UN@75 : Warrier's Collage 22092020

Posted by : M G Warrier Warrier's Collage 22092020 : UN@75 A Pradakshinam Wonderful Hindu Temples outside India https://youtu.be/fvx-cORdaS4 You will love the soothing background music while watching the presentation. B Interaction 1) R Narayanan, Thiruvanantapuram " Read the article of Vathsala Jayaraman. Very touching and the narration was as usual excellent. I liked very much the style of her narration of the story and other incidence, which conveyed some good message. Congratulations Vathsala Jayaraman, and thank you very much for sharing such stories." (Thanks from Vathsala Jayaraman and Collage) 2) Chittanandam V R " British Hospitality. Good one. Great comic relief from the routine. Sending to all my contacts." 3) PKK Nair " Temples darsanam -enjoyed." (Responses picked up at random for inclusion -Collage) C Readers Write V Babusenan While describing the fire in Lanka, caused by Hanumaan and fanned by his father*, Ezhutthassan wrote: 'Vibudha pathiyodu Nisicharaalayam venthoru Vritthaanthamellaam Ariyitchu kolluvaan Aham aham ikaadhiyaa Paavaka jwaalakal Ambarattholam Uyarnnuchennoo mudaa.' (To inform Devendra how the Raakshasaa's, that is Raavana's, abode was burnt down, the flames joyously rose up heavenwards in let-me-go-first fashion.) Here the beauty is that Devendra had a feud against Raavana for insulting him long ago, which was quite interestingly narrated by Kunchan Nambiar in one of his thullals. Nambiar described a wild fire thus: 'Mattathu chennangu Mattathin mel veenu Mattathum mattathum Mattathum bhasmamaay.' (That one fell on that one and that one and that one and that one were burned to ashes.) What a vivid description! Applicable equally to Raavana's Lanka as well as to any wild fire in the world." (*Vayu, or air, Hanuman is Vayuputra. Watch him in action -Collage) Lankadahanam : https://youtu.be/DvzRABn6mNM D UN@75 1) From the horse's mouth https://www.un.org/en/un75 UNexistence facts : Survival Instinct 2) T P Sreenivasan : Open Page https://openthemagazine.com/columns/the-un75/ C19 has proved that life after 65 is dispensible. Chicken knew this long ago!(Apologies to "Chicken 65" addicts!) E Current Affairs Central Bank Monetary Policy III, 2020-21 : RBI Retains the Reins* M G Warrier (*Submitted version of the article published in the current issue of The Global ANALYST. Link to the published version shared with some of you) The tenure of the first Monetary Policy Committee (MPC) came to a close with its last meeting in August 2020. During the first three years after being statutorily constituted, MPC secured its position in the policy formulation set up with excellent precedents for the successive committees to emulate. I will resist the temptation to list them. Suffice to say that RBI's Top Management has come a long way from the era of diplomatic manipulations which exerted visible pressure on the central bank governor till 2014. For those who have forgotten history, I quote from Dr Y V Reddy's book "Advice & Dissent" : " Operationally, Chidambaram continued the tradition of consulting the governor in the appointment of directors on the RBI board. In fact,all appointments were done after the two of us had discussed them and agreed. Every deputy governor appointed was on the basis of my recommendation as governor. However, the proposals were made by me after consultations with the minister and with the knowledge of the prime minister, in addition to Rangarajan at an informal level." If you guess that this could be one of the reasons for the initially short tenures of non-IAS governor/Deputy Governors got trimmed prematurely, I will not comment. But hopefully, the price in terms of reputation paid by the visiting dignitaries like Dr Raghuram Rajan, Dr Urjit Patel and Dr Viral Acharya who enriched the functional capabilities of RBI during their stay at Mint Road has started paying dividends during the period of Dr Shaktikanta Das. To understand the relevance of Dr Shaktikanta Das or to gauge the role of RBI governors when the going gets tough, we will have to read between the lines from the the books published by former governors Dr Reddy, Dr Subbarao and Dr Raghuram Rajan and former Deputy Governor Dr Viral Acharya after leaving RBI. This article has space to quote only one paragraph from Dr Reddy's book, which has devoted a few pages to dwell on the team work which sustains the quality and strength of RBI's policy formulation and implementation. Dr Reddy said : "Among the public institutions in India, the Reserve Bank is unique in many ways. It has strong technical competence and professional skills. Over the years it has preserved institutional memory. Though it is being accused of being conservative, it has demonstrated adaptability to changing times. Above all, the professionals take pride in their integrity. No wonder, a finance minister is reported to have commended :" Whomever we send as governor, the Reserve Bank's technocracy captures him." The image of the governor created by the media masks the fact that the governor's effectiveness draws on the strengths of the institution. The leadership of the governor makes a difference where judgements and difficult issues are involved, engagements with markets and government are sensitive, and credibility of policy communications is at stake. In times of structural transformation, the governor's vision and values do matter." RBI's Monetary Policy Announcement on August 6, 2020 (For excerpts from Governor's Statement,see Box) said : "The Monetary Policy Committee met on 4th, 5th and 6th August for its second meeting of 2020-21, the 24th under its aegis, completing four years of its operation under the new monetary policy framework. The MPC sifted through domestic and global conditions and evaluated their unfolding impact on overall outlook for India and the world. At the end of its deliberations, the MPC voted unanimously to leave the policy repo rate unchanged at 4 per cent and continue with the accommodative stance of monetary policy as long as necessary to revive growth, mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward. The Marginal Standing Facility (MSF) rate and the Bank rate remain unchanged at 4.25 per cent. The reverse repo rate stands unchanged at 3.35 per cent." This policy announcement came when the general perception induced in the public mind was that a change in RBI's policy stance can jump-start the economy. For creating