Macroeconomics

Twenty Years After The Asian Financial Crisis
07 August, 2017, Prabhat Patnaik
It was the free flow of foreign capital through “financial liberalization” that led to the East Asian Crisis of 1997, from which the “tiger economies” have not yet recovered fully. Even now, the augmented foreign reserves of these third world countries remain woefully inadequate to finance debt to foreigners, as the hegemony of international finance capital builds over their own assets.
'Riskless Capitalism' in India: Bank credit and economic activity
07 August, 2017, Rohit Azad, Prasenjit Bose & Zico Dasgupta
The Indian growth story of the 2000s’ cannot be over-simplistically explained as a result of “market-oriented” reforms. Public sector bank credit-financed investments, particularly in the infrastructure sector, played a significant role in sustaining growth, most crucially after the global economic crisis. Such a growth trajectory, however, proved to be unsustainable with the expansionary phase coming to an end in 2011–12 and bad loans piling up in the banking system.
NPAs: All talk and no action
04 August, 2017, C.P. Chandrasekhar
The problem of large NPAs of nationalised banks can be traced to the neoliberal reforms in the financial sector and outside, which prevent large government investments in infrastructure and capital-intensive industries that are imperative for development but too difficult a responsibility for the private sector to shoulder.
Growth in the Time of a Credit Squeeze
01 August, 2017, C.P. Chandrasekhar & Jayati Ghosh
GDP growth figures for the last few years have camouflaged a deceleration in credit growth that has affected all but the retail loans segment quite adversely.
The Hamburg Fiasco
19 July, 2017, C.P. Chandrasekhar
There is no sign of any consensus coming out of the G20 on the need for a mix of globally coordinated policies and a fiscal push to pull the world economy out of recession. What we have once again is a set of statements that says everything and therefore nothing.
Demography and care in Europe: The impact of social relations
18 July, 2017, C.P. Chandrasekhar & Jayati Ghosh
Trends in social relations are both affected by and impact upon economic changes. These in turn have an important bearing on desirable patterns of spending in the care economy, as suggested by an examination of recent marital trends in Europe.
Justice in the Age of Finance
07 July, 2017, C.P. Chandrasekhar
The very limited Barclays prosecution comes in the wake of a half-hearted investigation effort, which has thus far completely let off all those who took the world economy to the verge of a crisis akin to the Great Depression. It is not clear if anything will finally come out of even this case, which is aimed at merely teaching a lesson to those who hurt a bunch of financial investors by violating insider rules.
The Macroeconomics of Basic Income Grants
07 July, 2017, Jayati Ghosh
The idea of “Universal Basic Income”, today treated as novel, in fact dates back to Kautilya’s Arthashastra and Thomas Mores’ Utopia in the 16th century. Milton Friedman's “negative income tax” also revolved around the same idea, which was rightfully criticized by Minsky for inducing inflationary expansion in place of direct welfare schemes. Considering distributional effects, direct job creation is a more effective way to tackle poverty.
China's Labour Market Conundrum
05 July, 2017, C.P. Chandrasekhar & Jayati Ghosh
Has China's labour market reached a point where long years of high growth have led to demand outstripping supply, resulting in a sharp rise in wages?
The Roots of the Agrarian Distress In India
29 June, 2017, C.P. Chandrasekhar
The policy shifts of the reform era have not been in favor of agriculture. Trade liberalisation, deregulation and a greater role for market forces have not benefited the farmer, who is trapped in a persisting crisis. It is time for today's policy makers to recognise their own disconnect, and learn from the evidence at hand.
The Question Of Farm - Loan Waiver
23 June, 2017, Prabhat Patnaik
The primary reason why loan-waiver is being demanded at present is not an output fall owing to any natural calamity. It is the price-fall on account of the bumper harvest that underlies this demand. It is the breaking down of an appropriate institutional mechanism that is responsible for the peasants’ distress and periodic demands for loan-waivers.
The Economy under Modi
20 June, 2017, Prabhat Patnaik
As per official data, half of the country’s population witnessed no improvement in real per capita income over the three Modi years. Other indicators like the demand from net exports, Central Government expenditure (as a proportion of nominal GDP) and number of new jobs created in the organized sector, all reflect a gloomy picture of the Indian economy. The government has been keen on keeping finance capital happy while compromising on these matters.
