New Delhi: A sentiment of gloom and doom has gripped the markets. Markets have fallen for two straight days. Bank and FMCG stocks are the worst hit after the Reserve Bank’s 0.25 per cent cut in interest rates. Should the rest of the country imitate market behaviour and lose confidence in the economy? There is no reason to.

Rebuilding a sick economy takes time. It takes longer than turning around an ailing company. Over a year ago, consumer inflation was out of control. No one knew how to control it. The Reserve Bank’s monetary mechanism had been failing for the past three years. The feel-good factor was gone. The economy lacked direction. Business confidence was zero.

Things are better. The economy is not out of the woods. But a big change is that consumer price inflation is contained. This is partly why the Reserve Bank governor, Raghuram Rajan, lowered interest rates. But there are Monsoon worries which only long-term investment in river linking and irrigation expansion will help assuage in years to come. Ill-conceived MSP covering some crops and not most has distorted the food economy. Public sector banks remain saddled with bad loans hurting the process of recapitalization.

There are no quick-fixes to these issues. Equally, there is no reason to panic. Markets can panic. Policy-makers cannot. It is difficult to be conservative and restrained when pressure is building up on all sides. Rajan has chosen to be so. There is no reason to doubt his judgment.

The Reserve Bank does not have a magic wand. It can facilitate growth but not lead it. This is what Rajan tried to say announcing the rate cut. The bulk of heavy lifting has to be done by the government. It is doing so. Three rate cuts within half a year by a Reserve Bank governor who is famously conservative suggest a vote of confidence in the government’s economic management. More could be done. But you cannot rush the elephant.

In this conservative approach to rebuilding the economy, Prime Minister Narendra Modi and Rajan think alike. If it was a problem predominantly concerning the economy as in the West, fiscal and monetary tools would greatly help. Here, there is systems collapse. A socialist paradigm has crashed. There was wholesale looting of the exchequer and national resources plundered. Decision-making was subverted and eventually froze. A pure economic fix will get the country nowhere. The government would have to work on all fronts. It is doing so. There cannot be a faster decision-maker than Modi. But wise decisions take time.

The real question to ask is this. Do Modi and Rajan have a roadmap to revive the economy? Yes. The results are available. Rajan has stabilized the rupee. The Modi government has controlled inflation. These are major achievements. They are important handles to regain control over the economy. The build-up will be slow and steady. It will be based on fundamentals. This will serve in the long run than an economy whose principal feature is volatility.

What Modi and Rajan are urging is to prepare for the long haul. The Indian economy is a growth story but over a four- or five-year time horizon. That is as long as it takes to make decent profits on stock exchanges. Investing in good companies and honest managements are listed as premier virtues by the likes of Warren Buffet. Why shouldn’t the Indian economy be rebuilt differently?

Editor’s Note: Delhi is unliveable. Its air is poison. It is weakening and killing children. It can no longer support its ever-growing population. No new sub-cities must be allowed in the Capital. Prime Minister Modi must scrap his plans for a smart city in Delhi and relocate it to any of the states abutting the Capital. Let other places benefit from development and not just Delhi. Where possible, existing colonies in Delhi must be redeveloped with high rises and vast green belts.