba Mufti did not raise the subject of ongoing unrest at a meeting with the all-party delegation visiting Kashmir specifically to look into the crisis.
  2. Prime Minister Narendra Modi raised concerns about the China-Pakistan Economic Corridor, which runs through Pakistan-occupied Kashmir, during his meeting with Chinese President Xi Jinping on the sidelines of the G20 summit.
  3. The West Bengal government is working overtime to capitalise on the Supreme Court judgment returning the Singur land to the farmers, but there are still some questions about the compensation.
  4. Upcoming panchayat polls could expose infighting in the Biju Janata Dal ranks. 
  5. Karnataka Chief Minister Siddaramaiah is inducting M Krishnappa a land-developer-turned-politician into his Cabinet after pressure from Vokkaliga leaders. 

Punditry

  1. On Teachers' Day, an "ad-hoc" pens a letter to the President of India in the Indian Express describing just how India has managed to turn its best away from teaching.
  2. Praveen Chakravarty and Vivek Dehejia in the Hindu writes about the growing disparity in economic success between India's states.
  3. Meet the man blamed for the Aam Aadmi Party's disintegration in Punjab, as Aarish Chhabra reports in the Hindustan Times. 

Giggles

Don't Miss

Zinnia Ray Chaudhuri writes about an American dancer who, inspired by Hindu rituals and mythology, helped shape modern dance.

Ruth St Denis believed dance to be a spiritual expression, and her choreography and repertoire reflected her life-long interest in spirituality and exoticism. Her first solo production, Incense, was based on the incense burning ritual as practiced by Hindus. Her body moving fluidly amid ascending spirals of smoke made for a mesmerising performance. Some of her other iconic solo performances are The Cobras and Radha, which only further emphasised her commitment to integrating dance into spiritual practices (Hindu rituals in particular).

Denis draped saris, wore long skirts, elaborate head dresses and ornaments for her performances. One of her productions also touched upon the form of dance practiced by the nautch girls of India. Titled East Indian Nautch Dance, the choreography had Denis dressed in a black and gold layered hoop skirt and a blouse, similar to the ghaghra and choli worn by nautch girls.