Crop prices and farmers' unrest
20 June, 2017, C.P. Chandrasekhar & Jayati Ghosh
Distressed farmers are demanding loan waivers, but that should not deflect attention from what needs to be done and undone to address the roots of the agrarian crisis.
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.
What the data tells us about 'Sabka Saath, Sabka Vikas'?
26 May, 2017, Anamitra Roychowdhury
Modi rose to power by promising development for all, but his policies have fallen short in meeting any of the related targets, especially with respect to employment and livelihoods. A minor increase in farm income was met by the lowest-yet wage increase under MGNREGA. Belying the promises of the Skill India programme, Quarterly Employment Surveys show even greater joblessness. Resource allocation to health and education has seen negligible growth in the past three years. And the government narrative has shifted from development to moral policing. Modi rose to power by promising development for all, but his policies have fallen short in meeting any of the related targets, especially with respect to employment and livelihoods. A minor increase in farm income was met by the lowest-yet wage increase under MGNREGA. Belying the promises of the Skill India programme, Quarterly Employment Surveys show even greater joblessness. Resource allocation to health and education has seen negligible growth in the past three years. And the government narrative has shifted from development to moral policing. * This article was originally published in the Wire on May 26, 2017.
A Simple Arithmetic
25 May, 2017, Prabhat Patnaik
The advance GDP estimates for 2016-17, however calculated,show a grim picture of the economy. The real per capita income of the agriculture-dependent population, which constitutes half the country's populace, has remained stagnant or even marginally declined during the three years of the Modi government. While the pursuit of neoliberal policies can be held responsible for this, treating the aggregate growth as a “great achievement” for political mileage is unwarranted.
Where will Global Demand come from?
23 May, 2017, C.P. Chandrasekhar & Jayati Ghosh
As the US reduces its role as engine of global demand, there are no signs that other economies will be able to pick up the slack. The mercantilist approach exemplified by Germany is creating net global slowdown.
Narendra Modi on Poverty
20 March, 2017, Prabhat Patnaik
When Narendra Modi talks of shifting away from giving doles to the poor, what he has in mind is that the money being currently used for welfare schemes for the poor should be withdrawn from such schemes and handed over to the corporate magnates.
The Latest GDP Estimates
13 March, 2017, Prabhat Patnaik
The article discusses the possible reasons for the latest GDP estimates provided by the CSO not capturing the recessionary impact of demonetization which is an indisputable and established fact.
Budget 2017-18: The Macroeconomic Perspective
03 March, 2017, C.P. Chandrasekhar
One reason why the government chose fiscal consolidation instead of an expansionary budget in the wake of demonetisation is its erroneous belief that demonetisation in itself would deliver fiscal benefits.
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.
What can Corporate Planning Learn from National Planning
29 December, 2015, Pronab Sen
This paper examines the historical development of national planning in India and identifies the lessons that corporate planning can draw from the long and varied experience.
The Economy: The end of euphoria
27 May, 2015, C.P. Chandrasekhar
Despite having a good fortune of lower international oil prices, the Modi government failed to deliver growth in its first year while the expectations are still very high.
Government and RBI: No real stand-off over macro policy
08 May, 2015, C.P. Chandrasekhar
The current stand-off is more of a government effort to regain influence over macroeconomic management, as the government is accountable to the people whereas the RBI is not.
Lost Between Intent and Belief
03 March, 2015, Jayati Ghosh
The budget session is being undermined by the Finance Minister as hypothetical revenue figures make the allocation figures redundant under fiscal conservatism.
Prof. Bhagwati has Got It Wrong
12 January, 2015, Rohit
Jagadish Bhagwati's recent pitch for make-in-India is flawed as it ignores domestic demand and other pitfalls of an export-oriented growth strategy.
The "Niti Ayog"
12 January, 2015, Prabhat Patnaik
The replacement of the Planning Commission by the NITI Ayog marks a centralization of economic power in the hands of the Central Government at the behest of neoliberalism.
The Gathering Clouds of Recession
24 November, 2014, Prabhat Patnaik
The world capitalist economy's slide into a new downturn is likely to be a harbinger of major economic and political changes within the structure of world capitalism.
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.
Dilma Rousseff's Victory
05 November, 2014, Prabhat Patnaik
While Dilma’s victory represents an important step in the right direction, intensified class struggle will be required to sustain the scheme of “transfers” to the working poor.
