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

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Regional Divergence and Inequalities in India

The question of regional development holds special significance for India, given that the regions are not entirely homogeneous. The high growth rate of the economy as a whole has not led to a similar growth pattern for its regions. An analysis on regional convergence across 15 major states in India suggests that there is divergence of the aggregate economy for the period 1970–71 to 2013–14. The findings therefore do not lend support to the expectations of the neoclassical convergence hypothesis according to which poor regions tend to catch up with the advanced regions in the long run leading to regional convergence.

Majoritarian Rationale and Common Goals

Looking at existing policy instruments and goals, and the economic and social outcomes they promise to deliver, it is argued that majoritarian politics and social and cultural outcomes are not part of fringe thinking. The politics of hate actually works to build a consensus for ruling class economics. It is not surprising, therefore, that the only "nationalist outlook" of our times is to stand firmly behind the policy programme for the global investor.

IMF's Autocritique of Neo-liberalism?

In a recent article published in Finance and Development, an International Monetary Fund magazine, three economists have critically evaluated the policies the IMF promotes. They acknowledge evidence that suggests that economic growth under neo-liberalism is difficult to sustain, that it leads to an increase in inequality, and that continuing inequality is harmful for sustainable (or continuing) growth.

Evolving Centre–State Financial Relations

After the Fourteenth Finance Commission award, aggregate transfers as a percentage of gross domestic product has increased, while grants as a percentage of GDP has declined. The centre is resorting to cess and surcharges that are not shared with the states. This would mean denial of revenue to states, which goes against the spirit of the Constitution. Further, the states have a reduced untied fi scal space, with the union’s share in Centrally Sponsored Schemes in 2016–17 (BE) being reduced. Finally, in the absence of plan transfers, post 2017–18, the focus should be to develop a framework for non-fi nance commission grants to states which is predictable and certain.

Gender Inequality in Well-being in India

This article proposes to measure functioning-based well-being, as proposed by Amartya Sen and others, for 28 states in India based on National Family Health Survey 3 (2005-06) data. Significant differences between states were found in terms of well-being and wealth indices. Overall, women were found to be far behind men in terms of well-being. The well-being of women was found to decline with age and when they were in larger families, unlike men. While upper-caste women were not found to be doing significantly better than Scheduled Caste and Scheduled Tribe women, upper-caste men were better off. And the women in the northern mountainous regions were found to be doing better than women in the Indo-Gangetic plains. However, the well-being of both men and women was found to be significantly related to the wealth they possessed.

Lost in Its World

There is a refreshing candour in the Economic Survey 2015-16, but there is also an extreme unrealism.

Continuous Revisions Cast Doubts on GDP Advance Estimates

Two recent press releases by the Central Statistics Office substantially revise the new series of National Accounts Statistics. The new releases are more than just routine updates, and entail methodological changes and incorporate new sources of data, perhaps in response to various critiques. Yet, on comparing the advance estimates released with past such estimates, the CSO's latest growth projections once again turn out to be far too optimistic.

Macroeconomic Management in the Nineties

This paper discusses India's macroeconomic policies in the 1990s. Section II of the paper provides an overview of macroeconomic performance during the decade. Section III recounts the macro-policy responses to the principal problems and challenges that surfaced as the decade unfolded. Section IV surveys the main institutional reforms carried out in the nineties in the key dimensions of macroeconomic policy - fiscal, monetary and the exchange rate regime. Section V concludes by outlining briefly some of the major ongoing challenges for macroeconomic policy.

What Size the 'New' Economy?

Efforts need to be made to scientifically assess the size, coverage and growth of the 'new', or information technology, economy in India. Econometric models have so far ignored the sector in their analyses and forecasts, as no benchmark estimates are available. The estimates can be attempted on the basis of analysis of GDP estimates of IT-using sectors. The estimates can be cross-checked from private consumption vector, IT spending, and physical indicators of the progress of the IT sector. It is important to study the effect of the emerging IT economy on productivity to gauge the GDP contribution of the IT sector.

In Small Doses

The Reserve Bank of India’s monetary policy announcement for the first half of this fiscal year is very much on the expected lines. There are no dramatic pronouncements on the macroeconomic front – the governor had earlier already ruled out any reduction in the Bank rate or the cash reserve ratio – no big bang reforms, no new announcements on the recent stock market/banking fraud. Nothing to unnerve the markets or unsettle the economy. Instead the policy carries forward the overall reform agenda – albeit in fits and starts – even as it tries to plug the loopholes in the system that have come to light in the context of the latest scam. However, market observers looking to find some admission of regulatory lapse on the part of the RBI are likely to be disappointed. Apart from a brief mention that the policy is being “presented at a time when serious lacunae have emerged in the functioning of certain segments of the financial system”, there is no elaboration of whether the central bank’s own supervisory lapses – of the clearing house or of urban cooperative banks/ commercial banks – contributed to the market operators’ shenanigans.

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