Ad hoc T-bills, anyone?

In 1994, the government had decided to stop borrowing via what, since 1955, had been known as ad hoc treasury bills

The unseemly wrangle last month between the government and the Reserve Bank of India has reopened several questions, chief amongst which is an age-old one applicable to all sovereigns everywhere at all times: Should I loot, tax or borrow?

Looting is the easiest because if you have the monopoly of force — physical or legislated — you can rob anyone. Governments loot all the time. But this annoys the population.

Taxing is a bit harder, not because it is difficult but it costs a lot to collect and often the net benefit is quite small. The government used to spend 85 paise