#72 Should Courts Make Social Policies?🎧

<p><em>This newsletter is really a weekly public policy thought-letter. While excellent newsletters on specific themes within public policy already exist, this thought-letter is about frameworks, mental models, and key ideas that will hopefully help you think about any public policy problem in imaginative ways. It seeks to answer just one question: </em><em>how do I think about a particular public policy problem/solution?</em></p><p><em>PS: If you enjoy listening instead of reading, we have this edition available as an audio narration courtesy the good folks at </em><em>Ad-Auris</em><em>. If you have any feedback, please send it to us.</em></p><p><strong>India Policy Watch: Rajan-Acharya on PSB Reforms</strong></p><p><em>Insights on burning policy issues in India</em></p><p>— RSJ</p><p>Raghuram Rajan and Viral Acharya have a new paper titled, <em>Indian Banks: A Time To Reform?</em>, that looks at a comprehensive set of reforms that will enable public sector banks to drive the Indian economic growth engine instead of being a drag they currently are. Rajan and Acharya have held leadership roles at the RBI and know a thing or two about issues relating to the banking sector. </p><p><a target="_blank" href="https://www.bloombergquint.com/business/no-escaping-hard-task-of-making-indian-banks-robust-rajan-acharya">Here’s a nice summary of the recommendations by the </a><em>BloombergQuint</em>.</p><p>So, what to make of them? </p><p>There are 4 points we’d like to raise:</p><p>* <em>Is this the time?</em> Rajan and Acharya argue maintaining status quo is untenable. The huge strain on government finances now shifts the Overton window for much-needed reforms of the public sector banking system. This is their hope. In my view, shifting the status quo at this time carries the risk of falling off the brink. There’s a fog of uncertainty about the duration of the pandemic, the state of our public finances and the nature and length of recovery. More than any immediate reform we need some stability, however precarious, at this m