Strengthening India Post and the Indian Postal Bank

A Proposal for National Integration and Financial Inclusion India Post stands tall as one of the nation’s most respected institutions — an organisation of national reckoning that touches every citizen from birth to death. It continues to be a trusted carrier of information and a symbol of integration across the country. This proposal seeks to strengthen both India Post and the Indian Postal Bank, transforming them into the backbone of communication, savings, and financial access for every citizen. Summary of the Proposal All postal services should operate on a true cost basis with a 15% surplus, ensuring efficiency and sustainability. The India Postal Bank must serve every citizen, ensuring universal access to banking. India Post can further national integration by offering authentic translation services of laws, rules, and gazettes in all official languages. Every government and official building should provide currency deposit and withdrawal facilities, for both Indian and international currencies. Railway Stations should become hubs for Postal Bank and Postal Services, reviving the spirit of the Railway Mail Service through a modern hub-and-spoke model. The Reserve Bank of India (RBI) may handle all coins and currency from mints and presses, while Postal Banks at railway stations act as currency chests and distribution hubs. India Post may lease BSNL and other government properties for approved official services. The Postal Bank must be compensated for services provided to government agencies. The Postal Services Board can expand into “India Communication Services”, creating new cadres and employment opportunities. Collaboration with the RBI and international postal systems can strengthen communication and currency exchange infrastructure. Postal Services Board Proposal The RBI should be the sole handler of coins and currency, managing chests for all banking entities on a correspondent basis. Every financial institution should open a current account with the Postal Bank solely for cash supply and absorption. The Indian Postal Bank should function as India’s largest narrow bank — collecting savings, offering 0% current accounts and nominal-interest savings accounts, without lending to individuals or institutions. It invests exclusively in central government securities. The Postal Bank can sustain 1.75 lakh employees by collecting savings, disbursing cash, and operating under transparent, fee-based regulations. Expansion of Functions India Post may lease BSNL and government properties to handle approved activities of institutions such as the Election Commission, Parliament Secretariat, Judiciary, and others. The Postal Board can engage UPSC applicants, apprentices, and trainees, especially those preparing for public administration, in structured programs. Within the Parliament Complex, the Postal Board can act as an official communication channel for the Lok Sabha Secretariat, Rajya Sabha Secretariat, Election Commission, Finance Commission, and all constitutional bodies. The Postal Bank should be compensated for all services rendered to government agencies operating on its premises. Development of New Cadres The Postal Services Board can evolve into India Communication Services, creating new cadres through UPSC or direct recruitment. This Cabinet-approved personnel reform can generate large-scale employment while integrating communication and administrative functions across institutions. A multilingual national communication backbone can emerge — using all 23 constitutional languages — positioning India Post as the nation’s authentic communication channel. India Post can serve as the official translator for courts, ensuring accessibility and accuracy in every language. Every government office should host a Post Office counter as a familiar citizen interface, reinforcing India Post’s role as the bridge between people and the State. Collaboration with RBI and International Linkages The Postal Services Board can manage RBI’s backend infrastructure, ensuring citizens’ easy access to the Postal Savings Bank. It can facilitate currency exchange for foreign visitors and during emergencies such as hospital needs or national disasters. Through the Universal Postal Union, India Post can represent India globally — training staff abroad and managing embassy-level communication systems. Personnel Management The Indian Postal Bank, under the Indian Postal Service, should become a channel of national integration and trust. Every railway station should host a secure, well-built postal counter that accepts cash and checks from anyone within its jurisdiction. Each station should have three service counters – outside, inside but before the platform, and within the platform area. Cash deposit machines and ATMs will be installed near parking areas, ensuring convenience for local merchants. This will mean around 24,000 Postal Bank counters across India and 100,000 deposit machines serving railway and transport hubs. Post offices will also handle bus ticket counters, integrating postal and transport functions. The idea is “banking on the go”, enabling merchants to deposit daily collections easily. Postal Banks should operate from 6 AM to 10 PM, with employees working efficient four-hour counter shifts. The RBI should ensure two ATMs per station, distributing new notes and coins in eco-friendly packaging. Around 1.75 lakh employees will manage currency operations, with full access to social security and benefits, ensuring dignity of labour. Employment and Recruitment Anyone aged 21–70 years can opt for part-time or full-time work if they reside within 1–2 km of their assigned post. The proposed workforce includes 1.75 lakh Junior and Senior Officers, recruited through UPSC or direct entry. Work shifts will be organised into four rotations, each lasting four hours. With over 40,000 bus and railway stations, total employment could reach 8 lakh individuals. Students and young people above 18 years can join under an “Earn While You Learn” scheme. A two-year apprenticeship will prepare workers for wider government roles, contributing to a national skills registry. Operations and Expansion The Indian Postal Bank can operate in airports in partnership with the Airport Authority of India. The RBI can authorise it as the sole evacuator of currency from mints and presses to stations and cities. Commercial banks would no longer need to maintain currency chests, as Postal Banks will handle cash logistics securely. With protection from Railway and State Police, every major station can house Postal Bank ATMs and deposit machines.New ₹300 and ₹400 notes may be introduced — ₹300 for farmers and ₹400 as a symbolic wage for security personnel. Express trains could carry Postal Bank compartments for the safe and quick transfer of currency. Integration with state transport cooperatives will strengthen cash movement and public convenience. Conclusion The Indian Postal Bank will maintain strong daily cash flows, mobilising savings automatically from all sectors. With railway stations, bus depots, and airports serving as active financial hubs, this network will create new growth pathways for India. Together, India Post and the Indian Postal Bank can unite communication, finance, and service — generating jobs, ensuring inclusion, and securing the nation’s currency system, all while reaffirming India Post’s role as a true symbol of trust and integration.
Posted by G Giridhar Prabhu

