Why is the Governor talking about traffic lights?

Governor of the Reserve Bank, Raghuram Rajan is an angry man. Because he is worried. He feels," Our world is facing an increasingly dangerous situation," because after the Great Recession of 2008 governments are following " beggar thy neighbour " policies to divert growth from other countries, instead of undertaking structural reforms, which will " increase competition, foster innovation, drive institutional change ". Central banks, especially of rich countries, have a problem with very low inflation. " They feel that they cannot claim to be out of tools. If all else fails, there is always the 'helicopter drop', whereby the central bank prints money and sprays it on streets to create inflation (more prosaically, it sends a check to every citizen, perhaps more to the poor, who are likelier to spend it). But they can also employ a range of other unconventional tools more aggressively, from asset purchases (so-called quantitative easing) to negative interest rates," he writes. But these policies are ineffective because they either encourage people to save more, keeping the money in banks, or to borrow excessively to accumulate assets, leading to another bubble. What worries him are the 'spillover effects' because such policies depreciate their currencies which is bad for emerging economies. So what is Mr Rajan's solution? There should be another Bretton Woods type agreement wherein,"....policies with few adverse spillovers should be rated 'green'; those that should be used temporarily should be rated 'orange'; and policies that should be avoided at all times would be 'red'." With the greatest respect to Mr Rajan, surely he is being naive. The Congress threw over Rs 3 trillion on the MGNREGA scheme which pays the rural poor for 100 days a year - for doing nothing. A 23.55% jump in the salaries of civil servants dished out by the Seventh Pay Commission will add another Rs 1 trillion to government expenditure. What is wrong in paying civil servants? The government does not even know how many employees it has so a lot of the money is going to 'ghost employees'. Rs 20 billion to be spent on providing free gas connections to 15 million rural households. Another Rs 1 trillion announced today for free rural housing and on increased salaries for civil servants. Rs 1.15 trillion was spent on the Food Security Act in last year's budget. Where is the money to come from? Apart from politicians and civil servants not enough people earn enough to pay income tax so the government goes on increasing service tax and on adding cess, which is a tax on service tax. It is because our government has been dropping 'helicopter money' for years that the retail inflation is at 5.18%, when wholesale prices have fallen 16 months in a row. Which means that monetary policy, which is Mr Rajan's responsibility, has become moot. He cannot do anything to politicians in India, that is why Mr Rajan is angry with others.