Posted by: Deepa Vasudevan on Fri, Apr 1st, 2016
The Governor and the Genie
Raghuram Rajan is pacing up and down, his brow creased with worry. Soon it will be monetary policy day. As usual, the markets are braying for a rate cut. The government is watching smugly; they have passed the budget exam, now it is Rajan’s turn. Should he cut rates? Should he hold? God forbid, can he even dream of raising them???? Suddenly, he stops in surprise. A corked-up bottle on his desk? Rajan picks it up suspiciously and opens it. A blue flash, a crackle of lightning, and out pops a genie.
Genie: Finally, freedom! I have been stuck there for six months.
Rajan: Haven’t I seen you in a Disney movie?
Genie: That was my famous cousin, Aladdin’s genie. I am just the Indian interest rate genie. Now that you have released me, I will go down and make everyone happy.
Rajan: A genie? Hey, shouldn’t you be granting me three wishes?
Genie: Of course. Tell me what you want.
Rajan: First, bring down inflation.
Genie slashes his sword around a few times.
Genie: Done. CPI below 6%, just as you wanted!
Rajan: Second, make the government fiscally prudent. Cut down their borrowings.
Genie waves a wand in the air.
Genie: Done. Fiscal deficit on target. Fiscal responsibility back in focus. State finances improved.
Rajan: Third, get monetary transmission going. Nothing we do makes banks cut lending rates.
Genie scribbles furiously into a scroll.
Genie: Done. Small savings rate dropped and aligned with market rates. Banks moved to MCLR system. See, lending rates are falling already! Now can I please go down????
Rajan: smirks and reaches out for the genie and quickly puts him back in the bottle.
Rajan: Not so fast. I decide whether you go down or not.
Genie (muffled speech): What more do you want?
Rajan: Ram Rajya.
Gul Punjabi on Sat, Apr 2nd, 2016 6:21:22 pm
Succintly and hilarously expressed
Deepak J Adivarekar on Fri, Apr 1st, 2016 6:49:50 pm
Enjoyed! Intellectually engaging.