The GDP elephant
06 June, 2017, Jayati Ghosh
National income is hard to estimate in India where so much activity and employment is in the informal sector. Much of GDP calculation is not purely “technocratic” but relies on judgments and assumptions. As long as our system of national accounting does not clarify the real impact on the economy and the actual degree of deceleration of economic activity, we will remain in the dark.
The unsustainable US recovery
06 June, 2017, C.P. Chandrasekhar & Jayati Ghosh
Even the limited and unsteady recovery of growth in the US a decade after the 2008 crisis is based on an increase in debt that renders it unsustainable.
World Capitalist Crisis getting Accentuated
22 May, 2017, Prabhat Patnaik
After a brief illusion of recovery in the U.S., the world economic crisis is getting accentuated. Trump administration would rather increase its fiscal deficit, if at all it does, through tax cuts than state expenditure under the hegemony of finance capital. This might further suppress consumption expenditure, already constricted by falling global wages. Such policies, paired with hostile protectionism, would make correcting over-production and hence overcoming world crisis, almost impossible.
The De-digitisation of India
25 April, 2017, C.P. Chandrasekhar & Jayati Ghosh
Despite the government’s efforts to digitise the Indian economy forcibly, non-cash forms of payment appear to have declined as more currency has been made available to the public. This points to major flaws in the government’s coercive approach and the underlying rationale for cashlessness.
The State in Chinese Banking
11 April, 2017, C.P. Chandrasekhar & Jayati Ghosh
After four decades of financial reform China’s banking sector is still dominated by publicly owned institutions. But continuity in ownership does not mean that banking behaviour does not change.
Bad Bank Proposal for India
15 March, 2017, Sabri Oncu
The author’s bad bank proposal for India would be capitalised with zero coupon perpetual bonds the government would issue and would give the country some breathing time so that she can attack and tackle all her other problems.
Budget 2017-18: Blinded by neoliberalism
27 February, 2017, C.P. Chandrasekhar
All that this government has is its unfounded belief that mere reform in the form of the demonetisation, digitalisation and the GST would deliver growth rather than recession.
Is It India's Subprime?
14 February, 2017, Rohit
By presenting a comprehensive picture of the current corporate debt crisis in India, the author cautions that the situation is very similar to the one that led to the US subprime crisis.
China's Capital Flight Syndrome
30 January, 2017, C.P. Chandrasekhar
The sudden collapse in reserves due to an outflow of capital in a country that was considered the favoured destination for FDI points towards the fact that China is now paying the price for the capital account liberalisation measures adopted with its entry into the WTO.
Waning Stimuli
17 January, 2017, C.P. Chandrasekhar & Jayati Ghosh
Banks strapped with stressed assets are holding back on lending, dampening in the process the principal stimulus to growth in recent years. And there are no alternative routes to growth in sight.
The Growth of Digital Payments
03 January, 2017, C.P. Chandrasekhar & Jayati Ghosh
In the context of the failed demonetisation and continued shortage of currency, the government continues to push cashless digital payments. What are the implications for Indians?
The Utter Failure of Demonetization: The RBI Says So Even as it Says Not
29 December, 2016, Surajit Mazumdar
From the figure of the value of fresh banknotes issued by banks by 19 December, it can be concluded that we are still very far away from the full replacement of the cash withdrawn from circulation and the severe cash shortage is going to continue well beyond 30 December.
Committee to Study the Impact of Demonetisation on the State Economy of Kerala
20 December, 2016, C.P. Chandrasekhar, Pinaki Chakraborty, K. M. Abraham & V. S. Senthil
A Committee appointed by the Kerala State Planning Board to study the impact of demonetisation on the economy of the State of Kerala presented its interim report where it stated that after demonetisation, Kerala’s fiscal situation is grim and the day-to-day cash management has become a challenge at the state level that can snowball into a major crisis.
Banks as victims
17 December, 2016, C.P. Chandrasekhar
The damage to the reputation of banks and its employees, which and who have been victims of the engineered cash shortage, is likely to be aggravated by the adverse effects the demonetisation may have for the already damaged profit and loss accounts and balance sheets of the banks.