Proposal for a Planned Exit from the Urea Subsidy

Introduction India’s fertiliser subsidy system, especially for urea, has ensured affordable access for farmers for decades. However, this subsidy now poses structural, fiscal, and environmental challenges. Urea remains disproportionately cheap compared to other fertilisers, encouraging overuse and soil nutrient imbalance. A gradual, well-structured exit from the subsidy is essential to ensure fiscal prudence, environmental sustainability, and agricultural productivity, without hurting farmers’ income or food security. Background India consumes about 35 million tonnes of urea annually, with more than 70% under price control. The current subsidy regime distorts the fertiliser market, discourages balanced nutrient use, and drains public finances. Moreover, excessive urea use leads to soil degradation and environmental stress, while the subsidy discourages innovation and efficiency in fertiliser production. The government has made progress in direct benefit transfer (DBT) for fertiliser payments and promoting alternative nutrients like nano-urea, but the system remains heavily dependent on large-scale subsidy disbursements. A planned withdrawal over several years—combined with technology, logistics, and communication reforms—can enable a smooth transition. Rationale for Exit The key reasons for a planned exit include: – Rationalising public expenditure and freeing fiscal space for infrastructure, irrigation, and rural livelihoods. – Encouraging farmers to use balanced fertiliser combinations, improving soil health and long-term productivity. – Enhancing transparency and reducing leakages through efficient delivery systems. – Aligning fertiliser pricing with actual production and transportation costs. – Promoting innovation, efficiency, and private participation in fertiliser production and distribution. Proposed Framework for a Gradual Exit The exit must be phased, ensuring minimal disruption and clear communication. The following framework combines administrative, financial, and technological measures for an orderly transition. Stage One – Foundation for Reform A baseline year should be established to identify regional fertiliser usage, soil health status, and crop requirements. The first step would be to strengthen data collection through soil health cards and integrate fertiliser distribution with digital systems. India Post, Indian Railways, and the Common Service Centre (CSC) network can form the backbone of this logistics and monitoring system. Existing DBT mechanisms should be redesigned so that farmers receive targeted support directly in their accounts, instead of the subsidy going to fertiliser companies. This allows gradual correction of urea prices without immediately burdening farmers. Communication will play a vital role. The Ministry of Chemicals and Fertilisers, along with the Ministry of Agriculture and Department of Posts, should jointly handle information campaigns to explain the rationale, benefits, and stages of change. Messaging should be farmer-friendly, multilingual, and supported by extension officers and Krishi Vigyan Kendras. Stage Two – Controlled Price Correction and Nutrient Balancing Once DBT to farmers is in place, urea prices can be increased modestly in a predictable manner—perhaps 5–10% annually. Simultaneously, farmers should receive a compensatory cash transfer for two to three years, gradually tapered off as the market stabilises. At this stage, promotion of balanced fertiliser use becomes essential. Excessive urea usage can be corrected through incentives for complex fertilisers (NPK) and organic alternatives. Public campaigns can highlight that balanced nutrients improve yields, reduce input costs, and enhance soil fertility. This phase must also encourage increased production and distribution of nano-urea and other efficient formulations. These are lighter, easier to transport, and reduce nitrogen losses. Scaling up nano-urea production and its integration into the distribution system through Railways and India Post will improve access across regions. Stage Three – Liberalisation and Market Reform As subsidies taper down, the fertiliser market can be gradually liberalised. Domestic manufacturers and importers should compete under transparent pricing. Government oversight will remain for quality control, safety, and environmental standards. Railways can play a crucial role in ensuring efficient bulk movement of fertilisers, using a hub-and-spoke model where central warehouses supply district-level depots. India Post can handle last-mile logistics, ensuring supply even in remote areas, while also tracking sales and usage through digital receipts. To prevent sudden price shocks, buffer stocks and regional reserves can be maintained. Farmers’ cooperatives and state agencies can handle temporary procurement if prices spike abnormally. This ensures food security and confidence during the transition. Institutional and Administrative Measures A Urea Transition Coordination Committee should be set up with representatives from key ministries—Chemicals and Fertilisers, Agriculture, Finance, Railways, and Communications. It will coordinate implementation, track impact, and ensure corrective action. The use of technology—GPS mapping, online fertiliser tracking, and e-market platforms—should be expanded to ensure transparency. Integration with the Aadhaar will allow direct monitoring of subsidy transfers and farmer reach. District-level agricultural officers should work with post offices and Panchayats to identify farmers, verify land holdings, and ensure correct cash transfers. Special outreach efforts should be made in areas heavily dependent on urea-based farming, such as paddy and sugarcane belts. Safeguards for Farmers Farmer incomes must remain protected. The transition should ensure that total production costs do not rise sharply. Compensation transfers during the initial years will prevent shocks. Additional support through MSP adjustments, crop insurance, and targeted irrigation subsidies can offset input cost increases. Encouraging adoption of bio-fertilisers, composting, and integrated nutrient management will reduce dependency on chemical fertilisers. These initiatives can be supported under existing government schemes, ensuring continuity of farm productivity. Small and marginal farmers should be given priority in cash transfers and technical training. Farmer Producer Organisations (FPOs) and cooperatives can act as intermediaries, helping farmers understand nutrient balancing and efficient input use. Financial and Economic Benefits A phased exit can save the government over ₹1 lakh crore annually in the long run. These savings can be redirected to rural infrastructure, agricultural R&D, and soil rejuvenation programs. Reducing urea overuse will also cut import dependency, conserve foreign exchange, and improve environmental sustainability. Moreover, transparent fertiliser pricing will attract private investment and competition, improving efficiency and reducing administrative burdens on the government. Use of Public Systems for Delivery The Indian Railways can act as the main carrier for bulk fertiliser movement, ensuring timely supply to regional depots. Railways’ data systems can track shipments, costs, and leakages. India Post, with its vast rural reach, can deliver fertilisers to small farmers and act as an information and distribution hub. Its digital infrastructure allows real-time updates, grievance redressal, and delivery authentication. This collaboration between Railways and India Post will modernise fertiliser logistics, strengthen public institutions, and build transparency in the entire supply chain. Communication and Farmer Outreach The success of this plan depends on how well it is communicated. Farmers must feel part of the process, not victims of reform. Messaging should highlight how direct transfers empower them to make independent choices. Radio, television, and local campaigns through Panchayats should explain how soil health, balanced fertilisation, and direct benefit transfer will strengthen agriculture. Training sessions and demonstration farms can help farmers witness the benefits of reduced urea dependency. Agricultural universities and Krishi Vigyan Kendras can lead these initiatives. Environmental and Soil Health Impact India’s heavy urea usage has caused nitrogen imbalance, declining soil organic content, and water contamination. A controlled reduction, combined with bio-fertilisers and composting, will restore soil structure and reduce pollution. Promotion of integrated nutrient management—combining organic and chemical sources—will ensure sustainable yields. These environmental benefits, combined with fiscal savings, make the reform both economically and ecologically essential. Conclusion India’s fertiliser subsidy system has served its historical purpose but now needs restructuring. A planned, phased exit from urea subsidy—supported by direct transfers, logistics reform, and farmer outreach—will create a more balanced, efficient, and sustainable agricultural economy. The proposed transition is not an abrupt withdrawal but a gradual reallocation of resources. Farmers remain central to this reform; their incomes and productivity must be safeguarded. By using India’s strong public networks—the Railways, Postal Service, and Digital India infrastructure—the transition can be executed smoothly. This initiative can become a model for rational, transparent reform in India’s subsidy architecture—combining fiscal responsibility, environmental care, and farmers’ empowerment.
Posted by G Giridhar Prabhu

