RBI admits loan frauds under Modi Govt three times higher than UPA-II

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9 hours ago, Idassamed said:

Can you please elaborate, or point me to a website where I can read up on this topic. Why does BJP need the RBI reserves?

I don't invest in India. and don't follow up on India's news, so I couldn't point to any articles. 

The general view is this. credits in the system are cyclical. They rise, economy absorbs it. if it can't, inflation occurs. and the central bank steps in put controls on the credit.

UPA 1 had the cushion to increase credit in the system (RBI agreed to it as it was feasible then), because its predecessor NDA did a piss poor job being extremely conservative with its economic policies.  Inspite of generally having a positive record as a 'reform' oriented govt, They basically did no reforms. same applies to PVNR to an extent.

So UPA1  aggressively went for credit expansion, and social programs to sustain this growth. The problem is, inflation happened. and they  (RBI) had to cut back on such expansions, and India has been suffering this crunch since 2008 itself. Its been 10yrs now.

The current problem is well explained here.

https://moneymaven.io/viewfromthepeak/the-view/equity-update-india-credit-crunch-il-fs-and-yes-bank-7F-AprfyRkWCgZxE4BMQPw/

The loans made during UPA1, and UPA2 are the cause of today's cruch. But again, its not a political issue. Every govt wants to increase credit in the system to keep the economy moving. UPA was not wrong in doing it, NDA now is not wrong in asking for it.

UPA1 was the first real govt India had (economically). Modi govt is now simply asking RBI to let it function the way UPA was allowed to. There's one problem. UPA1's policies created inflation, and the fundamentals that caused it (lack of correct regulatory structure that eases small loans, lack of skilled manpower, lack of a huge market, lack of manufacturing base, lack of basic and logistics infra etc), are still the same.

Modi govt has not been able to 'reform' the Indian economy structurally (again I'm assuming), and is now simply trying to strong arm RBI, into getting their way. These people are aiming too high, without getting the most basic fundamentals right. Education, nutrition and healthcare for all. This is what propelled China to great heights. Not just credit. Not FDI.

i don't know much about India. Ask me about Indonesia and Taiwan. That's where I have maj of my investments.

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10 hours ago, Idassamed said:

Can you please elaborate, or point me to a website where I can read up on this topic. Why does BJP need the RBI reserves?

Another problem is, the current govt is cutting back on social programs (as far as I know), and in this scenario most credit expansion will directly go to the top.

and will create inflation, not on daily commodities, but on luxury items.basically what was happening in the US (until Trump came along, and will crash the economy soon with his clueless buffoonery).

ofcourse Indian credit is 10times more expensive than the US, so its not as obvious as it is in the US.

Modi govt doesn't want the RBI reserves for itself. It wants RBI to infuse more capital into the economy than it is currently doing because it has the ability to do it now. Again missing the point that, RBI's soundness is not a good reason to start digging into its coffers.

The structural problems mentioned earlier, still remain. Mainly lack of skilled labour.