Erdogan is no role model.

Like the proverbial stuck record our most esteemed Finance Minister has again demanded lowering of interest rate, but even more aggressively this time. As long as he does not repeat that embarrassing line of his predecessor of having to walk alone. Why can we not have economists as finance ministers rather than lawyers? Perhaps, he should see what is happening in Turkey where the lira is in free fall but President Erdogan keeps demanding lower interest rates. In a bizarre conspiracy theory he blames " The exchange rate conspiracy of the interest rate lobby." While Erdogan was spouting his nonsense at home the Prime Minister, Ahmet Davutoglu, the Deputy Prime Minister, Ali Babacan, who is responsible for the economy, and the head of the Central Bank, Erdem Basci were in New York, trying to calm the nerves of investors, so that they do not pull out suddenly, which will cause a precipitous fall in the value of the lira. Such is the pessimism about Turkey that Citigroup is selling its 10% stake in Akbank TAS, Turkey's second largest bank at a loss of $800 million. Granted that India is much stronger than Turkey at this time but do we want to be like it? Have we already forgotten how the Congress forced the Reserve Bank to hold the interest rate at unduly low levels in 2009-10 even as inflation was racing ahead to 10%. Negative real returns on savings saw Indians buying 975 tonnes of gold in 2013, which raised the Current Account Deficit to 4.8% and resulted in a fall in the value of the rupee to 68 to the dollar in August 2013. It is true that inflation rates are coming down with the Wholesale Price Index in negative territory at -2.33%, probably because of lower oil prices, while the retail inflation for March was 5.17%, down from 5.37% in February. After the IMF warning about the vulnerability of banks in India the Finance Minister is hoping that lower interest rate will allow banks to rollover bad loans at lower rates which companies maybe able to repay, thus allowing banks to clean up their books. Banks will then be able to lend again for vital infrastructure projects, without which the economy cannot grow. There is no need to panic. Elections will be due only in 2019 so the government has time to stabilise the economy so that growth is not a mirage based on high levels of debt and a property price bubble, like last time. Erdogan, on the other hand, wants a short term stimulus to the economy so that he can get a three-fifths majority in elections to be held in June so that he can amend the constitution to become a dictator. The economy may go to hell. He should see the condition of the Venezuelan economy after years of mismanagement by Hugo Chavez. Chavez escaped the consequences by dying. Erdogan may yet hang for his misdeeds.