INFLATION MEASUREMENTS

Introduction: In response to Question No. 4 of the Discussion Paper on the Review of the Monetary Policy Framework – “Should the target inflation level be removed, and only a range be maintained within the overall ambit of maintaining flexibility without undermining credibility?” This blog argues that India’s economic reality requires a shift towards a flexible range instead of a rigid inflation target. India’s diversity, the complexities of its economy, and the lived experiences of its people make it imperative that inflation is not viewed as a narrow statistic but as a broad, dynamic measure reflective of real conditions. Inflation: Beyond Numbers In the Indian context, inflation should be measured across a broad spectrum. No single location or market – whether production or consumption – can represent the vast diversity of the Indian economy. Prices, when conveyed in real-time through appropriate media, could transform the construction of indices into a people’s initiative. Here, the writings of Professor B. R. Shenoy remain highly relevant. He famously said: “We are, instead, seeking to make the traders scapegoat. Monopolies and semi-monopolies apart, contrary to popular belief and the emphatic assertions of administrators, traders have no more control on the prices than the thermometer has on temperature.” This clarity is what India needs today – to recognize that inflation reflects deeper structural realities, not just surface-level “culprits.” Historical Context India has faced persistently high inflation since 1957, in sharp contrast to the pre-1936 period, when the rupee maintained strong purchasing power. The difference between classical and modern economists is striking. Classical economics, much like generalist medicine, offered broad theories, while today’s macroeconomics resembles specialized surgery – sophisticated, data-heavy, and often discussed in academic conferences worldwide. India itself has transformed: from the Planning Commission to NITI Aayog, with over 120 think tanks and the Department of Economics and Statistics harnessing data nationwide. Yet, inflation has remained a subject of debate, discussion, and contention – even cynicism – among citizens and commentators alike. Why a Flexible Range Matters The Discussion Paper itself acknowledges that no single measure of inflation suffices. The Reserve Bank of India’s analyses now resemble forecasting the monsoon – algebraic models, GDP comparisons, international parallels, and projections.In such an environment, a rigid target risks losing both relevance and credibility. A flexible range, by contrast, would capture India’s diversity while maintaining the central bank’s credibility. Currency, Employment, and Prosperity Inflation cannot be managed in isolation. Monetary policy must also address employment generation – ensuring every able-bodied person has access to dignified work. Respect for currency – treating money as not only a medium of exchange, but also a store and measure of value. Savings and professions – honoring the contributions of both traditional and modern professions, as well as farmers and workers in the so-called “unorganized” sector. Radical proposals – such as introducing new denominations (₹300, ₹400) to symbolize the value of farmers’ and workers’ contributions – could reinforce this respect. Equally, proposals such as 23 new RBI regional offices would enhance inclusivity by reflecting India’s diversity in its financial governance. Rethinking Inflation Measurement One drastic and radical proposal is that inflation measurement should not be conducted by the Government or the RBI. Instead, an independent and broader process should handle this responsibility, while the RBI and Government merely respond to the results. This decentralization would improve credibility and public confidence. Building Public Trust For monetary policy to succeed, public trust in currency must be restored. Some steps include: – Redeeming damaged notes easily at post offices. – Encouraging deposits in Postal and Grameen Banks. – Mobilizing ₹5–7 lakh crore into postal accounts without disruptive demonetization. – Reassuring citizens that ₹500 notes will not be demonetized. – Deploying 30,000–40,000 local messengers (not celebrities) to build trust. – Preventing misuse of cooperative banks. – Counterfeit currency should be dealt with through intelligence operations, not by penalizing innocent citizens. From Poverty Elimination to Prosperity Creation India must go beyond a constant rhetoric of “poverty alleviation.” The real goal should be prosperity creation – rooted in employment, savings, currency stability, and flexible inflation management. Food inflation, given its seasonal nature, could even be measured through a separate index for production and consumption regions. The Role of Technology and CitizensInflation management must evolve into a real-time, citizen-driven initiative. – Homemakers monitoring household prices. – Farmers and traders reporting agricultural trades. – Manufacturers sharing production costs. – Service providers reporting fees. All of this could be enabled by dedicated apps, processed by PARAM supercomputers, with daily insights generated for policymakers. Beyond “War on Inflation” Inflation is often framed in adversarial, militaristic terms – a “war” to be fought. But this language is misplaced. Civilian issues require calm, precise action, not war metaphors. Here, India’s cultural philosophy offers guidance. Praxeology (theory of action) and the Bhagavad Gita’s Karma (theory of action) both emphasize constructive, disciplined engagement – not hostility. The Way Forward India is a professed market economy. Prices ultimately move with demand and supply, and consumer choice is the ultimate determinant. Thus, while the government’s role remains the promotion of economic efficiency, inflation management must be anchored in discipline, self-discipline, and informed citizen participation. The flexible range approach ensures that monetary policy remains credible, realistic, and aligned with India’s needs. Conclusion Inflation targeting in India must evolve. A rigid point target neither reflects India’s diversity nor inspires confidence. Instead, a flexible range, combined with a renewed focus on employment, respect for currency, financial inclusion, and citizen participation, will serve India better. Ultimately, monetary policy must not be about battling inflation as an enemy, but about enabling prosperity. As in cricket, where concentration is always “on the ball,” policymakers too must stay focused – not distracted by excessive commentary, but guided by clarity, discipline, and purpose. India’s future lies in anchoring inflation flexibly while empowering citizens, fostering employment, and building prosperity.
Posted by G Giridhar Prabhu

