The Twist was a dance, now it's an operation.

"The 23.9% contraction in India (and the number will probably get worse when we get estimates of the damage in the informal sector) compares with a drop of 12.4% in Italy and 9.5% in the US, two of the most Covid affected advanced economies," wrote Prof Raghuram Rajan. The government is waiting for the coronavirus epidemic to subside before stimulating the economy, but by then it may be too late. A lot of businesses will have closed down permanently, a lot of people will have lost their jobs and even those who have jobs would be reluctant to spend. A big stimulus is needed now. Supporters of the government claim that "US GDP contracted 32 percent, while India only contracted 23.9 percent in the June quarter", wrote Amritesh Malhan. This comparison is completely false because India compares this year's quarter with that of last year (y-o-y), while the US compares this quarter with the previous one (q-o-q) and then annualises the figure. Quarter on quarter comparison by Gita Gopinath showed that India fared worst among all G20 nations. Asaf-ud-Daula was the Nawab of Oudh between 1748 and 1797," wrote Udit Misra. "Every time there was a famine or dip in economic activity, Asaf-ud-Daula would employ the poor to construct a new building of some sort in lieu of food or money." Many of Lucknow's historic buildings were constructed then. Sher Shah Suri, who "ruled between 1538 and 1545, is known for investing in building up infrastructure in the form of the Grand Trunk Road and the introduction of the rupee as a currency, the development of the postal system apart from other efforts to improve the administrative capacity." India's lockdown was the most stringent, affecting supply chains, cases are still rising, because the lockdown was badly managed, and the fiscal situation was bad to start with, wrote Vivek Kaul. Despite restricted spending, "Moody's Investors Service on Tuesday said India will be among the large emerging market sovereigns to have the highest debt burden by 2021." "It further said in India, increased stress within the financial system among banks and non-bank financial companies, raises contingent liability risks to the sovereign." The Reserve Bank (RBI) has the onerous task of reviving the economy. But, "The RBI alone cannot kickstart the economy -- it can offer loans on easier terms, restructure existing loans to reduce repayment stress, push banks to lend more but it cannot stimulate demand, These, only fiscal measure can achieve," wrote Sindhu Bhattacharya. The RBI has been conducting open market operations (OMO) called 'Operation Twist', to reduce bond yields which will reduce borrowing cost of the government. The government needs to pay $40 billion to the states for the Goods and Services Tax (GST) but says it can pay only $9 billion, wrote Andy Mukherjee. "The bond market is largely unperturbed by the chaos, knowing that new Delhi is terrified of its wrath and ignoring the simplest option: Raise money on its own to fund sub-national governments." Most likely reason for government inaction is that only one state, Bihar holds assembly elections this year which Prime Minister Narendra Modi's Party is expected to control, whereas next year several large states are up for elections and Modi has set his sights on winning West bengal. Till then RBI may listen to Chubby Checker. And keep twisting.