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Wednesday, 2 December 2015


While watching recent RBI policy press conference, I went back in time (some 20 years), still in school when I first heard the word liberalization. It sounded like a magic wand or fevi-quick which will make everything up & running. Then also the first thing we did was compare ourselves to CHINA, the dragon. Twenty years hence, nothing has changed as someone asked the RBI governor (during the press conference), where do we stand with respect to China. On 30th November 2015, IMF included Yuan as the fifth currency in the SDR basket effective from 1st October 2016. So can we even afford to think like that? Yuan with 10.92% weightage in the SDR basket is way ahead of the Indian rupee.

China started its reforms in 1978 and we in 1991. Over the last thirty years, China has transformed itself into a global powerhouse with $ 10 trillion economy and forex reserves of 4 trillion dollars. So it’s just getting its due. Though some experts might argue that it’s just symbolic, becoming a reserve currency with dollar, pound, yen and euro definitely gives a high. In addition to that trade in yuan will go up considerably in the years to come.

We on our part  should stop playing this sleeping elephant or tiger game and just wake up first. Stop looking at foreign rating agencies for their cursory nods and approvals and start doing what is actually to be done. And the first thing is to PASS GST and other pending bills and keep moving forward for economic reforms.  As for China, we should remember what Lord Krishna once told Arjuna, “Sarvashreshta mat bano. Uttam banne ki cheshtha karo”.

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