ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Surajit DasSubscribe to Surajit Das

Reviving Fiscal Activism

Fiscal Consolidation, Budget Deficits and the Macro Economy by Lekha S Chakraborty, Sage, 2016; pp xix +197, ₹ 750.

Can Central Banks Reduce Inflation?

To explore the empirical validity of the proposition that a rise in the interest rate would necessarily lead to a lower rate of inflation, empirical evidence from 158 countries, during 1981 to 2013, is used to critically evaluate this widely accepted idea. Based on the findings, it is argued that from a policy perspective, the so-called “inflation targeting” should be revisited.

Death in Police Custody

We have watched with disgust and horror the brutal police assault on students during a peaceful demonstration organised by four Left students’ organisations on 2 April 2013 in Kolkata and the subsequent death of Sudipta Gupta, a participant in the demonstration, while in police custody. Sudipta was...

On Financing the Fiscal Deficit and Availability of Loanable Funds in India

A higher fiscal deficit - financed by domestic borrowing - does not necessarily crowd out private investment by limiting the availability of loanable funds for the private sector. The fiscal deficit always finances itself and the investment always generates an equal amount of ex post savings. The supply of money is always demand-determined and credit-led at any given interest rate. The available empirical evidence from India also substantiates this.

On Bringing Down the Fiscal Deficit

This article argues that undertaking a contractionary policy to cut down various government expenditures with the intention of bringing down the fiscal deficit as a proportion of GDP is fundamentally flawed. And that it is the responsibility of the central government to step up government expenditure.

Status of Agriculture in India

This paper looks at trends in the growth of agricultural production in India over the last one and a half decades, identifies factors that affect agricultural growth and analyses constraints that have affected growth in the sector. On this basis, projections have been made on the future growth of the sector in the medium term, coterminous with the Eleventh Five-Year Plan. All-India level and state-wise analyses highlight the role of public investment/ government expenditure on agriculture as being the crucial determinant in stepping up the rate of growth of agricultural production. Given other factors, a consistent increase in public investment to 15 per cent per annum should lead to agricultural growth of 4 per cent, which is concomitant with the projected growth rate in the Eleventh Plan. The other factors that are important for a higher agricultural growth are fertiliser usage and agricultural prices.

Effect of Fiscal Deficit on Real Interest Rates

This paper examines the proposition that an increase in the fiscal deficit, financed by government borrowing, necessarily raises the real rate of interest and thus 'crowds out' private investment. It finds that theoretical positions that affirm this point of view assume that the economy is in full employment, a condition that is not fulfilled in most developing countries. The existence of a definitive positive relationship between real rates of interest and the fiscal deficit-GDP ratio is tested empirically for India and for a number of other countries in the world. The finding is that interest rates do not necessarily depend on the fiscal deficit and that policies based on this understanding are erroneous.
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