Retro tax to bad bank to telecom: Political call to bite economic bullet.

For a government led by Prime Minister Narendra Modi sensitive to charges of corporate favouritism, acquiring substantive shareholding in a private company is a leap of faith. Buried in the fine print of the telecom package was this provision that lets the government 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 “pro-poor.”