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Good interview by @dugalira with Viral Acharya. Some good points--lack of disinvestment--mixed up with a lot of boilerplate stuff about CB independence, inflation credibility that seems to have not kept up with recent developments TBH. Also, poor history. https://www.pscp.tv/w/1OyKAglggBDJb?t=30m40s
He says that India did not have inflation credibility and links it to the fisc. Here is the former CEA on India's inflation performance. More here in my piece: https://swarajyamag.com/economy/monetary-policy-india-adopting-a-flawed-paradigm
Some history. India used to routinely monetise a significant part of the fiscal deficit before 1997. In fact, if you trawl through old budgets, you will see a line called budget deficit--that was the monetised portion. What was India's inflation performance during that time?
Dont judge by absolute levels or by comparison to developed countries. India's inflation performance has been solid in a relative sense. That has been the least of the problems. In fact, I would argue that democracy places such a strong constraint on inflation that you dont
...need CB independence. Just ask any politician what happens when "mehengai badh jaati hai." Easterly and Fischer had a survey about how people dislike inflation across countries. Recall Arab Spring.
Let go back in history: the Navnirman movements started with LG College students protesting against 20% hike hostel fees. Indian government took a sledgehammer to inflation, taking draconian measures. If you look at WPI inflation in India 1974-1980, it did better than the US.
I dont think credibility on inflation is a factor at all. As to debt and FRBM, I have written copiously. We are following policy shibboleths that are being discarded in the countries of their origin.
