Feedback
Search
Ashok Kotwal
GST Explainer: Introduction
Posted on: 16 Oct 2017
Seventeen years after its framework was formed, India’s biggest tax reform – the goods and ... read on »
Introducing a new feature: ‘Explainers’
Posted on: 16 Oct 2017
Our day-to-day lives are tossed around due to economic changes, resulting sometimes from g ... read on »
On demonetisation
Posted on: 23 Dec 2016
On the evening of 8 November, the Prime Minister announced on national television that Rs. ... read on »
Introduction to e-Symposium: The GDP conundrum
Posted on: 16 Nov 2016
Ever since India’s Central Statistical Organisation came out with the new GDP series with ... read on »

Tag: fiscal policy

Should India hold US$400 billion of foreign exchange reserves?
Gurbachan Singh
Posted on: 03 Oct 2017

RBI’s foreign exchange reserves have now crossed the US$400 billion mark. In this article, Dr Gurbachan Singh discusses why India’s Central Bank should not hold such large reserves.
read on »

Why are finances of Indian states deteriorating?
Ananya Kotia
Posted on: 27 Sep 2017
Topics:   Finance


The combined stock of debt owed by Indian states is about 21% of GDP, and is proliferating. In this article, Ananya Kotia discusses why the stock of the states’ debt is unsustainable today despite their commendable adherence to hard limits on borrowing flows imposed by India’s fiscal rule framework.
read on »

Straw men in the debate on basic income versus targeting
Martin Ravallion
Posted on: 11 Aug 2017

A universal basic income as a poverty-reduction policy is often contrasted unfavourably with targeted transfers. In this article, Martin Ravallion argues that five of the common arguments employed against basic income are really straw men that overstate the relative effectiveness of targeted transfers. While a universal basic income is not yet feasible in many countries, more universality and less fine targeting would create better social policies.
read on »

Demonetisation, cattle slaughter ban, and India’s cyclical agrarian crisis
Parag Waknis
Posted on: 04 Aug 2017

In this article, Parag Waknis discusses why India’s rural economy is always on the precipice of crisis, and how the recent shocks of demonetisation and cattle slaughter ban exacerbated the crisis by destroying rural incomes and choking off farmer’s main source of emergency funding, respectively.
read on »

Health policy and economic growth in India
Nalini Gulati , Nidhiya Menon
Posted on: 27 Jul 2017

A new synthesis paper (Menon 2017) produced by the International Growth Centre brings together evidence from various health-related IGC studies on India undertaken over the past seven years, to draw implications for health policy. At a workshop organised by IGC in collaboration with Ideas for India and Indian Statistical Institute, Srinath Reddy (Public Health Foundation of India), Alok Kumar (NITI Aayog), and Karthik Muralidharan (University of California, San Diego) discussed key policy lessons emerging from research, and areas where further work is required.
read on »

The economic and political consequences of India’s demonetisation
Abhijit Banerjee , Namrata Kala
Posted on: 26 Jul 2017

The ruling party at the centre won the Uttar Pradesh state election despite its demonetisation policy having some negative economic impacts on the Indian economy. By combining primary data from surveys of wholesale and retail traders, with secondary data on wholesale markets, this column seeks to analyse why this was so.
read on »

Are farm loan waivers really so bad?
Pronab Sen
Posted on: 23 Jun 2017

Recent announcements by various state governments of their intent to waive farm loans to varying extents have been strongly criticised by the media and other commentators. In this article, Dr Pronab Sen examines the validity of the claims on which this opposition is based.
read on »

Impact of disinvestment policy on public sector enterprises in India
Ritika Jain
Posted on: 12 Jun 2017
Topics:   Political Economy


To address operational inefficiencies in PSEs without comprising on their social objectives, disinvestment policy is often used. However, there are concerns regarding the extent of impact on firm performance since disinvestment may involve transfer of ownership but not control. Analysing data from 1991-2010 on all manufacturing PSEs owned by the central government, this column shows that the average annual efficiency score of disinvested enterprises rose by almost 20%.
read on »

Disintermediating the State: Would a universal basic income reduce poverty more than targeted programmes?
Justin Sandefur
Posted on: 31 Mar 2017

Commenting on the discussion of the universal basic income in India’s Economic Survey 2016-17, Justin Sandefur contends that a modest version of UBI could potentially save money and shift expenditure in a progressive, pro-poor direction.

