Best of BS Opinion: Quick fixes cannot substitute for structural reform

Our first editorial today, “Puzzling policy”, looks at the RBI’s premature closure of the FCNR(B) swap facility. The central bank said the scheme had received an encouraging response, with over $56 billion mobilised by August 13, most of it through FCNR(B) deposits. But the early closure raises questions about planning and communication. If the aim was to stabilise the rupee by boosting reserves, it is unclear why the scheme was ended before schedule, especially after officials had recently indicated otherwise. The editorial also argues that such flows do not solve India’s deeper external-sector weakness. What the country needs is more stable, long-term FDI, not repeated reliance on short-term instruments.

The second editorial, “Renewed reform push”, turns to the broader growth challenge. Prime Minister Narendra Modi’s Independence-Day address laid out the Sapta Dhara, or seven streams, for accelerating growth: Manufacturing, agriculture & food production, technology & innovation, connectivity, defence power, the green & blue economy, and soft power. The emphasis on reform comes at a time of global uncertainty, energy shocks and rising weaponisation of resources. But the editorial notes that ambition must be backed by faster reform, especially in trade and manufacturing. Welfare spending, including fertiliser subsidy, also needs rationalisation. Free coaching for competitive exams may ease pressure on households, but lasting relief for young people will come from better schooling, more jobs and stronger growth.

Ajay Shah’s column, “The cost of exchange rate policy”, makes the case against treating rupee management as a narrow technical exercise. Controlling the dollar-rupee exchange rate may offer artificial stability, but it imposes fiscal costs, complicates inflation targeting, weakens accountability, damages central-bank credibility, stunts financial-market development and encourages private-sector moral hazard. Shah argues that India’s earlier move away from price controls should now be extended to exchange-rate policy. A modern economy needs a capable state, a deeper financial system and firms focused on customers and innovation, not government arbitrage.

Surinder Sud’s column, “Economics of oilseed production”, looks at edible oils. India has the technology and crop diversity to reduce import dependence, but self-reliance will remain difficult, unless oilseed cultivation becomes economically attractive for farmers. The problem is not lack of scientific breakthrough. It is pricing and procurement policy, which has pushed oilseeds to less fertile and non-irrigated land while more remunerative crops occupy better land.

“Personal branding up close”, Alexandra Jacobs’ review of Kathryn Jezer-Morton’s The Story of Your Life says social media offers instant validation and curated identity, but it cannot resolve deeper anxieties around belonging, family, self-presentation and comparison.