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

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Capital Account Management in India

India has been subject to capricious capital flows since its integration with the global capital markets in the early 1990s. In a bid to balance diverse objectives, India, like many other emerging markets, has resorted to active management of various types of capital flows. This paper finds that while the calibrated liberalisation approach resulted in altering the composition of capital flows towards more stable flows, and has helped India to negotiate the "Trilemma," the use of sporadic capital account management measures in the face of surge or stop of capital flows has not been very effective in achieving their objectives of reducing external vulnerability or mitigating macro-prudential risks.

Monetary Policy Dilemmas at the Current Juncture

Monetary policies in advanced economies and emerging markets face quite different challenges at the current juncture. In the advanced countries, current dilemmas derive from the normalisation of unconventional monetary policies. The short-term dilemma is to determine when to start exiting extraordinary policies and selecting appropriate tools, as conventional tools may not be very relevant during this phase. The medium- to long-term challenges relate to the sequencing, pace and mechanics of normalisation. Monetary policy in emerging markets needs to cope with the familiar dilemmas of fiscal dominance, the growth-inflation trade-off and the "impossible trinity." With fiscal parameters in control, and food and commodity prices subdued, the chief dilemma currently confronting emerging markets involves a trade-off between targeting divergent domestic and external cycles. Although they are now better placed to absorb a sudden stop, the impact is likely to be differential, with those with weaker macroeconomic parameters suffering greater pain.

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.

Sectoral Linkages and Growth Prospects

This paper examines the linkage of growth among the agriculture, industry and services sectors of the economy, using both an input-output (I-O) and a simultaneous equation framework. Despite the substantial increase in the share of the services sector in GDP over the years, the I-O tables suggest that the agricultural sector still plays an important role in determining the overall growth rate of the economy through demand linkages with other sectors of the economy.

Growth vs Inflation Control

The reduction in the Bank rate and in the cash reserve ratio effected in the latest credit policy statement may appear small, but what is significant is the signal conveyed to the market that the policy of supporting investment by providing adequate liquidity and a softer interest rate environment will continue.

Liberalisation and Growth of Firms in India

This study analyses the impact of the liberalisation policies on the growth of firms in India. It analyses the inter-firm differences in growth rates over a seven-year period. The basic unit is the firm and the study allows for the entry and exit of firms during the sample period. Further, the authors show that not all firms have benefited from the liberalisation measures. There were gainers and losers. The impact of the determinants on growth has not remained constant over the years but has changed during the process of liberalisation.

Global Business and Political Governance

A brief look at critical turning-points that have marked qualitative transformations in the nexus between the polity and business. What is most noticeable is the pendulum-like movement of the status and influence of business from the periphery to the centre in the power structure. Each swing of the pendulum originates in the dysfunction of whatever organisational thrust happened to be dominant at the beginning of the swing. Surely, the present swing towards global business will generate some countervailing tendencies which will change the momentum of the process, as also its specific nature. In the process the opportunities for expansion available to the developing nations will diminish in one area, and increase perhaps in others.

What Ails Kerala's Economy:A Sectoral Exploration

The `Kerala model' of development has been facing a serious crisis due to low growth, high cost, low productivity, low investment and low employment in the state economy. This paper analyses the performance of major sectors of the state economy, such as agriculture, industry and the financial sector, during the past two decades and brings out the problems they confront. The paper highlights the lack of a development strategy in Kerala for growth and employment generation.

Environmental Compliance versus Growth

Stringent regulations to control pollution due to effluents have not stifled the growth of the palm oil industry in Malaysia; rather, they have complemented the industry's efforts to innovate and remain competitive.

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