Open society and its friends!

 Karl Popper wrote in his book "Open society and its enemies"  that Paradox of Tolerance leads to more intolerance. He explained that in order to maintain a tolerant society,the society itself must be intolerant of the intolerant. He openly borrows his idea from Plato's concept of Benevolent despotism or benevolent dictatorship.

Indians have understood this contradiction in governance and according to the best of statecrafts defined by them State Governance has four ways of taking action : Sama,Dhana , Bheda and Dhanda. When it should actively encourage dharmic ways of living, it should seek out and identify those who are bent upon disturbing this peaceful coexistence. It may be its own citizens or enemies from outside. For dealing with them it should employ the above four ways and it can move from one to another subtly, discreetly or sometimes directly. Dhanda is always the last resort and even for criminal acts and for offenders, punishment is a must. This is intolerance of the intolerant. Punishments should be given after speedy and fair inquiry and justice must be seen to be delivered without delay. This will have a deterrent effect.

However the contrast is to see who are Friends of Open society. Friends are Those who forge consensus, those who encourage cohesion, those who believe in cooperation, those who trust collaboration, those who practice transparent communication, and those who want syncretic, synergistic community development.

The tolerance towards genuine failures, mistakes in trying to invent, missteps in search of progress will go a long way in supporting open societies that are productive and supportive in the long run. When the societies are young in age such openness provides the youth power to blossom out full harnessing its potential.

But, many times, these friends of open society work in silence and with lot of patience. But earnestness, perseverance and persistence are their hallmarks. Friends of Open society will always build checks and balances to prevent even unintended misuse of power, influence, nepotism etc.

When Voltaire declared Liberty as the fulcrum of modern human society, he meant , civil liberties, freedom of expression and freedom of religion. He is widely believed to have written "I disapprove of what you say, but I will defend to the death your right to say it." Those who subscribe to his views are all Friends of Open society.Such open societies will bring forth positive changes in human dynamics and nurture inventions, innovations in all spheres of life from poetry ,arts to physics,biology.All this leads to prosperity in society and the virtuous cycle is set in motion.

It is our bounden duty to identify and safeguard these Friends of Society who are pillars of Tolerance and not to discredit them wantonly by imputing intolerance.

Inflation, Monetary policy and India

 The minutes of the recent meeting of Monetary Policy Committee  of RBi which were released this week, contain some interesting mentions. One of the news columns said that RBI minutes mention 'uncertainty' 12 times, 'growth' 43 times and 'inflation' 147 times It has expressed concern over inflation and it seems to be valid as CPI has remained above 6% which is more than the tolerance limit of RBI. Alongside, India is experiencing severe GDP growth pangs as its IIP has remained in the negative territory in the first quarter and in July also. Services sector is in a deeper mess except of course ITES, SAAS etc. which have been affected to a lesser extent. It looks like only Agri sector has not been impacted adversely so far ,as the progress of monsoon has been satisfactory and the spatial dispersion also fairly good.

The RBI Deputy Governor Mr.Michael Patra had said : "If inflation persists above the upper tolerance band for one more quarter, monetary policy will be constrained by the mandate to undertake remedial action, including an immediate and more than a proportionate response to head off the build-up of inflation pressures and prevent it from getting generalized." So, to sum it up ,we have classic case of "stagflation"- a combo of GDP slowdown and inflation.!

CPI in India has a higher weightage for food and fuel indices and these two are certainly not amenable to monetary policy measures. In India fuel price is driven more by Govt . policy measures and it is feeding into inflation with its rippling effects on the rest of the economy widespread.When pandemic is restricting economic activities profiteering becomes rampant in vegetable and food prices. When the supply chain and free movement of people and commodities happen, the inflation tendencies will come down. Cost push inflation of food prices will not listen to monetary policy signals in the short term in Indian conditions. As India is driven more by cash , there is a quite a lag in food inflation responding to monetary policy measures, if at all it is significant. May be hoarding and black marketing of these vegetables,cereals ,staples etc. may come down a little bit.However Govt. initiatives through Essential commodities and anti-hoarding sticks used by Govt. through other means incl. emergency imports may be more effective in the short term to bring down food prices.

When the economy is awash with liquidity, the prices in general have tendencies to go north .More so when the supply constraints remain elevated due to lockdowns,e-passes and uncertainties compounded by fear for life and livelihood affecting the income. In these circumstances. RBI should look at high CPI as extraordinary during the pandemic period and should start looking at Core inflation now and then revert back to CPI only after the pandemic is seen plateauing.In the meantime, RBI may seek a temporary amendment for its inflation targeting, switching to Core inflation in times of extraordinary circumstances like a pandemic,global financial crises etc. and then have a glide path back to CPI inflation targeting after the crest of the crises is over.