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Letter from the Editor Inclusion / Apr-June 2014   

One thing that has gone unnoticed in the Modi government is that it has not made any economic advisory appointments thus far. Increasingly it was seen that even before the government taking oath of office, several self-styled advisors appointed themselves in different positions. The reason for doing so is anybody’s guess.

Advisors come with their own ecosystems and corporate relationships. The advisory bodies hence formed, get into a tug-of-war as each one serves different masters and then tend to become gatekeepers for them. This perhaps is Modi’s undoing of UPA-II. Hopefully, this act of common sense would continue to prevail and Modi would seek advice from whoever he pleases and as and when required, instead of promoting permanent cliques.

Second, while everybody wanted to give an ‘economic policy’ to Modi, he still does not seem to have taken any. He is still sticking to his own brand of Modinomics. Even while he was releasing the book – Getting India Back on Track, a collection of essays by eminent economists – he did not speak much from the book. Whatever he talked about was his own model and in essence – ModiNomics – amplified at a national level.

Third, a caution that we have to avoid a headlong rush into Gujarat. Modinomics is not about Gujarat model, it is about common sense. Each state is different from the other, both in terms of the needs and the resources it has. If someone has sold a paper clip to the Government of Gujarat, he is expecting it to become a national standard. Rationally speaking, not all successes of Gujarat can be or should be replicated nationally in toto. But bureaucracy, for the time being, seems to be behaving otherwise. Departments are sending delegations to Gujarat to learn from the Gujarat model. While it is good as a learning tour, blindly following it may be a recipe for disaster. Caution needs to be exercised as copying may not work and destroy the idea of federalism that is at the core of Modinomics.

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Indian Financial Sector on the Edge of a Precipice says Yashwant Sinha
Excerpts from an interview with Sameer Kochhar, Editor-in-Chief, INCLUSION
Question: What do you think of India’s financial sector performance?
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Feedback - Inclusion:
Effective Leadership Is The Answer


The article by Mr Tarapore on the 'Financial problems of MSMEs' is an excellent piece, a well researched one.  RBI, SIDBI et al should look at the issues flagged by the author and see that the MSME sector gets better deal. As he has mentioned it is more a 'glamour' in lending to larger units than MSMEs. See the way every banker has walked in to lend to King Fisher Airlines which has left a huge NPA of over Rs.7000 crore with very little hope of recovering it from the owners. Recently, the newspaper report mentions that the CBI when approached the SBI, the consortium banker to provide certain information on KFA, the latter had refused to do so. The RBI has also not taken any forensic study to see if any complicity in financing such large units. It is sad its own representatives are on the Boards of these banks which have lent huge loans to KFA and others. It is sad to see that Mr Mallaya is happily watching the IPL matches cheer-leading his cricket team while 1000s of KFA employees are in the lurch without any pay for months on. Will RBI listen to the cries of common man? 
Dr S Santhanam PhD(Eco), CAIIB General Manager (Retd), NABARD & Consultant - Development Finance Pune

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Ideas for Growth, October-December 2013



I appreciate your thoughtfulness.
Manohar Parrikar, Chief Minister, Goa



Private participation is a must for bridging the gaps in basic facilities in urban areas. States have to be pro-active in laying down clearly how the local bodies and parastatals can pursue the agenda of seeking increased private participation and policies in this regard have to be stated clearly, says M Ramachandran




 
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