Mr. Siddhartha Shankar is totally convinced with the role of Indian Government in handling this Global Financial Crisis. “Of course it is and in a good manner, they did a great job by waiving of the loans of farmers, it gives buying power and in turn increases demand. They need to come up with more such schemes. They are taking steps in the right direction just they need to speed up and liberalize fast. They need to liberalize the FOREX inflow fast because if it is not we will soon run out of forex reserves.”
The economic slowdown in Europe and America was quite evident in middle of 2007, yet our central bank was busy in engineering an environment for a slowdown, they were more interested in the price of oil and inflation while it was clear that the developed world economies were slowing at a very rapid rate. Till the middle of the current year, the Central bank was busy raising interest rate when it should have been kept stable; regulators were busy curtailing FII freedom by banning P-Notes and so on. Rate cuts are welcome, they need to address the issue of foreign capital; let the money come into the economy, do not restrict it, remove all restrictions on ECB’s, help the export of software and BPO, that is net value addition. Rather than giving benefits to Steel, Textile where our raw material goes away give benefits to software and BPO industry, it will be the best in long run, all according to Mr. Siddhartha Shankar.
The Governments and Politicians need to realize that it is not a crisis for which America alone is responsible, it is a collective responsibility of all the regulators for not monitoring as to what was happening; responsibility of all governments to let the money supply grow to astounding levels driven from the cheap money of the developing world; responsibility of the Financial Institutions for lending recklessly.