The Indian Economy Blog

Archive for the 'Fiscal policy' Category

World Bank Loan In Rupees

Tuesday, December 11th, 2007

…likely for the Maharashtra government. The BBC reports that the World Bank is considering the first ever proposal for a loan of $3.5 billion to be disbursed and repaid in rupees and not the US dollar. This is being done to ostensibly counter the fluctuating rupee- dollar rate. However, it needs no saying that a [...]

A Japanese Model for Indian IT Companies

Monday, November 26th, 2007

…to counter the rising rupee. Professor Kaushik Basu of the Cornell University believes that the rise of the rupee against the dollar is inevitable in the mid-term. He also believes that the sudden collapse of the dollar is unlikely but there is not much that India can do to alter the current dynamics of exchange [...]

VAT a success

Wednesday, October 24th, 2007

Uttar Pradesh has fallen in line with the rest of India and implemented VAT. Subhomoy Bhattacharjee writes in the Indian Express on “the biggest success story of Indian public finance“.

The Case Against Sethusamudram

Wednesday, October 3rd, 2007

Before the issue of the historicity of the characters in the Ramayana came along to cloud the issue, much of the public debate hovered around political and environmental issues. Neither the commercial viability, nor the putative military strategic benefits, were adequately scrutinised. The commercial case for the project rests on the time and cost saved [...]

The Indian Army Part 2

Friday, June 15th, 2007

Budgeting- ‘Guns versus Butter’ The Indian budgeted defence expenditure (DE) for the current year (2007-08) is Rs. 96,000 crore and the Indian Army’s share of this pie is approximately 47%. The DE is 2.07% of the GDP; the corresponding figures for Pakistan and China are 3.4% and 2.8 % respectively. But there is a caveat [...]

The Indian Productivity Miracle

Tuesday, December 19th, 2006

Back in the late 1990s, economists were trying to figure out what it was that led to the secular acceleration of economic growth in the United States: the longest and largest peace-time economic expansion in the 20th century (see footnotes). How was it that a country could grow so much and for so long without causing inflation and [...]

Trend Growth In India

Saturday, October 14th, 2006

Prashant wrote to me earlier this week to bring a recent blog post (and Business Standard article) from Ajay Shah to my attention. Essentially Ajay is arguing the following: “a lot of what is going on is owing to procyclical (i.e. destabilising) macro policy. I emphasise the distinction between the long-term trend and the business [...]

China, India And The Global Economy

Tuesday, September 19th, 2006

Ajay Shah alerts us to a draft volume published by the World Bank (free download) titled Dancing with Giants: China, India and the global economy. Drawing upon the latest research, this volume analyzes the influences on the rapid future development of these two countries and examines how their growth is likely to impinge upon other [...]

More Bang For The Government Buck?

Tuesday, March 7th, 2006

Here’s a fantastic piece about Walmart efficiencies. Titled, Wal-Mart’s Shelf-Correcting System Is Model for Government, argues that the government (of USA) does two things well. …Anyone who’s ever filed a tax return or visited the Department of Motor Vehicles understands that government does two things well: spends our money and wastes our time… The piece [...]

How About A New White Elephant To Fund Infrastructure?

Saturday, November 5th, 2005

More of the same where the same has failed Here’s a conundrum: it is amply clear that given the abysmal state of India’s roads, railways, ports, irrigation and electricity grids, and given the rapid growth of the Indian economy over the past several years, good infrastructure is in great demand in India. Yet the central [...]

Is The Indian Rupee Overvalued?

Thursday, October 13th, 2005

As per the India Stock Blog The Rupee is fundamentally weak, but has been propped up by overly positive sentiments of Foreign Institutional Investors (FIIs), which are now moderating… Factors weighing on the Rupee: Trade and Current Account Deficit On the surface it would appear that oil would be the cause of the widening trade [...]

Black and Grey to White?

Sunday, October 2nd, 2005

In response to the previous post by Reuben bearing us glad tidings about the economy (that it grew at 8.1% last quarter) reader Patel points to a piece on Bloomberg claiming that the growth figures might be incorrect because of statistical fluctuations. But isn’t it possible that something elsee is happening? Much of India’s growth [...]

Matching Outcome To Intention

Friday, August 26th, 2005

The Indian Express reports: If all goes according to plan, in May 2006, citizens will have the first quantifiable indication on just how the government is spending the money it collects in taxes. In a first, Finance Minister P Chidambaram today tabled an “Outcome Budget” in Parliament that seeks to pinpoint scheme-wise targets, quarter-to-quarter, on [...]

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