A 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
It’s going to be a sombre Deepawali this year. If there were any doubts, the RBI Monetary Policy report of October 4 dispels them succinctly. Missing demand Global apprehensions abound around the policy and political uncertainty unleashed by the proxy war for access to markets between the US and China. Back home, slowing private demand […]Read More Its’ smart to stoke private demand
Tough reform decisions are best taken in times of grave crisis not when the going is good. Economic reform, at the best of times, is highly disruptive. It makes little political sense, in the real world, to throw away the benefits of a stable, growing economy, in the hope that the future would be brighter […]Read More BJP needs a consistent Economic Ideology
The first 100 days of the Modi 2.0 government have been marked by lows and highs. Sadly, the lows are longer lasting, while the highs are transient, even in the short term. The biggest low was the Budget for FY 2019-20 in July, which was presented, in the absence of the late Arun Jaitley, with […]Read More Modi 2.0 100 not out!
The galvanising energy – one new scheme a week – which characterised the Modi years is ironically, also the cause of an uncertain victory this year. Too many reform steps pancaked Three simultaneous, mega reform initiatives stand out – reducing the fiscal deficit; implementing the Goods and Services Tax and cleaning out bank balance sheets. […]Read More Triple whammy spoils BJP fiscal end game
Those who live by the stock market must pay for their indiscretions. The stock market slid by 2.7 percent on February 2, 2018 – the day after Budget Day; by an additional 0.88 per cent on Monday, February 5, followed up by a further slide of 1.6% on February 6. in tandem with the global […]Read More Post-budget stocks – Storm-in-a teacup
The politics around “demonetisation” — a misused term for what happened on November 8, 2016 — has taken centerstage in the run-up to the Assembly elections in Himachal Pradesh (that voted yesterday) and Gujarat (which goes to the polls in December). Finance minister Arun Jaitley has added “morality” to the cluster of objectives, that seemingly […]Read More “Demonetisation” as a morality play
Muscular tactics are paying-off in the Income Tax system. The number of assesses went up by an astounding 25 percent from 37 million in March 2016 to 46 million, by March 2017 and to 63 million by mid-July 2017. The linking of Aadhar-PAN card to bank accounts; the campaign against cash and now the GST, […]Read More Rooting out perverse incentives in GST
Citizens expect governments to intervene when the markets fail. The market for Diplomacy failed last month at Doklam. If the Chinese Army is to be stopped well north of the tri-junction between India, Bhutan and Tibet/China, then only the Indian forces, funded by taxes, can do the job. This is a satisfactory arrangement for all […]Read More Fix the “market” for political power
Hasmukh Adhia, India’s revenue secretary, is finance minister Arun Jaitley’s chief aide for rolling out the Goods and Services Tax. Contrary to his first name, he never smiles, at least not in public. But even he can now take a break and smile. The GST juggernaut is careening ahead. In just over a week, India […]Read More Can GST make Hasmukh Adhia smile?