“If America had a central bank chief like Y. V. Reddy, the U.S. economy would not have been such a mess,” Joseph E. Stiglitz, the economist and Nobel laureate, has said.
Being financially conservative is different from making adoption of new technology difficult. Today, Paypal doesn't work in India, the payment gateways are in a horrible mess and the one-time-password rule has given mobile commerce a huge setback. I believe the problem lies in not going into the details of implementation. There is a fine balance between security and usability which has to be maintained. As someone who is looking to start a web startup in India, I am disappointed by how consumer concerns are being ignored and online commerce is becoming more and more difficult here.
"Paypal doesn't work in India" statement is not fair. RBI has several guidelines for online transactions of money. It wants to be able to regulate all services that take money out of and put money into the country. Unfortunately, Paypal doesn't want to be regulated by any country but US. You're acting like a bank, and walking like a bank, only online, be prepared to be regulated like a bank. Paypal made a choice that it doesn't want to be a bank. It's not really RBI's fault, while I do think that they have think of some other solution to make people's live easier to accept/transfer money online.
This is not a conservative approach. This is incredibly progressive! Two-factor authentication (when implemented correctly) is a necessary security measure in the world we live in and more banks should mandate it. Today banks simply would rather pay out for fraudulent charges than have to implement this even though there are incredible externalities for customers when their cards are stolen.
I'm quite willing to be convinced that a conservative monetary system has shielded some countries from certain isssues, but some economist saying so doesn't make it so, not even if he's a famous economist. So some background on the mechanics would be nice.
I guess it depends on the interpretation of "some", but it only broadly says what he did (mostly keeping the market shielded off from international influences it seems, not quite what other countries should emulate - imagine what would happen if T-bonds weren't available to international buyers, or if Americans couldn't freely invest world-wide). It has no details on the economic landscape in India (for example, I have no idea about the housing market there) and it certainly doesn't address the question what effect a looser regime would have had in the light of the economic issues of 2008/09.
Now it's an NYT article, on the guy itself and not so much on the economic issues, so for the article, it's fine. But the claim that India was shielded from more economic woes because of this guy is a claim that cannot be backed up with just what is in this article.
doubt he has anything more than hearsay. He's always on the anti-india bandwagon every time such a story breaks out ..
Now, I know Black money is rampant in India and that it's almost a parallel economy in some respects but I'm not so sure it's a number as high as this guy claims.
Also, a whole lot of black money is being "cleaned" up by many a politicos and funneled back into the country via Mauritius and then that money's reinvested in legitimate businesses like real estate/property development as financiers
(source: my family friends have a business partner or two with such financial backing)
"In the United Kingdom, about 5 per cent of the population do not have bank accounts. In Australia, about 7-8 per cent of the population do not do banking.
In India, there are a total of 31 crore (Rs 310 million) savings bank accounts, but given the number of multiple accounts, the number of people having savings bank accounts cannot be more than 20 crore (Rs 200 million).
This means around 85 per cent of India's population does not have access to financial services in a cost-effective, transparent and fair manner."
Comments
India is generally conservative about financial issues.
In this case, it puts them on the wrong side. But their conservative approach also shielded India from the banking crisis experienced by US etc.
From http://www.nytimes.com/2009/06/26/business/global/26reddy.ht...
“If America had a central bank chief like Y. V. Reddy, the U.S. economy would not have been such a mess,” Joseph E. Stiglitz, the economist and Nobel laureate, has said.
Being financially conservative is different from making adoption of new technology difficult. Today, Paypal doesn't work in India, the payment gateways are in a horrible mess and the one-time-password rule has given mobile commerce a huge setback. I believe the problem lies in not going into the details of implementation. There is a fine balance between security and usability which has to be maintained. As someone who is looking to start a web startup in India, I am disappointed by how consumer concerns are being ignored and online commerce is becoming more and more difficult here.
"Paypal doesn't work in India" statement is not fair. RBI has several guidelines for online transactions of money. It wants to be able to regulate all services that take money out of and put money into the country. Unfortunately, Paypal doesn't want to be regulated by any country but US. You're acting like a bank, and walking like a bank, only online, be prepared to be regulated like a bank. Paypal made a choice that it doesn't want to be a bank. It's not really RBI's fault, while I do think that they have think of some other solution to make people's live easier to accept/transfer money online.
This is not a conservative approach. This is incredibly progressive! Two-factor authentication (when implemented correctly) is a necessary security measure in the world we live in and more banks should mandate it. Today banks simply would rather pay out for fraudulent charges than have to implement this even though there are incredible externalities for customers when their cards are stolen.
I'm quite willing to be convinced that a conservative monetary system has shielded some countries from certain isssues, but some economist saying so doesn't make it so, not even if he's a famous economist. So some background on the mechanics would be nice.
Not sure if you read the NYT article but it goes into some detail.
I guess it depends on the interpretation of "some", but it only broadly says what he did (mostly keeping the market shielded off from international influences it seems, not quite what other countries should emulate - imagine what would happen if T-bonds weren't available to international buyers, or if Americans couldn't freely invest world-wide). It has no details on the economic landscape in India (for example, I have no idea about the housing market there) and it certainly doesn't address the question what effect a looser regime would have had in the light of the economic issues of 2008/09.
Now it's an NYT article, on the guy itself and not so much on the economic issues, so for the article, it's fine. But the claim that India was shielded from more economic woes because of this guy is a claim that cannot be backed up with just what is in this article.
For every economist, there exists an equal and opposite economist. Both of them are wrong. - The First Law of Economists
85% of Indian economy runs on black money because 85% Indians do not have any bank a/c
Source?
doubt he has anything more than hearsay. He's always on the anti-india bandwagon every time such a story breaks out ..
Now, I know Black money is rampant in India and that it's almost a parallel economy in some respects but I'm not so sure it's a number as high as this guy claims.
Also, a whole lot of black money is being "cleaned" up by many a politicos and funneled back into the country via Mauritius and then that money's reinvested in legitimate businesses like real estate/property development as financiers (source: my family friends have a business partner or two with such financial backing)
http://goo.gl/IbHu
"In the United Kingdom, about 5 per cent of the population do not have bank accounts. In Australia, about 7-8 per cent of the population do not do banking.
In India, there are a total of 31 crore (Rs 310 million) savings bank accounts, but given the number of multiple accounts, the number of people having savings bank accounts cannot be more than 20 crore (Rs 200 million).
This means around 85 per cent of India's population does not have access to financial services in a cost-effective, transparent and fair manner."