oppn parties PMO Orders Review Of Proposal To Issue Overseas Bonds

News Snippets

  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
  • Although it was obvious, but the government still clarifies that there is no need to switch off appliances and only lights need to be switched off on April 5 at 9pm after confusion in the minds of some people
  • PM Modi and President Trump decide "to deploy full strength of (Indo-US) partnership" to fight against COVID-19
  • 17 states have reported 1023 cases of coronavirus linked to the Tablighi Jamaat, which translates to 30% of all positive cases in India
  • The government says people should not use alcohol-based hand sanitizers before lighting diyas or candles on April 5
  • The railways say there is no certainty yet when services will resume after the lockdown and a final decision will be taken in the next few days
  • As coronavirus cases multiply in Assam, six north-east states seal their borders with the state
  • Power System Operation Corporation Ltd. (POCOSO) putting all systems and protocols in place at war-footing to ensure there is no grid failure due to reduction in demand on April 5 at 9 pm
  • Power ministry scotches rumours that the power grid might fail due to the 9-minute blackout called by PM Modi on Sunday, April 5
  • Centre asks people to wear home-made masks if it is absolutely essential for them to step out of homes
  • Centre asks states to allow licensed street vendors to sell essential items
  • 8000 samples were tested across India on April 2, but the government said that testing will be need-based and will not be used as a confidence-boosting measure
  • Air India operating special flights to fly passengers stuck in India since the lockdown
  • For the first time in history, Darjeeling loses first flush tea due to suspension of garden work for Covid-19 outbreak
  • Supreme Court asks journalists to be responsible and publish only the official version of news after it was brought to its notice that migrant exodus started after the 'fake' news that the lockdown will be extended to three months
Total count stands ar 3082 as India records 16 Covid-19 deaths, the highest in a single day
oppn parties
PMO Orders Review Of Proposal To Issue Overseas Bonds

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.

Is Subash Chandra Garg, the former finance secretary now shunted to the power department (he has since applied for voluntary retirement), being made the fall guy for the controversial proposal to float sovereign bonds to borrow from the overseas market as announced in the budget by Finance Minister Nirmala Sitharaman? The Telegraph has published a news story by R Suryamurthy on its front page that alleges that after criticism of the proposal from several quarters, the PMO has ordered a review and Garg is being made the scapegoat. It also hints that the proposal is most likely to be shelved. However, unnamed  government sources say Garg did not properly apprise the PMO of the consequences of borrowing through overseas sovereign bonds.

Experts, including former RBI governors Y V Reddy and Raghuram Rajan, are skeptical about the need and efficacy of adopting this route. While Reddy is of the opinion that these bonds are like sovereign liabilities in perpetuity, Rajan feels that the better way to get dollar funds would be to raise the cap for foreign investments in G-secs or government securities. Rathin Roy, a member of the Prime Minister's Economic Advisory Council, opposes the proposal because he says it will affect India's economic sovereignty and have disastrous macroeconomic consequences. Swadeshi Jagran Manch, the economic think-tank of the RSS, has also opposed the proposal.

It is surprising that Sitharaman could announce the proposal without extensive consultations within the government and with domain experts from outside. Normally a proposal of such importance (remember, India has not used this borrowing route ever before) is discussed thoroughly and even vetted by several government departments before being made public. Without going into the merits and demerits of borrowing in overseas markets by floating sovereign bonds, it needs to be stated that just an idea that was not properly discussed or approved should not have found a place in the budget announcements. It gives the impression that decisions are being made arbitrarily.