When it comes to our economy, size does not matter.

"There are early warning signs that the Narendra Modi-led government is starting to turn the screws on the Reserve Bank of India (RBI) and its governor, Urjit Patel," wrote Prof V Dahejia. Patel trained under the noted macroeconomist Willem Buiter and well-known trade economist TN Srinivasan, "And, latterly, after the dust has settled on demonetization, he has amply demonstrated his independence and refusal to buckle under pressure from the government, whether on interest rate policy or the functioning of the bankruptcy procedure. Clearly, the mandarins in North Block are not happy -- nor are their political masters in South Block." Why? The Modi government did two things right at the start of its term, one was raising excise duties on petrol and diesel and the second was "the signing of the Monetary Policy Framework Agreement between the Finance Ministry and the Reserve Bank on February 20, 2015," wrote H Damodaran. "But far outweighing these 'good' are the many bad or, for that matter, even good things not done at the right time by this government. The fault here lies with not seeking honest professional opinion, and, instead being guided by ideologues and officials who aren't disposed to saying anything what their masters don't want to know or hear." The problem is that the Modi won elections in 2014 by deliberately making outrageous promises which he is not capable of fulfilling. "We were very confident that we can never come to power. So our people suggested us, just to make tall promises," said senior minister Nitin Gadkari. "If we come to power, we won't be responsible anyway! Now the problem is that people have voted us to power. Now people remind us of our promises along with dates. Nowadays we just laugh and move on." Modi inherited the 'twin balance sheet problem' in our public sector banks and initially allocated Rs 1.80 trillion to recapitalize banks and passed the Insolvency and Bankruptcy Code so that banks could take over assets of willful defaulters. Losses could be covered by the windfall gains from taxes on oil. Then, in 2016 Modi suddenly announced the withdrawal of all notes of high denomination, called demonetization, which "no professional economist with spine would have endorsed -- in a country facing no runaway inflation or a run on its currency". Modi thought that most of those notes would not be returned which would allow the RBI to reduce its liability and pay a huge dividend to the government which he would then distribute in handouts. It failed. Oil prices have gone up, as has the current account deficit and the rupee has fallen. The RBI raised interest rate for the first time in four and a half years in June when told not to, but refused to raise rate this month to support the rupee. So what is Modi's answer? He has appointed S Gurumurthy of the Swadeshi Jagran Manch to the board of the RBI, Gurumurthy is a chartered accountant, which is the exact opposite of macroeconomics. When you don't know the difference between micro and macro.