Utilisation of Gold

The Reserve Bank of India must take a contrarian step on selling and using its reserves in the form of gold. An Immediate, Two-Pronged Release It needs to quietly release 25 metric tonnes of gold in consultation in the physical market, and another 30 metric tonnes for exporters and users for utilisation in the export agenda. This can be done through two state-owned entities: Central Bank of India and Exim Bank of India. Such a move would temper international markets and high expectations. Rationalising Gold Holdings One way of rationalising the asset agenda is that private hoards in India are much larger, and the Reserve Bank of India need not hold the current level of holdings. State-owned banks can manage the flow and stocks of gold, which will channel the gold in organised forms and curb smuggling. Recycled gold also needs to be addressed as a useful activity. Gold for Bilateral Trade and Traceability Gold is an asset class which can be used to address bilateral trade. Government and state-owned banks can purchase up to 290 metric tonnes of gold from the USA duty-free, and service the Indian markets only with freshly mined gold with India markings and embedded identifiers. This will make the gold traceable to any extent. Redefining Bank Roles State-owned banks can be barred from giving gold loans, with this activity managed entirely by non-state actors. At the same time, state-owned banks can back state-owned entities to enter into progressive custodianship of warehoused metals. The Objective of Immediate Action The immediate step should be to sell the gold quietly next week in India. The objective would be: a) To neutralise the India Rupee premium and make it available at world cost. b) To supply to neutralise losses in Gold Redemption Bonds due to unusual price increases. Profits will be available next year as RBI surplus. Indian household assets remain safe, except those accrued through criminal activities. If world markets react, it is best to remain calm – it is a heated market. A Geostrategic Shift: From London to Tokyo Additionally, move London gold to Tokyo and lend it to Indian banks, which can borrow in the Yen–Rupee pair, or not. The Yen can then be utilised by Japanese companies in India for shipbuilding, engines, boats of all descriptions, and Fujitsu supercomputers for government applications. Japanese companies, with Indian government assistance, can also support archaeology and heritage protection. Cooperation in “wholesale banking” in Okinawa can help shorten air trips. Up to 200,000 families can go on two- to three-month work visas and vice versa.Japanese-built cruise vessels till 2040 can support Eastern Asia Pacific needs. There can also be collaboration in Chile and Argentina for goods and services, as well as currency printing and arrangements.
Posted by G Giridhar Prabhu

