Though Bollywood took centre stage in the past couple of days following the conviction of actor Salman Khan in a 20-year-old poaching case, the rest of the world was busy debating weightier issues. Most prominent among them was the looming US-China trade war, which may have global consequences.
Late on Thursday, US president Donald Trump doubled down on tariffs, ordering the US Trade Representative to consider $100 billion in new tariffs on imports from China. This, after a retaliation by Beijing, which increased tariffs on US imports by $50 billion.
Soon after, global markets, including the US, went into a tailspin. Indian bourses, too, were trading lower on Friday, after recovering from mid-week losses following a spectacular relief rally on Thursday. The benchmark BSE Sensex, however, managed to end the week up 1.81%.
Even as the stock markets yo-yoed during the week, India’s central bank maintained a steady, neutral stance, keeping interest rates unchanged in its bi-monthly review. In fact, in what will certainly cheer the markets, the RBI lowered inflation forecasts.
However, any prospect of a future rate cut would depend on how the looming trade war pans out and the direction of oil prices, besides the US Fed rate hikes and domestic fiscal concerns, especially in a pre-election year that could see the government go on a populist overdrive.
The Reserve Bank of India did, however, come down heavily on cryptocurrencies like Bitcoin, barring banks, non-banking lenders and digital wallets from dealing with individuals or firms dealing in digital currencies with immediate effect.
The RBI’s stance is in line with that of the government, which was explicit about its reservations on the use of cryptocurrencies. At the same time, however, the central bank has said that it was studying the possibility of introducing its own digital currency. A study group is expected to come up with a report by June.
The other big development of the week was the alleged quid-pro-quo deal involving ICICI Bank CEO Chanda Kochhar. Law enforcement agencies appear to be closing in on the kin of the top banker, who, along with her husband and brother-in-law, is facing allegations of nepotism. An ICICI Bank and Videocon Group shareholder had alleged that the large sums of loans given to the Venugopal Dhoot-promoted Videocon group smacked of favouritism.
Source-based media reports said that following a request from the Central Bureau of Investigation, immigration authorities had prevented Kochhar’s brother-in-law Rajiv Kochhar from boarding a Singapore-bound flight, and had detained him for questioning, following a preliminary enquiry that the agency had registered a few days ago. To be sure, all the allegations have been denied by ICICI Bank and Videocon.
While law enforcement seemed to move with some alacrity, India’s lawmakers did nothing, at least as far as law-making went. The budget session of the parliament was a complete washout, with no significant legislation, other than the budget being passed amid the chaos that followed the decision by the Telugu Desam Party to exit the National Democratic Alliance. Both houses were adjourned sine-die, with both the government and the opposition accusing each other for the stalemate.
Even as its floor management in the parliament came in for criticism, the government had to face some major embarrassment. It had to rescind an order by the information and broadcasting ministry that sought to suspend and even revoke the government accreditation given to senior journalists found guilty of generating or propagating fake news. The order followed loud protests from across the media, which alleged that this was nothing but an attempt to gag the press. The protests forced Prime Minister Narendra Modi to intervene and overturn the order.
But perhaps the the toughest challenge for the ruling NDA came on Monday, when a nation-wide ‘bharat bandh’ against a supposed ‘dilution’ of the Scheduled Castes and Scheduled Tribes Act by a 20 March Supreme Court order led to massive protests by various Dalit groups. The protests turned violent across Rajasthan, Madhya Pradesh and Uttar Pradesh leading to 11 deaths.
Fearing a political backlash, the government quickly moved a review petition. Although the apex court agreed to hear the same, it refused to stay its order, maintaining that it had not diluted the SC/ST Act. In a pre-election year, however, the issue could snowball, and cost the ruling combine dearly, as it makes its bid for re-election in 2019.