Best of BS Opinion: Fiscal fights, market machines, and policy pain

Business Standard

22-04-2025

There's a makeshift wooden ladder outside my building, made out of hollowed bamboo and wedged into the ground like it has no business being there. A mason climbs it daily, with one hand steadying the paint bucket, the other reaching out for support. It wobbles, always. But somehow, he gets to the top. I watched him again this morning, the ladder squeaking as he shifted his weight — and it struck me: that's the world today. Perpetually climbing ladders that rest on shaky ground — fiscal structures, market trends, regulatory balances, old institutions—and hoping it holds long enough to fix the wall. Let's dive in.
Take the 16th Finance Commission. Tasked with redistributing India's tax revenues, it is juggling rising state debt, Centre-State friction, and demands for a larger state share in the divisible pool, highlights our first editorial. Add Tamil Nadu's pitch for GDP-based distribution, and you see the ladder tilt: richer states demanding more because they 'contribute more.' But then come the cesses and surcharges. They're like loose pebbles under the ladder's feet, eroding trust.
In the markets, the human touch is slipping off the rails. Algorithms now command 54 per cent of trades in NSE's cash market, notes our second editorial. They're calculating, relentless — and often incomprehensible, even to the people who built them. Manual traders are slowly being edged out, like craftsmen watching machines duplicate their life's work. Trading floors aren't buzzing anymore; they're humming quietly, in binary. It is the long-term investors who keep the paint job going despite the ground becoming increasingly wobbly, unlike the day-traders.
Akash Prakash highlights another wobbly climb: the US dollar. Still dominant globally, yet overvalued, out of sync with America's real economy. With $25 trillion in foreign-owned assets and rising bond yields, the dollar's grip is loosening. It may remain the world's reserve, but its golden pedestal is built on Wall Street illusions, not Main Street reality.
Closer home, Prasanna Tantri explains how gold loan regulations could backfire. The RBI's new draft treats banks and NBFCs unequally, limiting NBFCs' lending while allowing banks more leeway. But banks aren't necessarily safer. This regulatory imbalance may deny underserved communities access to much-needed credit — yet another ladder set on loose ground.
And finally, Neha Bhatt reviews Policing and Violence in India: Colonial Legacies and Contemporary Realities edited by Deana Heath and Jinee Lokaneeta, a book that dissects institutional brutality. It's a stark reminder: even ladders designed to uphold justice can be weaponised when anchored in colonial design. Reform isn't about repainting rungs—it's about rebuilding the ground beneath.
Stay tuned!