Embraer in India

A Proposal for Integrated Regional Development Introduction: The Brazilian aircraft company Embraer is steadily advancing in the global civil aviation market. With India emerging as one of the fastest-growing aviation hubs in the world, the opportunity to bring Embraer into India is not only timely but strategically significant. By combining Embraer’s expertise with India’s competitive advantages, this partnership can catalyze long-term development in aviation, logistics, services, and regional connectivity. This proposal outlines how Embraer can establish operations in India, with Goa as its headquarters, Kolhapur as a potential assembly hub, and extended integration across ports, states, and industries. It also highlights how such a collaboration can be aligned with India’s 30-year economic vision. India’s Advantage in Aviation Partnerships India has steadily built capacity in manufacturing, design, and maintenance of critical spaces, making it a natural partner for a global player like Embraer. Government collaboration, both at central and state levels, is essential. Institutions like IFCI can play a catalytic role, perhaps through a subsidiary acting as Embraer’s advisory and general sales agent for a 30-year period. Embraer has expressed interest in investing in India. A central Navratna PSU could participate as a minority partner, with total stakeholder equity capped at 26%. Such an arrangement would encourage Embraer while ensuring domestic participation. Over time, high-net-worth individuals and private enterprises in India could also collaborate to strengthen transportation services, driving incremental improvements for decades. Goa and Maharashtra: A Strategic Base Goa emerges as a natural choice for Embraer’s India headquarters. Dabolim airport, originally a military facility, already has the infrastructure and symbolic significance to host such a base. With Brazil currently holding the G20 Presidency, the Goa-Brazil connection can be strengthened by inviting Embraer to set up operations here. However, while Goa provides the headquarters advantage, Kolhapur airport in Maharashtra offers the land required for aircraft assembly. With around 1,000,000 square feet of available space, Kolhapur can support Embraer’s manufacturing and testing facilities. Together, Goa and Maharashtra can create a powerful ecosystem — Goa handling leadership, services, and training, while Kolhapur manages assembly and operations. Expanding Regional Connectivity – Dabolim and Mopa airports can anchor a broader aviation strategy. – Women pilot training and validation centres could be established with DGCA’s support, encouraging India’s growing pool of female pilots. – UDAN regional flights can connect smaller destinations within 45–60 minutes, including new-generation connections to GCC nations. – Cargo capacity can be utilized to transport fruits, vegetables, and other products from Maharashtra and nearby regions, extending to Mopa for added efficiency. This model leverages the 150 km hinterland from the Goa-Maharashtra border, opening space for enterprise, population absorption, and industry-related growth. National and Global Extensions The proposal goes beyond Goa and Maharashtra. Nashik can be linked through dedicated flights, complementing HAL’s expansion. Kota in Rajasthan, with its underutilized old airport, could host additional Embraer assembly and testing facilities. The long-term business potential is immense — Embraer’s operations in India could generate about ₹100,000 crores over 30 years. Partnerships through CII and the Goa Chamber of Commerce can connect with Brazilian counterparts, establishing joint ventures outside Fortaleza in Ceará state. Globally, a South-South aviation and logistics corridor can emerge — linking Fortaleza to Senegal, Ethiopia, and onward to Goa. Embraer’s cargo planes would also boost India’s trade links with Europe, GCC nations, Egypt, Israel, Mauritius, South Africa, and Mozambique. Integration with Ports, Shipbuilding, and Containers Western India’s ports — Vasco da Gama, New Mangalore, and Cochin — can play a major role in this ecosystem. Cochin Shipyard is already expanding and can complement Goan enterprises in building smaller aircraft components. India’s container industry has immediate potential for 2 million containers. Goa, with its proximity to ports and rail networks like the Konkan Railway, can emerge as a container hub. Converting the Mormugao Steel Limited campus into a container manufacturing SEZ, supported by PLI incentives, will add significant value. Building a Services-Driven Economy in Goa For Goa, the Embraer partnership is more than aviation — it is about transforming into a services-led economy. Taxi electrification: Incentivizing 20% of Goa’s 18,000 taxis to switch to EVs. Interstate permits: Agreements with Maharashtra (2,000 permits) and Karnataka (1,000 permits) to boost regional movement. Residential development: 10,000 new homes and 10,000 guest rooms in South Goa for sustainable growth. Lounge networks: Rest stops every 10 km with EV charging, hygiene facilities, and 24-hour services. Taxi drivers can also serve as couriers for government and postal services, improving efficiency and reducing costs. This, combined with pooling systems and minibuses for peak demand, will ease congestion and generate revenue. Economic and Employment Impact The numbers tell their own story: ₹500 crores in new vehicle sales could generate ₹140 crores in GST for Goa. 5,000 new EVs and minibuses could create fresh mobility services. Lounge and charging facilities can generate employment for 10–15 Goans each, supporting hourly wages of ₹100–₹150. Long-term, 50% of Goa’s taxi fleet can become electric, with central support programs boosting innovation. IT and Government Infrastructure Goa can also attract IT and server facilities. Hosting data centres for the Income Tax Department, GST, RBI, SEBI, and other agencies will decentralize India’s IT load from congested Delhi NCR. With investments of ₹5,000 crores, Goa can support hardware and software projects, strengthening resilience against disruptions like fog, earthquakes, or agitations. Conclusion Embraer’s entry into India, anchored in Goa and Maharashtra, represents more than aviation growth. It is an opportunity to align aviation with logistics, services, IT, and sustainable living. Goa, with its service-oriented culture and strategic geography, can become a hub of peace, prosperity, and enterprise — extending its influence into neighboring districts and linking India to Brazil, Africa, and beyond. This integrated development proposal demonstrates how India’s aviation future can also drive regional harmony, sustainable employment, and innovation for the next 30 years.
Posted by G Giridhar Prabhu

