Photo courtesy wikipedia.org.
Ms. Christine Madeleine Odette Lagarde is re to have certified that Indian Monetary Policy rests in good hands.
Another great quote attributed to Ms. Christine Lagarde:
"...He is the one who steered the Indian economy to safer waters after it was hit by the market turmoil following the ‘taper tantrum’ episode of mid-2013. ..."
“India’s monetary policy rests in good hands. So I am very pleased to say that, in a very short time span, India successfully contained its domestic and external vulnerabilities more than in many other emerging economies,”
“I am fascinated by the vibrancy I see wherever I go in India. The world is looking to India to lead the path to higher, sustainable, and inclusive growth,”
How to define a good hand and a bad hand?
While Ms. Lagarde might have expressed her personal opinion or probably the opinion of the I.M.F., in giving credit to Mr. Rajan for India's emerging out of the market turmoil of 2013, reality may be different. There may be a complex mix of factors acting concurrently which enabled India to temporarily overcome the market turmoil. In my opinion, India is riding a tiger, while depending on foreign investments for meeting its imports, and balance of payments needs. India is successfully rotating its funds like a landlord who borrows heavily in the neighborhood, incurring new loans to repay old loan. The landlord's balloon will burst someday or other, but when , where, how, nobody knows. But, 'why' it is bound to burst, we can foresee. It is nothing but lack of international monetary resource management prudence. (Note: The samething which U.S.A. is also doing by acting as 'Reserve Country' for depositing surplus reserves of nearly the whole world.)
India's internal and external vulnerabilities remain what they were, what they are and what they will be. This is because, India's population is exploding, the population is learning new lavish consumption habits, there are no exportable surpluses of commodities and manufactured goods. The ugliest thing is, prior to 1991, India used to at least make a serious attempt to correct its balance of trade deficit, and keep its balance of payment current account deficit within manageable limits. Now, it appears that India is not keen on such corrective efforts. Present strategy seems to be, just beg for foreign investments, offering tax sops, vast swathes of lands etc.
Fascination about vibrancy wherever the IMF Chief goes, -- it is nothing but run-of-the-mill rhetoric to please the hosts.
Anyway, India needs no certification from IMF.