Retro Bad Bank Tax on Telecommunications

Prime Minister Narendra Modi sensitive to accusations of corporate favoritism, acquiring a substantial stake in a private company is a leap of faith. Buried in the fine print of the telecommunications package was this provision that allows the government to do exactly that.

Even in the United States, in the wake of the financial meltdown in 2008, emergency legislation was enacted to undertake a $700-billion Troubled Assets Relief Program or TARP to bail out private banks and institutions. A TARP-like move — as in the telecom relief package — requires more than just conviction in Indian economy, which like politics, is prone to binaries of a different kind: “pro-corporate” and in “favor of the poor “.