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

Ravindra H DholakiaSubscribe to RSS - Ravindra H Dholakia

Changing Dynamics of Inflation in India

Using the latest consumer price index (combined) series, it is found that the dynamics underlying India’s inflationary process have changed substantially. Significant reduction found in the inflation persistence reflects anchoring of inflationary expectations. Moreover, it is the headline inflation that reverts to the core and not vice versa, as was assumed so far. It implies the absence of any significant second-round effects. These features need to be taken into account for any policy analysis. Attempting to forecast inflation using various econometric techniques, it is found that a combination of alternative models based on mean square errors improves forecast accuracy as compared to any individual model.

Measurement Issues in Comparing Fiscal Performance of States

Interstate comparison of fiscal performance requires the use of appropriate concepts and proper measurement of state income, fiscal deficit and debt. GSDP at market prices and a comprehensive concept of debt consistent with the fiscal deficit of a state government are the right concepts to use for the purpose. Neither the rating agencies nor the finance commissions have used the right concepts so far. Illustrative estimates for Gujarat show that this can lead to misleading target setting and wrong perceptions about the fiscal performance of the states.

Double Deflation Method and Growth of Manufacturing

This comment points out an erroneous assumption in the calculations and central argument of Rajakumar and Shetty ("Gross Value Added: Why Not the Double Deflation Method for Estimation?," EPW, 15 August 2015) that reverses almost all their inferences and conclusions. If construction and service input prices are also considered in the construction of the input price deflators, the double deflation method may further raise the manufacturing real income rather than depressing it. Conditions under which single or double deflation can better approximate the Index of Industrial Production growth rate are also discussed.

Measurement Issues in State-Level Income from Registered Manufacturing: Case of Gujarat

This article discusses some important issues involved in the estimation of state income originating in the registered manufacturing sector with illustrations drawn from Gujarat. It critically discusses the present practices in preparing quick estimates when results from the regular data source of the Annual Survey of Industries have not as yet been fi nalised. The article points to the serious fl aw of gathering information in ASI without updating regularly the census sector frame at the state level, which results in ignoring new large and medium manufacturing units.

Cost and Benefit of Disinflation Policy in India

The Reserve Bank of India’s monetary policy stance is based on assertions that there is no trade-off between inflation and growth and that disinflation will result in more growth. This note examines recent empirical evidence on the direction of causality for growth and infl ation, and the short-run costs and long-run benefits of a deliberate policy of disinflation. There is no support for the first assertion because a regular trade-off does exist in India, imposing substantial short-run costs for deliberate disinflation. There is strong evidence for causality from growth to inflation, but the reverse cannot be ruled out. Under such conditions, the RBI should hold nominal growth of money supply and allow supply-side policies by the government to bring down inflation.

Relative Growth Performance of Gujarat

EPW has been publishing a number of articles on the relative economic performance of Gujarat, and on growth and human development in India under the United Progressive Alliance vs the National Democratic Alliance (28 September 2013, 12 April and 19 April 2014). These articles attract critical comment here from Ravindra H Dholakia and Sugata Marjit. Continuing the debate, R Nagaraj, and Maitreesh Ghatak and Sanchari Roy respond to Dholakia, while Ghatak et al respond to Marjit.

Gujarat's Growth Story

If one were to use correct concepts and measurements, it will be seen that labour in Gujarat has actually significantly benefited from high economic growth and productivity gains. Annual Survey of Industries data show that the state has outperformed many others in the level of employment and wage compensation. A critical comment on "Labour and Employment under Globalisation: The Case of Gujarat" (EPW, 28 May 2011).

Right to Education Act and Public-Private Partnership

The authors of "Feasibility of Implementation of Right to Education Act" (EPW, 20 June 2009) respond to the critique of their argument by Padma M Sarangapani (EPW, 24 October 2009) and Vimala Ramachandran (EPW, 11 July 2009).

Pages

Back to Top