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Employment, Output, and Degree of Monopoly in India

The employment rate in India is falling. Profit inflation is rising. A solution is shown to lie in public investment and public works, and a reduction in the degree of monopoly and/or profits.

Raghbendra Jha (1953–2023)

An eminent expert on India’s economy and a major contributor to South Asian studies in Australia, Raghbendra Jha passed away in New Delhi at the age of 70. His legacy includes a large body of work on the Indian economy, from the macroeconomics of inflation to microeconomic issues such as anti-poverty initiatives.

Illegal Immigration and Institutional Failures

It is important to address the feeling of hopelessness that is driving many Indians to illegally migrate abroad.

An Elusive Take-off

Savings and investment constraints severely limit the medium-term growth potential of the economy.

The Tax State and the Conundrums of Public Budgeting

This article elaborates on two broad trends that are shaping the public budgets of nations: (i) the tensions of globalisation and its implications on the tax state; and (ii) the process of financialisation. It shows that these two lenses can be employed to understand many of the proposals in the current Indian budget, and indeed even future budgets. They foreshadow the increasing status quoism and incrementalism that has come to mark public budgeting exercises the world over.

Current Inflation in India

Following the standard percepts for dealing with supply shocks, monetary policy continued to be easy for an extended period, while simultaneously huge fiscal stimuli were applied. Even when a more restrictive monetary stance was taken, the measures were not strong enough to restrain inflationary expectations. A soft monetary policy with a sizeable fiscal deficit can harden inflationary expectations and a perpetuation of a new higher normal for inflation.

Understanding the Structural Dynamics of Aggregate Demand Components and Economic Growth in India

A significant fluctuation in the growth rate of gross domestic product is observed, which comes along with the fluctuations of other demand components from 1951–52 to 2019–20. Applying autoregressive distributed lag to the co-integration model, and incorporating the structural changes in policies since 1991, it is found that in the long run, out of the five components that significantly influence the aggregate demand and hence the economic growth of India, the private final consumption expenditure plays the most significant role followed by private fixed investment—a 1% increase in the PFCE leads to an average 0.96% increase in the GDP. The result also reveals that the structural policy reforms implemented since 1991 have created the virtuous cycle of economic growth in the economy and should be a policy priority.

The ‘What,’ ‘Why,’ and ‘How’ of a Widening Current Account Deficit

The reason for the increase in the current account deficit during first quarter of fiscal year 2022–23 is analysed. One reason for the widening of CAD has to do with India’s growing dependence on fossil fuels. There is also an element of lack of price competitiveness that is hurting exports. India is exporting low-valued technology-intensive goods whereas importing high-valued technology-advanced goods. The Government of India and the Reserve Bank of India are taking adequate measures to control the widening trade deficit. While some of these measures are yielding results in reducing CAD, external factors such as geopolitical tensions and the United States Federal Reserve System’s move of quantitative tightening are making CAD difficult to control.

Impact of the Pandemic on Growth of the States

The slump and recovery in growth varied substantially and adversely affected disparate states.

The Digital Rupee

The launch of the central bank digital currency is a bold step in the right direction.

What Does the COVID-19 Experience Tell Us about Indian Growth Drivers?

Parts of this paper were presented at SSS-AIU, Study Group and EGROW Foundation webinars, O P Jindal Finance Global Finance Conclave and Rajagiri Conference on Economics and Finance. Enthusiastic feedback helped improve it. In particular, the author thanks Charan Singh for the invitation to develop one of her op-eds, Arvind Virmani, Amartya Lahiri and an EPW referee for comments. The author would also like to thank Krishnandu Ghosh and Sandipan Saha for research assistance and Shreeja Joy Velu for secretarial assistance. This paper is an updated and abbreviated version of IGIDR WP-2021–025.
 

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