On High Interest Rates
13 October, 2014, C.P. Chandrasekhar
The RBI's decision to follow a restrictive monetary policy seems to have been influenced by the inflow of foreign finance, even if that is at the expense of growth.
New Macroeconomic Consensus Rules Budget 2014-15
04 August, 2014, Rohit
The author critiques the macroeconomic framework that underlies the fiscal consolidation approach of the Union Budget for 2014-15.
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.
The Way Forward for the Economy
07 July, 2014, Prabhat Patnaik
The Indian economy cannot be revived by the neo liberal policies of austerity and incentives as only fiscal intervention can break the deadlock of stagflationary tendencies.
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.
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.
The Industrial Growth Conundrum
07 February, 2014, C.P. Chandrasekhar
The variations in manufacturing growth estimates by IIP, NAS and ASI triggered reports of an upward revision in 2011-12 GDP growth estimate, but the reasons are not obvious.
Is There a Case for Fiscal Stringency in India Now?
11 December, 2013, C.P. Chandrasekhar & Jayati Ghosh
The authors examine the evidence on central government’s receipts and expenditure thus far and consider the validity of the case for fiscal stringency at this point.
The Missing Global Recovery
26 November, 2013, C.P. Chandrasekhar & Jayati Ghosh
Periodic predictions of a much-belated recovery from a five-year long recession may divert attention from the persisting crisis. But the evidence is too stark to ignore.
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.
Is there a Flight of Capital from India?
10 October, 2013, C.P. Chandrasekhar
Capital flight from India aggravated the overall position of rupee, but the country’s balance of payments position is the fundamental weakness which needs to be addressed.
'Loans First' – Explaining Money Creation by Banks
30 September, 2013, Arnab Kumar Chowdhury
In fractional reserve banking, the description of banking as "accepting deposits for lending" distorts the perspective in which economics of banking is perceived and analyzed.
Is Fiscal Profligacy the Cause of the Crisis?
10 September, 2013, Prabhat Patnaik
Current account deficit is a major reason behind lack of demand and slowdown. Government spending on food security can boost demand for domestic goods and chance of a revival.
Redistributing Regulatory Power
21 May, 2013, C.P. Chandrasekhar
The FSLRC's far-reaching recommendations seek a fundamental redesign of India's historically evolved financial regulatory framework in favour of a liberalised financial sector.
Fragile Foundations: Foreign capital and growth after liberalisation
14 May, 2013, C.P. Chandrasekhar
The shift from debt-financed public expenditure to debt-financed private expenditure-led growth in India has resulted in increased dependence on foreign capital and vulnerability.
Economic Crises and Women’s Work: Exploring progressive strategies in a rapidly changing environment
11 March, 2013, Jayati Ghosh
Analysis of women’s employment and decent work in the context of the global economic crisis shows that gender sensitive policy responses are more likely to be successful.
Bad Economics, But Worse Politics
06 March, 2013, C.P. Chandrasekhar
There is nothing in the budget to reverse the stagflation, even as the opportunity to take effective measures aimed at showing concern for the common man has been missed too.
Niggardly on Essential Spend
01 March, 2013, Jayati Ghosh
Given that the Indian electorate would soon see what the real implications of the budget 2013-14 are, it is surprising that his own party let Chidambaram get away with this.
A Recipe for Continuing Stagflation
01 March, 2013, Jayati Ghosh
Budget 2013-14 will deliver neither higher growth nor improved conditions of life — instead it is likely to worsen the stagflationary tendencies in the economy.
A Plan for Corporate India
09 January, 2013, C.P. Chandrasekhar
Even though talk of planning is a travesty, the Twelfth Five Year Plan document is still a shocker, because of its unashamed advocacy of measures that favour private capital.
India's Growth Story: A comparative view
11 December, 2012, C.P. Chandrasekhar & Jayati Ghosh
Indian growth episode was not based on the sorts of stimuli and methods of financing that have characterised the growth of some other more successful Asian economies.
On Deregulation in the Petroleum Sector in India
17 October, 2012, Surajit Das
The policy of oil price deregulation in the face of rising international price of oil would have direct detrimental effects on growth, inflation and 'macroeconomic stability'.