Paddy and Rice

Why the Distinction Matters for India’s Farmers and Global Trade In the complex worlds of policy and agricultural practice, it is absolutely crucial to distinguish the basic agricultural produce: Paddy. Often, in the hustle and bustle of India, these fundamental basics are overlooked. So, let’s be clear. What Exactly is Paddy? In agriculture, “The term ‘paddy’ refers to rice that is still in its husk. It is the harvested rice grain that has not yet been milled to remove the outer husk.” () The farmer grows paddy. Rice is the product obtained only after the husk is separated. This distinction must never be confused in any form of policy or practice. For the farmer, the goal is simple: to grow enough paddy for family consumption. The surplus is then sold in exchange for money to sustain a livelihood. It is a cereal basic to life, with wheat being the primary alternate, though other choices are available for daily consumption. The Dignity of the Farmer and Their Choices Economics must be applied hand-in-hand with social and political objectives in the conduct of the State’s affairs, or the Government as we call it. The dignity of the individual needs to prevail when we discuss the farmer, his produce, and how to make his life better. It fundamentally comes down to the choices the farmer can make at the time of planting. As producers, farming families take significant risks when they plant their seed or seedlings—sometimes out of necessity, sometimes out of habit. We must create a system that honors and supports these choices. A Vision for Export: Evacuating Paddy, Not Just Rice India needs to export 10 million metric tonnes of paddy every year, in addition to rice. Why? The reason is threefold: evacuate, evacuate, evacuate and, in doing so, create an infrastructure to mill rice within importing nations. This strategy allows India to avoid direct rivalry in the world trade of milled rice. Instead, India can provide a steady supply, allowing rice surpluses from other nations like the USA to dissipate around the world based on natural demand. This market need not be subject to harmful speculation or volatility. Both US and Indian farmers have choices and, based on forecasts, can grow any crop they see fit. Building Resilient Buffer Stocks Abroad It is now time to consider that buffer stocks should be held at destination points. Each importing nation should have at least one year’s equivalent of consumption, milled at convenient locations. The logic behind this is sound: Rice is best milled after at least 9 months to one year of aging. There is more consistency in the safety of rice stored as paddy than in the storage of milled rice, which is best consumed within days or weeks. A household can store about 3 months’ worth of milled rice, but not more without risking infestation. (Note: Insect repellents need not be synthetic – there are natural options that can be approved by regulatory and sanitary/phytosanitary authorities.) The Practical Advantages of Paddy Export The logistical benefits are clear: – Paddy can be exported in bulk using ventilated marine containers by liners. – Rice has to be bagged, which is more costly and labor-intensive. The milling industry can export second-hand or first-hand machines to African nations that are importers. Governments can encourage the establishment of free zones as hubs and trading centres, making paddy available to millers at any time, whether in spot or forward markets. The advantage for India is immense: paddy exports can happen immediately after harvest. The essential aging process can take place during transit and at the destination. This means precious working capital need not be allocated to prolonged storage of paddy by the Government or private traders. Farmers or traders can evacuate paddy directly to ports or SEZ-based warehousing. A terminal market in rupees can be established with the Forward Markets Commission (with State Government approval) within the customs-bonded premises of ports. Financing a New Global System Indian enterprise, through institutions like Exim Bank and NABARD, can extend investment guarantee protection to millers in consuming nations, enabling them to undertake milling locally. Working capital management can be arranged by Indian commercial banks with correspondent relationships abroad, providing up to 80 percent of the value for shipment or storage. Once the rice is milled, the consumption function is taken care of by local consumers. This elegant system effectively eliminates all consumption-related issues for India. A Proposal for Leadership India’s trade relationship with the UAE has always been strong. The Indian Cabinet can pass a resolution for exporting 5 million metric tonnes of paddy – of any quality or variety that the farming community chooses to part with. When the UAE agrees to hold reserves for itself and for the region, including Africa, all nations prosper. In such a system, Australia and the US can also export their paddy. Rice, with its quality assured, will seamlessly find its way to any part of the consuming world. This is a vision for a more stable, dignified, and efficient global food system, starting with the simple, crucial distinction between paddy and rice.
Posted by G Giridhar Prabhu

Political Terminology

Rethinking How We Communicate In public life, there’s a familiar refrain: when questioned by members of the press, many politicians, elected representatives, or ministers respond with the standard line — “the matter is politically motivated.” Interestingly, the word politics itself contains the word ethical. Yet, in practice, the connection between politics and ethics often seems strained. Part of the problem lies with the media, and how narratives are perpetuated and framed. In English, the word political often causes misunderstanding. This makes it all the more important for spokespeople to have clear guidelines on the synonyms or terms they use. Communication Guidelines for Elected Representatives To avoid confusion and ensure clarity, the following measures could be considered: Elected representatives should speak only with Doordarshan. If they wish to speak in their native language, it should be broadcast on Doordarshan only. Establishing the Indian Communication Service (ICS) The President of India could establish a dedicated Indian Communication Service (ICS) to strengthen the government’s communication infrastructure. Its mandate would include: Sole responsibility for the publication of Gazette notifications Management of NICNET to world-class and international standards, using Indian technology Installation of a mainframe computer with nodes to store government files securely — both in digital and physical form — with archival and recovery systems All operations carried out within Central Government property Clarifying Roles: Elected Representatives vs Politicians When elected representatives use the term political, it should refer to their role in the political management of the nation — a role in which they have sworn an oath to protect the Constitution. Elected representatives: Must always be recognised as elected representatives Should not be equated with politicians who: – Belong to party systems – Aspire to become future elected representatives – Work their way up through the party agenda It is important to remember that even without a political party, any person can still contest elections and win as an independent candidate. Language and Definition Matter India has 23 official languages. This linguistic diversity makes it essential for the Ministry of Information and Broadcasting and the Ministry of Communication to jointly frame and define the meanings of critical terms used in press statements. By doing so, we can avoid misinterpretations and bring communication back to its intended clarity and purpose.
Posted by G Giridhar Prabhu

