Articles by R Kannan

Three issues - the absence of mortality table for the annuitants, lack of reinsurance arrangements and who is best suited to manage the funds during the accumulation phase - deserve urgent attention in the context of the government's new initiatives on pension reform.

The Reserve Bank has in the last few years pursued active open market operation as an indirect instrument of monetary policy. The Liquidity Adjustment Facility (LAF) which was introduced on June 5, 2000 is going to play a central role in RBI's liquidity management operations. The concepts of discretionary (DL) and autonomus (AL) liquidity measures make LAF a powerful instrument of monetary policy. The two-way causation between discretionary liquidity and the call money rate, which is a prime representative indicator of availability of liquidity in the system, clearly supports the use of DL and AL in the framework of the multiple indicator approach. Also worth noting in this context is the robust link between AL, DL and the monetary condition index.

Some developed countries have practised inflation targeting as a part of monetary policy during the 1990s. Price stability is needed to create a stable and non-inflationary environment for resource allocation. Stable price expectations are necessary for long-term contracts. Successful inflation targeting requires credibility of the enforcing agency, usually the government and the central bank. Credibility in turn requires that the target be chosen carefully. This article reviews inflation targeting experience so far and analyses the issues related to it. It argues for developing an inflation model for India. Inflation targeting in India should wait until financial sector reform agenda is accomplished.

the system for a while. Social action and judicial intervention may slightly improve the working and living conditions of some and may bring them within the system to some extent. But all this docs not (to my mind) invalidate the broad distinction proposed by me. Those within the system have a role to play in the system (however small), some minimal degree of control over their lives, some possibilities of collective action to improve their conditions, some rudimentary safety net of social security to fall back upon, some faint hopes of a brighter future and of upward mobility. Those who are outside the system have none of these things: they can only drift helplessly along; they have no voice in any matter; they are hopelessly at the mercy of those within the system.