governance, political economy, institutional development and economic regulation
Between spending and saving, governments are generally better at the former. High growth comes with the advantage that government revenue expands and gets spent, as is happening this fiscal. But this is also habit forming. If growth tapers down – as is expected in FY 2024- cutting back government spending will be politically rocky just […]
Read More Fiscal Options for Budget 2023-24Despite the hoopla around this year’s annual budget, it is unlikely to be a stunning display of “clever accounting” catering to all whilst pleasing none. Nor is it likely to strew goodies all around. Challenges abound The need is to spell out hard fiscal decisions. The list of challenges is long. The interest burden consumes […]
Read More No room for extravagance in 2021-22 budgetThe Union government has done well to resist being dragged into “bhed-chaal” (following the herd) by blowing up its fiscal balance beyond repair in the hope of a steep economic recovery. The case for continued fiscal rectitude The fiscal deficit (FD) is on track to increase to Rs 12.5 trillion this year. The expected GDP […]
Read More Fiscal rectitude flows from resilient revenuesThere 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 government accounts for Q1 (April to June) of fiscal 2021 give hope that the governments nuanced stance on Covid 19 management which emerged post the initial panicked lock down in March, is working. Fiscal crunch in Q1 In April and May revenue receipts were at rock bottom (30% and 25% respectively of revenue receipts […]
Read More The approaching fiscal stormEconomic 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 murmursPolitics is heating up. Elections in Bihar loom in November with Assam, Kerala, Tamil Nadu* and West Bengal tightly packed together in May next year, just after the FY 2021-22 budget. Bihar remains rural at heart. Luckily for the BJP, agriculture is the bright star in the Indian economy with expected growth of 3%. Doesn’t […]
Read More The price of fiscal exuberance“Waiting for Godot”- a play by Samuel Beckett in which a fictional Godot never arrives. The title has now become a code or allegory, to describe waiting forever for something which never happens. The 2014 “election jumla” of Rs 15 lakhs of recovered hawala money to be deposited into each bank account, quickly acquired this […]
Read More Fiscal stimulus – Waiting for GodotPrime Minister Modi is a “lucky General”. At a time when India seemed most vulnerable, God has chosen to level the field a bit by hitting the global economy and China with a pandemic which is sure to slow growth even further making us look relatively better. The misery of others often comes with collateral […]
Read More Red lining budget FY 2021A little history on economic growth – a major worry – can help provide perspective to today’s concerns. The incidence of annual downturns in growth (in constant terms) show a marked variance before and after 1990-91 in the Republics short economic history. Jagged growth in the first four decades Over the thirty-nine years prior to […]
Read More External assistance can rescue the economy
Opinion India 