Foreign Finance and India's Development
25 September, 2012, C.P. Chandrasekhar
The principal objective of the current government seems to be that of winning and sustaining the whimsical ‘confidence’ of foreign capital at all costs. This is the new and defining feature of economic policy of present day India.
How Wage-led Growth has Powered Argentina's Economic Recovery
31 August, 2012, Jayati Ghosh
The manner in which Argentina has been able to generate more genuinely inclusive growth, through the promotion of productive and fairly remunerated employment and a different approach to social protection, sets a bright example of alternative strategy. This could be a learning lesson for all other countries trying to come out of the current recessionary trends.
Tweaking Animal Spirits
08 August, 2012, C.P. Chandrasekhar
One element of the emerging policy consensus within India's economic policy establishment involves spurring demand for the private sector by diverting expenditure away from subsidies for the poor to finance investment. Simultaneously, a case is being made for providing more concessions to cajole the private sector into exploiting this opportunity.
Banking on Debt
10 July, 2012, C.P. Chandrasekhar & Jayati Ghosh
The latest figures on India’s external account reveal that the problem of declining foreign exchange reserves is the result principally of the widening of the current account deficit, which was far too large to be covered by an increase in capital inflows. While the government may do well to address the vulnerability caused by a rising import bill, especially on account of gold imports, it has been adding to external vulnerability by encouraging further inflows of speculative debt capital.
The Blame Game around Oil
13 June, 2012, C.P. Chandrasekhar
It is not that the UPA government is running out of alternatives to tackle the woes caused by the oil and currency shocks. The absence of decisive policies and lack of inner consensus have trapped the government in a debate on who would bear the burden and how the burden should be shared. A combination of subsidies and tax reforms can address the issue. But it calls for easing the grip of neoliberal thinking over the UPA.
India's Growth Story Ends
06 June, 2012, C.P. Chandrasekhar
Even when confronted with slowing growth, the Indian government is adopting austerity measures that trap the country in a recession because of the accumulated presence of foreign finance in the country. The latter not only increases economic instability, but also induces an element of “policy paralysis”. Capital controls are a must to give policy manoeuvrability to the government.
Growing Differences in State Per Capita Incomes
15 May, 2012, C.P. Chandrasekhar & Jayati Ghosh
The period of economic liberalisation has been marked by growing differences in per capita incomes across states, although the trend has varied across decades. In this article, the authors examine the evidence on per capita Net Domestic Product at the state level since 1980, and consider some possible explanations for the observed trends.
The Price of Growth
27 January, 2012, C.P. Chandrasekhar
The early signs of a reduction in the rate of inflation have been used as evidence to make a case for lower interest rates. However, there is no reason to believe that within the current policy regime, rate cuts would not aggravate inflationary trends once again.
Democracy and the Financial Markets
01 December, 2011, Jayati Ghosh
In the last few decades, it has become increasingly common for various developing and “emerging” markets to give greater importance to appeasing the interests of financial markets over the requirements of political democracy. Now, this is afflicting developed countries as well, where governments are sacrificing democracy in favour of the markets.
What World Leaders Need to Do Urgently (but are not)
04 October, 2011, Jayati Ghosh
Global leaders' efforts to control the prevailing anarchy and enable recovery in their economies end up having the opposite effect, because the direction of their macroeconomic policies is all wrong and mobile finance capital is still largely unregulated. Here are five basic steps that world leaders need to take.
India's Schizophrenic Banks
29 June, 2011, C.P. Chandrasekhar & Jayati Ghosh
In a move that is commendable, the Reserve Bank of India (RBI) has decided to continue with its recent practice of issuing periodic Financial Stability Reports (FSRs), or assessments of the strength and resilience of the financial system. Last year, reports were issued in March and December.
Trading Growth for Inflation
27 May, 2011, C.P. Chandrasekhar
Earlier this month all eyes were on Reserve Bank Governor Duvvuri Subbarao. Every statement of his was read as signalling whether he would raise interest rates and by how much he would do so this time. With the economy having bounced back and GDP growth approaching previous peaks, the presumption was that the focus of the governor’s attention would be the persistent and unacceptably high inflation. He would, therefore, be willing to sacrifice investment and growth, the pundits argued, by raising interest rates so as to moderate inflation.
