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

R KrishnaswamySubscribe to R Krishnaswamy

Surge in Union Government Revenues

The tax revenues of the union government have surged in the first half of 2015–16, growing much faster than budgeted. Indirect taxes led the rate of growth of tax revenue collections, while direct tax collections grew less than expected. Though higher revenue is welcome, indirect taxes are nonetheless regressive, and higher indirect tax revenue will only accentuate income inequalities in India.

Investment Revival

An analysis of bank lending rates suggests that reducing the lending rate, while important, may not be as critical to reviving investment as it is made out to be. The three interest rate regimes followed over the last two decades or so are compared here and it is found that the current base rate regime is by far the most stable, and is one which reduces uncertainty of interest costs.

Recent Trends in Inter-Sectoral Terms of Trade

Revisiting an old debate about terms of trade of agriculture vis-à-vis other sectors in the Indian economy, it is argued that the ToT of agriculture has remained favourable for a large part of the post-liberalisation phase, with it being most favourable since the mid-2000s. This is despite rising costs of production, high rural inflation, and rising human labour costs. It is further argued that large farmers seem to have benefited the most from the favourable ToT, which helps understand the narrowing inequality between rural and urban India, along with rising inequality within rural India.

RBI Balance Sheet in Recent Years

The Reserve Bank of India's latest accounts indicate that the structure of earnings has clearly shifted to domestic sources, particularly from assets. Further, the RBI has made large transfers to the Government of India over the past few years at the cost of maintaining critical reserves to ensure the fi nancial stability of the central bank. The RBI has not made public a report that is said to provide justification for such a shift in policy. This goes against the post-financial crisis view that central bank operations must be more transparent and open to public scrutiny.

Sixth Economic Census 2013

The provisional results of the Sixth Economic Census (2013) of establishments in the non-agricultural sector suggest that this is not a census count. A comparison with the National Sample Survey numbers shows that the number of workers in the latest census may be only a little over half the actual number. There also appear to be some serious omissions in individual states.

Advance Estimates of GDP (2013-14): An Analysis

The Central Statistics Office's advance estimates of GDP in 2013-14 place growth in the year at 4.9%. The regular differences every year between the advance and revised estimates of GDP suggest that the former will be modified either upwards or downwards when the final figures come in about two years hence. This is somethingthe CSO needs to look into though there are definite reasons for why the revisions take place, leading to more accurate estimates. The new series of GDP at basic prices is also discussed here.

The Puzzle That is India-UAE Trade

How is it that the United Arab Emirates has become India's largest trading partner in recent years, overtaking the United States, European Union and China? An unusual pattern of two-way flows in gold, diamonds and jewellery seems to underlie the boom in bilateral trade. There is reason to suspect that some of this trade involves round tripping of merchandise and to that extent the volume of India-UAE trade may be artificially inflated.

The Balance of Payments Situation: 1991 and Now

There is a fear that the current vulnerabilities on the balance of payments front signal another crisis as in 1991. This article analyses the factors underlying the current problems in the BoP and points out the key differences and also a few similarities between the state of the Indian economy then and now.

A Rethink on India's Foreign Trade Policy

With the global recovery nowhere in sight, this note looks at alternative strategies available to India to bridge the widening current account deficit by playing to the strengths of domestic production systems and through diversifying trading partners.

Sustainability Issues in India's Balance of Payments

The cover provided to the balance of payments all these years by invisible receipts and capital infl ows made the government lax about the widening merchandise trade defi cit. Now with the current account defi cit widening to dangerous levels, policy has shifted to wooing foreign capital at all costs and looking at options to control gold imports. The key to sustainability of the BOP lies in boosting manufactured exports and thereby containing the trade defi cit.

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