Keep The Government Out Of Service Businesses, At Least

The demise of Margaret Thatcher is a good time to revisit the idea of state-ownership of businesses. Thatcher was adamant and pushed privatisation aggressively. Her approach came in for much criticism but the eventual outcome is not something everyone disagrees with.   India, on the other hand, has had a checkered history when it comes … Continued

India’s 93%, 437 Million That Holds Up The Economy But Lacks A Voice

  Highlights  *Out of 465 million workers in 2009-10, 437 million (93%) was in the unorganised sector * Over 90% of unorganised labour engaged in wholesale/retail trade *  This 93% of the work force accounts for, hold your breath, about 50% of GDP   It might surprise some to know that most of the debates on … Continued

Should We Go MAD Over CAD?

  Highlights * Largest component of Current Account Deficit is the difference between the value of imports and exports * Exports of petroleum products, gems and jewellery and transport equipment are going up * Gold demand may soften for two reasons: festival season is over and duty hike may be a dampener in the short … Continued

You Don’t Need High Growth To Fix Poverty

“In the past 8 years, our economy has grown at a record annual rate of 8.2%. We have ensured that poverty has declined much faster, agriculture has grown faster, and rural consumption per person has also grown faster.  We need to do more, and we will do more. But to achieve inclusiveness, we need more … Continued

Why The Government Needs A Plan To Fix Non-Plan Spends

“Government expenditure boosts aggregate demand and it has both good and bad consequences. Wisdom lies in finding the correct level of government expenditure” – India Finance Minister, P. Chidambaram, Union Budget 2013-14 Speech.   A look back at Government expenditure numbers over the last few years highlights the significance of the Finance Minister’s words in … Continued

Maharashtra Gears Up For Drought And Elections

The Budget for 2013-14 would be the last for the Congress-NCP alliance in Maharashtra before the elections next year.  And in a year when the state is facing an acute drought and water shortage across major districts, Budget 2013-14 has made special provisions for drought relief with an allocation of Rs 2,086 crore. The National … Continued

The Government’s Track Record On Revenue Is Better Than You Think

“The purpose of a Budget exercise – and the job of a Finance Minister – is to create the `economic space’ and find the resources to achieve various socio-economic objectives. Right now, the economic space is constrained because of a high fiscal deficit, reliance on foreign inflows to finance the current account deficit, lower savings … Continued

Does Gender-Based Government Spend Work?

Women constitute 48% of India’s population but they lag behind men on many indicators like health, education and economic opportunities. The all-India sex ratio, according to Census 2011 data, is 940 women per 1000 men. While the all-India female literacy rate is 65.4%, Census 2011 also points out that women are increasingly heading households – … Continued

Was Dr Reddy Right In Asking For Caps On Inflows?

Back in 2004, when India’s foreign exchange reserves crossed the $100 billion mark, Planning Commission deputy chairman Montek Singh Ahluwalia proposed using a part of what was then viewed as excess reserves to finance infrastructure projects.   The proposal remained on paper and was abandoned many years later. Reserves, however, continued to balloon, mostly thanks … Continued

Why India’s Current Account Deficit Problem Vexes Everyone

In his latest Budget Speech on 28th February 2013, Finance Minister P Chidambaram expressed concern over India’s Current Account Deficit (CAD), saying “CAD continues to be high mainly because of our excessive dependence on oil imports, the high volume of coal imports, our passion for gold, and the slowdown in exports. This year, and perhaps … Continued