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

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The ‘What,’ ‘Why,’ and ‘How’ of a Widening Current Account Deficit

The reason for the increase in the current account deficit during first quarter of fiscal year 2022–23 is analysed. One reason for the widening of CAD has to do with India’s growing dependence on fossil fuels. There is also an element of lack of price competitiveness that is hurting exports. India is exporting low-valued technology-intensive goods whereas importing high-valued technology-advanced goods. The Government of India and the Reserve Bank of India are taking adequate measures to control the widening trade deficit. While some of these measures are yielding results in reducing CAD, external factors such as geopolitical tensions and the United States Federal Reserve System’s move of quantitative tightening are making CAD difficult to control.

Impact of the Pandemic on Growth of the States

The slump and recovery in growth varied substantially and adversely affected disparate states.

Scrutiny of the Union Government’s Performance

Price of the Modi Years by Aakar Patel, Chennai: Westland, 2021; pp vii + 488, `699.

The Digital Rupee

The launch of the central bank digital currency is a bold step in the right direction.

What Does the COVID-19 Experience Tell Us about Indian Growth Drivers?

Parts of this paper were presented at SSS-AIU, Study Group and EGROW Foundation webinars, O P Jindal Finance Global Finance Conclave and Rajagiri Conference on Economics and Finance. Enthusiastic feedback helped improve it. In particular, the author thanks Charan Singh for the invitation to develop one of her op-eds, Arvind Virmani, Amartya Lahiri and an EPW referee for comments. The author would also like to thank Krishnandu Ghosh and Sandipan Saha for research assistance and Shreeja Joy Velu for secretarial assistance. This paper is an updated and abbreviated version of IGIDR WP-2021–025.
 

Assessing the Recent Indian Economic Growth

Although the headline growth in 2021–22 and the projections for 2022–23 following the disastrous COVID-19 pandemic are impressive, indeed the highest among major economies, this is not the hoped-for V-shaped recovery as the output loss is far from being recouped. India’s output loss is among the highest in major G20 economies. It may be difficult for the Indian economy to sustain an average growth above 5% in a business-as-usual scenario because its potential growth has declined through hysteresis, and it faces several headwinds going forward.

Vulnerability as an Ex Ante Measure of Poverty

Using both rounds of the India Human Development Survey, vulnerability is measured as an ex ante measure of poverty for the Indian households. This article highlights the importance of measuring vulnerability in the overall poverty calculation and found it to be a significant predictor of the future poverty.

Sources of India’s Post-reform Economic Growth

This paper analyses the sources of India’s economic growth in terms of industry origins, inputs, and productivity during 1994–2018, comparing the pre- and post-global financial crisis periods. Manufacturing was one of the main contributing sectors to aggregate growth of the total factor productivity and gross value added in the post-GFC period. The results stress the need for proactive policies to support agriculture, manufacturing, and market services sectors.

Fiscal Situation of India in the Time of Covid-19

India announced a fiscal package worth `1.7 trillion to fight the COVID-19 pandemic, but there were arguments for more spending. Using data from a cross-section of countries, this paper estimates the relationship between fiscal spending and the spread of COVID-19, economic stringency, and macroeconomic factors. It argues that subsidy rationalisation is the way to fund the increased expenditure on health and direct transfers while maintaining fiscal discipline.

What Must be the Priority of the Budget?

Improving agriculture incomes and boosting consumer demand must be the top priorities.

 

How Reliable Is Labour Market Data in India?

Public perception about the pattern of shock on the employment rate during COVID-19 is based on the Centre for Monitoring Indian Economy data, which is widely referred to in public debates, corporate policy-making, and banking sector. The question that crops up then is how reliable is the CMIE data on the labour market? Here, the examination of the employment ratio indicator of the Periodic Labour Force Survey and CMIE is extended to two another very important labour market indicators, that are, labour force participation rate and unemployment rate, and a comparison of the PLFS and CMIE is carried out to look at their trends and association.

Price Risk of Central Government Securities in India

The study examines the determinants of price risk of the central government securities in India using their daily trading data comprising of 81,384 observations during the period 2011 to 2020.

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