Tweet using #basicincome

read on »

The tale and maths of universal basic income
Jean Drèze
Posted on: 15 Feb 2017

Commenting on the discussion on universal basic income in the recently released Economic Survey, Jean Drèze argues that UBI is an idea whose time will come, but that time is still quite distant as far as India is concerned.

Tweet using #basicincome

read on »

An economist’s view on recent domestic and world events
Dilip Mookherjee
Posted on: 31 Jan 2017

Dilip Mookherjee spoke to Hindu Business Line at length on a variety of issues including demonetisation, the upcoming Budget, and the Trump Presidency’s impact on the world economy.
read on »

How to go about chasing black money
Indira Rajaraman
Posted on: 30 Jan 2017

In the context of demonetisation, Indira Rajaraman argues that the focus of any sustainable reform of the taxation structure must be on reducing flows of tax evasion, not going after existing caches of black money.
read on »

Aadhaar, demonetisation, and the poor
Silvia Masiero
Posted on: 09 Jan 2017

There is a view that an Aadhaar-centred apparatus of digital inclusion can shield the poor from the problematic effects of demonetisation. In this article, Silvia Masiero argues that constraints of technology ownership, access to informational networks, and infrastructural readiness prove the argument wrong. Other means are needed to reduce the severe humanitarian consequences of sudden cashlessness.
read on »

Assessing the impact of demonetisation through the gender lens
Mitali Nikore
Posted on: 04 Jan 2017

In this article, Mitali Nikore, Senior Consultant at PwC India, highlights how demonetisation is impacting women differentially, and offers policy suggestions on how the negative effects can be mitigated.
read on »

On demonetisation
Parikshit Ghosh
Posted on: 23 Dec 2016

On the evening of 8 November, the Prime Minister announced on national television that Rs. 1,000 and 500 notes are no longer legal tender, and must be exchanged at the banks for newly issued currency. This major policy intervention has sparked a country-wide debate. Will it curb black money? Is it going to nudge us towards a cashless society? How much will be the collateral damage from the liquidity shock and is it a price worth paying?

Ideas for India is following the issue closely. A lot of commentary has already appeared on our pages and more will be forthcoming. This page collects together all the articles we have posted on demonetisation, in reverse chronological order.

read on »

Demonetisation: A thunderbolt in search of a target
Ajit Karnik
Posted on: 23 Dec 2016

In this article, Ajit Karnik, Professor of Economics at Middlesex University, Dubai, examines the various rationales that have been trotted out to justify demonetisation and finds little evidence to back these up. In his view, this seems to have been done mainly because a dramatic gesture was required to keep the supporters of the current government enthused.
read on »

Post-demonetisation: Can the old notes return?
Badri Sunderarajan
Posted on: 22 Dec 2016

Banks in India are reported to have received about 87.7% of the demonetised currency notes so far. In this article, Badri Sunderarajan argues that when once all the old notes have come in, it would make sense to reintroduce them into the system as legal tender.
read on »

India’s demonetisation drive: Politics trumps economics
Siddhartha Mitra
Posted on: 20 Dec 2016

In this article, Siddhartha Mitra, Professor of Economics at Jadavpur University, argues that even though demonetisation fails the standard economic cost-benefit test with regard to its stated objectives, it may still make for sound political arithmetic.
read on »

Demonetisation: Some very counterintuitive effects in practice
Gurbachan Singh
Posted on: 18 Dec 2016

Due to demonetisation, holders of black money lose if they cannot exchange their notes or sell these in the black market. It is widely reasoned that this implies an equal financial gain for the public authorities. In this article, Gurbachan Singh shows that this logic is flawed.
read on »

Will demonetisation lead to a protracted economic slowdown?
Radhika Pandey , Rajeswari Sengupta
Posted on: 15 Dec 2016

In this article, Pandey and Sengupta argue that the impact of the contractionary demand shock triggered by the note ban will gradually radiate from cash-intensive activities to virtually every sector of the economy.
read on »