Employment under the New Growth Trajectory
22 December, 2010, C.P. Chandrasekhar & Jayati Ghosh
Two developments have been taken as confirmation of the view that India has transited to a virtuous, high growth trajectory in recent years. One is the evidence of near sustained 8-9 per cent rate of GDP growth since 2003-04 and the rather quick and sharp recovery of GDP growth after the deceleration triggered by the global financial and economic crisis. The second is the evidence of a significant pick up in employment growth rates between the 55th and 61st Rounds of the National Sample Survey Organisation relating to 1999-2000 and 2004-05.
Fiscal Discipline and All That
27 July, 2010, Jayati Ghosh
Rarely has an economic idea had such a brief revival. After several years of almost undisputed sway of monetarist ideology over economic policy makers across the world, suddenly Keynesian ideas were back in fashion, in particular the idea that active state intervention in the form of increased state expenditure is necessary to bring a market economy out of a recession or depression.
India: A Setback for Neo-Liberalism
10 June, 2010, Prabhat Patnaik
The current developments in India mark the beginning of a process of the polarization of society into two camps, a pro-imperialist camp supported by the Fund, the Bank, globalized finance and the MNCs, and an anti-imperialist camp led by the Left but encompassing diverse elements. The degree to which consolidation of the latter camp can be successfully accomplished depends crucially on the ability of the Left to overcome sectarianism and narrowness of outlook and unite the widest possible segments of anti-imperialist social forces.
Foreign Aid or Aiding the Foreign?
01 May, 2010, C.P. Chandrasekhar
Passing of modified draft version of the Foreign Educational Institutions Bill by the Union Cabinet has raised certain questions with protagonists and opponents expressing a range of views on the subject. While there is a fear that the process underway is one of creating a window for foreign players and then changing the rules in their favour, question is also raised whether the implementation of the Bill amounts to skewing further the inequality in access to higher education.
The Travails of the Rupee
15 April, 2010, C.P. Chandrasekhar & Jayati Ghosh
The Indian rupee stood at a robust Rs. 44.4 to the dollar at the beginning of the second week of April. At that level the rupee had appreciated by more than 13 percent vis-a-vis the dollar over the preceding 13 months (Chart 1). This suggests that the Reserve Bank of India has not intervened in the market and bought up surplus foreign exchange to the extent required to relax the upward pressure on the value of the rupee and stall its appreciation.
The Monetary Lever
04 November, 2009, C.P. Chandrasekhar
The responses to the RBI’s most recent quarterly review suggest that India too has seen post-reform changes that give monetary policy and its consequences an important role in economic management. In fact, there is reason to believe that the role of monetary policy would increase substantially in the immediate future.
On the Dollar's Decline
21 October, 2009, C.P. Chandrasekhar
The article investigates whether the IMF SDR can replace US Dollar as the global reserve currency in the wake of falling prices of the latter. The author concludes that US Dollar remains the primary global currency because there is no other to replace it.
Prices and Politics in India
24 March, 2009, Jayati Ghosh
Inflation rate in India touched historical low levels of 0.44% in the week ending March 19th. While this is being projected in some circles as a positive development in the context of rising inflation some months earlier, this article argues that this need not be necessarily the case.
How to Spend the Money
06 March, 2009, Jayati Ghosh
One of the significant impact of the financial crisis on the world of ideas is that it has brought to the forefront the recognition of the role of the government expenditure in mitigating recessions, as was advocated by Keynes and Kalecki. This article makes a theoretical case for undertaking Keynesian measures to cope with the recession.
The Job Loss Syndrome
04 March, 2009, C.P. Chandrasekhar
The article explores the issue of job loss being experienced in the various sectors of the Indian economy and traces their advent to the ongoing global crisis. The article also argues that the Indian government's response was delayed which further intensified the problem.
Blowing Bubbles at the Bust
07 January, 2009, C.P. Chandrasekhar
With the elections behind it, the government has chosen to unveil the promised second instalment of the economic package that it claims will stimulate a slowing economy. Given the global fashion these days, some media observers have wrongly described this as the Centre's second ''fiscal stimulus'' package.
The Economic Geography of Recession
06 January, 2009, Jayati Ghosh
Now that the economic slowdown is truly upon us, and the government is no longer in complete denial about the vulnerability of the economy, the discussion is dominated by the possible effectiveness of the policy measures that have been announced to deal with it. But this depends upon two different features: first, what has caused the recession in the first place; and second, how it will affect different economic agents.
