ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Response to 'A Cost-Benefit Analysis of UID'

A debate on the study "A Cost-Benefi t Analysis of Aadhaar" conducted by the National Institute of Public Finance and Policy which was discussed in the EPW of 2 February 2013.

How Should Inflation Be Measured in India?

Though monetary policy in India is not explicitly charged with delivering low and stable inflation, it still needs to choose a measure of inflation as a reference. Questions of timeliness, weights in the price index, accuracy of food price measurement, and inclusion of the prices of services are relevant to the choice of measure. This paper looks at detailed price data, expenditure patterns of households and the composition of different price indices available in India, and discusses policies on inflation measurement in other countries. Under present conditions of measurement, the consumer price index for industrial workers, despite some serious deficiencies, is preferable to both the wholesale price index and the GDP deflator as the headline inflation rate. Thus, macroeconomic analysis and policy thinking need to move away from a focus on the WPI to the CPI-IW.

Examining the Decoupling Hypothesis for India

This paper examines the decoupling hypothesis for India. It analyses business cycle synchronisation between India and a set of industrial economies, particularly the United States, over the period 1992 to 2008. The evidence suggests that the Indian business cycle exhibits increasing co-movement with business cycles in industrial economies over this period. Indian business cycle synchronisation is stronger with industrial countries as a whole as opposed to the co-movement found with the us.

Early Warnings of Inflation in India

In India, year-on-year percentage changes of price indexes are widely used as the measure of inflation. In terms of monthly data, each observation of a one-year change in inflation is the sum of 12 one-month changes. This suggests that better information about inflationary pressures can be obtained using point-on-point monthly changes. This requires seasonal adjustment. We apply standard seasonal adjustment procedures in order to obtain a point-on-point seasonally adjusted monthly time-series of inflation in India. In three interesting high inflation episodes - 1994-95, 2007 and 2008 - we find that this data yields a faster and better understanding of inflationary pressures.

Insights into Economic Geography

Geography Social and Economic Profile of India by Peeyush Bajpai, Laveesh Bhandari and Aali Sinha; Social Science Press, Delhi, 2005; pp x + 173, Rs 1495 (hardcover).

Investment Risk in Indian Pension Sector and Role for Pension Guarantees

There is a considerable consensus that over the multi-decade horizons encountered in pension investment, there are enormous gains which can be obtained through portfolios of corporate bonds and equities, instead of a focus on government bonds. However, such investment strategies do impose greater uncertainty upon the worker about post-retirement consumption. Guarantees are one mechanism through which this investment risk can be contained. In this paper, we work out the cost of certain guarantee structures in the context of a simplified model. These calculations could help assist better decision-making about the role for guarantees in the Indian pension system. We also discuss some policy issues in pensions and in finance, which are related to the problem of guarantees.

Stock Market Response to Union Budget

This paper explores the interplay between the Union Budget and the stock market in the following areas: the extent to which the stock market response to the Budget is consistent with the behaviour that we might expect in an efficient market; the role of the Budget in the Indian economy, using the stock market as an information processing tool; and the extent to which empirical research can guide hedging and trading around the Budget date.

Black, Merton and Scholes Their Work and Its Consequences

The Nobel Prize in Economics for 1997 was awarded to Robert C Merton and Myron Scholes. If their partner, Fischer Black, had been alive today, he would have shared the prize. In this article, we take stock of markets for financial derivatives, and the work of Black, Merton and Scholes.

Designing India s National Information Infrastructure

Infrastructure Ajay Shah Shuvam Misra One of the current policy debates in India concerns the need for a 'national information infrastructure (NII)' and how it should be built. This paper sketches some key principles which a strong NIl should satisfy, in order to yield the maximal impact upon productivity growth of India's economy at the lowest possible cost.

Minimum Asset-Based Tax A Critique

Minimum Asset-Based Tax: A Critique Ajay Shah IN their article 'A Minimum Alternative Asset-Based Corporate Tax forlndia' (EPW, July 13), Indira Rajaraman and T Koshy evaluate an asset-based minimum corporate tax. They suggest that this tax would generate improvements in equity and efficiency, apart from revenue gains.

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