An indescribable act of financial minutiae

To wit

Treasury Secretary Geithner who presided over the downgrade of the full faith and credit of the US Government lectured India on its archaic financial architecture inadequate to fund the infrastructure development requirement of the country (which the inimical vice chair of the planning commission estimates to be $1 trillion plus or minus)

The suggestion was to expand permissible holdings of GOI and infra bonds by foreign investors, and, quite naturally, the influence that accrues to holders of sovereign debt

This thought should have been discarded into the nearest bin.

Sadly the inspired financial minds of the country plunged into the shallow end of the empty pool head first concluding that FII's may invest $25 billion in bonds of 5 year maturity with a three year lock in to solve a trillion dollar thirty year problem. This plan was met with a dinner tip of $100 million in investment.

Not to be deterred the mandarins submit that the lock in period for $3 billion of the $25 should be reduced to one year.

Frankly the only sensible solution is to outsource the government debt management function to the Chinese under the condition that all infrastructure investment is financed and the taps to Tibetan water remain open, much more efficient than dealing with US, European, and Japanese investors that have been reduced to intermediaries of Chinese capital.


Govt eases FII investment rules in infra - The Times of Indiat