PoorNoMore — ஏழைகளே இல்லாத உலகம்

What is an economy? What is to be measured? If it is not about the livelihood of the entire population, why should it be even measured and valued? If it is not about the economic status of the entire mass of people, including the living status of the last person, why should it be a national number? We were living through decades of scarcity. Now, for more than a decade, we are living with surplus - much more than the needs of the global population, the world is producing now. Most importantly, we're entering the era of mass production by AI-driven machines. If nearly 85% of the global population, including most of the countries except few, are deprived of a dignified life, what is the point of all these measurements modern economy is enamored of - GDP, Debt, Deficit, Fiscal Prudence? If a single person is left out by this measure, GDP, then why should he be forced to be part of the GDP-Economy? If we live through global or national scarcity, then at least rationing is ok, but...

Dr Rajan has identified many of India's economic problems with great clarity as usual. The important question is whether the solutions he proposes adequately address the underlying constraints. His stature as a former RBI Governor, distinguished academic and long-time participant in India's economic policy debate makes his latest Frontline interview particularly important. His diagnosis draws serious engagement - not least because some of his conclusions point towards questions that the conventional economic framework has not adequately resolved. There is one proposition on which we should disagree at the outset. Let China Be the Manufacturing Behemoth The suggestion that India should hesitate to pursue manufacturing because China has already become the world's manufacturing giant reflects a legacy economic mindset emanating from a reserves-constrained monetary regime . There is no economic rule that says only one country can build large-scale productive capacity. Le...

Why do modern economies readily create enormous amounts of credit money, yet hesitate to use sovereign currency power directly to mobilise the real resources needed to eliminate poverty and build prosperity? Modern economies have become extraordinarily comfortable with money creation. Not with government money creation. With credit-money creation on a gigantic scale. Every time a bank makes a loan and credits the borrower's account, new deposit money is created. This is not a marginal feature of the monetary system. It is one of the principal ways money is created in modern economies (https://www.bankofengland.co.uk/explainers/how-is-money-created). The scale is enormous. Credit-Money Machine India's banking system has already demonstrated an extraordinary capacity to create and support money through credit. As of July 2026, outstanding total bank credit stood at about ₹220 trillions. Total credit to the commercial sector from all sources was about ₹323 trillions. At t...

Introduction: What Does “Debt Monetisation” Actually Mean? Debt monetisation is generally described as the government financing its deficit by selling government securities directly to the central bank. Market financing, by contrast, is described as the government selling those securities to the market. The two are therefore presented as fundamentally different ways of financing government spending. But are they? To answer that question, we need to follow the monetary operation all the way through - not merely look at who initially buys the government securities. There is one principle we need to establish before we begin. The Central Bank's Policy-Rate Mandate A central bank that sets a target policy rate must conduct its reserve operations consistently with that target rate. As long as the central bank has a mandate to maintain a target policy rate, the quantity of reserves in the banking system is not something it can freely choose independently of that rate. If the banking sys...

Why Government Accounting No Longer Reflects the Operational Reality of the Monetary System - and Why That Matters to Everyone Introduction: The Monetary System Has Moved, But the Accounting Has Not In our previous article, Inside the Banking System , we followed money behind the walls of banking. We saw the difference between a bank deposit and central-bank reserves. We saw how commercial banks create deposits when they lend. We saw how payments between banks are settled through the central-bank reserve system. And we saw something particularly important about government spending: Government payment → bank receives reserves → recipient receives a bank deposit. If you have not read that article, it provides the plumbing behind what follows. But there is another question. If this is what happens monetarily, why does government accounting present government spending, taxation and borrowing in such a different way? This is not a minor technical question. Government account...

The VIP Backroom of Money Introduction Let’s play a quick game of mental architecture. Pull up your banking app on your phone. Look at that number staring back at you in your savings or current account. Now, let me ruin the magic trick: That number is not central-bank money. It is a liability of your commercial bank - a promise by your bank to pay you. If you take that phone into a high-security vault at the Reserve Bank of India (RBI), point to your screen and say, “Can I have my money, please?”, the security guards will politely escort you to the exit. Not because you are broke. Because your bank account balance and the RBI's money are two different layers of the monetary system. To understand how the banking system actually works under normal, day-to-day conditions, we have to look past the money we use to buy groceries or pay rent. We need to look at wholesale money  - otherwise known as central-bank reserves . Reserves are the exclusive money of the banking system . ...