Economic Times ⁽²¹⁸⁾

President's address to Parliament has dashed any residual hopes that United Progressive Alliance II (UPA II) might use its clear-cut electoral victory to introduce systematic radical reforms. Yet reform advocates must persevere. Read full article The President's address to Parliament has dashed any residual hopes that the United Progressive Alliance II (UPA II) might use its clear-cut electoral victory to introduce systematic radical reforms. Yet reform advocates must persevere. There remain enough reforms 'in transition' that a series of incremental actions could still make a dramatic difference. Simultaneously, there is considerable scope for the introduction of radical reforms in the social sector to which the UPA accords high priority. Perhaps the single most important reform that the finance minister can safely push is the comprehensive Goods and Services Tax (GST). As Dr Vijay Kelkar, chairman, Thirteenth Finance Commission, noted in his brilliant address at the convocation at the Indira Gandhi Institute of Development Research, this reform promises vast benefits via improved productivity.

Counter-examples showing non-performers' victory and performers' defeat can hardly invalidate the anti-incumbency hypothesis.Read full articleThe key feature of anti-incumbency is that it strikes at the state level. Counter-examples showing non-performers' victory and performers' defeat can hardly invalidate the anti-incumbency hypothesis. Despite nearly two weeks worth of 24x7 media dissection, two key events related to the election have gone unnoticed. One of these events is a case of a dog that did not bark but for a reason, just as in the famous Sherlock Holmes tale Silver Blaze by Arthur Conan Doyle, and the other of a dog that did bark but no one noticed. Consider first the dog that barked but went unnoticed: anti-incumbency. Because the election returned the Congress-led incumbent ruling coalition to power with near-majority votes, virtually all commentators have automatically assumed that anti-incumbency is now dead. But this reflects either a poor understanding of the anti-incumbency thesis or superficial reading of the results.

The Mulayamites have declared war against the computer. Will the electorate reward them? Or will it give them the same treatment the British government gave the Luddites in the early 19th century. Read full article They said Ned Ludd was an idiot boy That all he could do was wreck and destroy He turned to his workmates and said: "Death to Machines" They tread on our future and they stamp on our dreams. (Poet and performer Robert Calvert from his 1985 album Freq) As a part of his job-creation strategy, Samajwadi Party (SP) supremo Mulayam Singh Yadav has called for ousting computers whenever human hands can perform the task. This is a brilliant idea. Thus, begin with banks that increasingly rely on computers to maintain customer accounts, prepare monthly statements, match customer signatures and clear inter-bank accounts. In the past, these tasks were performed by human hands and provided valuable employment opportunities to our hard-working men and women. Consider just the impact of the use of computers in cheque-cashing on employment. In the past, this transaction employed multiple workers; one accepted the…

UPA govt's economic team had raised the hope that it will go ahead with economic reforms. But it failed to live up to expectations.Read full article Future historians will, no doubt, applaud Dr Manmohan Singh for his contributions to building a modern economy as finance minister and to freeing India of nuclear apartheid as prime minister. But they will also record the setback to reforms during his tenure as prime minister. The National Democratic Alliance (NDA) had contested the general election in May 2004 on a pro-reform platform. Therefore, many in the Congress interpreted its defeat as the rejection of reforms by voters. Prospects for reforms under the incoming Congress-led United Progressive Alliance (UPA) looked bleak.

Among all the failures of the UPA govt on the economic front, the slowdown in infrastructure sector is the most disappointing.Read full articleOnly a few months ago, many in the media had been arguing that the emerging market economies (EMEs) had now acquired a growth momentum of their own and were immune to the booms and busts in the developed countries. Less than six months into the financial crisis that originated in the United States, the "decoupling" thesis is biting the dust. The crisis, which turned the ongoing economic slowdown in the United States into a full-blown recession, has been transmitted to the Asian Asian EMEs at lightening speed. Triggered as recently as September 2008, it has led to a spectacular spiralling down of the GDP in many Asian countries. And more integrated the country's economy into the US economy, the more severe the impact. In South Korea, the GDP has fallen a whopping 21% in the last quarter of 2008. The loss in Singapore has been 17%. Taiwan has seen its industrial output decline by a gigantic 32% in 2008.