Articles by J Dennis Rajakumar

Tamil Nadu is a state that has ensured a simultaneous improvement in growth and human development. Innovative welfare interventions combined with economic dynamism have been a key feature of the state’s development. In the context of the Dravida Munnetra Kazhagam coming to power on the back of a slew of promises on welfare and development, and the ongoing pandemic, the trajectory of growth and resource mobilisation efforts by the state is examined. The analysis points to an emerging disjuncture between growth and tax efforts of the state as well as a decline in central transfers.

Based on the data from the All-India Debt and Investment Surveys, a re-emergence of non-institutional credit agencies in the incidence of household indebtedness is found since the 1990s, especially in the rural areas, reflecting the inadequate social commitments of the institutional agencies due to their contemporary organisational deficiencies. The data, however, do not seem to capture the extent of urban distress in totality. Yet, given the general dearth of evidence on the status of household indebtedness over time, institutions like the Reserve Bank of India and the National Bank for Agriculture and Rural Development should revisit this information to resurrect their roles in strengthening credit delivery to the general population.

The Index of Industrial Production series, the most significant macroeconomic lead indicator, was revised by the Central Statistics Office in May 2017, two years and three months after revising the National Accounts Statistics series. Even as the newIIP series is more current, growth rates of output do not match those of theNAS. This, along with the significant lag in the periodic revision ofIIP, diminishes its usefulness.

Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spending does not seek to be countercyclical given that economic growth is falling. There is vast scope to step up collection of corporate taxes by widening the tax base through greater compliance.

In producing the new series, the Central Statistics Office with its rebased National Accounts Statistics has done a studious job of marshalling diverse sources of data and weaving them together into a composite new source. However, the final picture of NAS data would have been more acceptable if better caution was exercised in using new concepts as well as new sources of data, and in weighing the growth results against frequent and extensive revisions. The CSO has failed to refine the growth results juxtaposed against the repetitive and substantial revisions that the data sources have impelled and have completely ignored the analytical construct of gross domestic product at factor cost.