Can “fasting” help cut the current account deficit (CAD)? This was a serious question by someone in the audience at a lecture by C Rangarajan, chairman of the prime minister’s economic advisory council. His reasoning was that avoiding diesel consumption for a day could be a way to control demand and fix the CAD. Rangarajan’s reply was oblique. It is a fundamental rule of economics that the price of a commodity goes up with an increase in demand, he said, adding, “We will do everything else instead of doing what is required.” As for “fasting”, Rangarajan suggested a better idea would be for women to stop buying gold instead, since gold imports jumped sharply this year.
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