Economic Times ⁽²¹⁸⁾

According to the advance estimate that was released by the Central Statistical Office sometime back, GDP growth during the second half of 2012-13 is expected to be just 4.6%.Read full article News on the Indian economy has been worse than even what the pessimists had predicted. According to the advance estimate that was released by the Central Statistical Office sometime back, GDP growth during the second half of 2012-13 is expected to be just 4.6%. This is one of the worst growth performances of the Indian economy in the post-reform era. The UPA had inherited a robust economy with the GDP growing at 8.5% in 2003-04. Absent a miracle, it will now bequeath its successor government an economy at its weakest in many years. This debacle in growth performance has brought India sceptics back to surface.

Sonia Gandhi ensured that the PM pushed the bailout through Cabinet to avoid trouble for her own and son Rahul’s election from UP in 2014. Read full article My last visit to New Delhi coincided with the elections in Gujarat. While trying to catch up with television in my hotel room, I noticed a campaign commercial. It opened with a song whose opening line translates as, “The nation seeks account of the misery inflicted over the last 10 years.” Although the reference to 10 instead of eight years should have served as a clue, my immediate reaction was to wonder why the Gujarat chief minister Narendra Modi was running his election campaign against the Congress in Delhi. As the commercial progressed, I realised my mistake: It was being run on behalf of the Congress with Modi as the target. But that begged the question why the Congress was challenging Modi in Delhi even before he had emerged as the leader of his party? And wasn’t this a case of the pot calling the kettle black since one could equally take the…

Reinforced by major additional reforms in the late 1990s and early 2000s, growth of the GDP and trade saw a massive shift.Read full article When the end to investment and import licensing and substantial tariff reductions led to only modest acceleration in GDP and trade in the 1990s, critics derided the reforms for having made little difference. But that changed in the 2000s. Reinforced by major additional reforms in the late 1990s and early 2000s, growth of the GDP and trade saw a massive shift. Trade expanded so fast that despite a rapidly-rising GDP, they climbed from 27% of GDP in 1999-2000 to 56% in 2011-12. But whereas a rising share of manufactures in the economy has led the economic transformation in every other successful country, this share has remained unchanged around 16% in India during the last 20 years. The causes of this disappointing performance of manufacturing are to be found in the lack of complementary reforms in factor markets — labour and land — and the inability of the government to build infrastructure. But misdiagnosis of the problem has…

Just because the transfer is affected in rice does not mean that the beneficiary will consume more rice, says Arvind Panagariya.Read full article Cash transfers enjoy two major advantages over in-kind transfers. First, they empower the beneficiary instead of placing her at the mercy of the provider, as is the case under in-kind transfers. Second, they foster efficiency by reducing corruption and leaks in the long distribution chains under inkind transfers. Nevertheless, critics like Lant Pritchett and Shrayana Bhattacharya have alleged that they are not a ‘cure-all ’ solution. Surely, the proponents understand that cash transfers are only one instrument among many to combat poverty. Indeed, if Pritchett and Bhattacharya have a cure-all solution, I will be the first to give up cash transfers in its favour.

A part of this slowdown is to be attributed to the paralysis in decision-making from which the government is recovering only slowly.Read full article India has now had a full year of growth below 6%. During the year ended June 30, 2012, India grew 5.9%. During the second half of this year, growth was even lower at 5.4%. Compare this growth with the average growth of 8.25% during the immediately preceding year ended June 30, 2011 - a solid 2.35 percentage points have, thus, been shaved off the annual growth rate. The decline is even sharper if we compare this growth to the last quarterly peak of 9.2% during the first three months of 2011. A part of this slowdown is to be attributed to the paralysis in decision-making from which the government is recovering only slowly. The role of the paralysis is corroborated by the disproportionate slowdown in mining and quarrying and manufacturing, which are more susceptible to government decision-making. Services, which are less dependent on the government, have been impacted less. Mining and quarrying saw negative growth of -0.95%…