ET2018 (12)

Urijit Patel's unfinished job

Patel was piloting the bank system from chaos to order, his successor must take up the taskRead full article It was with great sadness that I woke up to the news of resignation by RBI governor Urjit Patel this Monday morning. Urjit has been a friend for more than two decades and I have greatly admired him for his brilliance, professionalism, integrity, conviction and friendship. With his departure, India has lost a committed public servant. It is a rarity that a resignation, tendered amid policy differences with the government, elicits such a warm response from none other than the PM. In an unusual gesture, not only did Prime Minister Narendra Modi extol the governor for his thorough professionalism and integrity but also applauded him for steering “the banking system from chaos to order”. Patel earned this high praise through sheer hard work and principled policy making. He inherited from his predecessor an extremely fragile banking system. Years 2008 to 2014 had seen an unfettered expansion of credit by public sector banks (PSBs), with the RBI failing to deliver on its key…

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Finest scholar in the trade

Read full article With the passing away of Thirukodikaval Nilakanta Srinivasan, ‘TN’, the world has lost a true scholar. Intellectually, TN was as formidable as his full name. Personally, he was kind to one and all. He lived his entire life for scholarship —and for a little bit of Carnatic music. Bangladeshi economist M G Quibria, who studied with me at Princeton, used to describe TN as India’s Paul Samuelson. He opined that like Samuelson, TN had complete mastery of mathematical techniques and wrote simultaneously in a large number of fields including international trade, development economics, public finance and econometrics. No Jumbled Numbers… At one level, this was not surprising. Before he did his PhD in economics at Yale, TN had done his BA (Honours) and MA in mathematics, and then received two years of professional training in statistics at the Indian Statistical Institute (ISI), Kolkata, from none other than P C Mahalanobis. At Yale, TN wrote his thesis under the direction of Tjalling Koopmans, the 1975 Economics Nobel laureate. TN returned to India in 1964 and joined the Planning…

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Remembering Deena Khatkhate, an economist, a friend, a mentor

Read full article Economist Deena Khatkhate, who passed away at the age of 92 on September 15 in Bethesda, Maryland, in the US, was an unusual man. By his own description, he was a ‘gadfly’. Early in his youth, he joined the Communist Party of India (CPI), but quickly discovered its internal contradictions and exited it before finishing college. As he grew older, his disillusionment with State control of the economy and his conviction for promarket reforms grew.Between Amartya Sen and Jagdish Bhagwati, he saw his thinking aligned with that of the latter. Oddly, however, it was Bhagwati who first discovered Deena as an author. As Bhagwati puts it, when doing his bachelor’s degree in Bombay, he greatly “profited” from Deena’s writings. The two economists became good friends while still in Bombay, and maintained close contact after they moved to two different cities in the US. Phone calls between them grew particularly frequent after the passing away of two of Deena’s dearest friends, V V Bhatt and Anand Chandavarkar. Both had been his colleagues first at the Reserve Bank of…

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By invoking national security clause, Donald Trump goes for nuclear option in trade war

From being the architect of the open world trading system in the post-Second World War era, today the United States has descended into a state in which it feels it is a victim of that same system.Read full article A trade war is now in progress on two fronts. The United States opened the first front by imposing a 25% tariff on steel imports and 10% tariff on aluminium imports from a large number of its trading partners. That led many damaged parties to take retaliatory actions. China was the first to respond with a 25% tariff on $3 billion worth of food imports from the US. Mexico, Turkey, European Union and Canada followed suit once it became apparent that the US would not grant them the exemption from tariff they had sought. On the second front, the US has exclusively targeted China by slapping 25% tariff on a wide variety of imports worth $34 billion from it. China hit back in this instance as well, imposing 25% tariff on $34 billion worth of imports from the US. The US has…

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Focus on improving quality, not number of IoEs

Read full article As in school education, India has broadly won the battle of numbers in higher education. The Gross Enrolment Ratio (GER), which measures the number of students enrolled in higher education institutions (HEIs) as percentage of population aged 18-23 years, has risen from 8.1% in 2000-01to 25.2% in 2016-17. But just as in school education, the battle for quality of education has barely begun. One dimension of the quality is the number of universities recognised globally for the quality of their education and research. How does India do along this dimension? India Absent In the 2018 Times Higher Education (THE) university rankings, no Indian university appears in the top 200 institutions. China has two in the first 100 and another two in the 101-200 category. Among the institutions ranked between 201 and 600, India has six and China 19. Several smaller Asian countries — Hong Kong with three in the top 100 and two in the 101-200 category, South Korea with two in each category, Singapore with two in the top 100, and Taiwan with one university in…

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