Indian budgets have supplied an invaluable public good, a stable democracy

It is not just RBI which has delivered stability but also Indian budgets which have delivered social and political stability through fiscal policy

Two days ago the RBI governor, Shakti Kanta Das, during his Nani Palkhiwala memorial speech, said a striking thing. Financial stability, he said, is a public good.

This is a new idea. Public goods in economics have two simple — but conflicting — definitions. One says that consumption of them by one person does not reduce their availability for another. The other says that the marginal cost of producing an extra unit of these goods is zero.

Both definitions are valid. But you can see the contradiction and choose the definition that suits your current purpose.

It’s worth pointing out