In Search of a Real Stimulus
11 December, 2008, Jayati Ghosh
Now that the economic slowdown is clearly making itself felt in both economic activity and employment, the central government has finally decided to do something about it. The trouble is that the economic package announced on Sunday is simply too feeble to go very far and, even combined with the monetary policy measures announced earlier
Foreign Reserves and the Rupee
05 December, 2008, C.P. Chandrasekhar & Jayati Ghosh
The sharp depreciation of the Indian rupee from around Rs.44 to the dollar at the beginning of September to close to Rs.50 to the dollar through much of November gives cause for concern on many counts (Chart 1). To start with, while it does little to increase India's exports given similar depreciation in the currencies of India's competitors, it is bound to increase the foreign exchange outflow on account of imports and worsen the trade balance.
Surely Not the IMF Again?
18 November, 2008, Jayati Ghosh
There is an urgent need to examine alternative sources of emergency finance for crisis-affected developing countries, which are less destructive than the IMF. The latter?s intellectual autism and double standards in policy prescriptions for industrial and developing countries are once again reflected in its most recent World Economic Outlook.
The Financial Crisis and the Developing World
25 October, 2008, Jayati Ghosh
Violent fluctuations in stock prices along with other factors witnessed in emerging markets in the past two weeks have made it clear that the developing world is not insulated from the financial turmoil raging in industrial countries. The crisis will have different impacts in different places, depending on, in particular, the extent of integration of the capital market of the concerned developing country. An important positive fall-out of this financial crisis is that it has created an opportunity for replacing the economic model of neoliberalism with more progressive and democratic alternatives.
The Loss of Development Finance
23 October, 2008, Jayati Ghosh
The financial tsunami that is now threatening to engulf many developing countries as well, makes all the more clear the dangers posed by unregulated financial markets. As is known, in addition to creating the conditions for greater fragility, financial liberalisation generates a bias towards deflationary macroeconomic policies and forces the state to adopt a deflationary stance to appease financial interests. In fact, financial liberalisation in developing countries has even worse consequences, because it can retard or even reverse the development.
The Global Financial Crisis
29 September, 2008, Jayati Ghosh
Global capitalism has now entered a new phase, one that is unprecedented in its history. And the core of the capitalism – the US economy - has certainly entered uncharted territory particularly in the financial secto
Signs of Stagflation
26 September, 2008, C.P. Chandrasekhar
There is fear that India may have crossed a turning point, with growth in the future likely to be below the creditable 9 per cent per annum trajectory achieved over the last five years. Some features of growth performance during the first quarter, like the slowdown in agricultural and industrial growth and the continuing dependence on service led growth do give cause for such concern. The situation is more disconcerting since it occurs in the context of sharp inflation exceeding 12 per cent on an annualised basis.
Mid-Course Deviation
11 August, 2008, C.P. Chandrasekhar
The Indian Left cannot be accused of deviance for its decision to withdraw its support for the UPA government on the issue of the Indo-US nuclear deal. It has for long espoused the position that given the aggressive expansionism of the US under Bush.
The Coup D' Etat
04 August, 2008, Prabhat Patnaik
The Indian State that came into being after independence bore the stamp of the anti-colonial struggle. It aimed to promote egalitarian development, later re-christened as the building of a "socialistic pattern of society", and negate the hegemony of imperialism
The Oil Conundrum
17 July, 2008, C.P. Chandrasekhar
With international oil prices rising rapidly, crossing the $135-a-barrel mark and heading, according to some predictions, towards even $200-a-barrel, the oil economy has become a prime cause of concern for the government.
Engineering Stagflation
08 July, 2008, C.P. Chandrasekhar
The Indian economy has been at tipping point for some time now, poised to enter a period characterised by slow growth and high inflation. The decision of the government to hike the prices of petrol, diesel and LPG could well be the final push. In the government’s view the hike was inevitable, given the sharp increase in the international prices of crude and India’s dependence on imports to meet much of its consumption.
Inflation: How Much and Why
17 April, 2008, C.P. Chandrasekhar
Inflation is emerging as India's primary economic problem now. The problem is that it looks set to rise very fast with retail prices moving much faster than the rest. The major concern still is that this is occurring in a period when global inflation is on the rise and policies of trade liberalisation and domestic deregulation have reduced the degree to which Indian prices are insulated from international prices.