Demonetisation and Banks' Lending Rates
13 December, 2016, Prabhat Patnaik
The linking of demonetisation with a fall in banks’ lending rates is illogical and just a false propaganda of the ruling party to mislead people.
Demonetization as the Basis for a Fiscal Stimulus
07 December, 2016, Prabhat Patnaik
What the BJP spokespersons are putting forward that the cash which gets disabled in the black economy would enable the government to spend more on infrastructure or provide cash transfers to the people is sheer deception.
Demonetization as a Means of Fighting "Black Money"
06 December, 2016, Prabhat Patnaik
It is very obvious by now that demonetization, far from being an attack on the black economy, has in effect turned out to be an attack on the vulnerable informal segment of the white economy.
Finance Capital and the Nature of Capitalism in India Today
25 November, 2016, C.P. Chandrasekhar
This article explains how the growing dependence on foreign finance capital has distorted India’s growth. Due to the accumulated presence of foreign capital in the country since liberalisation, it is turning moribund and losing sovereignty.
Demonetisation: All pain for the majority
23 November, 2016, C.P. Chandrasekhar
The way the political establishment, sundry pundits, the media and a large section of the untutored or sycophantic elite of the country underestimated the extent of pain that the demonetisation measure would inflict on India’s poor and lower middle classes, points to their disconnect from a reality which bears little resemblance to the vision of a dynamic market economy they presume they inhabit.
Demonetization and its Discontents
23 November, 2016, Arjun Jayadev
The demonetization decree is pure fantasy-on all fronts and absolves everyone of the need to think about the myriad ways in which the collective project of Indian society has been corroded. It has a malign edge that has not been adequately acknowledged yet.
Demonetisation was Primarily a Political Act
22 November, 2016, Jayati Ghosh
It is becoming evident by the day that the primary purpose of the surprise announcement by the Prime Minister was political rather than economic, and that this political purpose was specifically directed towards ensuring the fortunes of the ruling party vis-à-vis its rivals.
Demonetization: Illusory Gains, Enduring Damages
18 November, 2016, Arindam Banerjee
The depressive economic cycle that has been immediately generated by the demonetization measure will not be mitigated within a few months as the government mistakenly assumes. It will have longer and deeper consequences for inequality and under-development in the Indian economy.
Interview with TM Thomas Isaac on Demonetisation
18 November, 2016,
In an interview to, economics professor turned Finance Minister of Kerala, TM Thomas Isaac said that the secrecy surrounding the demonetisation was a blow to cooperative federalism, where the state and centre work collectively, and the move would not have a serious impact on tax evaders.
The Chimera of a 'Cashless' Economy
18 November, 2016, Prabhat Patnaik
In its attempt of moving towards a cashless economy, when the government is forcing people to do so through the demonetisation exercise it is an act of sheer authoritarianism that is no less reprehensible than an attack on people's civil liberties.
Why the Corrupt Rich will Welcome Modi's 'Surgical Strike on Corruption'
17 November, 2016, Jayati Ghosh
Following the sudden withdrawal of the 500 and 1000 rupee notes, it is the poor and the middle classes, hugely reliant on currency for daily activities, who are being battered while the rich are relatively unscathed.
Artificially Created Distress
17 November, 2016, Utsa Patnaik
With the severe loss of purchasing power following the sudden decision of demonetisation, the country is being driven into an artificially created recession and the level of economic activity is declining.
Modi's Demonetisation Move may have permanently damaged India's Informal Sector
17 November, 2016, Pronab Sen
The author explains how the recent demonetisation has penalised virtually the entire informal sector, and perhaps damaged it permanently while doing nothing to curb either corruption or tax evasion.
C.P. Chandrasekhar on India's Currency Chaos
16 November, 2016,
C.P. Chandrasekhar, Professor, Centre for Economic Studies and Planning, JNU talks to World Business Report from the BBC World Service about how the shock announcement by the Modi government is creating unnecessary problems for the ordinary people across the country.
