In The Media ⁽⁴⁰⁰⁾

No matter what some Delhi-centric journalists and intellectuals might say, he remains personally intensely popular with people.Read full article I have maintained, since well before the Balakot airstrikes, that Prime Minister Narendra Modi will repeat his 2014 election victory in 2019. This conviction is rooted in many factors. The first factor is Modi himself. No matter what some Delhi-centric journalists and intellectuals might say, he remains personally intensely popular with people. Through regular radio broadcasts, social media interactions, and personal appearances at hundreds of functions and rallies each year, he has successfully conveyed to the average Indian that he is sincere, hardworking and decisive. Many may have specific complaints about unfulfilled promises. But few doubt his unwavering commitment to the nation and its people.

One concern is financial feasibility. NYAY pegs cost at Rs 3.6 tn —13% of govt expenditures in 2019-20 budget.Read full article Congress’ minimum income scheme, Nyuntam Aay Yojana (NYAY), raises several puzzling questions. Congress president Rahul Gandhi stated his party worked on the scheme for six months and consulted ‘all big economists’, including former RBI governor Raghuram Rajan. But, so far, none has satisfactorily answered any of these questions. Normally, a cash transfer scheme offers identified beneficiaries a fixed amount of cash. Once beneficiaries have been identified, you transfer the stipulated sum to them. But NYAY adds a twist to this standard scheme. It additionally guarantees every family a minimum income of Rs 12,000 a month. The first puzzle is whether the scheme would identify all those families with monthly income below Rs 12,000 and uniformly transfer Rs 6,000 a month to them. If yes, then for families with incomes exceeding Rs 6,000, the scheme would overshoot the target income. Why subject the taxpayer to this extra burden? An alternative would be that the scheme would give each identified beneficiary family…

Ending India’s preferential trade treatment won’t hurt economically—but it is politically dangerous. Read full article Abstract: Just as tensions with China have started to ease, U.S. President Donald Trump has opened a new front in his trade war: India. On March 4, 2019, he fired the first shot by notifying Congress of his intention to end the favorable treatment India has enjoyed under the Generalized System of Preferences (GSP). Negotiated during the 1970s under the auspices of the General Agreement on Tariffs and Trade, and later subsumed into the World Trade Organization, GSP allows many products from India and other developing countries to enter the United States duty-free. Trump’s decision to end GSP did not come as a surprise. Despite close cooperation between the world’s two largest democracies in defense and other areas, trade relations between them have been prickly for some time. They acquired an extra edge under Trump, who has sarcastically described India as “the tariff king.” Trump’s favorite complaint is India’s high tariff on Harley Davidson. But that isn’t the only one. He’s also irked that the United States…

Read full article Abstract: While digital technology now touches most Indians, there is insufficient appreciation of how far India has come within a short period. Digital infrastructure has greatly reduced friction in transactions whether financial or otherwise. This infrastructure and what will be built on it in the near future promise significant productivity gains. The best-known components of India’s digital infrastructure, of course, are what we now call the JAM trinity. It consists of the Jan Dhan bank accounts, Aadhaar biometric identity and mobile telephony. While these three components represent the front end, there is a lot more to our digital infrastructure. Two additional important columns of this infrastructure are Public Finance Management System (PFMS) and Unified Payments Interface (UPI). PFMS is an end-to-end solution for processing, tracking, monitoring, accounting, reconciliation, and reporting of financial flows into and out of the central government. It constitutes a unified platform for tracking releases of financial flows and their utilisation down to the last mile. Through the banking system, it connects the central government financial flows digitally to state governments, businesses and even…

For poorest beneficiaries, the transfers under PM-KISAN make a significant contribution to their purchasing power.Read full article The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme will transfer annually Rs 6,000 to every small and marginal farmer. Many in the Opposition have criticised the scheme, arguing that it offers too little to be of real help to farmers. Congress president Rahul Gandhi went as far as describing the scheme as “an insult to everything [farmers] stand and work for”. This denunciation is largely political. When in power, the UPA government had put in place a subsidy under the National Food Security Act (NFSA) that was roughly equal to the transfer under PM-KISAN on a per-beneficiary basis. One may rhetorically ask, was this subsidy, too, an insult to its beneficiaries? To those steeped in the elite culture of Lutyens’ Delhi, almost any transfer that is feasible within India’s tight fiscal constraints appears laughably low. We are reminded of the acrimonious debate on the Tendulkar poverty line in 2011. One commentator had argued then that at this poverty line, he could not even buy…