HELICOPTER MONEY IN INDIAN CONTEXT

Helicopter money is name coined in reference to an idea made popular by the American economist Milton Friedman in 1969 In the now famous paper “The Optimum Quantity of Money”, Friedman included the following parable:

Let us suppose now that one day a helicopter flies over and drops an additional INR 100 Billion in bills from the sky, which is, of course, hastily collected by members of public. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.”The basic principle is that if a central bank wants to raise inflation and output in an economy that is running substantially below potential, one of the most effective tools would be simply to give everyone direct money transfers. In theory, people would see this as a permanent one-off expansion of the amount of money in circulation and would then start to spend more freely, increasing broader economic activity and pushing inflation back up to the central bank’s target.

Helicopter Money in Indian Context 

Over the last two years Government of India is expediting the financial inclusion in a big way so that all Indian Citizens have bank accounts. Govt has started process of direct transfer of subsidies/benefits to Individual Indian Citizen account. A day is not far when Govt of India may wave of all Loans taken by Indians farmers/Persons having small incomes or to make country’s Middle class happy by slashing the Income tax rates or reducing housing loan interests /Increasing drastically the salaries of all Govt.employees thereby creating demand and economic growth further.

Another way which is adopted by many politicians is to siphon off money earmarked for country's development and then distributing this directly to rural voters to win elections. Whatever way is chosen “Helicopter money” had been and will remain prominent with Indian Masses down the poverty line. Biggest amount of Helicopter money goes to some fraudulent business owners (I will not name any)  through Public sector Bank Loans and gets adjusted/waived off as NPA s (or Bad loans) by these banks and such fraudulent business promoters leaving India in helicopter and vanish for ever with CBI-Enforcement Directorate chasing them and Govt showing helplessness,What a pity.