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BREAKINGVIEWS: Delhi's game of thrones stifles progress
MUMBAI (Reuters Breakingviews) - "Power resides only where men believe it resides" wrote Game of Thrones author George R.R. Martin. But right now in India there appears to be no one in power. As political machinations worthy of the popular TV show pre-occupy New Delhi, the country's economy comes ever closer to spiralling into an unnecessary decline.
Dysfunctional politics are disastrous for a country in need of strong policies and dynamic leadership. But, as ratings agency Standard and Poor's pointed out in a report on Monday, India has exactly that problem, starting with the tense relationship between Sonia Gandhi, the dynastically chosen head of the Congress party, and Manmohan Singh, the octogenarian prime minister. S&P warned that India might become the first BRIC country to lose its investment-grade rating.
The latest reason for doing nothing is a job reshuffle. In a well managed country, this would be an opportunity. In such a land, the government would be able to replace Pranab Mukherjee, the incumbent and unsuccessful finance minister, without causing any political damage. Mukherjee wants to move up to the ceremonial role of president.
In India, nothing is so simple. Intrigue over throne-filling has lasted for months, grounding decision-making to a halt. Officials in the finance ministry have not risen to the occasion. Rather than using the interregnum to show their ambition and professionalism, they are sitting on their thumbs.
The culture of political enmity is poisoning as well as slowing the selection process. Opponents of Montek Singh Ahluwalia, considered to be Manmohan Singh's first choice, have tried to tarnish the respected economist's reputation by publicising the cost of his foreign travel in his role as G20 sherpa. They have also raised a storm in a teacup over a $60,000 bill for new toilets in his current department.
India can't afford such pettiness. Gandhi needs to act, and act wisely. If nothing else, she could add the finance portfolio to Manmohan Singh's prime ministerial post. He did the job well two decades ago. But more than a strong finance minister, India needs a decisive centre of power.
- India's industrial output growth rose just 0.1 percent in April on a year-on-year basis, lower than expectations in a Reuters' poll for a 1.7 percent increase, government data showed on June 12. Output fell in March from a year earlier by 3.5 percent.
- Global rating agency Standard & Poor's cautioned that India might become the first BRIC country to lose its investment-grade rating, unless growth issues were addressed immediately in a report published on June 11. The credit rating agency cited slowing GDP growth and political roadblocks in economic policy making as some of the factors that could lead to a downgrade.
- Finance Minister Pranab Mukherjee rejected the rating agency's report, saying there would be a turnaround in India's "growth prospects in the coming months", according to a government statement on June 11.
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
(Editing by Edward Hadas and David Evans)
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