Abhijit Sen Speaks on the Impact of Demonetisation
16 November, 2016,
Abhijit Sen, retired Professor, Centre for Economic Studies and Planning, JNU speaks on the impact of the move by the Modi government on the economy.
Prabhat Patnaik speaks on Demonetisation
16 November, 2016,
Prabhat Patnaik, Professor Emeritus at the Centre for Economic Studies and Planning, JNU, speaks on the withdrawal of the 500 and 1000 rupee notes by the Modi government and associated measures, and the impact of the measures on the economy and people.
The Political Economy of Demonetising High Value Notes
15 November, 2016, Jayati Ghosh
The November 8 announcement by the Prime Minister is an ill-conceived and even more poorly executed move that appears to be an attempt by the government to display a lot of sound and fury, but signifying very little.
It's the Private Debt, Stupid!
15 November, 2016, Sabri Oncu
The global debt of the non-financial sector has reached an all-time high in 2015 and two-thirds of this debt, amounting to about $100 trillion, consists of liabilities of the private sector.
Demonetization of Currency Notes
10 November, 2016, Prabhat Patnaik
The argument, that the demonetization of 500 and 1000 rupee notes constitutes an attack on “black money”, is based on an utter lack of understanding of the nature of “black money,” a conception of it that is staggering in its simple-mindedness.
The Hegemony of Finance
19 October, 2016, C.P. Chandrasekhar
Finance has been able to successfully stall reforms that the 2008-09 crisis had established as being urgent and imperative, and the consequences of that are bound to be damaging.
Revving Up the Bond Market
12 September, 2016, C.P. Chandrasekhar
The new measures announced by the RBI aim at making the conservative institutional investors more bond-savvy and the bond market an important source for long term capital but in the process household savings would be exposed to increased risk.
An Overburdened Instrument
06 September, 2016, C.P. Chandrasekhar
The interest rate that is seen as being the principal instrument for macroeconomic management is proving to be a blunt tool when combatting inflation or promoting growth.
Unexpected Inflation
02 September, 2016, C.P. Chandrasekhar & Jayati Ghosh
The return of inflation, even if moderate, at a time when India is experiencing a normal monsoon and after a long period of inflation-targeted monetary policy is surprising.
The Business of Wilful Default
03 August, 2016, C.P. Chandrasekhar
Adventurous lending followed by wilful default that has become more common in recent years, is linked to the change in banking practices and the pursuit of quick profits after liberalization.
The Return to Retail Lending
02 August, 2016, C.P. Chandrasekhar & Jayati Ghosh
After having retreated from retail lending in the years since 2005-06, banks burdened by NPAs in areas like infrastructure seem to be returning to the retail market. How far can this go?
The Real Banking Problem
12 July, 2016, C.P. Chandrasekhar & Jayati Ghosh
Recognizing bad assets and writing them off may not resolve the banking problem, since the new financial order requires banks to lend to those who seem more prone to default.
Bad Loans, Lending Behaviour and Growth
07 June, 2016, C.P. Chandrasekhar & Jayati Ghosh
As interested observers focus on the bad loans, accumulating in the books of India’s commercial banks, the implications it has for lending behaviour and growth are less explored.
And Now, Price Deflation in India and China?
31 May, 2016, C.P. Chandrasekhar & Jayati Ghosh
While it was presumed the developing world, especially the more prominent emerging markets, were less prone to price deflation, data from China and India show trends of declining producer prices.
The Phenomenon of Negative Interest Rates
21 April, 2016, Prabhat Patnaik
Even the unconventional measure of charging negative interest rates, as the author says, is unlikely to end the recession because capitalism today is in a deep structural crisis.
Banks and the New Asian Tigers
30 March, 2016, C.P. Chandrasekhar
Substantial accumulation of bad debt in the domestic banking systems of India and China seems to be proving too heavy a burden to bear when the good times are disappearing.
Budget 2016-17: Signs of paralysis
16 March, 2016, C.P. Chandrasekhar
The divergence between the rhetoric and the actual allocations in the Budget 2016-17 depicts the ruling party's inability to use the fiscal lever to push for growth and welfare.
