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Calm before the Storm?

Vol. 51, Issue No. 12, 19 Mar, 2016
Parthapratim Pal

It is generally believed that India is doing far better than most emerging market economies in these times of global economic turmoil. Emerging markets are facing capital flight, with large-scale outflows, especially since the second half of 2015, with the trend expected to continue in 2016. India has been less affected than others, but is clearly vulnerable due to the large number of Indian firms that are exposed to external borrowings, a weak rupee, a year or more of declining merchandise exports, falling corporate profitability, and stressed corporate balance sheets.

Continuous Revisions Cast Doubts on GDP Advance Estimates

Vol. 51, Issue No. 10, 05 Mar, 2016
J Dennis Rajakumar, S L Shetty

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.

Fuel Pricing Policy Reform in India: Implications and Way Forward

Vol. 44, Issue No. 29, 18 Jul, 2009
Amita Batra, B B Bhattacharya

This paper undertakes an examination of the differential impact of international oil prices on domestic inflation and output growth in India under two alternative scenarios. One scenario is, when domestic fuel prices are allowed a formula-based automatic alignment with international oil prices and the second, when as per current policy, fuel prices have evolved as a consequence of revisions specified periodically by the government. The differential impact analysis has been undertaken in a structural Vector Autoregressive framework using the technique of innovation accounting.

Impact of Fiscal Deficit

Vol. 38, Issue No. 33, 16 Aug, 2003
M K Datar

Fiscal Deficit and Inflation in India: A Study in Nexus by Ashutosh Raravikar;  Macmillan India, 2003; pp x+252, Rs 385

Dynamics of Inflation in Services

Vol. 38, Issue No. 26, 28 Jun, 2003
Kalyan Raipuria

Price developments in services need to be analysed on the basis of CPI to study their contribution to inflation in relation to that of goods. At present, services sectors account for almost 50 per cent of the aggregate GDP. Higher price increases, rising productivity and increased tradability could create a â??virtuous circleâ?? associated with a higher share of services in GDP. However, reforms and privatisation programmes, if not associated with increased efficiency, may also contribute to a rise in charges and services prices.

Exchange Rate Policy and Management

Vol. 38, Issue No. 22, 31 May, 2003
Muneesh Kapur, R K Pattnaik, S C Dhal

The objective of this study is to present the Indian experience of exchange rate management against the backdrop of international developments both at the theoretical and empirical levels. No single exchange rate regime is most appropriate for all countries and the regime that is appropriate for a particular country may change over time. The stated objective of India�s exchange rate policy is managing volatility with no fixed rate target while allowing the underlying demand and supply conditions to determine exchange rate movements over a period. Against this background, the empirical exercise undertaken indicates that monetary policy has been successful in ensuring orderly conditions in the foreign exchange market and containing the impact of exchange rate pass-through effect on domestic inflation. Real shocks are predominantly responsible for movements in real as well as nominal exchange rate; monetary policy shocks have been relatively unimportant. Deviations from uncovered interest parity can be observed suggesting role for sterilised foreign exchange market intervention in ensuring orderly conditions; at the same time, the excess returns are insignificant and get eliminated relatively quickly. Overall, the analysis indicates that exchange rate management in India has been consistent with macroeconomic stability.

Growth vs Inflation Control

Vol. 38, Issue No. 21, 24 May, 2003
EPW Research Foundation

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.

Calcutta Diary

Vol. 38, Issue No. 19, 10 May, 2003
AM

The economic recession, which threatens to be long-lasting, is the product of the recession of political and cultural ethos; countrymen, we have rediscovered the bliss of colonialism, at least a new version of it, and cannot quite stop admiring it.

Inflation : RBI May Well Be Right

Vol. 38, Issue No. 19, 10 May, 2003

RBI May Well Be Right The outlook for inflation in 2003-04 is expected to remain benign, according to the Reserve Bank. This at a time when inflation, measured by point-to-point changes in the wholesale price index, is well over 6 per cent and the monsoon, or at least the Met office, promises another difficult year. International commodity prices, too, show signs of hardening, despite the welcome signs of crude prices remaining soft. Is it time then to take the central bank

Small Savings Policy Circumventing Tax Sops

Vol. 38, Issue No. 18, 03 May, 2003
Vivek Moorthy

Inflation benchmarking of small savings and provident fund interest rates, which is a sound policy in and of itself, has the added advantage of lowering the interest paid when there is inflation and tax exemptions cannot be touched.

The Economy: A Post-Budget Perspective

Vol. 38, Issue No. 14, 05 Apr, 2003
A V Rajawade

The focus of this article is not so much the quantitative or specific aspects of the budget as some qualitative issues regarding the economy. It touches on some developing trends and, since the budget is the peg on which it hangs, refers to one or two specific proposals.

Macroeconomic Management in the Nineties

Vol. 37, Issue No. 16, 20 Apr, 2002
Shankar Acharya

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.

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