This refers to “Vicious circles” (June 7). The case for not giving up capital control as an instrument of economic policy is well argued and demonstrated with undeniable evidence. The IMF must get over its allergy to controls.
The instrument of well-applied control with a clear-cut expiry date may have side effects in the short run but it has its benefits in the longer term.
The ill effects of long-duration controls on petroleum prices on the economic front, and the extension of reservation policy for every clamouring class — originally meant for the SCs and STs for 10 years but prolonged for six decades — on the socio-political front in India are far too evident now. While the former can be reversed to some extent, it seems the latter will endlessly go on till the reserved class quota breaches the 50 per cent limit imposed by the Supreme Court or the limit is further raised, which seems more likely with the nation’s myopic political class.
P V Maiya, on email
