governance, political economy, institutional development and economic regulation
There is something endearing about the desire of the Modi government to be fiscally correct in the amount of debt it piles up. Chrometophobia – the fear of debt This single-minded adherence to being fiscally correct was much in evidence during the Jaitley years when reduction of the fiscal deficit (FD) below 4.5% of GDP, […]
Read More Wanted visionary husbanding of public financesThe myth of a dominant center and weak states in India is long enduring. Some of this is wish fulfillment by national elites since it reinforces their own centrality, as Delhi based movers and shakers. How granular is the “post planning”economy? The “planned” economy approach, which ended in 2014 with the Modi government, also played […]
Read More Sorry StatesEconomic downturns are cruel. They impose traumatic disruptions in incomes and lives – salary cuts, extended long leave without pay, outright job loss, drying up of business income or bankruptcy. The cash crunch for government is at crisis levels The government is no different. Revenue receipt of the Union government in May (Rs 0.17 trillion) […]
Read More Fiscal murmursPrime Ministers Modi’s address on May 12 was, as expected, a dog’s breakfast of proposals aimed at pleasing everyone. Please all stimulus 10.5% of GDP The Rs 20 trillion ($260 billion) stimulus “package” – around 10.5% of the likely GDP of Rs 190 trillion in Fy 2021 – is touted as a silver bullet which […]
Read More New India – Vocal about local but aspirationally globalThe depressing sameness of the days for those locked-in as the epidemic rages, is relieved only by the 24X7 flow of electricity – the juice that keeps us all connected, informed, entertained and as summer advances, in air cooled or conditioned comfort. Thank God its not the power deficient noughties! Imagine being locked-in for two […]
Read More Joining the dots on electricityIn a quietly subversive “revolt” 47 officers of the Indian Revenue Service, which administers taxes on income, hit the headlines this week with a policy paper “Fiscal Options and Response to Covid-18 Epidemic” FORCE outlining the tax measures government could take to deal with the economic downside of Covid-19. Too young to be seen or […]
Read More May the FORCE be with young IRS officersWe have needed one since the 2008 global financial crisis when massive fiscal interventions provided the fizz to drag out a functioning economy for the next decade. The buzz fades This fizz has now run dry, sapped by – corporate freeloaders, who misused the cheap money at the expense of small investors, who naively assumed […]
Read More India needs a haircutThe bad news emanating from the slowing Indian economy over the last two years makes it counter-intuitive to imagine that COVID could be a blessing in disguise for halting the slow grind downwards. A crisis is also an opportunity COVID is a crisis and India – all of it- including whataboutery experts, cynics and most […]
Read More Use COVID to heal societyThe RBIs decision to hold the repo-rate (the administered rate at which the RBI lends money to banks) at 5.15 per cent for the second time in four months, mirrors the timidity of the Finance Minister in the budget proposals presented for FY 2021. Both are twins born of the same mother of policy paralysis […]
Read More RBI chickens out of stoking growthThe budget analysis commentariat heaved a sigh of relief after the budget for FY2021 was revealed. Unlike last year, at least the accounting seems accurate. So low were expectations that it was almost a pleasure to review the carefully consistent allocations across the more than 700 schemes and 300 major heads of expenditure. These soak […]
Read More FY 2020 budget post script