The IMF in Pakistan
18 February, 2016, C.P. Chandrasekhar
While presenting a positive picture of the Pakistan economy the IMF conceals the fact that Pakistan's role as an on-and-off strategic partner of the US has undermined its ability to find an independently funded growth strategy.
Is the Rupee "Weakening"
18 January, 2016, C.P. Chandrasekhar & Jayati Ghosh
While much concern being expressed about the weakening rupee, it is not the past record that is the problem; rather, its likely direction in the near future is a cause for worry.
IDBI Bank: The door to denationalisation
04 January, 2016, C.P. Chandrasekhar
The decision to privatise IDBI Bank is the beginning of a larger process of denationalisation of banking in India that would lead to exclusionary banking structure most unsuited to India's development needs.
Stock Market: Does patience pay
21 December, 2015, C.P. Chandrasekhar & Jayati Ghosh
The perception that investors looking for above average returns can turn to the stock market so long as they are willing to stay invested for extended periods doesn’t hold.
Interesting Turn Around
14 October, 2015, C.P. Chandrasekhar
The recent rate cut by the RBI reflects a shift in its policy stance and signals that it has accepted that the biggest threat in India today is not inflation, but deflation.
The Retail Investor as Anchor
06 October, 2015, C.P. Chandrasekhar
A pullout by FIIs underlies the market decline is broadly agreed upon, but that the decline would have been much greater but for a contrary entry of retail investors is less commented on.
Mutual Fund Mystery
29 September, 2015, C.P. Chandrasekhar & Jayati Ghosh
Underlying a recent surge in assets managed by mutual funds is a revival of retail investor interest in equity at a time when foreign institutional investors are turning bearish.
Assessing a Volatile Market
11 September, 2015, C.P. Chandrasekhar & Jayati Ghosh
Increased volatility in the Indian stock and debt markets and its consequences, question whether these markets, as structured now, deliver positive net economic benefits.
The Devaluation of the Yuan
08 September, 2015, Prabhat Patnaik
With the depreciation in the Chinese yuan, the world economy in all probability is going to face a deflation and a "debt-deflation" syndrome.
The Future of Public Banking
21 August, 2015, C.P. Chandrasekhar
The objective underlying the revival of the recapitalisation of public sector banks is privatisation, which would seriously impact India’s infrastructure development programme.
China's RenMinBi Strategy
18 August, 2015, C.P. Chandrasekhar & Jayati Ghosh
The sudden depreciation of Chinese currency, that has impacted global markets, may be an attempt to revive export growth and provide stimulus to growth to the flagging economy.
Black Notes in the Stock Market
17 August, 2015, C.P. Chandrasekhar
Even though SIT strongly recommends that PNs should be phased out if they cannot be made more transparent, they are unlikely to be banned as the government fears investor exit.
China's Troubled Stock Markets
04 August, 2015, C.P. Chandrasekhar & Jayati Ghosh
The boom bust cycles in China's stock markets question the government's view that there is much to be gained from deregulating them.
China's Stock Market Collapse
22 July, 2015, Jayati Ghosh
The negative impacts of China's stock market collapse, falling exports and the explosion of debt are not just felt within the economy but across the globe.
Great Dream of Prosperity
21 July, 2015, C.P. Chandrasekhar
The emphasis on the latest GDP growth numbers, when the figures from other indicators point to the opposite, may be the government’s only option to show that all is well.
Economic Forecasts and Reality: Should we believe the World Bank?
23 June, 2015, C.P. Chandrasekhar & Jayati Ghosh
The World Bank’s latest projections for GDP growth are pessimistic, especially for developing countries. But given its poor track record, how far they are reliable is doubtful.
When Will the Next Financial Crisis Start?
15 June, 2015, Sabri Oncu
The global financial crisis that started in 2007 has never ended and now there are warnings of a looming market liquidity crisis, but when this will hit remains to be seen.
Is the Bull Run Over?
08 May, 2015, C.P. Chandrasekhar
Downturn in financial market is inevitable, but the fact that a host of investors driven by the herd instinct live in denial complicates matters and worsens the outcome.
