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

Articles by S L ShettySubscribe to S L Shetty

Remembering V V Bhatt

A tribute to V V Bhatt, a pioneering economist of the post-independence decades, who at the Reserve Bank of India led a group of economists in creative and independent thinking, not afraid of speaking their minds.

RBI Balance Sheet in Recent Years

The Reserve Bank of India's latest accounts indicate that the structure of earnings has clearly shifted to domestic sources, particularly from assets. Further, the RBI has made large transfers to the Government of India over the past few years at the cost of maintaining critical reserves to ensure the fi nancial stability of the central bank. The RBI has not made public a report that is said to provide justification for such a shift in policy. This goes against the post-financial crisis view that central bank operations must be more transparent and open to public scrutiny.

Sixth Economic Census 2013

The provisional results of the Sixth Economic Census (2013) of establishments in the non-agricultural sector suggest that this is not a census count. A comparison with the National Sample Survey numbers shows that the number of workers in the latest census may be only a little over half the actual number. There also appear to be some serious omissions in individual states.

Financial Inclusion

The prime minister's mission on financial inclusion for all by 2018 is not a new programme, there have been variants initiated by the Reserve Bank of India and there was another proposal of the Ministry of Finance as well. The new programme as it stands has few details and does not seem to recognise the enormity of the infrastructural and human resource challenges that must be overcome and the scaling up expected of the banking sector. There also seems to be a lack of coordination between the RBI and the Government of India.

Budget and the Financial Sector

Even as measures to modernise and revitalise the financial sector need to be taken, the government should not tamper with the vigilance exercised by the Reserve Bank of India and the Securities and Exchange Board of India.

Growth in Indian Agriculture

Indian agriculture has been doing far better in the years since 2004-05. This note explores available data to understand why this has been so. It is found that after 2004-05, public investment in agriculture increased, the National Horticulture Mission was launched, and more agricultural credit was made available that spurred private investment in agriculture as well. These policy initiatives resulted in increased yields and higher agricultural growth.

ASI Results for 2011-12

The latest Annual Survey of Industries report, released for 2011-12, shows a high growth in the value of output, gross value added as well as employment generation. The ASI data suggests that over the past three decades Indian industry has spread to rural areas, creating more value and jobs than in industry located in urban areas. Industry is spending a smaller proportion of value added on interest paymen ts than it did in the earlier decades. However, compared to the 1980s, the share of profi t in gross value added has increased signifi cantly, while factory-floor workers' emoluments as a share of total earnings have reduced.

Rajan's Monetary Policy Foray

The Reserve Bank of India is not justified in holding on, almost continuously, to some discredited ideological position of monetarism and thereby hurting economic growth.

How the Gold Import Chickens Have Come Home to Roost

India's staggering gold import burden is to a large extent the result of liberal policies adopted towards the metal by the government in the post-reform years. Given Indian society's insatiable hunger for gold and that nearly all of it has to come in through imports paid for by savings that now cannot be used for productive purposes, these were bound to hit the wall sooner or later. Though stopping people from buying gold is not going to happen, public policies have to discourage gold purchases through the promotion of financial products, fiscal measures, and administrative controls.

K S Krishnaswamy

K S Krishnaswamy was an outstanding economist who contributed immensely to formulation of policies both at the Reserve Bank of India and at the Planning Commission. A tribute by a younger colleague at the RBI.

Priority Sector Credit

The revised RBI guidelines on priority sector lending discriminate against small and marginal farmers and favour corporates involved in agriculture. The guidelines seem to have been drawn up under pressure from banks.

Growth versus Inflation

The Reserve Bank of India has at last reduced its discount rate at which it repurchases government securities from the commercial banks, the repo rate. The reduction, however, has been very small and has come very late. In pursuit of a notion of central bank independence, the RBI has taken steps that have contributed to a decline in investment and a slowdown in growth. It is time the central bank accepts once again that one of its main roles is to maintain the fl ow of credit to the productive sectors.


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