ET2012 ⁽¹²⁾

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%…

Now that reforms have returned to the policy agenda, we may ask which reforms should receive priority during the remaining tenure of the present govt.Read full article Now that reforms have returned to the policy agenda, we may ask which reforms should receive priority during the remaining one-and-a-half years of the present government. Simultaneously, we must expose policy proposals on the table that would take the nation backwards. The recent Vijay Kelkar Committee report offers an excellent roadmap for the reforms the government may tackle during its remaining term. Though the report is principally about fiscal consolidation, the effects of the measures it recommends will go well beyond cutting high fiscal deficits. This is as it should be since the ultimate goal behind fiscal consolidation is to foster efficiency and accelerate growth. As the report rightly argues, urgent efforts are required to raise the tax-to-GDP ratio. A government that defines itself as the champion of inclusion and, therefore, also redistribution in favour of the poor, can ill-afford the decline in tax revenues from 12% of the GDP in 2007-08 to 10% in…

Singh words to the Cabinet committee on economic affairs,"If we have to go down, let us go down fighting," are at last those of a leader and not a follower.Read full article For eight long years, Prime Minister Manmohan Singh has listened to, and done the bidding of, the Congress party organisation, the socialists within his party, the obstructionist coalition members of the UPA, the Left Parties and the NGOs. But enough is enough. Just as he had followed his own instincts in the solitary instance of the Lok Sabha vote on Indo-US nuclear deal in July 2008 and, defying Left allies and his own leadership, scored a decisive victory, Singh has drawn the battle lines in the interest of the nation and his own legacy. His words to the Cabinet committee on economic affairs,"If we have to go down, let us go down fighting," are at last those of a leader and not a follower. The reforms announced by Singh include a 14% hike in diesel prices; permitting 51% foreign direct investment (FDI) in multi-brand retail and 49% in local…

Reforms initiated in 1990s sought to introduce transparency by unbundling SEBs into 3 separate cos entrusted with generation, transmission and distribution.Read full article The power failure in India on July 30-31 was big news in US media. When the radio and TV stations began calling with the question whether this spelt the end to India's claims to global-power status, my first reaction was to remind them that a similar failure of the grid in 2003 had drowned the entire Northeast and Midwest in the US and Ontario in Canada into darkness. But, alas, the similarity between the failures in North America and India ended there. In the US, ageing equipment and poor management by local distribution companies result in outages that can sometimes last for days. But residential and industrial customers can generally count on regular flow of electricity. In my 38 years in the country, not once have I experienced scheduled power cuts. Nor do most customers maintain backup generators. Except when a storm knocks down power lines, electricity flows continuously at a steady voltage.