Indian Exceptionalism
15 April, 2015, C.P. Chandrasekhar
Official satisfaction with the decision by Moody's to raise India's sovereign rating may be ignoring the possibility that the agency missed an important source of vulnerability.
Recapitalising India's Public Sector Bank
24 March, 2015, C.P. Chandrasekhar & Jayati Ghosh
The push to recapitalise public sector banks by raising capital through equity issues, on the grounds that Basel III needs make it unavoidable, may be a route to privatisation.
Statistical Jugglery, Reverse Redistribution and Corporate Absolutism
13 March, 2015, Amiya Kumar Bagchi
Statistical jugglery prasticed by the government in order to please big investors and the bid to privatise important public sector units need to be resisted at all costs.
Greece, its International Creditors and the Euro
20 February, 2015, Sabri Oncu
The Greece crisis resolution depends on whether the EU sees itself as a progressive project based on liberal market principles or as an imperialist project of finance capital.
Households and India’s Stock Markets
17 February, 2015, C.P. Chandrasekhar & Jayati Ghosh
Whilst India's stock markets touch dizzying heights, households are withdrawing from the market as they are influenced more by returns registered in short periods.
Asian Banks in Trouble
02 January, 2015, C.P. Chandrasekhar
Emerging market economies in Asia are confronted with signs of bank fragility owing to overexposure to the private sector, whose mounting external debt compounds the problem.
Debt in Asian vulnerability
25 November, 2014, C.P. Chandrasekhar & Jayati Ghosh
Amidst stock market euphoria, the growing international debt exposure of certain Asian countries, particularly Hong Kong, China and India, is a matter of major concern.
Wooing the NRI Depositor
07 November, 2014, C.P. Chandrasekhar
The significant spike in the inflows into NRI deposits in 2013-14 has been caused by different policy shifts of the central bank.
The Herd Instinct at Work?
26 September, 2014, C.P. Chandrasekhar
The SENSEX is driven by herd instinct of FII inflow coming with assumptions which are at best speculative; the trend may get reversed in case of a rise in the interest rate.
Passing the Buck
19 September, 2014, C.P. Chandrasekhar
Instead of looking at developed countries' monetary easing, the RBI should explore policy alternatives to restrict capital inflow and reduce India's external vulnerability.
The Bond Rush in Indian Markets
09 September, 2014, C.P. Chandrasekhar & Jayati Ghosh
The government’s incentives to foreign investors have resulted in a sharp rise in FPI investments in India’s debt market that does impose costs on the nation.
Banking with a Difference
12 August, 2014, C.P. Chandrasekhar
Democratic forces in BRICS and other countries have to ensure that the BRICS bank acts differently from existing development banks to be a true alternative as expected.
Money, Debt, and Deficit
30 July, 2014, Arnab Kumar Chowdhury
As debt is necessary to sustain the monetary system, hypothetical repayment of all debts can make the monetary system collapse and has the capacity to stall the real economy.
The Budget and BJP's Economic Policy
25 July, 2014, C.P. Chandrasekhar
The Union Budget for 2014-15 is a deflationary budget in the name of "fiscal consolidation," and chalks out a strategy to make India a labour-intensive manufacturing hub.
The BRICS Bank: Part of a new financial architecture (1)
25 July, 2014, Oscar Ugarteche
The BRICS Bank would be less vulnerable if it used non dollar denominated bonds similar to those established by the World Bank in the 1980's.
The BRICS Bank: Part of a new financial architecture (2)
25 July, 2014, Oscar Ugarteche
Given that the BRICS countries all have first tier development banks implies that they also have development bankers who can bring their expertise to the New Development Bank.
BRICS Gains Currency in Brazil
25 July, 2014, Biswajit Dhar
BRICS is poised to make a mark in the global economic governance, if the NDB and the CRA turn into credible financial institutions – as counterparts of the existing structure.
Corporate Karza Maafi at Rs. 36.5 Trillion
21 July, 2014, P. Sainath
Since 2005-06 a cumulative amount of Rs. 36.5 trillion has been given away to corporate sector in terms of various sops in corporate income tax, excise duty and customs duty.
