Archive for November, 2021

Opening to Foreign Investment in Government Bonds

It is now the 75th year since the end of British rule in India. The upcoming anniversary promises a rich vein to be mined for official publicity. The Information and Broadcasting Ministry has directed the print, electronic and digital media to display the newly minted logo of “Azadi ka Amrit Mahotsav” “so that citizens are made aware of India’s rich history and commitment to a bright future.” As the drumbeat of official Amrit celebrations gets steadily louder, each Central ministry is doing its bit; every public sector unit is scurrying to complete its quota of patriotic activities before it gets privatised. All this, no doubt, will rise to a climax on August 15, 2022 in the form of a grand sound-and-light spectacle celebrating an independent, atmanirbhar, and fully vaccinated India.  

Meanwhile, the Indian authorities are putting the finishing touches on a financial regime that will perpetuate an unprecedented level of control of India’s economic policy by foreign investors, overruling any lingering considerations of the needs and demands of the Indian people. It is important to grasp that this move has no other rationale whatsoever, even by the most conventional textbook economics. The simple mechanism through which this regime is to be instituted is large-scale foreign investment in government bonds. Below we outline how this works. (We have written about this once before, but it is worth looking at it again.[1])

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