The demonetisation boondoggle
Amartya Lahiri
Posted on: 04 Dec 2016

In this article, Amartya Lahiri, Professor of Economics at the University of British Columbia, argues that all public policy must rely on a clear-headed cost-benefit analysis and the recent demonetisation move fails the test.
read on »

Why Demonetisation?
Sarmistha Pal
Posted on: 01 Dec 2016

In this article, Sarmistha Pal, Chair in Financial Economics at the University of Surrey, examines whether the current government’s stance in tackling black money has significantly differed from its predecessor, and how far it is willing to go in this respect.
read on »

Consequences of the demonetisation shock
Sudipto Mundle
Posted on: 29 Nov 2016

In this article, Sudipto Mundle, Emeritus Professor at NIPFP, contends that we are likely to see a significant dip in economic activity till January 2017 or even till the end of the current financial year because of the disruptive demonetisation shock.
read on »

Notes ban: Modinomics vs. Moditics
Maitreesh Ghatak
Posted on: 23 Nov 2016

Maitreesh Ghatak, Professor of Economics at the London School of Economics, contends that while the ban on high-denomination currency notes is bad economics, it is a brilliant political move.
read on »

A monetary economics view of the demonetisation
Ajay Shah
Posted on: 21 Nov 2016

The demonetised Rs. 1,000 and 500 notes were 86% of the total volume of cash in India. In this article, Ajay Shah, Professor at NIPFP, argues that if a significant scale of firm failure were to come about, it would convert a temporary shock into a deeper and more long-term recession.
read on »

Going cashless but thinking cash?
Bappaditya Mukhopadhyay
Posted on: 20 Nov 2016

In this article, Bappaditya Mukhopadhyay, Professor of Economics and Finance at the Great Lakes Institute of Management, contends that switching from a predominantly cash-based to cashless economy needs a positive, exogenous shock and the recent currency ban could be the perfect opportunity for that. To give India’s cashless economy the push it needs, the government could allow mobile and other digital payment platforms to accept deposits in demonetised notes.
read on »

Picking up the pieces
Pronab Sen
Posted on: 18 Nov 2016

In an earlier article , Pronab Sen, Country Director, IGC India Central, examined some of the economic consequences of the recent demonetisation of Rs. 1,000 and 500 notes in India, and concluded that the potential damage could be substantial, both in terms of growth and equity.

In this article, focussing on solutions, he contends that the government now needs to realise that credit for production purposes is at least as, if not more, important than providing liquidity for consumption.

read on »

Policymaking in the ‘grey zone’?
Prerna Mukharya
Posted on: 17 Nov 2016

Prerna Mukharya, Founder of Outline India – a social enterprise that focuses on data collection, impact assessments and evaluation studies, predominantly working with rural populations in remote areas – discusses the impact of the currency ban on their work.
read on »

A macro view of India’s currency ban
Rajeswari Sengupta
Posted on: 15 Nov 2016

The recent ban on high-value currency notes has taken the country by storm. While much is being written about the pros and cons of this announcement in terms of the effect on black money, logistical costs, and the immediate inconvenience faced by the public, there is little or no discourse on the macroeconomic implications. In this article, Rajeswari Sengupta, Assistant Professor of Economics at IGIDR, discusses the impact of this move on money supply, output and prices, in the short- and medium-term.
read on »

Shock and oh damn
Pronab Sen
Posted on: 14 Nov 2016

In this article, Pronab Sen, Country Director for the India Central Programme of the International Growth Centre, argues that India’s recent demonetisation has penalised virtually the entire informal sector, and perhaps damaged it permanently.
read on »

A closer look at demonetisation
Gurbachan Singh
Posted on: 13 Nov 2016

In this article, Gurbachan Singh contends that black money and white money are simplistic concepts; there is a grey area as well. In his view, the economic effects of demonetisation in terms of real estate, seigniorage, and political funding are complex. The measure can be useful in curbing black money only if supplemented by other policies on a sustained basis.
read on »

A universal basic income to step up economic reform
Nimai Mehta
Posted on: 28 Oct 2016

In this article, Nimai Mehta, Academic Director of the Global Economics and Business Program at the American University, highlights the political challenge of introducing the wider set of reforms needed if a universal basic income (UBI) is to lift the poor out of poverty, and of ensuring fiscal affordability of UBI. Further, he shares some initial ideas on how these objectives may be achieved by leveraging the evolving Centre-state relations.

