In The Media ⁽⁴⁰⁰⁾

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.

Read full article Abstract: Today, we celebrate the 88th birthday of former prime minister Atal Bihari Vajpayee who, along with Narasimha Rao, must be credited with laying the foundation of the new India. To date, he also remains the only non-Congress prime minister to serve a full term. A member of Parliament for over four decades, Vajpayee served as India’s prime minister from March 1998 to May 2004. With Yashwant Sinha as finance minister on his side, he transformed the economic policy framework wholesale. Telecommunications, civil aviation, banking, insurance, public sector enterprises, foreign trade and investment, direct and indirect taxes, agricultural produce marketing, small-scale industries reservation, urban land ceilings, highways, rural roads, elementary education, ports, electricity, petroleum prices and interest rates were all subject to far-reaching reforms during his tenure.

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%…

Read full article Abstract: The experience with the latest package of reforms has provided further support for my hypothesis that when ruling politicians blame the lack of progress vis-a-vis reforms on missing consensus, that consensus is missing not among people but within the cabinet. Whereas the Indian public today fully appreciates the benefits of reforms, it is politicians who lag.The opposition parties had claimed that the latest package of reforms would damage millions of shopkeepers (FDI in retail), transport workers (diesel price hike) and urban households (subsidised LPG cylinders). Yet, none could translate that supposed harm into sustained anti-reform demonstrations in the public space. EvenMamata Banerjeefound her huffing and puffing going to waste, as her normally attentive Kolkata crowds greeted her with indifference.