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

Errol D' SouzaSubscribe to Errol D' Souza

Agricultural Policy Strategy, Instruments and Implementation: A Review and the Road Ahead

For 40 years, India's agricultural growth rate has averaged less than one-third of the government's modest target of 4%. The sector's performance has been about the same before and after the economic reforms in the early 1990s. The reforms that brought a dramatic acceleration of growth in urban sectors have essentially had no effect on agriculture. Slow agricultural growth has had ill-effects on food security, food price inflation and poverty reduction because of the inadequate level and composition of public expenditure. Agricultural education, research, extension and a wide range of ancillary public institutions have also suffered. Agricultural growth always demands massive public goods provision and that in turn requires a radical reorientation of central, state and district government activities. This paper advocates a new integrated, technology-led strategy to pull out of, what looks like, a vicious circle that agriculture is now caught in.

The Critics Are Not Keynesian Enough

It is because fiscal policy-makers may not respect intertemporal constraints that it is better to bind ourselves to rules. Also, in an intertemporal set-up, lowering fiscal deficits can be expansionary.

Budget 2006: Outlays, Inequality and Growth

The fiscal deficit is being contained by a decrease in interest payments and capital expenditures, along with a secular rise in direct taxes. However, the reduction in capital expenditures, mainly in infrastructure, is growth constraining. This article argues that infrastructure expenditures have a propensity to increase inequality and this turns the attention of government towards redistribution, which, in turn, increases transfer payments and squeezes out capital expenditures. Sorting out governance issues associated with infrastructure spending is essential to making budgetary finances more growth-oriented.

Hitching Employment to a Growth Strategy

An employment-oriented growth strategy requires a strategy of public investment in agriculture and promoting new technology, including the inputs embodied in those technologies. The bulge of employment in services is attributed to low productivity in the sector rather than to a high income elasticity of demand for its output. The paper argues for policy to concentrate on transforming manufactured goods clusters by exploiting their capacity to be sources of knowledge spillovers. Finally, with fiscal policy oriented towards long-term issues, aggregate demand management becomes the domain of monetary policy and the paper argues in favour of an expansionary outlook.

A Leap in the Dark

The orientation of fiscal policy should be on fiscal correction and long-term issues. Aggregate demand management is then the exclusive domain of monetary policy which by initiating a softer interest rate regime can also encourage capital inflows.

Budget 2005-06: The Big Picture: Macroeconomics of Outlays and Outcomes

The Fiscal Responsibility Act has been bypassed in the budget with a failure to achieve the fiscal deficit target and by a reduction in the share of capital expenditures. Special purpose vehicles and public-private initiatives have limited ability to further infrastructure investment and this along with the inability to control transfer payments will not encourage private capital formation, the targeted engine of growth. Finally, taxes on fringe benefits should not be on the productive component of these benefits and taxes on cash withdrawals are not neutral and affect the efficiency of financial intermediation.

Contractual Arrangements in Academia

The politicisation of higher education, corruption in faculty hiring and enrolment, and student political unrest are being addressed to a certain extent currently. Much less attention has been paid to the recruitment and retention of high quality faculty and the incentive structures that reward merit in academia. This article focuses on the organisational architecture of higher education institutions and uses the framework that describes it to make comments on academic contracts.

IIMS-I: Markets and Equity in Education

The traditional market failure approach does not identify the distinctive characteristics of higher education institutions sufficiently as it does not focus on their organisational architecture. Without this frame of reference it is difficult to comprehend the modes of functioning of higher education institutions. Policy-making in such a vacuum can result in distortions.

Life Cycle Concerns:Ineffectively Addressed

The lifetime concerns of individuals, though a key focus of the Budget for 2003-04, are nevertheless addressed in such a way that human capital - the engine of growth - will not be accumulated in an equitable or efficient manner.

What Is Monetary Policy Doing?

The Reserve Bank of India has been using open market operations to sterilise the inflows of foreign capital so as to contain domestic monetary expansion. At the same time it is intervening in foreign exchange markets. With downward price rigidity, and shocks such as declining foreign interest rates, and declining import tariffs as the economy integrates into the world economy, it is imperative to revise the money supply target so as to enable the economy to adjust to these shocks better.

A Primer on Required Tax Policy

In the last two years there has been a decline in the tax/GDP ratio but this year the finance minister intends to reverse that mainly through mopping up more corporation and income and service taxes and an improvement in union excise duty collections. However, the proposals in the budget are not conducive to promoting growth in the economy.

How Well Have Public Sector Banks Done?

The efficiency of the public sector banks has declined during the 1990s when measured by the spread/working fund ratio. Though the turnover/employee ratio of the public sector banks improved, the ratio for the private and foreign banks doubled relative to that of the public sector banks. The profitability of the public sector banks did improve relative to the private and foreign banks, but they have lost ground in their ability to attract deposits at favourable interest rates, in their slow technological upgradation, and in their staffing and employment practices, which has implications for their longer-term profitability.

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