RBI board member Gurumurthy suggests monetise deficit to rebuild economy after COVID-19

Pune, May 12: The coronavirus in India is not taking its foot behind, so is the economic retreat, isn't it? While there are many who discuss the measures to get the economy back in its position, we see no society or sector that is immune to the impact of coronavirus.

 

Surviving the threat of the pandemic, how do we as a society face this rising threat of economic stagnation is a big question, perhaps a hanging sword on Indian heads these days. So, the Organiser Weekly in collaboration with Newsbharati and 29 other media houses approached S Gurumurthy, Editor, Tughlak, Writer on Socio-Cultural, Economic and Political Issues to lead the talk on Rebuilding Indian Economy- Challenges and Opportunities.

 

 

Pin pointing the isuue at first, gurumurthy very well noted that Globalisation was never a durable idea but was some kind of an ideal. Terming it to be one of the impractical ideas that India got attached to, he said that Globalisaton was stouted as if it would lead the world to a conflict free globe. "Globalisation can never be the future and its an unfortunate fact", he added.

 

Further he stressed on the macro econmic structure of the country. "The countries that said should follow the macro economic fundamentals themselves stopped standing on their feet. The government usually should not borrow from the Central Bank, this being the central piece of advice. But countrie like Japan, America, European Union print the currency at around 3 tn dollar. This acts as a constraint to the monetary authority to India and we fail to understand this", he said.

Our economic thinkers, the governmnet falls for the wall street kind of principle. "India creates rupee only when the dollar comes in. Neither the government, nor the RBI prints rupee until the dollar comes in. That means if the US's Federal system reduces the interest rates, people will began investing in India only for the better returns. And that is what unknowingly creates money in India", he added.

 

He also blamed the existing prudential norms for the inability of the banks to lend to different sectors of the economy despite the need for funds. He favoured allowing a one-time restructuring of accounts classified as ‘non-performing’ to help Indian firms. Pointing out how banks are depositing more than Rs 6 lakh crore per day with the RBI despite incurring losses, but are still not able to lend, he said a developing economy like India needs more capital. Gurumurthy’s statement comes at a time when many economists expect the central government to borrow directly from the RBI, as rising expenditure and falling tax revenues exert pressure on government finances. 

 

Gurumurthy said that the situation has not changed so far. It is in 2015 that the PM Modi led governmnet thought of changing the Foreign Investment laws, but we cannot as we have to stick to the macro economic structure, he said. He suggested to have a program for rural development, policy adjustments, distant eductaion, road developments and more to build a harmonious, stable and stronger India.

 

Swaminathan Gurumurthy, also known as Thuglaq Gurumurthy, is an RSS Ideologue. Born to a Tamil Brahmin family at South Arcot District, he is also a journalist editing the Tamil political weekly Thuglak and a Chartered Accountant. Further, he is well known as the co-convenor of the Swadeshi Jagaran Manch. Gurumurthy is also a very well known adviser to many corporates on law and finance and also on macro economic issues affecting corporates. As a professional he has mediated and solved some of the most complex corporate issues.