Why so shy of MMT?

"India should give up the fear of inflation and monetize its deficit," wrote Nageswaran and Thiruvadanthai (N&T). Monetizing the fiscal deficit means the Reserve Bank (RBI) financing government borrowing by buying government bonds directly. Put simply, it means the RBI printing notes to buy government bonds. "Monetisation of deficit was in practice in India till 1997, whereby the central bank automatically monetised government deficit through the issuance of ad hoc treasury bills," wrote Deepthi M Mathew. Ad hoc bills were phased out after 1997 and the Fiscal Responsibility and Budget Management (FRBM) Act forbids the RBI from purchasing primary issues of government bonds. This is different from quantitative easing wherein the central bank buys treasuries from the secondary market and pays interest on it. This increases liquidity in banks and pushes interest rates down, thus making it easier to borrow. The RBI has been buying treasuries and bonds from the secondary market already. "Long before 'MMT' was coined, one of us had argued that since the 1980s, India has effectively adopted the MMT framework with Indian characteristics," wrote (N&T). Modern Monetary Theory (MMT) postulates that the government should finance its spending by printing currency, not by selling bonds, and taxes should be used only to contain inflation. "Unemployment is the result of a government spending too little while collecting taxes, according to MMT." There is no danger of inflation, say N&T, because, "Today, oil is about a third of its peak in July 2008, food prices domestically and globally are subdued, and India's monsoon seems normal." The price of crude oil maybe less than half that in 2011, but the retail price of fuel is higher than in 2008. Historically, the retail price of diesel has been lower than that of petrol to lower the cost of transport of essential goods but that difference has shrunk, and diesel is more expensive than petrol in Delhi for the first time ever. Taxes contribute around 70% of the cost of fuel. The consumer price index (CPI) rose to 6.09% in June from 5.84% in May but food inflation came down to 7.87% in June from 9.2% in May. Vegetable prices, especially those of potato and tomato, have risen in the past month, while the "pass-through effects of the Rs 11-12/liter increase in diesel prices since last month still to be felt". This inflation number includes services which have stopped functioning due to the lockdown and so is not reliable, wrote Anirban Nag. Inflation could rise to 12% and the rupee could fall 16% against the dollar if the government tries to stimulate the economy with more money, said Rabobank. The government forced the RBI to hand over Rs 1.76 trillion from its reserves last year and it has installed a retired civil servant as governor to be compliant, so why is it not asking the RBI to send a truckload of banknotes to North Block? Because only the government knows the true state of our economy. We are not told for our own good because ignorance is bliss. So caring.