Surjit Bhalla retweetledi
Surjit Bhalla lambasts the government: "Winning Elections, Losing the Economy
In a hard-hitting interview with @govindethiraj on The Core Report, economist Dr. @surjitbhalla delivers a sharp critique of India's current economic policy direction despite strong political stability.
Bhalla argues that India is facing a deep crisis of confidence. While inflation and current account deficits look better than the 2013 "Fragile Five" days, net FDI has collapsed — a direct result of the 2015 restrictive Model BIT and "Hotel California" clauses that made exit extremely difficult for foreign investors.
He points out that the consequences of that 2015 policy shift are now fully visible in 2024-25 as old treaties expire.
The problem isn't just foreign capital. Domestic capital is also fleeing due to retrospective tax fears, heavy-handed enforcement, and a surge in protectionist Quality Control Orders (QCOs) since 2017 that shield local players from competition.
Bhalla criticizes the overly centralized, secretive decision-making process concentrated in the PMO — a far cry from the open debate that preceded the 1991 reforms. He notes that despite 30 years of talk, manufacturing's share in GDP refuses to rise because policy incentives remain flawed.
His clear recommendations:
1. Immediately roll back FDI and BIT rules to the pre-2015 open framework.
2. Pass a permanent legislative ban on retrospective taxation.
3. Aggressively support and subsidize export-oriented companies, learning from South Korea, Vietnam, and Bangladesh.
On the rupee hitting lows, Bhalla says a solo float without fixing fundamentals would be "stupid and suicidal." Fix the structural issues and confidence — and the currency — will return.
A must-watch interview that raises uncomfortable but important questions about long-term economic direction.
@PMOIndia
Full interview: youtu.be/kzP_ZHA8tZU?si…
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