ET2019 ⁽¹⁶⁾

Read full article India’s GDP has grown at an annual average rate of 7.5% during the five years ended 2018-19. This average figure masks considerable variation in the annual rates, which peaked at 8.2% in 2016-17 and bottomed out at 6.8% in 2018-19. In the quarter ended March 31, 2019, growth fell to the worrying level of 5.8%. According to most reports, recovery in the growth rate appears sluggish for now. Some commentators point to demonetisation as a key trigger that led to the fall in the growth rate. But proponents of this view have provided no credible supporting evidence. Given that demonetisation took place in early November 2016, its impact should have been concentrated in 2016-17, which is not the case. One may invoke the argument that the effect took place with a lag. But given the instantaneous nature of the event, absence of any perceptible immediate impact greatly undermines the validity of the argument. According to another hypothesis, introduction of the goods and services tax (GST) and the disruption accompanying it were responsible for the decline.

A mission to provide eyeglasses can pave the way for large-scale manufacturing and raise productivity.Read full article Today, poor vision, due to lack of access to eyeglasses, is easily the largest unaddressed disability in the world. In India alone, 550 million individuals are estimated to suffer this fate. Given that eyeglasses cost as little as Rs 200, correction of refractive error through eyeglasses constitutes the health intervention with the largest bang for the buck. The commonest eye problems result from refractive error due to which eye is unable to focus clearly on an object. The result is hyperopia, presbyopia, myopia or astigmatism. Loosely speaking, these conditions are about the inability to see objects clearly up close (hyperopia and presbyopia), far away (myopia) or both (astigmatism). The commonest condition is presbyopia, which is age-related and affects a majority aged 35 & above.

This is a budget that, despite the temptation and a good enough excuse, doesn’t stray from the Modi government’s agenda to maintain fiscal discipline.Read full article As an economist, I am grateful that the PM hasn’t given up the path of fiscal rectitude. Rejecting calls by the ‘stimulus school’, the final budget pegs fiscal deficit for 2019-20 at 3.3%, down from the revised estimate of 3.4% for 2018-19 and 3.5% of actual level in 2017-18. Growth has been sliding down for the last four quarters, and it fell down to 5.8% during the last quarter of 2018-19, the latest quarter for which we have GDP estimates. There have also been reports of a slowdown in both private consumption and private investment. So, the temptation, as well as a good excuse, to go to town with spending was there. But the PM, who has fought hard for an unprecedented five years to restore fiscal discipline, has stayed course. While closer scrutiny will have to be done in the days to come, GoI has also continued to maintain a high quality of…

Read full article At 484 pages, the draft National Education Policy (NEP) 2019, released for comments by the human resource development (HRD) ministry, is a massive document. A policy should be a short and crisp framework document, with details eventually spelt out in legislations and rules and regulations that flow from it. This outcome could still be achieved by placing the key proposals in a short, single document with supporting arguments, analysis and data, useful in their own right, into an appendix. Turning to the substance of the policy on higher education, the draft NEP offers some excellent ideas. Its key recommendation to separate the functions of regulation, funding, accreditation and standard setting ought to be at the heart of future reform of higher education. It is broadly in the spirit of many of the ideas we have put forth earlier, though we differ on the details. The draft NEP also builds on recent HRD ministry reforms granting autonomy to higher education institutions following the recommendations of a NITI Aayog committee on which we served, and of the Higher Education…

Subramanian made the dramatic claim that the real GDP in India grew between 3.5% and 5.5% during 2011-17. Read full article In a recent working paper, former chief economic adviser in the ministry of finance Arvind Subramanian made the dramatic claim that the real gross domestic product (GDP) in India grew at a rate between 3.5% and 5.5% during 2011-12 to 2016-17. A number of critiques exposing myriad flaws of the paper have already appeared. They notably include contributions by Swaminathan Aiyar, Surjit Bhalla, Bibek Debroy, Charan Singh, and the Prime Minister’s Economic Advisory Council (PMEAC). Subramanian’s analysis is so problem-ridden, and its claim so far-fetched, that there are only two possible explanations for why he wrote it. One, he blundered — he simply did not realise the innumerable methodological problems afflicting his analysis. Two, he was aware of the shortcomings, but chose to ignore them in the hope of creating a sensation and gaining the attention of the government, media and, possibly, the whole world