Global Inflation and India
16 April, 2008, C.P. Chandrasekhar & Jayati Ghosh
With the annual rate of inflation in India having touched 7 per cent on a point-to-point basis during the week-ending 22 March 2008, the search for policies to combat the price rise has begun. One factor seen as making that search difficult is the ostensible role of "imported inflation" in driving the rise in domestic prices. There is an obvious reason why such an argument arises.
Neoliberal Discomfort
15 April, 2008, C.P. Chandrasekhar
It perhaps is a little too early to predict the coming death of "neoliberalism", or the economic philosophy that governments should facilitate the functioning of "free" economic agents rather than regulate them. More crudely put, the idea is that markets should be left free to work so long as they deliver profits. But globally evidence has been growing that markets are just not working, precipitating crises that requires bringing the state back in.
World Prices and The Transmission of Inflation
08 April, 2008, Jayati Ghosh
The recent global rise in inflation is partly demand-led, the result of several years of rapid economic growth and resultant demand. This however may be automatically controlled since both will act as a constraint on the other. But more worrying is the fact that the possibility of stagflation, brought about by supply constraints, cannot be ruled out. This will be far more difficult to control.
Addressing Social Concerns
10 March, 2008, Jayati Ghosh
The main issues in this year's economic strategy of the government, especially the intentions as signalled in this year's Budget proposals remain the same as that of 2004. These are employment, the agrarian crisis, nutrition and food security, education, health and social security. In each of these areas, the UPA government promised much. However, the delivery has not only been far below the promises, but in some cases even worse than the previous government.
The Industrial Upturn
05 November, 2007, C.P. Chandrasekhar
With the Sensex defying all laws of economic gravity, the disconnect between India’s booming financial sector and its real economy has only worsened. Few would argue that the performance of the real economy can explain the recent exuberance in the stock markets. So, this may be a good time to look to the real economy to introduce an element of moderation into assessments of economic performance.
Unravelling India's Growth Transition
02 November, 2007, C.P. Chandrasekhar
An appreciating exchange rate, stock market volatility and global pessimism are yet to affect India’s growth story. Figures released by the Central Statistical Organisation at the end of August indicate that GDP grew by 9.3 per cent during the first quarter (April-June) of 2007-08 when compared with the corresponding quarter of 2006-07.
Boosting a Rising Profit Rate
05 September, 2007, C.P. Chandrasekhar & Jayati Ghosh
Corporate results for recent quarters in India point to a rapid growth in profits. Quarter-on-quarter increases in net profits of more than 20 per cent are the norm in recent times. Interestingly, despite this sharp improvement in profitability, the clamour for a reduction in corporate tax rates has only increased.
Who is Doing the Saving and Investing?
11 May, 2007, C.P. Chandrasekhar & Jayati Ghosh
Since the turn of the century, the Indian economy is widely perceived to be on a rapid growth trajectory that is significantly faster than that of the previous decade. Certainly, the National Accounts Statistics of the CSO show that in the period 1999-2000 to 2006-07, GDP in constant prices increased at an average annual rate of nearly 7 per cent.
The Message from the Meltdown
11 April, 2007, C.P. Chandrasekhar
Financial year 2007 began with one more strong "correction" of the bull-run that has dominated Indian stock markets in recent months. The first trading day of the year, April 2, witnessed the second sharpest single-day decline ever in the benchmark Sensex. The close to 617 points decline was received as usual with alarmist statements that suggested that a bull run that keeps stock indices rising should be the norm in a healthy economy. "A World of Gloom In Your Cup" declared one newspaper with a fondness for bizarre banner headlines. It was another matter that the day following the "crash" the market recovered and the Sensex rose by 169 points, indicating that the previous decline was partly the result of market panic.
A Model of Growth of the Contemporary Indian Economy
10 April, 2007, Prabhat Patnaik
This paper provides a simple model of the current pattern of India's economic growth process, to reckon with the fact that even an accelerating growth rate may leave the unemployment problem completely unresolved, or even accentuated, as labour productivity rises at a faster rate than investment. An obvious conclusion that emerges is that the widely-held perception that higher and higher growth rates would eventually eradicate unemployment in the country, is untenable.


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