The Rise and Fall of the Global South
21 July, 2014, Prabhat Patnaik
The south that was supposedly rising is now witnessing a fall and this can be prevented only if the domestic market is expanded through egalitarian measures of redistribution.
Locking Out Financial Regulation
25 June, 2014, C.P. Chandrasekhar & Jayati Ghosh
The proposed deal on trade in financial services that has just been exposed by Wikileaks has serious implications even for countries that are not involved in the negotiations.
Who is afraid of Illicit Finance?
16 June, 2014, C.P. Chandrasekhar
NDA government's move to appoint an SIT to bring back illegal money from abroad brought more complex issues of finance and government's real intention to the foreground.
The Rupee's Climb
23 May, 2014, C.P. Chandrasekhar
A surge of capital inflow appreciated the rupee while the RBI is not keen to intervene due to inflation implications. Rupee may stabilise or start depreciating again later.
Stock Market Boom amidst Economic Crisis
19 May, 2014, Prabhat Patnaik
The stock market boom, within a slowdown in the economy, serves the interest of the finance capital, and the crisis cannot be addressed because the boom has to be sustained.
Pre-election Euphoria?
15 April, 2014, C.P. Chandrasekhar
The recent surge in the Sensex despite sagging performance of the overall economy reflects selective speculation by international finance which makes it more volatile.
Financial Strains in the "New" China
09 April, 2014, C.P. Chandrasekhar
Growing corporate debt and recent reporting of default raise questions on an impending crisis as the financial liberalisation process creates greater volatility in China.
The Next Internet Bust?
18 March, 2014, C.P. Chandrasekhar
Excess liquidity as part of the crisis solution may well be setting up the next IT bubble with investors speculating on start-ups even without definite revenue roadmaps.
The Sources of Bank Vulnerability
05 March, 2014, C.P. Chandrasekhar
Higher NPAs in the public sector banks of India is a consequence of the liberalisation agenda pursued by the government rather than the failure of the bank managers.
Public Banks and the Burden of Private Infrastructure Investment
21 February, 2014, Jayati Ghosh
The pushing through of private infrastructure projects without due regard to regulatory requirements is unjust, socially disruptive and exposes the economy to financial risks.
No Method in this Confusion
21 February, 2014, C.P. Chandrasekhar
The new RBI Governor struggles to maintain stability in the face of the threat of a US tapering even as other countries face turmoil in the absence of control on capital flows.
Cleaning Up the Old Economy
12 February, 2014, C.P. Chandrasekhar
While RBI argues that its recent move aims at preventing counterfeit of currency notes, this can serve as an easy way of converting large volumes of black money into white.
Search for Recovery
07 February, 2014, C.P. Chandrasekhar
Although every significant country of the world is still in the midst of growth deceleration, forecasters confidently hold out hopes of a recovery.
The Employment Challenge
22 January, 2014, C.P. Chandrasekhar & Jayati Ghosh
Although every significant country of the world is still in the midst of growth deceleration, forecasters confidently hold out hopes of a recovery.
The "Remaking" of Indian Banking
29 November, 2013, C.P. Chandrasekhar
There is little innovation in the nature of the financial reform that the present RBI governor recommends. These are all proposals that have been unveiled in the past.
The Elusive Recovery
21 November, 2013, Prabhat Patnaik
While monetary policies have failed to resolve the current global crisis, resistance to fiscal intervention from finance capital prevents any meaningful solution for recovery.
Macroeconomic Vulnerability and the Rupee’s Decline
28 October, 2013, C.P. Chandrasekhar
The measures adopted by the government to stem the rupee depreciation rather than being a success may well lead India into a crisis.
A New Growth Consensus?
28 October, 2013, C.P. Chandrasekhar
Recent measures by the RBI and the government emulate the path of fuelling growth by easy credit for specific sectors but that path is fraught with the risk of bank fragility.
On the Economics Nobel Prize
19 October, 2013, Jayati Ghosh
The Global Financial Crisis notwithstanding, the Economics Nobel Prize shows that the power of finance remains undiminished.

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