Indian Express Editorial Analysis
23 May 2020

1) Easy going-


  • In an unscheduled meeting, the monetary policy committee (MPC) of the Reserve Bank of India (RBI) slashed the benchmark repo rate by 40 basis points.
  • Cumulatively, since the imposition of the national lockdown in March, the MPC has cut rates by 115 basis points. The repo rate now stands at 4 per cent.
  • The dovish tone of the policy, as well as the RBI’s own assessment of the inflation trajectory, going forward, signals room to cut rates further.


  • (When monetary policy is dovish, it means that policymakers favor looser, more accommodating policy, because they want to stimulate growth in the economy)
  • (Monetary policy refers to central bank activities that are directed toward influencing the quantity of money and credit in an economy. By contrast, fiscal policy refers to the government's decisions about taxation and spending. Both monetary and fiscal policies are used to regulate economic activity over time)



  • It also suggests that the committee will continue to prioritise economic activity over price management — inflation is not the challenge, growth is.
  • The central bank also noted that the economy is likely to contract this year, though it refrained from providing an estimate.
  • The negative growth projection doesn’t come as a surprise — though the RBI’s reluctance to offer an estimate underlines( to give emphasis) the extent of uncertainty over the state of the economy.


  • Demand for credit is likely to remain low as, with continuing economic and health uncertainty, firms and households will postpone their decisions.
  • Moreover, risk averse banks are likely to hold back even if there are borrowers.
  • The challenge of ensuring liquidity flows to the stressed parts of the system will remain.
  • Higher-rated borrowers are likely to continue to get easy funding, while lower-rated borrowers will struggle — evidenced in higher credit spreads.


  • The credit guarantees provided by the central government for lending to MSMEs, NBFCs, MFIs could help moderate sectoral risk aversion, but only to some extent.
  • The reaction of the bond market to the policy statement was also muted(no impact). Perhaps greater clarity over the scale of the RBI’s open market operations, and the Centre and states’ borrowing programme for the year, is being awaited.

TRIVIA- (Open market operations or OMOs are conducted by the Reserve Bank of India (RBI) by way of sale and purchase of G-Secs (government securities) to and from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis)

  • Alongside monetary easing, the central bank also extended the moratorium on paying instalments on term loans for another three months. This further provided further relief to borrowers, both industry and households.


  • The dovish tone of the policy indicates not only further monetary easing, but also the use of both conventional and unconventional measures down the road to ease the economic stress.
  • But while monetary policy may have greater space to operate, there are limitations to what it can achieve.
  • It cannot do the heavy lifting alone. Fiscal support is needed.


2) The Political Therepy:


  • The past two months have thrown up an incongruous(inappropriate) image of the politician and the political party.
  • They are the managers of power, they talk of the “people”, but betray an instinctive choice of “law and order” and a techno-bureaucratic(this ideology places its belief in planning and rational management) idea of governance.
  • Most parties have been on a holiday. Politics was never a dirtier word than it is today.
  • At best, it is the season of social work or “constructive criticism”.
  • Except for some moral indignation(anger or annoyance) uttered on social media, most “Opposition” parties have remained both clueless and pathetically silent in the midst of this unprecedented(never happened before) crisis.


  • Yet, there are two elements in the latest Congress approach that indicate the return of politics at last.
  • One is the decision to focus on migrant labour and their plight(pain). Though it decided to take this line eight weeks too late, this emphasis allows the party to sharply contrast itself to what the government did or did not do.
  • If the Congress were to sustain this, the party would be moving towards a social coalition of the lower half of society that it has for some time shied(moved) away from.
  • Over the past few weeks, thousands of helpless workers have been struggling to reach their homes.
  • This has been chronicled(told) mainly through valiant journalism. It is a shame that such a gigantic(huge) tragedy and human suffering has not stirred the politicians out of their comfort zones.
  • Rahul Gandhi’s nominal outing may just symbolise what the political actors need to be doing.
  • Unless party workers hit the roads, talk with suffering workers, walk with them, they will not realise that taking a stand also means mixing with the people.
  • What Rahul Gandhi did the other day was hugely inadequate and far too late and yet, very important — a message to (his) party workers that politics needs to resume in its core sense — connecting with the people.
  • If leaders of state parties were also to take a cue, an opening up of the political arena might be facilitated in these times of political quiet.
  • Given the fact that many state parties have more active cadres locally than the Congress, much of the political action and agenda setting will depend on state parties.


  • On its part, the BJP, too, is caught in the trap of regulation and denial. Its inadequate political response to the pandemic has been three-fold.
  • First, it hoped that Modi magic will turn the virus away. If one listens again to the first speech by Narendra Modi (March 19) when he announced a day-long Janata curfew, one would be aghast(shocked) about the naiveté publicised by it.
  • But it is also about the collective willingness to believe in the impossible. The claim that a 14-hour-long curfew, and then, a 21-day lockdown will break the “chain”, constituted the BJP’s initial response (the lockdown did break many a life chain, but the claim was about chains of infection).
  • The BJP went about doing what it does best: Turn everything into an event feeding into pseudo(not real)-nationalist sentiment. Thus, outworn clichés(remark) about national pride, war, etc kept circulating.



  • Cut to the PM’s latest speech on May 12 indicating the second and third response.
  • That speech was significant for its careful underplaying(undervaluing) of the COVID issue and its frantic(distraught with fear, anxiety) effort to divert attention to India’s glorious future by adopting an “atmanirbhar” approach.
  • Suddenly, COVID was a non-issue and India’s march to power was the issue.
  • The third stage of the BJP’s response followed immediately – and was, in fact, included in that speech.
  • It consisted of a combination of claims of massive financial relief package and “reforms”.


  • After two difficult months of lockdown, India stands humbled(defeated) — by the virus, but more than that, by the treatment meted(given) out to its most vulnerable sections.
  • Also, humbled by the fact that a large lower stratum of so-called middle classes will have lost its source of livelihood.
  • At a moment when governments needed to be more deliberative, we have a government beset(surrounded) with uncontrollably delusional (based on or having faulty judgement) self-belief.
  • When governance needed to be more responsive and democratic, we celebrate the culture of obedience, inculcate bureaucratic authoritarianism and are happy with platitudes (a remark or statement, especially one with a moral content, that has been used too often to be interesting or thoughtful).


  • Resumption of democratic contestation is a must. Our main challenge is to revive and build politics.
  • If at this historic moment Opposition parties truly engage in politics, they would be ensuring a possibility of a political response to the pandemic.
  • Politics alone can be survival therapy for democracy — perhaps in doing that Opposition parties would be ensuring their own survival too.