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

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Assessing the Fiscal Capacity of Indian Governments

This article assesses the record of different post-reform governments in meeting their fiscal targets and improving both delivery and finances. A variety of indices are constructed, and consistency checks devised to measure relative performance. No government has achieved its targets, but the Congress Party has had the best record in keeping its promises, and reducing deficits. The effect of the growth dividend on lowering government debt and deficits is established. But the failure of the government finances to improve proportionately with this suggests the need for further improvement in expenditure management.

Avoiding Handicaps: Assessing Global Policy Advice for India

Aaditya Mattoo and Arvind Subramanian ("India and Bretton Woods II", EPW, 8 November 2008) offer useful suggestions for India's stance in global groups such as at the g-20. Subramanian ("Preventing and Responding to the Crisis of 2018", EPW, 10 January 2009) does the same for India's macro-policy responses following the financial crisis. But the arguments of the two sets of proposals are inconsistent. Mattoo and Subramanian want India to support a proposal to give the World Trade Organisation enforcement powers against undervalued exchange rates, but Subramanian wants India to follow self-insurance as China did. The reason for the inconsistency may be the authors' preference for India to follow the United States' interests in international negotiations, but to follow its own interests when domestic policy is involved.

Governance in India's Public Transport Systems: Comparing Indian Railways and Airlines

The paper examines the basic reasons and feasible remedies for organisational weakness in India's public transport systems and the possible contribution of ownership, industry and management structure, leadership, social norms, and institutional incentives to alleviating the weaknesses. The arguments are illustrated with reference to the public rail and air services and help to understand why some public sector transport undertakings have performed better than others. The most effective changes are those that create incentives, broadly defined, for individuals to improve productivity.

Indian Policy Modelling: Forging New Links

Forging New Links Economic Policy Modelling for India by V Pandit and K Krishnamurthy (eds); Oxford University Press, New Delhi, 2002; ASHIMA GOYAL This book aims to demonstrate the effective application of econometric methodology to modelling for Indian policy analysis. While the focus is largely on various dimensions of monetary policy, the methodologies vary over structural modelling, optimal control simulation models, time series analysis, and almost ideal demand systems. Although a complex and rapidly changing Indian macroeconomy has yet to be satisfactorily mapped, the various models give snapshots from differing perspectives that help to build up a composite picture.

Dictatorship, Democracy and Institutions

Using a systematic comparison of reform period policy choices and outcomes in China and India, this article explores the hypothesis that macroeconomic policies are influenced by the political structure. China's low but positive real interest rates, facilitated by greater exchange rate volatility, and high infrastructure investment allowed it to outperform India in its first post-reform decade. Political structure did lead to specific inefficiencies in macroeconomic outcomes, but macro-institutional changes exist that can improve policy. More openness under similar labour endowments gives both countries the opportunity to commit to more effective, stable and yet stimulatory macroeconomic institutions and policies.

Budgets: Promise and Performance

As an analysis of previous budgets reveals that there has always been a wide divergence between the government's promises and its performance. Overall there is very little connection between planned and actual growth in allocations to different sectors, and large fluctuations in allocations to agriculture. A worrying factor with regard to the current budget is the large reliance on extra-budgetary resources for the plan when these have not materialised in the past few years.

Rupee: Changing Trends

The immediate causes of the rupee appreciation in April were the weakness in the dollar and large FII inflows due to the initial public offerings of public sector units. Depreciation followed in May but the changes occurred because the RBI abstained from its normal intervention, which could have easily prevented the plus minus 5 per cent variation in the rupee. Perhaps it was sending a signal to markets that they should learn to live with limited two-way volatility.

Rupee Reversals

Rupee Reversals More on Real Exchange Rate, Fiscal Deficits and Capital Flows ASHIMA GOYAL It is instructive to link the comment the Lal, Bery and Pant (2003) (LBP from now on) paper has provoked with the excitement about the recent rupee reversals. The LBP paper got attention maybe partly because it suggested a reversal of a policy theme which has been dominant through the 1990s

The `Creditor' View

international financial architecture, he The

Building International Institutions to Avert Crises

Building International Institutions to Avert Crises Ashima Goyal International Finance and Developing Countries in a Year of Crisis: 1997 Discussions at the United Nations edited by Barry Herman and Krishnan Sharma; Vistaar Publications, New Delhi and United Nations University Press, New York;

Food Price as a Nominal Standard

Food Price as a Nominal Standard Ashima Goyal Foodgrain Price Stabilisation in Developing Countries: Issues and Experiences in Asia by N Islam and S Thomas, International Food Policy Research Institute; Washington, D C, pp 136 + viii.

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