Tweet using #basicincome

read on »

Universal basic income for India
Vijay Joshi
Posted on: 21 Oct 2016

In this article, Vijay Joshi, Emeritus Fellow of Merton College, University of Oxford, sets out his proposal for a universal basic income (UBI) in India. He contends that ´deep fiscal adjustment´, in combination with UBI, would make a huge positive difference to the lives of people, present and future, and provide an essential underpinning for the acceptability of radical economic reform.

Tweet using #basicincome

read on »

Panel Discussion: Two years of Modi government
Pranab Bardhan , Parikshit Ghosh , Pratap Bhanu Mehta , Mihir Sharma
Posted on: 29 Aug 2016
Topics:   Political Economy


In  a panel discussion organised to mark the 4th anniversary of Ideas for India, I4I Editor Parikshit Ghosh (Delhi School of Economics) moderates a discussion on ‘Two years of Modi government’ among Pranab Bardhan (University of California, Berkeley), Mihir Sharma (Bloomberg View) and Pratap Bhanu Mehta (Centre for Policy Research), encompassing issues related to policy and governance; corruption; manufacturing; social sector; and social and cultural issues.
read on »

Can India beat this slowdown?
Jayan Jose Thomas
Posted on: 24 Feb 2016

RBI Governor Raghuram Rajan has cautioned the government against seeking to generate economic growth by increasing public spending and hence, adding to the fiscal deficit. In this article, Jayan Jose Thomas, Associate Professor of Economics at Indian Institute of Technology, Delhi, puts forth the view that the only engine that can pull the Indian economy forward at the moment is government expenditure.
read on »

Fiscal deficit and growth slowdown
Gurbachan Singh
Posted on: 17 Feb 2016

Ahead of the Union Budget, several policymakers and economists in India have advocated increasing public spending to spur economic growth. In this article, Gurbachan Singh argues that even if India is facing a slowdown, a larger fiscal deficit is not the solution – more so now that RBI and the government have adopted inflation targeting. The prospect of a fiscal crisis may be farfetched but India may be incurring costs differently.
read on »

Charting a course for the Indian economy
Karthik Muralidharan , Arvind Subramanian
Posted on: 05 Aug 2015

Karthik Muralidharan (Associate Professor of Economics, University of California, San Diego) speaks with Arvind Subramanian (Chief Economic Adviser, Government of India) on a broad set of issues ranging from the uniqueness of the Indian development model, the political economy of reforms, reducing factor misallocation in the economy, enhancing State capacity, financing India´s infrastructure needs, to the implications of the Fourteenth Finance Commission, improving the design of social welfare programmes, and climate change.

This is the third in the series of I4I Conversations.

read on »

Where is India’s growth story headed?
Ila Patnaik , Madhavi Pundit
Posted on: 25 May 2015

The global financial crisis and domestic policy paralysis led to a decline in firms’ investment activities and investors’ business confidence in India. Could this have affected the economy’s long-term growth? This column contends that institutional capacity for reform and the right policy action can render the negative investment shock temporary, and ensure that the trend growth of output remains strong.
read on »

Promoting the use of a novel water-saving agricultural technology among Indian farmers
Anil Bhargava , Kajal Gulati , Travis J. Lybbert , Nicholas Magnan , David J. Spielman
Posted on: 28 Apr 2015

The Met Department has forecasted a below-normal monsoon in India this year. This column analyses the demand for a water-saving agricultural technology — laser land levelling — among farmers in Uttar Pradesh. It also discusses how such information can feed into the design of a novel approach to combining public subsidies with private service provision to encourage the technology’s uptake among small-scale, resource-poor farmers.
read on »

14th Finance Commission: A trust-based approach towards local governments
Meera Mehta , Dinesh Mehta
Posted on: 27 Apr 2015

