Credit crisis could benefit India

On the virtues of making haste slowly

V Anantha Nageswaran would smile when he sees the Economist Intelligence Unit concede that:

Ironically, the current global situation is also making India’s measured pace of economic reform look wiser than before. At a time when Western countries are frantically nationalising banking assets, the Indian government’s reluctance to sell more than 49% in its state-owned banks—which control some 70% of banking assets—now seems reassuring. In addition, India has not yet introduced full capital-account convertibility, which protects its currency, while its careful control of foreign borrowings by domestic companies limits dependence on the global financial system. Regulators have also periodically introduced curbs to slow the formation of potential asset bubbles, such as higher provisioning and prudential requirements on real-estate lending.

The EIU believes that while there would be some short-term worries, Indian companies are likely to use the crisis to make overseas acquisitions.

Pragati July 2008: A better connection with Israel

Issue 15 - Jun 2008
Issue Contents

PERSPECTIVE

“Adamant for drift, solid for fluidity”
India needs leadership and a renaissance in its foreign policy
Harsh V Pant

Business interests vs national interests
As Indian companies grow abroad
Sameer Wagle & Gaurav Sabnis

The myth of illiberal capitalism
Multi-polarity, democracy and what the US might do about them
Dhruva Jaishankar

FILTER

A survey of think-tanks
The post-American world; Asian geopolitics
Vijay Vikram

IN DEPTH

The India-Israel imperative
Indo-Judeo commonalities: the symbolic and the substantive
Martin Sherman

ROUNDUP

Fruits of knowledge
Apply knowledge-economy processes for food security
Mukul G Asher & Amarendu Nandy

Needed: A new monsoon strategy
The focus should be on groundwater recharge
Tushaar Shah

BOOKS

Know your consumer?
A review of Rama Bijapurkar’s We are like that only
Aadisht Khanna

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If all dentists are asked to fix computers

A lot of people will end up with bad toothaches

What’s this got to do with public policy? Read Atanu Dey’s op-ed in Mint to find out:

The social responsibility of corporations is to make a profit while following the rules. They have a comparative advantage in doing that, just as the government has a comparative advantage in making rules and solving social problems. Insisting that companies solve social problems is like expecting the dentist to fix a broken computer. Yes, he can possibly fix the computer if I lean on him hard enough and he spends a lot of time learning hardware maintenance, but that will be at the cost of a lot of untreated toothaches. [Deeshaa]