such a perception, along with economists and analysts, the expectations expressed through media by the government and the markets were also equally responsible. The pandemic has affected all segments of economy, including industry and transport. RBI's policy can impact only the financial sector and just one input in the whole process, namely bank finance. No denying the fact that harmonized efforts through fiscal and monetary policy interventions can smoothen the process of post-pandemic recovery or at least reduce the sufferings caused by the Lockdown situation. shown the limits of central bank action in the absence of fiscal intervention. Post-Demonetization India has seen RBI slashing rates severely, infusing inordinate liquidity into the system and indulging in extraordinary regulatory forbearance. The economy's response to all these central bank measures has been sluggish. The burden imposed on RBI is unfair. Many of the present growth problems have to be addressed through structural reforms across the institutional system in the financial sector and confidence-boosting measures by central and state governments. Where there is a will, there is a way. While the central bank's Base Rate is a strong indicator of RBI's policy perceptions its effectiveness in managing banks' deposit rates or lending rates is not as high as is made out by media and analysts. This is because there are several forces working simultaneously in the money market. Let us listen to the experts who have something to say about the banking system in India in general. In their 2019 book, "Good Economics for Hard Times", Abhijit Banerjee and Esther Duflo, referring to the general perception that 'the banking sectors in both China and India have serious problems' had this to say : "Indian banks are famous for trying to avoid lending to anyone except blue-chip borrowers (usually without recognizing that yesterday's blue chip-firms are often today's disaster wanting to happen). Chinese banks have undergone significant reforms since the 1990's, with the goal of allowing for entry of different actors and improving the governance of the state-owned banks, but the "big four" state-owned banks still tend to be all too willing to lend to dubious projects with good political connections.Finding money remains difficult for a young and ambitious entrepreneur with a good idea but no powerful friends. Indian banks have very much the same problem, and in addition they are reputedly overstaffed. Overstaffing means they needed to put a large wedge between the rate at which they lend to firms and the savings rate they offer to depositors if they want to break even. As a result, bank lending rates in India are high relative to the rest of the world,even though depositors earn very little interest." Pardoning the ignorance of the illustrious scholars about the history of social control and the subsequent nationalization of banks in India and the scheme of directed lending, let us focus on their observations about the lending and saving rates in India and the possible reasons for the high lending rates and the low savings rates offered by banks. Though they are telling the obvious, the problems they flagged need attention from the policy makers. The problems relate to inefficient functioning of banks, high lending rates and low return on savings. Focus again shifts to financial sector reforms.Arguing for a pause in rate reduction RBI Executive Director and member of the MPC Mridul Saggar made the following observations : "In my view, with considerable policy rate reduction effected since February 2019 and liquidity and credit easing getting front-loaded since March 2020, a breather is necessaryawaiting greater clarity. The transmission of rate cuts has picked up in the preceding quarter. Liquidity infusions have reduced financial market spreads on corporate paper of various tenors and credit quality, especially of corporate bonds whose issuance has risen. During July, the All-India financial institutions and Housing Finance Companies have been able to raise money through Commercial Papers at a weighted average rate below the reverse repo rate and corporates and NBFCs at below repo rate. Further rate reductions may come in the way of smoothening of interest rate movements unless durable reduction in path of inflation materialises. While markets and fundamentals seldom do a tango, a disconnect between the two carry the risks of disruptive market corrections. Policy needs to be mindful of the space that may be needed to deal with possibility of increased stress that may resurface later withloan defaults and recognition of bad loans. Impact of fiscal actions and space also need to be closely observed for demand management. Growth is at risk over the medium term if we sacrifice macro-financial stability for short-run expediency. Moreover, there is soundrationale that monetary policymakers should do less under uncertainty. While pausing, it is best to retain the accommodative stance as long as the baseline suggests that inflation will soften to well within the tolerance band keeping in view the need to avoid frequent directional changes even as policy remains data dependent. Also, confidence levels are currently fragileand monetary transmission of earlier rate reduction is still in pipeline." This more than clarifies the RBI's perception of the situation. The central bank is not in a hurry to go ahead with more rate cuts, but would wait and watch the results of action already taken on this front. Excerpts from the Governor’s Statement on Monetary Policy – August 6, 2020 (Not copied here. Accessible @ RBI Website) F Blogs and Links 1) Blog writing https://timesofindia.indiatimes.com/blogs/priyanka-dasgupta-blog/ustad-vilayat-khan-the-maestro-who-lived-like-a-king/ I'm not a fan of the Maestro whose Obit this Blog is. Another blog about this Obit inspired me to dig this out. That https://timesofindia.indiatimes.com/readersblog/reminiscences-of-an-ordinary-man/a-lost-opportunity-26312/ plus this made me sit back and think. About well researched articles ignored by readers and an 86 years old Dipak Sen regretting about unspoken words through another Blog! 2) C-Thoughts +ve https://timesofindia.indiatimes.com/readersblog/niveditadimple/how-to-stay-positive-in-covid-19-26274/ Think Positive G Leisure Heal the world : Michael Jackson https://youtu.be/BWf-eARnf6U

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