Big-bang reform ideas: let market principles guide India’s policy response to tough times
A convincing argument for a weakened rupee, for instance, would be if its free-float level can do a good job as a price signal to help us regain a better external balance overall. But local market rigidities could get in the way. Notably, fuel and fertilizer pricing is firmly in the government’s grasp, with prices given no role in helping us adjust to an import cost flare-up. For market-oriented reforms, the Centre must first liberate these sectors of stiff price controls.
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