The 14th Finance Commission has been hailed as ‘path-breaking’ for recommending larger fund allocations to state governments and giving them more autonomy in spending these funds. In this article, Meera Mehta and Dinesh Mehta highlight that the Commission has also recognised the need to trust and respect local government bodies, and has allocated much larger funds to them. Will this approach work and will state governments cooperate?
read on »

Getting centre-state relations right for health in India
Amanda Glassman , Anit Mukherjee
Posted on: 01 Apr 2015

The 14th Finance Commission has recommended devolving a greater share of revenues to states in order to give them more control over spending. In this article, Amanda Glassman and Anit Mukherjee examine the current centre-state relationships in the context of the health sector in India. They recommend that centre-to-state transfers should be performance-related, and should seek to, at least partly, level the playing field across states.
read on »

Evaluating the risks of inflation targeting in India
Renu Kohli
Posted on: 03 Mar 2015

The adoption of flexible inflation targeting by the Indian government and RBI is a landmark change in the country’s monetary policy. In this article, Renu Kohli - a macroeconomic policy specialist - discusses the risks associated with the move. She reasons that the national and global macroeconomic environment and the timing of transition to the new regime are crucial to its success.
read on »

Modi’s economic reforms: Foundation laid but time running out
Eswar Prasad
Posted on: 27 Feb 2015

Anticipation is running high that the Modi government will announce sweeping economic reforms in their first full-year budget, especially since their tenure so far has been bereft of any dramatic changes. In this article, Eswar Prasad, Senior Professor of Trade Policy, Cornell University, contends that Modi has laid a good foundation for reforms in his first nine months in office. But the hard work still lies ahead and time is running out.
read on »

‘Cry, the Beloved Country’: Mending Punjab’s economy
Nirvikar Singh
Posted on: 11 Feb 2015

The growth rate of Punjab, which once ranked among India’s most affluent states, is slowing. In this article, Nirvikar Singh, who holds the Sarbjit Singh Aurora Chair of Sikh and Punjabi Studies at University of California Santa Cruz, diagnoses key issues with the Punjab economy and provides his perspective on what it would take to mend it.
read on »

India’s macroeconomic outlook
Eswar Prasad
Posted on: 16 Dec 2014

With falling inflation, high forex reserves and the new government embarking on a broad reform agenda, things seem to be looking up for India. In this article, Eswar Prasad shares his macroeconomic outlook for the economy. He provides his perspective on foreign inflows, disinvestment, fiscal position, the reform agenda, and escaping the low-growth trap.
read on »

Two views on the Budget
Eswar Prasad , Bharat Ramaswami
Posted on: 12 Jul 2014

The Modi government’s first Budget has received a mixed response. Eswar Prasad and Bharat Ramaswami present two distinct views on the Budget. While Prasad is of the opinion that the Budget hits the right notes and emphasises some key policy priorities, Ramaswami believes that a coherent policy and worldview is yet to emerge.
read on »

India's unique crisis – a short term fix
Devesh Kapur , Arvind Subramanian
Posted on: 20 Dec 2013

While the current turbulence in the Indian economy bears a resemblance to the situation of other emerging economies, it is unique when compared with historical experiences of economic crises. In their previous article, Kapur and Subramanian discussed the misdiagnosis of India’s crisis, and consequent errors in policy remedies. In this part, they outline short-term actions for reversing the growth slowdown, reducing current account deficit and preventing inflation.
read on »

What is mitigating a financial crisis in India?
Gurbachan Singh
Posted on: 08 Nov 2013

The recent turmoil in the currency market and the general slowdown in growth in India are disturbing. However, India has by and large performed better in terms of macro-financial stability as compared to many parts of the world. This column discusses the problems confronting policymakers, and current policy responses and associated costs, and suggests alternative policies.
read on »

Long term recovery of the Indian economy depends on reforms
Sarah Chan
Posted on: 24 Apr 2013

The Indian economy has been facing challenges in the form of sluggish growth, high inflation, and rising fiscal and current account deficits. This column highlights trends in the economic conditions, and outlines policy actions and reforms needed to put the economy back on track.
read on »

Most Read

Twitter Feed