A Blueprint for Central Banking and Public Finance Reform in India

Introduction: India’s economic resilience demands bold, decisive reforms in central banking and public finance. These measures aim to reduce interest burdens, strengthen the rupee, and drive long-term growth while safeguarding national sovereignty. 1. Converting Dated Securities into Treasury Bills The Reserve Bank of India (RBI), in consultation with the Ministry of Economic Affairs, can invoke exceptional provisions to: – Convert the RBI’s holdings of dated central government securities into short-term Treasury Bills (7–364 days) at a rate of ₹1.25 lakh crores per week, bypassing primary dealers and markets through a one-time arrangement. – Proposed Interest Rates for Treasury Bills: 2.52% for 364 Days 1.62% for 182 Days 0.99% for 91 Days 0.45% for 46 Days 0.23% for 7–14 Days Impact: This conversion would significantly reduce the government’s interest outgo while offering flexibility in Open Market Operations (OMOs). 2. Why This Reform is Urgent This proposal arises due to: – A drop in the Wholesale Price Index (WPI) and the risk of deflation over the next six months. – Geopolitical tensions at India’s borders. – The need to safeguard the Indian Rupee from external pressures. – India’s foreign currency repayment obligations of ₹6,18,295.76 crores. Goal: A calibrated approach will reduce the revenue deficit and allow savings to be redirected toward capital expenditure and development. 3. A Treasury Bill-Centric OMO Framework Once securities are converted, the RBI should: – Conduct OMOs exclusively in Treasury Bills, not dated securities – Offer buy/sell operations at state capitals between 10 a.m. and 4 p.m. – Conduct special OMO sessions for primary dealers and commercial banks between 4 p.m. and 5 p.m. – Fix a single OMO rate to create a simplified market structure. 4. Benefits to Savers and Markets – Savers will continue to earn 8.8–9% returns from safe instruments. – The government saves massively on interest outgo, both in the current and future years. – Domestic savings strengthen the rupee and support India’s 15-year growth plan (till 2040) for infrastructure and housing. 5. Reforming Fixed Deposit Policies To align with RBI’s monetary policy – No fixed deposit should exceed 364 days or offer rates above the announced Bank Rate. – All fixed deposits to be treated as unsecured deposits. – Single deposits above ₹100 crores from any entity should not be accepted. Shift to Securities:Large depositors should be encouraged to use Demat or Securities Ledger Accounts (SGLs) and invest in central or state government securities for better risk management and transparency. 6. Deep Discount Bonds A Game-Changer – To mobilize long-term capital: – The RBI should allow commercial banks to issue deep discount bonds (DDBs) — not coupon-bearing bonds — up to ₹15 lakh crores. – Rate discovery will occur via daily auctions with primary dealers. – Bonds should be listed on domestic markets (e.g., GIFT City) and overseas platforms to encourage rupee-based transactions. – These bonds should be included in RBI’s OMO framework to enhance liquidity. 7. Moving Away from ECBs – Ban External Commercial Borrowings (ECBs) in their current form for banks and financial institutions. – Encourage corporates to raise funds via rupee-denominated DDBs instead. – Use RBI liquidity to retire ECBs early, cutting foreign currency outflows and keeping profits and taxes within India. 8. Creating Long-Term Investment Banks The RBI should foster at least nine dedicated investment banks, each with ₹90,000 crores in equity. – These banks could leverage 4x their equity (₹3.6 lakh crores) to fund credible infrastructure and commercial projects. – This would unlock ₹27 lakh crores for physical asset creation, boosting GDP growth to 8–9.2%. Job Creation: Approximately 2.75 crore jobs will be generated across all sectors and age groups (19–70 years). 9. Broader Economic Impact – Lending rates (5–25 years) will stabilize between 7.8–9.9%, reducing NPAs caused by high-interest loans. – India’s efficiency rankings (WEF) will improve. – Agriculture, manufacturing, and services will experience a surge in productivity and competitiveness. 10. Key Takeaways – Fixed Deposit policies need urgent reform. – Multilateral debts must be repaid strategically. – ECBs must be replaced with rupee loans. – Deep Discount Bonds and OMOs must form the backbone of market liquidity. – Long-term investment banks should fund infrastructure growth. CONCLUSION With these strategic reforms spanning – Treasury Bill conversions, bond markets, and investment banks – India can secure fiscal stability, empower domestic savings, and unlock a decade of rapid, inclusive growth. The above suggestions were sent to the RBI and various other dignitaries on 5th June 2025
Posted by G Giridhar Prabhu

