In The Media ⁽⁴⁰⁰⁾

Read full article Every crisis is an opportunity, so goes the saying. For Indian industry, it is an opportunity to lobby for a handout from the government at taxpayer’s expense. The auto industry’s case shows how far our industry leaders can cash in on this opportunity. Multiple representatives of auto industry have pleaded for help on the ground that this sector accounts for 50% of all manufacturing and has declined by 30%. Now, the latest press note on GDP by MOSPI reports that manufacturing as a whole grew 0.6% in the first quarter of 2019-20. Simple arithmetic show that this means that manufacturing other than auto grew a fantastic 31.2% during the quarter. Wow! But let us give the auto industry some rope and accept that it is only human to exaggerate to attract attention in the midst of a crisis. Assume that the share of autos in manufacturing is not 50% but 30%, and that its sales fell not by 30% but 20%. Even then it follows that manufacturing other than auto grew a handsome 9.4% during the first…

As minister of corporate affairs and minister of finance during the first term of Prime Minister Narendra Modi, Jaitley piloted two of the most important reforms — the IBC and the GST.Read full article When Arun Jaitley spoke at Columbia University, which he generously did on multiple occasions, introducing him was a challenge. So distinguished was his career, and so long the list of his accomplishments, that I always feared that my introduction would run longer than the main event. In writing about Jaitley today, I face the same challenge. There is no way to do justice to his accomplishments in the available space. He was India’s leading politician who served with distinction in government as well as in opposition. He was a formidable lawyer, a great communicator and, above all, a true human being who would extend a helping hand to anyone who he thought might need it.

Read full article Abstract: A common tactic that large corporations in India have learnt to deploy effectively whenever they incur large losses is to impress upon the government that unless they are bailed out, the entire sector, even the whole economy, might run into deep trouble. I witnessed the use of this tactic first hand during my years at the Niti Aayog. In 2015, a leading industrialist whom I had known for a long time came to see me and made this “too big to fail” argument to me. I smiled and told him, “I am afraid such fear mongering does not impress me.” The industrialist smiled back and said, “You are right [about fear mongering]. But when I make this argument to officials in ministries, it often produces the desired result.” Unsurprisingly, now that the auto industry is experiencing a slump in sales, its captains can be seen making the “save us or else deluge” argument everywhere. For instance, appearing on a foreign television programme, the vice-president of sales at Suzuki Motorcycle India recently noted that commercial vehicles are…

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.