BRIDGE THE GULF – The Mangalore Connection

The UAE Dirham is a pegged currency. For around 40 years, it has maintained a fixed rate with the US Dollar. Doing so saves transaction time and aligns with the world’s most convertible currency. Newspaper headlines or commentators discussing foreign exchange fluctuations as being “strong” or “weak” hold little significance in the UAE. This results in economic efficiency. Fundamentally, a currency fluctuates. It is neither strong nor weak in itself. Strength or weakness lies in the economy, which means the future supply and demand of that currency compared to its paired currency. Dubai is the center of attraction for social, economic, and political purposes, while Abu Dhabi, as the national capital, maintains very good relationships with all the nations of the world. It is therefore important that India, as a trading partner of the UAE, also connects the Rupee to the UAE Dirham by adopting what is known as capital account convertibility. When one says the euro is weaker, it could mean that the Dollar is stronger, while in reality, the euro is either depreciating or appreciating against other paired currencies. It is the best option for India to pair itself with the UAE Dirham as a currency of reckoning. The proximity to financial markets is one of the most important economic links, which creates social links. The fact that the UAE is part of the GCC will make convertibility in terms of the Dirham easier with other currencies of the region, especially those facing turmoil, dictatorship, or similar situations, collectively referred to as the MENA region. The MENA region stands for the Middle East and North Africa. Capital account convertibility in India has proceeded with caution as the nominal and real interest rates of India are higher than those of global economies. Indians have lived with inflation for so long, since the 1960s, that any sudden influx of foreign currency could disturb the monetary as well as the capital situation in India. The Government of India and the Reserve Bank of India have been very cautious about capital account convertibility, as it can attract huge capital flows within a few days or months, potentially disrupting the Indian economy and its enterprises. The prosperity that comes from a nation’s growth has to benefit the bottom of the pyramid. Immigrants from all parts of India are in the UAE and further abroad. Therefore, transportation services and the ability of nations to coordinate the social effects of migration are all very important in fostering love for the nation. The respect for both employer and employee as contributors to the region is also a major social factor. In the growth of the Indian economy, during the initial phases of rising oil incomes, Arabs used to visit India to enjoy the monsoon rains of Mumbai. The attraction of India for tourism by any Emirate or Sheikdom is also strengthened by diplomatic relationships. The UAE is a major exporter of natural gas and oil to India, and the level of cooperation is very high in economic, social, and political spheres. The convertibility of Dirham to Rupee could also be engineered with the digital Rupee. India can swap digital Rupees with the UAE Dirham floating currency and encourage UAE Dirham deposits in India with commercial banks as well as the Reserve Bank of India. As a first step, ₹1,00,000 crores can be invested by India and deposited with the UAE Central Bank. Similarly, ₹1,00,000 crores can be purchased by the UAE Central Bank and then deposited within itself. Mutually, half the amount would be counted as foreign exchange reserves by the Government of India as well as the Reserve Bank of India. For the UAE, it becomes a convertible Rupee for transactions between the two nations. The Indian Government and the Reserve Bank of India can encourage oil companies to buy Dirham from commercial banks, which, on a daily basis, the Reserve Bank can offer for transactions. Therefore, a vibrant capital market would be initiated, but there would be no forex market fluctuations, as the rate would be stable. If the Abu Dhabi National Oil Company invoices in Dirhams or in Indian Rupees, it will have the benefit of fluctuations in the Indian Rupee by keeping Rupee deposits that are repatriable in Dirhams, and in the treasury bill market, which is discounted to the market. Therefore, the Reserve Bank of India can convert all its current holdings of government securities into 42-day, 181-day, 182-day, and 364-day treasury bills equivalent to the US Dollar treasury bill rates, but also into equivalent rates of the Euro, Japanese Yen, Singapore Dollar, Hong Kong Dollar, and Korean Won. This would result in a vibrant forex market. This can also be extended to South Asian currencies, where the Reserve Bank of India can have swaps with these currencies, each to the equivalent of ₹25,000 crores, and a vibrant South Asian currency market can operate in Colombo, which can become the economic center for the SAARC region. This will help the island nation foster social, economic, and political cooperation by improving lives through a services economy. The Government of India and the Reserve Bank of India have recognized that India is a major merchandise importer, and an important measuring tool is the number of months equivalent of reserves. Overall, the UAE Dirham and Rupee market will become a convertible currency for South Asian currencies if there is a spot and forward market in Colombo, in the GIFT financial centre, and in selected financial centers of India. It is suggested that, since Mangalore has been a very important commercial banking and trading centre for the last 23 centuries with strong cultural, social, and economic relationships with the UAE, a large Indian diaspora, and all the ingredients for connections, the Reserve Bank of India and the Government can make Mangalore an exclusive center for the conversion and capital account convertibility process. All commercial banks operating in Mangalore can be authorized for convertibility of the current account, for the savings of the people of India in the UAE, under digital banking, and also for the Abu Dhabi National Oil Company to keep its reserves in Dirhams and Rupees in India, connecting it to the various requirements of the South Asian economy, especially Sri Lanka. It would be the most convenient location as the Mangalore SEZ can also host commercial banking services within itself as an operating center, and interrelate itself with Sri Lanka, Singapore, Dubai, Gandhinagar GIFT, and Mumbai, all within convenient distances. A services economy of shipping as well as air transport between the UAE and India is also very convenient at the Mangalore International Airport. In the neighbourhood, the storage of crude oil can be supported with Dirham-Rupee conversions, where Indians can be offered parcels of crude oil to trade in the forward and futures market by creating the Mangalore-Abu Dhabi crude futures based on crude forwards. This would also develop the product market in Mangalore as a port of delivery and storage for petroleum products in the future. Ethanol-blended petrol and diesel will be a key supply factor in the Indian market. Therefore, investments in blending ethanol with petrol products have tremendous potential in North Karnataka, which is a major sugarcane-producing region and can channel investments of up to ₹10,000 to ₹20,000 crores in blending facilities, tankage, product development, and resource conservation. The UAE Dirham–Indian Rupee digital conversion is waiting to happen and can be implemented in the shortest time. Hosting over 20,000 software professionals and the capacity to house an additional 10,000 service professionals in Mangalore, from the UAE, the MENA region, Sri Lanka, Japan, and other countries, the region can also take advantage of healthcare and medical facilities to develop into a world-class medical center. Additionally, it will ensure that currency is convertible at any point—365 days, 24 hours—from UAE Dirham to the digital Rupee. The stability provided by the political relationship will go a long way in developing social dynamics in economic relations for the rest of India, where sustainability as well as human development goals will be actively promoted, making Mangalore a city of excellence—New Mangalore. – While GIFT will be India’s international finance centre, over 18 smaller centres can be developed for both talent and knowledge. – The Government of India must encourage Rupee schemes in India for exporters and nations with trade surpluses. – Indian banks must be encouraged to hold balances in all G20 currencies along with official reserves. This will widen, broaden, and deepen the forex market. G. Giridhar Prabhu 01-01-2023
Posted by G Giridhar Prabhu